Family: Sharing and non-matrimonial property

The Courtroom of Attraction’s choice in Standish v Standish [2024] EWCA Civ 567 is a number one case on the therapy of non-matrimonial belongings and, particularly, on the ‘mingling’ or ‘matrimonialisation’ of such belongings. 

Background  

The wedding lasted 15 years and bore two kids. When their relationship began, the husband had belongings price £57m. In 2017, to keep away from inheritance tax, the husband transferred belongings price £77m into the spouse’s sole identify, with the intention that she would settle these funds in an offshore belief. That subsequent step was not taken by the spouse.  

The proceedings have been heard by Moor J at first occasion and his choice was reported as ARQ v YAQ [2022] EWFC 128. Each events appealed his choice to the Courtroom of Attraction.

The spouse’s grounds of enchantment included:

a.    The transfers to her in 2017 transformed these belongings into her ‘separate property’. It was the title to the property which was related, not the supply of the belongings. Alternatively, the belongings have been matrimonial property and there was no justification aside from for an equal division.

b.    The decide ought to have discovered that the property, Ardenside was a matrimonial asset. Though it had been owned by the husband earlier than the wedding, the events had holidayed there and had improved it through the marriage.  

The husband’s grounds of enchantment have been:

a.    The sharing precept shouldn’t be utilized to the 2017 belongings nor Ardenside. They represented the husband’s pre-marital wealth.

b.    Alternatively, in the event that they have been matrimonial belongings, the spouse had been awarded an extreme share of the household’s belongings, having regard to the size of the husband’s unmatched contribution of pre-marital wealth.  

The important thing parts of the Courtroom of Attraction’s choice have been as follows:

Moylan LJ acknowledged: ‘For my part, it’s clearly established that, within the software of the sharing precept, the supply of an asset is a essential issue and never title.’ By reference to the numerous reported circumstances cited by Moylan LJ, he famous that title doesn’t function as a major issue, in comparison with the supply of an asset. The latter options prominently in explaining the courtroom’s method to the appliance of the sharing precept. He additionally mentioned: ‘The sharing precept will apply with equal power to an asset held within the sole identify of 1 partner because it does to an asset in joint names.’

Moylan LJ additionally rejected using the time period ‘separate property’ and felt it higher to stick to the established phrases of marital/matrimonial and non-marital/matrimonial property.

Moylan LJ needed to be clear that he was not searching for to depart from what was mentioned within the Courtroom of Attraction’s choice in Hart v Hart [2017] EWCA Civ 1306, which stays a number one case on the problem of pre-acquired and inherited property. Moylan LJ acknowledged that the idea of matrimonialisation ought to proceed to be utilized, though it ‘must be utilized narrowly’. Citing Wilson LJ in Ok v L [2011] EWCA Civ 550, he acknowledged that: ‘The significance of the [non-marital] supply of [an asset or assets] could diminish over time.’ Moylan LJ proposed that there must be some slight reformulation of the three eventualities which have been referred to in Ok v L which mirrored the event in case legislation since that 2011 choice. The three eventualities summarised by Moylan LJ have been as follows:

a.    The proportion of the events’ belongings which could replicate the produce of non-marital endeavour is probably not sufficiently important to justify an evidential investigation and/or a departure from an equal division of the wealth.  

b.    The extent to which non-matrimonial property has been combined with matrimonial property and which implies that it must be included throughout the sharing precept.  

c.    Non-marital property which has been used within the buy of the household dwelling, that being an asset which generally stands in a class of its personal.  

Within the first instance, the sharing precept applies within the typical type. As for the household dwelling in state of affairs (c), sometimes the property must be shared equally, though there are reported circumstances the place that has not occurred, for instance FB v PS (Monetary Treatments) [2015] EWHC 2797 (Fam).

State of affairs (b) requires ‘a extra nuanced method’ the place the proof doesn’t set up a transparent dividing line between matrimonial and non-matrimonial property.  The underlying query is whether or not such belongings must be handled as having the identical character as these constructed up through the marriage with the consequence that they need to be shared on divorce.  

If such belongings are handled as having been matrimonialised and subsequently topic to the sharing precept, it doesn’t imply that the asset should be shared equally. There is no such thing as a authority which helps the rivalry that after an asset is matrimonialised, it should be shared equally. The non-matrimonial supply of the cash in query stays a related consideration.  

Implications of the choice

It should be remembered that the arguments heard by the Courtroom of Attraction addressed sharing circumstances. The place circumstances are decided by wants, such elements will override arguments in respect of the supply, therapy and nature of the belongings.  

Within the overwhelming majority of sharing circumstances, the household dwelling might be divided equally, whatever the supply of the capital. There are nonetheless a number of reported circumstances the place the courtroom has departed from that precept.  

Though the authorized title to property just isn’t a related consideration, the supply and therapy of such belongings do nonetheless stay related. For an asset which has not been matrimonialised, it is not going to be topic to the sharing precept. The idea of matrimonialisation is nonetheless fact-specific; whether or not an asset has been matrimonialised and the way it’s to be handled will rely upon the person info of the case. 

Andrew Newbury is a associate at Corridor Brown Household Legislation, Manchester