Can a spouse's 'bad' behaviour affect a divorce settlement?

Behaviour is frequently relevant at the start of many divorces because, under current law (section 1 ?of the Matrimonial Causes Act 1973), any person wishing to issue divorce proceedings without a period of at least ?two years’ separation from their spouse must use the other’s behaviour (adultery ?or unreasonable behaviour) ?to issue their divorce petition.  

When addressing how finances are resolved, the ?link with bad behaviour is set out in in section 25 of the Act.  However, it is only in rare cases that behaviour will affect a financial settlement.  

Statutory test

Section 25(2) of the Act provides that in deciding whether and how to exercise its powers to make financial provision or property adjustment orders, ?the court is to have regard to ‘all the circumstances of the case’.  The Act then draws particular reference at subsection (g) to ‘the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it’.  What does that mean in practice?    

The starting point is that ?to be relevant, conduct should be ‘both obvious and gross’ (Wachtel v Wachtel [1973] ). Miller v Miller; McFarlane v McFarlane [2006] remains the leading case on this issue, when the House of Lords unanimously rejected a ‘conduct’ argument. Baroness Hale commented that the court cannot apportion blame by picking over the events of a marriage, ‘save in the most obvious and gross cases’.

In the same year, Mr Justice Burton considered the issue ?of conduct in S v S (Non-Matrimonial Property: Conduct) [2006], observing that conduct must be truly exceptional and referring to a sense of ‘justice’.  

This limited opportunity for behaviour to affect a financial settlement accords with the overriding objective of the court to deal with cases justly, including saving expense and ensuring proportionality, as per part 1 of the Family Procedure Rules 2010.

Once the court has deemed conduct to be relevant, it can enhance the financial position ?of the ‘innocent’ party, or reduce or eliminate the entitlement ?of the ‘guilty’ party. Substantial increases and decreases to a person’s entitlement can be made without particular justification, in the absence ?of any real guidance. Even ?when they are already in a bad position, the court can decide ?to reduce or ignore the financial needs of the badly behaved, ?due to their conduct.

Relevant conduct

To assist practitioners in advising, the following are examples of behaviour which have been found to affect a financial settlement:

• Violence: Armstrong v Armstrong (1974) and Bateman v Bateman [1979] involved shooting or stabbing a spouse;

• Behaviour affecting a spouse’s ability to work: ?In Jones (MA) v Jones (W) [1976], the husband attacked his wife, causing injuries affecting her earning capacity;

• Immoral, criminal behaviour: In S v S (1982) the husband committed incest with children of the family; in Al-Khatib v Masry [2001] ?the husband abducted ?the children;

• Criminal activity aimed at killing a spouse: In Kyte v Kyte [1988] the wife facilitated ?the husband’s attempted suicide; in Evans v Evans [1989] the wife incited others to murder her husband;

• Behaviour with serious financial consequences: ?In K v K (Conduct) [1990], ?the husband’s serious drink problem and ‘disagreeable’ behaviour led to the forced sale of the matrimonial home and serious financial consequences for the ?wife; and

• Deception: In F v F [2007], ?the husband’s deception of the wife and the court (which was in one sense litigation conduct) was found to be so extreme that it had become conduct which it would be inequitable to disregard. ?The wife could not be fairly compensated by a costs order alone.

Finally, reference should be made to bad behaviour by a spouse during the course of the financial proceedings themselves, for example, hiding assets or ?lying about their financial circumstances (as in the recently reported cases of Gohil v Gohil and Sharland v Sharland [2015]). 

This litigation conduct is a different element and therefore addressed differently by the courts. It will not impact on the financial settlement. Instead, ?the courts’ usual approach is to make costs orders. Otherwise, they can make adverse inferences or even set aside ?a decision, whereupon the financial settlement must be considered afresh.

Claire Reid is a senior family and divorce lawyer at Slater and Gordon @SlaterGordonUK www.slatergordon.co.uk