GHJ v FDS & Anor

1. I am concerned with the marriage of GHJ and FDS. I will refer to them without disrespect as the husband and the wife, for ease of reference, not least because there is also a second respondent (“BVC”) who was formerly a director and shareholder in a limited company with the husband.

2. On 15 th , 16 th and 17 th December 2025 I dealt with a preliminary hearing relating to two discrete preliminary issues namely: (a) The wife’s application under s37 Matrimonial Causes Act 1973 in respect of a transfer of shares in the aforementioned limited company, (“Company A”) from the husband to BVC. This transfer occurred on 1 November 2023. (b) Whether certain monetary advances are gifts or loans, and if loans, whether they are ‘hard’ or ‘soft’ loans.

3. The matter is listed for a three-day final hearing in March 2026. The consequence of the determination of the preliminary issues will be to determine the shape of the ES2 for the final hearing. Preliminary Matters (BVC’s attendance and Special Measures)

4. Until the weekend before the preliminary hearing, BVC (who it has to be said has been throughout a reluctant litigant) acted as litigant in person. He was formally joined at the PTR, having previously declined an invitation to intervene. I understand that, although I never saw any formal application, he had on 9 December 2025 asked the parties’ solicitors via email for an adjournment of the preliminary hearing as he was due to be in Dubai where he often works on 15-17 December.

5. Clearly this was never agreed (Ms Hampton in her opening note pointed out that BVC had been served with the order joining him and notice of hearing and had responded by filing his witness statement, so had been aware of the three-day preliminary hearing for at least eight weeks). There was some talk of him appearing by CVP from Dubai or even by telephone.

6. As I say, despite being mooted, no application was made to adjourn, and it seems that BVC flew back from Dubai on Thursday 11 December. He was not present at court on day one (15 December) having hoped to have given evidence by CVP from the UK on day 2 rather than attend court. This was not taken any further, and he attended on day two, but only to give his evidence. He did not stay after having given this evidence and did not attend on day three when submissions were made on his behalf by Ms. Wills who had effectively stepped into the breach extremely late in proceedings in order to help BVC prepare for the hearing. To the extent that BVC could have been present throughout had he chosen, I do not find that his choice not to attend other than when he gave his evidence prejudiced him- he was represented by counsel.

7. Throughout the hearing, the wife was screened from the husband. The fact of special measures did not in my view affect the way in which she gave evidence or otherwise participate in proceedings. Background and issues to be determined.

8. The husband is now 45, and the wife is now 42. They were married in July 2007, separated in October 2023 and a final order of divorce was granted on 9 September 2024. The husband works in the financial services sector. The wife works in the beauty and personal care sector. There are three children of the marriage, privately educated. There have been contested private law proceedings, now concluded by an order dated 10 June 2025 and the children spend time with both parents without restriction.

9. Of particular relevance to the present application is a text via Instagram sent by the wife on 29 October 2023 to BVC’s wife in which she made allegations that the husband was engaging in criminal activity and sexual activity outside of the marriage and was abusing drugs and alcohol. This text took centre stage during a fair proportion of the hearing. The husband denies all of these allegations and in respect of drug use at least, he is able to rely on a drug test obtained within the private law proceedings which shows that between December 2022 and December 2023 he tested negative. That period encompasses the date on which the wife’s text to BVC’s wife was sent. The court is not asked to make findings as to the truth or otherwise of the wife’s allegations, but the husband maintains that the text is evidence of the wife’s vendetta against him.

10. Company A is a lead-generation business which via its online presence generates mortgage leads from potential clients, packages them and sells them to mortgage brokers. One of the brokers, indeed probably the biggest recipient of leads from Company A was the husband’s own brokerage, Company B. The husband is the sole director and 100% shareholder in Company B. There is a third company which remains as to a 50-50 shareholding in the joint names of the husband and BVC, being Company C. This is on the husband and BVC’s case a dormant company established to explore licensing of the software developed for Company A

11. Although this is a judgment in relation to preliminary issues, I will set out by way of context a summary, in very approximate figures (there being some valuation differences) just to set out the financial landscape, taken from the ES2 for the preliminary hearing.

12. In terms of real property equity or cash representing the same there is: • Family home equity (joint) £120,000. • The Auction Property (joint), a mortgage-free property which was bought at auction and which featured heavily in the preliminary issue hearing, £725,000. It was intended before the divorce that this property (which is a substantial detached property in a desirable area of X Town, but in need of substantial renovation as I understand it), was to become the new family home. • Remaining proceeds of sale of Property A (joint) £57,000. • Property B (joint) £124,000. • Spanish apartment £129,000. Total £1,155,000 .

13. There is negligible cash or other investments, but each party owns personal chattels not exceeding £28,000. The wife has small pension provision of £37,000, the husband has nothing.

14. The husband owns the limited company business, Company B, valued at £65,000 by the wife, nil by the husband.

15. There are debts or alleged debts (some of which featured in the preliminary hearing) whereby the husband asserts he owes £189,000 (wife’s case £5,000) and the wife maintains she owes £138,000 (including her litigation loan). The Law

16. I set out here the relevant part of section 37 , Matrimonial Causes Act 1973 : i. For the purposes of this section “financial relief” means relief under any of the provisions of sections 22, 23, 24, 24B, 27, 31 (except subsection (6)) and 35 above, and any reference in this section to defeating a person’s claim for financial relief is a reference to preventing financial relief from being granted to that person, or to that person for the benefit of a child of the family, or reducing the amount of any financial relief which might be so granted, or frustrating or impeding the enforcement of any order which might be or has been made at his instance under any of those provisions. ii. Where proceedings for financial relief are brought by one person against another, the court may, on the applicaton of the first-mentioned person— (a)if it is satisfied that the other party to the proceedings is, with the intention of defeating the claim for financial relief, about to make any disposition or to transfer out of the jurisdiction or otherwise deal with any property, make such order as it thinks fit for restraining the other party from so doing or otherwise for protecting the claim; (b)if it is satisfied that the other party has, with that intention, made a reviewable disposition and that if the disposition were set aside financial relief or different financial relief would be granted to the applicant, make an order setting aside the disposition; (c)if it is satisfied, in a case where an order has been obtained under any of the provisions mentioned in subsection (1) above by the applicant against the other party, that the other party has, with that intention, made a reviewable disposition, make an order setting aside the disposition; and an application for the purposes of paragraph (b) above shall be made in the proceedings for the financial relief in question. iii. Where the court makes an order under subsection (2)(b) or (c) above setting aside a disposition it shall give such consequential directions as it thinks fit for giving effect to the order (including directions requiring the making of any payments or the disposal of any property). (4)Any disposition made by the other party to the proceedings for financial relief in question (whether before or after the commencement of those proceedings) as is reviewable disposition for the purposes of subsection (2)(b) and (c) above unless it was made for valuable consideration (other than marriage) to a person who, at the time of the disposition, acted in relation to it in good faith and without notice of any intention on the part of the other party to defeat the applicant’s claim for financial relief. (5)Where an application is made under this section with respect to a disposition which took place less than three years before the date of the application or with respect to a disposition or other dealing with property which is about to take place and the court is satisfied (a)in a case falling within subsection (2)(a) or (b) above, that the disposition or other dealing would (apart from this section) have the consequence, or (b)in a case falling within subsection (2)(c) above, that the disposition has had the consequence, of defeating the applicant’s claim for financial relief, it shall be presumed, unless the contrary is shown, that the person who disposed of or is about to dispose of or deal with the property did so or, as the case may be, is about to do so, with the intention of defeating the applicant’s claim for financial relief.

17. The black letter law in respect of “gift v loan” is scant, as compared with s37 applications, as much depends on the circumstances of each case in terms of advances asserted to be gifts or loans, and if loans, soft or hard, but counsel helpfully provided me with a short authorities bundle which comprised in respect of S37 : • Kremen v Agrest , and [2010] EWHC 2571 (Fam) • AC V DC and others (Financial Remedy: Effect of s37 Avoidance Order) [2012] EWHC 2032 (Fam) and as to the loans: • P v Q [family loans) [2022] EWFC B9 and • Awolowo v Awolowo and Anor [2025] EWCA Civ 641 .

18. In terms of the section 37 application, the issues that would fall for determination would be: • Jurisdiction : Does the impugned share disposition fall within section 37 ? Put succinctly, can the court make an order? It is common ground in this case that the court can. • Substantive gateway : Was the share disposition (a) likely to defeat the applicant’s claim ( s.37(2) (a)), or (b) made with the intention of defeating that claim ( s.37(2) (b))? This is disputed, the husband and BVC aligning to say not; the wife disagrees. • Third Party Defence : Can BVC establish the s37(4) defence? • Discretion : If the statutory conditions are satisfied under s37(2) , and if BVC cannot establish his statutory defence then, in exercise of the court’s discretion, is it right that the court sets aside the disposition? Again, put succinctly, should the court make an order? The husband and BVC say no, the wife again disagrees. Even if the statutory threshold is met, relief is discretionary. The court must consider what is just and convenient in the circumstances and draw into its consideration whether compensation or adjustment when the final distributive award is made could balance any prejudice. Moreover, the court needs to be alert to the proportionality of setting aside the transaction along with delay in bringing the application (it is common ground that delay features in the present application). Documentary Evidence

19. I was provided with a core bundle running to 497 pages and a supplemental, disclosure bundle of another 1475 pages. In addition, on day two I was shown some disclosure which BVC had made during day one. Each party had made written statements (BVC’s self-prepared as a litigant in person), and there were forms E, replies to questionnaire, and the TL v ML points of claim and points of defence from the husband and the wife. There were written statements from the non-party witnesses.

20. The core bundle also contained the relevant contemporaneous documentation as to the purchase of the Auction Property, and accounts and other documents relating to both Company A and the husband’s company, Company B.

21. In addition, I received detailed opening notes from Ms. Hampton and Ms. Jewell. Ms. Wills had only been instructed very much at the eleventh hour by BVC and had endeavoured over the preceding weekend to help him to put his case in better order. I thank all counsel for their assistance in refining and presenting the issues. Oral Evidence

22. I will summarise the evidence of the six witnesses, from whom I heard.

23. The first witness was the husband. He described Company A as a venture launched with optimism. At inception, he “hoped it would be highly successful,” and acknowledged a passing discussion with a competitor about a potential buy-out which did not proceed because Company A was, in his view, ‘not yet a complete business’. He emphasised that by late 2023 the relationship with BVC had become tense and operationally strained.

24. He attributed Company A’s downturn chiefly to a Google algorithm change which he said took effect “overnight,” causing an immediate drop-off in online leads. His account was that even if he had stayed, Company A would have received “no leads,” and that other brokerages, including his own (Company B), were experiencing similar impacts. He asserted he “could see where it [Company A] was going” and that this was reflected in Company A’s 2024 accounts.

25. The husband told the court that the wife’s text message to BVC’s wife was “the icing on the cake,” describing it as the final catalyst in an already deteriorating situation as between he and BVC.

26. He accepted the share transfer occurred a mere three days after the offending text message. Discussions concerning the transfer were exclusively by phone, he added; there was no contemporaneous written negotiation, and no stock transfer form was retained. He presented the exit as necessary both commercially and personally, asking rhetorically, “How could I focus on rebuilding?” in the midst of both business and domestic upheaval.

27. His evidence was that the transaction linked his exit to writing off the £73,750 debt he owed to Company A (which had been used towards the purchase of the Auction Property), and that no solicitors were instructed to deal with the legalities. The indemnity document later dated 20 December 2023 was said to have been produced by BVC. Initially the husband could not recall if he saw it at the time; he later conceded he “probably would have had a copy” but could not explain his failure to disclose it.

28. Although he had resigned as director, the husband confirmed he was appointed company secretary of Company A on 30 April 2024. He said this role was “in name only” at BVC’s request because he (the husband) was FCA-registered and this helped bolster Company A’s Google credibility.

29. He conceded that Company B and Company A shared the same office address, explaining it as helpful for postal arrangements and online visibility. He acknowledged Company A signage remained on the door and did not remove it but stressed that Company B was the principal occupant of the city centre premises. Regarding payments from Company A to his brother NBV after the share transfer, the husband said BVC engaged NBV—who worked in “tech property and home automation”—to support a pivot away from reliance on Google algorithms.

30. He repeated (presumably based on BVC’s evidence) that Company A was now non-trading and generated no income, describing his exit as prudent to avoid repaying the £73,750 loan. He said he had since focused on Company B, generating business for Company B through paid online advertisements, joint ventures, and receiving remuneration at the “backend of any deal,” rather than relying on Company A-style lead sales.

31. The husband acknowledged his limited disclosure of Company A bank statements, with merely one bank statement produced late after he “found it during a clear-out,” as it was the only paper copy he had. He had said in earlier written evidence that he was nothing to do with Company A anymore so could not obtain bank statements. He also accepted inaccuracies in clauses 9.1.2 and 9.1.3 of the family loan agreements he had produced. He confirmed Company A paid dividends of £24,000 in 2022 and £48,000 in 2023.

32. On the issue of the family advances, the husband accepted that the gift declarations were signed to satisfy conveyancing and lender requirements, describing this as “common practice” because lenders would not- typically will not- accept family loans as part of purchasers’ funding arrangements. He agreed the declarations were signed after the Octopus bridging loan had been withdrawn. He accepted the loan agreement with his father was dated 23 February 2023, thus after the funds went to the solicitors. He agreed that his father was not currently charging the 6% interest reserved in the loan agreement but was “wanting his interest”. He stated the wife knew of the loan documents, notwithstanding she had not signed them due to the urgency of the situation. As to his sister’s advance, he accepted the loan agreement created also post-dated the payment to the conveyancing solicitors and that no interest had yet been applied but maintained both his father and sister could sue to recover. He said he personally did not know about the historic £33,000 allegedly owed by the wife to his father and was unaware of the then solicitors’ letter at the time.

33. He told the court that funds taken from Company B were a loan, not a dividend, because treating them as a dividend would have adverse tax consequences and risk closing his business. He relied on the wife’s texts referring to “paying everyone back” as consistent with his characterisation of a loan that required repayment.

34. Regarding the Company A’s company car, the husband could not recall the precise disposal date but said Company A had taken out the finance, could not afford ongoing payments, and that it was agreed the car would be sold to clear the lease finance.

35. He said he had had no ongoing business discussions with BVC after leaving Company A and minimised any social relationship, stating the families did not visit each other’s homes and he had only seen BVC’s children at the place of worship once.

36. The second witness was the husband’s father, TGB. He stated that he had cashed in three private pensions (into which he had paid since 1980) to provide money to the couple to assist with the purchase of the Auction Property. He said he had previously signed gift declarations for his other children and had in those cases been repaid, implying the declarations did not necessarily reflect the true character of the advances. He told the court that the husband and wife promised repayment within eight weeks. He was stridently adamant the monies in this case were loans.

37. He emphasised his and his wife’s status as pensioners and referred to health issues exacerbated by his involvement in this litigation. He said his only income was £900 per month and that the lack of repayment had materially affected his life (including not having had a holiday in two years).

38. On the alleged £33,000 debt, he accepted there was no written loan agreement, but said that during prior marital difficulties in 2011, the wife’s then solicitors admitted the debt. He had asked for repayment “a few times,” but expressed the familial reluctance to sue one’s children, remarking “why would I spend a hundred thousand pounds on legal fees?”

39. The final witness on day one was the husband’s sister, MKJ. MKJ stated that her text in response to the husband’s enquiry at the time made clear she did not want her assistance to be a gift. She agreed to lend despite initial reluctance and believed the couple had suggested approaching both families for help.

40. She said she did not realise her loan would remain unpaid after over a year. Asked if she would take the husband to court to recover, she answered “ 100% I would take him to court. ” Her evidence framed her advance as a loan with genuine expectation of repayment and a willingness to enforce.

41. BVC was the first witness on day two . He said that Company A “fell off a cliff,” attributing the decline to Google algorithm changes and to the husband’s insufficient contribution to lead-selling, which he considered the husband’s principal role. He produced a spreadsheet with a column for “Company B Leads,” indicating leads directed to the husband’s company Company B. He described internal friction, including dissatisfaction with the employment of an employee (CDS), as contributing to the breakdown.

42. He said that the husband owed Company A £73,750, which he regarded as the value effectively swapped for the husband’s 50% shareholding. He said there were no written negotiations; all was done via the phone. The indemnity was the first written document relating to the exit and was, he said, prompted by breakdown of trust and the desire for a clean break. Initially he said he was not aware the wife could make claims involving the shares; pressed further, he conceded “possibly she could,” and that the indemnity was a logical safeguard.

43. BVC denied that the share transfer was made “in contemplation of divorce,” asserting discussions pre-dated the wife’s message and were driven by a failing business and his perception that the husband was “a passenger” during 2023. He could not recall whose idea the transfer was, but later said the husband offered the shares to him, but he could provide no documentary evidence of negotiations or valuation. He said he did not keep a copy of the stock transfer form.

44. He explained his understanding of Google visibility (stating 0.3 is good, 0.4 is better), and said algorithm changes took about three months to bed in. He acknowledged he remained optimistic in September 2023 despite the update, stating “in business you have to be an optimist.”

45. He confirmed asking the husband to return as company secretary to enhance Google credibility rather than to signal real operational collaboration. He said the city centre address was chosen to “tick Google credibility boxes” rather than rely on an accountant’s registered office. He engaged NBV (the husband’s brother) around “Google paperclip” advertising, which “didn’t work out.” BVC insisted he never told his family he was holding shares for the husband pending the determination of these proceedings, and that there was “no chance” of working with the husband again. He said he currently works in Dubai in “hospitality and tech”, unrelated to Company A, and described Company A as dormant, with dissolution considered. He rejected any correlation between service of the s.37 application and the cessation of income coming into Company A.

46. The wife then gave evidence. She accepted the couple lacked funds to complete the Auction Property purchase and required external funding. She described the Octopus bridging loan, which was offered and then withdrawn, followed by a husband-led application to United Trust Bank. She said she would have been happy to take a commercial loan and that she did not want to pursue the gift route. In her witness statement she described the husband’s assertion that family loans were essential as “entirely inaccurate.” Under cross-examination she accepted she had not fully considered the timeframe when signing her witness statement but maintained that the husband’s position on the necessity of loans was incorrect and still “entirely inaccurate”.

47. The wife maintained the Company B funds that fed into the Auction Property purchase were a dividend, pointing to filed accounts made up nine months after the transfer. She was taken to her messages of 15 May 2023 stating, “we have to pay everyone back,” “going through the motions because we have debt owed to people,” and “we need to pay people back.” Her explanation was that she had just discovered the husband was taking drugs (she later accepted he had tested negative for cocaine in private law proceedings, as mentioned earlier in this judgment), that she was uncomfortable with gifts, and feared the husband’s family were “reverting to loans in order to bring shame on me.” A contemporaneous message “Have you done remortgage?” was said to refer to a Spanish property or another property or properties, not the Auction Property.

48. She accepted that the share transfer meant the husband avoided repaying £73,750 and acknowledged that this sum was now invested in the Auction Property, with the effect that she had retained the benefit but had lost the burden.

49. On the issue of delay, she said she discovered the share transfer by checking Companies House but could not specify the date. She explained the timing of her s.37 application by reference to a change of solicitors, a period as a litigant in person, and the need to secure a litigation loan. She denied tactical timing.

50. She described BVC’s wife as like a friend, given they were wives of business partners, although not “super close.” She said she felt BVC’s wife needed to know and that she wanted to tell “my truth,” anticipating the husband would also be saying things against her. She seemed to accept BVC’s evidence that he does not discuss business issues with his family and acknowledged there is no external evidence that BVC told family he was holding shares for the husband.

51. Having seen BVC’s documents, the wife accepted a dip in Company A’s online visibility due to Google but maintained the continuing downward trajectory was exacerbated by the fact that neither man was substantively working in Company A. She believed that neither would want to work alone in reality.

52. Her Form E listed multiple personal loans (from her aunt, cousin, and sisters for school fees and legal fees) which she distinguished from the Auction Property advances. In particular, a £25,000 loan from her sister VGT funded earlier solicitors’ fees; she said her sister VGT had taken out a loan with Natwest, and the £25,000 represented roughly £20,000 capital plus £5,000 interest. She denied two subsequent transfers to VGT were repayments, stating her sister was helping her manage day-to-day finances during a period when she was struggling, though she accepted there were bank entries showing some ability to manage bills.

53. The final witness was that sister VGT. VGT said she was unaware the Octopus bridging loan had fallen through when she received the wife’s “lend me” request and responded by advancing £50,000. She agreed £50,000 is a significant sum but said it did not affect her living standards given her basic salary of £166,000 and annual bonuses, often exceeding £100,000. She stated there were no text messages after the “lend me” request explicitly confirming the advance as a gift.

54. She offered cultural context, stating that within her community “when we say ‘lend’ it means give.” She further said it was her confident assumption that gifting would be considered normal within the husband’s family as well, although she acknowledged this was not founded on explicit confirmations in the contemporaneous messages.

55. She confirmed a separate loan for the wife’s legal fees (clarifying it was from HSBC rather than NatWest as the Wife had said). As to two £11,000 transfers, she said these were school fees drawn from children’s savings accounts. She explained that she had been paying school fees because the wife was struggling adding pointedly, “I am not a bank you know.” Her evidence distinguished between different forms of familial assistance and implied both generosity and an expectation that funds were used for specified purposes. Closing Submissions.

56. I have summarised the closing submissions of counsel.

57. Ms. Hampton on behalf of the wife submitted there is a marked asymmetry of knowledge: only the husband and BVC have full visibility of Company A’s affairs and of the impugned share transfer. The wife’s access to documents has been limited and, she says, hampered by late and partial disclosure. In particular, disclosure said to underpin the explanation based on “Google algorithms” was provided very late; a single company bank statement emerged two weeks before the hearing; and there was a general reluctance on the part of the husband and BVC to disclose material that would illuminate the transaction.

58. Ms. Hampton submitted that the husband lacked credibility. asserting that the husband has displayed a casual approach to truthfulness, particularly in relation to the execution of what would on his case be false gift declarations. The wife invited the court to treat his assertions in replies to questionnaire— “I am no longer involved and cannot provide anything further”—as demonstrably inaccurate in light of subsequent bank material disclosed and the continued points of contact between him and BVC.

59. The wife invited the court to apply s 37 Matrimonial Causes Act 1973 sequentially. First, under s 37(5) , the husband bears the burden to show that the disposition of his shares was not made with the intention of defeating the wife’s claim. Secondly BVC bears the burden under s 37(4) to prove the defence of bona fide purchaser for value without notice. Finally, if the court is satisfied to the requisite standard, the wife carries the burden of persuading the court to grant relief under s 37(2) .

60. On intention, the wife relies on a cluster of features: • the share transaction was effected in great haste; there was no stock transfer form or contemporaneous contractual paperwork; and nothing was committed to writing until 5 December 2023 notwithstanding that this was ostensibly a commercial deal between experienced operators. • There were inconsistencies in oral accounts : the husband said there was “no offer” while BVC initially gave a different account and subsequently retreated to an asserted lack of recollection. The husband’s own Form E attributed the timing to the wife’s text message rather than any commercial necessity. That document (box 4.4 on Form E) makes no mention of an algorithm-driven downturn. • Company A was healthy at the time of the share transfer, Ms. Hampton submitted. The 2023 accounts—the last before the transfer—were the healthiest, inconsistent, the wife says, with an imminent collapse narrative. • The indemnity dated 20 December 2023 is said to be telling. It is narrowly drafted to protect against any claim by the wife in relation to the company. It does not, strangely, cover any other potential third-party claims. The wife says this reveals both the husband’s intention and BVC’s knowledge that the transaction engaged matrimonial claims. • The wife relied on the principle that notice can be constructive, even if the court finds that BVC had no actual notice. The indemnity, the timing, and the surrounding circumstances, she says, were sufficient to put BVC on inquiry. Ms. Hampton cited the proposition that wilful abstention from inquiry may amount to notice. • There is evidence of continuing ties despite the supposed severance, there remained shared features—use of the same office address, the proximity of an employee (CDS) to the husband, the continuing existence of Company C, the secretarial appointment, and payments to the husband’s brother—said to be inconsistent with a clean break and consistent with arrangements to park the husband’s shares with BVC pending the conclusion of proceedings. • As to the wife’s message to BVC’s wife, the wife’s case was that BVC had already heard of difficulties and that the speed of the 72-hour turnaround points to a transaction catalysed by the prospect of matrimonial claims rather than commercial necessity. She further observes that the relevant algorithm change occurred on 28 September 2023 and would ordinarily take up to three months to bed in; contemporaneous messages between the husband and BVC (“Hopefully it will come back like last time”) indicate uncertainty rather than inevitability of decline.

61. Ms. Hampton contended that setting aside the transfer would make a material difference. On her case, the 2023 accounts showed a net asset value of c. £330,000. She accepts that reversing the transfer would revive the previously forgiven inter-company/owner loan, but she says it would restore the husband’s 50% shareholding to the matrimonial balance sheet and reinstate earnings capacity. She submits that Company A may presently be “on hold” pending the end of proceedings, and that a return to normal trading conditions could support income and mortgage capacity. She accepts there are hurdles but urges the court to treat the present downturn as a potentially temporary “blip”.

62. Turning to the ‘Loans’, three categories are in issue: (i) advances connected with the Auction Property; (ii) the historic £33,000 said to have been advanced by the husband’s father; and (iii) the deposit funds from Company B. The wife says the family “loans” were in truth gifts—or, at most, “soft loans” lacking the characteristics of enforceable indebtedness. She relies on: • the mismatch between the written instruments and the oral evidence (both father and sister expected repayment within roughly eight weeks but had not read the documents, which state a one-year repayment period closely); • the omission of the wife as a party to the instruments despite the husband later asserting joint liability; • the dating of documents after gift declarations; and • the absence of a loan agreement for the £33,000 beyond a single 2011 solicitor’s letter.

63. As to Company B, the wife questions whether the accounting designation (loan versus dividend) was applied retrospectively, noting that any tax optimisation from re-characterisation would be modest and manageable.

64. While she maintained the application is justified, the wife acknowledged the court will have to evaluate proportionality including the cost/benefit of any ancillary valuation exercise. Her primary case remains that the section 37 jurisdiction is engaged and should be exercised.

65. Ms. Wills set out BVC’s position as being is that he acted in good faith, gave valuable consideration (by effectively swapping the outstanding loan for the husband’s 50% shareholding), and lacked actual or constructive notice of any intention by the husband to defeat the wife’s claims. The late-executed indemnity is said to be unremarkable in commercial practice, reflecting subsequent ratification of terms rather than prior knowledge of matrimonial risk.

66. BVC submits that Company A’s financial trajectory had been negative following changes to Google’s algorithms. Past performance had been dependent on significant input from both principals; when the relationship deteriorated and the husband withdrew, BVC continued out of entrepreneurial optimism, but the business has since struggled to the point that it is effectively dead in the water and dissolution is under consideration by BVC. On that footing, the timing of the transaction is attributed to commercial necessity rather than matrimonial engineering.

67. However, Ms. Wills continued, even if the transaction were set aside, the court would be left with a company of little value, and with no realistic prospect of the principals working together. Ms. Wills emphasised the costs already incurred by all parties (estimated collectively by her at around £80,000 just for the preliminary issues hearing) as disproportionate to any realistic upside. She rejected the suggestion that BVC is merely holding the shares “in trust” for the husband pending the end of litigation; such a posture would entail him “hanging around” indefinitely despite diminishing prospects. If the transfer were reversed, the parties’ indebtedness would revive and would need to be met by them, thereby eroding any notional gain. Ms. Wills argued that the wife’s case rests on speculation about a future recovery that is not borne out by trading realities, including the impact of AI and search engine dynamics on lead generation.

68. On behalf of the husband, Ms. Jewell submitted that the husband denies any intention to defeat the wife’s claims. He places emphasis on the history of acrimony, including allegations he says were extreme and, in some instances, proved unfounded (e.g., drug use allegations later withdrawn in oral evidence and debunked scientifically in the private law proceedings). He characterises the wife’s actions as a “vendetta” against him which precipitated commercial rupture and urgent steps on his part. The share transfer paperwork followed after his “life had imploded”, explaining the administrative delay in formalising documents such as the indemnity.

69. The husband points to delay: the wife knew of the transfer before filing her Form E, did not seek s 37 relief at the First Directions Appointment (when represented), and issued the application just a week before the FDR. Ms. Jewell invited the court to infer that the timing was tactical and had a distorting/destructive effect on any realistic FDR negotiations.

70. The husband submits that, even were the transfer to be reversed, the court could not compel him to work with BVC, and their respective evidence is that neither wishes to do so. On any view, a Wells-type arrangement between husband and wife is impracticable given the animus. The husband argues that the value available to the wife, whether as a share of a 50% interest or via liquidation, would be modest once tax, closure costs, and working capital requirements are accounted for. He contends that the £73,750 traced into the Auction Property likely exceeds any net gain from a set-aside route.

71. On the financial trajectory, the husband says the effect of algorithm changes was already apparent from around March to May 2023 and is reflected in contemporaneous spreadsheet and text message evidence as between the husband and BVC. He invites the court to treat earlier optimistic conversations between the spouses about value as mere “inter-spousal chatter”, to be discounted against what the actual documents show.

72. Moving on to the loans, Ms. Jewell on maintained that the family advances were genuine loans, not gifts or shams. The urgency of the property transaction and the collapse of a commercial bridge facility explain the form of the documents, some of which were plainly generic and imperfect. Ms. Jewell asked the court to note that the wife was engaged with Octopus and was an active participant rather than an uninformed bystander. She pointed to contemporaneous messages in which the wife refers to “paying people back”, and to her historic acceptance in open correspondence that the £33,000 was a loan. As to “softness”, Ms. Jewell submitted that the father’s and sister’s evidence reflected both expectation of repayment and willingness to enforce (the sister saying she would “100%” sue). The fact that comparable gift declarations had been signed within the family when underlying arrangements were loans was said to support the explanation that such declarations are often sought for conveyancing and anti-money-laundering purposes irrespective of true inter-family intention.

73. It is the husband’s case that, even if the legal tests were met in the wife’s favour, the court should decline to exercise the s 37 discretion because the application is disproportionate, speculative as to benefit, and not worth the cost. Ms. Jewell asked the court to note the existence of a recently filed but unresolved Part 25 application for a valuation in the event that the share transaction is set aside and suggested that, applying necessity and proportionality, such expert evidence would be unlikely to be justified on the documents anyway. Discussion and Decisions.

74. I have considered all of the relevant evidence in this case, and because I have not referenced a particular piece of evidence (given the weight of documentation) it does not mean that I have ignored it. I have weighed all of the documentary and oral evidence in the balance.

75. I have had to approach the evidence of the principal witnesses (the three parties) with caution. None of them impressed as reliable or objective. Each had a clearly discernible interest in the outcome of proceedings, and each was more keen to put forward a narrative shaped to support their position and aspirations in terms of the outcome of the hearing than to provide a balanced or complete account of events as they occurred. All three of the witnesses gave evidence in a measured, unemotional and it seemed to me, self-rehearsed way. All are intelligent individuals; none of them are strangers to business affairs. Concessions were extracted unwillingly (for example over the drug testing on the part of the wife, in respect of the discrepancies in the loan documentation by the husband). As such, I have also to bear in mind the fallibility of memory. I have not placed undue weight on contested assertions that are not supported by contemporaneous material, albeit that there were clearly some documents created with possible future litigation in mind, such as the loan agreements and the indemnity.

76. This is not an exhaustive list, but there were inconsistencies in the husband’s evidence as to the real reason for the share transfer. Was it a failing business, was it a failing business relationship, was it because the wife set out to ruin him? His Form E indicated just the latter, some of his oral evidence (and that of BVC) concentrated on the former two alleged reasons. BVC’s evidence as to the ongoing links post the share transfer was unconvincing, albeit I accept his evidence that he and the husband were business partners, never best friends. The wife’s evidence on the issue of her text messages referring to loans and lending was not credible in the light of all the circumstances. Equally, I do not accept the wife’s evidence that she and BVC’s wife were close friends; they were acquaintances at best. There is some traction (on the evidence before the court) to support Ms. Jewell’s submissions on the point, that the wife was at least wanting to punish the husband for what conduct she believes he was engaged in, if not pursuing a full blown vendetta.

77. By contrast, the family witnesses were more straightforward, particularly VGT who is clearly a financially astute individual, though of course she was as partisan in terms of the wife as the husband’s father and sister were in respect of him.

78. In her opening note, Ms. Hampton flagged the issue of the court being asked to draw adverse inferences in respect of evidential gaps and I have been alive to that issue, not least given the information-imbalance weighing against the wife which Ms. Hampton referred to in her closing submissions.

79. I turn to my decision on the section 37 application. Firstly, whether the husband has shown, under s 37(5) , that the disposition was not made with the intention of defeating the wife’s claim. In my judgment he has not.

80. I have considered the timing—just days after the wife’s message to BVC’s wife— together with the paucity of contemporaneous paperwork and the later indemnity dated 20 December 2023 (directed specifically at shielding the transaction from the wife’s claims). Those are compelling indicators that matrimonial claims were a material consideration, albeit not the dominant one in my judgment. There was no stock transfer form or recorded negotiation preserved (which given that the husband and BVC were used to discussing business matters via text seems very unusual to say the least). There was no real valuation exercise; and no documentary trail consistent with an arms-length commercial exit of substance.

81. The husband’s explanation for the transfer was internally inconsistent: at various points he attributed it to (i) Company A’s alleged failure due to Google algorithm changes; (ii) a deteriorating relationship with BVC; and (iii) the impact of the wife’s allegations and litigation. I accept however that each featured in his decision-making. However, the absence of contemporaneous records evidencing a commercial rationale, the immediacy of the reaction to the wife’s message, and the targeted indemnity together lead me to conclude that the husband has not rebutted the presumption. As Ms. Hampton pointed out, the husband was directed to produce all correspondence relating to the share transfer. Having failed to produce anything, he explained this as being due to everything being done over the phone. I do not accept that explanation, so I draw the inference that there will be undisclosed evidence, probably text messages. There is also inconsistency between what the husband told the court namely that he didn’t have a choice in the matter (ie to transfer the shares) whereas BVC told the court that the husband actually offered his shares.

82. As mentioned, I find that, although not his dominant purpose, a material purpose of the disposition by the husband was to defeat any claim the wife may have had. This in my judgment co-existed alongside his wish to at least distance his relationship with BVC and to absolve himself from responsibility for the Company A loan. Precisely what in value terms the husband thought he would defeat is hard to assess given the total informality surrounding the transaction.

83. I accept that Company A’s financial outlook (albeit as only very recently evidenced in documentary form) had become uncertain and that the relationship between the husband and BVC was strained. The evidence shows genuine operational friction and an asserted downturn in online lead generation. Those factors explain, in part, why BVC wished the husband gone. They do not, however, displace the inference that matrimonial claims were materially within the husband’s purview when the transaction was effected. 84 I have also considered BVC’s evidence namely that he sought a clean break, regarded the husband as a “passenger,” and wished to move the business forward without him. I accept that he had a tactical wish to remove the husband given the strained relationship and the downturn. On the other hand, I have had to balance the evidence as to the cleanness of the break, given the car, the shared business address, Company C and the husband’s appointment as a secretary. This was a break, certainly, but there were a few threads left unbroken.

85. Secondly, has BVC proved the defence under s 37(4) as a bona fide purchaser for value without notice (actual or constructive). In my judgment, he has not. BVC’s evidence as previously mentioned was that he sought a clean break, regarded the husband as a “passenger,” and wished to move the business forward without him. Yes, I find there was a strained relationship and the Google downturn is clear. Nonetheless, the circumstances as I have already set out, were sufficient to put BVC on inquiry. Even if I am wrong in making that finding of actual notice, constructive notice is sufficient, as Ms. Hampton submitted and in my judgment it is established. BVC was at the very least in a position to make further enquiries. He therefore fails to make out the defence under s.37(4) (good faith purchaser for value without notice).

86. Thirdly, should the court in the light of the foregoing grant relief under s37(2) ?

87. Even if as here the statutory gateway under section 37 is satisfied, relief remains discretionary. Having considered this aspect of the application carefully, I accept the submissions advanced by Ms Jewell on behalf of the husband on this specific issue, as I have summarised them earlier in this judgment. This application, though technically sound, is disproportionate when viewed against the practical realities and the overriding objective of achieving a fair and efficient resolution, and against the background of the approximate (seven figure) asset base in terms of proportionality.

88. First, the utility of setting aside the share transfer is highly questionable. Company A is now dormant, with dissolution actively contemplated. I accept BVC’s evidence on that. He appears to have moved on, and his skill-base is not rooted in the mortgage business, but rather technology. The evidence demonstrates that the husband and BVC are unlikely to work together in any meaningful sense; any reinstatement of the husband’s shareholding would not revive the business or generate meaningful value in my judgment. On any view, the costs of unwinding the transaction and pursuing ancillary valuation exercises could well exceed any realistic financial benefit to the wife specific to the shareholding.

89. Secondly, the transaction was not a sham. It reflected at least in part a commercial and personal rupture, prompted by a deteriorating relationship and a failing business model. While I have found that the husband defeating the wife’s claim was a material purpose, there were tactical considerations in play from both the husband and BVC. The husband was also motivated by seeking to absolve himself of responsibility for the £73,750 loan, in circumstances where the business outlook was bleak, the business partnership between the husband and BVC was on the balance of probabilities untenable in the short, medium and long term. I do not find as a fact that BVC is holding the 50% share as a hidden nominee for the husband.

90. Thirdly, delay plays a part. The wife knew of the transfer well before issuing her application yet chose to proceed only shortly before the FDR. That timing disrupted settlement dynamics and has contributed to costs now estimated at £80,000 collectively—an outcome wholly inconsistent with proportionality. The evidence of valuation is scant- we have the annual accounts, and some bank statements, and empirical evidence of the effect of the Google algorithm change. From the wife’s perspective, and coming back again to proportionality, is the game worth the candle? In my judgment it is not. I say that particularly in the light of the fact that the wife did not seek an EBITDA valuation when issuing her s37 application which one might have been expected on a risk-benefit analysis.. The wife has based her application on figures given to her by the husband, doubtless with entrepenuerial hope and optimism than on anything more concrete. I accept (on the evidence before the court) Ms. Jewell’s submission that the value of Company A would be nowhere near the figures the parties were discussing in inter-spouse chatter. In exercising my discretion, I have had careful regard to proportionality.

91. Finally, and in passing, it may be possible (I say no more than that) for the wife to run an add back argument at final hearing, given that there is a seven-figure asset base with which to do so. Whether that would be proportionate, is another matter.

92. For these reasons, I decline to exercise my discretion to set aside the disposition.

93. I now turn to the issue of the family advances. On this issue, I accept the husband’s case. They are loans, not gifts.

94. The contemporaneous messages sent by the wife are highly significant in my judgment. In May 2023, she wrote: “We have to pay everyone back,” and “Going through the motions because we have debts owed to people”. These statements were made in the immediate aftermath of the Auction Property purchase and are inconsistent with her later position that the funds were gifts. They reflect an understanding that repayment was anticipated and that the advances were not gratuitous. While the wife sought to explain these messages as rhetorical or motivated by fear of reputational harm, I do not find that explanation persuasive. The language used is plain and accords with the husband’s evidence that both families expected repayment from the parties jointly. Additionally, I do not accept the wife’s case that she was content to accept bridging finance (which would have been at commercial rates of interest) but not family loans, and was only prepared to take those advances only on the basis of them being unrestricted gifts.

95. Ms. Hampton of course relies on the gift declarations. She submitted in terms that the ‘practice’ of supplying false gift declarations which do not reflect reality, is a very rare circumstance. That is not, I have to say, my experience- this practice is if not rife, surprisingly common in similar cases that come before this court. As mentioned during the hearing, commercial lenders firstly require gift declarations for underwriting purposes- they are less likely to lend money if borrowers are in hock to other creditors (including family creditors) for substantial sums. Solicitors’ mortgage instructions routinely require solicitors to advise the lenders (for whom the solicitors may also be acting) if there is any third-party borrowing making up the difference between the purchase price and the mortgage advance. Additionally, solicitors will seek this information for their anti-money laundering purposes, what are known as ‘source-of-funds’ enquiries.

96. As Mr. Jewell pointed out, it is not for this court to make a moral judgment as to whether that practice is right or wrong. I can however take judicial notice that this practice is not exceptional, nor is it exceedingly rare. In this case no mortgage was taken, so the gift declarations cannot be seen as an actual mortgage fraud, but they did need explanation particularly by the husband’s family. In my judgment they have established that these were in truth, loans. The gift declarations were false in all the circumstances and do not reflect the reality on the ground.

97. Although I find these advances were loans, they were in my judgment soft loans reflecting the familial context, absence of interest enforcement, and the practical realities of litigation risk.

98. On the facts of this case, there are shades of grey, rather than black and white. The softest loan is clearly that from the wife’s sister, VGT. Her evidence was candid: while she initially responded to a request to “lend,” she acknowledged that in her cultural context “lend” often means “give.” Her financial position—earning a substantial salary and bonuses—combined with her reluctance to pursue repayment, persuades me that this loan is unlikely ever to be called in. It should be treated as a liability of minimal practical weight. If the wife and her sister treat this as a gift inter se, so it will be.

99. As to the advance from the husband’s sister, MKJ, she expressed a willingness to enforce repayment, stating she would “100%” sue if necessary. However, that assertion must be viewed against the backdrop of family dynamics and the absence of any enforcement steps to date. This loan probably carries more weight than VGT’s, and I take on board that MKJ’s financial position appears somewhat removed from VGT’s but the loan remains soft in character and of course only the husband and MKJ signed the loan agreement.

100. The father’s Auction Property loan, though genuine and accompanied by strong expectation of repayment, is also tempered by familial reluctance to litigate. His evidence that he cashed in pensions and feels materially affected I accept, but he in turn accepted that suing his son would be anathema. The same goes for the historic loan. Indeed, if he demanded repayment in 2011 (when the wife appears albeit on the face of a single letter to have acknowledged the debt) or any time between 2011 and December 2019 being six years ago, he is arguably statute barred. That said, I have no evidence either way in terms of demands made formally or otherwise. That is not an issue this court is required to determine in this application.

101. Turning to the funds drawn from Company B, I find that these were properly treated as a loan and not as a dividend. The husband’s explanation was credible and commercially rational: declaring a dividend would have risked the stability of Company B and triggered an adverse tax charge. The evidence shows that Company B was the husband’s principal income source and that maintaining its operational viability was critical. Treating the advance as a loan avoided unnecessary tax exposure and preserved working capital. I accept that this was not a retrospective recharacterisation but a deliberate choice and commercially sound.

102. In summary, I find that the advances for the Auction Property were loans, not gifts, but they were soft loans of varying degrees. The Company B advance was a loan, not a dividend, for reasons of commercial prudence and tax efficiency. These findings will of course inform the computation of liabilities and the distributive exercise at the final hearing and will be reflected in an updated ES2.

103. To conclude therefore: (a) The wife’s section 37 application is refused. (b) All of the advances in issue were loans not gifts (or in the case of Company B, not a dividend). (c) They are soft loans.

104. Having formally handed down this judgment, I invite counsel to let me have an order to give effect to it. If there are consequential matters, as mentioned at the preliminary issues hearing, I will convene a CVP hearing for the convenience of all counsel, if they can provide me with a time estimate. District Judge Davies 5 January 2026. .