The Supreme Court has ruled in Standish that the sharing principle does not apply to non-matrimonial property, but family lawyers are divided on how big an impact the judgment will have
Family and divorce lawyers appear divided over the likely impact of this week’s landmark Supreme Court judgment in Standish v Standish, in which the justices found that the sharing principle does not apply to non-matrimonial property.
In a unanimous judgment, the court dismissed an appeal brought by Anna Standish over the ownership of £77.8m which was transferred to her in 2017 by her ex-husband Clive Standish (pictured below), former chief financial officer at UBS. He argued that the money was part of a tax planning scheme and his non-matrimonial property.
The couple’s marriage ended in 2020 after 15 years. In subsequent financial remedy proceedings, the judge found those assets were matrimonial property and divided the total assets 60/40 in the husband’s favour. The wife was awarded £45m.
The Court of Appeal subsequently ruled that at least 75% of the 2017 assets were not matrimonial and reduced the wife’s award to £25m. The reduction was said to be the largest cut affecting a matrimonial award ever ordered by the English courts.
Ms Standish appealed to the Supreme Court in a case that has been closely watched by private client lawyers.
In lead judgment, Lord Burrows and Lord Stephens, with whom Lord Reed, Lord Lloyd Jones and Lady Simler agreed, said that ‘the problem for the wife is that there is nothing to show that, over time, the parties were treating the 2017 assets as shared between them’.
They added: ‘The transfer was in pursuance of a scheme to negate inheritance tax and it was for the benefit exclusively of the children.’ There was ‘no matrimonialisation’ of the assets because ‘the transfer was to save tax’ and ‘it was for the benefit of the children, not the wife’. The money transferred in 2017 was ‘not being treated by the husband and wife for any period of time as an asset that was shared between them’.
The Court of Appeal was correct that none of the non-matrimonial proportion had been matrimonialised, the judgment said, adding that the 75% ‘remains non-matrimonial property and is not subject to the sharing principle’.
'This judgment… serves as a notice to those receiving substantial transfers during a marriage. They must ensure the intention behind the transfer is properly recorded'
Amy Harris, Brabners Personal
Upholding the decisions and order of the Court of Appeal and dismissing the wife’s appeal, the justices said: ‘In this judgment, we have thought it important to clarify that the sharing principle does not apply to non-matrimonial property; and to explain what underpins matrimonialisation and precisely why it is inapplicable to the transfer of the 2017 assets in this case.’
The Supreme Court’s clarification was welcomed by many family lawyers, though not everyone believes the decision will be as impactful as some suggest.
Sam Longworth, divorce and family law partner at Stewarts and lead partner for Mr Standish, said: ‘We are very grateful for the speed at which the Supreme Court reached this unanimous decision to reject the appeal of Mrs Standish against the largest-ever reduction by the Court of Appeal to a divorce award. The Supreme Court has also provided essential guidance as to when assets which do not have an originating connection to the marriage partnership should be considered marital. This guidance will give the courts a clear framework to ensure individuals cannot benefit from running false arguments as to whether they had or had not agreed to share certain assets during the currency of their relationship.’
Amy Harris, legal director at Brabners Personal, said the ‘landmark judgment… serves as a notice to those receiving substantial transfers during a marriage. They must ensure the intention behind the transfer is properly recorded, especially if they hope to rely on shared ownership arguments in the event of divorce.’
Yael Selig, a family law partner at London’s Osbornes Law, predicted ‘a surge in enquiries about prenuptial and postnuptial agreements’, which she said ‘remain the best possible way’ for clients to protect their wealth.
Aasha Choudhary, family law partner at Shakespeare Martineau, said the decision ‘marks a significant narrowing of the concept of “matrimonialisation”.
‘Most crucially, this ruling makes it clear that if couples want a non-matrimonial asset to become shared property, it must be recorded clearly. Without that, the default position may now lean toward such assets remaining non-matrimonial, a major shift in the legal landscape,’ she added.
Sarah Norman Scott, family law partner at Hodge Jones & Allen, said the judgment showed a ‘clear steer towards wealth preservation’.
By contrast, Claire Reid, partner at Hall Brown Family Law, said the Supreme Court’s ruling was ‘effectively…goalposts being moved slightly rather than a paradigm shift’.
Eri Horrocks, senior associate at Hunters, went further. She said the judgment ‘has left the law on matrimonialisation as clear as mud… the lawyers will still, as they have always done, continue to argue about whether an asset has been matrimonialised or not’.
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