The High Court judgment in AF v GF (2024) EWHC 3478 is an excellent recent example of the approach to matrimonialisation and the nuanced distinction between matrimonial and non-matrimonial property, as viewed within Family Law court proceedings for financial remedy.
What Is Matrimonialisation?
Matrimonialisation occurs when a non-matrimonial asset (such as a pre-marital business or inheritance) becomes treated as part of the marital assets available for division (the ‘matrimonial pot’). The asset that was originally ‘non-matrimonial’ can become intertwined with the matrimonial finances to such a degree that it is considered available and pertinent for division in financial proceedings. Whilst family law in England and Wales generally seeks to preserve the distinction between matrimonial and non-matrimonial assets, a key principle is that fairness prevails over strict application, and the court is afforded broad discretion.
For instance, where a party owns a business before marriage, that business is typically regarded as a non-matrimonial asset. If, however, it was actively developed during the marriage and used to meet the family’s outgoings, it may be argued that part (or perhaps all) of the business should be treated as a matrimonial asset subject to division. The court’s approach will depend on factors such as the length of the marriage, how the asset was used, and the extent of the non-owning spouse’s contributions.
Case Example of Matrimonialisation – AF v GF
In AF v GF, the husband (H) and wife (W) separated after a long marriage. Prior to the marriage, H had grown a successful investment management business that continued to expand significantly throughout the relationship. W argued for the inclusion of the business as part of the matrimonial assets based on her (indirect and direct) contributions.
At the heart of the dispute was the valuation of and perspective on H’s business. He contended that the business’s growth was largely attributable to pre-marital efforts and external market forces. W maintained that the expansion during the marriage should be more accurately considered a joint endeavour.
Key Issues & Legal Principles
The High Court took a pragmatic approach, recognising both the non-matrimonial origins of the business and the contributions made by both parties during the marriage.
- Matrimonialisation is not applied automatically: Inclusion in the matrimonial pot depends on usage, mixing, and intent. How the assets were treated and developed during the marriage will determine its status.
- Involving a spouse in a pre-marital business can lead to (at least) partial matrimonialisation: The court acknowledged W’s role in the business but did not agree that it had become entirely matrimonial. A portion of the value was deemed to be attributable to efforts during the marriage and, therefore, was considered for division.
- Fairness does not necessarily mean 50/50: The judgment reinforced the principle that fairness is determined by the specific circumstances of a given case and does not always result in equally sharing, especially when one spouse has brought a significant asset into the marriage.
Practical learnings regarding Matrimonialisation
The AF v GF judgment offers several important lessons:
- Keep clear records: If an asset existed before marriage, keeping clear records of its initial value and how it was managed during the relationship can help to avoid conflict over whether it should be considered non-matrimonial.
- Be mindful of integration: If a non-matrimonial asset (such as a business) is used to support the lifestyle within the marriage, there is a risk that it may be subject to division upon divorce.
- Understand the impact of contributions: For business owners, pre-marital assets will not necessarily remain untouched. Spouses who actively participate in growing a business may have a valid claim to a portion of its increased value.
Conclusion
The AF v GF case provides a clear window into the application of matrimonialisation in financial remedy cases. It confirms that the court takes a case-by-case approach to determine what is fair. Business owners and high-net-worth individuals can, nonetheless, be mindful of how their assets are structured and used during the marriage.
About the Family Law team
Amphlett Lissimore can help you agree on financial arrangements when you separate. We are an experienced team of family law solicitors and lawyers who regularly help high net worth clients come to an agreement inside or out of court proceedings. The team offers a fixed-fee initial meeting which help our clients know where they stand legally before proceedings even begin.
About the Author
Tom Airey is a solicitor in our family law department and specialises in prenuptial agreements, divorce, and financial arrangements following separation. Based at London Bridge, Tom Airey also meets with clients at our other offices and offers telephone and video appointments as well.