How are different assets, incomes, and liabilities treated by the courts?

In deciding how to fairly divide assets upon divorce, the courts are guided by three main principles: sharing, needs, and compensation. These principles are interconnected and guide the judge in reaching a fair and equitable settlement. Among them, ’needs’ holds particular significance as a paramount consideration in the pursuit of fairness.

In making a division, the court will consider if needs are able to be met from the available assets and whether there is a surplus. Where there is a surplus, the court may consider the origin of the assets, whether they are matrimonial or non-matrimonial, and whether the contributions have been unequal. In short, a party is to be awarded the higher of their needs entitlement and sharing entitlement.

As a general rule, the court takes into account Section 25 of the Matrimonial Causes Act 1973 which sets out various requirements that the Courts need to consider when deciding how assets will be divided. The first consideration is the welfare of any child under the age of 18. The court must also have regard to the following factors:

• The income,earning capacity, property and financial resources of each spouse

• The needs of each spouse

• The standard of living enjoyed by the family before the relationship broke down

• The age of the parties and the length of marriage

• If either spouse has a disability

• What each spouse contributed to the marriage (including future contributions)

• The value of assets both before, during and after the marriage

• The conduct of the parties, but only where it would be inequitable to disregard it

Additionally, as explained above, the court is guided by the three overarching principles of needs, sharing and compensation. Each case is unique, and the courts will examine all circumstances in coming to a decision.

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