A Supreme Court ruling this week in a high-profile UK divorce case could set an important precedent for divorce law, raising questions about how assets are divided among separating couples.
David Connor, director and head of family law at Woodcocks Haworth and Nuttall (WHN) Solicitors, summarises the case and its potential implications.
Background
The case involved Clive Standish, former chief financial officer at UBS and owner of significant sheep farming interests in Australia. Clive married Anna Standish in 2005 and the couple moved with their children to the UK in 2010. They separated around 2020 and divorce proceedings began in April that year.
At the time of separation, the marital assets were estimated to be around £132m, a large of proportion of which had grown from wealth Mr Standish had gained before the marriage.
In 2017, Mr Standish transferred around £78m of assets to his wife. The couple had reportedly agreed this was to benefit their children and was transferred to Mrs Standish as part of an initial tax planning exercise to mitigate against inheritance tax.
When the marriage broke down, Mrs Standish argued she was entitled to a proportion of this £78m assets as they had become matrimonial property.
The legal cases
The case debated the process of matrimonialisation in divorce proceedings, ie the point at which assets brought into a marriage become shared and where the starting point would be to divide equally during divorce proceedings.
- Matrimonial assets are those acquired by either party during a marriage and are regarded as part of the couple’s joint endeavours. This could include the family home, pensions, savings, or savings built up together during the marriage. These are generally subject to equal division, unless there are other circumstances such as needs, for example, the provision of a suitable home for one party to raise the couple’s children.
- Non-matrimonial assets are those received by one party before the marriage, such as inheritance or previous wealth, or gifts received by a spouse during the marriage. They are generally excluded from the sharing principle in divorce.
Previous rulings
Initially, the High Court ruled in Mrs Standish’s favour, determining the transferred assets had become matrimonialised, and awarded her £45m.
Mr Standish appealed this, and the Court of Appeal then reduced this to £25m, arguing 75 per cent of £78m transferred assets remined non-matrimonialised. It determined that given the circumstances for the transfer of assets, this transfer did not matrimonialise the assets.
The 75 per cent reflected that fact that the Court of Appeal determined the remaining 25 per cent of the assets were matrimonial, due to a number of factors including that Mrs Standish worked during a proportion of the marriage.
Mrs Standish appealed this verdict to the Supreme Court, which has now dismissed her appeal, upholding the decision of the Court of Appeal.
Implications
While in Standish v Standish, the sums being discussed represent significant values, all assets can be subject to becoming matrimonialised during a marriage, including land, jewellery, antiques and other forms of wealth. Therefore, the case has implications for divorcing couples across the UK in the division of assets.
The ruling establishes a principle that a transfer of assets does not necessarily mean that non-matrimonial property becomes matrimonial and that the circumstances, ie whether the assets have been treated as shared during the course of a marriage, are the key determining factor.
The judgement underlines the importance for those involved in divorce proceedings to seek expert legal advice, particularly where one party has brought significantly more wealth than the other into the marriage, or specific assets which they wish to keep after the divorce is finalised.
David Connor is a director based at WHN’s Rawtenstall office. He leads a team of specialist family lawyers, helping individuals on all areas of family law including complex financial cases including pre-nuptial agreements, financial settlements in divorce and separation.
If you need help on a divorce and finances matter, our specialist solicitors are here to help. Please contact David on 01706 225621 or by email david.connor@whnsolicitors.co.uk.
