A recent landmark judgment by the Supreme Court of England and Wales in Standish v Standish has provided crucial clarity on the distinction between matrimonial and non-matrimonial assets in divorce proceedings, particularly concerning the “sharing principle.” This decision has notable implications for how financial settlements are approached in England and Wales, and by extension, offers valuable insights for the Nigerian jurisdiction, which often draws upon English legal precedents in matrimonial matters.

Understanding the “Sharing Principle” and Asset Classification

The Matrimonial Causes Act 1973 in England and Wales grants courts wide discretion in making financial orders after a divorce, aiming for a fair outcome. This fairness is guided by three core principles:

• Needs Principle: Ensuring both parties’ financial needs are met.
• Compensation Principle: Compensating a spouse for disadvantages incurred due to the marriage (e.g., giving up career opportunities).
• Sharing Principle: Dividing the “fruits of the matrimonial partnership,” typically on an equal basis.

Central to the “sharing principle” is the distinction between matrimonial property and non-matrimonial property.

• Non-matrimonial property generally refers to assets owned by each spouse before the marriage or acquired during the marriage by inheritance or gift from an external source.
• Matrimonial property encompasses assets earned or gained during the marriage as a result of the couple’s common endeavour.

The Standish v Standish case primarily revolved around the application of the sharing principle to a “big money” case where the husband had transferred approximately £77.8 million to the wife shortly before their divorce. These assets largely comprised the husband’s pre-marital wealth. The key question was whether this transfer “matrimonialised” the assets, making them subject to equal sharing.

The Standish v Standish Judgment: Key Takeaways

The Supreme Court meticulously analyzed the concept of matrimonialisation – the process by which non-matrimonial property can transform into matrimonial property. Overruling the first instance judge, and largely upholding the Court of Appeal’s reasoning, the Supreme Court clarified several critical points:

• Sharing Principle Applies Only to Matrimonial Property: The court definitively stated that the sharing principle applies exclusively to matrimonial property. Non-matrimonial property is not subject to the sharing principle, although it can be considered under the needs and compensation principles. This brings much-needed certainty to an area where previous rulings had been less explicit.
• Source, Not Title, is Determinative: The transfer of legal title alone does not automatically transform non-matrimonial property into matrimonial property for sharing. The court emphasised that the source of the assets remains crucial.
• Matrimonialisation Requires “Treatment as Shared Over Time“: For non-matrimonial property to become matrimonial property (i.e., matrimonialised), there must be clear evidence that the parties, over a sufficiently long period, treated the asset as shared between them. This goes beyond mere ownership changes driven by specific intentions (like tax planning).
• Tax Planning Transfers Generally Not Matrimonialised: In the Standish v Standish case, the transfer of £77.8 million to the wife was solely for inheritance tax planning purposes, intended for the benefit of the children via trusts. The Supreme Court held that such a transfer, aimed at tax mitigation and not reflecting a shared intention to treat the assets as jointly owned by the spouses, does not lead to matrimonialisation. The underlying intent and the specific purpose of the transfer are paramount.
• “Matrimonialisation” is not a Narrow Concept, but Intent is Key: While disagreeing with the Court of Appeal’s assertion that matrimonialisation should be applied “narrowly,” the Supreme Court emphasised that the core inquiry remains whether the parties’ dealings with the asset demonstrate an intention to treat it as shared.

In essence, the Supreme Court ruled that a significant portion of the assets originating from the husband’s pre-marital wealth remained non-matrimonial property and was therefore not subject to the sharing principle. Only the smaller portion of the assets genuinely earned during the marriage was considered matrimonial property for equal sharing.

Impact on the Nigerian Jurisdiction

Nigerian courts frequently look to English legal principles and precedents when adjudicating matrimonial causes, particularly where local statutes are silent or less developed. While Nigeria has its own Matrimonial Causes Act (Cap M7, LFN 2004), it shares broad similarities with the English Act regarding the court’s discretion in financial settlements.

The Standish v Standish judgment will likely have a persuasive, if not binding, influence on Nigerian courts in the following ways:

• Clearer Distinction Between Matrimonial and Non-Matrimonial Assets: Nigerian courts may adopt a more stringent approach to classifying assets. This means a greater emphasis will be placed on the origin and nature of wealth, rather than just who holds title, when determining what is subject to division. Pre-marital assets, gifts, and inheritances are more likely to be ring-fenced and excluded from the “sharing principle” unless there is clear evidence of matrimonialisation.
• Scrutiny of Intra-Spousal Transfers: Transfers of significant assets between spouses, especially those made for specific purposes like tax planning or to benefit third parties (e.g., children), will likely face closer scrutiny. Nigerian courts will likely consider the underlying intention behind such transfers. If the intent was not to genuinely share the asset as part of the matrimonial pool, it may not be treated as matrimonial property upon divorce.
• Emphasis on “Treatment as Shared”: For non-matrimonial assets to be “matrimonialised” in Nigeria, parties will need to demonstrate that, over a considerable period, they have actively treated those assets as shared within the marital partnership. This could involve commingling funds, joint investments, or using the asset for the direct and unequivocal benefit of the marital unit beyond mere logistical arrangements.
• Refinement of the “Needs” Principle: While the sharing principle for non-matrimonial assets is now clarified, Nigerian courts will still retain the discretion to consider non-matrimonial assets when assessing a spouse’s financial needs after a divorce. This means that even if an asset is deemed non-matrimonial, a court could still order a portion of it to be used to meet the other spouse’s reasonable needs if other matrimonial assets are insufficient.

In conclusion, the Standish v Standish judgment provides a robust framework for distinguishing between matrimonial and non-matrimonial property and clarifying the boundaries of the sharing principle. For Nigerian divorce proceedings, this translates to a more precise and principle-driven approach to asset division, encouraging parties to delineate their pre-marital and gifted wealth if they wish to preserve its non-matrimonial character.