The family assets were in the region of andpound;8.5M. The wife sought a half share. The husband proposed that she should have 40%. The husband had built the family fortune through exceptional hard work and astute business acumen in the field of substantial development and construction projects. The court considered how capital and income could be calculated in ancillary relief proceedings: ‘The valuation of a person’s earning capacity by its reduction to a fixed figure is not an exercise that can usefully be embarked upon. There are too many imponderables. However, it seems to me perfectly proper to pray in aid, by way of makeweight to an argument in relation to any particular capital division, an earning capacity available to one party or another over and above income generated from the capital being divided.’
‘But how should the court now evaluate those respective contributions in the context of section 25? It is in this area that, needless to say, enormous amounts of forensic energy have been expended. That this should have happened is largely due, of course, to the recent case law on the subject. I have had the benefit of being referred not only to White at length but also all the decided cases which have been reported since that case on this particular subject. The husband’s counsel has helpfully produced a folder containing all the relevant authorities. He did this in aid of his argument that the husband’s contribution should be not regarded as one of equality with the wife’s but of a character and quality which marks it out as special or stellar or outstanding. This, he said, should lead to a finding that (after applying the equality crosscheck required since White) his client should end up with more than half the resources.
In a number of decisions since White eg Cowan [2001] 2 FLR 192 and L v L (Financial Provision: Contributions) [2002] 1 FLR 642, the court has recognised, in an appropriate case, the possibility of a (financial) contribution by one spouse or another at such an extra-ordinary level that it is entitled to special recognition and value. Unfortunately, this has led to this concept becoming the centrally important issue in almost every case particularly where the assets exceed the party’s reasonable needs. Hardly a case is heard nowadays than that one party (usually the husband) seeks to establish that he has played a markedly more valuable part in the accumulation of the wealth and the marriage partnership so that he should be specially rewarded by way of a greater share of the assets. I wonder whether, with respect to the members of the Court of Appeal in Cowan, they would have made the extensive remarks they did (about the possibility of a special contribution) if they had realised the forensic Pandora’s Box that would be opened in actual practice. The effect is not at all dissimilar to the ‘conduct’ debates of the 1970s. In those days ‘conduct’ was similarly raised against wives to try and limit their claims. However, the court, recognising the undesirable consequences inherent in those arguments and further the impossibility of fairly adjudicating upon them introduced the concept of ‘obvious and gross’ very effectively to limit their application. It is suggested by some that these current ‘special contribution’ debates are reintroducing conduct by the backdoor. I would say by the front door. For what is ‘contribution’ but a species of conduct. ‘Conduct’ (subsection 2(g)) refers to the negative behaviour of one of the spouses. ‘Contribution’ (subsection 2(f)) is the positive behaviour of one or other of the parties. Both concepts are compendious descriptions of the way in which one party conducted him/herself towards the other and/or the family during the marriage. And both carry with them precisely the same undesirable consequences. Firstly they call for a detailed retrospective at the end of a broken marriage just at a time when parties should be looking forward not back. In part that involves a determination of factual issue (and obviously the court is equipped to undertake that). But then, the facts having been established, they each call for a value judgment of the worth of each side’s behaviour and translation of that worth into actual money. But by what measure and using what criteria? Negative ‘conduct’ is one thing (particularly where it is recognisably ‘obvious and gross’) but the valuing of positive ‘contribution’ varies from time to time. Should a wealth creator receive more because eg his talents are very unusual or merely conventional but well employed? Should a housewife receive less because part of her daily work over many years was mitigated by the employment of staff? Is there such a concept as an exceptional/special domestic contribution or can only the wealth creator earn the bonus? These are some of the arguments now regularly being deployed. It is much the same as comparing apples with pears and the debate is about as sterile or useful.’
the court concluded as to the contributions: ‘Does that put the husband into that narrow category of wealth creators whose special gift or talent is the foundation of great wealth? I cannot so find in this case. I cannot evaluate the husband’s contribution as greater than the wife’s without discriminating against her on the grounds that the work she did over just as long a period was of less value than the husband’s. That is precisely the approach foresworn by Lord Nicholls. The husband in this case was a hard working, dedicated husband, a father and provider over 32 years. By the same token the wife was a hard working and dedicated housewife, a mother and homemaker over the same period. ‘Each in their different spheres contributed equally to the family’ per Lord Nicholls. To find otherwise would, on the facts of this case in my judgment, amount to blatant discrimination. The husband’s role was the glamorous, interesting and exciting one. The wife’s involved the more mundane daily round of the consistent carer. That was the way in which the parties to this marriage chose, between themselves, to organise the overall matrimonial division of labour. How can it then be said fairly, at the end of the day, that one role was more useful or valuable (let alone special or outstanding) than the other in terms of the overall benefit to the marriage partnership or to the family?’ The court commented on the costs incurred (andpound;400,000): ‘That is not especially unusual in this class of case. But the parities are not assisted to achieve compromise when they are encouraged by the law to indulge in a detailed and lengthy retrospective involving a general rummage through the attic of their marriage to discover relics from the past to enhance their role or diminish their spouses. Perhaps ‘obvious and gross’ has a renewed role here. ‘Obvious’ because it imports the concept of very easily discernible and ‘gross’ in the sense of it being abnormally large. Unless this or something similar is soon introduced to curb these debates I fear there is a real danger that the forward looking White innovations will be lost in a sea of post break-up, backward-looking mutual recrimination and the court’s task and role in this already uncertain area will thereby be set back at least a generation.’
Judges:
Coleridge J
Citations:
[2002] 2 FLR 1143, [2002] EWHC 1339 (Fam)
Statutes:
Matrimonial Causes Act 1973 23(2)(f) 23(2)(g)
Jurisdiction:
England and Wales
Cited by:
Cited – McFarlane v McFarlane; Parlour v Parlour CA 7-Jul-2004
Appeals were made against orders for periodical payments made against high earning husbands. The argument was that if the case of White had decided that capital should be distributed equally, the same should apply also to income.
Held: The . .
Cited – Lambert v Lambert CA 14-Nov-2002
The parties appealed an order for the division of the family’s 20 million pound fortune on divorce. The husband argued that his special contribution to the creation of the wealth meant that he should receive a greater share.
Held: The Act gave . .
Cited – Sorrell v Sorrell FD 29-Jul-2005
The parties contested ancillary relief on their divorce. The marriage had been very long, and the assets were very substantial. The husband contended that these assets represented an exceptional contribution on his part.
Held: In this case an . .
Cited – Sorrell v Sorrell FD 29-Jul-2005
The parties contested ancillary relief on their divorce. The marriage had been very long, and the assets were very substantial. The husband contended that these assets represented an exceptional contribution on his part.
Held: In this case an . .
Cited – Miller v Miller; McFarlane v McFarlane HL 24-May-2006
Fairness on Division of Family Capital
The House faced the question of how to achieve fairness in the division of property following a divorce. In the one case there were substantial assets but a short marriage, and in the other a high income, but low capital.
Held: The 1973 Act . .
Cited – Haines v Hill and Another CA 5-Dec-2007
On the divorce, the husband was ordered to transfer his share in the house to the wife. On his bankruptcy shortly after, the order was confirmed. After the wife sold the property at a profit, the trustee in bankruptcy applied to set the transfer . .
Lists of cited by and citing cases may be incomplete.
Family
Updated: 20 April 2022; Ref: scu.198592