BS v HC [2026] EWFC 20 (B)

[2026] EWFC 20 (B)
IN THE CENTRAL FAMILY COURT
B E T W E E N:
BS Applicant
- and -
HC Respondent
IMPORTANT NOTICE This judgment was delivered in private. The judge has given leave for this version of the judgment (but no other version) to be published.All persons, including representatives of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.
Mr Justin Warshaw KC (Counsel instructed by Craig, Solicitors) appeared on behalf of the Applicant husband.
Mr Edward Boydell KC (Counsel instructed by Ellis Jones, Solicitors) appeared on behalf of the Respondent wife.
Written Judgment of His Honour Judge Edward Hess
dated 19 th January 2026 and 3 rd February 2026
Between
Applicant husbandApplicantRespondent wifeRespondentDate 2026-02-03
[1]This case concerns the financial remedies proceedings arising out of the divorce between BS (to whom I shall refer as “the husband”) and Ms HC (to whom I shall refer as “the wife”).[2]The case proceeded to a final hearing over four days on 12th, 13th, 15th and 16th January 2026. Evidence and submissions were completed by the end of 15th January 2026 and this judgment has been written largely on 16th January 2026 and completed on 19th January 2026.[3]Mr Justin Warshaw KC (Counsel instructed by Craig, Solicitors) appeared on behalf of the husband. Mr Edward Boydell KC (Counsel instructed by Ellis Jones, Solicitors) appeared on behalf of the wife. I commend both Counsel for their high levels of skill and persuasiveness and their assiduously hard work on the case. Both parties have been represented by first class legal teams in these proceedings. The wife has incurred a total of £289,104 in legal costs, the husband a total of £304,213. It is very unfortunate that these two intelligent, respectable and pleasant individuals have had to spend nearly £600,000 in legal costs to resolve their financial differences. With a level of ‘give and take’ on both sides, this case really should have been compromised at an earlier stage.[4]The court was presented with three electronic bundles at the outset of the hearing: a core bundle running to 478 pages, a wife’s supplemental bundle running to 238 pages and a husband’s supplemental bundle running to 244 pages. I have considered the documents presented to me, in particular I have considered:-(i) A collection of applications and court orders.(ii) A collection of documents relating to the financial remedies proceedings between the husband and his first wife, including a judgment and order from 2006 and another order with D81 forms from 2019.(iii) Material from the husband including his Form E dated 7th October 2024, his answers to questionnaires and schedules of deficiencies and his narrative section 25 statement dated 16th December 2025.(iv) Material from the wife including her Form E dated 14th October 2024, her answers to questionnaire and her narrative section 25 statement dated 18th December 2025.(v) Material from the SJE PODE, Mr Richard Nobbs of Excalibur Actuaries, including his main report dated 1st December 2025 and his responses to further questions dated 18th December 2025.(vi) Completed ES1 and ES2 documents and a detailed chronology.(vii) Various property valuation evidence.(viii) Selected correspondence and other disclosure material.[5]I have also heard oral evidence from the husband and the wife. The time estimate for the hearing was long enough to allow Counsel to have three hours each of time for cross-examination, which fully met their time requests. Overall, I am entirely satisfied that this gave a full and fair opportunity to each party to put forward their own case and challenge that of the other.[6]I have also had the benefit of submissions from each Counsel in their respective opening notes and their closing partly oral and partly written submissions.[7]The history of the marriage is as follows:-(i) The husband is aged 63 and is in good health. He currently lives between a rented home in London and the jointly owned property at AB in Devon. He has had a career in industry, mainly in a family-owned business called S Limited, but then for T PLC when they bought out the family company. He is now largely retired, since 2021 doing only a limited amount of consultancy work via a company owned by him, BS Limited. He was married to his first wife in 1985 and there were four children of that marriage, now all adults in their thirties. That marriage broke down in 2003. Divorce proceedings and financial remedies proceedings followed with a final hearing taking place in the PRFD in the Summer of 2005 which culminated in a written judgment dated 14th July 2005 and a final order sealed on 16 May 2006, both from DJ Berry. Decree Absolute followed in 2006. I shall return to the detail of this order below, but I note at this stage that the order left open certain aspects of the financial position, including ongoing substantial spousal and child periodical payments (including school fees) orders and (unusually) an adjourned lump sum application specifically targeted at being re-activated in the event that the S family company shares were ever sold. It was not until a further order was made in November 2019 that the husband’s ongoing obligations to his first wife were finally terminated when further capital provision was made.(ii) The wife is aged 60. She has some health issues, in particular she suffers from severe arthritis in the base of both of her thumbs. This causes pain and joint weakness but does not interfere with activities such as typing on a computer. She may in due course have joint replacements on a private basis. She currently lives at what was intended to be, but never in the end became, the family home in Bristol. She has worked in the past as an interior designer, although has not done so for some considerable time (perhaps 13 years) and is not doing so at the moment and currently has no earnings (a fact which is criticised by the husband, and to which I shall return below). She has been doing some Open University studies and intends to return to them in due course, but the focus of this is personal enjoyment and intellectual satisfaction rather than a desire to gain qualifications with a view to earning money in the future. Before she met the husband she had not been married, and she has no children. She has an elderly father of some wealth, who has been financially generous to her in a number of ways in the past, of which more below; but they are sadly now estranged, and it has not been suggested that the wife is likely to receive more money from him, either by way of inter vivos gift or inheritance.(iii) The parties met in 2008 and began a relationship of cohabitation in April 2009 (then aged 46 and 43 respectively) and married on 23rd August 2009. From April 2009 until early 2014 they lived together at a flat in East London, a property owned by the wife’s father which had been the wife’s home before the parties met and for which her father charged them no rent. From 2014 to 2023 they lived together at CD in Gloucestershire (although the husband continued to use the East London property when working in London during the working week until 2018, still paying no rent). From 2023 to 2024 they lived together at AB in Devon. In this period the Bristol property was purchased in joint names and, at that time, it was anticipated that they would both split their future life in retirement between Bristol and Devon when the refurbishment works at the Bristol property were completed. They liked the idea of having the benefit of a city environment but also being able to escape at will to a seaside environment.(iv) There were no children of the marriage, but the wife’s case is that she was very fond of the husband’s children and helped them in various ways during the marriage, in particular by arranging for one of the husband’s sons and his wife to occupy her father’s East London property for about two years between 2018 and 2020 on a rent-free basis.(v) Sadly, the marriage broke down in 2024 and the parties separated, on 31st March 2024 (per the husband) or 19th May 2024 (per the wife) so, on either view, the marriage had a duration of approximately 15 years and is firmly and properly in the category of a long marriage (nothing very much turns on the different positions on the date of separation). The wife then moved to the Bristol property (where she remains) and the husband remained in AB in Devon, although from mid-2025 also rented accommodation in London.(vi) A Divorce application was made by the wife on 24th June 2024. A Conditional Order of Divorce (Decree Nisi) was ordered on 15th January 2025. A Final Order of Divorce (Decree Absolute) awaits the outcome of the financial remedies proceedings and is not, in itself, controversial.[8]The financial remedies proceedings chronology is as follows:-(i) On 12th August 2024 the husband issued Form A. The case initially proceeded at the Plymouth Family Court.(ii) A First Appointment took place before HHJ Walsh on 21st November 2024.(iii) A private FDR took place before Duncan Brooks KC on 3rd March 2025. Sadly, no compromise was reached.(iv) A post pFDR directions hearing took place before DJ Mashembo on 30th April 2025. She transferred the case to the London FRC and listed the case for a PTR on 5th December 2025 and a final hearing in January 2026.(v) A further directions hearing took place before DJ Ashworth on 10th October 2025.(vi) The PTR took place before HHJ Hudd on 5th December 2025.(vii) A final hearing has taken place before me over four days in January 2026. The evidence and submissions completed on 15th January 2026 and I have used the fourth day, 16th January 2026, and a little more, to write this judgment.[9]In dealing with the applications overall I must, of course, consider the factors set out in Matrimonial Causes Act 1973, section 25 and 25A, together with any relevant case law.[10]Matrimonial Causes Act 1973, section 25, reads as follows:-(1) It shall be the duty of the court in deciding whether to exercise its powers under section 23, 24, 24A or 24B above and, if so, in what manner, to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.(2) As regards the exercise of the powers of the court under section 23(1)(a), (b) or (c), 24,24A or 24B above in relation to a party to the marriage, the court shall in particular have regard to the following matters:- (a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire; (b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future; (c) the standard of living enjoyed by the family before the breakdown of the marriage; (d) the age of each party to the marriage and the duration of the marriage; (e) any physical or mental disability of either of the parties to the marriage; (f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family; (g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it; (h) in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.[11]Neither party is seeking ongoing spousal periodical payments order so the provisions of section 25A are not relevant to this dispute.[12]I now turn to my analysis of the section 25 factors. There being no relevant minor children, I turn first to the “property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future”, the computational part of my task. In the end, the asset schedule has almost entirely been agreed and I need only make the following limited observations and findings. Otherwise, the asset schedule below is agreed:-[13]The only major issue in dispute in the computational part of the case is whether or not I should accede to the add-back arguments advanced by Mr Boydell arising out of a number of payments made by the husband to his adult children since the marriage broke down. The payments said to be in this category are as follows:- DATE AMOUNT PURPOSE ACORDING TO H 6th May 2024 £12,000 A gift of £3,000 for each of his four children, said to be compensation for a family holiday which would not now happen. 21st May 2024 £20,000 A gift to a son and his wife to enable them to have IVF treatment. 24th May 2024 £10,000 A further gift to thesame son and his wife to enable them to have IVF treatment. 29th May 2025 £10,320 A gift to his daughter to fund a course in Aesthetics. 2025 £15,539 and £3,776 Gifts to his daughter to help fund her wedding in September 2026 Late December 2025 £30,695 A further gift to his daughter to help fund her wedding in September 2026, even though payments to the caterer etc. are not due until approximately June 2026. TOTAL £102,330[14]Mr Boydell’s contention is that the monetary amount of these payments should be added back into the husband’s column on the asset schedule because (in a case where monies are to be shared equally) it is unfair if one of them makes substantial non-consensual gifts prior to a division of assets because the mathematical effect is that the non-consenting party is paying for half of the gift. He argues that the court should not condone such payments because they amount to an unfair manipulation of the situation. He suggests that the timing of the payments – the earlier tranches coming immediately after the breakdown of the marriage and the latter tranche coming between the PTR and the final hearing – should cause the court to be suspicious. He argues that, whilst a generous gift to an adult child for a wedding is prima facie perfectly commendable, it should be paid from the donor’s half of the assets and the non-consenting other party should not be penalised.[15]Mr Warshaw reminds me that the legal test for add-backs is a high one – only dissipations which are wanton or reckless and where the spending was deliberately targeted towards diminishing the share of the party will justify such an add-back: see, for example, Norris v Norris [2002] EWHC 296, Vaughan v Vaughan [2007] EWCA Civ 1085 and MAP v MFP [2015] EWHC 627. He suggests that these gifts are part of the husband’s habitual wish to help his children as a loving father and that the payments do not reach the threshold for an add-back. In so far as they do, he points (as a defensive shield) to a high degree of reciprocal spending in the last year or so by the wife (for example on health and therapy items) and he cross-examined the wife to a significant extent on this. It is fair to say that the wife did acknowledge in her oral evidence a high level of spending in the last year, justifying it by reference to the high trauma and distress which accompany any person going through financial remedies proceedings.[16]It is right for the court to state clearly that any financial remedies litigant who does engage in manipulative spending between separation and a financial remedies hearing with a view to diminishing the sharing claim of the other does run the risk that the court will add back that the amounts spent to restore mathematical fairness. In the end, however, I have not been persuaded that the facts of the present case cross the line to cause me to do this. In so far that some of the payments by the husband get close to the line – I have in mind the December 2025 gift in particular – I have been persuaded that the counter arguments about the wife’s spending should properly be treated as neutralising the position. I have accordingly decided not to make any add-back adjustments in this case.[17]The other issues requiring a determination are comparably minor issues. I have decided to include a debt figure of £27,000 advanced by the husband for his CGT debt due on his sale of T PLC shares. On this I propose to accept the husband’s evidence that this is the likely figure and that the debt is genuine in preference to the wife’s case that this has not been properly documented. I have, however decided not to include the debt figures advanced by the husband of £3,400 for accountancy fees (I was persuaded they were properly in the husband’s costs figures), £453 for AB utility fees (I regard this as part of a continuum which should not be in this snapshot schedule) and £9,036 for London rent (again, this is a part of a continuum which should not be in the snapshot schedule and in any event it is not due until 16th February 2026). My schedule records all these figures as zero.[18]I can accordingly complete the computational part of my task by tabulating the current financial position as follows:- REALISABLE ASSETS/DEBTS19. Joint The Bristol property Value agreed at £885,000 less notional costs of sale at 3% = £858,450 858,450 AB, Devon Value agreed at £310,000 less notional costs of sale at 3% = £300,700 300,700 TOTAL 1,159,15020. Wife Money in bank accounts in sole name 5,893 Investments / Policies in sole name 33,602 Credit card & Paypal debts -36,295 Level legal fees loan -179,469 Level maintenance loan -70,783 Outstanding Legal Fees This calculated by reference to fees incurred of £289,104 less fees paid of £206,268 = £82,836 -82,836 TOTAL -329,88821. Husband Money in bank accounts in sole name 249,996 Investments / Policies in sole name 1,583,455 100% shares in BS Ltd 2,885 Credit card debts -6,299 Income tax debt for y/e 5 April 2025 -58,988 Income tax debt on a/c for y/e 5 April 2026 -3,068 CGT debt on sale of T PLC -27,000 Monies due to accountant 0 London rent due in February 0 Utility bills at AB 0 Outstanding Legal Fees This calculated by reference to fees incurred of £304,213 less fees paid of £240,403 = £63,810 -63,810 TOTAL 1,677,171 PENSIONS22. Wife Standard Life SIPP CE 35,363 TOTAL 35,36323. Husband Quilter SIPP CE 3,043,327 ReAssure AVC CE 20,514 TOTAL 3,063,841

REALISABLE ASSETS/DEBTS

[19]There is a particular argument about pensions, of which more below, but both parties agree that a persuasive starting point for the division of the non-pension assets, all of which it is accepted should be regarded as matrimonial property, is to divide them equally, to respect the sharing principle which is that, as a starting point in the division of capital after a long marriage, fairness and equality usually ride hand in hand so that matrimonial property should be divided equally. In the words of Lord Nicholls in White v White [2000] UKHL 54, “As a general guide, equality should be departed from only if, and to the extent that, there is good reason for doing so” and in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 “This 'equal sharing' principle derives from the basic concept of equality permeating a marriage as understood today. Marriage, it is often said, is a partnership of equals…The parties commit themselves to sharing their lives. They live and work together. When their partnership ends each is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary. Fairness requires no less.”[20]The mechanics of equal sharing in this case of the non-pension assets would in my view be best achieved by an order that includes the transfer of the Bristol property to the wife and a transfer of AB to the husband with a balancing lump sum from the husband to the wife to equalise the bottom line on the figures. I have been told that an offer has been accepted for AB but that contracts have not been exchanged. The husband has said that, whilst his earlier position had been that he wanted to retain AB, his present position is that it should be sold. I have decided that my order will be structured in a way which gives him the option as to what should happen to AB. The order will give him the choice between having AB transferred to him outright and an order for sale with him receiving 100% of the net proceeds. On the mathematics, equality of the non-pension assets would be achieved by the husband paying to the wife a balancing lump sum of £724,654, the mathematics of which is illustrated by the following table:- Wife Husband Own Assets (per schedule above) -329,888 1,677,171 The Bristol property to W 858,450 0 AB, Devon to H 0 300,700 Balancing Lump Sum H to W 724,654 -724,654 TOTAL 1,253,216 1,253,217[21]Mr Warshaw accepts that such a lump sum is appropriate. Mr Boydell argues that there should be a needs-based additional lump sum paid to the wife; but the mathematics of such a claim is entwined with the arguments about the extent to which the wife has a sharing-based claim to the husband’s pensions, to which I shall now turn.

PENSIONS

[22]It is common ground that the husband now has pensions of substantial value (£3,063,841) and the wife has pensions of limited value (£35,363).[23]At the heart of this case is the dispute as to the extent to which the husband’s pensions should be regarded as matrimonial property (and thus subject to the sharing principle) or non-matrimonial property (and thus only to be invaded on a needs basis). This difference in turn raises the disputes both as to the extent to which the pensions should be treated as having accrued during the marriage (i.e. 2009 to 2024) and the extent to which the portion which accrued outside the marriage (i.e. before 2009) should be treated as having been subsequently ‘matrimonialised’. For a variety of reasons, in the present case these are not simple questions; but they do require an answer.[24]The chronology for the acquisition of the husband’s pension rights, and of the growth of the actuarial value of those rights, is complicated and unusual and has been carefully and helpfully tracked by Mr Nobbs in his PODE report. I make the following comments and findings about this chronology:-(i) On 1st February 1988 the husband joined the defined benefit final salary scheme for his employers, the S Limited Pension Scheme. The husband was only one of a number of scheme members. His rights under the scheme accrued by virtue of his year-by-year service for his employers.(ii) The husband’s rights under this scheme accrued by reference to a multiplier (the number of years employed) and a multiplicand (a portion of his final salary). The multiplier was subject to a maximum cap of 20 years of service so that by 2008 (before the parties met) he had already reached the maximum 20 years of service and the multiplier was fixed. The multiplicand, however, continued to rise after 2008 if his salary rose, which it did (though fairly marginally) between 2008 (£217,494 per annum gross) and 2012 (£222,593 per annum gross) and the husband had to make pension contributions.(iii) On 30th March 2012, however, the S limited Pension Scheme closed, that is to say that whilst accrued rights up to that date continued to exist and to be binding on the scheme, no further rights accrued after that date, save for inflationary upgrading of the existing rights.(iv) Although some of the finer details are unknown, it is clear that at least as early as in 2005, when the husband went through his first divorce, the S Limited Pension Scheme was significantly underfunded, that is to say that there were insufficient funds in the scheme to meet in full its obligations to all members of the scheme: see Occupational Pension Schemes (Transfer Values) Regulations 1996, Schedule 1A A full description of how pension sharing works with underfunded schemes is to be found in Pensions on Divorce: A Practitioner’sHandbookby Hess, Taylor Rainer & Galbraith (4th edition) at chapter 16. . This fact was recorded in passing in the DJ Berry 2005 judgment. As such, it is likely that the CE figure used in the 2005 divorce proceedings, which is recorded in the DJ Berry judgment as being “about £260,000” represented a reduced CE, i.e. one that was reduced proportionately by the identified level of underfunding. The company accounts for 2005 suggest that the actuarial assessment at the time was that the assets in the scheme were thought only to cover about 65% of the obligations so it is likely that any published CE would have been proportionately reduced by about this amount. If that assumption is correct then the full unreduced value of the husband’s pension in 2005 would have been about £400,000 (i.e. £260,000 x 100/65). The husband’s first wife received a 50% pension sharing order under the order made by DJ Berry on 16 May 2006. She would then have had the option of taking an external transfer worth £130,000 (i.e. 50% x £260,000) or an internal transfer of £200,000 (i.e. 50% x £400,000). The latter choice, although on the face of it more advantageous, would have carried the risk that in due course the scheme might declare itself insolvent and enter the Pension Protection Fund, which might in the end prove to be less advantageous. We know that the husband’s first wife chose to take an external transfer. A similar choice would have been available in 2006 to the husband with his remaining half share of the pension – he could have transferred his accrued rights out of the scheme at the reduced CE and invested the pension credit in a different scheme altogether had he so wished. In fact, he elected to remain in the scheme. Mr Nobbs has estimated that the value of his reduced CE at the moment that the husband commenced cohabiting with his second wife (i.e. April 2009) would have been about £180,000.(v) We can now be confident that the husband’s election was significantly more advantageous than that of his first wife because, when the CEs were identified in the Form D81s in the 2019 capitalisation proceedings, the husband’s pensions were declared to have a total CE of £1,548,496 (apparently the full unreduced figure) whilst his first wife’s pensions were declared to have a total CE of only £243,320. Further, we know that by March 2021 the full CE value of the husband’s rights was £2,407,990, which was subject to an 8% reduction on a transfer, so that its reduced CE value then was £2,215,351. This was the moment, in March 2021, when the husband chose to transfer out of the scheme and he took the pension credit of £2,215,351 and invested it in a Quilter SIPP.(vi) An important question here is why it was that the reduced CE value increased from £180,000 in April 2009 to £2,215,351 in March 2021. Mr Nobbs has investigated this matter and identified a number of causes.(vii) The first cause is that we know from available records that in each year in the period between 2013 and 2021 the husband’s company made very substantial contributions to the scheme with the specific view of eradicating the underfunding in the scheme – between £1,000,000 and £2,000,000 each year was paid in. Plainly, if these payments had not been made then the same sums of money would have been available to fund dividend payments to shareholders, higher income payments to employees or a greater value for the company in retained profits and the pension fund might have become insolvent. By 2021, the underfunding problem had been substantially (though not entirely) eradicated – the best estimate is that the underfunding at this time had been reduced to about 8%.(viii) In addition to the substantial extra funding, the other identified causes are that prevailing macro-economic financial circumstances in the period between 2009 and 2021 (a period of low interest rates) and some changes in the actuarial methodology for pension valuation meant that the CE valuation of particular pension rights increased. In one sense this is something of an illusion because the rights are the same, it is just the CE value that is different, but if an advantageous moment is identified to cash out of the scheme into an investment fund then the advantage can turn into a real one, and this is exactly what happened in the husband’s case. By transferring out in 2021 he avoided the general fall in CE values caused by the rises in interest rates in 2022.(ix) We know that there had been a previous payment into the Quilter SIPP in 2020 (from a pension which it is accepted was a pre-2009 pension) such that, prior to the transfer in of the £2,215,351 in March 2021, its CE value was already £62,231. Thereafter, the CE has risen to the current figure, which is £3,043,327. This is an investment fund, so the substantial increase in value between 2021 and now is attributable to skilful investments from the fund managers.[25]The question therefore arises as to how to fit these facts into a reasonable assessment of the extent to which the pension should be treated as having accrued during the marriage (i.e. 2009 to 2024) in the context of assessing whether they should be regarded as marital acquest. In the words of the Supreme Court in Standish v Standish [2025] UKSC 26:- “It is important to recognise that there is a conceptual distinction between matrimonial and non-matrimonial property. In general terms, this distinction turns on the source of the assets. Non-matrimonial property is typically pre-marital property brought into the marriage by one of the parties or property acquired by one of the parties by external inheritance or gift. In contrast, matrimonial property is property that comprises the fruits of the marriage partnership or reflects the marriage partnership or is the product of the parties’ common endeavour.”[26]In the context of pensions, the question is often referred to as one of “apportionment”. It is right to note (as did Mr Nobbs) that this issue has been addressed by the Pensions Advisory Group, most recently in its report of January 2024, known as PAG2 For avoidance of doubt I declare an interest as co-chair of the Pensions Advisory Group and I record that Mr Nobbs was also a member of the working group. I have expressed the view in SP v AL[2024] EWFC 72 (B) that the views of PAG should be treated as being prima facie persuasive in the areas it has analysed, although of course susceptible to judicial oversight and criticism and I maintain that view. . The approach of PAG2 is to provide a number of methodologies for looking at this issue – identified in PAG2, Schedule S as ‘the deferred pension method’, ‘the CE method’ and ‘the Straight-Line method’ - and then to identify the fairest way of answering the question on the facts of a particular case by considering the results of the different methodologies. This is broadly what Mr Nobbs has done, although he has appropriately adapted the methodologies and called them ‘the service approach’ (which is similar to the ‘deferred pension method’), ‘the funding approach’ and ‘the CE approach’. Whilst acknowledging that there are a lot of approximations and assumptions involved in the exercise, he has tabulated his mathematics as follows:- Service approach Funding approach CE approach Percentage attributable to the period pre-April 2009 85.6% 19.4% 8.5% Percentage attributable to the period between April 2009 and April 2012 14.4% 19.8% 1% Percentage attributable to the period between April 2012 and March 2021 0% 60.8% 64.1% Percentage attributable to the period since March 2021 0% 0% 26.5% TOTAL 100% 100% 100%[27]Mr Nobbs’ view was that the ‘funding approach’ analysis has some difficulties because many pensions being divided do not, in fact, have funding in place, but are not necessarily regarded as being underfunded (for example most public sector pension schemes). His view was that the other two approaches were more likely to be persuasive but took the view (really following PAG2) that it was a matter for the court to reach a fair decision based on a balance between the other two approaches. He did not consider that the question could be answered actuarily. I agree with this view and his overall approach and I express the view that his figures are helpful and illustrative of what was happening here.[28]Mr Boydell invited me to concentrate my attention on the CE approach and he has drawn from this that the vast majority of the CE value can be attributed to the period of the marriage – perhaps the figure of 91.5%, i.e. 100% less the 8.5% accruing on the CE approach prior to April 2009. He has argued that a key factor here is that for a very long period (between 2013 and 2021) the company was making large payments into the fund which boosted the husband’s CE figures and dampened other payments the husband might have received from the company. He suggests that, whilst the decision to do this would not have been the husband’s alone, he was the CEO of the company during this period and must have had a significant influence in this and this is a classic example of marital endeavour.[29]Mr Warshaw on the other hand has contended that the right way forward here is to look primarily at the service approach, i.e. to look at when the service was performed by the husband which led to the accrual in pension rights. The valuation of these rights is, he says, no more than a sideshow. This approach would suggest that 14.4% of the pension should be treated as being accrued during the marriage. He said that if I was to look at the CE approach figures at all, I should be cognisant of the facts that of the figure of 64.1% (representing the 2012 to 2021 period on the CE approach), Mr Nobbs’ calculations suggest that only 23.7% of this is attributable to the payments in by the company, the remaining 40.4% being attributable to actuarial matters such as interest rates and valuation methodology assumptions, including demographic assumptions. Further, the 26.5% post 2021 increase on the CE approach is solely attributable to passive growth, not marital endeavour. At its highest, says Mr Warshaw, 14.4% plus 23.7% of the pension, i.e. 38.1% of the pension could be regarded as being marital endeavour.[30]I remind myself at this stage also of the earlier Court of Appeal decision in Hart v Hart [2017] EWCA Civ 1306 which deals with cases where the facts are such as to make it impossible or very difficult to identify a clear mathematical demarcation line, where (as here) there is a complicated continuum. In the words of Moylan LJ in Hart: “In arriving at this determination, the court does not have to apply any particular mathematical or other specific methodology. The court has a discretion as to how to arrive at a fair division and can simply apply a broad assessment of the division which would affect "overall fairness"…Finally, I would repeat that fairness has a broad horizon”.[31]My view is that the above question should not solely be answered by reference to one mathematical analysis. Although the mathematical analysis is a helpful and important ingredient, the search for fairness requires a broader weighing of the competing arguments. In some cases one of the formulaic approaches might seem fairer, in other cases a different formulaic approach might seem fairer and in other cases a blend of approaches might be fairest. The unusual facts of the current case illustrate the dilemma. Weighing all of the above matters, I have reached the broad conclusion that it is fair to regard 55% of the husband’s pensions as having accrued during the marriage and 45% as having accrued outside the marriage.[32]In the present case, the search for fairness also requires consideration of whether a higher figure could be introduced by reference to matrimonialisation. The court needs to consider the extent to which (whatever portion of the pension started as a non-matrimonial asset) the husband’s pension has become ‘matrimonialised’. Again, the recent Supreme Court decision in Standish v Standish [2025] UKSC 26 has provided a definition of this term, or at least a methodology for identifying when it has happened. “…what starts as non-matrimonial property may become matrimonial property. Roberts J referred to this as “matrimonialisation”…Although it may be new to the English language, we accept that that is a useful shorthand term to describe the process or mechanism by which non-matrimonial property may become matrimonial property. But whether one is using that label or not, the important question on any facts is whether that transformation has occurred…what is important…is to consider how the parties have been dealing with the asset and whether this shows that, over time, they have been treating the asset as shared between them. That is, matrimonialisation rests on the parties, over time, treating the asset as shared.… “Over time”, which was the phrase used by Wilson LJ in relation to each of his three situations, means that the period of time must be sufficiently long for the parties’ treatment of the asset as shared to be regarded as settled….It further follows that we agree with the essential thrust of the following passage from Peter Duckworth, Matrimonial Property and Finance (2025) at B3[20]:
“a better view may be that matrimonial property is not something that is predetermined at the outset of a marriage, but is governed by the parties’ intentions and how they treat the relevant asset over a period of time. Thus where a party has demonstrated an intention to use an inheritance for the benefit of the family, by translating it into actual use and enjoyment, the parties have elected to treat it as matrimonial property, even if its origin was from outside the marriage.”…it is our view that it is the parties’ treatment of what was initially non-matrimonial property, over time, as shared between them, that is central in deciding the fairness of that property being viewed as matrimonialised.”
[33]The wife’s case advanced by Mr Boydell is that the husband’s pension, whatever its origins, has become wholly matrimonialised (although I note that the mathematics of his open position at trial was pitched at a level which assumed it was less than wholly matrimonialised). I have had some very detailed submissions on the respective contributions that the parties have made to this marriage. The husband’s pension aside, it is clear that both parties have made substantial contributions. The wife received a gift from her father in July 2013 of £1,500,000, although a contribution from outside the marriage which she could have kept separate, has been contributed to the matrimonial pot in its entirety. She has also contributed an asset of considerable value – free use of the East London property for the family from 2009 to 2020. The husband has also made substantial contributions from the sale of shares in the family business which he accepts are part of the matrimonial pot (even though they have their origins in assets held prior to the marriage or inheritances during the marriage). On the quantification of the net value of the share sale proceeds I accept the husband’s explanation that the figure was £1,562,181, notwithstanding a rather lower figure on the forms D81 filed in the 2019 proceedings with the husband’s first wife. Further, the husband had the benefit in 2012 of the proceeds of sale of a gifted property called X Cottage, which were something over £200,000 and went into the marriage pot. The husband also earned a substantial income between 2009 and 2021 which he contributed to the marriage, although for a long time he had to make substantial payments to his first wife. The wife did not do much paid work but she did considerable work on refurbishing various properties, most obviously CD. My task is not, however, to weigh these contributions to provide a result after along marriage and some of the evidence in this case has come dangerously close to amounting to the “rummage in the attic” that Coleridge J warned against in G v G [2002] EWHC 1339.[34]The issue of matrimonialisation is, in my view, rather a different one. Rights in a pension, unlike cash or property, rarely become ‘mingled’ during a marriage. They remain in the sole name of the person who earned the pension rights – that is just a feature of how pensions are held. They are never put into joint names. Where, as here, the pension rights have not been drawn down at all then they remain an un-mixed and un-utilised asset, but the source of future income. What does it take for it to be fair to treat such an asset as having been matrimonialised? Mr Warshaw has argued that, since the pension fund remains untouched, it can in no sense meet the Supreme Court test in Standish because it has not yet been translated into ‘actual use and enjoyment’. In my view, whilst I recognise that these words do appear in the Standish judgment, this is too literal an interpretation. An actual use and enjoyment provides a clearer example, but a common intention to put the asset into use and enjoyment in the future could also in my view give rise to matrimonialisation if that intention was relied upon by the other party to his or her detriment. As I put it to Mr Warshaw in argument here, if, for example, one spouse said to the other words to the effect of, “if I contribute my £1,000,000 of cash to purchase a family home in joint names will you agree to treat your £1,000,000 pension as a joint asset, even if it remains in your name” and the other spouse agrees then (notwithstanding that the pension has not yet been put into actual use and enjoyment) that would amount to matrimonialisation in my view. A different conclusion would not be fair.[35]So has this happened here? What is essentially relied upon here by the wife is a conversation which took place in 2013 when she received the gift of £1,500,000 from her father. It was agreed that there would be a purchase of CD, which was to cost £838,000 plus purchase costs and was then to have substantial refurbishment costs, initially at least funded by the wife to the extent of several hundred thousand pounds, and was eventually sold in 2023 for £1,600,000. This issue arose as to whether CD would be placed in the wife’s sole name (since she was paying for it) or in joint names. The wife says, and I accept her evidence on this, that the husband asked for the property to be placed in joint names and said words to the effect of “it doesn’t matter that I am not contributing to the purchase price because we will share everything equally in our marriage, everything comes and goes out of the same pot”. It is not suggested that he made any specific reference to his pension in this conversation and there were other assets to which he could have been, and probably was, referring, most obviously his company shares (which eventually sold for a sum which was broadly equal to the wife’s father’s gift). It is a difficult question, but I have not been persuaded on the facts of the present case that these words could fairly give rise to the husband’s pension rights thereby became matrimonialised. More, in my view, would be required to meet the Standish test.[36]The consequence of these findings is that in terms of the justification for a pension sharing order on a sharing (as opposed to needs) basis only 55% of the husband’s pensions should be taken into account. Translating this into a pension sharing figure (talking a broad rather than precise mathematical basis since Mr Nobbs’ report doesn’t precisely cover this eventuality, but broadly treating the arguments about the wife’s Standard Life pension and lower state pension as cancelling out against the parties’ age difference and the husband’s Reassure AVC), this would translate into a pension sharing order of 27.5% of the husband’s Quilter SIPP (with its current CE value of £3,043,327).[37]It follows from all the above that I assess the wife’s sharing claim as being for:-(i) The transfer to her of the Bristol property.(ii) The payment to her of a lump sum of £724,654.(iii) A pension sharing order for 27.5% of the husband’s Quilter SIPP.[38]Mr Boydell has argued that the wife can make out a needs claim for in excess of this provision. In order to decide whether he is right about this I need to assess what the above provision will produce for the wife.[39]In approaching this calculation, I need first to make a decision about her housing needs. Having heard and read all the evidence on this subject, and having taken into account the standard of living that the parties jointly enjoyed during the marriage, the ages of the parties, the duration of the marriage and the respective contributions, I have reached the clear conclusion that her reasonable housing needs are met by her remaining at the Bristol property . It is a reasonably modest city terraced home (I have seen the photographs) and in the context of this case it is reasonable for her to have this as her home. The husband will be able to afford something similar if he so chooses, or he could decide to retain AB and have a less valuable flat in London. I do not accept Mr Warshaw’s argument that the wife should be required (as part of an analysis of reasonableness) to downsize her accommodation and I regarded the husband’s case on this (with the provision of housing particulars for unsatisfactory, inadequate properties in Bristol) as a weak part of his argument.[40]Further, I need to make a decision about her earning capacity, including any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire. Of course she could earn something if it was absolutely vital; but this is a question of reasonableness. Given her age and health issues and the fact that she hasn’t worked for more than a decade and the fact that the husband himself decided substantially to retire when he was about the same age as the wife is now, I have in all the circumstances decided that it is not appropriate for me to place into these calculations any figure for an earning capacity and it is reasonable to assume that she will have no earned income in the future. What she ultimately chooses to do is, of course, a matter for her, as it is for the husband.[41]It follows from the above that it will almost certainly be necessary for the wife to take her pension income straight away (i.e. now rather than at her state pension age). I have the benefit of Mr Nobbs’ calculations as to what particular levels of pension sharing order would provide for the wife in terms of gross annual income (including taking her own Standard Life pension taken straight away and her state pension when she reaches the age of 67). According to Mr Nobbs’ table, a 27.1% pension sharing order would produce an annual gross income of about £50,000 per annum from all these sources in the event that she does turn a pension sharing order into an income now. Accordingly, a 27.5% pension sharing order would produce a little more than this, perhaps something in the region of £40,000 per annum net to meet her normal living expenses.[42]Apart from her housing provision, most of the wife’s remaining capital will need to be deployed to produce income. She will need to pay off her substantial debts (£329,888) so the above provision will leave her living mortgage-free in the Bristol Property with cash of £394,766 (£724,654 less £329,888). If I allow her a small cushion of cash (perhaps to have her wrist operations, though this is a matter for her) then she will have a Duxbury fund of about £375,000. Using the 2025-26 At A Glance tables, this would produce something in the region of £25,000 per annum net for 19 years or £20,000 per annum net for 26 years. It is, of course, a matter for her as to how she deploys the money in fact.[43]I now need to decide whether the wife could properly mount a needs-based claim for more than this. Mr Warshaw would say no, because he suggests that all she needs to live on is about £44,000 per annum. Mr Boydell would say yes, because he suggests that the wife needs £84,000 per annum on which to live. It is not unusual in these cases for these figures to be manipulated to fit a case – on one side upwards and on the other side downwards – and in my view this has happened here in both directions. Having seen her spending budget and heard her giving oral evidence about it, and making a reasonable assessment of the wife’s income needs in the context of the standard of living that the parties jointly enjoyed during the marriage and all the other circumstances (I accept the conventionality of the suggestion that it is reasonable to live off a little less when becoming older, though it doesn’t always follow to any great extent), I reach the conclusion that a reasonable figure for the wife to have to meet her reasonable spending needs is in the range of £60,000 to £65,000 per annum.[44]As it happens, this broadly matches the figures I have set out above on what income she will have on my determination of the case on a sharing basis. Many of these figures are, of course, approximations, but my broad conclusion is that on the facts of this case, the wife could not fairly justify a needs claim above the level of the sharing claim. On my analysis, the sharing claim and the needs claim produce broadly the same result and that is the solution which I propose to adopt. In my view an equal sharing of the non-pension assets combined with a 27.5% pension sharing order produces a fair outcome here.[45]Accordingly, my order will be that:-(i) The Bristol property will be transferred to the wife.(ii) AB will (at the husband’s election) either be transferred to him or to be subject to an order for sale in which he will have conduct of the sale and will receive 100% of the net sale proceeds.(iii) The husband will pay a lump sum to the wife of £724,654. I see no reason why that should not be paid forthwith, and I suggest he has 28 days to pay it, failing which interest will run at the High Court Judgment Debt rate.(iv) There will be a pension sharing order for 27.5% of the husband’s Quilter SIPP. The wife will cover 27.5% of the pension sharing charges, while the husband will be responsible for the remaining 72.5%.(v) There will otherwise be a clean break.[46]I did not receive any submissions from Counsel on costs issues on the basis of alternative outcomes; but in view of the fact that the outcome of the case is somewhere between the two positions (the husband offered half of the non-pension assets and a pension sharing order of 8%; the wife sought half of the non-pension assets and a pension sharing order of 44% or a 38% pension sharing order and an extra lump sum), and in the context of the starting point of no order as to costs under FPR 2010 Part 28, I would like to give a provisional indication that the right order here is that there should be no order as to costs. If either side wishes to argue otherwise I will receive written submissions in the first instance.[47]The only other issue I need to decide is the issue of chattels. The vast majority of the chattels issues were agreed between the parties and only a limited number of them was I asked to determine. I have listened to what each side said about this in their oral evidence and my decision (albeit fairly arbitrary) is as follows:- ITEM TO BE RECEIVED BY William and Anne perfect oil paintings To be retained by the wife Georgian Silk Needlework To be retained by the wife Kyffin Williams Watercolour To be retained by the wife Charles Sim Mottram Watercolour To be retained by the wife Jack Jones Charcoal street scene To be retained by the wife Antique Needlework Map To be retained by the wife Julie Cockburn framed egg artwork To be collected from storage by the husband Georgian Irish Cupboard To be collected from storage by the husband Reg Gammon Beach scene watercolour To be retained by the husband Table lamps & shades To be divided by agreement[48]This is my decision and I invite Counsel to produce a draft order which matches these conclusions. I would ask that this should be done within 14 days and, if there are outstanding disputes, a report should be made to me setting out what the disputes are by the end of that 14 day period. I would accordingly request to have a response not later than 12 noon on 2nd February 2026.[49]I am formally handing down this judgment by way of email on 19th January 2026 and the appeal period will run for 21 days from that date.[50]Subject to any further submissions either party may wish to make, I propose to publish this judgment in anonymised form on The National Archives and invite Counsel to agree an anonymised and redacted version of this judgment for publication to prevent the identification of the parties by any reader; but allowing the reader to understand the decision and the reasons for it. HHJ Edward Hess Central Family Court 19th January 2026 LATER

HHJ Edward Hess

[51]Subsequent to sending out my judgment, and pursuant to paragraph 46 above, I have received detailed submissions from each counsel on costs. The wife has sought a costs order but the husband has been content to go along with my provisional indication of no order as to costs (albeit saying that he has a better case on costs than the wife). Although I have admired the tenacity and articulacy of the submissions, I have in the end not been persuaded to change my initial view that the fair outcome here is for me to make no order as to costs. In reaching this conclusion I have been cognisant of the FPR 2010 Part 28 starting point of no order as to costs and also that the eventual outcome was between the two open positions and the result had the feel more of a ‘score draw’ than a win for either party, each party succeeding on some issues but not on others. Further, also in the context of FPR 2010 Part 28, I have not been persuaded that I should make a separate or distinct order in relation to the relatively small costs incurred in each counsel producing written submissions on costs.[52]Counsel have agreed an anonymised version of my judgment in accordance with paragraph 50 above which I am content to adopt for publication purposes. Neither party wishes the judgment to appear without anonymisation and redaction and I see no reason why I should override this position.[53]With the approval of Peel J, I certify that this judgment may be cited (in the context of the decision on pension apportionment and matrimonialisation) in accordance with the Practice Direction on the Citation of Authorities [2001] WLR 1001 and Guidance given by the President of the Family Division dated 24 February 2025 under the heading Citation of Authorities: Judgments of Circuit Judges and District Judges. HHJ Edward Hess Central Family Court 3rd February 2026