Pandora's box revisited

The most urgent question hanging on the lips of a divorcing client is often either 'how much will I have to pay?' or else 'how much will I get?' The honest answer, at an initial meeting, is usually that much will depend on the value of the asset base, once determined, and, of course, the application of section 25(2) Matrimonial Causes Act 1973 principles.


It is well established that the proper approach is to apply the section 25(2) criteria to the facts of the case, only giving priority to the welfare of minor children of the family. The factors are not equally important but will have their relative weights assessed in each case.


Decisions pre White v White [2000] 2FLR 981 often saw the wife receiving whatever she required to satisfy her needs and her husband being awarded the balance of the matrimonial pot. Ms White mounted her successful challenge to this principle and we now advise clients that, in most cases, the starting point will be an equal division of the assets.


The cases of Lambert v Lambert [2002] EWCA Civ 1685 and Cowan v Cowan [2001] EWCA Civ 679 were attempts to counterbalance the 'yardstick of equality' enunciated in White by trying to establish that there had been special contributions (section 25(2)(f) of the Act), which should be financially acknowledged and credit given. In Cowan, the judge suggested that in very few cases would the contribution be so 'special' as not to be ignored.


Epimetheus advised his disobedient wife, Pandora, not to open the box. Post Lambert and Cowan, practitioners could be forgiven for thinking Epimetheus's warning could equally be given to a client who might consider it a good idea to run a 'contributions' argument.


In the case of Sorrell v Sorrell (July 2005, Mr Justice Bennett; reporting restrictions lifted on 11 October 2005) saw a successful challenge as to whether the assets, said to be in the region of £100 million (gross) or £75 million (net) should be divided equally between the parties or whether the yardstick of equality should be departed from and, if so, to what extent.


It was accepted that the wife made a full contribution to the marriage: however, the husband's was exceptional. The application of the Court of Appeal's decision in Lambert and in particular Lord Justice Thorpe's dicta that 'for the present, given the infinite variety of facts and circumstances, I propose to mark time on a cautious acknowledgement that special contribution remains a legitimate possibility but only in exceptional circumstances' was of critical importance to this case. The other important issues went more to the quantification of the assets or to more general points.


The marriage lasted 32 years; the wife at the date of the trial was 59 and the husband was 60 years old. There were three adult sons, two of whom were married.


In March 2004, the wife filed her divorce petition, which was unopposed. On 26 March, decree nisi was pronounced. On 23 November, the wife commenced proceedings under part IV of the Family Law Act 1996 to obtain occupation of the matrimonial home and, on 2 December, the husband was ordered to occupy the basement of the home only. On 7 January 2005, that order was made final by consent and the husband ordered to make a costs contribution of £30,000.


The wife had not worked during the marriage but the husband, in stark contrast, had a very high earning capacity. It was accepted that any possibility of meaningful employment for the wife was out of the question. The wife stated that she wanted to be able to leave assets to her sons on her death.


On application of the section 25(2) principles, the court spent no time on needs/obligations and responsibilities. The standard of living was good and increased commensurately with the passing years and increased wealth. Their lifestyle was never extravagant.


The marriage was clearly a long one, spanning 32 years, and was at the top end of duration. Neither party suffered any form of disability and neither party sought to place reliance on conduct (section 25(2)(g) of the Act). It was also determined that there had been no loss of benefits (section 25(2)(h)). The remaining, and central, issue of the case was section 25(2)(f), relating to contributions.


In evidence, at the outset, the wife accepted that the husband had generated a significant majority of the assets. She went on to say that she thought her contribution as homemaker was no less valuable and no attempt should be made to quantify it in tangible financial terms.


The judge accepted, notwithstanding the wife's contrary efforts, the husband's evidence that he had been a good father and 'not allowed my work to eclipse my family life, in which I have maintained a full family role throughout my career'. The judge found the wife's attempts to downplay the husband's role as a father to be 'unfortunate and she had no basis for such a stance'.


The wife's view was that Mr Sorrell was a bad husband, and the judge expressed some acknowledgement of her critical comments. However, as she had not sought to rely on conduct (section 25(2)(g)), the judge determined it had nothing to do with the case and ignored all spousal criticisms.


In his judgment (paragraph 102), Mr Justice Bennett noted the anxiousness of previous judges in Lambert, Figgins v Figgins [2002] FAM Court of Appeal 688 and the decision of Mr Justice Coleridge in G v G (financial provision; equal division) [2002] EWHC 1339 (Fam), [2002] 2 FLR 1143 not to open a 'financial Pandora's box' that would permit spouses to run the 'special' contribution argument in every case where the assets exceeded the parties' reasonable needs.


Mr Justice Bennett considered whether the husband had made a special contribution in exceptional circumstances. In his judgment, he was satisfied that the evidence established that the husband possessed the 'spark' or 'force' or 'seed of genius' that lay behind the explanation for the success story.


This ruling is of significant importance not only to high-value cases. The judge based his decision not on the size of the assets but on the husband's abilities (paragraph 118, 'Fairness in the circumstances of this case demand that there be a departure from equality'). Accordingly, the award was made as to 60% to the husband and 40% to the wife.


The wife has applied for permission to appeal against the decision.


How should the contributions argument be approached now? We surely have a clear signal that a contributions argument will succeed when the requirements of Lambert are fulfilled. What is perhaps interesting is to what extent practitioners may be able to convince district judges to accept the applicability of the Sorrell decision when dealing with cases that do not fit into the high-net-worth realms.


Mr Justice Bennett made it clear that his decision was not influenced by the high-net-worth value of the case. The higher award to the husband was triggered by the husband's outstanding contribution. This is an interesting academic principle, but only time will tell whether it will have a practical application in small money cases.


The lid to Pandora's box has indeed creaked open, but it has only released a bug that is familiar, at least in judicial definition if not in practice, to practitioners since the decision in Lambert. It would seem the law is unchanged and the case of Sorrell is not an open invitation to challenge the equality argument, unless those contributions were born out of pure genius in exceptional circumstances. The Pandora bug must still wear a stellar coat of arms.


By Gill Rivers, consultant, Charles Russell, London