London Courts Stick to 50-50 Principle: Judges Reject Banker’s Claim to be a ‘Genius’ in Divorce Case
London Courts Stick to 50-50 Principle: Judges Reject Banker’s Claim to be a ‘Genius’ in Divorce Case
A former American financier has been unsuccessful in his attempt to reduce the £72m payment he must make to his ex-wife in one of the biggest divorce awards made by the English courts in recent years.
Randy Work, 49, said a High Court judge had not given him a large enough share of a £140m fortune and did not recognise the “special contribution” he had made to the creation of the couple’s wealth. Mr Work used the word “genius” in his description of how he had made £7bn for an American private equity firm in Japan, while making millions in commission for himself.
He claimed he had applied “groundbreaking methodologies . . . to the distressed debt sector” when managing the Japan office of Texan private equity firm Lone Star, producing total profits for investors of $7bn.
The Court of Appeal rejected the earlier attempt by Mr Work to overturn the High Court ruling that gave an equal share of his wealth to his estranged wife. The three judges upheld the 2015 decision, in which it was ruled that Mr Work should give his wife half his assets because the couple had been equal partners in a relationship that had lasted for more than 20 years.
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Husband’s contribution to wealth not ‘wholly exceptional’
Ruling on the divorce in 2015, Mr Justice Holman told Mr Work that his wealth contribution, which was estimated by the financier to be more than $300m in 10 years, was not “wholly exceptional” and rejected his claim to be a financial “genius.”
“I personally find that a difficult, and perhaps unhelpful, word in this context . . . To my mind, the word ‘genius’ tends to be overused and is properly reserved for Leonardo da Vinci, Mozart, Einstein and others like them,” he said.
During the divorce hearing, Mr Justice Holman had said the case “should be so easy” to settle as there was “plenty of money to go round.” He criticised the couple for displaying “unedifying and destructive pugilism” in their legal battle. The series of hearings had cost more than $3m in legal fees and associated costs.
Mr Justice Holman instead said Mr Work had to demonstrate some “exceptional and individual quality which deserves special treatment” so as to prove he had made a special financial contribution to the relationship – and this he had not done. He ruled the couple’s wealth should be divided equally as “this was a marriage of two strong and equal partners over 20 years.” The couple, both originally from the United States, were in their 40s when their 18-year marriage ended in 2013.
The three appeal judges ruled that Mr Justice Holman had been correct in rejecting the financier’s claim that his contribution to the couple’s marital wealth was “exceptional,” agreeing that Mr Work had not demonstrated he had made a “special contribution” based on “some exceptional and individual quality in the spouse concerned” and that “hard work alone” was not enough.
Furthermore, the appeal judges identified an element of Mr Work “being in the right place at the right time” when he amassed earnings of more than £241m when he relocated to Japan to set up and run the offices of Lone Star between 1998 and 2008.
London courts stick to 50-50 principle
The case has been keenly watched because it provides an example of the difficulty courts have in departing from the legal principle that wealth should be equally shared upon divorce even when it has been largely amassed by one party. London courts have gained a reputation as being a more sympathetic place to contest high-value divorces. Judges typically rule an equitable division of assets, giving equal weight to the work of a wealth creator and a homemaker. In the past 17 years there had only been three reported cases where a breadwinner was successfully able to claim that a special contribution in their career justified them retaining more of the couple’s wealth.
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If you are a high-net-worth client and would like to discuss any aspect of family law, are considering divorce proceedings or a trial separation, or want to draw up a pre or post-nuptial agreement, call us in absolute confidence on 03456 381381. Alternatively, please email us at familylaw@ibblaw.co.uk. IBB’s family law experts are based in Chesham, Buckinghamshire and provide support to clients throughout Buckinghamshire, London and all surrounding areas.
