Sharp v Sharp

Under the Matrimonial Causes Act 1973, s 25, equal sharing is a yardstick of fairness, not an inflexible rule or presumption. The court must consider all the circumstances and identify any good reason to depart from equality. In the small class of short, childless, dual-career marriages where finances have been substantially separate and one party has generated substantial assets without the other's contribution, the duration, source and nature of the assets, financial arrangements, needs, compensation and family contributions may justify excluding some assets from equal sharing or reducing the other spouse's share. A formal pre-nuptial agreement is not a prerequisite. The first-instance judge had applied an impermissibly rigid approach.

The parties had cohabited and married for about six years, had no children, worked during most of the relationship and maintained a substantial degree of financial separation. The wife received very large employment bonuses, while the husband received comparatively modest bonuses. The High Court, Family Division, awarded the husband £2.725 million, representing equal sharing of the matrimonial assets after concessions concerning pre-acquired property: [2015] EWHC 2921 (Fam).

The wife appealed, arguing that the combination of the short marriage, dual careers, absence of children and separate finances justified a departure from equality. The central issue was whether that result required a formal pre-nuptial agreement.

The substantive appeal was allowed. The appeal against the costs order was dismissed.

1. Section 25 of the Matrimonial Causes Act 1973 requires an assessment of all the circumstances. The sharing principle and equality yardstick promote fairness, but equality is not a presumption or fixed formula. A court must identify any good reason for departing from equal division.
2. The majority reasoning in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 established that, in a short marriage, the duration and source of assets may justify departure from equality. The principle may apply in a narrow class of childless, dual-career cases where only some finances were pooled and substantial assets were generated unilaterally. Needs and compensation must also be addressed.
3. The Court of Appeal in Charman v Charman (No 4) [2007] EWCA Civ 503 had not confined this possibility to cases involving a formal pre-nuptial agreement. Its observations preferring Lord Nicholls's approach on dual-career marriages were obiter and could not displace the majority guidance in Miller.
4. On the facts, the combination of the short marriage, no children, dual incomes, separate finances and the wife's unilateral generation of substantial bonuses justified departure from equal sharing. The husband was awarded SD, valued at £1.1 million, plus £900,000, making a total capital award of £2 million. LC was allocated to the wife. The remaining terms of the first-instance order were unchanged.
5. McCombe LJ agreed with the result but considered that the whole of Baroness Hale's discussion of dual-career marriages in Miller was contributory to that decision and directly applicable. David Richards LJ agreed with McFarlane LJ's reasons. The costs appeal failed because no error of principle or other basis for interfering with the trial judge's discretion was shown.

• Court of Appeal (Civil Division) allowed the appeal on capital division and dismissed the appeal concerning costs: [2017] EWCA Civ 408.
• High Court, Family Division awarded the husband £2.725 million following equal division of the matrimonial assets: [2015] EWHC 2921 (Fam).