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Vardags Family Law Essay competition 2023/24 | Abigail Clare Wadlow

Abigail Clare Wadlow - Queen Mary University of London

Special contribution - A rare comet in the sky?

Excessively successful breadwinners seek to put judges in a state of awe at their success to shine so brightly that they achieve comet status in the eyes of the law. But are we right to measure breadwinners spectacular success against the success of a homemaker? Can the courts appropriately identify when an individual can achieve comet status and justify a departure from equality upon divorce? One can be sympathetic to the breadwinner for only through their hard work, determination, and capability they have amassed their fortune, providing for the family to enjoy an extremely high-quality standard of living. So, why should they not be entitled to a greater proportion of the couples assets?

A move away from the principle of equality in White v White?

The landmark decision in White v White produced the principle of equal sharing as the starting assumption for dividing marital assets and a departure from equality is only justified by a good reason. White placed huge emphasis on maintaining a level playing field for the breadwinner and homemaker to eradicate discrimination of respective roles. Yet despite the great emphasis placed on equality, a year later the exception of special contribution was conceived in the case law. In a case as old as myself, Cowan v Cowan allowed the Husband to successfully argue for a departure from equality in his favour due to his unmatched contributions to the familys wealth.

Lord Nicholls in Miller; McFarlane outlined that the success of a special contribution argument can only occur in a factual matrix of exceptional wealth: The wholly exceptional nature of the earnings must be, to borrow a phrase more familiar in a different context, obvious and gross. Nonetheless the doctrine survived Lord Nicholls but has been confined to cases of very significant wealth. The case of Work v Gray was crucial for analysing the treatment of special contribution. Both parties proposed a development of the law, with the Husband arguing for greater clarity and the Wife arguing that the concept should not exist. The Court of Appeal rejected both parties proposals and instead amended the trial judges summary of the law to show the following. Firstly, the circumstances to result in a departure from equality must be of wholly exceptional nature and would be very obviously inconsistent with the objective of achieving fairness for them to be ignored. Secondly, that exceptional earnings are to be regarded as a factor pointing away from equality of division only when it is inequitable to proceed otherwise. Thirdly, only to allow the argument if there is such a disparity in the spouses respective contributions to the welfare of the family that it would be inequitable to disregard. Finally, the Court of Appeal highlighted the importance of avoiding discrimination against the homemaker. Yet it appears that the court is emphasising equality through providing guidance on when a special contribution claim can be successful but in my opinion the claim for special contribution is in itself discriminatory in nature.

Breadwinner vs homemaker

 

Most commonly it is the husband who argues that he has made a special contribution to the matrimonial assets. However, it can be argued that the husband can only amass this exceptional wealth due to the other spouse devoting themselves as the homemaker. Often couples decide between themselves that one partys career is going to be more successful, and the other spouse should invest their time not into a career but instead to maintain the home. Allowing special contribution is discriminatory in nature and ignores the fact that the fortunes of the homemaker are tied to the fortunes of the breadwinner. This implies that financial contribution outshines domestic contributions. Coleridge J described the argument for special contribution as a general rummage through the attic of their marriage to discover relics from the past to enhance their role or diminish their spouses, showing the potential that the argument of special contribution has to turn the couples divorce into a competition of contributions to the marriage.

 

A case that has highlighted the courts vigilance to not discriminate against the homemakers when special contribution has been argued is Chai v Peng . The husband had been successful in building his business empire during the 43-year marriage. Of which he argued should be considered as a special contribution to the extreme wealth that the couple enjoyed and therefore justifying a departure from equality to reimburse him for his success. The wife, formerly Miss Malaysia, showed her dedication and commitment during the marriage for emotional support and to bring up their five children. The court recognised that the husbands considerable financial success was matched to the wifes raising of their five children, affirming that her role of the homemaker was of equal value to the husbands role as the breadwinner. This reaffirmed that point that there is equality in marriage. Through the sharing principle that was exaggerated in White, it is imperative that the during the courts assessment of a fair division of the assets they interpret the section 25 checklist to not discriminate against financial and domestic roles within the complex dynamics of a couples relationship. In my opinion, a couples marriage is built on the foundations of a principle of sharing and support irrespective of whether it is financially quantifiable. The courts are more readily acknowledging by not discriminating between the homemaker and breadwinners quantifiable contributions. It would be careless for UK courts to discriminate because effort to the bringing up of a family cannot have a figure attached to it like generated wealth can. It is only fair that in these circumstances the homemaker can also share the rewards from the joint enterprise.

Comet plus status?

Special contribution was once again tried and tested but failed in the big-ticket case of DR v UG (reported April 2023). This highlighted how rare it remains for a successful special contribution argument. The assets of this case totalled approximately £248,000,000. The husband had sold his company for £400,000,000 which manufactured a world leading medical product. However, when the parties met neither of them had any material resources. The Husband just had his biochemistry engineering degree and over the course of the marriage the husbands business was built up. Upon divorce, the husband argued that there should be a departure from equality as the wealth generated from the business was a special contribution on his behalf. Also, that the sale value of the business was a post-separation endeavour as the high price was only achieved by the business change in product. Moor J rejected both of the husbands arguments. In addressing the claim for special contribution, Moor J said that the husband had not satisfied the tests outlined in Work v Gray. He held that there was nothing wholly exceptional in nature about the husbands successes in the context of the husbands business in specialised therapies. Allowing a departure from equality would not coincide with the object of achieving fairness. A key factor in Moor Js decision was that upon the sale of the business, the purchasers did not retain the Husband unlike other senior figures of the business. It alluded that the husband was not viewed by the purchasers as crucial to the continued success of the business. While he may have been helped by a slice of good fortune…good fortune does not equate to special contribution. On the facts of this case, the husbands success in turning £310,000 into £250,000,000 was not deemed special enough of an achievement for the courts to justify a departure from equality.

It appears that even in 2023, the courts are reaffirming that the contribution must be truly astonishing enough to be so blinding it cannot be ignored to justify a departure for equality. In this context of DR v UG despite the husband being a successful entrepreneur and creating a company worth hundreds of millions of pounds even in the realm of medical product manufacturing. He did not make the cut. It was still not enough of a spectacular success to blow the judges away. This is important for ensuring that the argument for special contribution does not open the floodgates to undermine the principles of equality from White. He was just another successful businessman. This case is also vital for ensuring that breadwinners who amass huge fortunes arent just automatically entitled to claim special contribution. But instead, the argument remains assessed in each cases own sphere to ensure that in a principle that can be so easily discriminatory it is only available to very exceptional cases.

To compare this with the only case since 2014 that has been successful in their argument for special contribution. The case of Cooper-Hohn v Hohn created much excitement particularly for breadwinners as it gave them a glimmer of hope that the courts were being more sympathetic towards rewarding their hard work to earn the familys fortune. The couple were married for 17 years and had four children. At the final hearing Roberts J found that there were assets available for distribution of the value of US$1,467,155,938. The assets were generated primarily by the husband through his successful career in finance. Roberts J allowed for the husbands argument of special contribution and a significant departure from equality, awarding the wife 36% of the total assets.

Roberts J justified his decision on the basis that he acknowledged the wifes role as president and CEO of the couples UK Foundation and as the childrens primary carer. However, the Husband was also involved in the couples charitable projects and raising the children, the Husband was ultimately described as a financial genius. Of which Roberts J defined as a person must have some exceptional natural capacity or intellectual or creative power of other natural ability which finds reflection in the exercise of an exceptional skills in a particular area of the activity. To emphasise her point, Roberts J added in the judgement if he does not, who could, highlighting the extremely high bar claimants need to satisfy that they are a genius. It would therefore have been inequitable to disregard the husbands role as the generating force behind the familys wealth achieved by his innovative visions and capability to develop those. Robert J recognised the husbands special skill and efforts despite the couples partnership as a joint enterprise. Roberts J made it clear in her judgment that the wife could not have done more but that the Husband had made a further contribution over and above the wifes. Therefore, their contributions were unmatched in terms of their joint endeavours in the marriage.

This case was beneficial in emphasising that the special contribution argument was intended to be only for exceptional cases where a contribution is unmatched to the other spouse even after the consideration of dedication to being a homemaker. Here, the husband made the cut in this case due to his genius-like attributes. However, the issue arises that the view of a genius is utterly subjective, and one judges view of a genius may be different to another judges view.

As unpredictable as a comet?

With the status that breadwinners need to meet to successfully claim special contribution arguably being a comet plus status. It makes it incredibly difficult for legal professionals to advise their clients on the outcome of their claims and whether strategically arguing for special contribution will be worthwhile in terms of legal fees. With the court seemingly firmly upholding the principle of a level playing field from White, breadwinners have a more difficult task in dazzling judges with their genius attributes. Therefore, legal professionals must make an assessment for their clients whether they believe they are a genius capable of achieving this. With no successful claim in the last ten years legal professionals will be hesitant to advise their client to choose this strategy. This may also be why we have not seen successful cases argued with many solicitors and barristers not willing to advise their clients to audition in the courts talent contest to be branded a genius and achieve a departure from equality. It seems that only if a legal professional was advising a client of the likes of James Dyson or Elon Musk could they be confident in this approach.

With London having the powerful title of divorce capital of the world it is no wonder that these exceptionally successful individuals battle over the jurisdiction of the divorce proceedings. With their many residences scattered around the world, many couples will purchase properties in the UK allowing for jurisdiction arguments to arise. With the focus on equality, England is attractive to many homemakers to achieve an even split of the assets as opposed to other jurisdictions such as the state of California. In the case of Chai v Peng the wife won the jurisdiction battle to have the divorce in England and not Malaysia. However, it is a double-edged sword in terms of special contribution. With case law emanating a feeling of unpredictability for special contribution claims, breadwinners may be more risk averse without this guaranteed win. Therefore, breadwinners may not find the English legal system so attractive for guaranteeing an unequal split of the assets. But not impossible as shown in Cooper-Hohn v Hohn.

Concluding remarks

This brings me to the concluding portion of my remarks whereby in this essay I have emphasised the rarity that is a successful claim for special contribution. The argument is intended to justify a departure from equality when dividing assets upon divorce. That the fact the success of the argument is so rare reflects how extraordinary the contribution must be to qualify as unmatched from the other spouses to rebut the principle of equal sharing in a marriage. This invalidates the core principles of why two individuals marry to be in a joint enterprise based on equality. It is a joint enterprise where each spouse takes their role to build a life together. Furthermore, it can be shown that if special contribution is allowed too often it has the potential to discriminate between the homemaker and breadwinner which will go against the principle of fairness established in White. For this contribution to be unmatched is just as rare as an individual who can be remarkably successful in their endeavours to gain the status of a genius. Of whom can be likened to a rare comet in the sky.

 

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Bibliographies

White v White [2000] UKHL 54

[2000] UKHL 54

Cowan v Cowan [2001] EWCA Civ 679

Miller v Miller; McFarlane v McFarlane [2006] UKHL 24

Work v Gray [2017] EWCA Civ 270

[2023] Fam Law 961 (August 2023)

G v G (Financial Provision: equal division) [2002] EWHC 1339 (Fam), [2002] 2 FLR 1143

Pauline Siew Phin Chai v Tan Sri Dr. Khoo Kay Peng and Others [2017] EWHC 792 (Fam)

White v White [2000] UKHL 54

S.25 Matrimonial Causes Act 1973

DR v UG [2023] EWFC 68

Work v Gray [2017] EWCA Civ 270

The Brief: Financial Remedy Update from 4PB [2023] Fam Law 961 (August 2023)

[2023] EWFC 68

[2000] UKHL 54

Cooper-Hohn v Hohn [2014] EWCA Civ 896

[2014] EWCA Civ 896, para [283]

In Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 Lord Nicholls held that special contribution should "be regarded as a factor pointing away from equality of division when, but only when, it would be inequitable to proceed otherwise.

[2000] UKHL 54

[2017] EWHC 792 (Fam)

Cooper-Hohn v Hohn [2014] EWCA Civ 896

[2000] UKHL 54

 

 

 

 

 

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