How the court decides on a fair outcome in contested financial proceedings arising out of a divorce is a complex issue and professional advice is recommended.

A recent Family Court case demonstrates this and shows how the courts deal with the thorny issue of substantial non matrimonial assets, typically owned pre marriage, acquired post separation or received from third parties by way of gift or inheritance.

In GR v AR the parties were in their 40s and separated after an 8 year marriage which produced one child aged 7 who spent broadly equal time with each parent.

Both parties had successful careers in business, the wife accruing assets worth c£36m (up from c£4m when the parties started cohabiting) largely occurred as a result of her stellar performance in business whereas the husband’s assets had flatlined at c£5m. He had not worked however since 2019.

The husband wanted the wife to pay him c£15m whilst the wife offered c£7.5m

The wife sought to rely on the way the parties had kept their finances very separate throughout the marriage even down to splitting restaurant bills equally.

The court endorsed the basic concept of equality permeating a marriage observing that the parties commit themselves to sharing their lives. When a marriage ends each is entitled to an equal share of the assets of the relationship unless there is a good reason to the contrary.

The correct approach is to quantify which assets are matrimonial and which are non-matrimonial. As a “strong starting point” the matrimonial assets should be divided equally however long or short the marriage may have been and the non-matrimonial assets left with the party who contributed them.

Determining the partition between matrimonial property and non-matrimonial property is not always straightforward.

The family home is usually (though not always) treated as matrimonial property and typically shared equally even if this was brought into the marriage at the outset by one of the parties

Non-matrimonial property is “property received or created outside the span of the partnership” and the court decided that the nature and source of the asset is the key issue, rather than the manner in which the parties have run their lives.

The court rejected both parties’ complex spreadsheets, taking the view that the court should take a broad brush approach.

The court decided that roughly one third of the wife’s assets were earned before the relationship started.

The court also concluded the family home was matrimonial as it had been used as the family home for nine years and the husband had contributed to its initial furnishing.

The husband therefore received a settlement of c£11m.

It is important to note that the cost of this case and the uncertainty would have been avoided had the parties given consideration to a Pre- Nuptial Agreement which could have set out clearly how the parties’ respective wealth would be divided on a relationship breakdown. Pre Nups are always worth considering where there is significant wealth, especially on one side, or where that wealth comes from family gifts or inheritance and especially if there are children from a prior relationship.

For further advice please contact Fiona Apthorpe, Natalie Haydon Yeung or Adrienne Donneky at Geldards’ Family Team.