Will my spouse / partner’s bad behaviour be taken into account by the court when it looks at our finances?
In the vast majority of separations the behaviour of one or both parties is something that will often be raised as a factor that should have a bearing on the outcome of proceedings. Whether it will actually be taken into account by the court usually depends on two things:
- the particular ‘behaviour’ being considered; and
- the type of proceedings the parties are engaged in.
In this article we are going to focus on looking at ‘behaviour’ in the context of financial proceedings whether between a husband and wife on divorce or civil partners on dissolution of their civil partnership. In both of these types of cases there is likely to be at least some element of each parties’ behaviour that the other takes issue with, after all these couples are separating. For such behaviour to be taken into account by the court when determining the appropriate division of the couple’s financial resources, it must be of a level that it would be ‘inequitable for the court to disregard’. But what does this actually mean in reality?
Where the behaviour in question is at the most serious of levels, such as in one case where one spouse had attempted to murder the other, there is simply no question that such behaviour should and will have an impact on the appropriate division of the parties’ financial resources. Thankfully, however, such extremely serious behaviour is rare. So what about the vast majority of cases, where one (or potentially even both spouses / civil partners) have acted questionably? Well in short, it is a subjective decision for the Judge. There is, however, some guidance within the existing case law to give us some indications of the types of things Judges will consider to be ‘inequitable for the Court to disregard’. These broadly fall within three categories:
- Non-financial conduct – This is any behaviour that does not relate directly to financial matters. By way of an example, for many even the idea of their spouse having an affair or even starting a new relationship is totally unforgivable. Whilst morally reprehensible, this is not something that the court will take into account when considering the appropriate division of a couple’s finances. Likewise, the fact that someone has acted unkindly or ignored their spouse will not be sufficient. Whilst such behaviour can and often does form the basis of a divorce or dissolution petition, it is extremely unusual for any such behaviours to be considered significantly serious for the court to factor them into its decisions about how financial resources should be divided. At the time of writing the reported cases in this area include just four occasions where the court has taken such behaviour into account, ie where one spouse attempted to murder the other, where one spouse stabbed the other causing serious life changing injuries, where one spouse attacked the other with a razor again causing serious life changing injuries and where one spouse repeatedly sexually assaulted the parties’ children.
- Financial conduct – This is where a party has acted in a way that damages the financial position of the parties or wastes their assets. Examples of this include, where one spouse / civil partner has stopped working without good reason, engaged in reckless overspending, committed fraud (most commonly by extending or altering a mortgage product without the agreement of their spouse / civil partner). In these cases as there is a direct link between the behaviour and the financial implications of the same, it is often easier for a Judge to penalise the wrongdoer. This is most commonly done by making them responsible for the additional liability incurred as a result of their behaviour or by adding back assets that have been spent / wasted to that persons share of the assets.
- Litigation conduct – This is where one party acts in a way that disregards the court’s authority. Most commonly through deliberate and / or repeated breaches of the court’s orders. In these instances, Judges are most likely to punish the wrongdoer by making them pay the additional legal costs that have been incurred to ensure their compliance. It is also possible that the wrongdoer could be found to be in contempt of court. Once rare, contempt proceedings are now becoming more commonplace in family proceedings, as in recent years Judges have committed to take a tough line against those who seek to gain an advantage by not adhering to or respecting the court’s orders. If found to be in contempt of court punishments can include an unlimited fine or (in the worst instances) a period of imprisonment of up to two years.
Few cases reach the very worrying behaviour displayed in the recent case of Moutreuil v Andreewitch. In that case (which actually involved an unmarried couple), Mr Andreewitch had already had an order made against him freezing one of the bank accounts in his name as there was a dispute between the parties about who the funds in the account belonged to and the court considered that the funds needed to be safeguarded until that issue was determined. Despite this, Mr Andreewitch made over 560 unauthorised withdrawals from the frozen account, in clear contravention of the court’s freezing order. Mr Andreewitch sought to argue that the withdrawals were necessary in order to pay for the family’s spending but this was not borne out by the evidence, which clearly showed he and Ms Moutreuil had other funds which could and should have been used. As a result the Judge was highly critical of Mr Andreewitch’s conduct commenting that:
‘the repeated pillage of the account deprived the family of the funds which had been earmarked for, among other things, much-needed family therapy.’
before sentencing him to six months imprisonment, albeit suspended for 12 months.
Are there any steps that I can take to protect assets from being squandered by my spouse?
Prevention is always better than cure and the same is true when it comes to protecting your financial position. The preventative steps that can be taken will depend on the particular assets that you and your spouse have and how these are legally owned. For example, if your family home is registered in the sole name of your spouse then it is possible to register a notice on the title to make everyone aware of your rights and interests in the same. Likewise it is possible to change the signature requirements on payments from joint bank accounts to ensure that your authorisation (as well as that of your spouse) is required before any transactions / withdrawals are made. The court also has powers to freeze bank accounts so they cannot be used. Similarly the court has the ability to undo transactions if it considers that one spouse / civil partner has tried to sell off assets under market value or transfer assets to third parties unreasonably.
If you believe that your spouse is squandering your matrimonial assets it is vital that you act quickly and take specific advice on the best steps to be taken in your particular circumstances.
If you are concerned about your situation and would like some further advice about what steps can be taken to protect your assets, then please contact a member of our specialist family team who will be able to assist you.