- Tel:020 7091 2700
How Are Finances Shared in Short Marriage Cases?
- AuthorRichard Busby
The purpose of this article is to consider how claims are now being treated following the breakdown of short marriages in light of the recent Court of Appeal decision in the case of Sharp v. Sharp.
Mr & Mrs Sharp, both in their 40s, had been married for 4 years, with no children. When they met, both were already earning about the same high salary but Mrs Sharp’s career took off and she earned virtually all the wealth after that.
She sought to argue that in a ‘short, childless, dual career marriage’, there should be no expectation that her wealth gained during the marriage should be shared equally as the judge at trial had done, when awarding Mr Sharp £2.7M.
Mrs Sharp had made her offers at about £725,000 less than the husband had been awarded and held on to the view that this was enough, arguing that “because this was a short marriage he should not get half of the matrimonial pot”. She pointed out that there had never been any sharing of the parties’ separate wealth, no joint accounts and such like and that this assisted in creating the distinction between shareable and non-shareable matrimonial property.
This was the fundamental point of the appeal and the Court of Appeal agreed that the trial judge had been too generous. Three Judges in the Court of Appeal ruled that a £2M slice of the £5.45M family fortune was all Mr Sharp deserved after a short and childless marriage.
Upholding Mrs Sharp's appeal, however, the Court of Appeal said the facts of the case 'triggered a plain exception' to the equal sharing principle as husband made no contribution to the source of the wife's bonuses.
How do courts approach short marriage cases?
Amongst other factors, the length of a marriage is something divorce courts are directed to have regard to by statute but there is no legal definition as to what a ‘short marriage’ is.
Whilst there is no doubt that parties can still be judged to have made significant contributions in a short marriage, the prospects for that are likely to be less than in a marriage partnership of longer duration and the question then arises; how are assets in a short marriage to be divided?
It is more obviously fair to see there may be equal division of assets built up through joint endeavour during the course of the marriage --but how ought pre-acquired or non-matrimonial assets be shared?
The pre 1984 divorce laws had introduced a requirement for the court to place the parties, so far as practical, in the same financial position as they would have been had the marriage not broken down, focusing only on needs.
That limitation has long since been repealed and after leading cases in 2000 and 2006, the courts moved toward a starting point of equal sharing regardless of the length of the marriage. Other factors may often come into play, particularly when there are children or certain needs or contributions but equality is the accepted guide to start from.
This is not of universal application and the courts retain a wide discretion. There may be cases of short marriages where the limited financial resources of the parties necessarily mean that attention will still have to be focused on the parties' needs. That is not so in big money cases. Then the court is concerned to decide what would be a fair division of the whole of the assets, taking into account the parties' respective financial needs and to a limited (and not entirely clear, since judicial opinions vary) degree any clear need for compensation. The court will look at all the circumstances, including pre-acquired wealth and, very exceptionally so-called stellar contributions. The general approach in this type of case should be to consider whether, and to what extent, there is good reason for departing from equality. As already indicated, in short marriage cases there will often be a good reason for departing substantially from equality with regard to non-matrimonial property, and particularly so of course where there are children of the marriage.
If anything, the Sharp case continues to re-emphasise the width of discretion the courts have in applying the Section 25 factors and each case will still fall to be considered on its own merits. It is worth remembering that even in the leading short marriage case of Miller v. Miller from 2006, the court did not award the wife more than 1/6th of the husband’s total wealth.
This case also further emphasises the need to consider pre-nuptial agreements which in short marriages particularly can assist parties in retaining their own separate wealth. For further enquiries, contact Fisher Meredith Family team on 020 7091 2700.