The Ministry of Justice has announced that the Divorce, Dissolution and Separation Act 2020 (DDSA 2020), which received Royal Assent on 25 June 2020, will now have a commencement date of 6 April 2022....
In recent years, there has been two arguably parallel lines of case law on the general approach courts should take to non-matrimonial property. The two groups of case law represent the two different schools of thought: the artists and the scientists.
In recent years, there has been two arguably parallel lines of case law on the general approach courts should take to non-matrimonial property. The two groups of case law represent the two different schools of thought: the artists and the scientists. Mostyn J, himself a clear leader of the scientists, described the difference between the two approaches in N v F (Financial Orders: Pre-Acquired Wealth)  2 FLR 533. Under Mostyn J’s scientific approach the court must first identify the whole matrimonial pot, and within that how much constitutes both matrimonial and non-matrimonial assets. The court shall ‘identify the scale of the non-matrimonial property to be excluded, leaving the matrimonial property alone to be divided in accordance with the equal sharing principle’ (paras  & ). At para  of that case he was clear that:
‘I adhere to my view that the two step approach is the right one, generally speaking. It is precisely what Wilson LJ did in Jones. It seems to me that the process should be as follows:
(i) Whether the existence of pre-marital property should be reflected at all. This depends on questions of duration and mingling.
(ii) If it does decide that reflection is fair and just, the court should then decide how much of the pre-marital property should be excluded. Should it be the actual historic sum? Or less, if there has been much mingling? Or more, to reflect a springboard and passive growth, as happened in Jones?
(iii) The remaining matrimonial property should then normally be divided equally.
(iv) The fairness of the award should then be tested by the overall percentage technique.’ (para )
The artistic approach on the other hand has been consistently favoured by Moylan J (as he then was). This view takes a more discretionary broad brush approach, rather than the formulaic two stage method as set out above. Under this view, the percentage share of the whole matrimonial pot is adjusted from the 50%:50% starting point according to discretionary judicial ‘feel’ as to what would be an appropriate percentage shift to reflect the existence of non-matrimonial property in that case. Moylan J ordered a 40%:60% split of the assets in C v C  1 FLR 8 through this technique. He concluded that ‘it would be unhelpful to suggest that the assessment of the extent to which such departure is justified can be calculated by reference to any formula or clear mathematics…’
The primary criticism levelled at the artistic approach is that it depends upon the discretionary intuitive feel of a single member of the judiciary. It therefore risks results that are arbitrary and lack consistency. Mostyn J summarised the concern perfectly in JL v SL (No 2)  EWHC 360 (Fam): ‘how do the parties understand how, say, a 40% has been alighted on, as opposed to say, 43% or 45%? The technique may reflect the individual judge’s instinct and intuition but it risks being described as a lawless science.’ (para ).
In other words, the artist is the student who gives an answer on a maths exam, but does not record any of their ‘workings out’ along the way. In the same way that the examiner might struggle to understand how the answer was reached, so too would the parties or perhaps more importantly any appellate court seeking to review an artistically chosen percentage. The scientist student conversely, not only provides his workings as to how his answer was reached, but also provides a cross-check method to confirm that his answer is within the right bracket. This would appear more accessible to examiners and parties alike.
The scientific formula is not above criticism however. Wilson LJ was clear of the shortfalls of both approaches in Jones v Jones  EWCA Civ 41. Counsel in Jones argued for opposite methods. ‘Criticism can easily be levelled at both approaches. In different ways they are both highly arbitrary. Application of the sharing principle is inherently arbitrary … but is the greater apparent specificity of Miss Stone’s approach an illusion? Powerful voices are raised against the accuracy of the types of valuations which her approach often requires…’
So the two opposing camps are established, with their apparent failings known, it is from here that two arguably juxtaposing lines of authority can be said to have emerged.
Artistic case law
One early expression of the artistic view can be found from the then President in Charman v Charman (No 4)  EWCA Civ 503. When considering what the sharing principle should be applied to, he reaches the conclusion that: ‘the principle applies to all the parties’ property but, to the extent that their property is non-matrimonial, there is likely to be better reason for departure from equality…’ (para )
In P v P  2 FLR 1135, the parties had been married for 24 years. The question arose as to how to treat bonuses and deferred shares received by the husband in between the time of separation and the financial remedy proceedings. Moylan J emphasised the court’s discretionary role when handling non-matrimonial property, holding that the weight to be given to such assets fell within this discretionary remit. He did not feel it was necessary to identify precise pots of matrimonial and non-matrimonial property in order to reach his decision.
Moylan J similarly did not define the pots of different property in SK v WL (Ancillary Relief: Post-separation accrual)  1 FLR 1471. He cited Miller; McFarlane 1 FLR 1186 where Lord Nicholls stated ‘similarly the ‘equal sharing’ principle might suggest that each of the party’s assets should be separately and exactly valued. But valuations are often a matter of opinion on which experts differ.’ (para ) These words will ring particularly true with any practitioners who sought accurate property or company valuations in the immediate aftermath of this year’s Brexit referendum result.
The exact method adopted by Roberts J in Cooper-Hohn v Hohn  1 FLR 745 has been the source of much debate. One view is that she too took a broader artistic approach to the treatment of non-matrimonial property in this case: ‘the factor [post-separation accrual] must, in my view, find its reflection in the overall quantum of the financial award she [the wife] will receive at the conclusion of these proceedings. It goes to the heart of what I consider to be fair in the overall context of the case.’ (para ). The final sentence in particular seems to ring true with the warnings Moylan J gave against the use or reliance of too much mathematics or formulae by the courts.
Scientific case law
There are equally as many cases that supports the scientific school of thought. Mostyn J held the same strong view in FZ v SZ and Others (Ancillary Relief: Conduct: Valuations)  1 FLR as in N v F (2011, above) stating: ‘it is so easy to say – “well there is a good deal of non-matrimonial property here so I will reduce the claimant’s share to 40%.” But that approach simply does not tell anyone what weight is being given to that factor…’ (para ) He persists with this position in JL v SL (No 2)  EWHC 360 (Fam) holding that the court should always strive to identify the matrimonial and non-matrimonial pot. Once this has been achieved, there should be equal division of the matrimonial assets but no such sharing of the matrimonial pot. This approach he held was more likely to avoid discrimination (see paras -).
It would appear that two entrenched positions are well established from the above authorities. This would likely put practitioners in difficulty when advising clients as to the likely outcome or court treatment of their non-matrimonial property. The answer appeared to be that if the entire pot was not taken by needs, then the approach taken simply depended upon the inclination of the particular tribunal – artistic or scientific. The seeds of reconciliation however appear to be first planted by Mr Cusworth QC (sitting as a Deputy High Court Judge). In JB v MB  EWHC 1846 (Fam), he reached the following conclusion:
‘It is more satisfactory for the parties to have the exercise of discretion explained by reference to a share of what is matrimonial, and an explanation of why that determination has been so made, rather than simply to be told that x% of the whole pot is the right proportion, for reasons rooted in the judge’s experience but not more specifically articulated.’ (para )
He then went on to qualify his support for the scientific approach, stating:
‘that is not to say that such an approach will always be practicable, or even possible, nor that in any event it is any less arbitrary. It is simply that if such a determination can be made, then it must be a useful way-marker for the court and the parties to have been able to do so. There are bound to be many cases (and Cooper-Hohn may be an obvious recent example), where even to make such an attempt would appear futile.’ (para )
In other words, when the scientific approach is possible on the facts, it is beneficial for the court to provide their judgment in these terms for the parties. In other cases, however, such as Cooper-Hohn, it may be that the factual matrix is such that this method would be futile at best and harmful at worst – (a maths student who provides incomprehensible workings out and methods to the facts of the question set may be more confusing than the student who did not).
Mr Cusworth QC had demonstrated that the two methods can be reconciled: if the scientific approach is available, the courts should adopt this technique. If however the facts of the case make this formulaic approach impossible, then in those circumstances the broader discretionary tactics of the artist should be used.
The issue came before Roberts J again shortly thereafter in MCJ v MAJ  EWHC 1642 (Fam). In that case, in which the marriage was a second marriage for both the parties, the husband had considerable pre-acquired wealth from two main sources. One of these sources, a property portfolio, constituted 68% of the husband’s wealth. The husband produced an asset schedule during the proceedings, attempting to show the value of his wealth at the time the parties had started to cohabit.
At para  of her judgment, Roberts J appears to endorse and cement the view first touched on by Mr Cusworth QC above. Her conclusions to this effect are important and deserve to be set out in full:
‘Where does this evidence lead me? … As both counsel accept, it is simply not possible on the basis of the evidence before me to perform the sort of forensic exercise envisaged by the Court of Appeal in Jones v Jones  1 FLR 1723 and by Mostyn J in N v F  2 FLR 533 and S v AG  1 FLR 651. In appropriate cases (which will be the vast majority), I accept and endorse the stepped and intellectually rigorous approach of (a) deciding whether the existence of pre-marital property should be reflected in outcome at all, depending upon issues of the length of the marriage and what has been referred to in previous decisions as "mingling"; (b) if so, the extent of the pre-marital property to be excluded from the sharing principle; and, finally, (c) the equal division of the remaining (marital) property subject only to the cross-check of fairness and need. This approach was analysed recently by Mostyn J with his customary clarity in JL v SL (No 2)(Appeal: Non-Matrimonial Property)  EWHC 360 (Fam),  2 FLR 1202, paras 17 to 27. However, there are cases where reliable accountancy evidence is simply not available so as to make it possible for a court to establish a reliable and historical benchmark in terms of crystallized value at a particular point in time. It seems to me that this is one those cases.’ (para ).
Implications for practitioners
Judgments within the last 18 months have brought clarity for both practitioners and parties. There no longer appears to be conflicting approaches but a harmonious reconciliation which set out the correct approach for courts to take: where the facts and accounting of a case enable the scientific method, then it should be adopted. Practitioners should be alert however for a case matrix where such a method would be ‘futile’ and instead the artistic broader brush discretionary approach adopted.