The recent case of Sharp v Sharp shows a departure from the longstanding principle that in financial proceedings the starting point is that capital built up during the course of a marriage should be split down the middle, regardless of the length of the marriage – also known as the ‘sharing principle’. Mrs Sharp has been successful in her appeal against a court order which awarded £2.725million (which represented exactly 50% of the total matrimonial assets) to her husband. The award to Mr Sharp has now been reduced to £2million.
The couple in this case were both in their 40s, married for four years and had no children. Mrs Sharp discovered that her husband was having an affair in September 2013 and petitioned for Divorce in December 2013. When they met, they were both earning around £100,000 per annum however Mrs Sharp’s career then took off due to a significant increase in the energy market and she received bonuses totalling £10.5million over 5 years. Throughout their time together the couple maintained largely separate finances and there was no ‘intermingling’ of their money during the marriage.
The Court of Appeal considered all the facts of the case and decided that the Mr Sharp should receive 50% of the value of the parties’ two properties (circa £1.3million) and an additional award of £700,000 to reflect the combination of the following three factors:
- The standard of living during the marriage;
- The need for a modest capital fund in order to live in the property that he is to retain;
- Some share in the assets held unilaterally by Mrs Sharp.
The Court of Appeal went on to state that:
‘if…the equal sharing principle of 50/50 allocation is now applied by the courts and practitioners, in cases which are not pre-determined by ‘needs’, to all relevant assets in every marriage, without exception, from the moment the couple leave the church or the Register Office, this would seem to be a very significant and wholly unjustified development’.
This judgment confirms that the Court will not automatically apply the equal sharing principle to every case. The decision opens up the Court’s discretion particularly if there are no children and both parties are in full time employment and kept their financial affairs separate throughout the marriage.
Despite this judgment there are still many questions which remain unanswered, such as: ‘how long does a marriage have to be to be defined as ‘short’?’ and ‘when does my partner become entitled to share in the wealth I have generated?’. In light of Mrs Sharp’s recent success it is likely that the Courts will see an increase in arguments about the length of a marriage and period of cohabitation. In order to avoid uncertainty, the best advice remains to have a pre-nuptial agreement in place which clearly sets out your intentions in the event of separation.
If you are concerned about the division of assets upon separation or other issues relating to divorce please contact a member of our team for more advice today on 0161 927 3118.