A question often asked by parties in matrimonial proceedings is the extent to which their spouse’s misconduct is relevant. Spouses tend to automatically consider that if they have been wronged in some way, their estranged spouse should be punished by receiving a lesser share of the available assets. However, what a court considers to be “misconduct” may be very different to what the parties to a marriage may think.
Sadly, within matrimonial practice, it is all too often for Courts to see allegations of domestic abuse, financial mismanagement, infidelity, drug and alcohol abuse and many more. It may be said that many of those alleged behaviours in the matrimonial court is just part and parcel of everyday practice. For the individuals however, these behaviours are often the reason they are in the matrimonial court in the first place.
The introduction of Non Fault Divorces was specifically designed to remove fault based petitions. The court no longer has to be satisfied that the respondent is at fault in some way for a marital breakdown, so why would the Courts be interested in conduct in the ancillary financial proceedings?
Section 25 of the Matrimonial Causes Act 1973 identifies conduct as a relevant factor the Court can take into consideration. Conduct is only be taken into account as part of the section 25 discretionary exercise if in all the circumstances, it would be ‘inequitable for the court to disregard it’ (s 25(2)(g)) Clearly this is a high bar and one which denotes really serious misconduct over and above the highly fractious and extremely unpleasant behaviours, often present during difficult marital breakdown.
The position about conduct in matrimonial proceedings has always been quite unclear probably because conduct is the exception rather than the norm and thus these are not factors that frequent the Court that often.
OG v AG (2020) was a case overseen by Mostyn J. The case concerned the party’s business post Brexit. The Husband in that case had set up a rival company to take business and custom away from the marital business that was in dispute. The Wife in that case alleged fraudulent misconduct by her Husband and alleged he deliberately sabotaged their joint business venture to reduce its value. Accordingly, she sought to rely on the Husband’s conduct pursuant to Section 25(2)(g).
Mr Justice Mostyn provided a helpful overview of the legal position in relation to conduct. He identified four distinct categories and suggested that if behaviour fell within one of those four categories, it may feature in financial remedy cases.
Category 1 – Gross and Obvious personal misconduct
It seems category 1 is quite expansive in its application. Mr Justice Mostyn was keen to stress that such personal conduct would only feature in “rare circumstances” and where the behaviour complained of caused financial impact.
A key feature appears to be causation. Does that therefore mean that longstanding abuse resulting in emotional harm for example would fall foul of this provision in the absence of any evidence of financial loss or implication? Not necessarily as Mr Justice Mostyn was clear in reminding practitioners that if the “inequitable to disregard test” is met, the Court may reflect the behaviour in the substantive award. Actually quantifying that reflection is likely to be very difficult and the subject to litigation in itself. The Court, as Mr Justice Mostyn said, cannot just pluck a figure out of thin air to penalise immoral conduct.
Category 2 – “add back jurisprudence”
“This arises where one party has wantonly and recklessly dissipated assets which would otherwise have formed part of the divisible matrimonial property”. Again, it was emphasised that such conduct would need to be “clear and obvious”.
Category 3 – litigation misconduct
Whilst addressed by Mr Justice Mostyn in his judgment, it is envisaged to be a slightly different point in that whilst the Court was very clear that litigation misconduct should be penalised in costs, it was also noted that litigation misconduct in itself is unlikely to lead to any substantive disposition of the marital assets.
Using marital assets to conduct that litigation misconduct however, may give rise to behaviour under category 2 and thus may be recoverable.
As an aside, to the substantive issue in question, it is worth remembering that the parties remain under an obligation to continue to negotiate under Practice Direction 28A no matter how unreasonable the other spouse may be. One parties’ poor litigation conduct does not absolve the other party from their duties to the Court or to their clients.
Category 4 – Inferences
This category relates primarily to those who fail to fulfil their duty to provide full and frank disclosure. Conduct in those circumstances can give rise to the Court undertaking an artificial exercise of trying to quantity assets that are undisclosed. In cases where such an exercise is impossible, the Court is not permitted to simply pluck a figure from thin air. There must be some evidential basis to allow inferences to be drawn even if that evidence is “ballpark” rather than specific.
In summary, the starting point for any party seeking to rely on conduct are Mr Justice Mostyn’s four categories. Whilst not necessarily all encompassing, they are at least a good starting point. It may be said the all encompassing “inequitable to disregard” test is perhaps a fifth category but has the benefit of its own provision in the legislation.
Over the years, courts have endeavoured to grapple with the complex issue of conduct and how the person guilty of that conduct should be treated compared to the “innocent party”. Ultimately, there is little by way of guidance as each case must turn on its own facts. The Court must retain a discretion to apply Section 25 as it sees fit to the facts of the case before it. For those interested in this particular topic, courts have endeavoured to grapple with conspiracies to murder[1], abduction of children[2] and sexual assault of a child family member[3]. All of those cases fall within the “inequitable to disregard category” and thus fall firmly within the legislation rather than the 4 categories identified by Mr Justice Mostyn but nevertheless, provides useful reading on how to quantity conduct.
A particular point of note is the interplay between conduct and the parties’ needs. No matter how badly someone may behave, their needs remain and the court has a duty to take those needs into account. Will conduct ever trump needs? Maybe, but very rarely.[4]
Remember, conduct is fact specific. It is essential conduct is raised at the earliest opportunity, normally at the FDA. The person alleging conduct carries the burden of proving it on the balance of probabilities. Failure to raise conduct swiftly is likely to lead to cost implications. Indeed, pursuing conduct arguments disproportionately or with no real merits of success may ironically be litigation misconduct.
[1] Evans v Evans [1989] 1 FLR 351
