Clark v Clark & Anor

In ancillary relief proceedings, marital misconduct may affect the quantification of an award, while litigation misconduct ordinarily attracts a costs sanction rather than a reduction in financial provision. Where litigation misconduct has wasted substantial assets and costs cannot provide full compensation, the waste may exceptionally be reflected in the substantive award. The court must explain its conclusions, but the statute does not require a rigid calculation of the award absent misconduct followed by a separate cash valuation and deduction for misconduct. On appeal, clear findings of fact and credibility should not be reopened without proper grounds. The judge’s discretion must, however, be exercised consistently with those findings and with the statutory factors.

The parties married after a short relationship. The husband was wealthy and the wife was in serious financial difficulty. The trial judge found that the wife had exercised undue influence, wasted substantial sums, engaged in serious marital misconduct and conducted the litigation unreasonably.

The judge nevertheless awarded her assets and a lump sum substantially exceeding the husband’s final offer. Both parties sought permission to appeal. The wife sought to retain Wellow Park because of her phobias and alleged suicide risk. The husband challenged the reasoning and amount of the award, particularly the failure to reflect the findings of misconduct and the costs wasted by the wife’s refusal of a generous offer.

The central issues were the proper treatment of marital and litigation misconduct under section 25 of the Matrimonial Causes Act 1973, and the extent of appellate intervention.

1. The wife’s appeal was dismissed and the husband’s cross-appeal was allowed. The court substituted an order requiring the transfer of Middlebridge Street and Cornmarket Street to the husband, subject to appropriate adjustment for charges, while the wife retained other assets and received a lump sum of £125,000. There was no order as to costs.

2. The trial judge’s findings of fact, credit and personality were supported by the evidence and could not be reopened on appeal. The fresh evidence did not justify reassessment. The wife’s medical evidence did not establish that retention of Wellow Park was required, and the appellate court was not entitled to substitute its own assessment for the trial judge’s findings.

3. The dominant factor under section 25(2) of the Matrimonial Causes Act 1973 was conduct. The judge had made exceptionally severe findings against the wife, including marital misconduct, financial misconduct during the relationship and litigation misconduct. The award failed to reflect the full rigour of those findings and was therefore the product of manifest error.

4. A distinction should ordinarily be drawn between marital misconduct and litigation misconduct. Marital misconduct may affect the quantification of financial provision. Litigation misconduct should ordinarily be dealt with through costs and not by altering the substantive award. Exceptionally, where litigation misconduct has squandered assets to such an extent that a costs order cannot provide full compensation, the waste may be reflected in the quantification of the award. The court should generally seek to ensure that the party responsible bears the cost of the waste, subject to exceptional mitigating circumstances.

5. The statutory task does not require every judge to calculate a hypothetical award without misconduct, assign a cash value to the misconduct and deduct that sum. Such an approach may sometimes assist, but it is not a universal overlay on section 25. The judge must explain the conclusions reached, without being required to disclose every stage of the reasoning process.

6. The court rejected the trial judge’s assumption that the husband’s unstated generosity or presumed wishes justified an award beyond his litigation offers. Relief had to be determined by the statutory criteria and the proved circumstances, not by speculation about what the husband would have wanted in his heart.

• Court of Appeal (Civil Division): the wife’s appeal was dismissed and the husband’s cross-appeal was allowed. The order below was substituted, with no order as to costs and leave to appeal to the House of Lords refused.
• High Court, Family Division: Mr R Hayward-Smith QC, sitting as a deputy High Court judge, made an ancillary relief order awarding the wife assets and a lump sum exceeding the husband’s final offer.