Standish v Standish: Court of Appeal Decision on Matrimonialisation

Court of Appeal reduces wife’s divorce award by £20million

Dealing with financial matters on divorce can be complex. And where one party owns valuable assets accrued prior to the marriage – there are additional factors to consider. The divorce and financial remedies team at Osbornes Law are highly experienced in representing wealthy clients, in the UK and internationally, on financial settlements.

‘Matrimonialisation’ of assets

A landmark case, Standish v Standish has highlighted a modern concept – the ‘matrimonialisation’ of assets – the impact of which is to bring pre-marital assets within the ‘pot’ of assets for division between the parties. Assets typically treated as non-matrimonial include inheritances, property purchased before the marriage, family business assets and valuable possessions.

When considering what happens to savings and investments in divorce, the established starting point for determining a fair division is an equal split of matrimonial assets, referred to as the ‘sharing principle’. Therefore, the financial implications for the party owning what they consider to be non-matrimonial could be significant, as the recent case of Standish illustrates.

Background to the case

The parties married in 2005 and had two children. Clive Standish accumulated most of his wealth from his career in financial services before he married Anna – retiring in 2007. When the marriage ended in 2020 the total wealth at stake was around £132m.

The Court of Appeal considered the correct approach to the sharing principle where non-matrimonial assets were a key issue.

The particular assets under consideration included an £80m amount transferred from investment funds held in Clive’s sole name into Anna’s sole name, as well as shares in a farming business owned in his own right (acquired before the marriage). The shares were transferred in 2017 as part of a tax planning scheme

The trial judge decided that those assets had been ‘matrimonialised’ and were subject to the sharing principle. In practical terms, this led to Anna being awarded £45m.

Clive successfully appealed. The appeal court emphasised that a critical factor when applying the sharing principle is the source of an asset, not legal ownership.

Giving judgment, Lord Justice Moylan said: “The sharing principle is founded or based on each party, in accordance with… fairness, equality and non-discrimination, being entitled to an equal share of their matrimonial property, namely the ‘fruits of the partnership’ or the wealth built up by the parties’ ‘endeavours during the marriage.”

Applying that principle, the judge’s application of the sharing principle was flawed – resulting in an unjustified division of the assets in Anna’s favour. A fair result would have led to Anna receiving around £25m. A fresh determination would have to be made.

What is matrimonialisation?

The court’s view was that the concept of matrimonialisation should be narrowly applied – it’s about “fairness.” Moylan LJ went on to provide a useful reformulation of the concept of matrimonialisation. In summary:

• The percentage of the parties’ non-marital assets is not significant enough to justify an unequal division
• The extent to which matrimonial and non-matrimonial property has been mixed – and how – means that, in fairness, it should be included within the sharing principle; and
• Where non-marital property was used in the purchase of the former matrimonial home – the former matrimonial home should typically be shared equally

What does this mean?

This case is one of the most significant rulings on finances on divorce to be handed down in recent years. Divorcing spouses (or civil partners) should not assume that assets and property they consider to be non-matrimonial will be treated as such for the purposes of a fair financial split.

It is clear that the source and use of the assets in question are key considerations, rather than the legal ownership or proportion of assets that are non-marital assets. Always seek early advice and representation before making any assumptions.

Get advice from expert Divorce Lawyers

The divorce lawyers at Osbornes Law have extensive experience in advising high-net-worth clients throughout financial proceedings. Our team understands the complexities and sensitivities involved in high-value divorces, ensuring that our clients receive tailored legal guidance.

We are committed to protecting our clients’ interests and achieving fair and equitable outcomes during the division of assets, maintenance disputes, and any other financial issues that may arise during the divorce process.

If you’re seeking expert legal support on divorce, reach us by filling in our online enquiry form or by calling us directly at 020 7485 8811.