FAMILY DIVISION
B e f o r e :
(sitting throughout in public)
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MANDY C GRAY | Applicant | |
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WILLIAM RANDALL WORK | Respondent |
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MR C. HOWARD QC and MR R. CASTLE (instructed by Hughes Fowler Carruthers) appeared on behalf of the respondent.
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Crown Copyright ©
MR JUSTICE HOLMAN:
"III.
It is specifically agreed that in the event of termination of the marriage of the parties by divorce or death, husband will have no right, title, interest, or claim in, to, or with respect to any of the separate properties then owned by wife, except, in the event the marriage terminates on account of the death of one of the parties, as provided by wife's will or by other valid testamentary disposition; and wife will have no right, title, interest, or claim in, to, or with respect to any of the separate properties then owned by husband, except, in the event the marriage terminates on account of the death of one of the parties, as provided by husband's will or by other valid testamentary disposition."
"WHEREAS, WILLIAM R. WORK ( the "husband") and MANDY C. GRAY (the "wife") have contemporaneously herewith entered into the AGREEMENT BETWEEN SPOUSES in which they have agreed to partition any community property they may own and to give certain properties to each other so as to establish their respective ownership in and to all of their respective properties;
WHEREAS, husband and wife desire to enter into this ADDENDUM AGREEMENT BETWEEN SPOUSES to establish and define certain of their respective rights and obligations during their marriage and upon the dissolution of their marriage by divorce or husband's death; and this addendum, along with the AGREEMENT BETWEEN SPOUSES, shall be construed as one agreement but shall be independent and several in their enforceability;
WHEREAS, neither husband nor wife is contemplating divorce and this addendum is not made because of any thought on the part of either party that such a divorce is likely to occur or is within either party's current contemplation or intention; and
WHEREAS, husband executes this agreement as additional consideration to wife's execution of the AGREEMENT BETWEEN SPOUSES."
"The total sum payable to wife shall be in lieu of any other division of the property of husband and wife upon their divorce and of any obligation of husband to maintain, support, pay alimony to, or make any other payment to wife; and wife agrees that by accepting the total sum payable to wife she shall not be entitled to any of husband's property, including any and all of the property divided by the AGREEMENT BETWEEN SPOUSES, or to any maintenance, support, alimony, or payment of any kind from husband and that the total sum payable to wife shall be in full satisfaction of wife's marital rights, including any rights that she may have to any marital property."
"V.
Notwithstanding any other provision of this addendum, wife is under no obligation to accept the total sum payable to wife as settlement of husband's obligations upon divorce and is free to seek from a court with jurisdiction over any divorce proceeding between the parties (the "divorce court") maintenance, support, alimony, a property settlement, or any other allowable recovery from husband or from property owned by husband ("alternative relief") in lieu of the total sum payable to wife; provided, however, if wife seeks alternative relief from any court, wife shall be deemed to have forfeited and to have relinquished her right to the total sum payable to wife, and, so that there will be no ambiguity or uncertainty as to whether or not wife is seeking alternative relief, wife agrees to file with the divorce court either an express affirmative election to accept the total sum payable to wife in lieu of any alternative relief or an express affirmative election to seek alternative relief, which shall be determinative as between the parties provided the final relief granted by the divorce court is consistent with the wife's election ..."
"Mr Howard: It was made quite clear to you, wasn't it, Ms Gray, that if this had been litigated in Texas, you wouldn't have got any more than the TSP because of the partition agreement?
A. No, I do not agree with that statement. That is not how it was explained to me at all. Yes, we partitioned our assets but the addendum agreement put everything back into our mutual property, so that I could go against that. In fact, my lawyers anecdotally said 'here in Texas we start at 50 per cent for the wife and we go up from there'."
"... Parties should not seek to promote a case of 'special contribution' unless the contribution is so marked that to disregard it would be inequitable. A good reason for departing from equality is not to be found in the minutiae of married life.
68. This approach provides the principled answered in those cases where the earnings of one party, usually the husband, have been altogether exceptional. The question is whether earnings of this character can be regarded as a "special contribution", and thus as a good reason for departing from equality of division. The answer is that exceptional earnings are to be regarded as a factor pointing away from equality of division when, but only when, it would be inequitable to proceed otherwise. The wholly exceptional nature of the earnings must be, to borrow a phrase more familiar in a different context, obvious and gross. Bodey J encapsulated this neatly when sitting as a judge in the Court of Appeal in Lambert v Lambert ... He described the characteristics or circumstances which would bring about a departure from equality:
"...those characteristics or circumstances clearly have to be of a wholly exceptional nature, such that it would be very obviously inconsistent with the objective of achieving fairness (i.e. it would create an unfair outcome) for them to be ignored."
"In my view, the question of contributions should be approached in much the same way as conduct ... It had already been made clear in White v White that domestic and financial contributions should be treated equally. Section 25 (2) (f) of the 1973 Act does not refer to the contributions which each has made to the parties' accumulated wealth, but to the contributions they have made (and will continue to make) to the welfare of the family.
Each should be seen as doing their best in their own sphere. Only if there is such a disparity in their respective contributions to the welfare of the family that it would be inequitable to disregard it should this be taken into account in determining their shares."
"The statutory requirement in every case to consider the contributions which each party has made to the welfare of the family, as well as those which each is likely to make to it, would be inconsistent with a blanket rule that their past contributions to its welfare must be afforded equal weight. Nevertheless, the difficulty attendant upon a comparison of their different contributions and the danger of its infection by discrimination against the home-maker led the House in Miller heavily to circumscribe the situations in which it would be appropriate to find that one party had made a special contribution, in the sense of a contribution by one unmatched by the other, which, for the purpose of the sharing principle, should lead to departure from equality ..."
"The notion of a special contribution to the welfare of the family will not successfully have been purged of inherent gender discrimination unless it is accepted that such a contribution can, in principle, take a number of forms; that it can be non-financial as well as financial; and that it can thus be made by a party whose role has been exclusively that of a home-maker. Nevertheless in practice, and for a self-evident reason, the claim to have made a special contribution seems so far to have arisen only in cases of substantial wealth generated by a party's success in business during the marriage. The self-evident reason is that in such cases there is substantial property over the distribution of which it is worthwhile to argue. In such cases can the amount of the wealth alone make the contribution special? Or must the focus always be upon the manner of its generation? In Lambert Thorpe L J said, at paragraph [52]:
'There may be cases where the product alone justifies a conclusion of a special contribution but absent some exceptional and individual quality in the generator of the fortune a case for special contribution must be hard to establish.'
In such cases, therefore, the court will no doubt have regard to the amount of the wealth; and in some cases, perhaps including the present, its amount will 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 in some other field. Sometimes, by contrast, it will immediately be obvious that substantial wealth generated during the marriage is a windfall - the proceeds, for example, of an unanticipated sale of land for development or of an embattled takeover of a party's ailing company - which is not the product of a special contribution."
"Like this court in Lambert, we find ourselves unable to identify any figure as a guideline threshold for a special contribution of this character. It would, we consider, be dangerous for us to do so. However laden with qualification, the guideline might discourage a court from discerning special contribution in the generation of wealth below the threshold in circumstances, however rare, in which it should properly do so. The greater concern, however, is the obverse risk that it might encourage a court to discern special contribution in the generation of wealth above the threshold in circumstances in which it should not properly do so. While the law recognises the concept of a special contribution in the generation of wealth, there is no doubt that, following the decision of this court in Lambert, approved and developed in Miller, it keeps the concept in very narrow bounds. We would not wish a party's claim to have made a special contribution to succeed by reference to something interpreted as effectively a presumption deriving from our identification of a threshold figure."
(i) 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: per Bodey J in Lambert but quoted with obvious approbation by Lord Nicholls of Birkenhead in Miller at paragraph 68.
(ii) Exceptional earnings are to be regarded as a factor pointing away from equality of division when, but only when, it would be inequitable to proceed otherwise (Lord Nicholls of Birkenhead in Miller at paragraph 68).
(iii) Only if there is such a disparity in their respective contributions to the welfare of the family that it would be inequitable to disregard it should this be taken into account in determining their shares (Baroness Hale of Richmond, in Miller at paragraph 146).
(iv) It is extremely important to avoid discrimination against the home-maker (the Court of Appeal in Charman at paragraphs 79 and 80).
(v) A special contribution requires a contribution by one unmatched by the other (the Court of Appeal in Charman at paragraph 79).
(vi) 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 (the Court of Appeal in Charman at paragraph 80). A windfall is not enough.
(vii) There is no identified threshold for such a claim to succeed (the Court of Appeal in Charman at paragraph 88).