Culligan v Rosemin-Culligan [2026] EWCA Civ 948

Judgment date: 24 July 2026

https://caselaw.nationalarchives.gov.uk/ewca/civ/2026/948

Moylan LJ giving the lead judgment with Coulson and Arnold LJJ agreeing.

Summary

The Court of Appeal gives clarity on Wells sharing and that it was never really intended for this to be as a ‘last resort’ or that a ‘minority element; it is to be required. The objective is to achieve a fair balance and distribution of liquid (realisable) and illiquid (risk laden) assets in all the circumstances of the case, and this does not necessarily mean there will be a clean break.

Background

There is a fairly intricate background and history to the proceedings within this lengthy judgment primarily on the application of Wells sharing.

This is a summary:

1. W’s application for FR issued on 21 June 2022.
2. Hearing before MacDonald J with judgment and final order made on 1 September 2025.
3. The judge approached his award on the basis of sharing. However, he awarded the W £9.5m of the liquid/realisable assets and £4.1m of the illiquid assets and the H £4.1m of the liquid assets and £9.6m of the illiquid assets. The net effect, in part, was that the H retain 70% of his shares and W 30%.
4. Without focusing too much on the origins and genesis of the H’s shareholding the following is relevant.
5. The W previously had an interest in ELSA company and the court determined that she had reduced the asset pot for tax purposes and added back consultancy fees she received into her side of the asset schedule.
6. The H had shares in a company named SETL Limited. In the background and over the years the H had utilised significant profit made from the sale of Bitcoin towards the family assets, the FMH, towards ELSA, and towards shares in SETL. Up to 2022 SETL was struggling and making a loss.
7. In 2023 SETL was acquired by Colendi (as otherwise SETL would fold). There was a share swap and H received 3.6% of the share capital in Colendi and retained 46% of the shares in SETL.
8. There was an issue as to whether the W could receive an interest in the H’s shares in Colendi. The judge determined it remained unclear if this was achievable.
9. Experts were instructed and to mitigate against some tax it was opined that the W could make elections under USA tax codes and rules to minimise tax implications. W chose not to.
10. H’s shares in Colendi were valued at £19m. However, the expert opinion was that the H could not extract any amount from the Company.
11. The case before MacDonald J also included conduct arguments. W argued that the H had been secretive with his unilateral actions in the sale to Colendi. This was not found to be conduct; however, the judge would later rely on this with distribution of the assets later in his judgment. The judge did take the W’s conduct into account with her sale of ELSA and added back her consultancy fees over four years.
12. The judge found the total wealth, including the £19m Colendi shares, to be £27m. The judge then approached ‘a fair distribution of assets’ on the basis of his interpretation of Wells v Wells. The judge then referred to Versteegh v Versteegh [2018] EWCA Civ 1050, [2019] 2 WLR 399 (‘Versteegh’). He summarised the effect of that case, at paragraph 103, as being ‘that ‘Wells sharing’ will be a last resort and should only comprise a minority element of the award’ (emphasis added). He then repeated this: ‘[104] The view of the Court of Appeal in Versteegh that Wells sharing will be a last resort and should only comprise a minority element of the award was expressed in the context of illiquid and risk laden assets that could not be valued accurately or at all.’ He also noted that ‘considerations of fairness operate both ways’ before adding, as relevant considerations: ‘if the illiquid or risk laden asset has been built up from matrimonial funds in an open manner during the course of the marriage and is capable of being reliably valued, there may be a stronger argument for the risk and the potential reward to be shared more equally. To this end, the circumstances by which the asset in question came to be illiquid or risky, and the reliability of any valuation that can be achieved in respect of it, may also be relevant when evaluating whether and, if so, to what extent it is fair for the illiquid or risky asset to be shared.’
13. The judge found that the Colendi shares could not be shared and the fairest way was for the W to receive contingent lump sums. The judge then went on and stated: ‘On the evidence before the court, I am satisfied that the wife was not consulted by the husband before he dealt in the way that he did with the substantial matrimonial asset that was SETL Limited, rendering that matrimonial asset illiquid and subject to increased risk … [110] In my judgment, the combined effect of the matters set out above is that there must be some sharing of the illiquid Colendi asset, although the wife’s share should be kept to the minimum amount required to ensure fidelity to the principle of fairness. In addition to the difficulties inherent in ‘Wells sharing’ summarised above, I am satisfied that it is fair for the husband to bear the larger share of the consequences of having, without consulting the wife, converted his shareholding in SETL Limited, representing close to half the matrimonial assets, into an illiquid minority interest in a multinational corporation.

The law

There is an extremely helpful overview on the law related to what is commonly referred to as Wells sharing and also the court’s approach to effect a clean break in circumstances where there are considerable illiquid assets whether that be by way of share capital, investments or held on trust. See paragraphs 54–68. Of note it is helpful to rehearse the following:

‘[55] I would, however, start by observing that it is not challenged that, when the court is determining its award, it must take into account the nature and quality of the respective assets that each spouse will retain. In Martin v Martin, my judgment (with which Simon and Coulson LJJ agreed) dealt with a submission, at [80], which had challenged the “concept of assets having variable degrees of risk” by contending that “cash in a bank and shares in a private company have the same level of risk and that the only question for the court is the reliability of the valuation of the latter”. In dealing with this submission, I referred to a number of authorities including Versteegh in which Lewison LJ had said, at [185]:
 
‘… the difference in quality between a value attributed to a private company on the basis of opinion evidence and a sum in hard cash is obvious.’
 
This ‘difference in quality’ meant that, at [94], this ‘is a relevant factor when the court is determining how to distribute the assets between the parties to achieve a fair outcome’.
 
[56] As a result, I rejected the submission challenging the concept of risk and concluded, at [85]:
 
‘that … assets have different levels of risk; and (b) … as a matter of principle, the court must take this into account when applying the sharing principle.’
 
Adding, at [93]:
 
‘… the broad choices are (i) ‘fix’ a value; (ii) order the asset to be sold; and (iii) divide the asset in specie: at paras [34] and [195]. However, to repeat, even when the court is able to fix a value this does not mean that that value has the same weight as the value of other assets such as, say, the matrimonial home. The court has to assess the weight which can be placed on the value even when using a fixed value for the purposes of determining what award to make. This applies both to the amount and to the structure of the award, issues which are interconnected, so that the overall allocation of the parties’ assets by application of the sharing principle also effects a fair balance of risk and illiquidity between the parties. Again, I emphasise, this is not to mandate a particular structure but to draw attention to the need to address this issue when the court is deciding how to exercise its discretionary powers so as to achieve an outcome that is fair to both parties. I would also add that the assessment of the weight which can be placed on a valuation is not a mathematical exercise but a broad evaluative exercise to be undertaken by the judge.’ (emphasis added)
 
In terms of the weight that can be placed on valuations of private companies, there are a number of factors which can be relevant to this, such as those referred to by Peel J in HO v TL [2023] EWFC 215, [2024] 2 FLR 175, at [23].’
 
[63] The judge’s approach was clearly significantly based on his analysis of, what he considered to be, the ‘view of the Court of Appeal’ in Versteegh. It is, therefore, necessary to consider the passages relied on by the judge in some detail. In that case, counsel for the wife had submitted, at [144]:
 
‘that whilst Wells purports to recognise that a situation may arise where a business cannot be valued and, therefore, the right course is the transfer of an interest in the business to the wife, it is an option only rarely, if ever, adopted due to the wholly unsatisfactory outcome which is the result. The views expressed by the Court of Appeal in Wells he submits should be regarded as being in the context of a ‘a one off case’ in which, in any event, the court did not even adopt its own suggested alternative outcome.’
 
[64] This submission was dealt with by King LJ in a passage relied on by the judge:
 
‘[151] I fully accept that the making of a Wells order is something that should be approached with caution by the court and against the backdrop of a full consideration by the court of its duty to consider whether it would be appropriate (per s 25A of the MCA 1973), to make an order which would achieve a clean break between the parties. I do not accept however that Wells was a wholly singular case and should be regarded as such by the courts: see for example GW v RW (Financial Provision: Departure from Equality) [2003] EWHC 611 (Fam), [2003] 2 FLR 108 and WM v HM (Financial Remedies: Sharing Principle: Special Contribution) [2017] EWFC 25, [2018] 1 FLR 313.’
 
[65 … ] [196] Mostyn J returned to the theme in WM v HM (Financial Remedies: Sharing Principle: Special Contribution) [2017] EWFC 25, [2018] 1 FLR 313, in which he said at para [24]:
 
‘Generally speaking, a Wells sharing arrangement (see Wells v Wells [2002] EWCA Civ 476, [2002] 2 FLR 97) should be a matter of last resort, as it is antithetical to the clean break. It is strongly counterintuitive, in circumstances where one is dissolving the marital bond and severing as many financial ties as possible, that one should be thinking about inserting the wife as a shareholder into the husband’s company ... However, Wells sharing is not so objectionable if it only applies to a minority element of the claimant’s award.’’

Of importance to practitioners on this issue the following is highly relevant with the Court of Appeal now explaining and interpreting key elements of Wells sharing as follows:

‘[66] It can be seen that the expressions adopted by the judge of “last resort” and “minority element” came not from the judgments in the Court of Appeal but from the passage quoted by Lewison LJ from the judgment of Mostyn J in WM v HM. I would note that an appeal from that decision was allowed, in part, including because Mostyn J had “failed to consider whether his proposed award ‘achieved … a fair division of both the copper-bottomed assets and the illiquid and risk laden assets’“, Martin, at [138]. I would also note that Lewison LJ merely quoted these passages without comment. What was said in WM v HM clearly did not form part of the ratio in Versteegh and, indeed, any analysis would have had to address the difference between what was said in the two quoted passages, namely ‘standard fare’ and ‘last resort’.
 
[67] In my view, there is no principle that Wells sharing is only to be included as part of an award as “a last resort” nor, indeed, that it should only comprise a minority element. I would agree with Mr Southgate’s submission that the former is not a helpful expression. I would add that there is, equally, no principle that it should be “standard fare” having regard to the well-recognised disadvantages of Wells sharing and to the potential for it to be inconsistent with a clean break. I would repeat King LJ’s observation in Versteegh, at [151], that “the making of a Wells order is something that should be approached with caution” and with “full consideration by the court of its duty to consider whether it would be appropriate” to effect a clean break so that, as phrased by Mr Southgate, the parties are not left joined together financially in any material way if that can be fairly achieved. Much will, of course, depend on the facts of the particular case.’ [My emphasis added to these two crucial paragraphs]

The decision

The appeal was allowed for the following non exhaustive reasons:

1. It was an error to consider Wells sharing as a last resort and should only comprise a minority element.
2. This impacted on the decision of a fair balance of risk and illiquidity. The judge did conclude that the considerations of fairness operate both ways but did not then apply the fair distribution of illiquid capital equally to the H.
3. Despite not initially considering the H not consulting the W about the sale to Colendi as being conduct it was wrong to then penalise the H for the same. The reality on the evidence was that but for the sale of Colendi, SETL’s future was significantly at risk.
4. The evidence also did not support a finding that the sale by the H of SETL to Colendi did not provide anything other than a significant value.
5. The evidence did not also support a conclusion that the Colendi shares were subject to an increased risk when compared with the SETL shares.
6. It would not be in accordance with the Overriding Objective to remit the matter back when the Court of Appeal can consider afresh.
7. The issue of achieving a clean break was not feasible and not particularly relevant in these circumstances. The shares were matrimonial to which the sharing principle applies. They were and are an illiquid asset to which risk attaches. The position of the parties was asymmetric in the sense of future risk and therefore the Court of Appeal could see no justification for dividing the Colendi shares (or their value) other than equally between the parties. ‘Any other distribution would not … effect a fair balance of risk and illiquidity.’ The Deed of Covenant to be amended for the W to receive 50% of the H’s shareholding in Colendi and the FMH which was valued at £7m be sold and the H to receive 40.4% of the net proceeds of sale to be a fair readjustment of the realisable (copper bottomed) assets.

This judgment has been certified as citable pursuant to the Practice Note (Citation of Cases: Restrictions and Rules) [2001] 1 WLR 1001.