In BM v MB & Ors [2025] EWFC 129, Fiona Hay (sitting as a Deputy High Court Judge) presided over a case that had it all: dynastic business assets, disputed share transfers, intergenerational family conflict—and over £1.1 million in legal fees.

It is a masterclass in how financial remedy litigation can escalate dangerously when asset protection measures intersect with family breakdown.

The Setup: Complex Structures and S.37 MCA 1973

The case centred around a longstanding family business, held by the husband (H) and various family members. Crucially, just months before the parties separated, H moved:

• 25% of his shares in the business into a discretionary trust for the benefit of the children;
• Multiple parcels of land into a Limited Liability Partnership (LLP) structure.

The wife (W) argued these were calculated attempts to defeat her financial claims, and sought to set aside the transactions under section 37 of the Matrimonial Causes Act 1973—a provision empowering the court to unwind dispositions made to frustrate financial relief.

What the Court Found

Judge Hay found that although the trust and LLP structures had been under discussion for some time, their implementation closely aligned with the breakdown of the marriage. Crucially:

• The wife was not fully informed of the transfers;
• The husband failed to demonstrate that the transactions weren’t motivated by a desire to reduce W’s claim;
• While pitched as inheritance tax planning, the timing and secrecy raised red flags.

The court set aside both the share transfer to the trust and the transfer of land to the LLP under s.37.

The Cost of Litigation

One of the most sobering aspects of the case was the scale of legal costs:

• W: £480,248
• H: £392,642
• H’s mother and others: over £237,000 combined

As the judge noted, the dispute “could and should have been resolved” without this financial destruction. She quoted Baroness Hale in Sharland v Sharland [2015] UKSC 60, who emphasised that adversarial financial disputes are corrosive not only to wealth but to the family itself.

The damage here extended beyond finances: the adult children were drawn into the litigation, cross-examined against their parents, and the family fabric unravelled.

Lessons for Practitioners

1. Disclosure still rules: Attempts to ring-fence assets before or during divorce must be transparent. Even long-considered tax plans will be scrutinised if implemented around separation.
2. Timing matters: The court will look closely at when and why transactions occurred. Close proximity to marital breakdown may indicate intention to defeat financial relief.
3. Litigation restraint is key: The case is a warning against unbridled adversarialism, especially when adult children are involved.
4. Proper planning requires proper process: H's failure to inform or include W, even nominally, undermined his case. Asset protection strategies must anticipate future scrutiny.
5. Section 37 remains potent: Though rarely invoked, s.37 can unravel sophisticated structures where they frustrate fairness.

Final Thoughts

BM v MB is not just about trusts and land transfers. It’s about what happens when private family succession planning collides with public duties of disclosure and fairness. While the structures were technically competent, they failed on transparency and timing.

For family lawyers, the case is a reminder: substance, not just form, governs outcomes—and that litigation, left unchecked, can cost more than it’s worth.