A significant decision has recently been handed down from the Court of Appeal which is likely to have implications for the sharing principle and its application to short marriages. Julie Sharp, a city trader, successfully challenged a previous court decision which awarded her former husband £2.7m (half of her wealth) after a six year marriage, including co-habitation.
Although the parties each earned about £100,000 when they started living together, by the time of their divorce, Mrs Sharp had received bonuses in the sum of £10.5 million, compared to Mr Sharp’s relatively minor bonuses. The couple are in their early forties and they do not have any children. Mrs Sharp is a wholesale fuel trader and Mr Sharp worked in IT before taking voluntary redundancy.
In November 2015, at the final hearing in the High Court, the total assets in the case amounted to £6.8 million. The High Court ruled that Mrs Sharp should retain £350,000 of the money she possessed prior to the marriage, but everything else should be split equally under the sharing principle. Mrs Sharp appealed to the Court of Appeal.
There, Mrs Sharp argued that this was a short marriage and that she and Mr Sharp had dual incomes and kept separate finances and therefore an equal division of assets was not appropriate. The Court of Appeal agreed and excluded Mrs Sharp’s savings from the marital assets and awarded Mr Sharp one of their two substantial rural homes and a lump sum of £900,000.
The Court of Appeal ruled that a combination of the following factors:
(a) a short marriage;
(b) no children;
(c) dual incomes; and
(d) separate finances
justified a departure from the principle of equal sharing so as to achieve fairness between parties.
The case raises an interesting issue as to what constitutes a ‘short’ marriage and at what stage someone is entitled to share in the wealth generated by their spouse. Furthermore, the case endorses the concept that needs take priority, even in cases of couples having substantial joint means. It is a decision that will reinforce the importance of effective pre-nuptial or post-nuptial agreements in cases where there are significant earnings and assets.