It is quite common that one party to a financial remedies application on divorce will claim that the bad conduct of the other party should reduce the amount that that party receives.
But such claims rarely succeed, as the conduct has to be of a particularly serious nature to have a bearing upon the outcome of the application.
In a recently decided case, however, the court found both parties ‘guilty’ of bad conduct, and penalised them accordingly. The case stands as a warning to parties of the possible consequences of bad conduct.
The case had a long and complicated history, the original application having been made back in 2011.
But we need not go into the details of the history of the case, or its various complexities. What concerns us here is the conduct of the parties.
We will begin with the wife.
The wife was found to have committed two separate frauds.
The first fraud was that she, or someone acting on her behalf, had forged the husband’s signature to various documents, including a consent order made in 2011 stating that the matrimonial home would be transferred to the wife, and the document transferring the property to her. The consent order was subsequently set aside.
The second fraud was that the wife, who was an accountant at the time, tampered with one of her bank statements that was produced to the court, to suggest that her mother had loaned her a sum of money.
Turning to the husband, he was found to have sent a copy of the court’s judgment in respect of the wife’s first fraud to the professional body that regulates accountants, with the result that the wife lost her job, and suffered financial hardship accordingly. The court had specifically directed that the judgment should not be disclosed to third parties.
So how were the parties penalised for their conduct?
As to the wife, the court found that the husband was the joint owner of the former matrimonial home, and ordered the wife to pay the husband a lump sum of £150,354 in respect of his interest, that sum calculated by reference to the current value of the property (the wife had argued that an earlier value should be used), and disregarding the payments the wife had made in relation to the mortgage and improvements to the property since 2011.
As to the husband, the judge estimated that the wife had lost £10,000 as a result of his conduct. Accordingly, the lump sum payable to him by the wife was reduced by that amount (i.e. the husband would have received £160,354, but for his conduct).
You can read the full judgment in the case here.
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