The Telegraph reported just before Christmas that :

Millionaire seeks greater share in divorce because he is a ‘genius’, prompting court to examine the meaning of the word 

 

The case is one involving a multimillionaire financier who is unhappy with the equal division of the finances when he and his wife divorced. It has been going for some time – in early February 2015 it was reported that Mr Work didn’t want to part with ANY of his fortune, prompting the judge, Mr Justice Holman to say “I am not sure you and I are on the same planet.” The Telegraph, reporting whilst the hearing was ongoing, said that the judge had expressed his disbelief at the husband’s position at the outset, namely that “a wife of roughly 20 years, married when neither had a bean, and he is now worth at least £150m, should be expected to go away with just over £3m”. At the time the judge’s exasperation with what he apparently saw as an unreasonable approach to attempting to settle the matter, featured in most news reports. The case could be reported in this way because of Mr Justice Holman’s preference for sitting in open court.

The background facts in very brief form are these :

The couple had been married for some 20 years, and at some stage had signed a Texan post-nuptial agreement. The matrimonial wealth was vast and had been generated by the husband. Mr Work said that the wife’s decision to come to court to try her hand for more meant she should not have anything.

 

So what’s all this about being a genius?

[UPDATE : There is a great explanation of this topic in The Times here].

In so called “big money cases”, where there can be no argument that there is plenty to go around, it has often been argued that in some exceptional cases the “special” or “stellar” contribution of a fantastically successful businessperson (usually the husband) should justify a departure from equality or even that the husband should retain the vast majority of the wealth. In a case called Miller & Macfarlane it was said that

The characteristics or circumstances which would result in a departure from equality have to be of a wholly exceptional nature such that it would very obviously be inconsistent with the objective of achieving fairness for them to be ignored…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. Often, however, he or she will need independently to establish such a quality, whether by genius in business or some other field.

Mr Justice Holman was not terribly attracted to the idea of trying to decide whether or not Mr Work was really a genius, saying

1. Paragraph 80 of Charman, excerpted in paragraph (vi) above, is one of several authorities that employ the word “genius”. It appears also in Lambert, and very recently in Cooper-Hohn, and in other authorities in which the court has debated whether the person claiming a special contribution possesses the quality of “genius.” I personally find that a difficult, and perhaps unhelpful, word in this context. To my mind, the word “genius” tends to be over-used and is properly reserved for Leonardo Da Vinci, Mozart, Einstein, and others like them. It may lead, as it did in this case, to the rather crude question to (in this case) the husband: “You don’t describe yourself as a genius, do you?” Not surprisingly, the husband, like any person with a modicum of modesty, was rather nonplussed by the question. Oscar Wilde is famously said to have declared that he had nothing to declare but his genius. More modest, even if exceptionally talented, people may be slow to make such a claim.

2. What I understand is meant by the word “genius” in this context, and what is required for a claim to a special contribution to succeed, is some “exceptional and individual quality which deserves special treatment.” See Charman at paragraph 80. But the fact that judges have used the word “genius” in this context does tend to underline how exceptional, individual and special the quality has to be.

3. It is clear from the above propositions and the outcome in other cases that hard work alone is not enough. Many people work extremely hard at every level of society and employment. Hard work alone lacks the necessary quality of exceptionality. Further, to attach special weight to hard work in employment risks undervaluing in a highly discriminatory way the hard work involved in running a home and rearing children.

4. It is clear also that a successful claim to a special contribution requires some exceptional and individual quality in the spouse concerned. Being in the right place at the right time, or benefiting from a period of boom is not enough. It may one day fall for consideration whether a very highly paid footballer, who is very good at his job but may be no more skilful that past greats, such as Stanley Matthews or Bobby Charlton, makes a special contribution or is merely the lucky beneficiary of the colossal payments now made possible by the sale of television rights.

Mr Justice Holman’s full judgment can be read here : Gray v Work [2015] EWHC 834 (Fam) (06 March 2015). He concluded that Mr Work, whilst very successful and hard working was not a genius and his wealth generation was not so exceptional as to justify a departure from equality.

At the end of his judgment, Mr Justice Holman also urged the parties to down weapons and sort out the nuts and bolts in light of his decision :

I wish to stress that the important decisions in principle have now been made. The feuding and position taking must now stop. I would expect solicitors and counsel of the repute in this case to bend every endeavour to enabling these parties now to compromise and agree, and to bring this terrible conflict to an end.

Sadly, this went unheeded…

 

The Appeal

On 20 January 2016 Lady Justice King granted Mr Work permission to appeal against Mr Justice Holman’s order. Her judgment granting permission can be read in full here : Work v Gray [2016] EWCA Civ 286 (20 January 2016). From that judgment we can see that an appeal had been made some time earlier and permission to appeal had been refused on paper in July 2015 because there were no reasonable prospect of succeeding in appealing the exercise of the judge’s discretion, but the application had been renewed leading to an oral hearing. By this stage the “special contribution” or “genius” point was the focus of the appeal, in particular the way in which the judge had approached it. The argument boiled down to whether or not the judge had wrongly taken the view that a special contribution had to involve something more than just a really enormous amount of generated wealth. The husband argues that some sums are so exceptional that they are enough to qualify as a “special contribution” even without the genius feature. The appeal judge appears to have been persuaded that this point was arguable, which was enough to allow the appeal to proceed to a full hearing. It appears that the Court of Appeal were swayed in part by the fact that “special contributions” is something that has been cropping up in big money cases for years, and the state of guidance through caselaw is making it difficult for lawyers to advise their clients with any certainty whether or not “special contributions” applies in their case. It is likely therefore that whatever the outcome of this case the Court of Appeal will take the opportunity to try and clarify the law in this area.

It seems that it is this judgment from as long ago as January 2016 that is the subject of the Telegraph article. It’s timing is a bit of a mystery, but it is likely that journalists have had this appeal diarised for some time and have put in a holding article, as the appeal hearing originally scheduled for late 2016 has been put off until February (see below).

 

The Number Crunching bit

In the meantime, on 15 February 2016 Work v Gray (Phase II: Computation and Distribution) [2016] EWHC 562 (Fam) (15 February 2016) another High Court Judge, Mrs Justice Roberts, had the unenviable task of sorting out the actual details following the “in principle” decision of Mr Justice Holman – basically, how should the different types of assets be valued, treated and divided up to achieve a half share for each? Mrs Justice Roberts tells us in her judgment that

It is agreed that the further journey which this case will take to the Court of Appeal in October or November 2016 does not in any way prevent me from dealing with the remaining aspects of this “Phase II hearing”.

A particular issue seems to have been what discounts should be applied to certain assets depending on how liquid or illiquid they were. In short, the Wife contended that the husband, who was keeping the illiquid assets, should not benefit from any discounts from gross value when the amount of her cash payment of 50% was calculated. The Judge heard not less than 3 expert accountancy experts, but ultimately disagreed with the wife on the principle of discounting : she did apply some discounting, but not as much as contended for by the husband.

Things don’t seem to have warmed up at all by the time of this hearing, when the judge said

The state of mutual hostility between these two parties is perhaps best summed up by H’s reference to W at one stage as “my counter-party”. I have little doubt that W’s perception of H as a litigant is equally fixed in the territory of his determination, as she sees it, to pay her as little as possible.

Mrs Justice Roberts, whilst publishing her judgment giving full details of the case and providing the names of the parties, sat in private as is more common in this sort of dispute.

 

What next?

According to the Court of Appeal Civil Appeals Case Tracker, the appeal is due for hearing on 7 or 8 February 2017 (it appears that for some reason the hearing scheduled for late 2016 had to be postponed), so we should expect to hear more around then. However, it is in a “floating list” so it is possible it will be postponed if something more urgent comes up. We will attempt to update this post or post a fresh one once the appeal has concluded. The Court of Appeal hearing will take place in public.

Feature Pic : Saturn by Nasa Goddard Space Flight Center on Flickr – thanks!