Equalisation as Proper Provision and Evidence‑Based Valuation of Private Companies in Divorce: H v K [2025] IEHC 612

Introduction

This High Court appeal in H v K [2025] IEHC 612 (Jordan J, 15 July 2025) revisits the core concept of “proper provision” under the Family Law (Divorce) Act 1996, as amended, in the context of a long marriage where the principal assets are a family home and a privately-held company owned by one spouse. The case addresses how courts should assess and value a small but successful company for the purposes of financial provision, the use of equalisation payments to achieve fairness, the structuring of property transfers with a sale fallback, and the role of time-limited spousal maintenance where adult children are still being supported in education.

The parties married in 1995, separated in 2015, and the husband left the family home in 2020. There are two adult children of the marriage (born 2001 and 2003), with whom the father is presently estranged. The wife works in local government; the husband co-owns (50%) a company which has been showing strong performance.

At first instance, the Circuit Court granted a decree of divorce and ancillary orders that, in substance, awarded the wife the family home outright, awarded the husband the company, made nil maintenance orders, and granted the husband 25% of the wife’s pension. The husband appealed. The principal issues on appeal were:

• What constitutes “proper provision” on the facts of a long marriage with modest overall resources but a thriving private company.
• How to value the husband’s 50% shareholding, including treatment of alleged contingent liabilities and the company’s “key person” dependence.
• Whether equalisation of assets should be used as a fairness cross-check in this long-marriage case.
• Whether spousal maintenance should be ordered in circumstances where adult children are still incurring educational and living costs.
• Appropriate treatment of pensions in the round, given the overall asset structure.

Summary of the Judgment

Jordan J affirmed the decree of divorce but found that the Circuit Court’s ancillary orders failed to make proper provision for the appellant. Key features of the High Court’s orders include:

• Valuation and equalisation:
  • Acceptance of the wife’s expert valuation of the company at €600,000 overall, valuing the husband’s 50% share at €300,000.
  • Recognition that the combined marital assets are essentially the family home (€605,000) and the husband’s company share (€300,000), totalling approximately €905,000.
  • Use of equal division as the appropriate benchmark for proper provision in this long marriage, implemented by:
    • An equalisation payment: the husband’s interest in the family home to be transferred to the wife upon her payment of €150,000 to the husband by 31 July 2026; or
    • Fallback sale: if the payment is not made by that date, the home to be sold and the husband to receive 25% of the net proceeds.
• Income and maintenance:
  • Order for spousal maintenance of €750 per month from January 2026 to December 2029, reflecting the continuing financial responsibilities borne by the wife (including support of the adult children in education) and the husband’s greater earnings potential.
• Pension:
  • Declaration that the wife is solely entitled to her pension, with a Pension Adjustment Order to reflect that position; the spousal element of the contingent benefit to be allocated to the husband.
• Other orders:
  • Husband retains the entire legal and beneficial interest in the company.
  • Orders to secure the transfer/sale of the family home, rights of residence, and the County Registrar’s authority to effect transfer if either party fails to comply.
  • No order as to costs (confirmed in a brief addendum hearing on 23 July 2025).

In reaching these orders, the Court rejected the husband’s expert valuation methodology as “flawed and unreliable,” emphasising the need to ground valuations in evidence of actual performance and to avoid speculative deductions for poorly substantiated liabilities.

Analysis

Precedents and Authorities Cited

• D.T. v C.T. [2002] 3 I.R. 334 (Supreme Court):
  • Proper provision is assessed at the date of trial.
  • Non‑discrimination: the homemaker role cannot be discounted relative to the breadwinner role.
  • Outcome is case-specific; equal division is not mandated; in some cases, a “one-third” yardstick may be a useful lower-end benchmark.
  • Proper provision is the aim, not a formulaic division; periodic payments are not the only means of provision.
• N.O. v P.Q. [2021] IECA 177 (Court of Appeal):
  • The same “proper provision” analysis applies across judicial separation and divorce, with the non-exhaustive statutory checklist guiding the exercise.
• M. v S. [2020] IEHC 562 (Barrett J):
  • Reiterates the non-discrimination principle (citing D.T. v C.T. and English authorities White v White [2001] 1 A.C. 596 and Cowan v Cowan [2002] Fam. 97).
  • Endorses equal division as a cross-check against discriminatory undervaluation of homemaker contributions, particularly in “ample resources” cases (with the caveat that equal division is not mandated).
  • Highlights the court’s power to make lump sum orders, and the entitlement in principle of both spouses to independence and security without necessarily relying on periodic payments.
• White v White [2001] 1 A.C. 596; Cowan v Cowan [2002] Fam. 97:
  • English authorities emphasising non-discrimination and equal division as a fairness cross-check, which Irish courts consider persuasive in the Irish statutory framework.

The judgment draws heavily on the established Irish principles that “proper provision” is the overarching standard, that equal division is not automatic but can serve as an appropriate benchmark in long marriages, and that non-discrimination between roles is essential. It also underscores that proper provision is a holistic exercise informed by s.20 factors and real-world financial evidence.

Legal Reasoning

Jordan J’s reasoning proceeds along three interlocking axes: (1) the statutory s.20 factors, (2) the correct approach to private company valuation in family proceedings, and (3) structuring orders to deliver proper provision in a practical, enforceable way.

1) Section 20 factors applied to the facts

• Income and earning capacity (s.20(2)(a)):
  • The husband’s company is performing well and growing; he has stronger earnings potential compared to the wife, whose future income trajectory is more modest.
  • Any suggestion of future inheritance for the wife is speculative and is accorded no weight.
• Financial needs and obligations (s.20(2)(b)):
  • Accommodation is the core need for both parties. With two households to be maintained from modest resources, preserving the family home for the wife (and the children who live with her) is prioritised, but balanced by an equalisation payment in favour of the husband.
  • The wife has been meeting most education and living costs for the adult children; this will likely continue “for a few years.”
• Standard of living (s.20(2)(c)):
  • The family enjoyed a modest but comfortable standard of living — the orders aim to avoid undue disruption while acknowledging financial constraints.
• Age and duration (s.20(2)(d)):
  • A long marriage (about 20 years cohabitation before breakdown), with both parties now within a decade of ordinary retirement age; duration supports a broadly equal approach.
• Contributions and impact on earning capacity (s.20(2)(f) and (g)):
  • Both spouses contributed to the business and the family; the wife’s homemaker and business contributions are acknowledged.
  • Had the wife remained in or returned earlier to external employment, her current earnings and pension would likely be stronger; this weighs in favour of compensatory considerations.
• Conduct (s.20(2)(i)):
  • No conduct issues arise that would affect provision.
• Accommodation (s.20(2)(j)) and pensions (s.20(2)(k)):
  • Accommodation is treated as the “core issue.”
  • Pensions are addressed by allocating the wife her pension in full, subject to contingent spousal benefit arrangements; the husband’s future income prospects from the company serve as a counterweight.

2) Valuation of the private company: evidence over speculation

The core valuation dispute was stark: the wife’s expert placed the husband’s share at €300,000 (company €600,000), while the husband’s expert put his share at €10,000–€20,000 and sought to load the valuation with a landlord’s dilapidations claim of €170,000. The Court rejected the latter approach for several reasons:

• The company’s financials show “solid revenue and profits” and rising bank balances across 2019–2023 (with a robust 2024 figure), inconsistent with a negligible equity value.
• The husband’s expert treated the landlord’s claim as a “material legal claim” without considering the lease’s terms or legal foundation; a valuer for the company estimated any liability at a fraction of the landlord’s asserted sum.
• No value was ascribed to business equity associated with the premises, despite evidence of an approach to the landlord to purchase its interest.
• While the wife’s expert may have used a “high” multiplier and underweighted key-person risk, the result still better captured the practical reality of value, given sustained performance and growth.

Importantly, the Court also reframed the company’s “place in the matrimonial assets”: its “real value” lies in providing secure employment and income to the husband, likely improving as the company grows. That observation underpins the decision to let the husband retain the company intact while using the home as the equalisation lever.

3) Delivering proper provision through equalisation, maintenance, and pension structure

• Equalisation as fair provision in a long marriage:
  • Total assets = ~€905,000 (house €605k + company share €300k). An equal division implies each party’s position should be worth approximately €452,500.
  • Because the husband keeps the €300k company interest, he needs roughly €150k more to be equalised. That is achieved either by:
    • the wife paying a €150,000 lump sum to secure the husband’s transfer of his interest in the home, or
    • a sale with 25% of net proceeds to the husband if the lump sum is not paid by the stated date.
  • This is a textbook use of equalisation as a fairness cross‑check in a long marriage, consistent with D.T. v C.T. and M. v S., while recognising that the legal test remains proper provision rather than mandated equal shares.
• Spousal maintenance, time‑limited:
  • €750 per month from Jan 2026 to Dec 2029 reflects:
    • the wife’s ongoing support for adult children (especially education‑related costs),
    • the husband’s higher future earning capacity, and
    • a limited horizon as a transitional measure toward post‑divorce independence.
  • This is a pragmatic deployment of spousal maintenance to address real financial burdens that might not be neatly captured by “child” maintenance where adult children are involved.
• Pension treatment:
  • The wife keeps her pension in full, with the spousal element of the contingent benefit awarded to the husband.
  • This complements the overall balance, particularly as the husband retains an income‑producing asset with growth potential.
• Practical enforceability:
  • County Registrar empowered to execute documents in default; s.4 Family Home Protection Act 1976 order dispenses with spousal consent for sale in the relevant scenario; liberty to apply ensures a forum to resolve sale‑related disputes.

Impact and Significance

This judgment provides concrete guidance on several recurrent issues in Irish family law:

• Equalisation as a route to proper provision in long marriages:
  • While proper provision is not synonymous with equal division, equalisation is reiterated as an appropriate benchmark in long marriages with relatively straightforward asset pools.
  • Clever structuring — a lump sum by a date certain, failing which a sale on agreed terms — delivers clarity, fairness, and enforceability.
• Valuation of private companies in family proceedings:
  • Courts will look behind methodologies and reject valuations that are inconsistent with objective financial performance.
  • Speculative or unsubstantiated liabilities (e.g., asserted dilapidations) cannot be wholesale deducted absent legal analysis of the underlying instruments (such as leases) and realistic quantification.
  • Key-person risk may warrant some discount, but it must be balanced against evidence of sustained profitability, cash reserves, and growth trajectory.
  • Intangible “business equity” (e.g., in leased premises) that has practical value should not be ignored.
• Maintenance when adult children remain financially dependent:
  • Where adult children continue in education, and one parent shoulders the financial load, time‑limited spousal maintenance may be used to reflect that real, ongoing expense even where “child maintenance” may not strictly be available for all adult children.
• Pensions in the round:
  • In cases where the working spouse retains a valuable income‑generating company and the other spouse retains the family home subject to equalisation, it may be appropriate to leave each party with their own pension, tempered by contingent benefit arrangements.

Practically, H v K signals to practitioners and experts that private company valuations must be evidence‑driven, with transparent assumptions and proper legal due diligence on alleged liabilities. It also underscores the Court’s readiness to use targeted lump sums and clear fallback sale mechanisms to balance competing accommodation needs and asset retention preferences.

Complex Concepts Simplified

• Proper provision:
  • The constitutional and statutory standard the court must achieve at the time of divorce. It aims to secure fairness and avoid discrimination between different marital roles. It is not a rigid equal split, but in long marriages an equalisation outcome may be appropriate.
• Equalisation payment:
  • A lump sum or percentage transfer designed to balance the value each spouse takes away where one retains a particular asset (e.g., a business) and the other retains another (e.g., the home).
• Key-person risk:
  • In small companies, the business may depend heavily on one individual. Valuers may discount value to reflect the risk associated with that dependence; but the discount must be reasonable and evidence-based.
• Business equity in leased premises:
  • Even without owning the premises, a business can build value associated with its location, fit-out, goodwill, or potential to purchase landlord’s interest; such value should be considered if supported by evidence.
• Section 14 and 15 orders (Family Law (Divorce) Act 1996):
  • Section 14 enables property adjustment orders (e.g., transfer or sale of the family home). Section 15 enables orders conferring rights of residence.
• Section 18(10) succession dis-entitlement:
  • Prevents either party from later seeking provision out of the other’s estate after death; it “closes the door” on succession claims between former spouses.
• Section 4 Family Home Protection Act 1976:
  • Allows the court to dispense with a spouse’s consent to a sale of the family home in defined circumstances, ensuring a sale cannot be frustrated.
• Pension Adjustment Order (PAO) and contingent benefit:
  • A PAO redistributes pension rights between spouses. “Contingent benefit” typically refers to benefits payable on the death of a scheme member (e.g., a spouse’s pension); allocating the spousal contingent element can be used to balance interests where the underlying pension remains with one party.

Key Practical Takeaways

• In long marriages, equalisation remains a powerful fairness tool within the overarching “proper provision” test.
• Company valuations must be rooted in the company’s demonstrated financial performance; speculative liabilities require legal and evidential scrutiny.
• Courts may acknowledge the “income function” of a private company by allowing the owner-spouse to retain it, and equalising through the home.
• Time-limited spousal maintenance can be used as a pragmatic response to continuing educational expenses of adult children and to differences in earning capacity.
• Pension division is not automatic; leaving pensions with the holders, with appropriate contingent benefit arrangements, may be just in the overall balance.
• Orders should contain mechanisms for execution (County Registrar authority), timelines, and sale fallbacks to avoid stalemate.

Conclusion

H v K [2025] IEHC 612 does not rewrite the law of “proper provision,” but it meaningfully clarifies its application in a recurring fact pattern: a long marriage with a family home and a viable private company. The Court underscores that:

• Proper provision is a holistic, fact-sensitive exercise guided by s.20 factors, in which non-discrimination between homemaker and breadwinner roles is bedrock.
• Equalisation may be the appropriate outcome in long marriages, but it must be achieved by practical, evidence-based orders — here, a lump sum with a sale fallback and a time-limited maintenance order.
• Private company valuations in family proceedings must be rigorous, eschewing speculative deductions and reflecting actual performance, risk, and growth potential.

The judgment will be cited for its careful treatment of small-company valuation in the family law context, its affirmation of equalisation as a route to proper provision, and its pragmatic use of time-limited maintenance to reflect the realities of ongoing educational support for adult children. It provides clear, structured guidance for practitioners on how to marshal evidence, propose workable equalisation structures, and craft enforceable orders that deliver fairness in substance as well as in form.