Lawrence v Gallagher: financial relief & civil partnerships - Guest Post by Peter Burgess of Withers

The Court of Appeal recently ruled on the first reported case of financial proceedings from the dissolution of a civil partnership (Lawrence v Gallagher). The case confirms that the division of assets on the dissolution of a Civil Partnership should be approached on identical principles to the division of assets on divorce. Since the two statutes are identical, and since the Courts since the decision of the House of Lords in White v White have long trumpeted the importance of non discrimination, the Court of Appeal’s decision in this regard is hardly surprising. It is a significant barometer of how social attitudes have changed that only a few sentences of the judgment is dedicated to the fact that Mr Gallagher’s claims derived from a civil partnership rather than a marriage.

Mr Lawrence was 47 and Mr Gallagher 54. Mr Lawrence was an equity analyst and Mr Gallagher an actor. The parties had been together for 11 years, but in a civil partnership for less than a year before the relationship broke down.

Mrs Justice Parker awarded Mr Gallagher roughly 45% of the assets, including a cottage, a share of Mr Lawrence’s pension and a lump sum of £557,000, to bring the total up to £1.6m. In doing so she rejected Mr Lawrence’s team’s submission that either this was a dual career case and Mr Gallagher should be restricted to his needs only or, in the alternative that the valuable London property to be retained by Mr Lawrence should be excluded form the case altogether as being non matrimonial.

The Court of Appeal accepted that the Judge had made a few incorrect findings, but supported Mrs Justice Parker’s rejection of the two arguments run below. Lord Justice Thorpe, however, criticised Mrs Justice Parker for not explaining how she arrived at a 45:55 split of the assets. In his view, the lump sum should have been calculated on the basis that Mr Gallagher would receive the cottage and the pension and then considered what balancing lump sum was required, rather than starting with a percentage and working backwards. Without explaining how he arrived at this figure, Lord Justice Thorpe determined that a more appropriate figure would be £350,000.

Moreover, he felt that Mrs Justice Parker had erred in awarding 45% of Mr Lawrence’s deferred compensation to Mr Gallagher; in his view this was not a present capital asset but formed part of Mr Lawrence’s future income.

The case offers little beyond a reminder that the judicial devices we have encountered since White are but no substitute for the wording of section 25 of the Matrimonial Causes Act which should be consistently applied by trial judges. Beyond identifying the problem of sharing a deferred income stream, however, the case does little to add to the array of case law that purports to give guidance to practitioners. It is to be hoped that the Law Commission’s report on the division of property on relationship breakdown, due in 2012 and referred to in the Judgment, will clarify matters.