E v L [2021] EWFC 60 (Fam) – Short, childless marriages, the sharing principle and absence of white leopards

Divorce & Matrimonial Finance

13 August 2021

The husband was aged 66 and the wife aged 61.

The parties’ relationship began in 2015 when the husband immediately began providing the wife with financial support, paying her between £5000 – £10,000 per month.

The parties became engaged in 2016 married in 2017 and separated in 2019. The parties disagreed over the date of cohabitation, the wife saying 2016 and the husband denying there was any cohabitation before marriage.

The husband was a highly successful production manager for live music events, specializing in audio and visual effects. The husband had reached the pinnacle of his career in this industry, demonstrated by the fact that he worked with a well- known artist on their 2017 – 2019 world tour, which was one of the highest grossing concerts of all time, and over the course of his career he had worked with some of the biggest names in music.

The husband had interests in six businesses, and there was significant disagreement between the parties over the value of company A. The value of the husband’s interest in the other companies was of no relevance to the outcome of the case.

The Wife was seeking a lump sum of £5.5 million. This was her calculation of half the marital acquest.

The husband’s open position was that he should pay the wife £600,000.

The judge identified that “the extent of the difference between the parties is extraordinary. It seems to be the production of the imprecision within the case – law combined with the intransigence and dogmatism by the parties in pursuit and defence of the claim.”

The husband maintained from the start that because of the short duration of this short, childless marriage, this is not a case for equal sharing of the marital acquest but one where the wife should be confined to very conservatively assessed needs.

Childlessness

As the sharing principle looks at the value accrued during the span of the marital relationship and deems the parties’ incommensurable contributions to that accrual to be of equal worth, divides that value equally, why should the presence of a child make a difference?”

With 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” (Emphasis added)

And XW v XH [2019] EWCA Civ 2262 Moylan LJ, while seeking to limit this exception to the equal sharing principle, seemingly accepted, that it might apply in a short marriage case which was childless stated:

“141. Returning to Miller, in my view, the substantive focus of Lady Hale’s observations, at [147] to [153], is short, childless marriages. However, even if she left open that they might apply in other than such marriages, we can now see that to apply them to those cases would be discriminatory in the same way that special contributions initially risked being applied in a way which would have significantly undermined the progress made by White.

141. Whilst there may be elements within the above paragraphs in Miller which are capable of a broader interpretation, I am persuaded that they do not require this court to take that approach. I acknowledge, in this discretionary area, that it would be unwise to close doors to the notion that fairness might leave scope for the court to decide not to effect an equal division of marital assets because of a particular factor or combination of factors in an individual case. However, as a matter of general principle, I find it hard to envisage how, in other than short, childless marriages fairness would be achieved if the existence of “business assets” was the basis of justifying an other than equal division.

145. Accordingly, it is evident that a broader application of a different approach to a marital asset merely because it was a business asset would be, as was identified in Charman, at [83], “deeply discriminatory” and would, therefore, “gravely undermine the sharing principle” The effect would be the same whether property is excluded from the sharing principle, because it is not treated as marital property, or whether the sharing principle is not applied to such property so as to divide it equally. Indeed, it would seem to me likely to be rare for sufficient wealth to have been generated other than through “business efforts and acumen” for the determinative principle to be sharing rather than need. This is why I have concluded that the application of a different approach to the business assets, in other than a short, childless marriage, would result in the sharing principle being undermined in the same way identified in Charman and, accordingly, that the judge was wrong to take this factor into account, at [239]. (Emphasis added)

The husband argued that not having children denotes a completely different category of commitment.

This was roundly rejected by the judge.

When applying the sharing principle “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.” [29]

On an analysis of Miller Mostyn J found that childlessness was not a reason why the House of Lords upheld the unequal division of the acquest in that case [31] and it was unclear how this factor had crept into Sharp [33].

And at [34] “In my judgement this factor should be banished from any consideration of whether there should be a departure from the application of the sharing principle. Whatever may be the true construction of that section of Baroness Hale’s speech, it does not include bringing into consideration the childlessness of the marriage, if that were the case. “

Shortness of the marriage

In relation to the application of the sharing principle to short marriages as to long marriages the judge stated with reference to his opinion in GW v RW [2003] 2FLR 108 that in order to have equal validity with a financial contribution, a domestic contribution needed to be earned over time “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 (Miller), that 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 the possible rare exception to this for 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 and independently active. It is for his reason that the Court of Appeal in Sharp acknowledged the exception [44] but specified that the exception would only apply in a fringe of cases (McFarlane LJ at [75]).

Mostyn J held that the reason for the 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 does not however involve a departure from the sharing principle in that “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]
Findings

The start date for the purposes of calculating the acquest was found to be January 2016, by then the parties were in a serious committed relationship, even if somewhat itinerant.

The end point was the time of trial.

The acquest that arose between January 2016 and June 2021 should be divided equally.

“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 paid a balancing payment of £1,515,000 on a clean break basis.

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