England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		29/07/2005

This judgment is being handed down in private on Friday 29th July at 2 pm. It consists of 24 pages and has been signed and dated by the judge. This judgment may be shown to the parties immediately upon receipt by Counsel. (It may not be reported without leave of the judge.) Afternote – This was lifted with effect from 10th October 2005

The Honourable Mr Justice Bennet:

1. The substantial issue in this ancillary relief application is whether the assets, said to be of the order of £100m (gross) or £75m (net of tax) should be divided equally between Sir Martin and Lady Sorrell ("the husband" and "the wife" respectively) or whether the yardstick of equality should be departed from (and if so, to what extent) on the ground that, notwithstanding that the wife has made as full a contribution as possible, the husband's contribution was exceptional. Thus the application of the Court of Appeal's decision in Lambert v Lambert [2002] EWCA Civ 1685, [2003] 1 FLR 139, and in particular Thorpe LJ's dicta at p.158c:-

"However for the present, given the infinite variety of fact and circumstance, I propose to mark time on a cautious acknowledgement that special contribution remains a legitimate possibility but only in exceptional circumstances" is of critical importance in this case. There are other issues, but these go to the quantifications of the assets or more general points.

2. The short facts of the inception, course and duration, and termination of the marriage are these. On 25 April 1971 the wife, then 25 years old, and the husband, then 26 years old, married. They have three grown up sons Mark, Robert and Jonathan, two of whom are married. In 1972 they jointly purchased 3, Winnington Road, N2. That property remained their home until in July 2001 they jointly purchased 6, Walton Place, SW3. In 2003 Winnington Road was sold. In 1999 the marriage ran into difficulties. However the parties were reconciled. By the end of 2003 the marriage ended. In March 2004 the wife filed her divorce petition. It was unopposed. On 26 May 2004 a decree nisi was pronounced. On 23 November 2004 proceedings were taken by the wife under Part IV of the Family Law Act 1996 in respect of the husband's occupation of Walton Place. On 2 December 2004 HHJ Mayer, on an interim basis, ordered that the husband be allowed to occupy the basement only. On 7 January 2005 that order, by consent, was made final and the husband was ordered to pay the wife £30,000 towards her costs of the application.
3. The marriage lasted 321/2 years, which, by any standard, is very long. The wife is now 591/2 years old, the husband 60 years old. Both of the parties are Jewish. The husband comes from a more orthodox background than the wife. She adapted to that. She explained in her evidence how they adopted traditional rules – she the homemaker, he the breadwinner. She was very family orientated. She told me she married for "keeps" and for love. She wanted to grow old with the husband. She told me that Jewish family life is sacrosanct. The end of the marriage, I am satisfied, was very distressing for her.
4. Precisely why the marriage did end is of little or no relevance, but at least in part the success of the husband, and as will be seen it was a phenomenal success story, must have played some role in creating the conditions in which the marriage foundered. I shall return to the wife's evidence, written and oral, on her contribution in due course.
5. The husband's father, was until his death in 1989, the husband's constant mentor to whom he was deeply attached. His father ran a chain of electrical retailers. After school the husband went to Cambridge University where he read economics. Upon graduation in 1966 he went to Harvard Business School. In 1968 he completed his MBA. At the time of the marriage the husband was working for Mark McCormack in his sports and personality management agency.
6. In 1974 the husband began working for James Gulliver as his personal financial adviser. In 1977 the husband moved to Saatchi and Saatchi as its financial director. He left in 1985. During those 9 years he refined schemes for acquisitions one of which became known as the "earn out" technique i.e. the key personnel of the company taken over were locked in until certain profit targets were met. Then their shares or cash would be made available.
7. According to his affidavit of 1 June 2005 the husband played an important, if not pivotal, part in imposing strict financial discipline in an industry where financial control was generally neglected. He also had a strong rapport with financial institutions of the City of London. As he neared the age of 40 he felt he was ready to "start doing for my own company what I had done so well for others".
8. In 1985, together with Mr Rabl, a stockbroker, the husband found a company based in Kent that manufactured supermarket shopping baskets, pots and pans, namely Wire and Plastic Products Ltd ("WPP"). In May of that year he and Mr Rabl bought a 27% stake in WPP for £250,000 each and changed the name to WPP Group plc. In December 1986 the husband left Saatchi and Saatchi and became the Chief Executive Officer of WPP, a post he has retained ever since.
9. Between 1986 and 1988 WPP purchased about 18 further companies, here and in the USA, and in doing so the share price increased to £7-49 and the market capitalisation to £90m.
10. In 1987 WPP took over J. Walter Thompson ("JWT"), the prestigious advertising agency. According to the husband, that acquisition marked a pivotal moment in the development of WPP. WPP took over a company JWT, which was thirteen times its own size. Whilst there were other players in this takeover the husband's evidence, which I have no reason to doubt, is that he was the driving force, persuading both the board of JWT and investors that the deal was a sound one. The group's profit level of 4% rose to 10% not within 4 years the husband told investors but in about 11/2 years. He attributes that to his financial systems which he put in place.
11. In October 1987 came the stock market crash. By early 1989 the WPP Group share price had recovered to a peak of 694p.
12. In 1989 WPP took over another prestigious advertising agency, Ogilvy and Mather. The husband in his statement (paras 46 to 48) describes it. It was not an easy operation for the reasons he there sets out. However, in 1989/90 there came a real crisis with the recession that wrought so much havoc for many people. In 1989 the share price of WPP reached a peak of 672.30p. By late 1989/early 1990 it crashed by 610p to 62p, (see D208). In 1991 it went lower still to 35p. The husband explained that WPP was in real difficulties. Investors threatened to withdraw their loan facilities of c.£1.4 billion. If they withdrew, WPP was finished. Over 1991 and 1992 WPP through the husband (and no doubt, others within WPP) sought to restructure WPP's debt in negotiations with 20 banks and financial institutions. Having persuaded the institutions to swap debt for equity, WPP in 1993 went to the stock market with a rights issue of £88m. It was a success, and the corner was finally turned. The banks sold a significant tranche of their equity at a profit. The share price recovered to about 90 or 100p. In 1994 WPP's pre tax profit reached £35m.
13. By 1997 the husband said [para 61] that there was no trace of the difficulties of the early 1990s. WPP share price was trading around 300p.
14. In mid 2000 WPP purchased another agency, Young and Rubicam, in a deal worth $4.7 billion, which was the largest ever deal in the advertising and marketing sector. The deal put WPP second behind Omnicom in the table of communication and service companies based on worldwide revenue. Further takeovers followed [see para 65].
15. In 1999 the share price of WPP reached an all time peak of 985.50p. With the bursting of the dot.com bubble and the general decline in the stock market, its share price declined to a low in 2001/02 of 474.50p. It has by 2005 recovered to c.586p.
16. In 2004 WPP profits were £546 million. Currently WPP is worth over £7 billion, has a turnover of £4.3 billion, and employs 85,000 people including (associates) in 1,700 offices in 104 countries.
17. The husband believes that he has built one of the best businesses in the industry from scratch. He concludes his written account with these words:

"76. I believe that the creation of this wealth is without doubt an exceptional financial contribution. Of course the wealth that I have built for others (the investors) dwarfs the wealth that I have built up personally and for my family, but I do believe that a total family fortune of over £100 million (gross), of which almost all is invested in WPP, represents a spectacular contribution which can fairly categorised as "exceptional".

This does not represent the fruits of one lucky gamble, or merely dedication and determination, rather (as I hope I have illustrated above in the necessarily abbreviated account of my career) through a rare, if not unique, combination of inspiration, innovation, courage and hard work. I find it hard to see how the creation of wealth through the exploitation of an inherent gift for music, or sport or art could be qualitatively different from the creation of wealth through the exploitation of my own abilities."

Assets – capital and income

18. There is no dispute as to what the assets comprise. The dispute is about how some of them should be valued.
19. The non-WPP assets comprise real property in England and France, bank accounts, stocks and shares and loan accounts. The matrimonial home at 6 Walton Place is worth £2,997,857. The property in St Paul de Vence and the adjacent land are together valued at £277,333. There are two bays in the Harrods underground car park, which is close to Walton Place, each worth £91,758 (total £183,516). The bank accounts line shows, according to the husband, £2,191,075, and according to the wife, £2,221,075 i.e. a difference of £30,000, which reflects an add back for costs ordered to be paid by the court on 7 January 2005 by the husband to the wife. Stocks, gilts, securities, life insurance policies, national savings certificates and bonds, and loan accounts are agreed at a total of £1,177,151.
20. There was, until final submissions, a dispute about liabilities. The husband's figure is £8,770,246, the wife's £8,415,246 i.e. a difference of £355,000, which reflects an add back of 50% of £710,000 borrowed by the husband to assist Jonathan and his wife to buy their London home. It was agreed between Counsel, on their client's instructions, that the husband would transfer his 50% interest in Jonathan and his wife's house to them, and accordingly 50% of £355,000 (£177,500) should be deducted from the lump sum which I shall order, if I were to order that the assets be split equally.
21. I turn to the WPP assets. The husband personally owns shares in WPP which, if a 28 day average of the market price of WPP shares is taken i.e. £5-86 per share, are worth £1,217,557. There are holdings in WPP by Trust No.1 and Trust No.2, which the husband established in August 2004 and March 2005 respectively and into which were placed 2,561,907 and 2,999,003 shares respectively. Trust No.1 shares are worth £14,222,228. Trust No.2 shares, on the husband's case, should be taken at £17,577,907 and on the wife's case at £17,948,284, a difference of £370,400 representing a dispute whether tax losses in Trust No.2 can be used to offset gains realised by the husband personally and/or by Trust No.1.
22. Shares held within Performance Share Plans are worth £38,953, within a Restricted Stock Award (now vested personally in the husband but additional to his personal holding set out above) £604,176, and £3,415,749 worth of shares in a Capital Investment Plan.
23. LEAP is the acronym for Leadership Equity Acquisition Plan. There have been three such LEAPs and more are planned for October 2005, and possibly 2006 and thereafter. The first was in 1991 and included only the husband. The second was in about 1996 for about thirty WPP employees including the husband and the third was in October 2004 for about twenty WPP employees including the husband. The first and second LEAPs resulted in a substantial grant of shares in WPP which are reflected in the above assets. The third LEAP ("the Renewed LEAP") was started in October 2004 and backdated to 1 January 2004. The scheme, so far as the husband is concerned, requires him to retain ownership of 1,032,416 shares in WPP. The potential reward is a number of shares, based on the multiple of the number of shares committed to the LEAP, by reference to WPP's performance compared to the whole of the industry peer group of companies in the 4 years 2004 to 2007 inclusive. If WPP is ranked 1st and 2nd reward will be 4 x the number of shares committed, if 3rd 3.6 x , 4th 2.8 x, 5th 2 x, 6th 1.6 x and thereafter nothing. At present WPP is placed 8th.
24. The shares committed to the Renewed LEAP are to be valued at £5,193,652, according to the husband or £5,584,790, according to his wife. The difference of £391,100 is due to a dispute whether a discount should be made on the ground that those committed (or retained) shares are illiquid.
25. Under the Renewed LEAP the husband will be entitled to potentially a rich reward. All will depend on the ranking of WPP. However Mr. Hobbs, the wife's forensic accountant, and Mr Boulton, the husband's forensic accountant, differ in the value to be attributed to that potential award. However, according to the agreed comparative asset schedule ("the schedule") put before me, a copy of which is attached to this judgment, it is agreed that the sum attributable to the value of the Renewed LEAP is £3,070,327.
26. JMS Financial Services Ltd ("JMS") was until 23 March 2005 the service company through which the husband provided his services to WPP. The husband has a 25% and the wife a 24% interest in JMS. The other stakeholders are the three sons and the husband's mother. Since 23 March JMS has become an investment company holding, together with its wholly owned subsidiary, JMS No 2 Ltd, chalets in Verbier, a property in Covent Garden and WPP shares. The parties' assets in JMS and JMS No 2 are worth £3,401,199.
27. The JMS Retirement Benefit Scheme holds shares in WPP worth £17,422,019.
28. The Capital Investment Plan also resulted in the grant to the husband 2,649, 289 Deferred Stock Units ("DSU") each of which entitled the husband to one share in WPP. So long as the DSU remain deferred the husband legitimately avoids paying tax @ 41% which will arise on delivery to him of the shares. The husband was entitled to the award in January 2004 and elected to defer until October 2004. In October he again elected to defer until October 2008. He cannot receive his shares until then. I am told by Mr Marks that, on the assumption that the current tax regime remains in force, the broad effect of deferring is that the husband will be better off by £1,560 (net) for every 1p his WPP share price rises between 1 October 2004 and 1 October 2008. If the share price as at 1 October 2008 is below that on 1 October 2004 he gains nothing from the deferral.
29. The husband's valuation of the DSUs is £8,339,827; the wife's £9,161,326. The difference of £821,500 is represented by a dispute as to whether there should be a discount for the deferral of that stock which could have been realised on 1 October 2004.
30. Pruway is agreed at £440,640; the pensions at £1,130,590.
31. Thus, taking the schedule as it stands, the total net assets are, according to the husband, £74.28m and, according to the wife, £76.25m. From both totals Pruway and what is termed "the wife's inheritance" are agreed deductions. The husband however also seeks to deduct the full value of the Renewed LEAP of £3,070,327 (the wife only 50% i.e. £1,535,164) and what is called "keyman" at £4,285,427. The wife hotly disputes the validity of any key man principle and therefore the deduction.
32. Thus the husband says that the total marital assets are £66,335,773. The wife says that they are £74,124,377, a difference of £7.788m.
33. I now turn to adjudicate on the various disputes as to the assets.
34. The forensic experts in this case are Mr Ian Hobbs, for the wife, and Mr Richard Boulton, for the husband. Both are qualified accountants. Mr Boulton has recently been called to the Bar. Each have set out their qualifications at D.25 and D.78 respectively. I will not repeat them. They are both well qualified to give evidence in this case.
35. Mr Hobbs reported on 11 April 2005. Mr Boulton reported on 27 May and 20 June 2005. On 24 June 2005 Mr Hobbs again reported, this time on matters in Mr Boulton's report. They held a without prejudice meeting on 29 June 2005 and at D.216-226 is their joint memorandum of agreed and disputed matters between them. On 15 July 2005 they exchanged emails about the treatment of CGT gains and losses arising out of the No.1 and No.2 Trusts.
36. I wish to state at the outset of my assessment of their evidence, both written and oral, that each was trying to help me to the best of their abilities. Criticisms were made of Mr Boulton that he was partisan. I reject that particular criticism.
37. The biggest item in dispute is that about "keyman". I therefore shall start with that.
38. This issue is raised and developed by Mr Boulton in section 8 of his first report (see D.121-133 inclusive). Mr Marks puts the husband's case succinctly in para 2.3.3 of his skeleton argument:-

"H's case, supported by Mr Boulton, is that the market price of the WPP of the WPP shares includes an element, between 5% and 10% (and one arithmetical analysis might support 8%, which is Mr Boulton's figure) which is the market's appraisal of the value of husband's expected future contribution to the business. While this is a value which could theoretically be realised immediately we say that this is really attributable to H's future endeavours, after cessation of the marriage partnership and should be isolated as a "non-marital asset".

39. The "keyman" element is referable to all of the WPP shares except the Renewed LEAP. Mr Marks submits that this has nothing to do with the value of the shares but everything to do with the apportionment of that value between the period of the marriage (marital) and in future (non-marital) – or, as he puts it in another way, between the endeavours of the husband during the marital partnership and his endeavours after the partnership has terminated.
40. The argument is developed along these lines. It is necessary to look at the impact of the husband's departure on the value of the WPP shares. That cannot be precisely calculated because it would depend on market reaction. But in the end it is a matter of "feel", a proposition Mr Boulton broadly agreed with. Mr Boulton opines, as I understand it, that if there was an announcement by WPP that, with immediate effect the husband was leaving WPP and disposing of all his shares in WPP, the WPP share price would drop between 5% and 10%. Mr Boulton's best estimate (he did not like the word "guess" used by Mr Marks at para 8.11 of his skeleton argument) would be 8%. Mr Marks submitted in his skeleton argument that "8% feels "about right".
41. Mr Boulton's methodology is as follows. It is necessary to consider the long-term impact on both revenues and costs at WPP by reference to the performance of similar companies rather than to the market as a whole. Having done that he concludes at para 8.19 of his first report:-

"From the long-term data contained in the analysts' reports, it is apparent that the growth ratio in WPP's revenues 1991 to 2000 was 7.5%, compared to an industry average of 6.6% (i.e. there was a growth premium of about 0.9%)."

At paras 8.22 and 8.23 he wrote:-

"In my view, therefore, it would be more appropriate (and conservative) to attribute at least one half of the 0.9% growth premium achieved by WPP in the last full cycle, to the husband as CEO throughout the period (i.e. 0.45%). "I therefore conclude that, absent his contribution, the firm's revenues would grow in future by around 0.45% less each year than they would otherwise."

Similarly with costs, after analysis he concludes at para 8.29:-

"I therefore believe that a conservative estimate of the husband's net effect on WPP's costs might lie in the region of 1.0% of WPP's sales, a figure of £50 million per annum based on analysts' forecasts of the company's sales in 2005. That is, absent the husband's prescence as CEO of WPP, its total operating costs would be in the region of £50 million higher that they are."

42. Mr Boulton then calculates the probabilities of the husband leaving WPP from now until 2010 (see table 13 at para 8.34 of his first report). He then, see table 14, estimates "the key man" portion at 9.8%, which (para 8.38) he accepts is "subjective". At para 8.44 he says:-

"Conclusion. I recognise that the assessment of the key man portion of the current WPP share price is subjective. In my view, however, based on all the evidence reviewed in this section, it is at least 5% and may well be as high as 10% of the current share price. In my calculations in section 10, I have used a key man portion of 8%."

43. The husband gave evidence on this issue. He said that if an announcement was made that he was leaving WPP the share price is likely to fall. Having been with WPP for 20 years the market would see his departure negatively. Even if he had to sell shares to fund my order it would not be well received by the market.
44. Mr Hobbs is deeply unhappy about the principle, application and detail of this approach. It is common ground between the experts that key man discounts are widely recognised by the United States courts, particularly where the founder of a business dies and it is necessary to value his shares in the business for the purpose of estate taxation, and in cases of marital dissolution. Mr Boulton suggested, inferentially at para 8.6 of his first report, that US courts apply this principle in respect of major public companies, but could not produce or name any such cases. Indeed Mr Boulton, having introduced the subject of US precedents (see paras 8.5 and 8.6 of his first report) told me that in fact in his report he was ignoring and placed no reliance on them. I am afraid that is not how those paragraphs read. Nevertheless he and Mr Hobbs were in agreement that such discounts are applied where the shares of a company are unquoted and where the founder has a significant shareholding. Neither are aware of any particular case in England (or indeed elsewhere) where any such discount has been applied to a small minority stake in a large public company on the departure of a senior executive.
45. Mr Hobbs is of the view that the key man principle (if such can be said to be a proper description) is pure speculation. He told me in evidence that a court cannot be in a position to say whether it is more likely than not that if the husband ceased to be the CEO of WPP the share price would fall. Whether the share price would go up or down in such circumstances would depend on how the market evaluated the position. A court cannot second guess the market. The same reasoning applies to whether a court can determine a) by how much the price is likely to fall and b) for how long the price would remain depressed.
46. He is also critical of Mr Boulton's application of the so-called principle. From where does Mr Boulton obtain the fraction one "one half" of the 0.9% growth premium (para 8.22)? In my judgment this came close to being a fraction plucked out of the air. Mr Boulton accepted that a fraction of 0% or 100% of 0.9% would be quite unreasonable. He agreed with me that 30% of 0.9% would be reasonable. I specifically asked Mr Boulton to what figure below 30% of 0.9% would one have to go before he would say that the fraction became quite unreasonable. He answered in a rather woolly way but its purport was 0% to 10%.
47. A further criticism is made. Compare para 8.29 (quoted at para 41 above) with para 8.39(ii):

"I believe that this outcome is reasonable on the basis of the assumptions that I have made. In particular:

(i)……..

(ii) the Respondent's culture of cost minimisation is likely to survive his tenure as CEO (and the higher interest payments may well have disappeared by 2010)

(iii) …….."

48. As Mr Hobbs pointed out to Mr Boulton and as was accepted by him, the two stances are mutually inconsistent. Thus Mr Boulton had to concede that the lines in table 14 "Husband's cost contribution" and "additional interest costs" had to be deleted entirely. The figure of 9.8% would then drop to 5%.
49. Mr Boulton produced at para 8.42 three examples of the share price of quoted companies dropping on the death or retirement/resignation of chief executives. As to the third (Joseph Galli) Mr Boulton had to accept that Mr Galli was not one of the founders of Amazon.com and had only joined a year before he resigned.
50. Furthermore, Mr Boulton accepted in cross-examination that the key man of 8% was not part of the value of the shares. Yet, as was pointed out to him, at table 18 he had deducted the key man element to arrive at the "net realisable (my emphasis) value of personally held shares" of the husband. He sought to correct that mistake in his second report at table 18A headed "net realisable value of personally held shares". The correction, it is said, can be seen from the words "net value ("marital asset")" at the bottom. However in my judgement that explanation is less than satisfactory given a) the table's heading and b) para 10A.10 which reads:

"In table 18A below, I have calculated the value that I believe the husband would be able to realise (my emphasis) for these assets….. In the case of his ordinary shares…..the value is simply the number of shares multiplied by the current share price less the key man portion of the current share price (my emphasis)".

51. I reject the husband's case on this major issue. This was an ingenious, tactical ploy (but put forward entirely bona fide) to reduce the pot available for distribution. It is trite law that the assets must be valued as at the date of trial. The value of an asset is the price at which it would change hands on the open market in an arms' length transaction. The key man argument in the instant case is based on an assumption that the husband is going to leave WPP. I find that he is not. There is no evidence to suggest that he is – indeed the evidence is all the other way. I prefer Mr Hobbs' reasoning and accept his evidence. Mr Mostyn exposed effectively the mistakes, contradictions and implausibilities in Mr Boulton's evidence. In his final submissions Mr Mostyn demonstrated that if the element of growth premium attributable to the husband falls to 30% and the costs saving datum is eliminated the final key man figures falls to 2.9%, a far cry from 8%. Finally, the husband's case sits most uneasily with the purchase of shares in March 2005. On 23 March 2005 the husband used the net bonus voted to him of £18,518,844 to purchase 2,999,003 WPP shares @ 617.5p per share. JMS Retirement Benefit Scheme also purchased 666,213 shares for £4,113,865. I agree with Mr Hobbs' comments at para 41 of his second report:

"In my opinion it cannot be right for Sir Martin to seek a key man discount for shares purchased for cash as recently as March 2005 in the full knowledge of this matrimonial dispute. Had he not spent £18 million on WPP shares he would have had that amount of cash in his pocket. Had JMS RBS not spent £4 million buying WPP shares it would have had the cash available for the purpose of these proceedings. It ill behoves Sir Martin to argue that shares he bought for £18 million in March of this year in the full knowledge of these proceedings are worth 8% less than that for the purpose of these proceedings. It is an obvious nonsense".

52. The next largest issue on the schedule was note 6 under the heading "Renewed LEAP". The figures in the original agreed schedule were an endeavour by each expert to give an approximate value of the likely benefits which may arise for the husband in 2008. The husband's figure was £3,070,327; the wife's £4,506,426, thus a difference of £1,436,100. In his final submission Mr Mostyn, notwithstanding the extensive evidence, said that I should not waste my time trying to assess the value and I should make a Wells sharing order. The schedule under the wife's column would appear to accept Mr Boulton's figure.
53. The value of the Renewed LEAP is calculated in the accounts of WPP at £7.8m pursuant to FRS 20, an accounting standard set down by the Accounting Standards Board. FRS 20's purpose is that the cost of such schemes as LEAPs should be shown in the company's accounts for the benefit of shareholders. Mr Hobbs explained that it is only a best estimate. No-one knows what will happen. There may be no award in 2008 or an award on a sliding scale. The best prediction that Mr Boulton can make, taking into account reductions for non-marketability discount, and income tax, that before the keyman portion is deducted the renewed LEAP is worth £3,058, 818 – see Table 21A of his second report. Mr Hobbs' figure after tax could be about £4.13m (see paras 87 to 97 inclusive of his second report).
54. In deciding whether in the middle of 2005 it is sensibly possibly to arrive at some value for the potential reward for the husband under the Renewed LEAP in 2008, it is instructive to look at the past. The husband has partaken in two previous LEAPs much to his advantage. Furthermore, he has earmarked over 1m shares of his holding to be retained for the Renewed LEAP. In his evidence he said it was an investment into something he knew best i.e. WPP. That seems to me to indicate a measure of confidence on his part that he is going to reap a reward under it. I am satisfied that he will remain as CEO as I have said. Thus, he and his fellow directors will do all in their power to achieve the grant of rewards under it. In these circumstances I think I can be cautiously optimistic that the husband will reap a not insignificant reward. To err on the side of caution I will take the figure of £3,070,327 in the schedule which is so close to Mr Boulton's as to make no difference.
55. Next I go to note 4, his retained shares in connection with the Renewed LEAP. The number of shares required to be retained is 1,032,416. It is a condition of any award that the husband continues to hold that number of WPP shares until 31 December 2007. I am told that Mr Hobbs agrees a discount for non-marketability for these shares if Renewed LEAP is considered to be a marital asset with a positive value, (see para 3.13 of the memorandum of agreement and disagreement). Mr Boulton disagrees. He considers that the non-marketability of the above shares should be taken into account, irrespective of whether any value is attributed to them by the court. Mr Hobbs disagrees. The husband is able to sell his shares at any time. Only if his total shareholding falls below 1,032,416 shares would the husband forfeit some or all of his interest in the Renewed LEAP. In his oral evidence Mr Hobbs said that in principle there should be a discount since the husband elected to be part of the LEAP and was obliged to commit (or retain) a specified number of shares.
56. Should then the Renewed LEAP be considered to be a marital asset? Mr Marks submits that it is all attributable to the period since the wife ceased her domestic contribution. It will be part of the husband's future income. Mr Mostyn accepted that to some extent it will be the product of the husband's future endeavour but that it really comes so close to the marriage period that it can be considered, at least in part, as a continuum or product of the marital partnership.
57. In my judgment, there is force in both arguments. But I also have to regard under s.25(2)(a) of the 1973 Act to the husband's likely future resources. Thus in all these circumstances, I see no serious difficulty in adopting Mr Mostyn's submissions in respect of the item against Note 7 in the schedule that half of the Renewed LEAP should come in as a marital asset, i.e. £1,535,164.
58. On that basis a discount on the value of the Renewed shares is appropriate and fair. I propose therefore in respect of the item against Note 4 to take the husband's figure of £5,193,652.
59. I go to Note 5 on the schedule, the WPP DSUs. Mr Boulton argues that a discount should be applied to the 2,649,208 DSUs in WPP. The shares were granted to the husband under the terms of the original LEAP but receipt was deferred by him until 1 October 2004, and later deferred again until 1 October 2008. Mr Hobbs disagrees that any discount should be made. Mr Hobbs' point is a simple one. At para 25 of his second report he said:

"By 1 October 2004 Sir Martin knew he was getting divorced and, in my opinion, it is wholly inappropriate for him to seek to discount shares which could have been allocated to him on 1 October 2004 on the ground that, because he has chosen not to receive them until 1 October 2008, they are non-realisable."

The husband could have taken the shares and paid the relevant tax; or he could have taken the shares, sold them in whole or in part, and received a cash sum after tax was paid.

60. Mr Boulton's view is that, given the shares have increased in value by 12% between 1 October 2004 (522p per share) and 20 May 2005 (584p per share) it is appropriate to value them as they are. The deferral was a rational investment strategy.
61. Accepting that it may have been a rational investment strategy, nevertheless the fact remains that the husband is seeking to reduce the value of the DSUs, which have increased in value, by a discount which, if he had not elected to redefer in October 2004 he would not be able to take advantage of. I am afraid his case smacks of having his cake and eating it. He could have taken the shares but did not. The shares increase in value, but, he says, the market value must be discounted because he voluntarily locked them away, no doubt in order to defer tax. I reject this argument. I take therefore the wife's figure of £9,161,326.
62. Note 3 relates to Trusts No1 and 2. Trust No1 contains WPP shares in which there are gains. CGT therefore will arise. Trust No2 acquired the shares bought in March 2005. The share price since then has declined. There are therefore losses. Mr Hobbs opines that because the shares purchased in March 2005 are Trust No 2's only assets, loss relief would not be available were the shares now to be sold. However, since the shares in both trusts are being treated as though they are held personally by the husband, Mr Hobbs says it would be artificial not to set the loss against the gain.
63. I agree with Mr Boulton. He said that there is no possible mechanism by which the losses of Trust No.2 can be offset against the gains of Trust No.1, since the tax regime does not permit Trust No.2 to treat its losses as allowable for tax were they now to be sold. The husband, it is not disputed, engaged in sensible tax planning by setting up these trusts. If the shares in Trust No.2 are realised at a loss – and for the purposes of this hearing their present value must be taken – then no offset can be made. I therefore take the husband's figure of £17,577,907.
64. Finally I come to the item against Note 1. I agree with the wife's case. The £30,000 must be added back because if it is not the effect is that the wife ends up bearing her costs of the Family Law Act proceedings, in which she obtained, by consent, an order for costs against the husband. Therefore I take the wife's figure of £2,368,729.
65. Therefore, looking at the schedule, the figure in the wife's column of the marital assets for division of £74,124,377 needs to be reduced by the difference between the figures at Notes 3 and 4 i.e. a total of £761,500. The marital assets for division are therefore £73,362,877.
66. The wife has no earning capacity. She never worked during the marriage and was not expected to. Obviously at 59½ any possibility of meaningful employment is out of the question. The husband has never suggested she has an earning capacity.
67. The husband, in stark contrast, has a big earning capacity. His net income for the year was £1.4m net. Furthermore, his capacity to increase his capital base is considerable. I am satisfied that he has no present intention of retiring. He undoubtedly retains the complete confidence of the shareholders and board of directors of WPP. To all intentions and purposes he was the founder of WPP. He has a strong attachment to the business. In my judgement, barring the unexpected, he is likely to remain as the C.E.O of WPP for some little time to come.

Needs/obligations/responsibilities

68. No time at the trial hearing was spent on this topic. That is hardly surprising given the size of the assets. Each party will be more than adequately catered for. The children are grown up. The wife in her evidence spoke of the wish to be able to leave assets to the children upon her death. That she should be able to achieve whether or not she leaves this case on terms of financial equality.

Standard of living

69. The standard of living was good, became as the years went by very good, but never tipped over into the extravagant. They owned Winnington Road and now own Walton Place, bought St. Paul de Veuce and adjoining land in 1993, had the use of WPP's apartment in New York, led a very full social life (Ascot, Glyndebourne etc.) and entertained very generously.

Age of parties/duration of marriage

70. Nothing more than has previously been set out in this judgement needs to be said, save to emphasise that the marriage was a very long one, and by comparison to the run of cases that come before the courts it could be said to be almost at the top end of "duration".

Disability

71. None.

Conduct

72. Although issues of behaviour were ventilated during the final hearing, they went to issues relating to contribution. Neither party sought to place any reliance at all on s.25(2)(g) of the Matrimonial Causes Act 1973, as amended.

Loss of benefits

73. This does not arise. The wife in paragraph 156 of her affidavit of 1 June 2005 said that by virtue of the divorce she would not be able to share in the future earning capacity of the husband unless that was reflected in the award to her. However, Mr Mostyn QC told me (and see para 3 of his skeleton argument) that the wife could have mounted a claim to a share of that future income – see his submissions at paras 73 to 78 inclusive of my judgement in Parlour – v – Parlour sub.nom. J v J [2004] EWHC 53 (Fam), [2004] 1 FCR 709 and repeated before the Court of Appeal in [2004] EWCA Civ 872, [2004] 2 FCR 657 at para 48. However she did not do so in the light of her open position.

Parties' open positions

74. Before I return to the issue of contribution I think it would be helpful now to set out each party's open positions.

The Wife.

75. She wishes for, as does the husband, a clean break. Walton Place and the two car parking spaces should be transferred to her free of encumbrances. She is to transfer to the husband her interest in the land adjoining the property at St. Paul de Vence together with her shareholding of 25.05% in SCI Marobjon. She will transfer her shares in JMS, including JMS No 2, to the husband. Each will keep inherited property (which in the context of this case is very small). She should receive 25% of whatever sums the husband receives from the Renewed LEAP and of such shares as are vested under the two PSPs made on 3rd April 2004. The pensions would be shared equally. The wife also seeks a substantial lump sum which, on the basis of the parties sharing the assets equally, and thus to bring the wife including her own assets up to such a position, on Mr Mostyn's calculations in opening the case would come to about £28.22m.

The Husband.

76. He will transfer to the wife Walton Place, free of encumbrances, and vacate the basement. He will transfer one of the underground car parking spaces, retaining the other for himself. [Towards the very end of the hearing he agreed that the wife could have both]. The wife is to transfer all her shares in JMS and SCI Marobjon and he will indemnify against her against all taxes, and she will transfer the land adjacent to St Paul de Vence and indemnify her as above. The wife will keep her entitlement under the JMS Refinement Benefit Scheme but transfer her entitlement to a new provider. The transfer of her funds will be deemed to be 7.4% of the overall total fund value of the Scheme. By 15 October 2005 the husband will pay to her a lump sum equal to the average WPP share price at the close of business on each working day from 1 August to 30 September 2005. As at c.12 July the share price was 594p which would give the wife a lump sum of £20.4m. As stated in the husband's open proposal:-

"The effect of the above proposals is intended to be that after excluding from division the inherited assets (including W's), the Renewed LEAP and the "keyman" element of the share price, the remaining ("marital") assets are divided broadly 60/40 in favour of the husband. The wife would end up, assuming a share price of around £5.94p, with total net liquid assets of about £26.7m (as well as valuable chattels not included in the schedule)."

77. Mr Mostyn is, in my judgment, correct to point out that the division of 60/40 proposed by the husband is actually closer to 65/35 due to reductions in the pool of assets that the husband says should be made but which Mr Mostyn categorises as artificial.

Contribution.

78. Since this is central to the resolution of this case it is appropriate to set out s.25(2)(f) of the 1973 Act in full. The court shall have regard to:-

"(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family";

79. I have already summarised the husband's written evidence in paras 5 to 17 above. He would in addition say that he was a good father and made a full contribution in that regard. The wife responded to the husband's assertions by devoting paras 48 to 146 inclusive of her 157 paragraph s.25 affidavit to the issue of her contribution. Mr Marks criticized her for that, particularly bearing in mind, as the wife agreed in crossexamination, that the husband had always acknowledged that she had made as full a contribution as she could as wife, mother, and homemaker. There is some justification in that criticism. Mr Marks also suggested that her affidavit read as a lawyer driven document. The wife told me that she alone was its author subject to editing of its length by her legal team. I accept that.
80. At the very outset of her lengthy written account the wife said (para 48):-

"I accept that the very significant majority of the assets in this case have been generated during the course of the marriage by the Respondent's business acumen and expertise."

At para 49 she said:-

"…….. I understand that the Respondent intends to raise an argument to the effect that his contribution has been so significant as to outweigh the contribution made by me during the course of the marriage. I believe I have made no less than an equally valuable contribution to the marriage albeit that……..[it]………..cannot be quantified in tangible financial terms."

81. So it is that the wife went into lengthy and I am afraid I have to say, inordinate, detail in her account of her full (admitted by the husband) contribution. In addition the exhibits to the affidavit (re contribution) run to 472 pages, and take up one and a half ring binders.
82. I have no doubt that the brunt of running the home/s and bringing up the boys fell on the wife. She more than willingly undertook those very important, time consuming roles. She can be justly proud of what she has achieved. However, in my judgment, she has tried to overegg the pudding. At para 58 she has recounted how a friend told her last year that when the husband was at Saatchi and Saatchi and the boys at school at Arnold House she recalled it was as if the wife was a "single mother". At para 38 of his skeleton argument Mr Mostyn, in a passage that he told me was specifically approved by the wife, wrote:-

"W accepts that husband was a perfectly good father, in the limited time he made available for the children. He was a father by appointment. He decided when and where he would have quality time with the children. It was not extensive. All the manifold humdrum aspects of parenting was left exclusively to wife."

83. However, in her cross-examination, the wife accepted that the husband had never missed a parents' evening at school in respect of each of the three boys. He was a regular supporter of the boy's sporting events when he could. To my ear, that hardly sounds like being a father by appointment.
84. The husband in his evidence rejected the appropriateness of the "single mother" comment. He told me he was heavily involved with the boys at Arnold House. Further, neither was he a father by appointment nor did the wife predominantly bring up the boys. In his evidence-in-chief he told me that the boys were and always had been very important to him. He was vitally involved in their education and did everything throughout it. He accepted his business commitments took a lot of time but he had made a full contribution in their development.
85. I accept the husband's evidence. The wife's attempt to downplay the husband's role as a father was, to put it kindly, unfortunate, and she has no basis for such a stance. I agree with the husband's statement at para 85 of his affidavit that:-

"more than most, I have not allowed my work to eclipse my family life in which I have maintained a full family role throughout my career."

86. Much time and effort was spent by Mr Mostyn in seeking to demolish the husband's assertion that he was a "good" husband. The wife gave evidence how in the later years of the marriage the husband had "marginalised", "dehumanised" her, and "discarded", her from his affections. Criticism were made of the husband's behaviour in late 2003 and in 2004. He tore up the first letter from the wife's solicitors. He ignored 11 letters from the wife's solicitors, and two court orders of 29 June and 29 July to file his Form E. He eventually instructed solicitors in August 2004. An order of 17 August to file his Form E by 30 September was complied with.
87. Further criticisms are made of his post-separation behaviour. He excluded the wife from the apartment in New York. He refused to vacate Walton Place despite at least four medical reports that it would be in the wife's interests that he leave. The wife had to start Part IV proceedings under the Family Law Act 1996. On 2 December 2004 HHJ Mayer, on an interim basis, excluded the husband from all but the basement. On 7 January 2005 the husband accepted that position - see the consent order of that date.
88. Yet further criticisms of his behaviour in 2004 are made. They include cutting off the wife's black Amex card and taxi account; placing a stop on a cheque for some £33,000 which wife drew from JMS to fund her costs; his refusal not to take his "mistress" (it was alleged) to St Paul de Vence; and his "unilateral and divisive" act in purchasing a property for Jonathan without consulting the wife.
89. All this was introduced by and on behalf of the wife and categorised as "childish bullying" or "childish retaliation" by Mr Mostyn, which was symptomatic of the way the husband had behaved towards the wife prior to the separation in late 2003.
90. I agree that he did not behave as a "good" husband in that from about 1993 he conducted an affair about which the wife learned in 1999. I agree he was insensitive about his occupation of Walton Place post the wife making clear in late 2003 and 2004 that the marriage was over. The wife was entitled, as a shareholder of JMS, to fund her solicitors from JMS and he should not have stopped the cheque. But, in my judgment, there is nothing in the criticism of him funding Jonathan's property given the vast assets in this case.
91. I agree that the husband opened himself up to attack by the assertion that he was a "good" husband. But to characterise the husband as a "Pharisee" [see para 36 of Mr Mostyn's skeleton argument] in this regard was unnecessary.
92. In any event what, one may ask, has all this got to do with the case given that s.25(2)(g) is not relied on? The short (and long) answer is nothing. I ignore it.
93. I should not end this part of the analysis on contribution on a negative note so far as the wife is concerned. That would be unfair. I think that the wife was broadly accurate in her evidence where she said that the husband earned the bread; she sorted everything at home; both of them were happy with that division; the husband was devoted to his role and she supported that; she gave him carte blanche in his business career; and that she supported him in the social side of his career. Indeed I do not think the husband sought to controvert her evidence in this respect, other than in relation to the wife's assertions that a) he was a father by appointment and b) he was not a good husband. I agree with his evidence that he was not a workaholic i.e. that his business career did not subsume his time and energies to the exclusion of the wife and/or children. As I have said, and as always been conceded by the husband, the wife was a dedicated, hardworking, caring and loving mother and wife. She could not have done more. As for the husband, I shall have to analyse his contribution in the context of "special" or "exceptional" or "wholly exceptional" in a little more detail after looking at the law on this vexed topic.
94. The wife's central stance is that she should, at the end of the day, after payment of the appropriate balancing lump sum, be left with 50% of the assets. She does not in any way accept that there should be a division which leaves her with less. Mr Mostyn relies heavily upon Lambert. He submits the husband must establish "characteristics or circumstances (which) clearly have to be of a wholly exceptional nature, such that it would be very obviously be inconsistent with the objective of achieving fairness (i.e. it would create an unfair outcome) for them to be ignored" per Bodey J at para 70 of Lambert.
95. Mr Mostyn submits that the Court of Appeal in Lambert left open "with considerable reluctance" [para 14 of his skeleton argument] the possibility that someone, somewhere, someday, might be able to satisfy the test of being a special contributor. He submits that the "exceptional and individual quality" spoken of by Thorpe LJ in para 52 of Lambert must sound in the specific context of s.25(2)(f) as a contribution to the welfare of the family and not merely to society as a whole. He submits the husband does not meet such criteria and does not come within the restricted category spoken of in Lambert.
96. Mr Mostyn submitted (at least in opening – see paras 23 at seq. of his skeleton argument) that in Lambert the Court of Appeal took the further step of asserting the principle that in a long marriage the different and incommensurable contributions of the parties should – absent unspecified exceptional circumstances – be deemed to be of equal worth. Dr Cretney QC has interpreted Lambert as having gone much further than White v White [2002] 2 FLR 981 in creating "a community of property system imposed by judicial decision" ((2003) 119 LQR 349). I have read his article with interest. I asked Mr Mostyn in his final submissions whether he submitted that that was what Lambert had created. He did not so submit. And I think, wisely; for such a view point is quite inconsistent with what Lord Nicholls of Birkenhead in White was at pains to point out namely that a presumption of equal division would go beyond the permissible bounds of interpretation of s.25 of the 1973 Act, see in particular p.990 d-f, see also Cowan v Cowan [2001] EWCA Civ 679, [2001] 2 FLR 192 per Thorpe LJ at para 32 and per Robert Walker LJ at para 79.
97. In opening Mr Mostyn submitted that Cowan and Lambert cannot really be reconciled, even if the Court of Appeal in Lambert refrained from saying so expressly. However, in Lambert the Court of Appeal took the all important step of stating that, in cases of long marriages, where the spouse's contributions are intrinsically different and incommensurable, each should be regarded as no less valuable than the other. This said, Mr Mostyn, was a new principle. Different contributions are henceforth deemed to be of equal value. This reasoning in Lambert, submitted Mr Mostyn, cannot readily be reconciled with the earlier reasoning in Cowan; but Lambert must be taken to represent the current law.
98. Mr Mostyn further submitted that the "special" contributor's enhanced share of the assets can only be at the expense of the other spouse's share which is thereby reduced. But if the other spouse is "fully entitled" the equation/calculation will not work. There is, in practical terms, no room for the recognition of a fully entitled spouse in the domestic sphere if the entrepreneur is to receive more than half the assets.
99. Mr Mostyn referred to the "special" contributor as an elusive creature. To my mind, the subtext of his submissions was that for all practical purposes the "special" contributor is an extinct creature.
100. Mr Marks, for his part, emphasised that in England and Wales we do not have "community of property imposed by judicial decision", but a statute – the Matrimonial Causes Act 1973, under which the court is bound to consider all the factors set out in s.25(2) including (f). Cowan and Lambert must co-exist. Lambert is a development of Cowan but does not and cannot overrule it, see Young v Bristol Aeroplane Company Limited [1944] KB 718 and Davis v Johnson [1979] A C 264.
101. Mr Marks submitted that Mr Mostyn's submissions on Lambert are wrong. Mr Mostyn's essential thesis that the Lambert test sets the bar so high that for all practical purposes no-one can qualify, is fallacious. Lambert lays down no test or principle. The 1973 Act requires the court to evaluate the contributions of each of the parties to the marriage and to do so is not inherently, i.e. improperly, discriminatory. The statute requires it and the court cannot duck it. In the vast majority of financial cases the incommensurability of the respective contributions will make it impossible to differentiate between them. Unless one of the parties had made some "special" contribution in "exceptional circumstances" contributors will be treated as being equal. Lambert preserved the concept of "special" contribution, which is a way of recognising that all spouses are not equal. It is a comparatively simple concept that one of the parties has within him/her a seed of genius which will be recognised when seen. Finally, neither party has an "entitlement" to his/her half" of the assets. The applicant has a right to claim such a share and the court will decide what is fair in all the circumstances of the case. Therefore it is fallacious to say that the "special" contributor's enhanced (i.e. greater than half) share of the assets can only be at the expense of the other spouse's share which is thereby reduced.
102. In my judgment the dominating influence on the judgments in Lambert of Thorpe LJ and Bodey J are basically, as I read them, the decision of the Full Court of the Family Court in Australia in Figgins v Figgins [2002] Fam CA 688 and the decision of Coleridge J in G v G (Financial Provision: Equal Divison) [2002] EWHC 1339 (Fam), [2002] 2 FLR 1143, in particular paras 33 and 34 cited in full by Thorpe LJ at para 20 of Lambert. Put shortly the Court of Appeal took strongly into account the "financial Pandora's box" that would be opened in practice if spouses, generally husbands, were permitted to run the "special" contribution argument in every case where the assets exceeded the parties' reasonable needs. Coleridge J likened it to the "conduct" debates of the 1970s where conduct was raised against wives to try and limit their claims. Coleridge J's judgment, it is plain, had a powerful impact on the Court of Appeal.
103. The other powerful influence was the decision of the Full Court in Figgins where Nicholson CJ, giving the judgment of the court, made trenchant observations on the concept of "special" contributions and said in para 57 thereof "We think that this doctrine of "special contribution" should, in any appropriate case, be reconsidered." See further the passages from the judgment in Figgins as set out by Thorpe LJ at para 26 of Lambert.
104. Accordingly at para 27 Thorpe LJ said:-

"From these authorities in this and related jurisdictions two consistent themes emerge. First it is unacceptable to place greater value on the contribution of the breadwinner than that of the homemaker as a justification for dividing the product of the breadwinner's efforts unequally between them. Secondly, both the practicality and the value of the exercise of making the parties to a failed marriage on their respective performances is questioned."

105. At the end of para 27 Thorpe LJ said:-

"Additionally the decision of the Full Court in Figgins v Figgins clearly supports Coleridge J's distaste for special contributions and suggests the need for this court to return to the relevance of an asserted special contribution and to reconsider its impact upon the s.25 exercise."

106. Thorpe LJ then carried out a searching analysis. I hope I may be forgiven if I do not set it out since it can be read in full in his judgment. The nub or thrust of his judgment comes at para 45 and 46:

"[45] Having now heard submissions, both full and reasoned, against the concept of special contribution save in the most exceptional and limited circumstance, the danger of gender discrimination resulting from a finding of special financial contribution is plain. If all that is regarded is the scale of the breadwinner's success, then discrimination is almost bound to follow since there is no equal opportunity for the homemaker to demonstrate the scale of her comparable success. Examples cited of the mother who cares for a handicapped child seem to me both theoretical and distasteful. Such sacrifices and achievements are the product of love and commitment and are not to be counted in cash. The more driven the breadwinner the less available will he be physically and emotionally both as a husband and a father. There is also some justification in Mr Mostyn's emphasis on the extent to which the homemaker frequently sacrifices her potential to generate assets by undertaking the domestic commitment to husband and children. At the same time she risks the outcome of failure and so earns her entitlement to share in the successful outcome.

"[46] In sum I am much more wary of the issue of special contribution than I am in writing my judgment in Cowan v Cowan. Perhaps Nicholson CJ, who seems poised to banish the phenomenon, may have found the better path. The circumstances set out in para [43] above allow this court to re-evaluate the whole issue. However for the present, given the infinite variety of fact and circumstance, I propose to mark time on a cautious acknowledgement that special contribution remains a legitimate possibility but only in exceptional circumstances. It would be both futile and dangerous to even attempt to speculate on the boundaries of the exceptional. In the course of argument I suggested that it might more readily be found in the generating force behind the fortune rather than in the mere product itself. A number of hypothetical examples were canvassed ranging from the creative artist via the superstar footballer to the inventive genius who not only creates but also develops some universal aid or prescription. All that seems to me to be more safely left to future case-by-case exploration."

107. May LJ agreed with Thorpe LJ. Bodey J agreed with Thorpe LJ in a short judgment. At paras 69 and 70 he said:

"[69] I agree that it is not possible to define once and for all, by way of some formulaic label, the precise characteristics of the fortune-maker (or fortune- making) required in the paradigm case such as this, in order that when the proposed distribution of the resources is checked against the 'yardstick of equality', the fully contributing homemaker should receive a lesser share of the wealth than the fortune-maker.

"[70] However, those characteristics or circumstances clearly have to be of a wholly exceptional nature, such that it would very obviously be inconsistent with the objective of achieving fairness (ie it would create an unfair outcome) for them to be ignored."

108. In my judgment, there is much good sense in Mr Marks' submissions. I agree that Lambert does not establish any new principle or test. I do not accept Mr Mostyn's arguments on this point. Although the Court of Appeal used language similar to that in Cowan (see per Thorpe LJ at para 67 "the product of genius", per Robert Walker LJ at para 106 "(where his contribution in terms of entrepreneurial flair, inventiveness and hard work) was truly exceptional", and per Mance LJ at para 155 "Mr Cowan's special business skills, acumen and efforts"….and [his] special achievement"), nevertheless the content of the judgments in Lambert make it clear that courts would now look at the argument of "special" contribution with great care, if not a sceptical eye. In my judgment Lambert sent a strong message to litigants and their advisers that they could not expect routinely to run a case of "special" contribution successfully. I accept that the Court of Appeal did circumscribe or tighten the criteria to "the most exceptional and limited circumstance" [per Thorpe LJ at para 45]. Lambert emphasises that the court must be cautious, but special contribution does still "remain a legitimate possibility but only in exceptional circumstances" [para 46 of Thorpe LJ].
109. What then are the circumstances in which the concept of "special" contribution can be deployed successfully? Thorpe LJ. did not suggest guidelines. He left it to be developed on a case, by case, basis.
110. In my judgment, no-one could seriously argue that the facts of the instant case do not legitimately within the dicta of Lambert give rise to serious arguments that the husband's contribution is capable of coming within the concept of "special contribution". The contrary would mean, in my opinion, that it is highly likely that no "special" contributor, at least in the field of businessmen and women, could ever bring him or herself within such a concept.
111. The real issue in this case is whether the husband has established that he made a special contribution in exceptional circumstances. I agree, with respect, with what Mance LJ. said at para 166 of Cowan:

"…..Even where there is a surplus, any consideration of contribution should be undertaken on a broad basis with the aim of seeing if there was something really special about the skill or effort devoted by either spouse during the marriage." I would like to emphasise the words "broad basis".

The issue ought not to be the subject of detailed, in depth analysis but of a broad brush appraisal based on the evidence.

112. The husband was not merely a successful businessman but an exceptionally talented one. In his written evidence, supplemented by his oral evidence, he gave an accurate account, not challenged in cross-examination, of buying into WPP and developing the business to its present pre-eminence as its CEO for nearly 20 years. He had the courage and foresight to start (effectively) his own business and by clever man management, ruthless cost cutting, wooing and keeping clients, adroit (and perhaps brave) takeovers, keeping the confidence of banks and institutions, surviving the near terminal crisis of the early 1990s, and generally displaying extraordinary acumen and drive, he was the driving force in developing and building WPP into what it is today. This was not a case of a businessman just being in the right place at the right time. It went far, far beyond that. I agree with Mr Marks' submission that the evidence does establish that the husband has achieved in his business career what few others have done and he is regarded within his field and the wider business community as one of the most exceptional and most talented businessmen.
113. Mr Marks took me through the document to which the husband had referred in his affidavit. These consist of articles in Fortune of July 2000, Management Today of June 2003, Fortune of November 2004, Campaign of April 2005 and other publications. The flavour of them would suggest that the husband, in his business career, was and is regarded as a quite exceptionally talented performer.
114. In my judgment, the evidence establishes that the true explanation for this extraordinary success story is that the husband does possess the "spark" or "force" or "seed" of genius, call it what one will. It was by his talents as I have set out above that he generated the fortune for the family. One only has to glance at the schedule to see that the overwhelming preponderance of the fortune is derived from the shares in WPP. His genius was the generator of that fortune.
115. The next issue, therefore, is does his "special" contribution in exceptional circumstances (for so I find) deserve recognition in the way expressed in Cowan by Thorpe LJ. at para 67, by Mance LJ at para 170, and by Bodey J. at para 70 of Lambert? I have no difficulty in reaching the conclusion that it does, in the circumstances of this case. It simply would be unfair not to recognise it. If it was ignored it would in my judgement create an unfair outcome.
116. I am aware of the last sentence in para 45 of Thorpe LJ's judgement that:

"At the same time she risks the outcome of failure and so earns her entitlement to share in the successful outcome."

I agree that in 1989/90, if WPP had gone under the family fortune would have gone. The wife supported the husband through that crisis staunchly and lovingly. But I do not think that in the broad picture this ought to be a decisive factor in favour of the wife.

117. I am also aware of what Thorpe LJ. said at para 52 of Lambert. I do not base my decision upon the factor that the size of the family fortune "…alone justifies a conclusion of special contribution…." But I do find, as I hope I have made clear, that there is within the husband "exceptional and individual" qualities as the generator of the fortune.
118. I am mindful that, if the yardstick of equality is to be departed from, it will be solely because of the husband's "special" contribution as per Lambert. Absent that, there would be an equal division of the assets. However, in my judgement, fairness in the circumstances of this case demands that there be a departure from equality. Mr Marks submitted that the proper and fair division of the assets be by way of a split of 60% to the husband and 40% to the wife. As I understand him, Mr Mostyn did not dissent from such a split if I were to decide to depart from the yardstick of equality. His submissions were directed towards persuading me not to depart from the yardstick at all.
119. Mr Moystn sought to persuade me to make Wells type orders in respect of certain of the WPP assets. Mr Marks vehemently opposed that submission and asked for a total clean break. I have considered Wells v Wells [2002] EWCA Civ 476, [2002] 2 FLR 97, and M v M (Financial Relief: Substantial Earning Capacity) [2004] EWHC 688 (Fam), [2004] 2 FLR 236, and the submissions made by both Counsel. I am not persuaded by Mr Mostyn's submissions. The assets here are more than sufficient to achieve a clean break. It is in neither party's interests to be tied to each other financially for longer than is absolutely necessary.
120. After submissions had closed and in the course of writing this judgement I received a letter from Mr Marks "conceding" a Wells sharing in respect of certain assets. I have considered it but am not prepared to go down that route for the reasons I have sought to explain in paragraph 119 above. If the parties, having received this judgement, agree to restructure my adjudication so that the same result is achieved but by different methods, then that is a matter for them, subject to my approval if the restructure is to be formalised by a court order.
121. Mr Marks submitted that the husband should pay the wife a lump sum denominated in WPP shares. It will be paid in cash but, to allow for the possible fluctuations in both directions of the share price between now and payment, the amount should be expressed as 3,430,000 times the average share price over a given window of time. The husband can only sell shares in windows. If the share price moves in either direction substantially, then one or either party may be aggrieved depending on the direction.
122. The wife opposes that proposal. The wife said in evidence it would make her very uneasy. Not unnaturally she does not want to be at the mercy of a fluctuating share price.
123. The WPP assets have been calculated at £5.86p per share as the average price over a very recent period of time. The proportion of 60/40 is to bite on the assets as valued at the date of trial. How the husband raises the lump sum is a matter for him. He will be able to take skilled advice from several quarters. The wife is entitled to know at the end of this case what lump sum she will receive. I reject the husband's submissions on this point.
124. 40% of £73,362,877 is £29,345,150. That will be made up as follows:

	£
Walton Place	3,249,500
2 car parking spaces	183,516
Own banks	2,017,743
Stocks, gilts, securities	29,792
Life insurance policies	36,743
National Saving Certificates	47,244
National Savings Bonds	5,095
Pension sharing (50%)	565,295
Unpaid costs	(321,414)
	5,813,514
Balancing figure	23,531,636
Total	29,345,150

125. I refer to para 20 above. As the split of the assets is to be 60/40 and not 50/50, the balancing figure should be reduced by 40% i.e. £142,000 as against £177,500. Accordingly the lump sum payable by the husband to the wife is £23,389,636.
126. The wife will, accordingly, exit the marriage with assets of, in total, £29,345,636 less £142,000 i.e. £29,203,636. Adopting the figure of £4.7m for the wife's housing (Walton Place and another property) suggested by Mr Marks in paragraph 12 of his final submissions, (and in which I would include the two car parking spaces), broadly speaking the wife will have an investment fund of c. £24.50m. Mr Marks has calculated in para 12 of his final submissions that if the wife were to spend at the rate of just under £400,000 p.a. from an investment fund of £22m the balance remaining after 28 years (i.e. her expectation of life) when the wife will be 88, will, on a Duxbury calculation, be of the order of £60m plus the houses. She would have to spend at the rate of £1.06m p.a. to exhaust the investment fund of £22m in 28 years time. Thus with an investment fund of £24.50m the figures will be proportionately higher. The wife will more than cover her needs, live extremely comfortably for the rest of her life, be able to leave substantial funds to her children, and, as she wishes, be a substantial charitable donor. The husband, I accept, will exit with significantly more assets. Nevertheless in all the circumstances of this particular case the result is, in my judgement, fair.