In a recent Court of Appeal case, Lord Justice Ryder rejected a wife’s appeal to include expert valuation evidence in her forthcoming divorce proceedings.
The eventual settlement may be one of the largest ever in the UK, such is the wealth of the couple involved. Mr Hohn is a highly successful hedge fund manager, and the couple’s assets reportedly total many millions.
The particular assets of concern to this appeal were a number of so-called ‘management entities’ – effectively companies – used by the husband to channel his income from management of the hedge fund. He insists these entities have a total value of approximately £63 million ($109 million), while his wife believes they actually be worth hundreds of millions more.
In rejecting the wife’s appeal Lord Justice Ryder said:
“The valuations sought in this case would likely be theoretical. It would not be a valuation of assets available for distribution between the parties”.
The Lord Justice took issue with the timing of the wife’s claim: the former couple were but a few months from their scheduled final hearing date and there had been ample opportunity to make the application prior to when it was made. Under the Family Procedure Rules – specifically rule 25.6 – divorcing couples are required to apply for permission to seek expert advice “as soon as possible” and certainly no later than the first appointment in financial ‘remedy’ (settlement) divorce proceedings
“I would accordingly refuse permission and dismiss this appeal.”
In this case, ‘shadow accountants’ had prepared a report (in draft) prior to the wife’s application. It’s a sinister-sounding term but shadow accountants are essential in many cases, particularly higher value ones. They are engaged by one party to provide their expertise (for example, a valuation or views on incomes) but do not produce an expert report to be seen by a court in the proceedings. In Hohn v Hohn it is to be expected that the shadow accountants will continue to provide their expertise in the period leading up to the final hearing so as to assist their client’s Counsel in presenting Mrs Hohn’s case at the final hearing.
Lord Justice Ryder made one point very clear in the judgment. If you believe you may require expert evidence in proceedings then ensure you obtain it as soon as you can, and certainly no later the first hearing or appointment. Failure to do so may has potentially severe financial consequences. Take note!
Read the full judgement here.
Photo by apollonian via Flickr