Factual background (E v L[2021] EWFC 60)
The Parties
- Husband (H) was 66 years old and Wife (W) was 61 years old
- H was a highly successful production manager for live music events, specialising in audio and visual effects
- H had reached the pinnacle of his career
- W was a housewife who had various careers such as modelling, working as a proprietor of a lingerie, nightwear and a swimwear shop
The Relationship
- The parties entered into a relationship in 2015
- H immediately provided W monthly financial support, paying her £5,000-£10,000 per month
- In September 2016, the parties became engaged and married in June 2017
- W says that the parties cohabited in January 2016 but H disputed this and asserted that their cohabitation did not occur until marriage
- The parties were engaged in September 2016 and married in June 2017
- W claims that the parties separated in December 2019, whereas H opined that the final separation happened in October 2019
Post Separation
- H reduced W’s financial support to £2,500 per month
- W issued her divorce petition and application for a financial remedy in March 2020
- Decree nisi was produced in October 2020
- H had an interest in six businesses and there was a significant disagreement between the parties’ valuation of Company A
- H’s interest in the other business had no bearing on the overall outcome of the case
Parties’ Positions
- W sought half the marital acquest. which she said would be reflected by a lump sum of £5.5million
- H proposed to pay W a lump sum of £600,000
Discussion
The judge found the disparity between H and W to be “extraordinary”. The reason for the stark difference in positions was H maintaining that the short duration of the parties short, childless marriage did not warrant equal sharing of the marital acquest. Moreover, H opined that W should be confined to very conservatively assessed needs.
Should the absence of a child in a marriage merit departing from the equal sharing principle?
The husband argued that not having children denotes a completely different category of commitment which voids the sharing equal principle. The sharing principle looks to the value accrued during the course of a marital relationship, and deems the parties’ incommensurable contributions to be of equal worth. Mostyn J made reference to Sharp v Sharp [2017] EWCA Civ 408 at [97] where McFarlene LJ stated:
“The inescapable conclusion from this analysis of the speeches in Miller, in terms of the possibility of some alteration from, rather than a strict application of, the equal sharing principle 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, is that fairness may require a reduction from a full 50% share or the exclusion of some property from the 50% calculation. Of the five members of the Judicial Committee, only Lord Nicholls suggested a contrary view and even on his analysis the potential for some form of relaxation can be seen”.
Mostyn J further made reference to XW v XH [2019] EWCA Civ 2262 which ultimately led him to the conclusion that he “struggled with the logic underpinning this exception” [21]. He rejected the argument advanced on behalf of H. The court made clear that when applying the sharing principle, it must “start and invariably finish with the proposition that a marriage is a marriage” [28]. Mostyn J made the following observation at [29] ““for the court to start asking why there are no children, and whether this denotes a lesser extent of commitment to the relationship, is to make windows into people’s souls, and should be avoided at all costs.”
Mostyn J made it clear that the absence of children in a marriage “should be banished from any consideration of whether there should be a departure from the application of the equal sharing principle” [34].
Should the duration of a marriage merit departing from the equal sharing principle?
Upon careful reconsideration of his opinion in GW v RW [2003] 2FLR 108, Mostyn J determined that, “I now figuratively hold my hand in the flames and recant. There is absolutely no logical reason to draw a distinction between an accrual over a short period and an accrual over a long period. As Lord Nicholls pointed out, the statutory factor of the duration of the marriage will be reflected in the nature of things by the fact that in a short marriage the accrual will almost inevitably be less than in a longer marriage“ [43].
There is, of course, a possible exception to this. The exception applies to non-family assets generated by one spouse alone during a short marriage where those assets have been kept separate and where both spouses have been financially independent. The Court of Appeal acknowledged this exception in Sharp but specified that it would only apply in a “fringe of cases” (McFarlane at [75]).
Mostyn J held that the reason for such a rarity was obvious, “The exception is founded on the notion that the value of the contributions made by one spouse during a short marriage in generating “business assets” is worth more than the value of the contributions made by the other spouse during that period. Like the now discredited doctrine of special contributions this notion gives rise to the Orwellian oxymoron that all contributions are equal but some are more equal than others. It is very difficult to escape the conclusion that discriminatory forces are underpinning this notion. Hence the need to confine the application to extremely rare situations” [46].
Excluding non-matrimonial property, however, does not conceptually involve a departure from the principle of equality. It simply excludes the fruits of a pre- (or post) relationship project. Whilst this is “plainly a legitimate technique to apply in any case, but most particularly in a short marriage case where the connections and transactions happened relatively recently and have not faded into the past with the result that the fruits of the transaction became matrimonialised” [50]
Decision
Mostyn J determined that when calculating the marital acquest, the start date for the accrual was January 2016. This date was when the parties were in a serious committed relationship. The end point of accrual was the time of trial. The marital acquest arising between January 2016 and June 2021 should be divided equally. Mostyn J stated that “there is no good reason to at all to depart from equality in the division. This case is not a white leopard” [77]. The wife was to be paid a balancing payment of £1,515,000 on a clean break basis.
Take away points
- Having a child does not denote a different category of commitment which warrants departing from the equal sharing principle.
- The same degree of commitment as marriage can be established early into a relationship – a vague point which will no doubt require further consideration and clarification by the court in times to come.
- The duration of marriage has no influential bearing on the equal sharing of the marital acquest principle.
- The clock stops for the purposes of calculating the acquest at the date of the trial.
Written by Natasha Khalique, Pupil Barrister, Unit Chambers.