To 'matrimonialise' or not?

Matrimonialisation in the Supreme Court

The Supreme Court appeal against the Court of Appeal decision in Standish v Standish [2024] EWCA Civ 567, [2024] 4 WLR 60, [2024] 2 FLR 966 (23 May 2024) is being heard as I type this post. The decision of the Court of Appeal confirms that on application of the matrimonial property sharing principle (ie the the sharing of property generated by the parties’ joint endeavours during the marriage), the source of an asset was the critical factor and not a party’s legal title to that or other property. Mrs Standish (W) should have been dealt with according to her needs not according to any sharing principle, said Lord Justice Moylan (Moylan LJ) in the Court of Appeal.

Both parties had been married before and had children by those marriages. The husband (H) had a successful business career, such that the parties and their two children enjoyed a high standard of living. Late in the marriage H transferred assets in his name (around £80m) to W expecting that she would later transfer those assets to a trust to which H expected to be added as a beneficiary before the money passed on to the parties’ children.

On the couple’s divorce H applied for financial provision. He said his unmatched contribution of premarital wealth meant the transferred assets remained his. The case should be considered only according to W’s needs. W said provision should be dictated by the fact that all the assets had been matrimonial from the outset: all assets should be divided equally. Mr Justice Moor (Moor J) held that the effect of the transfer of assets by the husband was that those assets had been ‘matrimonialised’ and were therefore subject to the sharing principle. He gave W 40% (£45m) and the rest to H.

To matrimonialise or not

Both parties appealed. H’s appeal was allowed. Any principle of ‘matrimonialisation’ must be applied with fairness in mind, said Moylan LJ. There was nothing to justify the conclusion that the transferred assets had been matrimonialised. The judge had been wrong to apply the sharing principle as he had. A fair outcome, said the Court of Appeal, should be dealt with on a ‘needs’ basis and ‘could be met’ by W retaining around £25m.

The Supreme Court summary of the case records that the Court of Appeal found that the assets transferred to the wife in 2017 were not transformed into matrimonial property. At least 75% of the 2017 assets were not matrimonial, and – says the summary – it ‘therefore reduced the wife’s total award by 40% to £25m’.

This is wrong. The Court of Appeal made no award. They allowed H’s appeal, and then went on to say:

[182] … A judge may well decide that the wife’s needs could be met by a sum in the region of £25m (and I do not overlook that the husband considered that his offer of £25M exceeded the wife’s needs) but they might not.

Moylan LJ, in the Court of Appeal, refused to dispose of with the case, having given the £25M indication. He sent it back to Moor J with the comment:

[183] … The matter must be remitted for determination by application of the needs principle, if (and I emphasise if) the parties cannot even now arrive at an amicable solution. If they cannot, and although we have overturned his decision on the application of the sharing principle, in my view Moor J, if available, would be best placed to make such a determination.

That step in the proceedings did not occur as the Supreme Court gave permission to W to appeal.

An exercise of judicial discretion

The problem with English and Welsh law – if it is a problem – is that whatever the Supreme Court may say, in law the first instance judge – Moor J, in Standish – has an absolute discretion as to how money is distributed between parties. The Supreme Court can only give guidance. It is the Matrimonial Causes Act 1973 (MCA 1973) Part 2 and Civil Partnership Act 2004 (for same sex couples in the same terms as MCA 1973) which gives that very wide discretion. And the House of Lords have said that, as a matter of law, an order made based on discretionary principles should only be set aside very sparingly indeed (G v G (Minors: Custody Appeal) [1985] 1 WLR 647 [1985] FLR 894)

MCA 1973 ss 23 and 24 (what orders for financial provision the court may make), for example, are in terms which are as non-directive to judges as can be imagined; and deliberately so as far as the framers of the 1973 Act were concerned. Section 25(1) suggests certain factors the court must take into account when making one or more of the s 23 etc orders – eg income, earnings of parties, their needs and ages, disability and conduct and so on.

The best-known guidance is probably the ‘equality yardstick’ or sharing principle as explained by Lord Nicholls in the House of Lords in White v White [2001] 1 AC 596, [2000] 2 FLR 981, [2000] UKHL 54; but it is no more than guidance. It is the statute which dictates what judges can do. Decision making and final disposal in each case is left to individual judges.

Imagine a hospital where, if one consultant gave you an opinion, then you could go on to eight more and more senior clinicians (for the courts analogy you have three judges in the Court of Appeal and five in the Supreme Court) for still more variations on the first opinion. Our NHS would grind still slower than now.

‘Matrimonialisation’ a matter for statutory reform

If I were asked, I would say: let very rich people make do with one opinion. In Standish, the decision of Moor J – who is no slouch in this area of work, anyway – would be final (save for legal principle mentioned shortly). Both parties in Standish still have more money than most of us could ever imagine after the decision of Moor J. If they submit their case to the court let them make do with one High Court judge (bearing in mind also the narrow appeal principle in G v G (above)).

My exception to this is where a first instance judge – such as Moor J – has got an aspect of legal principle wrong in his reasoning (eg in defining ownership of an asset or misunderstanding inheritance or tax law). This would take that part of the decision outside the G v G limitation.

To ‘matrimonialise’ (a new verb?) is not a matter of legal principle. It can only become so if an Act of Parliament says so (and I know this subject is under review by the Law Commission). It is a matter of judicial discretion – ie how Moor J carefully reasoned and decided on the day he gave judgment. It should be out of bounds for further judicial interference (eg by Court of Appeal and Supreme Court).

30 April 2025