Generally speaking, any money acquired in the course of a long marriage will, all other things being equal (in particular the needs of the parties), fall to be divided 50:50 between the parties on divorce, irrespective of where that money came from.
But sometimes the provenance of the money will have a bearing upon its division on divorce, as was seen in a recent case in the Family Court at Torquay.
The case was also notable for being one of the few ‘small money’ cases that are reported. Most reported financial remedies cases involve the division of substantial assets, and whilst all cases involve the same law, those big money cases are often of little relevance to couples with modest assets.
The case involved a couple whose only available assets were two flats. One of the flats, the former matrimonial home, had an equity of just £2,500, and the other, purchased as an investment property, had an equity of about £17,500.
Against this, the couple had debts of over £30,000 and legal costs of £60,000.
The couple separated when the wife and the children left the matrimonial home in 2019 and moved into rental accommodation. The husband remained in the matrimonial home.
Divorce proceedings ensued, and financial remedy claims were made.
The wife sought the sale of both properties, with her receiving the proceeds.
But the judge did not agree.
So far as the former matrimonial home was concerned, the judge felt that it was best that the husband keep the property, in view of the small level of the equity, the costs of sale and early redemption which would go with a sale, plus the precariousness of the level of the equity, with the risk it may go into negative equity.
As to the other flat, this was purchased wholly or primarily from compensation monies received by the husband for injuries he received in a road traffic accident.
Whilst the judge accepted that the wife had an interest in the flat, he felt that the court should not entirely ignore the question of provenance. The money for the flat came from the accident suffered by the husband, and it would be harsh and unfair simply to ignore that, for some sort of sharing equality of equal needs.
Accordingly, the judge ordered that the flat should be sold and that the wife should receiver£4,000 from the net proceeds, with the husband receiving the balance.
The full judgment in the case can be read here.
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