DP v EP (Conduct; Economic Abuse; Needs)
| Jurisdiction | England & Wales |
| Judge | Madeleine Reardon |
| Judgment Date | 10 January 2023 |
| Neutral Citation | [2023] EWFC 6 |
| Court | Family Court |
[2023] EWFC 6
HER HONOUR JUDGE Madeleine Reardon
IN THE FINANCIAL REMEDIES COURT
SITTING AT THE CENTRAL FAMILY COURT
Ms Harris for the applicant
Mr Lewis for the respondent
Hearing dates: 28 – 30 September 2022, 14 October 2022, 14 November 2022
Costs decision: 10 January 2023
Introduction
This is my judgment at the conclusion of a final hearing in financial remedy proceedings.
The applicant wife is a property consultant. She is 49. The respondent husband is a builder. He is 59. They married in 1994 and separated in 2018. Between them they have three children, all now adults.
For convenience I intend to refer to “the marriage,” and to the parties as “H” and “W”, notwithstanding the background which, as I shall explain, is a little unusual.
The proceedings began conventionally in 2019 with a petition for divorce, upon which decree nisi was granted in March 2020. Subsequently it transpired that at the date of the parties' marriage W was married to another man. This led to an application by H to rescind the decree, expert evidence from the country where W's first marriage had taken place, separate litigation in that country; and ultimately, in June 2022, an agreement that W would not defend H's application for a nullity order. In the meantime the financial remedy proceedings suffered a considerable amount of delay.
It is a significant feature of the case and of the background that H is (or has been until quite recently 1) functionally illiterate. For the majority of his adult life, therefore, he has had to rely on others to support him with many aspects of day to day life which most people take for granted. It is not disputed that for the duration of the parties' cohabiting relationship it was W who undertook that role.
I should make it clear that H's illiteracy has not prevented him from building up a successful career, and that the income he has generated has contributed to the parties' ability to provide a comfortable lifestyle for themselves and their children.
The proceedings
W's application for a financial remedy order was issued in November 2019. It became apparent during the course of this hearing that because the focus of the parties for much of the past three years had been on the complex and hotly-contested matrimonial proceedings, most of the preparation for this hearing had been shoehorned into the window between the hearing on 9.6.22, when those proceedings were compromised, and this hearing in late September. H's side of the case was particularly difficult to prepare in such a limited timeframe because of the challenges he faces in getting to grips with the issues without being able to read any of the documentation for himself.
The hearing was listed with a time estimate of three days. On the morning of the third day, when I was expecting to hear submissions, the parties informed me that H's legal team had discovered, on reviewing some of W's bank statements, that there was a significant discrepancy between what those statements purported to show and W's written and oral evidence. After hearing submissions I determined that notwithstanding the fact that this discrepancy could and should have been spotted
by H's legal advisors well before the hearing, fairness demanded that the evidence be re-opened and the issue in question explored. H's vulnerabilities, and the fact that he would not have been able to spot the discrepancy himself, played a significant part in that decisionThe need to recall W on this issue meant that I was unable to complete the hearing within its listed time slot, and this judgment has had to be reserved.
Summary of the issues
From one perspective this case could be described, and has been by W, as a straightforward “needs” case. The identified capital assets are relatively modest, totalling something in the region of £1.46m. Those funds will inevitably be required to re-house both parties.
Moreover, the parties' children are adults, both parties are working, and neither has any particular health or social disadvantage. In other words, there is little to choose between them in terms of need. So this ought to be a case, all else being equal, where the “needs” and “sharing” principles are aligned and point unerringly towards an equal division of capital and a clean break.
H disagrees. His case is that throughout the relationship W was leading what he describes as a “double life”. He believes that, having knowingly entered into a bigamous marriage with him, W conceived a plan to defraud him and ultimately to leave him, having enriched herself at his expense. In addition to making allegations of sexual infidelity, which do not directly concern this court (I record for completeness that W makes similar allegations against him), H says that throughout the marriage W was siphoning off joint funds and using them to accrue assets that he knew nothing about. He says that his illiteracy permitted W to act in this way, and that she exploited his vulnerability in this regard.
H is therefore running:
a. An “add-back” case (that certain funds which H says W has either recklessly or deliberately dissipated from the parties' resources should be added back into the matrimonial pot before distribution);
b. A case that it is more likely than not that W has undisclosed assets, derived from the funds which he says she has diverted and hidden over the course of the relationship;
c. A “conduct” case (ie that W's conduct in and of itself is something that it would be inequitable to disregard under MCA 1973, s 25(2)(g)); to supplement his argument on this point, H says that W's conduct amounted to economic abuse within the definition contained in the Domestic Abuse Act 2021, s 1(4).
These aspects of H's case inevitably overlap. They lead H to propose that out of the available and identifiable assets, he should receive (on his figures 2) £919,898 and W £528,885, resulting in a capital division in his favour of 63%:37%.
W denies H's allegations entirely. In her Form E she alleged that H had perpetrated emotional abuse towards her during the marriage, although she is not running a “conduct” case within these proceedings. She says that because of H's behaviour towards her, in particular during a period when she was unwell abroad in 2008/2009, she considered the marriage to be over many years before the separation. She accepts that from time to time during the parties' relationship she undertook financial transactions which she did not inform H about, but says that this was because the parties managed
their finances independently, and that H also engaged in financial ventures without informing her (although she does not specify what these were)W's case, broadly speaking, is that the matrimonial pot should be divided equally. In fact, because she agrees that the parties should each retain their business assets and she should bear some of her own debt, her proposal results in a 55%:45% division of the assets in H's favour. On her figures she would leave the marriage with £663,920 and H with £795,330.
The parties agree that neither should pay spousal maintenance to the other, and there should be a clean break.
Background
H is a national of [country A] who has lived in the UK since the late 1970s. W is from [country B], and has lived in the UK since 1990. The parties met in the early 1990s when both were working for the same employer. They cohabited from 1992 and married on 5 February 1994. It is agreed that at the outset of the marriage neither had much in the way of assets, and therefore that the entirety of the asset base was accrued during the course of the relationship.
At a hearing before Recorder Chandler KC on 9.6.22 it was determined by consent that the marriage was void ab initio because at the time it took place W was married to someone else. I am conscious that the factual background to this is highly contentious, and that no findings have been made because the matter was compromised. What does not seem to be disputed is that W's marriage took place when she was just 16, after she had been made pregnant by a man significantly older than her. She separated from her husband after just over a year of marriage, when she and her family moved to the UK. The marriage was annulled in [country B] in 2021.
Between them the parties had three children: H's daughter from a previous relationship, W's daughter from her marriage in [country B], and a third daughter born to both parties in 1995. All were treated as children of the marriage. They are now all well into adulthood and fully independent.
The parties gave very different accounts of the nature of their relationship. H says that although there were some difficulties from time to time, the parties remained in a cohabiting and meaningful relationship until 2018. W says that from early in the marriage she considered that the difficulties were insuperable and that she informed H of this in 2009; thereafter, she says, although they continued to share a home they were effectively separated and no longer considered themselves a couple.
The parties separated in November 2018. H has remained living in the former family home, a two-bedroom flat in North London. W is currently living in a property jointly owned by the parties that was previously their family home.
The law
The fact-finding process
Factual disputes are resolved by the financial remedies court on the balance of probabilities. The burden of proving that an allegation is true lies with the party making the allegation. Findings must be based on evidence, including inferences that can properly be drawn from the evidence, and not on suspicion or speculation. The law operates a binary system and may only find either...
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Conduct In Matrimonial Finance
...of influencing the outcome of financial proceedings. In a recent judgment by HHJ Reardon (DP v EP (Conduct: Economic Abuse; Needs) [2023] EWFC 6) it was held that economic abuse, as defined in the newly enacted Domestic Abuse Act 2021, can amount to conduct for the purpose of determining fi......