Case Law Divorce Settlement9 Nov 2021 | Lisa Pepper
6 cases that shape your divorce settlement
Part of what makes our divorce lawyers experts in their field is knowing what way a judge is likely to determine your case. This enables us to confidently advise you on tactics to ensure you obtain the best outcome possible in your divorce.
Our knowledge comes not only from our wealth of experience and understanding of the law but also from our examination of case law. By this we mean, our reading and analysis of judgments from other divorce cases.
By way of example, here are six important cases which have shaped English divorce law to give you an insight into the judicial process when considering your financial settlement.
White v White
The yardstick of equality
While this case is now over 20 years old, it is worth a mention at the outset as it is arguably one of the most important divorce cases in England. It has helped shape how all courts approach the question of ‘what is a fair settlement in a divorce?’ The case also introduced what the judge referred to as ‘the yardstick of equality’ when it comes to dividing assets between wealthy spouses.
Prior to White v White, the division of assets, even in cases involving a high-net-worth couple, was primarily based on need, and this meant the less wealthy spouse, typically the wife, received significantly less than an equal share of the matrimonial assets. That all changed in this landmark case.
Mr and Mrs White had been married for over 30 years. Shortly after marriage, they purchased a farmhouse and 160 acres of land. They both came from farming backgrounds, and while both worked to make the farm a success, the wife’s primary role was as a carer for the three children of the family and the husband was primarily responsible for running the farm. After the case went to the House of Lords, the court held that ‘there should be no bias in favour of the money-earner and against the homemaker’.
Any award, particularly in a case in which the resources were sufficient to meet the needs of both parties, must be checked against what was described by Lord Nicholls in White as “a yardstick of equality”. Lord Nicholls said a judge “would always be well advised to check his tentative views against the yardstick of equality of division”. He went on to say “as a general guide, equality should be departed from only if, and to the extent that, there is good reason for doing so. The need to consider and articulate reasons for departing from equality would help the parties and the court to focus on the need to ensure the absence of discrimination”.
Since then, case law has developed the idea of a “cross-check” against the yardstick of equality into a principle of sharing “the fruits of the marital partnership” (see Miller v Miller; McFarlane v McFarlane  UKHL 24).
The starting point in any financial settlement remains the same: to value all the cash, property, assets and debts. If a 50/50 division of the assets the couple built up during the relationship meets needs, that is the likely outcome.
Over time, case law has developed to clarify some of the reasons the court might support a departure from a position of equality, particularly where there are assets that are non-matrimonial.
E v L – Division of assets in a short childless marriage
This recent case centred around how assets are to be divided in a short childless marriage, and whether there should be a departure from the sharing principle.
The couple began a relationship in 2015 before becoming engaged in 2016 and marrying in 2017. The relationship came to an end in 2019 when they separated. From the outset of the relationship in 2015, the husband, who was a highly successful production manager for live music events, paid the wife financial support of between £5,000 and £10,000 per month. The husband’s high income was in stark contrast to that of the wife’s.
The matter came before the court as the wife was seeking half of the marital assets (£5.5 million on her calculation), and the husband was offering £600,000. The husband argued that as this was a short childless marriage, the wife’s claim should be confined to her needs. He also argued that the fact the marriage was childless was a show of less commitment.
The husband’s argument was rejected as the court recognised that there can be many reasons why marriage is childless and that to consider this circumstance would be ‘to make windows into people’s souls and should be avoided at all costs.’
In relation to the short duration of the marriage, the judge commented, ‘There is absolutely no logical reason to draw a distinction between an accrual over a short period and an accrual over a long period … a case where there can be a legitimate non-discriminatory unequal sharing of matrimonial property earned in a short marriage will be as rare as a white leopard.’ In his comments the judge is referring to only matrimonial assets, that is, those accrued during the course of the marriage, not those assets obtained before marriage. The judge makes clear that in relation to dividing matrimonial assets, there should be no distinction between a long and short marriage.
While fewer matrimonial assets will be accrued during a shorter period than over a longer period, the judge determined in this case that the assets accrued from January 2016, when the parties where in a serious committed relationship, should be divided equally. Consequently, the wife obtained just over £1.5 million in settlement. The judge concluded that ‘there is no good reason to depart from equality in the division. This case is not a white leopard.’
This case highlights that the presence of children in a marriage is relevant only to needs, not the sharing principle. It also shows that there is unlikely to be a situation in which an equal division of assets accrued during a short marriage is treated any different to those accrued in a long marriage.
NS v SS – Spousal maintenance
In NS v SS the Judge gave guidance that has acted as a “check” on the term and amount of spousal maintenance which was being awarded by the Courts. The Judge said that spousal maintenance should be awarded ‘where the evidence shows that choices during the marriage have generated hard future needs on the part of the claimant. Here the duration of the marriage and presence of children are pivotal factors’. But: ‘where the needs in question are not causally connected to the marriage the award should generally be aimed at alleviating significant hardship’ only.
The amount of spousal maintenance was to be decided only with reference to need, save in exceptional circumstances, and where needs are not connected to the marriage then the maintenance should be aimed only at alleviating significant hardship. The Judge said that the Court must consider a termination of spousal maintenance with the transition to independence as soon as it was just and reasonable. A term of spousal maintenance should be considered (rather than a joint lives order) unless the recipient spouse would be unable to adjust without undue hardship, were the payments to cease. A degree of not undue hardship in transitioning to independence was acceptable.
The material standard of living was relevant to the amount of spousal maintenance awarded, but it was not decisive. The Judge was of the view that the standard of living should be carefully weighed against the desired objective of the claimant spouse achieving eventual independence.
Radmacher v Granatino – the role of a prenuptial agreement
This case changed how our courts and lawyers approach prenuptial agreements, strengthening their role in the protection of wealth.
The case involved a husband who was a French investment banker, and a very wealthy German wife who was heir to a family fortune from the paper industry. They entered an agreement prior to marrying in 1998, stating that neither would benefit from each other’s property acquired prior to or during the marriage. The parties separated in 2008, having had two children.
Initially, the court awarded £5.5 million to the husband, but the wife challenged this in light of the prenuptial agreement. The court held that the prenuptial agreement was legally enforceable as each person had freely entered the agreement with full knowledge of each other’s assets. The husband’s award was dramatically reduced to a lump sum of £800,000 and he was allowed the use of property which was held on trust by his wife for him for the duration of his parenting years, together with £35,000 per annum maintenance.
This case showed a landmark swing in England on how prenuptials are to be treated, demonstrating that they will be given decisive weight in court unless there are reasons to show it would be unfair to do so.
Gohil v Gohil and Sharland v Sharland – the perils of hiding assets
It is always tempting for the wealthier person to try to conceal assets when negotiating a divorce settlement, however, the courts will view this behaviour as fraudulent.
The Supreme Court ruled that Mrs Sharland and Mrs Gohil could each seek larger divorce settlements from their husbands after each of their respective husbands failed to provide full and frank disclosure of their assets in the initial financial proceedings on divorce.
These two cases make it easier for parties to set aside a financial settlement if there is later found to be non-disclosure of assets. The court stated that a deliberate and fraudulent non-disclosure of assets will be deemed relevant unless the party at fault can be proven otherwise.
How we can help
Osbornes Law have a team of expert divorce lawyers in London who can discuss your particular circumstances and will explain your full range of options for divorce and separation. We also have expertise in drafting and advising on prenuptial agreements.
While these cases only relate to English law, we deal with both UK and international divorces. If you are overseas or outside London, we have video conferencing facilities and a full online service to ensure you are kept up to date and fully appraised of your case and legal options.
Lisa Pepper is a partner in the family department specialising in Divorce, finance and children matters. She is also an accredited mediator. Lisa specialises in helping parties with considerable international assets. She is ranked as a leading lawyer in Chambers UK, Chambers HNW, The Legal 500, Spears HNW directory and Tatler Advisory.
Contact Lisa by filling in an online form.
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