In recent times, we have seen a shift in society whereby an increasing number of couples are choosing cohabitation over marriage. For those who do decide to marry however it may be worth considering what constitutes a long marriage and what affect would the length of your marriage have on any potential financial settlement if you were to divorce?
In 2015 the Office for National Statistics published a report concluding the average marriage last for 11.9 years. Would you consider this a long marriage or a short marriage?
Before a recent decision made in the Court of Appeal, there was no legal distinction as to what constituted a long marriage rather than a short marriage.
In the case of Sharp –v- Sharp, the Court of Appeal confirmed the legal distinction between a long marriage and a short marriage. In that case, the parties married in June 2009 and their relationship ultimately came to an end in December 2014. The Parties cohabitated for some 18 months prior to their marriage and they were both earning modest salaries when they met. The parties did not have any children.
In the First Instance, Sir Peter Singer held that “the parties, in effect, subscribe [to the sharing concept] when they marry unless they choose to opt out (or attempt to do so) with a prenup”. As such, Sir Peter Singer awarded the Husband £2.725 million from the matrimonial pot; effectively half. The total assets of the marriage totaled £6.9 million however the matrimonial pot was agreed at a figure of £5.45 million which did not include the £1.1 million home owned by the parties together with £350,000 to reflect pre-acquired assets.
The Wife appealed the decision of Sir Peter Singer on the grounds that the parties did not have any children, they were career focused, the marriage was short and the parties’ finances were such that they were effectively separated.
The Respondent Husband argued that the Wife is attempting to distinguish between ‘family assets’ and ‘business/investment/unilateral assets’ however there is no distinction. The Husband argued that that the sharing principle applied equally to long marriages and short marriages.
The Court when considering the division of finances in matrimonial cases will have regard to the list of factors set out in section 25 of the Matrimonial Causes Act. Generally, the starting point for such a division is 50/50 unless either party can demonstrate to the Court that there should be a departure from equality.
During the course of the marriage in the case of Sharp –v- Sharp, the Wife received discretionary annual bonuses totalling £10.5 million whilst the Husband’s bonuses were trivial. The Judge stated that although there was no “deliberate and agreed intention on their part to maintain strict separation of their finances. For example, they would, not infrequently, split restaurant bills between them and, regularly, each pay half of any utility bills on the two properties. Further, although the husband was aware that the wife received substantial bonuses during the period, he was never privy to the details and, in addition to providing the total purchase price of the two houses, the wife fully funded the couple’s various holidays and bought a series of three Aston Martin cars for the husband” this suggests that they maintained separate finances.
The Court of Appeal confirmed the approach laid out by the majority in Miller in relation “to short, childless marriages, where both spouses have largely been in full-time employment and where only some of their finances have been pooled” advising fairness may require a departure from equality rather than a strict application of the equal sharing principle. The departure may occur via “a reduction from a full 50% share or the exclusion of some property from the 50% calculation”.
It was further confirmed that a ‘short marriage is no less a partnership of equals than a long marriage. The difference is that a short marriage has been less enduring. In the nature of things this will affect the quantum of the financial fruits of the partnership’.
McFarlane LJ concluded that the Judge at first instance did not act in accordance with the findings in Miller. ‘A departure from the sharing principle may occur to achieve the overarching goal of fairness – therefore, in the instance where the marriage is short, there are no children both parties have their own income and separate their finances, this is sufficient to justify a departure from equal sharing in order to achieve and overall fairness between the parties’.
McFarlane LJ advised that the Husband should receive half of the capital of the two properties owned by the parties (worth £1.3 million) and an additional award to reflect a combination of 3 factors: “(a) the standard of living enjoyed during the marriage; (b) the need for a modest capital fund in order to live in the property that he is to retain; and (c) some share in the assets held by the wife”. The additional award was valued at £700,000 making the award to the Husband a total of £2 million which would be made up of the property transferred to him in the value of £1.1 million and a lump sum of £900,000.
In this case, the husband made the concession that the property he was awarded could be discounted as matrimonial assets however; the Judge concluded that it was not appropriate that the property purchased prior to the marriage did not fall in the pot as the wife’s liquid assets were not being treated as part of the matrimonial assets for sharing. He concluded that both properties were matrimonial homes and therefore should be divided equally between the parties.
In light of the above case, it can be expected that the guidance in relation to short marriages may justify a shift from equality in cases where the parties do not have any children, are not financially reliant on the other party and have similar earning capacities.
If you are considering a divorce or are already within the process and require advice in relation to financial matters, please do not hesitate to contact our expert team of family solicitors led by Head of Department Pauline McNamara. You can contact us by telephone on 0151 375 9968 or email .