Pre-Nuptial Agreement Ruling

A Pre-Nuptial Agreement can potentially help avoid stressful and costly litigation - such as arose in the recent Court of Appeal case of Sharp –v- Sharp.

Mr & Mrs Sharp had been married for 4 years and had lived together for 18 months prior to marrying.   There were no children. They were in their early 40s and at the date of the marriage had similar incomes. Mrs Sharp had some assets prior to marriage and Mr Sharp agreed the value of these should be excluded for the purpose of calculating his award. During the marriage the parties’ incomes changed. Mrs Sharp began to receive large bonuses totalling £10.5m during the marriage. In the year prior to separation Mr Sharp took voluntary redundancy. Like many couples, Mr & Mrs Sharp kept their finances largely separate during the marriage.  

When the matter fell to be determined by the High Court Mr Justice Singer awarded Mr Sharp one-half of the matrimonial assets. His view was that on marriage couples sign up to the concept of equal sharing of assets on divorce unless there is a Pre-Nuptial Agreement in place which states a desire to the contrary. The Court of Appeal did not agree with this approach.

Mrs Sharp successfully appealed the first instance decision and the award to Mr Sharp was reduced. Mrs Sharp was not so successful in appealing a costs order made against her as a result of which she had to pay a contribution of £80,000 to Mr Sharp’s costs which at the time of the initial trial were £200,000.

There can be many reasons for moving away from the presumption of equal sharing when a marriage breaks down. It’s clear that Mr Justice Singer’s comments were wrong and equal sharing is not always the correct outcome in the absence of a Pre-Nuptial Agreement to the contrary. In this particular case, the reasons for moving away from equal sharing were the length of the marriage, the fact there were no children, the parties’ dual incomes and separate finances. However, Mr Justice Singer’s approach may be indicative of a further move towards a reliance on properly constructed Pre-Nuptial Agreements.

The cost of this litigation alone is a powerful reminder as to why many couples now prefer to enter into a contract defining what they want to happen to their assets should their marriage sadly fail.

For information, guidance and advice about Pre-Nuptial Agreements you can contact either Sandra Marshall or Madeleine Young on 0118 957 5337.

Published on 20/06/2017