Introduction
In Family Court financial remedy proceedings, non-matrimonial assets are distinct from matrimonial assets.
When the court applies the statutory provision governing family finance disputes, namely section 25 of the Matrimonial Causes Act 1973, matrimonial and non-matrimonial assets are often treated differently from one another, however, this is not always the case.
When is an asset non-matrimonial?
Assets that are acquired by one spouse before a marriage or after a married relationship, and inherited property, whenever acquired, are regarded as non-matrimonial. Assets that are jointly owned, or emanate from sources internal to the marriage, are regarded as matrimonial.
There may, however, be situations where the significance of an asset’s origin is low. In K v L [2011] EWCA Civ 550, the Court of Appeal highlighted three situations where this might be the case, namely where:
- over time, matrimonial property of such value has been acquired as to diminish the significance of the initial contribution by one spouse of non-matrimonial property
- over time, the non-matrimonial property initially contributed has been mixed with matrimonial property in circumstances in which the contributor may be said to have accepted that it should be treated as matrimonial property or in which, at any rate, the task of identifying its current value is too difficult.
- the contributor of non-matrimonial property has chosen to invest it in the purchase of a matrimonial home which, although vested in his or her sole name, has – as in most cases one would expect – come over time to be treated by the parties as a central item of matrimonial property.
The second and third of the above scenarios essentially reflect the principle of “mingling” or “mixing” whereby non-matrimonial assets are, in effect, regarded as having converted into matrimonial assets. The length of a marriage is a significant factor in such cases. The use of non-matrimonial assets during the course of the marriage is also significant.
Do non-matrimonial assets matter?
Yes they do. This is because matrimonial assets are subject to the sharing principle whereby property is often divided equally between the parties, whereas non-matrimonial property is not subject to the sharing principle and is sometimes “ring-fenced”. The following example illustrates the point:
- “A” brings £100,000 into a marriage with “B”, in the form of equity in a house
- “A” buys a car worth £25,000 during the marriage
- “A” and “B” divorce after a relatively short marriage of a year
- arguably, the £100,000 should be “ring-fenced” as non-matrimonial property and retained completely by “A”, whereas the £25,000 car should be treated as a matrimonial asset, sold, and the proceeds divided equally
The above is a simple example. Real cases can often be much more complicated.
The Court of Appeal stated in Hart v Hart [2017] EWCA Civ 1306 that there is no specific formula according to which the Family Court must approach non-matrimonial assets. Instead, the court’s approach will vary depending on the facts before it. For example, the court may decide that the parties should retain the entirety of their non-matrimonial assets because there are sufficient matrimonial assets for their future financial needs to be met. On the other hand, the court may decide to deploy the non-matrimonial assets of one spouse to meet the needs of the other spouse.
Summary
The above can be summarised into three questions, which the court will ask itself when making a decision:
- where did the asset originate from?
- how have the parties treated the asset over the course of the marriage?
- can the parties’ needs be met without recourse to the asset?
The answers to the above questions can often have a significant bearing on the outcome of a Family Court matrimonial finance case.
About us
Demstone Chambers family law barristers are specialist family lawyers. We can help with Family Court Financial Remedy proceedings. We are based in Milton Keynes, but we can attend court anywhere in England and Wales. We regularly appear in courts in Milton Keynes, Birmingham, London, and surrounding areas.