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
Katie McCann: Kuits Family Law
