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The court has recently held in the case of XW v XH 2017 EWFC 76 that the starting principle or equal sharing in a divorce may be justifiably departed from in a case such as this as the value of the husband’s company was taken as at the date of the marriage – not at the date of the divorce.
The parties had been married for nearly 7 years. They had one child who suffered from a rare genetic condition. At the time of the marriage, the husband’s assets, which were mostly company shares, were worth around £3.8m and by the time of the divorce, they were worth £500m. The wife argued that she should be entitled to half. The husband argued that the assets were non-matrimonial and should therefore be excluded from the sharing principle and that the case was a needs-based case.
The couple had also signed an Italian separation of property agreement. Although the parties had signed an Italian separation of property agreement at the time of the marriage, the judge held that it would not be fair to hold the wife to the terms of that agreement, as she had not fully understood or appreciated the implications.
The judge dismissed the husband’s argument that the business assets should be excluded from the equal sharing principle entirely but did accept that it affected his conclusions on how they should be shared. The judge also accepted that the husband’s contribution during the marriage to the growth in the value of the business could be classed as a special contribution and thus could depart from the equal sharing principle.
This was further helped in this case that it appeared that the couple had to a large extent kept their finances separate during the marriage. The wife was therefore awarded a “fair outcome” in the amount of £115m.
This case demonstrates that the court may depart from the equal sharing principle for reasons of a nuptial agreement, unilateral assets, latent potential of assets and/or special contribution.
If you would like more information please call 0161 941 4000 and ask to speak to a member of our Family Law team.