The Supreme Court has, today, overturned the decision of a Sheriff and the majority decision of a Scottish Appeal Court in a case concerning the extent to which one spouse’s pension forms part of matrimonial property for division on divorce.

In Thomas McDonald v Annie Newton or McDonald, the husband had contributed to a pension scheme for only a matter of months during the 25 year marriage. The Sheriff and two of the three Judges in the Scottish Appeal Court held that it was only the value of the pension at the point when contributions stopped that should be considered as ‘matrimonial property’.

After contributions stopped, the value of the pension continued to rise for the remainder of the marriage.

Allowing the appeal and giving the unanimous decision of the five Supreme Court Justices, Lord Hodge, a Scottish Judge, concluded that the “period of membership” of the pension scheme meant simply that and that the words “contributing” or “active” should not be read into that simple expression.

In this particular case, the increase in the amount of matrimonial property on account of the Supreme Court ruling is around £130,000. The impact of the decision will, of course, be wider than this particular case.

The case has been sent back to the Sheriff at Edinburgh for the Supreme Court ruling to be given effect to. As Lord Hodge points out, the increased value might not, in the final result, be shared equally. That will, in the first instance, be for the Sheriff to decide.

A copy of today's judgment can be found here.