How does the Court deal with finance cases where there are many assets available? ST v AR [2025] EWFC 4
A look at the difference between the needs and sharing principle – Part 1
The recent case of ST v AR gives us a good insight into how the Courts deal with cases where the resources clearly exceed the needs of both parties and where one party has far more assets than the other.
The case also considers arguments over inherited assets and whether an asset should be deemed non-matrimonial, and therefore not capable of division.
The Context
In this particular case, the parties had been married for 11 years but had been in a relationship on and off for 10 years prior to their marriage having met in the 1990s. They had a child together who was 10 years old at the time of the divorce proceedings. There was also a 20-year age gap between the parties, with the Husband being 70 years old and the Wife being 51.
The list of assets involved was lengthy, with the husband having received a large inheritance from his grandparents, the vast majority of which was a property portfolio now managed by a private equity investment company, the husband also had a business of his own and several LLCs (all of which totalled approximately £115,800,000).
The parties owned multiple properties (combined value of approximately £5.49 million), combined savings of £1,896,000, combined investments of approximately £14 million, and a yacht worth £2.1 million. It was very clear that the parties had enjoyed a very high standard of living throughout their marriage and often travelled business class and sometimes even by private jet.
The husband was a sculptor who has had the freedom to pursue his career due to the financial security offered by his inheritance. The wife had obtained a degree in architecture however, she had not worked throughout the marriage.
The wife’s position was that any settlement should be determined by her needs. However, her position was that her needs should be assessed based on the living standard that she has enjoyed throughout the marriage and should also be assessed in light of the financial resources available to the husband, ie what is available for sharing. In short, the wife sought the following:
- For the family home to be transferred to her (worth approximately £3.49 million)
- A lump sum of just over £19 million, made up of:
- £14,789,000 to cover her income needs
- £464,500 for work to be done to the family home
- £3.5million for a second property and
- £275,400 to discharge a litigation loan.
- The wife also sought child maintenance of just over £83,000 per year.
The husband on the other hand, sought the following:
- To retain the family home
- For the wife to be awarded funds to rehouse, along with capitalised maintenance.
A large part of the husband’s case was that the inherited property portfolio should not be taken into consideration as it was a non-matrimonial asset which was not liquid and not capable of division. The husband also believed that the wife had largely inflated her needs in an attempt to secure a larger settlement.
The judge ultimately favoured the husband’s position, he dismissed the wife’s arguments and decided to determine the level of the wife’s award based on an assessment of her needs rather than an assessment and calculation of a sharing claim.
The judge awarded the following to the wife:
- £4 million to rehouse
- £8 million as capitalised income
- £250,000 towards her legal costs.
The judge also agreed that the husband should retain the inherited property portfolio.
Resource: A guide to financial proceedings during a divorce.
So, how did the court approach this case with so many assets available?
Despite the multitude of assets available, the high figures discussed, and the arguably complex arguments made on behalf of each party, the court treated this case in much the same way it does other cases and started by applying the basic principles. The judge clearly laid out the approach that should be taken and the law to apply, the main points are summarised here:
- The court’s objective must be to achieve an outcome which is as fair as possible in all the circumstances (White v White [2000] 2 FLR 981).
- There should be no discrimination between husband and wife and their roles within the family (White v White).
- When evaluating fairness, the court must consider the Section 25 criteria and first consideration must be given to any children of the family.
- There is powerful encouragement towards a clean break (Miller v Miller; McFarlane v McFarlane [2006] 1 FLR 1186).
- Three essential principles are needs, compensation and sharing (Miller v Miller).
- Where the result suggested by the needs principle is greater than an award calculated by the sharing principle, the needs principle will prevail (Charman v Charman).
- In most cases, matters will start and end with the parties’ needs.
- Parties are usually entitled to an equal division of marital assets and non-marital assets are usually retained by the party to whom they belong unless there is a good reason not to do this (Scatliffe v Scatliffe [2017] 2 FLR 933).
- Evaluating what is marital and non-marital is not easy and must be dealt with based on the particular facts of each case.
- Needs are elastic and cannot be looked at in isolation.
- Needs should be set at a level close to the standard of living enjoyed during the marriage (Miller/McFarlane).
- The source of wealth is also relevant to needs, if it is non-marital, then it would be unfair not to weigh that factor in the balance.
The Needs Principle
In most cases, meeting the essential needs of both parties is not always achievable. In fact, in some cases, it is only possible to meet the very basic needs of one party, usually that is the parent with the day-to-day care of the children.
Needs fall into two categories:
- Housing needs
- Day to day income needs
The needs of both parties are normally considered fairly generously within the context of the resources available, and the standard of living enjoyed in the marriage. The idea behind this principle is that both parties should obtain what they need, in order to rehouse and meet their daily expenses, if possible.
The Sharing Principle
On the other hand, is the idea that all assets within the matrimonial pot should be divided equally between the parties. The starting point for the division of assets on divorce is a 50/50 division, this is the sharing principle, ie that all assets should be shared equally, unless there is a good reason not to do so.
However, this principle can often become difficult to apply when there are not enough assets within the pot to meet the needs of both parties, for example, when dividing the assets equally does not allow both parties to meet their needs. In these cases, needs will often trump sharing and the court will need to decide how best to allocate and resources available to meet the needs of the parties.
Stay tuned next week where we will be discussing what happens on the opposite side of the spectrum, when the assets within a marriage far exceed the needs of both parties…
Contact GoodLaw Solicitors
At GoodLaw Solicitors LLP, our Family Law team has a great deal of experience dealing with many types of cases, from those where there are not enough assets to meet both parties’ needs, to cases where there are far more assets than needed.
Therefore, if you are going through a divorce or are thinking about a divorce and would like to discuss how finances are dealt with on divorce, please do not hesitate to get in touch with our Family department.
We offer a free initial consultation in qualifying circumstances and would be happy to discuss your options with you.
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