When it comes to marriage, many ascribe to the philosophy of ‘what’s yours is mine and what’s mine is yours’. However, the tide can often turn when a relationship breaks down. This is particularly evident in cases where one party to the marriage is successful and has generated significant wealth because of their ‘special contribution’ or ‘genius’. In many such instances, the main breadwinner will look to minimise the contribution of their spouse, whose primary role may have been that of a homemaker. Marie Stock, Senior Associate Solicitor at Coffin Mew, talks lawyer monthly through the intricacies of said ‘special contribution’ or ‘genius’ and the impact this can have on UK divorces.
The case of White v White (2001), established the fundamental principle of ‘sharing’. In reaching a judgement, Lord Nicholls observed, ‘there is no place for discrimination between a husband and wife and their respective roles…whatever the division of labour chosen by the husband and wife or forced upon them by circumstances, there should be no bias in favour of the money earner and against the home maker and child carer’.
The court took a different view in the case of Sorrell v Sorrell (2005). In this instance, the parties, married for some 34 years, had accumulated wealth of over £73m. The court remarked on the husband’s brilliance and attributed this to the company going from strength to strength. It decided that the husband did possess the ‘spark or force or seed of genius’ and concluded that his genius had generated his fortune. The assets were therefore divided 60:40 in his favour.
Following the same approach, in Charman v Charman (2007), the court found in favour of the husband and the assets were divided 63:37. The court identified the need for an adjustment where there had been a special contribution. It was concluded that any such adjustment needed to be ‘meaningful and significant’ in its nature, not merely a token gesture.
The court also commented that a ‘threshold of wealth’ should be identified, below which, it would be unlikely to conclude that there had been a ‘special contribution’. A figure of between £30m and £50m was cited.
In the case of Cooper-Hohn v Cooper-Hohn (2014), matrimonial assets exceeded £1bn. The husband was a successful hedge fund manager.
The court decided that the husband’s ‘exceptional business acumen and financial genius’ justified a departure from equality, ruling that the wife should receive 1/3 of the matrimonial assets.
Nonetheless, the judiciary has been seen to shift its approach on occasion. In Robertson v Robertson (2016), the husband had acquired shares in ASOS, a successful online clothing company, before parties met. The court acknowledged that whilst the husband was hugely successful, he was not a genius. The court awarded the wife an equal division of the matrimonial assets in addition to a 1/3 division of the value of the husband’s shares in the company. The court commented that the wife had been an excellent home-maker and to treat the husband’s special contribution as “unmatched” would be “highly discriminatory“.
In the case of Chai v Peng (2017), the court followed a similar line of reasoning.
The parties had been married for 42 years and had five children together. The husband had generated wealth of £205m and it was calculated that matrimonial assets totalled £161 million.
The court ruled that there should not be a departure from equality on grounds of special contribution, noting that the wife had contributed as a mother and homemaker.
In Work v Gray (2017) the husband had generated over £225m from his work in the private equity firm, Lone Star. In the first instance, the court stated that a ‘special contribution’ was hard to establish. On appeal, the judge Holman J commented ‘it is sufficient for the court to determine whether the contribution is wholly exceptional’. This required the court to look at both the nature of the contribution and to determine whether it derives from an ‘exceptional and individual quality’. The court dismissed the husband’s appeal.
The court has made it clear that it is not easy to identify what is ‘genius’, despite many such protestations from wealthy parties who are keen to ring-fence their ‘special contribution’ to their marriage. Whilst many of the above cases demonstrate a shift away from the ‘sharing principle’ applied in the case of White v White (2001), it is apparent that each case must still be considered with regard to its own individual facts. Although a ‘threshold of wealth’ guide has been proposed, arguably, we are a long way off a definitive ‘genius’ test in the context of matrimonial settlements.