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The Landmark Decision of Standish v Standish and the Sharing Principle Clarified

Last month, the Court of Appeal applied the largest ever reduction in UK divorce history and decreased the wifes £45 million award to £25 million. 

The Appeal Court judges in Standish v Standish [2024] EWCA Civ 567 declared that the previous application of the sharing principle—which holds that matrimonial assets should be shared equally unless there is a valid reason to deviate—was flawed and led to an unjustified division of the familys wealth in the wifes favour

Background of this case: 

Mr Standish had a highly successful career in financial services, generating the majority of his asset base before the relationship began. The parties started cohabiting in 2004, married in 2005 and later had two children together. Mrs Standish was a homemaker throughout the parties relationship and Mr Standish retired in 2007. 

Central to the case was the £77 million that Mr Standish had transferred to his wife in 2017 as part of a tax and estate planning arrangement, intended to be placed in a trust for their children. However, Mrs Standish filed for divorce before the arrangement could be finalised. 

Mrs Standish argued that the amount had been gifted and therefore should be considered to have been matrimonialised and taken into consideration when calculating her settlement. Nonetheless, lawyers for Mr Standish contended that the transfer of funds did not change the fact that the assets were primarily earned by Mr. Standish before the marriage, making them non-matrimonial

At the time of the first instance hearing in 2022, the total value of the assets was approximately £132 million of which the 2017 transferred assets represented £77. The first instance judge, Moor J, determined that £112 million was matrimonial property (which included the £77 million transferred) and £20 million was non-matrimonial property. Accordingly, the original award gave £45 million to Mrs Standish and £67 million to Mr Standish in a 40:60 split of the £112 million. 

Unhappy with this result, Mrs Standish brought an appeal seeking to increase her £45 million award to £66 million, claiming that she should be apportioned half of the couples total wealth of £132 million. However, the Court of Appeal not only dismissed Mrs Standishs appeal but also allowed a cross-appeal from Mr Standish that the source of the funds, primarily accumulated before the marriage, was a crucial factor that had been inadequately considered by the first instance judge. As a result, Mrs Standishs award was reduced to £20 million, making it the largest ever reduction in UK divorce history. 

Implications of this judgement on the sharing principle: 

This case considered the proper application of the sharing principle. 

The English family courts approach to asset division upon divorce is based on its unrestrained power to enforce whatever financial settlement it considers fair. One of the key principles of fairness is the sharing principle, based on the fundamental concept of equality within a marriage. Marriage is often described as a partnership of equals and therefore the sharing principle states that when the partnership ends, should share "the fruits of the matrimonial partnership" 

It was common ground that the sharing principle applies to matrimonial property and does not apply to non-matrimonial property. However, this case further clarified what makes an asset matrimonial and non-matrimonial and also guided the way a non-matrimonial property can be matrimonialised – or in other words, become an asset to which the sharing principle applies.  

The first instance judge was found to have erred because his conclusion was based solely on the fact that the £77 million in assets were transferred by Mr Standish to Mrs Standishs name – as a result, making the title of the assets the determinative factor when deciding how to chraracterise the wealth. However, as clarified by the Court of Appeal, the source of the assets is what determines the character of the assets (whether they are matrimonial or non-matrimonial). 

Why is this so important? This is because matrimonial assets are subject to division in financial proceedings upon a divorce. However, if the assets are categorised as non-matrimonial, then they may not be subject to division – unless required to meet the needs of party. To learn more on matrimonial and non-matrimonial assets, read our guide by clicking here

This case will now be returned to the High Court for a needs assessment to determine whether the reduced award of £25 million will adequately meet Mrs Standishs financial requirements. We eagerly await further updates. 

Related reads: 

Vardags | Sharing, needs and compensation: navigating divorce settlements 

Vardags | How straightforward is the sharing principle? 

Vardags | Shares or needs? How to decide on maintenance awards 

Vardags | Court of Appeal departs from equal sharing principle for successful business woman 

Vardags | Deviation from the sharing principle in divorce case 

The information on this website is intended as a guide and does not constitute legal advice. Vardags do not accept liability for any errors in the information on this website, nor any losses stemming from reliance upon the statements made herein. All articles and pages aim to reflect the legal position at time they were published, and may have been rendered obsolete by subsequent developments in the law. Should you require specialist advice, tailored to your situation, please see how Vardags can help you.

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