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Court of Appeal reduces financial remedy award in civil partnership dissolution case

Court discourages the over-complication of section 25 pleadings

The Court of Appeal has allowed an appeal by Peter Lawrence, a financial analyst at JP Morgan, against a financial remedy award made by Mrs Justice Parker to Mr Lawrence's former partner, Donald Gallagher, an actor.

The case – Lawrence v Gallagher [2012] EWCA Civ 394 – has been said to be the first substantial appeal concerning financial issues between a same-sex couple following the dissolution of a civil partnership.

At first instance Mr Gallagher had been granted an award equating to a little under £1.7 million of what the court had found to be total assets of £4.1 million. The court had taken account of a cottage, valued at £900,000 bought by the couple and a Docklands flat which Mr Lawrence had purchased in 1997 prior to their relationship. The value of the flat had risen in value from the original price of £650,000 to £2.4 million. The award had given Mr Gallagher a share of that gain.

The Court of Appeal, having reviewed the valuations of certain of the assets and their status, reduced the award to Mr Gallagher. Lord Justice Thorpe, delivering the main judgment of the Court with which Lord Justice Moses and Mr Justice Ryder concurred, said:

"The fact that the claim arises from the dissolution of a civil partnership rather than a marriage is of little moment since it is common ground that the language of schedule 5 to the Civil Partnership Act 2004 is identical to the language of s.25 of the Matrimonial Causes Act 1973."

 Andrea Woelke, principal of Alternative Family Law, solicitors, commented:

"This case was hailed in the press as a test case on whether financial remedies on civil partnership dissolutions were to be different to those on divorce. This was despite the fact that it was common ground that the law is the same. Alas, this Court of Appeal judgment is nothing of the sort. The widely-reported argument raised on behalf of Mr Lawrence (an equity analyst at JP Morgan) was that this was a "dual career" case where the sharing principle should not apply and Mr Gallagher (an actor) should only be able to claim for his needs. This was based on the lack of children. The entire argument was rejected in one sentence [28] on the basis that "the couple clearly intermingled and combined their available capital and income to enjoy a high standard of living of their own design.

"Although the award was reduced, this was mainly on technicalities (wrong valuation of the joint home at the start of the relationship, confusion of gross and net income and wrongly-included non-vested bonuses). It is unclear what the award was in the end as a percentage, not least because if some of the assets are taken out of the overall calculation that does not in itself change the percentages. It seems that the difference from equal shares is mainly due to the Mr Lawrence's contribution of the joint home (and its value at that time the two met) and post-separation acquired assets rather than any other factors.

"Thorpe LJ's main thrust, supported by Ryder J, is that practitioners and advocates should refrain from putting a spin on the s.25 factors. He held that the case was "comparatively simple" but had been "made unnecessarily complicated as the advocates sought to achieve their goals by praying in aid one judicial creation or another." [38] He re-emphasised the words of Bodey J in CR v CR [2007] EWHC 3334 (Fam) that "it remains the statutory criteria which ultimately guide the court's overall discretion by the exercise of which fairness is sought to be achieved." The case must be seen as a reminder to practitioners not to "coin ever more sophisticated phrases which are intended to highlight particular aspects of the notion of 'fairness'," [57] but to concentrate on the statutory criteria."

Alison Hawes, partner at Irwin Mitchell, said:

"What is interesting about the judgment is the judge's impatience with the courts and legal advisers straining the words of the statute to try to come up with creative ways of describing relatively simple concepts. It is clear from the review of the hearing before the High Court judge that there was a very detailed analysis of the entire history of the couple's dealings over the course of their 12-year committed relationship and some creative descriptions of what might be 'fair'.

 "In terms, although Lord Justice Thorpe found that challenges to the original order might be technically correct, his view was that they made not very much difference to the overall position. His judgment could be read as an appeal to specialist practitioners not to overcomplicate a relatively straightforward situation where after a long relationship parties both needed affordable, comfortable housing; enough income to meet their needs and pension provision on retirement.

"In a typically succinct judgment, Lord Justice Thorpe pointed out that until and unless the law is changed to provide clarity in relation to "non matrimonial property", or how one party should meet another's need on relationship breakdown, 'we must never forget the legislated checklist'. It is a timely reminder to focus on the law rather than striving to be too clever."