Standish and the Married Women’s Property Act 1882

Much has already been written about the decision of the Court of Appeal in Standish v Standish, and given that permission to appeal to the Supreme Court was granted on 16 October 2024, much more will be written about it in the months to come.

The purpose of this article is not to go over the ground already covered by writers much more eminent than us, but to consider:

• an argument made on behalf of the wife that the decision put her, as a married woman, in a worse position than she would have been as a cohabitee; and
• whether the rights of unmarried partners might be enhanced by the decision

Before we proceed, it might be helpful to have a brief recap.

The facts

The parties’ relationship began in 2003 and they married, each for the second time, in 2005. They separated in 2020, having had two children.

The trial judge, Moor J (whose judgment was reported as ARQ v YAQ [2022] EWFC 128) found the marriage lasted 15 years and 9 months, which he described it as “not a very long one”, although even on his finding, this somewhat exceeded the ONS median duration of a marriage ending in divorce (12.9 years).

The husband was very wealthy when they married, such that the vast majority of the assets were non-matrimonial.

In 2017 the husband transferred assets from his sole name into the wife’s sole name. The value of those assets was £80m at the time of the hearing before Moor J. The intention behind the transfers was to avoid tax. The wife was to have placed the assets into an offshore trust, but she never did. She kept them, and changed her will so that the husband would not benefit from them on her death.

In order for the tax avoidance scheme to succeed, the husband had to divest himself of all interest in the assets. The wife therefore argued that the assets had become both legally and beneficially hers. Not only that, but they had become non-matrimonial assets on her side of the balance sheet. As such, she argued that they were not subject to the sharing principle. A bold set of assertions, everyone agrees.

Moor J found that the assets in question had become matrimonialised, and that they should be shared equally. He awarded the wife £45m, which was equivalent to about 34% of the overall assets,  which he valued at £112,631,062. That was quite a departure from the old yardstick of equality and so the aggrieved wife appealed. The husband cross-appealed, although it has been said that he would not have appealed if the wife had accepted the decision.

The Court of Appeal dismissed the wife’s appeal and substituted an award of £25m. The stuff of nightmares for both the wife and her lawyers, and perhaps also a surprise to the husband and his lawyers.

The Court of Appeal decision

Moylan LJ delivered the leading judgment, with which King and Phillips LJJ agreed, which runs to an extremely elegant and instructive 183 paragraphs. It can be distilled into the following principles:

• The concept of matrimonialisation survives, but should be applied narrowly.
• In determining whether an asset has been matrimonialised, its provenance and not its title is critical.
• If an asset has become matrimonialised, it will be subject to the sharing principle.
• The sharing principle does not mean that the asset will be shared equally.
• Assets should be shared in such a way as to achieve fairness overall, which may involve recognition of the endeavours or contribution of one or other of the parties.

For Moylan LJ, those principles meant that:

• The assets transferred to the wife in 2017 had not become her non-matrimonial property.
• Far from it, the vast majority of the assets in the case had not even been matrimonialised and the total matrimonial pot was approximately £50.48m rather than the £112.63m found by Moor J.
• The starting point would be that the matrimonial assets would be shared equally, giving the wife £25m, about 19% of the overall assets;
• However, since there had been no assessment of whether this sum met the wife’s needs, the case would need to be remitted back to Moor J for him to determine whether it did or not.

The judgment is well worth a read, if only for the masterful way in which it canters through the authorities from White v White [2000] 2 FLR 981 to XW v HW (Financial Remedy: Non-matrimonial Assets) [2019] EWCA Civ 2262, sub nom XW v XH (Financial Remedies: Business Assets) [2020] 1 FLR 1015. But the judgment is not without controversy. For example:

• Is it right that, after a marriage lasting at least 15 years with two children, the wife’s award is limited to only 19% of the overall assets even taking into account the husband’s unmatched contributions?
• If one crosschecks the outcome against the yardstick of equality, is it fair to depart that far?
• Although the assets derived from the husband, he divested himself entirely of them in order to gain an advantage for himself (and by extension the wife). Can it therefore be right to find that they had not at least become mingled and thus matrimonialised?
• Was it right for the husband to claim that the assets were still his despite the fact that he had given them away and that he had given them away with the benefit of legal advice and with a very clear intention to divest himself of ownership?

These are the issues which have occupied the minds of commentators and practitioners, but we are keen in this article to explore something slightly different: the argument, put by leading counsel for the wife, that if provenance is more important than title when determining whether an asset is matrimonial or not, that might leave a wife – in particular this wife – in a worse position than she would have been in if the parties had not been married.

The cohabitee argument

The argument was put by Richard Todd KC at first instance and was dealt with by Moor J at [75] of his judgment:

“I have not considered whether the transferring money-maker in that situation would have any arguments pursuant to a resulting trust, assuming there was no need to divest oneself of the money entirely for tax reasons. The point is that very different financial considerations apply depending on whether you are married or you merely cohabit. In general, marriage protects the home-maker. The fact that it may be different in this case does not make it wrong. Whatever I decide, the Wife is going to leave this marriage in an infinitely better financial position than she entered it.”

Moylan LJ dealt with the argument at paragraph [170], when he said that:

“Mr Todd’s somewhat immoderate submissions that this would ‘condemn’ a spouse as ‘inferior’ to, or ‘worse off’ than, those who were not married do not assist. The legal framework is very different and, as a result, the applicable principles are very different. It is not a matter of better off or worse off, nor indeed is it a matter of ‘confiscation’. It is the exercise by the courts of their powers under the MCA 1973 in accordance with established principles to achieve a fair outcome.”

The judges rightly agreed that:

• the legal framework is very different depending on whether you are married or unmarried; and
• the whole purpose of MCA 1973 s25 is to reallocate resources between a divorcing couple in such a way as to achieve fairness

They also agreed that although this wife may have been worse off, that did not make the decision wrong. That is what we would like to consider further, starting with these points:

• Moor J expressly didn’t consider whether a transferor might have arguments about a resulting trust. Indeed, there was no resulting trust in this case. The husband had divested himself absolutely of any interest in the assets.
• If Mr and Mrs Standish had been unmarried, the assets would therefore have been Mrs Standish’s absolutely and she would have been better off by at least £63m.
• How can it be right, regardless of provenance, to determine that assets which have been transferred to the other party without reservation have not become matrimonialised?
• Moor J at least was persuaded that, as Mrs Standish would be infinitely better off than she was at the start of the marriage, that answered the cohabitee argument, but that is not reflective of the law of property nor of matrimonial finance law. Wealth at the end of a relationship relative to the start is not a section 25 consideration.

In practice

Standish was published in July 2024, at which time we were instructed by one of the parties to an unmarried relationship. Our client had generated all the wealth during their 20-odd years together. He had paid for several properties, which were all in their joint names, and there was a significant amount of money held in investments in their joint names.

The interesting, and somewhat unusual, fact in this case was that the parties had been engaged. The engagement had come to an end at the end of their relationship, which was only a few months prior to our being instructed.

This generated a certain amount of excitement in the solicitor’s office, for she knew that the parties’ engagement could invoke the Married Women’s Property Act 1882, s17 of which says:

“In any question between husband and wife as to the title to or possession of property, either party may apply… to the High Court or the family court … and the court may, on such an application… make such order with respect to the property as it thinks fit.”

Section 2(2) of the Law Reform (Miscellaneous Provisions) Act 1970 extendsMWPA  1882 s17 to couples who were engaged to marry but broke off their engagement:

“Where an agreement to marry is terminated, section 17 of the Married Women’s Property Act 1882… shall apply as if the parties were married, to any dispute between, or claim by, one of them in relation to property in which either or both had a beneficial interest while the agreement was in force.”

In a rush of blood to the head, the solicitor put the following propositions to counsel:

• Section 17 as extended says that the court may make whatever order it thinks fit in relation to property and in the case of parties who had been engaged, it will determine the issues as though the parties were married.
• Standish says that provenance, rather than title, is determinative of whether an asset has become matrimonialised.
• If claims between this couple were to be determined as though they were married, then Standish suggests that the assets in joint names might nonetheless revert to the earning partner.
• Crazy, you might think, since the assets in our case had been well and truly mingled, but remember that in Standish the assets had been wholly and without reservation transferred to the wife and were still held to be largely the non-matrimonial property of the husband.
• Well, you might say, but you can’t pick and choose which parts of the matrimonial finance jurisprudence you want to adopt and leave out those you don’t. What about the fact that in our case the assets had been earned during the relationship? Clearly, you say, they are (quasi) matrimonial assets and subject to the equal sharing presumption. Yes, ok, good point.

Luckily, counsel was able to apply the jurisprudential equivalent to a cool flannel to the solicitor’s fevered brow. The solicitor’s propositions were of course nonsense, and not just because of your final very good point. Counsel is one of relatively few practitioners with recent experience in this field and given that the rest of us have – well, none – it’s worthwhile setting out here exactly how MWPA 1882 s17 applies in real life.

Back in the 1960s the redoubtable Lord Denning had also suffered a rush of blood to his judicial head, claiming that s17 “transcends all rights, legal or equitable, and enables the court to make such order… as appears to be fair and just in all the circumstances of the case” (Hine v Hine [1962] 1 WLR 1124). At the time, the court’s powers to redistribute property between a divorcing couple were restricted, and s17 provided the principle mechanism by which matrimonial finance disputes were resolved. Lord Denning thought it was time to extend those powers. He always was ahead of his time.

However, in 1970, the House of Lords determined that s17 did not, as Lord Denning would have it, convey an unfettered discretion. Rather, as Lord Diplock put it in Pettit v Pettit [1970] 1 WLR 1124, para 820D:

“It is a procedural section… The power conferred upon the judge… gives him a wide discretion as to the enforcement of the rights of the proprietary or possessory rights of one spouse in any property against the other, but confers upon him no jurisdiction to transfer any proprietary interest in property from one spouse to the other or to create new proprietary rights in either spouse.”

Thankfully, the MCA 1973 was enacted only three years later, so there was not too much longer to wait before wives could benefit from the sort of distributive powers foreseen by Lord Denning.

You would think, wouldn’t you, that that would have been the end of it? Not so. In 1989 (in Mossop v Mossop [1989] Fam 77), it was once more argued that s17 as extended gave the court the power to make any of the orders open to it under the MCA 1973 in respect of a couple who were engaged but not married. The Court of Appeal was unequivocal: there was no such power. Not only because the section is purely procedural, but also because the powers granted by the MCA are conditional upon the grant of a decree of divorce, nullity or judicial separation. Since there can be no such decree granted to an engaged couple, there is no jurisdiction to make a substantive order.

That really is the end of the matter. Unless and until Parliament takes another look at the rights and remedies available to unmarried couples (and of course Resolution is working hard to ensure that it does), s17 is of limited substantive as opposed to procedural use. In our case, we were back to well-established Trusts of Land and Appointment of Trustees Act 1996 principles which, sadly for our client, meant that provenance was of no relevance. The assets had been placed into joint names without any intention to create any trust other than beneficial joint and equal tenancies.

What, then, is the point of section 17? In counsel’s view, it does have value, providing an alternative route to justice in certain limited circumstances,[1] perhaps most helpfully for married couples who may be facing bankruptcy of one or other of them, or for an unmarried applicant who doesn’t want to go to the cumbersome extent of issuing TOLATA proceedings when they can do so under Part 18 Family Procedure Rules 2010.

Additionally, when hearing an application under s17 brought by a formerly engaged party, the court may consider s37 Matrimonial Proceedings and Property Act 1970 as if they were married. This provides:

“ It is hereby declared that where a husband or wife contributes in money or money’s worth to the improvement of real or personal property in which or in the proceeds of sale of which either or both of them has or have a beneficial interest, the husband or wife so contributing shall, if the contribution is of a substantial nature and subject to any agreement between them to the contrary express or implied, be treated as having then acquired by virtue of his or her contribution a share or an enlarged share, as the case may be, in that beneficial interest of such an extent as may have been then agreed or, in default of such agreement, as may seem in all the circumstances just to any court before which the question of the existence or extent of the beneficial interest of the husband or wife arises (whether in proceedings between them or in any other proceedings).”

The test here is similar to the familiar jurisprudence on establishing an implied or imputed common intention constructive trust, but there are arguably some differences, particularly in respect of the lack of need to show a detriment, which might make it easier for a party to prove a beneficial interest under s37 than under the normal common law. However, this question appears to remain untested by the courts.

And so back to Mrs Standish. The Court of Appeal remitted her case back to the High Court for a determination of her needs, since there were no findings as to whether the award of £25m would meet those needs.[2] There is no doubt that she is much better off now than she was at the start of the relationship, but that is not a relevant consideration. Could she have used s17? How would the court have treated the assets if she had?

Given that the section bestows no distributive powers, and any relief will be declaratory, the court would have had no option but to declare Mrs Standish the legal and beneficial owner of the assets. Would this have helped her? Although Moylan LJ makes it clear that title, rather than provenance, is determinative of the characterisation of assets as either matrimonial or non-matrimonial, nowhere does he explicitly determine beneficial ownership of the assets, and neither does he say whether the outcome would have been different if the court had found that the assets had belonged beneficially to Mrs Standish. Indeed, this is somewhat unclear (see paragraphs [58] and [170] discussed above).

We suggest that, if the court had found explicitly that Mrs Standish was both the legal and beneficial owner of the assets, it may have been more difficult to simultaneously find that the assets, by being characterised as non-matrimonial, in reality belonged to Mr Standish. That, we suggest, is the central and intrinsic contradiction in this otherwise erudite and masterful judgment.

We will await the decision of the Supreme Court with interest. Our own prediction is that the characterisation of the assets will be found to be less important; that in light of the length of the marriage and the fact that both parties contributed, the provenance of the assets will be of less significance than it was to the Court of Appeal. In short, this is a sharing case, subject to consideration of the fact that (a) it was not the longest of marriages; and (b) almost all of the assets derived from Mr Standish’s pre-marital wealth, but that deviation from the yardstick of equality to a 81/19% split will not be considered fair.

For all our other, unmarried clients, business as usual.

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[1] See “The Married Women’s Property Act 1882 in Modern Family Litigation” by Jacob Gifford Head (https://giffordhead.co.uk/married_womens_property_act)

[2] A whole other article needs to be written about the elasticity of the concept of needs and whether such generosity of interpretation as we have become used to seeing in the reported decisions is actually fair.