Anna Catherine Standish v Clive Thomas Standish

Hearing dates: 15 and 16 November 2023

Approved Judgment

This judgment was handed down remotely at 14.00 on Thursday 23 May 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

The wife appeals and the husband cross-appeals from the financial remedy order made by Moor J (“the judge”) on 27 October 2022. The appeals concern the proper application of the sharing principle and, in particular, the manner in which the court identifies assets to which it applies. In broad terms, the parties agree that it applies to matrimonial property and does not apply to non-matrimonial property (or marital/non-marital property). They disagree as to what makes an asset matrimonial or non-matrimonial property and also as to the manner in which an asset which was initially non-matrimonial can be, what has come to be known as, matrimonialised; in other words, become an asset to which the sharing principle applies.

The total wealth, as found by the judge, was £132 million of which he determined that £112 million was matrimonial property and £20 million was non-matrimonial property (a farm in Australia called Ardenside Station “Ardenside”). Within the sum of £112 million were investment funds totalling £80 million which the husband had transferred from his sole name into the wife's sole name in 2017 (“the 2017 Assets”) and a farming business (“Ardenside Angus”, valued at £8.6 million) in which the wife had been given shares, also in 2017. Both of these transactions were part of tax planning schemes. As explained further below, the judge decided that, as a result of the transactions in 2017, these assets had been matrimonialised and that, accordingly, they were subject to the sharing principle.

The asset schedule attached to the judge's order shows that of the wealth of £132 million, roughly £81 million was in the wife's sole name (including the 2017 Assets worth £80 million at the time of the final hearing); £22 million was in the husband's sole name (including Ardenside of £20 million); and £29 million was in joint names and was divided equally between the parties in the schedule (the matrimonial home of £20.6 million and the shares in Ardenside of £8.6 million). The total in the wife's column was £95.7 million, and in the husband's was £36.9 million.

The judge decided that an unequal division of the matrimonial property of £112 million was justified principally because, at [81]: “To a significant extent [the 2017 Assets were] pre-marital and had only been matrimonialised towards the end of the marriage”. He, accordingly, awarded the wife 40% (£45 million) and the husband 60% (£67 million) of the matrimonial property. Overall, therefore, the husband was awarded £87 million (66%) and the wife £45 million (34%) of the parties' total wealth. As can be seen, the effect of this was that the wife had to transfer assets valued at approximately £50 million to the husband.

In summary, both parties contend that, for different reasons, the division effected by the judge failed properly to apply the sharing principle.

The principal focus of the wife's case was that the judge had been wrong to decide that the 2017 Assets had been matrimonialised. Title was the critical factor and he should have decided that the 2017 Assets (and the wife's shares in Ardenside Angus) were her “separate” or non-marital property. They were not, therefore, subject to the sharing principle save for the fact that the wife had conceded that they, with the balance of the marital property (the former matrimonial home and Ardenside), should be divided equally between the parties because this was a “partnership marriage”.

The principal focus of the husband's case was that the judge was wrong to determine that the 2017 Assets (and Ardenside Angus) had been matrimonialised. The source of an asset was the critical factor not title. The majority of the parties' wealth, including the 2017 Assets, continued to be the product of the husband's pre-marital endeavour rather than the product of marital endeavour and was, therefore, not subject to the sharing principle which applies to the latter and not the former. The characterisation of an asset as matrimonial or non-matrimonial property was not an end in itself but was for the purposes of reaching a fair outcome. This is not dependant on title but was determined by whether it was the product of marital endeavour because, in fairness, such property should be shared equally between the parties.

The wife advanced two Grounds of Appeal.

Ground 1: the judge had been wrong to decide, at [75], that the 2017 Assets and Ardenside Angus had “become matrimonial property”. He should have treated them as the wife's “separate property” which would have given “respect for autonomy” and proper “effect to how the parties had chosen to hold their assets” which was “central to the wife's case”. Although they were not marital property, the wife had voluntarily conceded that they should be treated as marital property and shared equally because she “accepted that the overall nature of their partnership meant that the total of the assets should be divided equally”. Alternatively, if they were matrimonial property, there was no justification for an other than equal division. Further, the judge had been wrong effectively to award the wife 40% of the value of Ardenside Angus when she had a 50% shareholding.

Ground 2: the judge should have found that the property, Ardenside, was a matrimonial asset because, although it was owned by the husband before the marriage, the parties had holidayed there; it had been maintained and improved and “added to” during the marriage; and the gross value of the land had increased very substantially.

As summarised above, by his cross-appeal the husband contends that the judge should not have applied the sharing principle at all to the 2017 Assets or Ardenside Angus. This was because they were not matrimonial property but, both before and after the transfers into the wife's name, represented the husband's pre-marital wealth. The judge applied the wrong test when concluding that they were matrimonial property. Alternatively, it was submitted that, if they were matrimonial assets, the judge awarded the wife an “excessive” share of the family's assets, having regard to the “scale of the husband's unmatched contribution of pre-marital wealth”.

The parties were respectively represented at this appeal, and below, by Mr Todd KC and Mr Sear for the wife and by Mr Bishop KC and Mr Harvey for the husband.

Background

The judgment below is reported as ARQ v YAQ [2022] EWFC 128, [2022] 4 WLR 112. It was reported in an anonymised form but, understandably, no application was made for the hearing before the Court of Appeal to be subject to reporting restrictions or for this court's judgments to be anonymised.

The background, which I take from the judgment below, is as follows. I will call the parties the wife and the husband for ease of reference.

The husband was born in the UK but moved to live in Australia in 1976. He is now aged 71. He had a very successful career in the financial services industry. He retired in October 2007, a relevant date because his marriage to the wife had taken place in 2005.

The husband married his first wife in 1979. Their home was in Australia throughout their marriage. They have three children. They separated in 2002 and were divorced in 2003. A consent financial order was made in Australia.

The wife was born in Australia. She is now aged 56. She married her first husband in 1988 with whom she had three children. They were divorced in 2004.

The husband and wife began their relationship in 2003. The same year the husband's employment required him to move to live in Switzerland. The wife and her children joined him there in 2004. The husband and the wife married in 2005 and have two children together.

When the husband retired in 2007, the family returned to live in Australia. In 2008, the parties purchased a home in England and they, with the wife's three children and their two children, moved to live here in 2010. The property (“the FMH”) was purchased in the joint names of the parties. It cost approximately £9.6 million and very substantial sums (the wife said £7 million; the husband's figure was a sum in excess of £2.5 million) were then spent on renovating it. All the funds were provided by the husband (judgment at [9]).

The marriage came to an end in 2020. The husband and wife have remained living in England, the wife at the FMH.

When the parties married, the husband had accumulated very significant wealth through the financial rewards he had received from his employment. In broad terms, they comprised: (i) financial investments and funds in bank accounts; (ii) a farm and farm business in Australia which had been purchased outright in 2002 (Ardenside and Ardenside Angus); and (iii) a property in Melbourne which was sold in 2010. The farm had been purchased in the joint names of the husband and his first wife and was transferred to the husband as part of their financial agreement in 2003. The husband's case was that these assets were worth £57 million as at June 2004 and that, by the date of the hearing before the judge, if uprated “to today's...