Court of Appeal ruling abandons equal sharing principle for short marriages

Published: 19th June 2017

A recent ruling in the Court of Appeal has raised questions over the long-standing equal sharing principle, following a successful appeal which saw an ex-wife lower her husband's payout to just £2 million from assets totalling £5.45 million.

Mrs Sharp, who made her fortune as an energy trader, was given a greater share following an appeal as the court decided that a combination of factors were 'sufficient to justify a departure from the equal sharing principle in order to achieve overall fairness between parties'. The length of the short marriage and the fact that there were no children involved, as well as both parties having separate incomes and finances were all contributing factors to the judge's final decision.

The original judgement was passed in November 2015, with the High Court awarding Mr Sharp £2.75 million - exactly half of the total matrimonial assets. Mr Sharp’s share has now been reduced to £2 million.

At the start of the relationship, the couple had lived together for 12 months before purchasing their first home in 2008, which Mrs Sharp paid around £1 million for. Following their marriage in 2009, they bought a second home for more than £2 million. Mrs Sharp filed for divorce on the grounds of adultery, following an affair by Mr Sharp which was believed to have started in 2013.

The couples' assets were significantly boosted by Mrs Sharp's annual bonuses, which totalled £10.5m in addition to her salary during the five years of their relationship. Mr Sharp received a similar annual salary, however the size of his bonuses paled in comparison to those of his wife.

Speaking at the case, Lord Justice McFarlane said: 'An automatic or blind application of a 50/50 split in every case can only be an impermissible judicial gloss on the statute [Matrimonial Causes Act 1973], which expressly required the court to consider all the circumstances of the case'.

‘The husband made no contribution to the source of the wife’s bonuses and this is not a case where, save in the final year, the husband is said to have contributed more to the home life or welfare of the family than the wife. This case is, therefore, an “on-business partnership, non-family asset case” where the bulk (indeed effectively all) of the property has been generated by the wife.’

‘Mrs Sharp received bonuses way beyond the level of her previous earnings purely as a result of her employment and without any contribution, either domestic or business, from her husband.’

During the appeal, the judge dismissed the High Court's order on the division of capital, replacing it with a property adjustment order which granted the first home to Mr Sharp along with an additional lump sum of £900,000 and the second home to Mrs Sharp.

The ruling has raised many questions: What constitutes a 'short marriage'? How long must a relationship last before someone is entitled to share the wealth generated by their partner? It may also create more arguments about the length of time a couple have been together if they have chosen to cohabit before getting married, as this factor is taken into account when the court is deciding on how much to award each spouse.

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