JPMorgan Banker-London Star’s Gay Divorce Sets Precedent
JPMorgan Chase & Co. (JPM) equity analyst Peter Lawrence won a U.K. appeal cutting to 1.37 million pounds ($2.19 million) a divorce payout to his ex-civil partner, former “Priscilla Queen of the Desert” star Donald Gallagher.
Lawrence must give Gallagher 33 percent of their assets accumulated during the 11-year relationship, rather than the 42 percent share awarded by a lower court, the Court of Appeal ruled yesterday in London.
Under the decision, the banker will keep the London apartment he purchased before the coupling, even though the property increased in value from 650,000 pounds when the couple moved in together in 1997, to 2.4 million pounds. Gallagher got the pair’s second home, valued at nearly 900,000 pounds.
“If this were a heterosexual marriage, and he were the female partner married to a wealthy City trader, he would have walked away with a considerably greater sum,” Matt Baldwin, a spokesman for Gallagher’s law firm Boodle Hatfield, said in a phone interview referring to workers in London’s financial district.
The decision comes about a year-and-a-half after the U.K. Supreme Court took the country closer to U.S.-style divorces with a ruling on pre-nuptial agreements, which are often used by wealthy people marrying someone with less money. The October 2010 decision, on a settlement between a wealthy German heiress and a former investment banker for New York-based JPMorgan, said such accords can be given decisive weight in U.K. divorces.
In yesterday’s ruling, on what lawyers called Britain’s highest-value civil-partnership divorce, the appeals court reduced a cash payout to Gallagher to 350,000 pounds and rejected his 90,000-pound share of Lawrence’s deferred bonuses. In the U.K., gay couples can’t marry and are the only ones eligible for civil partnerships.
Lawrence initially offered Gallagher 420,000 pounds to find new housing and a 183,000-pound share of his pension, according to the appeal ruling. According to the decision, a lower-court judge called the offer, “quite unrealistic.”
Under the appeal ruling, Gallagher will keep the couple’s home in the English countryside worth nearly 900,000 pounds, his “pride and joy,” and receive 200,000 pounds of Lawrence’s pension, the panel of judges said.
“This successful and affluent couple had enjoyed the use of two properties whilst they were happy together,” the appeals court said in its judgment. “Once they fell out, each needed a home of his own.”
Lawrence, 47, and Gallagher, 54, together for more than a decade, separated seven months after getting a civil partnership in December 2007.
Lawrence paid Gallagher 1,000 pounds a month for living expenses from November 2008 to March 2010, when the actor secured a lead role in “Priscilla.” The play, about a transsexual and two drag queens on a road trip in Australia, closed in London’s West End in December.
“Don has still come away with far more than Mr. Lawrence ever offered him and the outcome is much closer to Don’s original proposal,” James Ferguson, Gallagher’s lawyer, said in an e-mailed statement yesterday.
Lawrence initially sought to categorize their partnership as a “dual-career relationship” that would have helped divide their combined money based on how much they earned. The lower court and the appeals court rejected that idea.
Division of Assets
“This couple clearly intermingled and combined their available capital and income to enjoy a high standard of living,” the appeals court said.
The civil partnership was treated as a marriage for the purpose of dividing assets, the appeals court said in the ruling. Britain is considering legalizing gay marriage after U.K. Prime Minister David Cameron, who leads the Conservative party, said he backs such rights.
“The case was not in fact about the principles of civil partnership, which are the same as on divorce, but about how to divide assets which were largely brought into the relationship by one party,” Sarah Higgins, Lawrence’s lawyer with Charles Russell LLP in London, said in a statement.
The ruling demonstrates the importance of using asset- division agreements before marriages or civil partnerships, said Michael Gouriet, a lawyer with Withers LLP who wasn’t involved in the case.
“One person’s view of fairness is different from another,” Gouriet said in a phone interview. “If you want to mitigate against that uncertainty then have a pre-nup.”
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