In Michael v Michael (No 3) [2025] EWFC 245, His Honour Judge Hess dealt with the tangled web of asset valuation, liquidity, tax exposure, and non-matrimonial property in a case where the wife emerged with over £15 million—but still raised grounds of unfairness.
This is a case that reminds us how complexity doesn’t disappear with wealth—it just changes shape.
- Illiquidity: The Risk of ‘Paper Wealth’
The wife’s complaint was rooted in the fact that the majority of her award was illiquid—tied up in company shares and private assets—while the husband retained greater accessible cash. The court acknowledged that illiquidity could pose real-world difficulties, but ultimately found that in the context of such large sums, the imbalance did not render the award unfair.
The court is unlikely to accept illiquidity as a basis to disturb an otherwise generous settlement—especially when the party has received many millions, even if not immediately spendable.
- Tax Risk: Hypothetical or Real?
The wife raised concerns over latent tax liabilities associated with her share of the business assets. The court reiterated the well-established principle: speculative tax risks won’t generally reduce the award unless there is a clear and quantifiable liability.
Myerson v Myerson [2009] EWCA Civ 282 remains good law: parties must live with the ups and downs of asset valuation, especially where shares are retained as part of the agreed or ordered outcome.
- Valuation of Private Companies
A significant theme in the case was the valuation of a private business—standard fare in HNW divorces. Notably, the court endorsed the single joint expert’s conclusions, and rejected the idea of a second valuation, in line with the Daniels v Walker principles. The dispute centred not just on quantum, but on the structure of how business assets were to be divided or retained.
- Non-Matrimonial Assets and Contribution
A recurring argument from the husband was that certain business interests and inherited property fell outside the matrimonial pot. The judge acknowledged the concept of non-matrimonial property but found that over such a long marriage, and due to the intermingling of finances, much of the distinction had become blurred.
- Overall Fairness in Ultra-HNW Settlements
The court took a wide-lens view: although the wife received just under 40% of the overall wealth, she was awarded £15.25 million in assets—a sum that exceeded her assessed needs by some distance.
This underscores the principle that “needs” are not capped at bare necessities in high-value cases, but also that sharing may still be moderated where non-matrimonial property dominates the asset base.
Conclusion
Michael v Michael is not groundbreaking, but it offers a valuable reaffirmation of core financial remedy principles:
- Fairness does not demand equality in every scenario.
- Illiquidity and hypothetical tax should be carefully evidenced.
- The court will balance contributions, needs, and asset origin—but not at the expense of pragmatism.
A strong case to cite when clients equate perceived imbalance with unfairness—especially when the sums involved are comfortably in the eight-figure bracket.
