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Appeal judges reduce award in first civil partnership finance dispute

29 March 2012

Lord Justice Thorpe has allowed the appeal by banker Peter Lawrence seeking a reduction in the award made to his former partner actor Donald Gallagher in the first financial dispute following the dissolution of a civil partnership.

The original £1.6m settlement decided by Mrs Justice Parker included a property near Bankside, in London, that Lawrence bought before he met Gallagher.

Valued at £650,000 in 1995 the flat at Clink Wharf is now worth an estimated £2.4m and the JP Morgan analyst argued it should not have been treated as a shared asset.

In the meantime, the couple jointly bought a cottage in Sussex, valued at £822,000.

Thorpe LJ said the £1.7m capital appreciation on the London flat should not have been taken into account literally when determining the value of joint assets.

It was, the judge said, “the product of the demand for London properties in good locations, simply not matched by the performance of country cottages however pleasantly situated”.

“A crude comparison of the respective market values alone gives a misleading impression of the relative desirability of the two properties,” he added.

He said the main concern for judges considering similar cases was to ensure each of the parties had “a home of his own” and then “what funds are necessary for each to live comfortably in their own homes”.

Allowing the appeal in Lawrence v Gallagher [2012] EWCA Civ 394, Thorpe LJ said the first instance judge followed “too theoretical a map” to arrive at a fair outcome and that there was “no rationality” for the £577,778 lump sum award.

“It would have been safer and more orthodox for the judge to have assessed the fair lump sum from the foundation that the respondent would have Pine Cottage and his pension share as the foundations of the award,” he said.

He reduced it to £350,000 and also removed Lawrence’s bonuses from the settlement but confirmed the £200,000 pension sharing order.

Actor Donald Gallagher, who recently starred in the West End musical Priscilla Queen of the Desert, and investment banker Peter Lawrence cohabited for 11 years before entering into a civil partnership that only lasted seven months.

Last June, Mrs Justice Parker made a £1.6m award in favour of Gallagher, based on total joint assets of £4m.

Gallagher’s lawyers argued that although his assets were a comparatively modest £40,000 when he met Lawrence, he was the homemaker in the relationship.

The actor helped “create and maintain a lovely home in the flat in various ways – soft furnishings, planting on balconies, improvement of layout and fixtures, redecoration”, they said.

But Patrick Chamberlain QC, for Lawrence, argued that it would be wrong to use the principles applicable to divorce to the dissolution of a civil partnership.

It is the second time in a fortnight that Mr Justice Thorpe is making gay legal history.

Last month he ruled in A and B v C [2012] EWCA that the friend of a lesbian couple who had donated his sperm so the women could have a child together should be allowed to be the “third parent” in the family.

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Divorce