Standish v Standish: a summary of the Supreme Court judgment

The Supreme Court issued their judgment in the Standish case on 2 July 2025. This eagerly anticipated judgment is a unanimous 5 bench decision.

The case concerns the proper application of the English law "sharing principle" and the manner in which the court identifies assets to which the sharing principle applies.

Facts

Mr and Mrs Standish were married in 2005 and had two children together. In April 2017, Mr Standish transferred assets worth £77.8 million (most of which he had acquired prior to the marriage) to Mrs Standish. His intention was that Mrs Standish would put the assets into trust for the parties' children, as part of a tax planning exercise. The question was whether, on divorce, those assets constituted part of the "matrimonial property" to be shared between the parties and if so, how the "sharing principle" should be applied.

High Court judgment

Following the initial trial (English equivalent of a Scots Law proof), the judge held that most of the assets in question had begun as non-matrimonial property, being assets held by Mr Standish prior to the parties' marriage. However, they had been 'matrimonialised' (similar to the Scots Law concept of assets being converted into matrimonial property) by virtue of them having been transferred to Mrs Standish. They were therefore eligible for division between the parties. Despite finding that the assets were matrimonial, the judge took into account their pre-marital origin and accordingly ordered that they be shared 60/40 in favour of Mr Standish.

Court of Appeal

Both parties appealed to the Court of Appeal. It held that the judge at first instance had incorrectly made the transfer of title from Mr Standish to Mrs Standish the determinative factor in considering how the transfer of the pre-marital assets in 2017 was characterised. It was the source of the assets, rather than title to them, which was the determinative factor. There was nothing which justified the conclusion that the importance and relevance of the source of most of the assets being non-matrimonial was in any way diminished as a result of the transfer of title to those assets to the wife and the transfer of the assets had not 'matrimonialised' them.

The assets therefore remained non-matrimonial and were not subject to the 'sharing principle'. Mrs Standish's award was reduced from £45 million to £25 million as a result of this.

Supreme Court ruling

Mrs Standish thereafter appealed to the Supreme Court. Arguments were heard over two days wherein Mrs Standish challenged the Court of Appeal's narrow interpretation of 'matrimonialisation', arguing that the assets that had been transferred should be subject to the sharing principle and that undue weight had been given by the Court of Appeal to the source of funds argument, rather than the parties' intentions during the marriage.

When issuing their judgment, the Supreme Court stated five principles relevant to the sharing principle and provided new guidance as to the circumstances in which non-matrimonial property may become matrimonial property (or "matrimonialised") and subject to the sharing principle. The Supreme Court clarified that non- matrimonial property is not subject to the sharing principle.

The Supreme Court upheld the decision of the Court of Appeal. The Supreme Court ruled that how the parties had been dealing with the asset and whether they treated the asset as shared between them was vitally important. For an asset to be 'matrimonialised' there must be intention by a party to share the non-matrimonial property with their spouse. The parties must treat the asset as being "shared". The Supreme Court confirmed that the transfer of an asset between spouses for tax purposes, irrespective of the time period involved, will not normally show that the asset is being treated as shared between the spouses. Therefore, such a transfer will not normally constitute 'matrimonialisation'. The Court decided that the parties had not treated the asset as being shared between them. Therefore, they were non- matrimonial assets and not subject to the sharing principle (save for the element of the transferred assets that had not been acquired prior to the marriage which was matrimonial).

The Standish ruling means that if a party wishes to share in a non-matrimonial asset they will require to demonstrate that there has been an intention by their spouse to share in those assets and that they have been treated as shared assets during the marriage. The' needs' and 'compensation' principles were not engaged in the Standish case, although the Supreme Court did make clear that non-matrimonial property can be subject to the principles of needs and compensation.

Implications in Scotland

Under Scots law, each party to the marriage is entitled to a fair sharing of the matrimonial property. This will generally mean an equal sharing. There are special circumstances arguments which can be advanced in support of an unequal sharing of the matrimonial property. This includes a "source of funds" argument which can be used to argue that account ought to be taken of any conversion of non- matrimonial property into matrimonial property during the course of the marriage (this is similar to the concept of 'matrimonialisation' referred to in the Standish case). There is no set formula for the application of special circumstances arguments and ultimately whether to take any account of such arguments is a matter for the discretion of the court.

As these principles are similar (in part) to the issues discussed in Standish this decision, may be persuasive in certain cases, given that it has been handed down by the Supreme Court.

Prior to entering into a marriage or civil partnership, any party who is concerned about protecting assets which they have or are likely to receive should seek the advice of a family lawyer. Pre-nuptial, post nuptial and cohabitation agreements are all effective tools which can reduce the risk of a non- matrimonial asset finding its way into the 'pot' to be divided on divorce. For more information, please get in touch with one of our family law experts.