Culligan v Rosemin-Culligan

Factual and Procedural Background

The Appellant and the Respondent were married for approximately forty years and have three adult children. All marital wealth was generated during the marriage. A material source of wealth was an investment in Bitcoin by the Appellant which was partly applied to develop a business (Company B) and to acquire other assets. Company B was sold to Company A in January 2023 by way of a share swap; the Appellant received a minority shareholding in Company A (c.3.6% of Company A). The Appellant's holding in Company A (net of tax) was valued by expert evidence at £19 million; that valuation was treated as representing a significant portion (about half) of the parties' matrimonial wealth.

The High Court (Judge MacDonald) made a final financial remedy order on 1 September 2025 dividing the parties' capital resources equally by value but allocating to the Respondent a greater proportion of liquid/realisable assets and to the Appellant a greater proportion of illiquid/risk assets (the Appellant retaining approximately 70% of his share in illiquid assets comprising the Company A holding). The Respondent's share of any value realised from the Appellant's Company A holding was provided for by contingent lump sums supported by a Deed of Covenant. The Appellant appealed. The Court of Appeal (Judges Moylan, Coulson and Arnold) heard the appeal on 16 April 2026 and handed down its approved judgment on 24 July 2026.

Legal Issues Presented

1. Whether the High Court's division of liquid and illiquid/risk matrimonial assets (notably the treatment of the Appellant's Company A shares) effected a fair division in accordance with the sharing principle and relevant authorities (so‑called "Wells sharing").
2. Whether the High Court misapplied authority (in particular Versteegh) by treating "Wells sharing" as only a last resort and as properly comprising only a minority element of an award.
3. Whether the Appellant's failure to consult the Respondent before the Company B→Company A transaction, and the judge's treatment of that absence of consultation, justified giving the Respondent a smaller proportion of the illiquid asset value.
4. Whether the United States tax implications (and the Respondent's refusal to make a US tax election) made transfer of the Appellant's Company A interest to the Respondent unrealistic and thereby justified the judge's structure of relief (contingent lump sums and Deed of Covenant).
5. Whether other findings below (including on the Respondent's structuring of the Company C sale and resulting tax) required adjustment of the overall division.

Arguments of the Parties

Appellant's Arguments

• The High Court's award was unfair because it left the Appellant holding a disproportionate share of illiquid/risk assets (70% of his share) while the Respondent received most liquid assets.
• The judge erred in treating "Wells sharing" as a last resort and as only properly comprising a minority element (relying on an incorrect interpretation of Versteegh), which led to an artificially small share of the Company A value being attributed to the Respondent.
• The absence of consultation before the sale of Company B to Company A did not justify disadvantaging the Appellant; indeed the sale likely created or enhanced value and, in any event, would have proceeded regardless of consultation.
• The only practical route to equalise the division of Company A value was to require sale of the former matrimonial home with the Appellant receiving a specified percentage of the net proceeds to effect an equal division of the Company A value.
• The judge should have adjusted the award to reflect additional tax loss caused by the Respondent's structuring of the Company C sale.

Respondent's Arguments

• The judge's overall approach and outcome were within the permissible exercise of discretion and produced a fair outcome when read as a whole; the judge did not literally intend to treat "Wells sharing" as absolutely confined to last‑resort cases.
• There were good reasons to keep the Respondent's contingent element small: uncertainty, asymmetry of information, dependence on the Appellant for future cooperation and the difficulties of protecting the Respondent's position were all relevant.
• The judge correctly found it fair for the Appellant to bear a larger share of the consequences of converting his prior holdings into a minority interest in Company A without consultation.
• The judge was entitled to reject the Appellant's claim for an additional award in respect of the Company C deferred consideration; conduct adjustments were discretionary and had been reflected in costs orders.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court of Appeal (Judge Moylan, with whom Judges Coulson and Arnold agreed) analysed whether the High Court's distribution produced a fair balance of risk and illiquidity. Key steps in the Court's reasoning were:

1. The Court accepted the High Court's valuation of the Appellant's Company A holding at £19m as a reliable expert snapshot but emphasised that such a valuation is a snapshot and the future realisation and timing are subject to "significant uncertainty".
2. The Court reviewed the judge's reliance on authority (notably Versteegh) and concluded there is no principle that Wells sharing must be confined to cases of last resort or to a minority element of an award; the issue is fact‑sensitive and governed by fairness and the need to balance risk and illiquidity (drawing on Martin and earlier authorities).
3. The Court examined the factual basis on which the High Court treated the Appellant as bearing larger consequences (the judge relied on the Appellant's lack of consultation about the Company B→Company A transaction and the view that the sale rendered a large matrimonial asset illiquid and subject to increased risk).
4. The Court found the absence of consultation was not determinative: evidence showed Company B was financially at risk and the sale to Company A likely created or materially enhanced value; the transaction would likely have proceeded even if the Respondent had been consulted. Thus lack of consultation did not justify the unequal division.
5. The Court held that the judge's reliance on the purported increased risk or illiquidity produced by the sale was not supported by the evidence: the sale replaced one illiquid asset with another and the evidence suggested the sale increased prospects of realisation rather than diminishing them.
6. The Court observed internal inconsistencies in the High Court's approach (the judge rejected the Respondent's conduct as inequitable to take into account but then relied on the Appellant's lack of consultation in determining division) and concluded the reasons given did not sustain the unequal split of Company A value.
7. The Court considered remedies. It concluded it was appropriate to vary the order rather than remit, given the length of proceedings and that the Court could fairly determine the issue: the value attributable to the Respondent from the Company A holding should be increased to 50% of that value and the Deed of Covenant amended accordingly; to effect the equalisation the matrimonial home was to be sold with the Appellant to receive 40.4% of the net proceeds (the percentage fixed to avoid future disputes over sale price).
8. The Court recorded that none of the Appellant's other grounds had material impact on that outcome and that the High Court's refusal to award the Appellant the additional sum sought in relation to Company C deferred consideration had not been shown to be wrong in principle.

Holding and Implications

DISPOSITION: The appeal was allowed in part. The Court varied the High Court's order so that the Respondent's share of the value realised from the Appellant's Company A holding is increased to 50% and the Deed of Covenant is to be amended accordingly; there is an order for sale of the former matrimonial home with the Appellant to receive 40.4% of the net proceeds. Other aspects of the High Court's order were left intact insofar as they were not shown to be materially wrong.

Implications: The direct effect is a reallocation of the Company A value to achieve an equal division of that asset's value between the parties and a sale of the former matrimonial home to implement that reallocation. The Court clarified that there is no rigid rule that Wells sharing must be confined to "last resort" cases or to a minority element; the appropriateness and extent of any Wells sharing is fact‑sensitive and governed by the overarching requirement of fairness and the need to balance risk and illiquidity. The Court did not purport to lay down a novel binding precedent beyond this interpretive clarification; its conclusions were applied to the facts of this case to vary the order below.