Financial Infidelity – Cautionary Tales
It is uncommon that a court takes financial conduct into account when determining a resolution to financial disputes within a marriage. The reason is that courts do not like to forensically analyse the spending of either party within a marriage and tend to determine that financial contributions in money or money’s worth have historically been equal between you.
Neither do they like to ‘pick over’ the events of the marriage and decide who is the more to blame for what went wrong here. You can see that this sort of analysis could lead to many, many injustices.
The test that the law applies to these circumstances are apportioned to the personal AND the financial conduct of your spouse as these are often combined to form the misconduct as a whole.
- Personal misconduct
This requires conduct that is ‘both gross and obvious’ and therefore unfair to disregard it when considering financial remedies between you.
A good example of this is where a spouse has obsessively and consistently attempted to avoid paying tax with the inevitable devastating consequences on the family, leading to a court assessing the needs of others in the family first impacted by the disastrous outcome because of the actions of the spouse.
- Financial misconduct
The test here is that it has to be ‘reckless or wanton dissipation (of assets) by one spouse’
We need to explore the reality of what the courts mean by ‘reckless’ and ‘wanton’ so that we can identify how these descriptions may apply to the circumstances of your case before we determine whether to include this when pleading your financial needs.
Reckless
What we need to show is evidence that your spouse has spent, well, recklessly….and of course the best way that we can do that is to look at the bank statements when he discloses them to you as is his duty. Or credit card balances. We may need to get a court order for those statements to be disclosed.
Let us say for example, your spouse has had a propensity to night clubs. Spending thousands at a time. We need to trace this and demonstrate this as reckless spending of matrimonial assets. We can seek that these sums are added back into the matrimonial finances pot which would otherwise disadvantage your needs in order that he does not gain from this behaviour which is simply grossly unfair on you.
Wanton
This is described in the dictionary as a cruel or violent action, deliberate and unprovoked.
So, where there is clear evidence of matrimonial asset dissipation by your spouse which is deemed a cruel deliberate and unprovoked action, and it is necessary to ‘add back’ those assets (by other means if necessary) because that add-back is required to meet your financial needs, the wanton test is satisfied. In theory.
The courts are cautious with ‘add-back’ based on the behaviour of a spouse. It can involve a forensic approach and lead to inconsistency by the judiciary of behaviours regarded as wanton or not because it can be subjective. This then leads to the risk of unwarranted litigation. Therefore, deliberately wanton dissipation is the emphasis.
To give you an example of this, one day, there was a case in the family High Court, that heard evidence of Wife that her Husband spent £750,000 on cocaine addiction and sex workers although included in this calculation was expensive treatment to rid him of these habits.
It has to be said that ‘add-back’ of a third of this amount was apportioned from other financial assets of the Husband in the proceedings and was considered enough to meet the Wife’s needs, but the important caveat here is that the court ruled that Husband’s behaviour was the result of a flawed character.
Irresponsible, but the flaw formed part of his character that also led to great financial wealth in the marriage. Not deliberate nor wanton, an addiction, not a recreation, and so in this instance ‘add back’ of that expenditure was not considered appropriate by the court.
If there had not been enough assets available from elsewhere within the marriage to meet Wife’s needs, we do not know if this would have led the judge to form a different view. Judges are afforded wide discretion in matters of matrimonial finance disputes.
Which brings us neatly on to the Court of Appeal in 2016. Similar to Husband in the High Court shown above, our man here was fond of similar persuasions but in this case, Wife’s needs were considered such that it would be unfair for them to be disregarded and actually apportioned Wife’s needs not by ‘adding back’ because of reckless or deliberately wanton behaviour but because of all of the other statutory factors taken as a whole.
Conclusion
Judicial consideration of whether a party to a marriage is flawed or deliberately wanton in the dissipation of matrimonial assets is a matter of interpretation and certainly ‘flawed’ wins the day at the moment. However, it does not defeat your overall needs which must be met.
The question then will be, how will the court use its wide discretion to interpret what your particular needs should be in this case?
Therefore, the answer in your case (as in everyone’s), is that we should look at all of your own particular needs very carefully to ensure that you are not disadvantaged. To justify your needs by seeking that a larger share of the assets between you are awarded in your favour, taking into account any financial infidelity and abuses at the hands of your Husband to your detriment.
Dissipation and, indeed, trying to hide intact assets (often futile), take many different forms, but you get the picture. Regardless of varied judicial interpretation, financial infidelity is a live issue, and it can cause serious harm.
We are here for you to level the playing field.