The Supreme Court decision in the case of Standish v Standish is probably one of the most hotly awaited decisions by matrimonial and finance practitioners for years. Well, it is finally here, and this article will focus on the decision reached by the Supreme Court which is the end of the line for Appellants meaning we should now have some finality.
My colleague, Christopher Wall, wrote an article on the Court of Appeal decision in the very same case back in May 2024 which can be accessed here. (Court of Appeal Guidance on Matrimonialisation: Standish v Standish [2024] EWCA Civ 567 – Becket Chambers).
Whilst the Court of Appeal decisions are binding on lower Courts, matrimonial Judges have inevitably had a degree of trepidation when applying the principles derived therein, knowing an Appeal to the Supreme Court was pending and the decisions they made relying on the Court of Appeal authority may look very different if the Appeal to the Supreme Court succeeded.
In summary, the Court of Appeal considered the concept of “matrimonialisation”; (a process by which non marital assets become matrimonial) and the interlink with the sharing principle.
In this case, the Husband transferred circa £80m worth of assets to his Wife in 2017 as part of a tax avoidance scheme. The parties then separated, and the Husband sought to recover his assets on the basis the parties had always intended to preserve them for the children by way of a trust. By the time the matter came before the Court, the majority of the assets in dispute were held by the Wife despite being funded entirely by the Husband (both pre and during the marriage).
The Court of Appeal concluded that;
(a) the judge had incorrectly made the transfer of title from the husband to the wife the determinative factor in determining how the 2017 Assets were characterised;
(b) the source of the 2017 Assets, rather than title to them, was the determinative factor;
(c) there was nothing which justified the conclusion that the importance and relevance of the source of “most of” the 2017 Assets being non-matrimonial was in any way diminished as a result of the transfer of title to those assets to the wife;
(d) the transfer of the 2017 Assets had not matrimonialised any of the transferred assets;
(e) 75% of the 2017 Assets remained non-matrimonial property and were not subject to the sharing principle (and, although not explicitly spelt out, it was implicit in the Court of Appeal’s reasoning that 25% of the 2017 Assets was matrimonial property by reason of the contributions of both parties and should be shared equally);
(f) the correct figure for all the matrimonial property subject to the sharing principle was £50.48 million;
(g) the fair outcome on an application of the sharing principle would provide the wife with approximately £25 million (half of £50.48 million) in place of the judge’s award of £45 million, leaving the husband with approximately £107 million (which figure included his share of the matrimonial property and his non-matrimonial property);
(h) the judge had not carried out a needs assessment and, as the Court of Appeal was unable fairly to determine the wife’s needs so as to conclude that an award of £25 million met her needs, the matter was remitted for a needs assessment.
The basis of the Appeal.
The Court of Appeal effectively disagreed with the Judge at first instance in relation to which assets had been matrimonialised and thus were subject to the sharing principle. The Court at first instance awarded the wife £45m which was reduced to £25m by the Court of Appeal.
The Wife sought permission to Appeal which was granted by the Supreme Court. The basis of her Appeal was as follows;
- The Court of Appeal were wrong to conclude the transfer of the £80m assets to her in 2017 did not lead to their “matrimonialisation”
- The transfer was effectively a gift from the Husband.
- The Court were wrong to rely solely on the source of the funds and the focus ought to have been on the Husband transferring those assets to the Wife during the marriage.
Permission to Appeal was granted on the 17th October 2024. The Supreme Court Judgment was delivered on the 2nd July 2025 after some 10 months of uncertainty amongst matrimonial practitioners.
The decision of the Supreme Court
The Judgement of the Supreme Court is surprisingly short for such a highly anticipated decision. Whilst the Judgment should be read in full for its proper context, paragraphs 45 – 65 are a must read for matrimonial practitioners.
It is pertinent to note this Judgment was the first case the Supreme Court has considered in relation to the sharing principle since White v White (2001 and Miller v McFarlane (2006) some 25 and 19 years ago respectively. It may be said this Judgment is a key component of modern practice and was an opportunity by both the Court of Appeal and Supreme Court to provide its own analysis (and thus guidance) of how the Matrimonial Causes Act 1973 is applied some 52 years after its creation.
The decision of the Supreme Court, can be summarised as follows;
- There is a conceptual distinction between matrimonial and non-matrimonial property. In general, the distinction turns on the source of the assets. Examples of non-matrimonial assets include pre-marital property or inheritance for example. Matrimonial assets are those that are the fruits of the joint endeavour of marriage.
- Non-matrimonial property should not be subject to the sharing principle (but may still be utilised in cases of need)
- The Court endeavoured to make as clear a precedent as possible that the sharing principle will only ever apply to matrimonial property.
- The sharing of matrimonial property should normally be on an equal basis.
- There is no good reason to treat matrimonialisation as a narrow concept. It is neither narrow nor wide. Although this has not previously been clearly spelt out, what is important (leaving aside matrimonial property resting on contributions from each party) is to consider how the parties have been dealing with the asset and whether this shows that, over time, they have been treating the asset as shared between them. That is, matrimonialisation rests on the parties, over time, treating the asset as shared.
- In the context of this case, the parties intentions were to save tax. The Court said “transfers of capital assets with the intention of saving tax, do not, without some further compelling evidence, establish that the parties are treating the capital asset as shared between them.”
Discussion
As is common place in matrimonial proceedings, decisions from the Court of Appeal and Supreme Court normally relate to cases of considerable wealth. Practitioners and Judges are left with the unenviable task of seeking to apply principles from a high net worth context to a range of financial cases, very many of which are cases of very modest assets.
It is important to remember Standish v Standish is a judgement exclusively in relation to the sharing principle. It does not change the approach in relation to cases of need but may go some way to reaffirming the notion that non-matrimonial assets may be invaded if the needs of the parties require it.
In the majority of cases the Family Court considers on a day to day basis, the division of assets is predicated almost entirely on need, meaning many of the principles in Standish will be of limited value save for the concept of matrimonialisation which will no doubt be source of debate and litigation for years to come. All of that however fades into insignificance in cases of need meaning parties need to take a realistic and pragmatic view as to how prominently they wish to argue some of their assets are non-matrimonial if, in all probability, they will be invaded by the Court to meet needs in any event.
The Supreme Court agreed with the Court of Appeal in most respects save for the suggestion by Moylan LJ the “source” of the asset was important. Instead, the Supreme Court considered how the parties treated the asset over time and their intentions were more important.
It may be argued the “source” of the asset is far easier to prove than the parties’ intentions. It is unclear what evidence the Supreme Court envisages when one is seeking to prove how (non-matrimonial) assets have been treated by the parties. In the case of Standish, the Wife inevitably would have benefitted, either directly or indirectly, from the Husband’s assets, particularly the income derived from them but the Court suggested she was unable to prove any benefit to her rather than a benefit to the children.
Whilst the Supreme Court sought to clarify the position on the sharing principle, its Judgment seems to raise more uncertainty about how one proves a “shared intention” in the first place. The absence of guidance or principles to be applied to that particular aspect of its reasoning, I surmise may lead to further litigation until further clarity is obtained.
Perhaps it is not the end after all.
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