In C v C [2025] EWFC 152 (B), Recorder Christopher Stirling tackled a complex and increasingly common issue in modern financial remedy proceedings: what happens when a party borrows against non-matrimonial property for matrimonial purposes? Does that make the borrowing—and perhaps the asset itself—matrimonial?

The facts involved a London husband (H) who inherited a property, 27 R Avenue, from his mother. The property was clearly non-matrimonial, being a pre-marital gift. However, H raised a significant mortgage against it during the marriage, using the funds to support the family. He then argued the mortgage itself should be considered a matrimonial liability, separate from the property it was secured against.

The Core Issue: Can You “Matrimonialise” a Mortgage?

The husband’s logic was superficially compelling: the loan was used to support the family, so it should count as a joint debt. But the judge wasn’t persuaded. Stirling rejected the idea of severing the debt from its security, noting that treating the mortgage as matrimonial while leaving the asset non-matrimonial would be “wholly artificial.”

Instead, he adopted a more integrated approach: the mortgage reduces the value of the non-matrimonial asset, and therefore doesn’t create a separate matrimonial liability. Nor does the use of borrowed money, even for family purposes, override the fundamentally non-matrimonial nature of the asset itself.

Why This Matters

This decision is important because it helps clarify the often-murky area of borrowing against non-matrimonial assets. We frequently see parties leveraging inherited or pre-acquired property to raise funds—sometimes to support the household, sometimes to pay legal fees, or other costs. It is tempting to argue that the act of borrowing “transforms” part of the asset into something matrimonial.

But C v C is clear: you can't isolate a debt from its security just because the money was used for the family. This ties in with recent guidance in WX v HX and ND v GD, which emphasise that the application of income or value from non-matrimonial property doesn’t automatically convert the underlying capital into a matrimonial asset.

The Subtler Argument: Unmatched Contributions

That said, the judge did recognise that using non-matrimonial assets (or loans secured against them) can be relevant in the overall discretionary exercise. Such use may be seen as an unmatched contribution—a factor which might justify a departure from equality in the division of matrimonial assets. But in this case, W had also made substantial unmatched contributions, including from her inherited wealth.

The result? The borrowing and counter-contributions effectively cancelled each other out.

Key Points for Practitioners

• Don’t assume that using non-matrimonial property for family needs “converts” it into matrimonial property. It doesn’t—unless there’s mingling, use as a family home, or other transformative steps.
• Be cautious about arguing that borrowing creates a standalone matrimonial debt. Courts are unlikely to separate a secured liability from the asset it’s secured against.
• The discretionary power of the court remains broad. Even if an asset stays non-matrimonial, its use may be relevant in adjusting the division of matrimonial property.
• Focus on overall fairness, not just legal categorisation. The court will always look at the totality of contributions and resources in arriving at its decision.

Final Thought

C v C offers timely clarity on an issue that arises in many divorce cases—particularly where family wealth and inherited assets are in play. It reminds us that even where the parties dance around the legal labels of “matrimonial” and “non-matrimonial,” the court’s focus remains firmly on fairness, nuance, and context.