First appeal court ruling on civil partnership settlements

02 April 2012

In the first reported financial settlement appeal concerning a same-sex civil partnership, the England & Wales Court of Appeal has sharply reduced the award made to one of the parties at first instance.

The dispute involves a wealthy investment bank analyst, Peter Lawrence, and actor Donald Gallagher. They cohabited for eleven years starting 1997 before becoming civil partners in late 2007. But they broke up after a further seven months and the civil partnership was legally dissolved in June 2009.

The assets to be split included a London flat that Lawrence had owned since 1995 (i.e. before cohabitation began); and a country cottage in Sussex which they bought jointly during the cohabitation. The dispute was mainly about the disposition of the pre-relationship assets.

The case was first heard in June 2011 in the Royal Courts of Justice, which decided that the assets – including the flat – were worth a total of GBP4.17 million. . At that hearing Gallagher (the less wealthy partner) was awarded the entire cottage, worth GBP900,000, plus GBP800,000 in cash and pension rights. Mrs Justice Parker said this amount was required to meet his financial needs.

Lawrence appealed, claiming that the London flat should not have been included in the assets to be divided because it was a pre-cohabitation asset.

The EWCA allowed his appeal in part, reducing Gallagher’s award by GBP320,000. Lord Justice Thorpe said that Gallagher, a celebrity actor, was to a large extent self-sufficient and so his needs were not as high as the first instance court had calculated. But Thorpe disagreed that the flat should be taken entirely out of the matrimonial pot, since the couple had used the two properties jointly while they were cohabiting.

The EWCA judgement confirms that the matrimonial sharing principle as applied to pre-civil-partnership assets is the same as that used in heterosexual marriages (Lawrence v Gallagher, 2012 EWCA Civ 394). This was in fact common ground, since the relevant statutory wording (schedule 5 to the Civil Partnership Act 2004) is identical to the “checklist” set out in s.25 of the Matrimonial Causes Act 1973.



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