Cooper-Hohn v Anthony Hohn

In a very high-value financial remedy case, assets are valued at the date of trial, but post-separation growth need not be treated as part of the marital acquest to which equality applies with full force. The court must assess the source and nature of the growth, including whether it resulted from one party’s continuing personal industry or from passive growth in matrimonial property.

A special contribution remains available in exceptional cases. It requires an unmatched contribution of exceptional quality, but there is no financial threshold and no presumption that exceptional wealth alone justifies departure from equality. The court must explain why equality is departed from and determine the overall award by applying the statutory discretion fairly, rather than by rigid formula.

The wife sought financial remedy orders following a 17-year marriage. The parties had accumulated personal assets approaching US$1.5 billion, while substantial additional funds had been transferred to charitable foundations outside the matrimonial resources.

The principal disputes concerned computation of the available assets, the treatment of post-separation growth and earnings, the possible goodwill value of the husband’s fund-management entities, tax liabilities and indemnities, and whether the husband had made a special contribution. The wife also sought a share of the substantial growth in the value of the investment fund after separation.

The court had to determine how the statutory fairness exercise applied to post-separation accrual, exceptional wealth generation and the parties’ differing financial and domestic contributions.

1. Computation and post-separation accrual. The assets were valued at the date of trial. The date of separation remained important because it marked the end of the parties’ mutual spousal contributions. Post-separation assets were not automatically excluded from the court’s jurisdiction, but their source and character affected the share to which the wife was entitled.
2. The husband’s continuing active investment activity, including the recovery of earlier losses and the creation of new investment opportunities, represented substantial post-separation contribution. The court therefore treated the second-stage IREO investment, unallocated profits and the vast majority of contingent incentive fees as post-separation accrual. The wife nevertheless retained an entitlement to share in that accrual because the investment fund had its genesis in the marriage and she had remained at risk in relation to its performance.
3. The court declined to attribute goodwill above the underlying net asset value of the fund-management entities. The evidence showed that the business was overwhelmingly dependent on the husband’s personal investment decisions and that investors were likely to withdraw if he left. Future earning capacity was relevant to fairness but was not itself treated as a capital asset for sharing.
4. Special contribution. The statutory requirement to consider contributions survived White v White, Lambert v Lambert, Cowan v Cowan, Miller v Miller; McFarlane v McFarlane and Charman (No 4). The husband’s financial contribution was exceptional and unmatched. His wealth-generating ability, innovative investment strategy and scale of achievement justified a departure from equality. The wife had nevertheless made a full contribution as homemaker, primary carer and senior leader of the charitable foundation.
5. The court rejected a rigid formula for separating marital and post-separation wealth. Taking account of the total assets, post-separation accrual, special contribution, future income, capital-generating capacity and tax issues, the wife was awarded US$530 million, approximately 36.12% of the available resources.
6. Tax and implementation. The pension was to be divided by a pension-sharing arrangement, avoiding a notional deduction for tax. A deduction of £10 million was made for the likely risk of tax on unwinding the TCI structure. The wife was required to provide a proportionate indemnity for identified tax risks, secured by an escrow containing 40% of the cash element of her award. The general indemnity sought by the husband was refused, and the indemnity was to end on 6 April 2019.

The judgment records an earlier interlocutory appeal concerning permission to adduce expert valuation evidence. The Court of Appeal refused permission on the merits and because the application was late, while confirming that the final hearing judge could take account of the husband’s future earning capacity and any future profit through the overall distribution.