The recent case of DR v UG [2023] EWFC 68 reminds parties and practitioners that to establish a special contribution, an extremely high threshold must be met. Read on to learn more.
Firstly, What is Special Contribution?
When it comes to divorce, financial settlements start their negotiations on a 50:50 basis. However, spouses who feel their contribution to the marriage has been far greater than their other half, are left feeling that these 50:50 arrangements are severely unfair. In these circumstances, a case can be made for a special contribution.
Special contribution might refer to a financial contribution made by one party in a divorce or separation that is considered exceptional or extraordinary. These contributions could involve factors such as a significant financial windfall or a substantial non-financial contribution to the marriage. But, as the DR v UG case warns us, the courts have a high criterion.
The Facts of the Case
During their marriage, the husband had been involved in business and had completed a management buyout of a company. He purchased his majority shareholding (70%) for £310,000. This had been funded through mortgaging the family home. The business was a success, and this led to him selling his shareholding after the separation but before the final hearing. The total assets had increased to £250 million.
The Final Hearing
The wife sought 50% of the proceeds of the husband’s share in the business. The assets were marital as the wife relied on her contribution to the family which included moving to different countries. The husband submitted that there was justification to depart from equal sharing on two grounds: his special contribution to the marital finances and his post-separation endeavour.
The judge, Mr Justice Moor, did not accept that there was a ‘special contribution’ when comparing the case to Work v Gray [2017]. He made the point that the course of business was not “wholly exceptional in nature.” Furthermore, the judge was not satisfied that the second test had been met as the wife during the marriage, had often looked after the children whilst the husband was away for around 100 days per annum.
Regarding the post-separation endeavour, the husband argued that he was marketing the same product, but it was to be used in a different field, of specialised therapies, which he argued was a new venture. Mr Moor did not accept this and stated that it was the same product dusting the marriage and at the time of the sale. The use of a new strategy did not give rise to a new venture.
The facts of the case did not give rise to departure from equal sharing. The wife was awarded 50% of the parties’ assets.
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