Sarah Wood writes for FT Adviser, examining the High Court’s approach to asset division in the divorce case of Diane and Anthony Culligan.
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Over the course of four days in November 2024 the High Court heard the application brought by Diane Culligan, a significant figure in women’s football, against her ex-husband Anthony Culligan to determine how their substantial financial assets should be divided between them following their divorce.
The parties married in February 1992 and were together for 40 years, and upon their divorce had net assets worth £27mn to be apportioned between them. There was no dispute between them that the £27mn should, in broad terms, be equally divided.
One of the key questions for the court was how best to achieve that through a redistribution of the assets held. Diane had argued that she should retain the former matrimonial home, whereas Anthony’s position had been that the house should be sold, and the net proceeds of sale divided between them.
Assets in the marital pot
The bulk of the parties’ wealth derived from Anthony purchasing just over 1,000 bitcoin at a total cost of £10,000 in 2012. By 2017, the value of that bitcoin holding had increased to £20mn.
During the marriage the bitcoin had been sold off to fund several projects and the business interests of both parties. In particular, it was used to provide financial support for Anthony’s company, SETL Limited, while also providing financial support for Diane’s company, ELSA.
ELSA had been incorporated in April 2019 and one month later purchased London City Lionesses, the rebranded Millwall FC women’s side. Diane had played a key role in removing the women’s side from the umbrella of the men’s club, which was in keeping with her long-held interest in and commitment to women’s football.
Over the course of four years between 2019 and 2023 the parties invested a total of £3.3mn into ELSA from the sale of bitcoin. In May 2023 the decision was made that the parties could not continue to fund ELSA, and it was acquired by YMK Holdings LLC. Significantly, part of the sale and purchase agreement between YMK and ELSA provided for Diane to be paid an annual consultancy fee of £750,000 for four years, totalling £3mn (£1.6mn net).
Meanwhile, Anthony’s company SETL Limited had received £2.7mn from the sale of bitcoin between April 2019 and September 2022 but consistently recorded a net operating loss between 2020 and 2022.
In January 2022 Colendi, a financial services platform, expressed an interest in acquiring SETL Limited and in September 2022 Colendi SETL Ltd was established, which ultimately would come to hold Anthony’s shares in Colendi in trust for him.
In January 2023 Colendi acquired the entire share capital in SETL Ltd by way of a share swap. The terms of the articles of association of Colendi remained intact following the share swap, with the upshot being that the shares held by the trust on behalf of Anthony could only be transferred with the permission of the founder of Colendi or upon completion of a pre-emption process.
The fact that the arrangement had been structured this way and without the knowledge of Diane was one feature of the evidence that the court heard during the four days in November 2024.
Leaving aside the complexities of how Anthony Culligan could extract any interest he held in Colendi to one side for now, having heard expert evidence on the point, the court was satisfied that the value of his shareholding in the company was £19mn (£13.6mn after capital gains tax).
In addition to funding the parties’ respective business interests, the bitcoin had been used to undertake substantial renovations on the former matrimonial home. The property had been purchased shortly after the parties married back in 1993. It has nine bedrooms, seven bathrooms and various reception rooms, including a home cinema. For the purposes of assessing the value of the marital pot, the court ascribed it a net value of £5.9mn.
The bitcoin had also been used to purchase a total of eight rental properties, which produced rental income of £100,000 per year. Those eight properties had a combined value of £2.6mn.
The decision
On January 14 2025 Mr Justice MacDonald handed his judgement down. Unsurprisingly, given the consensus of the parties on the point, he concluded that the marital pot of £27.3mn should be divided equally between the parties.
But what did that look like in practical terms?
The judge concluded that Diane’s £13.6mn was to be comprised of the value of the former matrimonial home; £2mn held in her personal bank accounts; £1.6mn from the sale of ELSA on the basis that the court found that this was deferred consideration from the sale of ELSA to YMK and so should be treated as capital and not income for the purposes of distributing the assets; 30 per cent of the future benefit of Anthony’s interest in Colendi (£4.1mn); plus 50 per cent of Anthony’s pension.
On the other side of the balance sheet, Anthony received all of the rental properties; his recently acquired property in Georgia; 70 per cent of the value of Colendi; a lump sum payment of £750,000 from Diane; and 50 per cent of the ‘agreed’ deferred consideration of £750,000 which derived from the sale of ELSA.
The court’s judgement was largely reported in the press at the time as being a ‘win’ for Diane because she had she managed to retain the family home, but a closer analysis of the court’s decision, together with its subsequent decision on costs and anonymisation, perhaps leaves it open to question about whether the outcome can truly be hailed as a victory for her.
Rationale of the judge’s ruling
The starting point for the judge, as it is in any financial remedies case following a divorce, is that there should be equal division of the assets between the parties unless there is good reason to depart from that starting point.
While both parties had sought to raise issues of conduct with a view to persuading the judge that it might be appropriate to award them slightly more than 50 per cent, in broad terms they were agreed that the assets should be divided equally.
Significantly, for the reasons set out below, the court did not find that there was any possibility that the high bar for establishing a conduct claim had been met in this case.
And so, from that agreed starting point the court looked to divide the assets between the parties. In this case the judge was satisfied that it was not necessary for the former matrimonial home to be sold to give justice to the case and to enable both parties to be housed. That is an important element of the particular facts in this case.
While the judge alluded to the fact that he had found, on the evidence, that Diane had an “emotional connection” to the property, it is essential to understand that was not the reason why the court did not make an order for it to be sold.
That is because the judge had also concluded that, as a single person, her housing needs did not extend to a nine-bedroom property, regardless of the good standard of living enjoyed by the parties during the marriage. Instead, the reason why the judge allowed Diane to retain the property was because he was satisfied that a fair distribution of the assets could be achieved without the need to sell it.
In making the determination about what a fair distribution of assets looked like in this case, the judge spent considerable time assessing whether that meant it was appropriate for Anthony to be awarded assets that were largely comprised of an illiquid and risky asset, namely his shares in Colendi. Ultimately the Judge concluded that it was.
In making that assessment he weighed up the fact that the shares comprised almost 50 per cent of the total marital pot, but he also attached considerable weight to the fact that, unlike in some cases, he was confident that the value of £19mn that had been ascribed to the shares was accurate. It was that aspect in particular that persuaded the judge that he had reached a fair outcome for these parties.
A reading of the judgment suggests that if the supporting evidence that he had considered in reaching his conclusion about the value of the shareholding had not been so compelling then the court may have approached matters differently.
In all likelihood, that different approach would have involved awarding Diane a greater percentage of the future benefits to be derived from the Colendi shares, which would have been offset by awarding Anthony a greater percentage of the other assets. In other words, the court would have tried to achieve a fairer division of both the copper-bottomed assets and the illiquid and risk-laden assets.
Whether that also would have involved an order for the sale of the former matrimonial home is debatable. That is because there were significant other assets in the marital pot that were available to the judge to distribute between the parties such that it still might not have been necessary to order that the property be sold.
Who won?
The headlines that accompanied the story depicted Diane as the victor in the case, and at first blush it is easy to see why. She had wanted to retain the family home and did so. In comparison, Anthony had wanted the family home sold and a more equal division of any future benefit he derived from his Colendi shares.
But the headlines should not stop there. Diane had not just wanted the family home, but her open offer made in advance of the hearing had also sought the transfer of some of the rental properties to her. And so, while she succeeded on the one headline-grabbing aspect of the case, she had wanted more.
Other unreported elements of the case also come into play. This was a bitterly fought case that cost Diane the best part of £1mn in her own legal costs. She was also ordered to pay Anthony 20 per cent of his legal costs because of the way she had conducted the litigation – in particular by pursuing conduct arguments that the judge found to be entirely without merit and which were an unnecessary distraction during the hearing that had only served to increase the litigation costs of both parties.
The judge also had no hesitation in finding that both parties were unimpressive witnesses. He was critical of both in respect of how they had conducted some of their business activities, finding that Diane had, for example, deliberately chosen to take the deferred consideration for the sale of ELSA as a consultancy fee to avoid that sum being available for distribution with the proceedings.
By the same token, he also found that Anthony had structured his shareholding in Colenti in an overly complex way, which made it difficult for the shares to be easily transferred to his ex-wife.
The judge’s assessment of both parties and his criticism of Diane’s litigation conduct is available for anyone to read within the judgement that is available online as the judge refused her subsequent application for anonymity, largely on the basis that there should be open justice.
In some cases, litigation following a divorce is inevitable where the parties are simply incapable of reaching agreement. However, the nature of the proceedings is such that it does not necessarily follow that there will always be a clear winner, despite what the headlines say.
Sarah is Joint Head of the Business Crime Team at 5SAH and is ranked in both Chambers & Partners and the Legal 500 for her confiscation and asset recovery work. Sarah is ranked as a Tier 1 leading junior barrister in the Legal 500. Sarah is also recognised in Chambers & Partners in Financial Crime - Private Prosecutions spotlight table. She is an experienced and highly accomplished practitioner who specialises in criminal and family matters involving high-value assets and complex financial arrangements.
Sarah has experience in all aspects of the financial proceedings that follow a divorce or separation; her knowledge and experience of international asset-tracing and complex offshore trust arrangements gained through her criminal work give her a distinct advantage in this area of work.
She is one of a handful of counsel at the Bar with demonstrable experience of dealing with cases where there are contemporaneous proceedings in the criminal and family courts in relation to the same assets and is therefore able to advise clients and appear in all aspects of both sets of proceedings.
