New Financial Remedy judgment from the Supreme Court expected to affect all future divorce cases

The Supreme Court hearing on Standish v Standish is expected to have widespread implications for the definition of 'matrimonial property' in future divorce cases.

Background

In this case, Mr Standish had accumulated significant wealth prior to his marriage to Mrs Standish in 2005, through his work as an investment banker. In 2017, he was advised by his accountant to transfer £77 million to Mrs Standish to take advantage of her non-domiciled status (until 6 April 2025, non-domiciled UK residents had different, advantageous, tax rules). The intention was for this £77 million to be placed into a trust.

However, before the trust was established, Mrs Standish applied for divorce, still holding the £77 million ("The Assets").

Both parties agreed that anything acquired during the marriage should be shared equally under the "sharing principle" established in White v White. The courts were therefore asked to determine whether:

a) The Assets were non-matrimonial property belonging to the wife, as legal title had been transferred to her;

b) The Assets were non-matrimonial property belonging to the husband, since the source of the £77 million was from his personal endeavours before the marriage; or

c) The Assets were matrimonial property, and thus subject to equal division.

Judgment

The High Court, and subsequently, the Court of Appeal, dismissed both (a) and (c) as 'nonsense'. They ruled that whether assets are matrimonial depends on their origin, not on legal title. Because the Assets were generated before the marriage, the Court of Appeal confirmed it was non-matrimonial property and should not be divided equally.

However, the Court of Appeal diverged from the High Court by reducing Mrs Standish's share from 34% to 25%, concluding that the original award did not represent a ‘fair allowance’ given the source of the funds.

Supreme Court Appeal

The decision has been appealed to the Supreme Court, which will re-examine the case and issue a judgment primarily addressing the question:

“When does non-matrimonial property become matrimonial property in the context of financial remedy proceedings, and how should the sharing principle apply to such property?” (UKSC)

The hearing took place in early May, and we await the Supreme Court's judgment later this year.

If you would like to discuss the financial implications of property acquired before marriage, please contact our Family Law team today and one of our solicitors will be happy to arrange an appointment with you.