Short mar­riage may not mean equal split

Belfast Telegraph - Business Telegraph - - Analysis & Company Report - By clare cur­ran, Part­ner in charge of the mat­ri­mo­nial De­part­ment Clare Cur­ran is a spe­cial­ist fam­ily law ad­vi­sor and can be con­tacted on clare@wor­thing­ton­slaw.co.uk or tele­phone 028 91811538

The Court of Ap­peal re­cently con­sid­ered whether it is in­evitable or not that mat­ri­mo­nial as­sets should be shared equally be­tween a hus­band and wife upon a mar­riage break­down.

The mar­riage in dis­pute was rel­a­tively short, last­ing for just over four years, and with an ad­di­tional pe­riod of 18 months pre-mar­i­tal co-habi­ta­tion.

The par­ties were rel­a­tively young — in their early for­ties — and there were no chil­dren. The wife was a trader and the hus­band worked in IT.

In the early years, the par­ties’ re­spec­tive in­comes were broadly sim­i­lar at around £100,000.

How­ever, the wife re­ceived dis­cre­tionary bonuses to­talling over £10m dur­ing the mar­riage and in Novem­ber 2012, a year be­fore the mar­riage broke down, the hus­band took vol­un­tary re­dun­dancy.

The par­ties had not, it was said, de­lib­er­ately agreed an in­ten­tion to main­tain sep­a­rate fi­nances, but there were a num­ber of as­pects of their fi­nan­cial ar­range­ments which did in­di­cate a no­table de­gree of sep­a­ra­tion.

For ex­am­ple, the judge at first in­stance noted that the par­ties split restau­rant bills and util­ity bills, that the hus­band was not privy to de­tails of the wife’s bonuses and that the wife gifted the hus­band two cars dur­ing the re­la­tion­ship.

At the time of the first in­stance hear­ing the as­sets to­talled £6.9m. The hus­band agreed that some of the value of the as­sets should be ex­cluded from the over­all pot in dis­pute to re­flect the fact that they had been ac­quired prior to the mar­riage, re­duc­ing the as­sets in dis­pute to a value of £5.45m.

The judge at first in­stance de­ter­mined that par­ties ef­fec­tively sub­scribe to the shar­ing con­cept when they marry un­less they opt or at­tempt to opt for a pre-nup­tial agree­ment.

He there­fore con­cluded that the value of the as­sets and sav- ings built up dur­ing the mar­riage should be shared equally, not­with­stand­ing the dif­fer­ent pro­por­tions which the par­ties had contributed and found that “no suf­fi­cient rea­son had been iden­ti­fied… for de­part­ing from equal­ity of di­vi­sion” of those such as­sets.

The wife ap­pealed, sub­mit­ting that it was rel­e­vant that the par­ties had a short, child­less, dual ca­reer mar­riage and that the struc­ture of the par­ties’ fi­nances, com­bined with those facts, jus­ti­fied a de­par­ture from the equal shar­ing prin­ci­ple.

The hus­band submitted that no dis­tinc­tion is presently made be­tween ‘fam­ily as­sets’ and ‘ busi­ness/in­vest­ment/uni­lat­eral as­sets’ and that the prin­ci­ple of equal­ity ap­plied to short mar­riages as much as to long ones be­ing “no less a part­ner­ship of equals”.

The Court of Ap­peal held that the case of Miller was still the au­thor­i­ta­tive guid­ance in re­la­tion to such cases and that the “in­escapable con­clu­sion” of the ma­jor­ity ap­proach in that case in re­la­tion to “short, child­less mar­riages, where both spouses have been largely in full time em­ploy­ment and where only some of their fi­nances have been pooled” fair­ness may re­quire de­par­ture from, rather than a strict ap­pli­ca­tion of, the equal shar­ing prin­ci­ple.

Con­se­quently the wife’s ap­peal was al­lowed on the ba­sis that the no­tion that the shar­ing prin­ci­ple ap­plied un­less the par­ties had en­tered into a pre-nup agree­ment was “un­sus­tain­able and not sup­ported by any author­ity”; the ma­jor­ity in Miller was that de­par­ture from equal shar­ing could be a pos­si­bil­ity in cases in­volv­ing a short mar­riage and dual in­comes and the man­ner in which the par­ties ar­ranged their fi­nances suf­fi­ciently es­tab­lished that the wife main­tained her cap­i­tal separately in a man­ner com­pat­i­ble with that de­scribed by Baroness Hale in Miller.

Thus the hus­band’s claim was re­duced to £2m made up on a 50% share of the value of the par­ties’ two prop­er­ties held in joint names and a fur­ther lump sum to re­flect the stan­dard of liv­ing en­joyed by the par­ties dur­ing the mar­riage, the need for a mod­est cap­i­tal fund to live in the prop­erty the hus­band was re­tain­ing and some share in the as­sets held by the wife.

Di­vorce can be a costly af­fair

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