Billionaire Hamm’s is one of the biggest divorce settlements in history, but is it big enough?

American entrepreneur Harold Hamm, best known for his position as CEO of Continental Resources, has been ordered to pay his ex-wife, Sue Ann Hamm, $995.5 million in what has been referred to as one of the biggest divorce settlements in history. Although an enormous figure to most, it is only a fraction of Mr Hamm’s $14 billion empire and Sue Ann plans to appeal the decision on the grounds that it is inequitable. For this reason, the ruling invites an intriguing question – is the Oklahoma County Court’s decision reasonable compared to the conclusion that a court in England and Wales would have reached?

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Oklahoma is an equitable distribution state when it comes to the division of property on divorce. This means that any settlement must be just and reasonable. In order to achieve this, a judge must take into consideration the contributions of each party during the marriage, as well as deciding what each ex-spouse needs in order to move forward following the separation. Also to be considered is the standard of living enjoyed by the ex-couple whilst they were married and any factors that are clearly relevant – such as a spouse’s ability to pay. As the 24th richest man in the United States, it is fair to assume that Mr Hamm wouldn’t exactly struggle to make payments to his ex-wife. One would also be forgiven for suspecting that the ex-couple enjoyed a rather comfortable standard of living.

Whilst equity is central to property division in Oklahoma, its synonym fairness is the main consideration of judges making financial orders following marriage breakdowns in the UK. But what exactly is fair? And would Lord Nicholl’s famous ‘yardstick of equality’, together with the S25 factors of the Matrimonial Causes Act 1973, place Sue Ann Hamm in a better position? Let’s consider the facts. Harold 68 and Sue Ann 57 were married from 1988 until Sue Ann filed for divorce in 2012. Although Harold made mention of the fact that the couple had been separated since 2005, in England and Wales a marriage of 17 years could be considered long for the purposes of financial distribution. The affair that Sue Ann alleged Harold to have had would be irrelevant in an English court, as only conduct with the ‘gasp factor’ would be taken into account. The ex-couple have two children together: Jane, 23, and Hillary, 20. Although a UK court would investigate their financial needs together with their earning capacities, the reality is that this would not be a huge consideration due to the fact that they are both over the age of minority.

In Oklahoma, a significant factor for consideration was how Mr Hamm acquired his fortune. Just your ‘regular’ multi-millionaire when he married Sue Ann, Harry went onto purchase one million acres of land leases, which saw Continental Resources become a major oil producer and in turn propelled him into billionaire’s territory. Oklahoma law states that money earned during a marriage can form part of a divorce settlement if made through skill, as opposed to ‘luck’, or a change in the economy in which case it cannot. Mr Hamm’s argument that he had ‘stumbled across’ his additional wealth fell short when Judge Haralson stated that Harold’s skill, effort and leadership had been the driving force behind the success of Continental Resources.

Although Mr Hamm’s argument was unsuccessful, looking at how wealth has been generated in this way would be completely alien in the UK. Whether by luck or skill, this amount of wealth would fall into the pot for consideration.

A consideration of the UK court would be the needs, obligations and responsibilities of both Harold and Sue Ann. Due to the extreme wealth of the couple, this factor is likely to be reviewed in conjunction with the standard of living enjoyed by the parties before the breakdown of the marriage. This is because the ‘needs’ of a party are extremely subjective and will therefore be very different depending on the lifestyle a party has become accustomed to. A UK court would be looking to ensure that Sue Ann would be able to continue living comfortably; however, the difficulty arises when trying to decide how much money she will need to do this. Realistically, the almost $1 billion that she is set to receive in Oklahoma would allow her to have a life of luxury beyond anyone’s wildest dreams.

Also relevant is the fact that Sue Ann Hamm was not a lady of leisure throughout her marriage. She was a lawyer in Harold’s company when the couple married, playing a significant role negotiating the company’s land deals. Her work could be found to be a significant contribution to the family, alongside Harold’s contributions. Also, if she stopped working to take care of the children (which is currently unreported), she could have an argument to be compensated for the loss of her career.

Taking all of the above factors into account, it appears that there could be a strong argument in the UK in favour of Sue Ann receiving an equal distribution. After all, she had a long marriage and contributed to the family’s welfare. In addition, Harold certainly has enough money to fund an equal split. However, the ruling of Cowan v Cowan[1] throws a significant curve ball into the equation. In this case, the Court of Appeal held that a stellar contribution by one spouse is enough to justify a departure from the yardstick of equality. Charman v Charman[2] seems to confirm that Harold’s $14 billion business could be viewed as stellar, hence creating a shift in his favour.

So what would all this mean for Sue Ann here in England? All the factors certainly point to potentially more than the 1/14th share she has been awarded. Some might say it’s no wonder she is trying her luck on appeal!

[1] [2001] 2 FCR 332 [2] [2007] EWCA Civ 503

New Presumption of Parental Involvement: Is the law too concerned with appeasing the parent?

The welfare of the child has always been the fundamental consideration for courts dealing with child arrangements following a couple’s separation. The welfare checklist set out in S8 of the Children Act 1989 provides statutory guidance that requires certain factors to be considered. Amongst other things, the wishes and feelings of the child and the child’s needs are considered, so that the most appropriate arrangement is reached. Due to the subjective requirements of each child, extreme care must be taken to ensure that the specific needs of the child are met.

Consideration must be given to where the child should live and how often they should see or speak to each parent. Until recently, these matters were addressed through residence and contact orders respectively; however, these were replaced with the all-encompassing child arrangement orders in April 2014. The purpose of the amendment was to shift the focus away from the name of the order and towards the content. Too often, parents were being side-tracked and, instead of focusing on their child’s best interests, they were becoming fixated on becoming the parent with residence. By removing the concept of a ‘winner’ and a ‘loser’, it was hoped that the focus would return to the child.

A further change to the law came into force on 22 October 2014, whereby S1 Children Act 1989 was amended to include the presumption that it is in the best interests of the child for both parents to be involved in the child’s life, unless evidence to the contrary is shown. Explaining the legislative changes, Mr Justice Hughes stated that, “No parent should be excluded from their child’s life for no good reason.”

But when has the law ever allowed this to happen? Surely it goes without saying that as long as it is safe to do so, then parental involvement will be encouraged? Judges have been dealing with parental disputes for many years and reported cases show that even when a parent’s conduct has been questionable some sort of contact has been maintained, as long as there is no risk to the child.

“As a result, one could be forgiven for thinking that the amendment brings nothing new to the table,” says Katie McCann, Head of Family Law for Kuits. “However, what it does do is shift both parent’s involvement from being a consideration to a presumption that is not to be strayed from without good reason.” As Mr Justice Hughes goes on to explain, “This is not about giving parents new ‘rights’ but making clear… that the family court will presume that each parent will play a role in the future life of their children.”

It is important to clarify that the changes to the Children Act do not create a presumption of equal parenting. Although this idea was considered initially when the above provisions were drafted, it did not come into fruition, and rightly so. A presumption of a 50:50 split in relation to parenting would not compliment the welfare principle and would be a potentially dangerous move in some cases. The risks attached to such a presumption are highlighted by Australian family law and the devastating case of 4-year-old Darcy Freeman, who died at the hands of her father in 2009. He had been given access to his children under the Australian shared parenting law, despite concerns from his ex-wife as to the safety of this. This tragic case emphasises that a presumption of shared parenting can easily jeopardise the safety of a child, without relevant checks and balances being in place.

“The UK law appears to tread with caution by expressing that the presumed involvement may be direct or indirect,” says McCann. “Although the importance of child-parent contact is acknowledged, the law is not prepared to endanger the child and therefore indirect contact may be appropriate where there is the potential of harm through direct contact. Although this approach appears to be balanced and sensible, the motives behind the recent amendments can be questioned. There is room to argue that the introduction of child arrangement orders and the insertion of the presumption of parental involvement are both for the benefit of the parent, as opposed to the child.

“As stated above, the involvement presumption has always existed and recording it in statute simply reassures parents that, unless there is a good reason to the contrary, they will remain involved in their child’s life. The introduction of child arrangement orders does nothing more than rebrand contact and residence orders by placing them in a slightly more modern and less stigmatising packaging. Massaging the ego of the parent that does not gain the label of a ‘residence order’ appears to be the main objective. By focusing on accommodating the parents’ feelings, it can be argued that the child’s welfare becomes less of a priority and this is unacceptable.”

The government do not accept that the focus has been shifted away from the child and explain that, on the contrary, the purpose of the changes is to ensure such focus remains intact. They claim that the aim of the legislative amendments is to promote a greater understanding of how the courts reach their decisions in cases relating to parental disputes. The hope is that, in doing so, parents will be persuaded to take a less rigid approach, secure in the knowledge that their involvement is desired.

“It is still early days and one cannot be sure of the effects, if any, of the legislative changes,” concludes McCann. “However, if the government’s outcomes are achieved, it is hoped that parents will stop trying to win the ‘custodial war.’ In turn, this will ensure that focus is placed on accommodating the child’s best interests and this, of course, is the ultimate goal.”

The Need for Greater Family Law Court Judgements

Many family law hearings in the UK are held in secret, but more will be published in the future, says the court of protection. Unless there are extremely compelling reason not to, judges will give permission to make the hearing public. More details will emerge from sensitive domestic disputes, even if some of them are anonymised. These new regulations will begin on the 3rd of February. Sir James Munby is the main man who has been pushing for these reforms to the family court system.

This move will improve public understanding about the court process, and hopefully incur greater faith in the system. Public debates about famous cases – such as the pregnant lady who was forced to receive a caesarean – are often misinformed because the facts aren’t readily available. False reporting isn’t always the fault of the media, if they can’t access the details of the hearing. With greater transparency, public debates and articles will be better informed of all the facts. This will hopefully create a less biased account of events.

The Decision

There are two types of judgements: normally published cases and possibly publishable cases. These categories provide the framework in which a decision is made.

The judge will only publish the hearing if he or she deems that it’s in the public interest to do so. Families under protection, children, and vulnerable individuals that can’t usually make their own decisions, will obviously continue to benefit from anonymity. A judge will choose to keep a judgement or case secret, if this would breach any important anonymity. In many cases, the judge will decide what is appropriate for publication – he or she is not allowed to publish information at the request of a party or the media. The judge must decide that it’s within the public interest.

Is That All?

Exonerated parents or anonymous parties may wish to discuss their experience with the media; sometimes this is advantageous to the case, as it can bring forward more evidence or witnesses. Otherwise, there are strict rules about what the media can or can’t publish from the family courts. Journalists can attend hearings, but they need to obtain the court’s permission if they want to report the case.

There may be details which a journalist isn’t able to publish, due to the sensitivity of the details.

In the court of protection, the hearings are private – the media and the public aren’t allowed in. This is to safeguard the rights of vulnerable people who would suffer unduly if the contents of the case were made public. It seems like this will happen more rarely in the future, as the government is on an anti-privacy binge.

How Military Divorce Differs from Regular Divorce

Military divorces are much like any other divorce. Two people decide they no longer want to be married, and go through the process of separating property, assets and determining child custody issues. However, the way these concerns are addressed, and the way things are separated between the two parties, requires a consideration of the military member’s lifestyle and benefits. Understanding how survivor benefits and military pensions are divided up, and how custody of children is determined, is important for both spouses considering divorce.

Child Custody

Many military marriages involve an active duty spouse and a civilian spouse. The lifestyle of these families adapts to the military world, with active duty personnel moving regularly for various deployments, and with the military spouse frequently away from home. Families that fit this description should be aware that the courts will rarely grant full custody to the active duty spouse.

When determining child custody, the courts always look out for the best interests of the child. It is understood that, while the active duty spouse is doing much for his or her country, the lifestyle is ill suited for raising children. Military families should assume that child custody will go to the non-active spouse, and this will likely include child support payments.

Division of Military Pensions

Active duty service members are entitled to a pension after 20 years of service. The courts answer the question how to divide up this pension in the case of divorce. Most military couples are aware that the non-military spouse is entitled to half of the pension after 10 years of marriage. However, not all are aware that this division is negotiable.

The couple can come to an agreement on the division of the pension in their own way. This includes if the marriage has been shorter than the standard 10 years, and it includes the possibility of a payout of less than 50 percent of the pension after the 10-year mark.

The 10-year and 50 percent standards are simply guidelines for the court to go on. The arguments presented by both divorce attorneys and the decision of the court can produce a number of different results. Each spouse may wind up with more, or less, than he or she was aiming for.

It should also be noted that only after ten years of marriage can the finance center pay the awarded portion of the pension to the spouse. If the non-military spouse wins some of the pension, but the marriage did not last for at least ten years, it is the responsibility of the retiree to make the payments to the ex-spouse.

Survivor Benefits

Some spouses make the mistake of assuming that the Survivor’s Benefit Plan (SBP) – the payout that happens upon the death of the military spouse – will still go them in the event of death. While the SBP can be awarded to the divorced spouse during the divorce proceedings, this is certainly not guaranteed.

If the ex-spouse is not awarded the SBP, then he or she will stop receiving pension payments in the event that the military member dies. This is something to remain aware of during divorce negotiations.

Military Divorce Lawyer

Spouses considering a military divorce should seek the help of an experienced military divorce lawyer. This will help ensure the best possible results from the divorce.

Family Law Property Issues in Australia

(Victorian & Australian Law)

In recent times, the jurisdiction of property disputes in Family Law has broadened. Traditionally, property was only divisible between married or divorced couples. De-facto and same sex partners are now able to apply for a property settlement, though under different law. In the absence of agreement between the parties, an application for the settlement of a property dispute is made to the court, to be decided on the basis of need.

The settlement reached becomes legally binding and enforceable by the courts. Here’s a rough guide to what usually happens in these situations…

Applications

Parties can make a property settlement by agreement or, if agreement cannot be reached, make an application to the court for a property settlement. Applications for the division of property after divorce can be made to the Family Court or to the Federal Magistrates Court where a property dispute is worth less than $700,000.

Only parties who are or were married can make an application for a property settlement under the Family Law Act 1975 (Cth). In the case of divorce, an application must be made within 12 months of receiving the decree absolute. De-facto and same sex partners can make an application under the Property Law Act 1958 (Vic) in the Supreme Court, County Court or Magistrates’ Court.

Once an application is made, the parties will be asked to attend a case conference, with the aim of settling the property dispute by agreement before it goes to court. Present at this conference will be the parties, any family lawyer involved and a court registrar. If this conference is unsuccessful, the parties will go to court.

Property disputes in de-facto and same sex relationships (domestic relationships) are dealt with under the Property Law Act 1958 (Vic). A domestic relationship is a relationship between two people (regardless of gender) who live together as a couple on a domestic basis but are not married. The domestic relationship must have existed for at least two years for an application for a property dispute to be made under Part 9 of the Property Law Act . If there are exceptional circumstances, for example children being born out of the relationship, this two-year period can be waived. The relationship must have ended after 8 November 2001 for Part 9 to apply.

Property

The type of property divisible in a property settlement includes assets, cash, real estate, investments, insurance policies and superannuation. Debts are also taken into account. In a domestic relationship, as governed by the Property Law Act , superannuation and retirement benefits are not included in a property settlement. In making an order for property settlement, the court calculates the total pool of assets of the parties.

The division of these assets is based on both contributions made by each of the parties to the asset pool and future needs. The contributions of the parties include non-financial contributions, which means a homemaker will not be disadvantaged in this assessment. Future needs takes into account who is responsible for the daily care of the children, earning capacity, age, health and the financial circumstances of any new relationship. The aim is to distribute the property fairly between the two parties.

If you believe your partner is going to dispose of assets before the total pool of assets is calculated you can obtain an injunction to stop the sale taking place. Bank accounts and proceeds from the sale of any assets that has already taken place can also be frozen.

Spousal Maintenance

A party can apply for ongoing spousal maintenance if they can prove they are unable to support themselves. This application must be made within 12 months of divorce. An application for spousal maintenance is often included with an application for property settlement so that all financial issues are dealt with at once.

Spousal maintenance cannot be applied for where a domestic relationship exists.

Enforcement

If an agreement is reached between the parties, they can apply to the court for consent orders. This will make the agreement enforceable by the courts in case of dispute. Consent orders, once made, are final. A party must prove fraud, impracticality or other exceptional circumstances if they wish the consent orders to be set aside or varied.

If a party is not complying with the orders made, an application can be made to the court for enforcement. In this application, the party applying must set out exactly what the problem is. The court will then decide whether an order is needed to enforce the existing order.

A family law property settlement is an important process to go through after the breakdown of a marriage or domestic relationship. A property dispute can be settled by agreement between the parties or resolved by the court. Each case is unique and will be considered by the court according to its own circumstances. The court will not consider who is at fault in the breakdown of a relationship. Rather, it will be resolved on the basis of fairness and need.