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Brief encounters: a move away from sharing in short marriages

In proceedings following divorce, it is often the case that matrimonial property is shared equally once the needs of each party and any children are…

In financial proceedings following divorce, and subject to an assessment of fairness,  it is often the case that matrimonial property is shared equally once the needs of each party and any minor children are met. However, the recent Court of Appeal judgment in the case of Sharp v Sharp means that this may not be the case for “short marriages” in the future.

Facts

Julie and Robin Sharp had been married for 4.5 years – plus 18 months of pre-marital cohabitation – at the time of their separation. They were both in their early 40s and had no children.

During the marriage, they both earned around £100,000 in basic salary. But, while Mr Sharp received minimal bonuses, Mrs Sharp’s bonuses during the marriage totalled approximately £10.5m.

First instance hearing

At first instance, the judge found that the couple had operated separate finances throughout the marriage. While this was not a deliberate and agreed intention, there was evidence of the couple equally splitting restaurant bills and each paying half of the utility bills for their two properties. Additionally, Mr Sharp was not privy to the details of Mrs Sharp’s bonuses, while Mrs Sharp gifted cars and holidays to Mr Sharp.

The judge held that the matrimonial assets totalling £5.45m should be divided equally with each receiving £2.725m. Mrs Sharp appealed.

Decision on appeal

The Court of Appeal unanimously allowed the appeal, stressing that in “short, childless marriages, where both spouses have largely been in full-time employment and where only some of their finances have been pooled” fairness may require that the assets are not equally shared.

Mr Sharp’s award was therefore reduced to £2m, made up of £1.3m as a share of the jointly-owned properties and a further £700,000 to reflect the standard of living in the marriage, his need for a capital fund to live in the house that he was to retain and as a limited sharing of the assets held by Mrs Sharp.

Analysis

While this judgment will be extremely welcome to wealth-generators in short marriages, the limits of the decision are fairly apparent and many claims may flounder on the subtle distinctions between what are assessed to be separate and joint finances.

The overriding question from this judgment though is how ‘short’ is ‘a short marriage’? This relationship/marriage is not short by the standards of many marriages that family law practitioners are faced with and it remains to be seen at what point a short marriage becomes a ‘medium-length’ marriage for the purpose of asset division.

According to ONS Statistics released in 2015, over the last 50 years, the median duration of marriages ending in divorce has ranged from 8.9 years to 12.2 years.

It is also a timely reminder for those with significant earning capacities and assets to protect, to consider a pre nuptial agreement in advance of a wedding.