BC v BC (No 2) (Matrimonialisation; Division of Shareholding; Provision for Debt) [2026] EWFC 37

Judgment date: 20 February 2026

https://caselaw.nationalarchives.gov.uk/ewfc/2026/37

Garrido J. Final hearing in financial remedies proceedings, considering matrimonialisation and whether there should be a departure from equality due to the shares’ original non-matrimonial character.

Introduction

The parties married in 2008 and separated in 2024; [2]. There was one 17-year-old child of the marriage; [2]. The parties had spent a total of £2,820,445 in legal fees and disbursements within the proceedings; [2].

The parties’ cases: computation

The parties could not agree on the computation of their net wealth; [4]. Garrido J determined it to be £51.5 million (rounded); [4]. Of this sum, approximately half was represented by a shareholding in a listed company (‘BB’) of which H was the executive chairman; [4]. Garrido J noted cash-flow limitations caused by the fact that the bulk of the balance was held in real property or pension assets and by H’s debt to HMRC in respect of unpaid CGT; [4].

The parties’ cases: needs and sharing

The parties accepted that their needs would be met by operation of the sharing principle; [5]. W sought equality on the basis that the parties’ net wealth was wholly matrimonial; [5], [6]. She argued that there was a period of seamless cohabitation from 2005 until the parties married in 2008, during which a company (‘CC’) was floated and H’s shareholding in it was valued at approximately £10 million; [6]. W argued that, regardless, the value of the shares was realised in 2014 and that practically the whole sum had been treated as joint funds; [6].

H sought a 55/45 split in his favour, arguing that there was no increase in the value of the CC shares when the parties were cohabiting, and that even if the sum had been matrimonialised the court should depart from equality to reflect his unmatched contribution; [5], [7].

Mechanism for sharing

Some transfers of real property had been agreed; [8]. W objected to the transfer of the parties’ French property to H; [8]. W sought an outright transfer into her name of half of the BB shares held by H personally, and a pension sharing order for half of the remaining BB shares held in a small self-administered scheme; [9]. She was willing to give reasonably necessary ‘drag and tag’ undertakings; [9]. W did not want a share in H’s SIPP as she argued that the outcome of a pension sharing order would be uncertain; [10]. W additionally sought whatever balancing lump sum payment that would fulfil an equal division of the parties’ net assets; [11]. She accepted that she was liable to account to H for half of his HMRC debt; [11].

H sought retention of the French property; [12]. He resisted a transfer of BB shares on the ground that it would damage the share price because the market’s confidence was substantially based on his personal control of a significant proportion of the shares; [13]. H asserted that the reaction of retail investors (who held 40% of the shares) was unpredictable; [13]. H proposed that he should hold W’s beneficial interest in accordance with undertakings so that she would receive the full benefit of the shares in due course; [13]. H asserted that W’s proposed ‘drag and tag’ undertakings would limit her envisioned autonomy; [13].

The legal framework

Garrido J considered s 25 Matrimonial Causes Act 1973; [14].

Concerning H’s proposed departure from equality, Garrido J considered Peel J’s analysis at [40]–[46] in VV v VV [2023] 1 FLR 170 of the law on pre-marital cohabitation; [15]. Garrido J examined the Supreme Court’s words at [47]–[55] of Standish v Standish [2025] 2 FLR 489, concerning matrimonial property and the concept of ‘matrimonialisation’; [18].

On the issue of sharing H’s holding in BB, Garrido J considered the decision in BR v BR [2025] EWFC 88, in which a buy-out of W’s entitlement to H’s shareholding was preferred over dividing the shares in specie because, per Peel J at [96], ‘a clean break is desirable’; [19]. Garrido J noted, however, that the case was unhelpful because he had to decide whether to divide the shares in specie (with ‘drag and tag’ provisions) or to leave them in H’s ownership until H decided that W should benefit; [20].

Concerning how the HMRC debt should be paid, Garrido J concluded that the decision in Fisher-Aziz v Aziz [2010] EWCA Civ 673 (that, where, a wife in occupation of the final matrimonial home seeks the transfer of the property instead of the proceeds of sale, ‘she should ordinarily succeed’, [6]) was unhelpful; [21]–[22].

Cohabitation

Garrido J relied upon Williams J’s description of cohabitation at [68] of IX v IY (Financial Remedies: Unmatched Contributions) [2018] EWHC 3053 (Fam), [2019] 2 FLR 449, namely that ‘the mere fact that parties begin to spend time in each other’s homes does not of itself … equate to marriage’ and that ‘the court must look to an accumulation of markers of marriage which eventually will take the relationship over the threshold into a quasi-marital relationship’; [31].

Garrido J therefore concluded that the parties’ cohabitation began in early 2007, once H had met W’s children and the parties were in the process of purchasing their eventual matrimonial home; [32]. Their ‘joint emotional and financial status’ was ‘cemented’ by their engagement and the establishment of their joint bank account; [32]. Garrido J rejected W’s case for earlier cohabitation on the basis of W’s sole purchase of a property for herself and her children in 2006; [33]. His conclusion was reinforced by W’s ‘confusing presentation of her financial circumstances and living arrangements’; [34].

A 2011 letter from the parties to a solicitor, in which they had declared that their cohabitation had commenced in 2005, did not alter Garrido J’s conclusion, due to the uncertainty of the letter’s authorship and its purpose; [35].

The matrimonial/non-matrimonial status of the CC shares

The shares were initially non-matrimonial, because H held them before cohabitation; [36]. Garrido J noted that the question of whether the growth of the value of the shares throughout 2007 was a product of joint matrimonial endeavour was likely of ‘little importance’ given that H did not realise any money from his shares until 2014; [37], [38]. That the shares were pledged to borrow £6.5m, which was paid into the joint bank account and spent on acquiring a London flat and the Caribbean property, and on renovations to matrimonial property and family expenses, reinforced their matrimonialised status; [38], [39]. Garrido J concluded that the parties had treated the realised value of the CC shares as a shared resource; [39].

Should there be a departure from equality?

Garrido J determined that the shares’ original non-matrimonial character should not be recognised by a departure from equality; [40]. He relied on [50] of Standish, concluding that ‘there is no room for a hybrid treatment of assets that have been matrimonialised’ and that they must be ‘subject to the same normal rule of equal sharing as other matrimonial assets, and the same limited justifications for departure’; [41].

Effecting equal division

Garrido J ordered the sale of the French and Caribbean properties in order to meet the HMRC liability, with the balance to be divided equally between the parties; [47]. He concluded that failing to make provision for the HMRC liability ‘risks embroiling the parties in a fresh dispute’, and the sales were justifiable because the properties were ‘incidental luxuries’; [46].

Garrido J preferred W’s solution to the division of the BB shareholding; [54]. He concluded that W had no interest in destabilising the company or H’s position within it, and that transfer risks could be minimised through ‘drag and tag’ provisions; [52], [56]. The judge did not accept H’s case that such provisions would merely give W illusory autonomy; [53]. H was ordered to transfer 50% of the shares he held personally; [55]. Pension sharing orders for 50% of the BB shares in the SSAS, and for the remainder of the SSAS, were made for W; [55], [56].

Regarding the SIPP, Garrido J observed that fairness dictates not only an equal division of the parties’ wealth but, ideally, equal divisions within asset classes; [58]. A pension sharing order was therefore made for W to receive 50% of the SIPP; [60].

W to take responsibility for the joint Caribbean credit account and the Caribbean liabilities; [61]. The remaining joint assets to be divided equally; [61]. H ordered to pay a balancing lump sum to W to fulfil equal division; [62].

The parties to contribute equally to a budget of £65,000 for their child’s upkeep (so H to pay £32,500/ annum in child periodical payments); [66].