Divorce Ruling Ends Era of 50-50 Split as Female City Trader Wins Appeal to Cut Her Divorce Payment
Divorce Ruling Ends Era of 50-50 Split as Female City Trader Wins Appeal to Cut Her Divorce Payment
A millionaire City trader has won an appeal to cut her divorce payment to her ex-husband after a judge said the ‘sharing’ principle did not apply for a dual-income couple with no children.
Julie Sharp successfully challenged a settlement that gave her husband Robin half her £5.45m fortune after their four-year marriage ended.
Divorce lawyers said the ruling marked a “sea change” in how one of the basic principles of matrimonial law could now be applied to shorter marriages.
Lord Justice McFarlane said the facts of the case “triggered a plain exception” to the 50-50 sharing principle. “The bulk, indeed effectively all, of the property has been generated by the wife,” he said.
The couple, who were both from modest financial backgrounds, married in June 2009. Mrs Sharp was earning £135,000 yearly before her career took off and her salary and bonuses grew substantively. She petitioned for divorce in December 2013 after discovering her husband was having an affair. Mr Sharp denied infidelity until questioned in court during the divorce case in 2015.
IBB’s divorce law expert, Amanda Melton commented:
“This decision is a welcome departure from the usual principle of equality but it must also open the door to the possibility of such a departure in longer marriages. Where there are no children, dual careers and a separation of finances why should the same not apply in a longer marriage”.
No impediment to depart from traditional principle
Divorce judge Sir Peter Singer ruled that the “principled outcome” was that Mr Sharp should receive half of the couple’s total assets because no sufficient reason had been identified for departing from the established principle of equal division. He awarded Mr Sharp capital of £2,725,000. Mrs Sharp appealed, insisting this was unfair. She argued that “because this was a short marriage he should not get half of the matrimonial pot.”
However, Lord Justice McFarlane, one of three judges sitting on the Court of Appeal panel, has now said there was “no impediment” to depart from that principle, concluding that in a short, dual career marriage in which the couple had kept their finances separate, it was indeed “justified.”
Mr Sharp was granted a settlement of a £1.1m house and a £900,000 lump sum.
Announcing the court’s decision, Lord Justice McFarlane said:
“The husband made no contribution to the source of the wife’s bonuses and this is not a case where, save in the final year, the husband is said to have contributed more to the home life or welfare of the family than the wife . . . This case is, therefore, a ‘non-business partnership, non-family asset case’ where the bulk, indeed effectively all, of the property has been generated by the wife.”
Mrs Sharp had “received bonuses way beyond the level of her previous earnings purely as a result of her employment and . . . without any contribution, either domestic or business, from her husband,” he said.
Lord Justice McFarlane concluded: “Short marriage, no children, dual incomes and separate finances are sufficient to justify a departure from the equal sharing principle to achieve fairness between these parties.”
Further evidence of retreat from 50-50 policy
The ruling is further indication of London courts shifting away from the traditional policy of dividing assets equally during divorce cases. In other recent cases involving bankers and wealthy couples, judges have used so-called “special contributions” to cut non-working spouses’ share of the marital possessions.
However, the judges in Sharp v Sharp said they were not necessarily ripping up the more traditional approach to the division of assets.
“Nothing that is said in this judgment is intended in any manner to unsettle the clear understanding that has been reached” on the approach that should be taken in the vast majority of cases, the judges said, adding “The focus of the present appeal, which is very narrow, is upon whether there is a fringe of cases that may lie outside to equal sharing principle.”
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