Charman v Charman was, at the time in 2005, the largest ever contested case in English divorce proceedings, with total assets of £131 million. The wife argued that she should be entitled to 45 percent, with the slight departure from equality representing the husband’s special financial contribution – so great that it could not be ignored.
Beverley and John Charman were at school together in their teens and married in 1976. Mr Charman enjoyed a phenomenally successful career in finance and over the course of their marriage, they built up a fortune. They were together for nearly 28 years before John Charman abandoned his residence in the UK for Bermuda and told his wife their marriage was over.
Mrs Charman filed for divorce in England and Mr Charman then hurried to file in Bermuda. Mr Justice Coleridge found the case to be “as English as Tunbridge Wells”, and divorce proceedings continued in the English family courts, ending the short-lived jurisdiction battle.
The case proceeded with Mrs Charman conceding that husband’s contribution had been of such significance as to justify his departure from the marriage with a greater proportion of the assets. While she requested 45 percent, her husband was reportedly “bemused” that she should find £20 million anything but generous, arguing for a settlement of under 15 percent of the marital assets. “Indignation” as Sir Mark Potter described in his Supreme Court judgment, “rendered this litigation hard fought at every turn”.
The High Court awarded Mrs Charman 36.5 percent, holding that, whilst the husband had indeed contributed greatly to the marriage because of his financial ingenuity, it was not right to say that his contribution was more than twice as valuable as that of the wife.
Mr Charman appealed, challenging both the valuation of assets, which included a disputed trust, and the judge’s assumption of equal distribution as a starting point. Indeed the judge had begun with this hypothesis of equal division and then factored the husband’s special contribution into the equation by way of discount.
The Court of Appeal confirmed both the method and outcome. The judgment referred to the sharing principle first developed by Lord Nicholls in White v White whereby the parties’ contributions to the welfare of the family should generally lead to an equal division of assets unless there was a good reason for the division to be unequal. Nicholl’s “yardstick of equality of division” was only meant to be a check for the court to measure their judgement against, not a “starting point”, a distinction which most of the House agreed with. However even at the time of the final White v White hearing, Lord Cooke doubted that Nicholl’s “yardstick” would in practice be any different from taking it as a starting point.
Charman v Charman departed from Nicholl’s conclusions in White v White in explicitly declaring that the court’s consideration of the sharing principle is no longer required to be postponed until the end of the statutory exercise. It highlighted the commitment to the equality principle and the generous provision to the financially weaker party that the English courts will allow.
From needs-based settlements that too often discriminated against homemakers, to a piecemeal commitment to equality, English nuptial law had progressed dramatically in recent decades. This landmark case declared that not only should departure from equality be justified, but it should be the expectation from the outset.
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