Does a short marriage get short shrift in the divorce courts?
Hannah Sims, a solicitor in the Family Team, considers a recent Court of Appeal decision which addresses whether a short childless marriage evades the equal sharing principle on divorce.
It is firmly established that the starting point for the division of the matrimonial assets of a divorcing couple should be to share them equally where resources are sufficient to meet the parties’ needs. Whatever the division of labour chosen by the husband and wife, the overriding objective of fairness requires that this should not prejudice or advantage either party when dividing the assets built up during the marriage.
The principle has been applied strictly and there has been a firm and widely applied rule of thumb in cases that, where needs are met, matrimonial assets would be spilt equally unless there is a good reason which dictates otherwise.
In the recent case of Sharp v Sharp, however, the Court of Appeal was asked to consider a relaxation of the equal sharing principle. The childless marriage lasted six years and the couple both worked and maintained separate finances. The wife had been paid very substantial bonuses totalling approximately £10.5 million in the central 5 years of their relationship together whilst the husband’s were comparatively trivial.
At first instance the court considered that the assets built up during the marriage, regardless of the very different proportions in which the parties contributed to them, should be subject to the equal sharing principle. It accordingly awarded the husband £2.725 million of the total assets of £5.45 million.
When the case reached the Court of Appeal, however, the court rejected the argument that the only basis for a departure from an equal division of matrimonial property was where there was a valid pre-nuptial agreement in place. The court concluded that an automatic application of the equal sharing principle in every case would be an unjustified ignorance of the statutory factors which require the court to take into account all of the circumstances of the case, and which also include the length of the marriage and the parties’ respective contributions.
The wife was therefore right to contend that a combination of relevant factors (a relatively short marriage, no children, dual incomes and separate finances) were sufficient to justify a departure from the equal sharing principle in order to achieve fairness. Consequently, the husband’s award was reduced to £2 million.
The Court of Appeal reasoned that more often than not the equal sharing principle achieves overall fairness in the vast majority of cases. Importantly, however, the decision acknowledges that there should not be an automatic application or presumption of an equal division of the assets built up during the marriage. However, the decision does raise further legal questions about what constitutes a short marriage, and after what period should wealth generated in the marriage be shared equally.
It may be that in light of this decision couples decide that a pre-nuptial agreement may not be needed to avoid equal sharing of assets built up during a marriage that is short, childless, and where both parties work and keep their finances separate. However, it remains that a pre-nuptial agreement which sets out the parties’ intentions on divorce in whatever circumstances could provide greater certainty and avoid the costs of litigation.