Since White v White in 2001, it has been the settled English law that assets earned during a marriage should be shared equally between the parties regardless of whose name they are held in or who earned them. This ‘sharing principle’ recognises that marriage is a partnership and that the parties’ differing roles contribute to the success of the whole.
While this is a simple rule for many who marry young and build up assets over their marriage, case law has developed over the past 23 years to deal with families where matters are less straightforward. This includes cases concerning substantial pre-marital or post-separation wealth, inherited wealth and the treatment of the family home (regardless of its source).
The latest in this line of cases and of significant importance is the Court of Appeal decision in Standish v Standish in which Stewarts (partners Sam Longworth and Lucy Stewart-Gould) secured for Mr Standish a reduction in his wife’s ‘sharing’ award from £45 million to £25million (45 per cent), which is believed to be the largest reduction by percentage and value of a divorce award by the Court of Appeal.
The case of Standish vs. Standish
Clive Standish, a former CFO of UBS, retired in 2007 after a highly successful career. He generated the vast majority of his significant wealth before the parties’ marriage in 2005. Until 2017, all of this wealth was in his sole name aside from two joint bank accounts and the former matrimonial home.
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In 2017, as part of a tax planning exercise, Mr Standish transferred assets worth approximately £77 million to Mrs Standish by agreement with the intention and expectation that she would settle these assets into a trust for the benefit of their children. However, Mrs Standish did not transfer the assets into trust; instead, she commenced divorce proceedings in April 2020, while the assets remained in her name.
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The High Court awarded Mrs Standish £45 million out of total assets of £130 million (of which the 2017 transferred assets represented approximately £80m). The main components of her award were her half-share of the family home plus 40 per cent of the value of the assets transferred in 2017. The court found that the transfer to Mrs Standish had ‘matrimonialised’ what would otherwise have been non-marital assets, but to account for the non-marital source of that wealth, split those assets 60:40 in Mr Standish’s favour.
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In the Court of Appeal, Mrs Standish argued that her ownership of the assets (until 2017, her husband’s non-marital property) was the critical factor and that the court could share them only because she had made an offer to do so. Mr Standish maintained his argument that the non-marital source of the wealth was critical and that the 60/40 split gave insufficient credit for the non-marital endeavour that had generated this wealth.
The Court of Appeal found that the 2017 transfer had not ‘matrimonialised’ the property and that this concept should be interpreted narrowly.
The court then considered what amount of the 2017 assets was attributable to endeavour during the relationship (i.e. before Mr Standish’s retirement). It made an allowance of 25 per cent in that regard, to which Mrs Standish was entitled to 50 per cent. Together with her share of other marital property, her sharing entitlement was £25 million.
Spotlight on the sharing principle
The foundation stone of the sharing principle is marital endeavour. The family home retains its special status, but for all other assets, a party will need to show they result from work during the marriage. Mrs Standish’s reliance on title was contrary to White and potentially discriminatory.
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Having awarded £45 million on a ‘sharing’ basis, the High Court had not assessed Mrs Standish’s needs in detail. The Court of Appeal remitted the case to the High Court for that assessment. If Mrs Standish wishes to increase her award beyond £25 million, she will need to convince the High Court that £25 million is insufficient to meet her needs.
The case can be viewed in conjunction with another successful appeal brought in the Court of Appeal by Stewarts (partners Debbie Chism and Richard Hogwood), XW v XH. That case dealt with the sharing principle, where assets had increased substantially in value during the marriage. The court warned against discriminatory treatment of the ‘homemaker’ compared to the ‘breadwinner’.
Lucy Stewart-Gould is a partner at Stewarts and a Spear’s Recommended adviser.
