The Court of Appeal recently ruled on the first reported case dealing with financial issues arising on the dissolution of a civil partnership and confirmed that the approach is based on identical principles to the division of assets on divorce. Since the matrimonial and civil partnership statutes are identical, and since the decision of the House of Lords in White v White, the English Court has long trumpeted the importance of non-discrimination, the Court of Appeal's decision in this regard is not surprising.
Mr Lawrence was 47 and Mr Gallagher 54. Mr Lawrence was an equity analyst and Mr Gallagher an actor. The parties had been together for 11 years, but in a civil partnership for less than a year before the relationship broke down.
Mrs Justice Parker awarded Mr Gallagher roughly 45% of the assets, including a cottage, a share of Mr Lawrence's pension and a lump sum of £557,000, to bring the total award up to £1.6m. In doing so the Judge rejected Mr Lawrence's submission that either this was a dual career case and Mr Gallagher should therefore be restricted to his needs only or, in the alternative, that the valuable London property to be retained by Mr Lawrence should be excluded from the case altogether as being non-matrimonial as it had been acquired before the cohabitation.
The Court of Appeal accepted that the Judge had made a few incorrect findings, but supported Mrs Justice Parker's rejection of the two major arguments referred to above. Lord Justice Thorpe, however, criticised Mrs Justice Parker for not explaining clearly how she arrived at a 45:55 split of the assets. In his view, the lump sum should have been calculated on the basis that Mr Gallagher would receive the cottage and the pension and then consider what balancing lump sum was required, rather than starting with a percentage and working backwards. He also felt that the Judge had erred in awarding 45% of Mr Lawrence's deferred compensation to Mr Gallagher; in his view this was not a present capital asset as part of the shares had not vested and in any event formed part of Mr Lawrence's future income. Without explaining how he arrived at this figure, Lord Justice Thorpe determined that a more appropriate figure for the lump sum would be £350,000.
The case is a reminder of the broad discretionary ambit of the Judges when applying the statutory criteria in deciding financial cases on relationship breakdown. The case provides some helpful guidance on the treatment of deferred income. Of significance was also the care the Court of Appeal took in ensuring there was no discrimination. Only a few sentences of the Judgment is dedicated to the fact that Mr Gallagher's claim arose on a civil partnership.
Beyond identifying the problem of sharing a deferred income stream, however, the case does little to add to the array of case law that purports to give guidance to practitioners on the treatment of different categories of wealth. It is to be hoped that the Law Commission's report on the division of property on relationship breakdown, due in 2013 and referred to in the Judgment, will make recommendations on the approach to be adopted by the courts in cases involving pre-acquired or inherited wealth.
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