Divorce and Wealth
Cooper-Hohn v Hohn – Departure in equality of capital the Wife should receive following divorce
In the case of Cooper-Hohn v Hohn, the Husband sought a departure from equality in terms of the share of the wealth that the Wife should receive at the end of the marriage.
Following the divorce of a very wealthy couple, the Wife applied for financial remedy orders.
The assets which were available for division between the parties were worth between 1.35 and 1.36 billion US dollars.
In addition, the wealth which the parties held personally, a further sum of 4.5 billion US dollars had been channelled into a charitable foundation.
In respect of the personal wealth, the Husband argued that the majority represented post separation accrual, having been accumulated or earned during the ensuing years of separation since 2012, at a time when the Wife’s contributions had ceased.
As such, the Husband stated that there should be a departure from equality in terms of the share of wealth the Wife should receive at the end of the marriage.
The Husband also contended that his creation of wealth fell to be considered as a special and unmatched contribution which was further justification for a reduction in the Wife’s entitlement.
The Husband stated that that Wife should receive no more than one third of the assets as they stood in April 2012 when the marriage effectively came to an end, and one third of the post separation accrual.
The Wife sought an equal share of the assets as it stood at the date of the hearing.
The Wife stated that she made contributions that matched those made by the Husband, even if they were different in kind and quality to his wealth. As such, the Wife claimed that if her one half entitlement was reduced, it would amount to discrimination in terms of her contributions.
The Court considered the facts before them and in particular whether a departure from equality was justified.
In addition, the law required the Court to consider the value of the assets as they stood at the Trial. There was no presumption of an equal division or any bias in favour of either party.
In this case, there had been on the facts, post separation accrual. As such, there would be a significant departure from equality in the Husband’s favour which was entirely justified by the compounding factors of post separation accrual. It was held that the financial returns had been achieved by the investment strategies developed by the Husband and the wealth creation obtained came about by his ability to identify a new investment opportunity and make it work. The new work and investments created by the Husband in the period after the parties separated fell at a point too distant from the essential character of the matrimonial partnership to quality as matrimonial property.
Therefore, a fair outcome had to reflect some departure from equality of division in order to reflect the contributions made by the Husband in the two or more years since separation.
It was held that it would not be fair to treat the wealth creation after the breakdown of the marriage as part of the matrimonial assets in which the Wife would be entitled to an equal share.
The Court considered that there had been a special contribution made by the Husband and such contribution should and would be reflected in a departure from equality in terms of the overall award which the Court proposed to make.
In view of the above, the Wife should receive an award of 530 million US dollars from the available assets of just under 1.5 US dollars. This sum represented approximately 36% of the global resources. From her share the Wife would have to pay her share of any tax risks which materialised.
The Court considered that an award at that level properly reflected the Wife’s contributions and her entitlement to a fair share of both the matrimonial assets and post separation accrual.
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