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DR v UG [2023] EWFC 68 – Special contribution argument fails

Posted on 16 October 2023

The husband was a board member and driving force behind a pharmaceutical business and a world-leading manufacturer of a medical product, based in England. The company was sold in 2022 for over £400m. The wife is a homemaker, having given up her job to care for the children. The parties began cohabiting in 1999 and married in 2004. 

The husband had been involved in the business since 1999. He successfully turned its fortunes around and became CEO in 2016. He paid £310,000 for nearly 70% of the shares in the trading company and one of the issues was how the £310,000 had been funded, it being suggested that this was done through mortgaging the family home. 

The husband had suffered from mental health issues and stepped down as CEO in July 2020. He continued to work for the company one day per week. His contract ended on 31 December 2022.

Financial Forms E were exchanged in October 2020, at which time the husband said he had to resign as CEO as he was not able to give the business his full attention due to the divorce and Children Act proceedings.  He was pessimistic about the future of the trading company, referring to delays to drug trials as a result of the pandemic.

The wife sought 50% of the proceeds of the husband's share in the business. She relied on her contributions to the family, which had included moving to different countries in support of the husband's career. The husband offered 30% arguing special contribution by his endeavours and business acumen. He pointed to the fact that his £310,000 investment had grown to over £250M. He further argued post-separation endeavour and that all but one year of this work was conducted after the breakdown of the marriage.

Moor J did not accept that this was a "special contribution" case and noted that special contribution had last been successfully argued in 2014. In order to amount to "special contribution" a contribution needed to be:

  • of a wholly exceptional nature;
  • a disparity in the respective contributions of the parties to the welfare of the family that it would be inequitable to disregard; and
  • the amount of the wealth alone may be so extraordinary as to make it easy for the party who generated it to claim an exceptional and individual quality which deserves special treatment. A windfall is not enough.

He also rejected the husband's position on post-separation endeavour. No more had been required to "harvest" the asset, as it had already been sold. The husband was no longer employed there. There was no undue delay and it was not a new venture created since the breakdown of the marriage. Moreover, the capital used had come from the matrimonial home.

The wife was therefore awarded 50% of the parties' assets, which amounted to £284m in total.

Sandra Davis says: Spouses who have occupied the "breadwinner" role within a marriage have long sought ways to preserve the wealth that they consider to have been generated by "their" efforts (as opposed to being a product of the marital partnership). The concept of special contribution, initially envisaged as being something wholly out of the ordinary has at times been raised by the financially stronger spouse to preserve their assets, even where the only unusual feature is the scale of the wealth involved. This case clearly reminds parties and practitioners that to establish special contribution, an extremely high threshold needs to be met. The courts will not discriminate against those who have fully contributed to a marriage but without directly generating wealth.  

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