Sometimes the Court can order an unequal division of relationship property when a couple separates - find out why...
On a separation, the Property (Relationships) Act 1976 starts with an assumption of an equal split of relationship property. However it is possible that assets could be divided unequally.
One mechanism for an unequal division is through section 15 of the Act which allows a court to adjust the division of relationship property where it is satisfied that the income and living standards of one partner are likely to be significantly higher than the other, because of the division of functions in the relationship. The court can either order a lump sum or a transfer of property to the party who is economically weaker. If assets are largely held in trust then there is little scope for an adjustment.
Section 15 only applies in exceptional cases. Difficulties in establishing jurisdiction and uncertainty have meant that the provision has not been as useful or as widespread as hoped. Awards have also been relatively small and applications have not been as great as had been expected.
To qualify the income and living standards of one party must be likely to be significantly higher than those of the other, which involves looking to the future. The next step is to look to the cause of the disparity. This involves looking at the situation when the parties were living together. There must be sufficient evidence of the roles of each partner during the course of the relationship, and of the future disparity.
Historically the section has been used where one party has stepped back to care for the children of the relationship and then cannot get back into the workforce and earn at the level they would otherwise have been able to. Another common situation is where one party's career has been supported to the detriment of the other, perhaps necessitating moves around. The Court assumes that these types of decisions were mutual. Suggesting that it was one party's choice not to work is not necessarily going to be successful, nor is the suggestion that they could have hired a Nanny instead.
The section can be used to argue that one party has been negatively affected, but also to argue that these decisions have enhanced one person's position at the end of the relationship. Cases of depressed income as a result of the relationship are more common, and have been more successful, than those of enhanced income. Enhanced income cases are recognised by Judges as more difficult to establish. Such claims are always open to the argument that the better off partner is in that position due to their natural talents, rather than any support given by the "at home" partner.
Two examples that have successfully argued for an award include:
- The wife supporting a husband through a medical degree, with training and placement requiring movement around the world as well as around the country.
- A wife who had no qualifications at the start or end of the relationship, being the stay at home parent while the husband travelled for work for 50% of the year and gained qualifications throughout the relationship.
Currently there is an appeal before the Court of Appeal which included an application for enhancement due to the relationship. It is likely that this will give us some further direction and useful guidelines in assessing the merit of an economic disparity claim.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.