Banker succeeds in increasing his divorce settlement
22nd September 2009 by: Deborah Jeff and David Lillywhite
The Court of Appeal has ruled that a former investment banker is entitled to a larger divorce settlement after he appealed against a ruling which awarded his wife 85% of the matrimonial assets.
Following an 8 year childless marriage, the High Court had earlier ordered that William Murphy should receive only £450,000 of the couple's £3 million fortune. Helene Murphy, it was ruled, should receive the greater share because of her smaller earning capacity. Mr Murphy had been an investment banker until 2004 when he was made redundant and hadn't worked since. The couple had a very comfortable lifestyle and lived in a £7 million house in Chelsea. Both were in their early 40s and therefore had many working years ahead of them.
The Court of Appeal also held that the High Court was wrong to rule that Mr Murphy had been guilty of wasting £2 million worth of assets following the end of the marriage in 2006. Lord Justice Thorpe said that Mrs Justice Parker’s judgement had relied on a schedule of expenditure provided by the wife’s legal team “which was not agreed and not supported by evidence and which was plainly wrong in some instances”. The key asset in the Murphy case was a deferred compensation scheme from Merrill Lynch whom Mr Murphy had worked for in London before he was made redundant. Lord Justice Thorpe ruled that this scheme was not a liquid asset that should have been included in any final calculation because it involved several risky investments which had no maturity date and crucially, at present it was not available to the husband. The same analysis was also applied to Mrs Murphy’s share in an Irish company which Mr Murphy said should be included in the settlement. Lord Justice Thorpe disagreed, noting that the return on this investment would be “very much in the future” and therefore should not be included.
As a result of the appeal, Mrs Murphy, who originally received £1.9 million, will receive £1.5 million while Mr Murphy will now receive £820,000. Crucially, he will also be able to claim his legal costs.
The decision demonstrates the cost to a high earning individual of achieving a clean-break as part of an overall financial settlement. Although Mr Murphy wasn't employed at the time of the hearing, the Court took the view that he would earn a far greater income than Mrs Murphy in future.
Deborah Jeff, Head of Family at Seddons said: “The advantage of the Court of Appeal's decision is that although Mr Murphy receives a far smaller share of the capital, his future income will now be his own and to many high-earning individuals that's a price worth paying. This case also serves as a reminder of the benefit of entering into a prenuptial or postnuptial agreement in order to provide a clear framework for the financial aspect of a divorce should the worst happen.”
Following an 8 year childless marriage, the High Court had earlier ordered that William Murphy should receive only £450,000 of the couple's £3 million fortune. Helene Murphy, it was ruled, should receive the greater share because of her smaller earning capacity. Mr Murphy had been an investment banker until 2004 when he was made redundant and hadn't worked since. The couple had a very comfortable lifestyle and lived in a £7 million house in Chelsea. Both were in their early 40s and therefore had many working years ahead of them.
The Court of Appeal also held that the High Court was wrong to rule that Mr Murphy had been guilty of wasting £2 million worth of assets following the end of the marriage in 2006. Lord Justice Thorpe said that Mrs Justice Parker’s judgement had relied on a schedule of expenditure provided by the wife’s legal team “which was not agreed and not supported by evidence and which was plainly wrong in some instances”. The key asset in the Murphy case was a deferred compensation scheme from Merrill Lynch whom Mr Murphy had worked for in London before he was made redundant. Lord Justice Thorpe ruled that this scheme was not a liquid asset that should have been included in any final calculation because it involved several risky investments which had no maturity date and crucially, at present it was not available to the husband. The same analysis was also applied to Mrs Murphy’s share in an Irish company which Mr Murphy said should be included in the settlement. Lord Justice Thorpe disagreed, noting that the return on this investment would be “very much in the future” and therefore should not be included.
As a result of the appeal, Mrs Murphy, who originally received £1.9 million, will receive £1.5 million while Mr Murphy will now receive £820,000. Crucially, he will also be able to claim his legal costs.
The decision demonstrates the cost to a high earning individual of achieving a clean-break as part of an overall financial settlement. Although Mr Murphy wasn't employed at the time of the hearing, the Court took the view that he would earn a far greater income than Mrs Murphy in future.
Deborah Jeff, Head of Family at Seddons said: “The advantage of the Court of Appeal's decision is that although Mr Murphy receives a far smaller share of the capital, his future income will now be his own and to many high-earning individuals that's a price worth paying. This case also serves as a reminder of the benefit of entering into a prenuptial or postnuptial agreement in order to provide a clear framework for the financial aspect of a divorce should the worst happen.”
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