CB v KB [2019] EWFC 78

Facts

  • CB (“H”) and KB (“W”) married in 2003 and separated in 2017. They had six children.
  • H was the bass player in a well-known band and W did not work.
  • H received income in five ways:
    • Publishing royalties from the songs written by him (“Stream 1”);
    • Remuneration for broadcasts of the band’s songs on radio and TV (“Stream 2”);
    • A percentage of the lead singer’s publishing royalties (“Stream 3”);
    • A share of the recording royalties (“Stream 4”); and
    • A share of ticketing and merchandising income, created by touring (“Stream 5”).
  • It was agreed that W had a sharing interest in Streams 1-4, as they had been created during the marriage.
  • There was also no dispute about the capital, agreed at £2,754,351 for W and £3,015,113 for H, giving a total of £5,769,464, and both parties were re-housed.

Issues

  • The first issue was the value of H’s music income from Streams 2-4 (Stream 1 was agreed), which was addressed by four witnesses. The valuation methods were agreed. However, the multipliers and discounts that should be applied and the matrimonial natures of the streams were disputed.
  • The second issue was whether W had a sharing claim to Stream 5, H’s future earnings from touring.
  • The third issue was how H’s child maintenance obligations should be calculated.
  • The fourth and final issue was whether there would be sufficient capital to meet W’s future income.

Held

  • In addressing the valuation of the income streams Mr Justice Mostyn endorsed the ‘hot-tubbing’ method of giving evidence [18]. The expert accountants gave their evidence concurrently and occupied the witness box together. Therefore, the evidence on each topic was given contemporaneously and not separated by a hiatus. Mostyn J commented that such a method ‘should be considered for use in financial remedy cases where competing valuers give evidence’ [18].
  • On assessing the expert evidence, Mostyn J valued Streams 1-4 at £4,450,693. He used various multipliers and discounts to reflect the level of risk in the streams, and to reflect the non-matrimonial nature of Stream 3.
  • Mostyn J declined to treat Stream 5 as a matrimonial asset because income derived from future tours by H playing songs created during the marriage would still be earnings created after the marriage: ‘The fans are coming to see the band performing, not to listen to songs being played by a machine and pumped out of loudspeakers’ [43].
  • Combined with the agreed net assets figure, this gave a total of £10,220,158. Mostyn J applied the equal sharing principle and awarded W £5,110,079.
  • Mostyn J confirmed that that when calculating child support the starting point should be the result of the CMS formula and in this case he found no reason to depart from it.
  • As a result if W were to amortise her Duxbury fund (which was a ‘pre-eminently reasonable’ expectation [53]), W would initially receive £172,126 pa, plus child support of £50,400 pa, giving her a total of £222,526 pa. Mostyn J found this would ‘very amply’ meet W’s reasonable needs on a clean break basis [56].