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Is your contribution ‘special’ enough? – Lara Myers’ article in Solicitors Journal

Lara Myers article was published by Solicitors Journal on 23 December 2016

Written by Lara Myers
04/01/2017

The case law on special contributions shows the court has set the threshold inordinately high for parties seeking to deviate from equality, writes Lara Myers.

In the recent case of Robertson v Robertson [2016] EWHC 613 (Fam), the husband’s legal team attempted to persuade Mr Justice Holman that his role as founder and chief executive of the online fashion giant ASOS justified a departure from the sharing principle.

Although Mr Robertson had been the moneymaker in the family, his wife had been an ‘excellent homemaker and an excellent mother’, the judge declared, and both had therefore made equal contributions to the marriage. While the husband had been extremely successful in what he had achieved, it was in no way ‘extraordinary’. The judge commented that Mr Robertson had not invented the internet, nor had he invented internet clothes shopping. He had simply exploited the growing online fashion retail market. The judge felt that to differentiate between the husband’s and wife’s roles would be ‘highly discriminatory’.

If founding an online fashion empire worth over £2bn does not constitute a ‘special contribution’ within a marriage, what does?

In Cowan v Cowan [2001] EWCA Civ 679, the court accepted that the husband had made a ‘special contribution’ as he had set up a plastics company that developed bin liners. Lord Justice Thorpe described the husband as a ‘genius’ and this, therefore, justified a departure from equality.

Cowan led to numerous cases in which one party argued that the wealth generated by his or her expertise meant that it was reasonable to depart from equality. However, in Lambert v Lambert [2002] EWCA Civ 1685, the Court of Appeal sought to limit the application of special contributions, making clear that the argument was appropriate only in truly exceptional cases.

Following White v White [2001] 1 AC 596 and Miller and McFarlane [2006] UKHL 24, Charman v Charman (No 4) [2007] EWCA Civ 503 developed the principle of a spouse’s ‘special contribution’. Mrs Charman conceded that her husband’s ‘special contribution’ had been of such significance it justified a departure from an equal division of assets, and Mr Justice Coleridge agreed, holding that it entitled him to 63.5 per cent of the matrimonial assets, with the wife getting the other 36.5 per cent.

The husband appealed on the basis that the judge had made insufficient allowance for his special contribution. On appeal, Sir Mark Potter reviewed and added some clarity to the relevant law on special contributions. He suggested guidance on the appropriate range of percentage adjustment to be made in special contribution cases – namely that such a contribution should normally at least entitle the person who had made it to 55 per cent of the assets. However, it would be unlikely to entitle that party (after a long marriage) to receive more than twice as much as the other party, and therefore the maximum that the ‘special contributor’ was likely to receive was about two-thirds.

The special contribution argument was considered in two other recent cases. In SK v TK [2013] EWHC 834 (Fam), the parties’ net assets were approximately £18m. While the husband had created some technology early on in his career, most of his work related to the management of his business. Mr Justice Moor dismissed the husband’s special contribution argument, stating that ‘it would not be accurate to describe him as a “genius”’ and, though rare, his business success ‘cannot be said to be “exceptional”’. Put simply, the husband did not make the cut.

In Cooper-Hohn v Hohn [2014] EWHC 4122 (Fam), the husband was a hedge fund manager who had built up $6bn during the marriage. The wife was a director and chief executive officer of their principal charitable foundation and primary carer of their four children. When the couple separated in 2012, their personal wealth was $700m. It had doubled in value by the time of the final hearing in 2014, largely due the husband’s effective investment strategies. Mrs Justice Roberts accepted that the husband’s special contribution to the marriage and post-separation accrual justified a departure from equality.

The husband’s ‘financial genius’ was demonstrated by the vast wealth he had generated. Roberts J held that the wife could not have done more to qualify for an equal share of the parties’ assets, but that the husband had made a further contribution that was over and above hers.

Examining the case law discussed in this article illustrates that the court is willing to accept the ‘special contribution’ argument only in very exceptional circumstances. The court has set the threshold inordinately high. Family solicitors must therefore be cautious before choosing to raise this argument: the client’s contribution must be wholly exceptional and the argument is only likely to be successful where your client is in the realms of Bill Gates – or even Donald Trump.

Read the article on Solicitors Journal website here.

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Lara Myers

I joined Gordon Dadds as a trainee and qualified into the firm’s Family department in September 2015. I specialise in all aspects of the divorce process, including financial issues and private law child matters. I also deal with pre-nuptial and post-nuptial agreements.  I am a member of Resolution and strive to establish a constructive and non-confrontational approach when dealing with family disputes.

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