‘For richer, for poorer…’
The recent case of MAP v MFP [2015] EWHC 627 is the latest in a line of cases where ‘add back’ has been considered by the Court, in circumstances where the applicant wife sought to accuse the husband of profligate expenditure that should be re-attributed to him before division of the assets. However, in what is an interesting judgment and one which may further restrict the availability of add back to all but the most wealthy of spouses, the court seems to be of the view that you take the rough with the smooth when it comes to your spouse’s expenditure even when it is on drugs and prostitution.
Addictive personality
In MAP v MFP, the parties had been married for 40 years. They began with nothing, had four children and ended up with a matrimonial pot worth £25 million. The majority of the marital wealth was created by the husband’s very successful property maintenance business which he set up on the 1970’s. Whilst both parties were involved in the business, the Court found that the husband was the “driving force.”
The marriage broke down, and during the period post separation the husband (according to the wife) had spent £1.5 million on cocaine and prostitutes and rehab, spending up to £6000 per week funding his drug habit and a total of £230,000 on rehab.
The husband didn’t really deny the addictions, although the level of expenditure as submitted by the wife was not entirely accepted by him. Nor was the notion that the sums, whatever they may have been, should be added back. The husband’s legal team sought to argue that in essence the husband had personality flaws in his character, which had always been present throughout the relationship. Indeed the husband admitted that since 2007 he had been paying escorts, and using drugs and that the wife was well aware of this, and to the extent that he sought help through rehab clinics whilst they were together, she acknowledged that he was trying to get help. The argument went that the wife could not pick and choose what aspects or character traits that her husband had to suit her claims. She could not benefit from his business acumen, without acknowledging any of his perhaps less conventional habits.
The law on add back
The leading authorities on ‘add back’ are Norris v Norris [2002] EWHC 2996 (Fam), [2003] 1 FLR 1142 and Vaughan v Vaughan [2007] EWCA Civ 1085, [2008], 1 FLR 1108.
To summarise, they say that the court must consider the following:
- extent,
- timing, and
- nature of the ‘wanton dissipation’,
then set that against a general assessment of the overspending party before then, considering ‘fairness’ in the context of what if any ‘add back’ there should be but noting that there has to be some reality check – you can’t add back money that is no longer there.
Sex, Drugs and S.25 (g)
In MAP v MFP, Moor J took the approach that it is a ‘conduct issue’ and therefore considered within the Matrimonial Causes Act 1973 S.25(g) namely, “conduct that it would in the opinion of the court be inequitable to disregard“.
In Miller/McFarlane, Baroness Hale had determined that such conduct, to come within S.25 (g), had to be ‘gross and obvious’. Furthermore, in Martin v Martin [1976] Fam 335, Cairns LJ said, ‘A spouse cannot be allowed to fritter away the assets by extravagant living or reckless speculation and then to claim as great a share of what was left as he would have been entitled to if he had behaved reasonably.’
A ‘wanton dissipation of the assets’
In applying the authorities to the husband in this case, Moor J decided that not even the money spent on the drugs or prostitutes satisfied the test for ‘conduct’ to the extent that such monies were not to be added back. Moor J said:
“… a spouse must take his or her partner as he or she finds them. Many very successful people are flawed. This is true of this Husband. I have decided that it would be wrong to allow the Wife to take advantage of the Husband’s great abilities that enabled him to make such a success of the company while not taking the financial hit from his personality flaw that led to his cocaine addiction and his inability to rid himself of the habit. It may have been morally culpable. Overall, it was irresponsible. But I find that this was not deliberate or wanton dissipation. It would be wrong to add it back.” ?
When will add back apply?
It seems only in very limited circumstances. Firstly, where needs are already met. Secondly, only when the expenditure in question has been to wantonly dissipate assets, such that the spouse at fault has done so to frustrate the matrimonial claims. Thirdly, in situations where there has been a ‘course of dealings’ during the marriage whereby the spouse’s personality and spending habits have been part of their personality, good and bad – then you take as you find.
It is worth noting that add back can apply to the costs spent in the litigation itself. In McCartney v McCartney [2008] EWHC 401 (Fam) Sir Paul McCartney successfully applied for add back to the assets of Heather Mills in relation to the costs spent by her on pursuing ‘futile’ claims against him in certain respects. He succeeded in so far as the sum of £500,000 was added back ‘to represent completely unreasonable expenditure over the 15 month period‘ [para 179]. Perhaps one of the lesser known features of that case, where another form of add back made more waves in the press of an altogether more ‘refreshing’ nature.
Take a vow
So, the ‘conduct’ has to be truly exceptional and not just unusual or morally suspect. The courts are really holding couples to the vows they made when their journey began but perhaps when considering those vows there should be a new one added – ‘through addiction or affliction’.
Contact
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If you would like more details on this or want to discuss your family law matter, please do not hesitate to contact James, Frank, or Evelyn. Paradigm Family Law offers a free initial consultation with a top rated divorce lawyer and our fixed fee solutions cover financial proceedings from start to finish. You can call us on 01904 217225 or email us to [email protected].
