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29 MAR 2012

Court of Appeal reduces civil partnership award

By Hugh Logue, Newswatch Editor

RCJThe Court of Appeal has this morning handed down a judgment in the first reported civil partnership case.  Peter Lawrence, a financial analyst at JP Morgan Asset Management, successfully appealed an order against him on the dissolution of his civil partnership, reducing the amount he has to pay to his partner, Don Gallagher, by about £320,000.

The couple entered into a civil partnership in December 2007 which lasted 7 months. They lived together for 11 years prior to the civil partnership.  Mr Lawrence owned a flat in London which was worth £2.4 m at the time of the hearing in front of Mrs Justice Parker. He also had some savings. Mr Gallagher entered the relationship with £40,000. Mr Lawrence and Mr Gallagher had a Deed of Trust setting out their unequal financial contributions (62%/38%) to a second property in Sussex, which was worth £822,000 net of costs of sale and mortgage at the June hearing. Mrs Justice Parker awarded Mr Gallagher a total of £1.7m in property, cash, pension and other investments.

In the leading judgment, Lord Justice Thorpe decided that Mr Lawrence should have the flat in London and Mr Gallagher the property in Sussex. The question then was whether there should be a balancing payment to reflect the fact that the London flat is more valuable than the Sussex property, and whether Mr Gallagher needs any more.

Thorpe LJ said that there was "no rationality" in Mrs Justice Parker's figure of £577,778. He regarded as the most significant feature of the case that the value of the London flat had increased from £650,000 at the outset of the relationship to £2,400,000 at the end. The increase in value of £1.7 m was the product of demand for London properties in good locations rather than an indication of relative desirability. He added that the original judgment did not express why a division of the assets 45/55 was fair given the "crucial" contribution of the London flat which soared in value during the relevant period.

Thorpe LJ went on to say that the judge should have assessed a fair lump sum on the assumption that Mr Gallagher would have the Sussex property and a pension share, and she would have then come to a significantly lower figure, and his figure was £350,000.

Sarah Higgins, of Charles Russell LLP solicitor to Mr Lawrence said: "Mr Lawrence is pleased that the order has been varied and that the matter has been concluded".

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