Financial Remedies update: Short Marriage cases – a departure from the principle of equal sharing

In White v White [2001] 1 AC 596 the House of Lords established what has become a principle that the matrimonial assets of a divorcing couple should normally be shared between them on an equal basis. The Court of Appeal delivered judgement this week in the case of Sharp v Sharp [2017] EWCA Civ 408 in which they determined that this is not inevitably the case where the marriage has been short, there are no children, the couple have both worked and maintained separate finances, and where one of them has been paid very substantial bonuses during their time together. This is the first time since the joint appeal of Miller & Mcfarlane in 2006 that the Court has directly considered this issue.

In Sharp v Sharp each party came to the marriage from a relatively modest financial background. Each of them worked hard to achieve the qualifications and experience which each of them brought to their relationship at the start of the six years for which their cohabitation and marriage lasted. The wife worked continuously as a fuel trader whilst the husband work until 2012 in IT. Both had basic salaries or around £100,000 p/a however the significant difference between them was that wife received a discretionary annual bonus which in the central five years of their relationship totalled £10.5 million. Any bonuses the husband’s employment brought were comparatively trivial. At the time of the hearing the total assets held by either party amounted to £6.9 million. The figure for “matrimonial assets” was £5.45 million.

At first instance, the parties adopted polarised positions, the wife offering a lump sum and a transfer to the husband of one of their two properties, together with a contribution towards his legal fees (representing a total value of £1.23 million). In contrast, the husband sought a total package of £3 million.

After reviewing the relevant authorities, the trial judge concluded that no sufficient reason had been identified to depart from equality of division. The fact that this was in effect a husband’s claim against a wife rather than the more conventional claim of wife against husband empathetically did not call for a discount. The principled outcome was half of the matrimonial assets, a final total payment to the husband of £2.725 million.

Noting that this appeal focuses on a fringe of cases that may lie outside the equal sharing principle, and in a lengthy judgement where he considers in detail the principles as set out in White, Miller and Charman. McFarland LJ, finds that the wife’s bonuses were not “family assets”, and observes that the court is obliged to take account of the duration of the marriage with a view to considering reducing the husband’s share to reflect the period of his domestic contribution. McFarlane LJ sets out that in a case where, in contrast to the more traditional ‘bread-winner’ / ‘home-maker’ model, each partner worked full time for most of the marriage, and where there are no children, it must be necessary for the court also to evaluate the extent, if any, by which the husband’s domestic contribution exceeded that of the wife. He concludes on the facts of this case, the combination of potentially relevant factors (short marriage, no children, dual incomes and separate finances) was sufficient to justify a departure from the equal sharing principle in order to achieve overall fairness between these parties.

The husband was subsequently awarded a total sum of £2 million (a property transfer valued at £1.1 million plus a lump sum of £900,000). He was awarded half of the capital value of their two properties and an additional sum to reflect a combination of: (a) the standard of living enjoyed during the marriage; (b) the need for a modest capital fund in order to live in the property that he is to retain; and (c) some share in the assets held by the wife.

William Hillier
Magdalen Chambers

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