Weekly Family Law Update June 21, 2023

Husband not entitled to more than half of assets, court rules

It has often been said that the starting-point for any division of assets between husband and wife on divorce is an equal division. However, this is not always the case. It is true that when a marriage ends each party is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary.

Whilst there is no “one size fits all” answer for why there is a departure from an equal split; the most common such good reason is that a half share of the assets will not be sufficient to meet one of the party’s financial needs: often where there are children involved or other material circumstances.

But in many cases, particularly where the assets are more than enough to meet the reasonable needs of both parties, an equal split is the most likely outcome, where assets are to be “shared”. Again, as part of the running theme, this is not always the case.

However, in such cases one of the parties may still feel that they should be entitled to more than half, and they will put forward an argument in support of this claim.

In a recent case in the Family Court the husband put forward two arguments in support of his claim that he was entitled to more than half. As we will see, the court did not accept either argument.

Special contribution

The first argument that the husband put forward was that he had made a ‘special contribution’ towards the assets of the marriage, such that he should be entitled to more than half.

And it was certainly true that the husband had made a very substantial contribution towards the assets of the marriage.

Whereas during the course of the marriage the wife had been a home-maker and child-carer, the husband had pursued a very successful business career, which was responsible for amassing most of the assets, which by the time of the final hearing of the wife’s financial remedy application totalled some £284 million.

But was that sufficient to amount to a ‘special contribution’?

The law does recognise that a special contribution by one party can entitle them to a greater share of the assets, but only in exceptional circumstances.

Here, however, the judge did not consider that the husband’s financial contribution was sufficient to meet that high bar. The work of the husband was not of such a wholly exceptional nature such that it would be obviously unfair to be ignored; there was not such a disparity in the respective contributions of the parties to the welfare of the family that it would be inequitable to disregard it; and the amount of the wealth was not so extraordinary as to make it easy for the husband to claim an exceptional quality which deserved special treatment.

‘Post-separation endeavour’

The second argument put forward by the husband was that he had generated much of the wealth after the parties separated, so that wealth should not be shared with the wife.

And it is the case that the court will consider assets acquired after the separation to be ‘non-matrimonial’, and therefore not to be divided between the parties, unless required to meet one party’s needs (which would not be the case here, as obviously the assets were more than enough to meet the wife’s reasonable needs).

In support of his argument the husband pointed out that at the time that the parties separated in 2019 his interest in his business was worth only £33 million, whereas when it was sold in 2022, it was worth over £250 million. The husband claimed that this increase was down to his creating an entirely new business venture after the parties had separated.

The judge did not agree. He found that the husband had not created a new venture – it was the same business that had been created during the marriage.

Accordingly, the husband failed on both of his arguments. There was no good reason why the wife should not be entitled to an equal share of the assets. The court therefore ordered that they should be divided equally.

How Prince Family Law can help?

David Prince is a leading expert in high net asset and complex financial cases regularly dealing with multi million pound divorces which have included complex offshore trusts, multiple businesses, substantial farms, solicitors, accountancy, medical and dentistry practices and entrepreneurs.