The desire to achieve fairness in divorce settlements was illustrated in a recent case before Court of Appeal.

The case involved a couple who married in 1992 and then separated in 2004. The wife had inherited a large sum of money which she was using to support herself at the time she met her future husband. He was earning very little at the time and had no significant assets.

Neither the husband nor the wife worked between 1992 and 1997 and instead supported themselves from her inheritance. They then started a car wash business in 1997 which the husband still runs. The business premises were bought in the wife’s sole name and her husband paid her rent at well below the market value.

When the couple separated their total assets amounted to £1.37m.

Following a number of landmark cases, there is a general principle that assets should be divided equally in divorce settlements unless there are compelling reasons against doing so.

The judge at the court hearing followed this principle of equality and ordered that the car wash premises should be transferred to the husband. The wife appealed saying the principle of equality was misplaced in this particular case because she had brought all the wealth into the marriage from her inheritance.

The Court of Appeal ruled in her favour saying that there was no rule that the equal division of assets was the automatic procedure in all cases. Lord Justice Hughes said: “On the contrary, the starting point in all cases is the financial position of the parties. And in all cases the objective is fairness, which requires an individual assessment of each case.”

He said that one reason “for departing from equality is recognised to be the case where assets are the product not of efforts of different kinds during the marriage, but of inheritance by one spouse alone”.

That was precisely what had happened in this case. Lord Justice Hughes said: “It seems to me that fairness will be done in this case if (i) the husband is permitted to continue in sole occupation of the premises for the purpose of his business for so long as he wishes, (ii) the proceeds of the carwash, if and when sold, are divided equally between the parties and (iii) in the meanwhile rent is payable from husband to wife at half the current market rent.

“That will mean that the wife's capital will consist (at present values) of the former matrimonial home (£306,000), her liquid assets (£262,000) and half the carwash (£400,000), a total of £960,000 or so.”

The case illustrates that although there is a general principle of equality, each case will be decided upon its own specific facts and the courts will strive to achieve a settlement that is fair to both sides.