Locations we serve
Locations we serve
Locations we serve
Other Services
020 7404 9390
Available 24 hours

Jones v Jones

The case of Jones v Jones [2011] EWCA Civ 41 concerned the value of a business in relation to matrimonial proceedings.

The parties had met in 1996 and separated in 2006. When they married, the husband owned a business worth around £2 million. By the time they had separated, it was worth £12 million, but was sold the following year whilst the proceedings for financial settlement were under way, with a net profit of £25 million. In the husbands Form E affidavit, he had stated that the value of his company was £3 million, which was later held to be a dishonest estimation as he would have known at that time that he was going to receive at least £20 million, given that he was in active negotiations for its sale.

In the High Court, Charles J awarded the wife £5.4 million on a clean break basis. He determined that 60% of the net proceeds represented what the husband had brought to the marriage and was therefore a non-matrimonial asset which should not be shared. The remaining 40% was shared equally, and the wife was also awarded an additional sum to cover her costs. The wife appealed, arguing that she should be awarded 40% (£10 million).

The appeal raised the question of how the proceeds of a sale of a company, which had been brought into and built up over the course of a marriage, should be treated by the courts when deciding a financial settlement.

The husband had set up his business 10 years prior to the marriage, after 19 years of working in the oil and gas industry. This previous experience likely contributed to his business success. On this basis, he argued that a departure from the sharing principle was justified. He offered the wife £5 million, which was calculated by looking at the increase in the business value from the start of the marriage until the separation, and then dividing the difference equally. The wife rejected this.

In the Court of Appeal, Wilson LJ held that Charles J had wrongly placed significant capital value on the husbands earning capacity, thereby capitalising it and treating it as a non-matrimonial asset. Whilst the earning capacities of parties will be considered when deciding a financial settlement, Wilson LJ held that a partys earning capacity should not be held to be an asset in of itself.

The court also held that the latent potential of the business at the start of the marriage should be considered as a springboard in the valuation. Therefore, Wilson LJ doubled the expert valuation of £2 million to £4 million to reflect this latent potential or springboard. This was then increased to £9 million to take into account the business passive growth, which was determined by reference to the FTSE All Share Oil and Gas Producers Index. This meant that the proper valuation for the company at the start of the marriage was £9 million, rather than £2 million. On that basis, the court held that the matrimonial portion of the business should be valued at £16 million, to reflect the net increase in the business value over the course of the marriage, and divided equally. Wilson LJ then tested this outcome against his overall view of fairness to both parties. He considered that the wifes claim of 40% would be unfair to the husband, and a fair bracket was 30-36%. An award of £8 million amounted to 32% of the net profit of £25 million, and so survived this test.

This case is an example of the court taking a more mathematical approach when considering the division of assets in financial proceedings. It also provides useful insight into how the concepts of passive growth and springboard may be used to value a business.

To learn more about how businesses are valued in divorce proceedings, read our guide here.

If youre considering or going through a divorce, click below for a free initial consultation with one of our expert divorce solicitors.


The information on this website is intended as a guide and does not constitute legal advice. Vardags do not accept liability for any errors in the information on this website, nor any losses stemming from reliance upon the statements made herein. All articles and pages aim to reflect the legal position at time they were published, and may have been rendered obsolete by subsequent developments in the law. Should you require specialist advice, tailored to your situation, please see how Vardags can help you.


Ayesha Vardag

Founder & President Ayesha Vardag Founder & President Divorce & Family
“Ayesha Vardag - Britain's top divorce lawyer.” 
The Telegraph

Stephen Bence

Chief Executive Officer Stephen Bence Vardags CEO
“Dr Stephen Bence is a financial genius.” 
Lewis Marks KC

David Lister

Senior Partner - Divorce & Family David Lister
“Brilliant with a real spark which clients love” 
Legal 500
This site uses cookies. Find out more. Use of this site is deemed as consent.   OK   CUSTOMISE