MF v SF

In financial remedy proceedings, a notional reattribution or add-back requires clear evidence of dissipation with a wanton element. Suspicion, disputed expenditure and unwise financial decisions are insufficient without proof that resources were deliberately dissipated. Conduct may justify an adjustment to an otherwise equal division where it would be inequitable to disregard its financial consequences. Costs may be ordered despite the general no-order rule where a party’s conduct in the proceedings makes that appropriate, including unreasonable pursuit of allegations, disproportionate litigation and rejection of a reasonable open offer.

The wife applied for financial remedies following the parties’ separation. The principal disputes concerned the husband’s redundancy, loans allegedly owed to a company, the value of his shares in ABC 2011 Ltd, alleged dissipation of matrimonial resources, litigation conduct and the parties’ future income and housing needs.

The court rejected the wife’s allegations of collusion and found that the husband’s shares were to be valued by reference to net assets. It then determined whether any sum should be added back for alleged dissipation, whether conduct justified adjustments to an equal division, and what capital, pension-sharing and maintenance orders were fair.

1. Resources and valuation. The husband’s redundancy was genuine, the loans remained repayable, and the shares in ABC 2011 Ltd were to be valued by reference to net asset values. Their value was assessed at no more than £1.7 million. The court accepted that the current offer for the shares should be accepted expeditiously.
2. Add-back. Applying the approach in Vaughan v Vaughan [2008] 1 FLR 1108, the court asked whether there was clear evidence of dissipation containing a wanton element. The wife’s schedule did not establish dissipation. Expenditure on the husband’s business, furniture and family-related matters was not shown to be excessive or wanton. No sum was added back.
3. Conduct and costs. The wife’s rejection of an earlier share-purchase offer caused a loss to the family and it would be inequitable to disregard that conduct. Her pursuit of speculative and unfounded allegations also produced a grossly disproportionate costs disparity. Applying Rule 28.3 of the Family Procedure Rules 2010, the court ordered an adjustment in the husband’s favour, while substantially discounting the sums sought so as not to create an excessive disparity.
4. Outcome. The wife received net capital resources of approximately £900,000 before pension sharing, the husband just over £1.3 million, and the parties received equal pension shares. The wife was awarded maintenance of £50,000 annually initially, reducing by £5,000 after six months, with further reductions linked to earnings. She was also to receive 25% of any net bonus above £15,000, subject to a £50,000 maximum. Maintenance was to terminate in 2024, with a section 28(1A) bar preventing extension.

First-instance determination of the wife’s financial remedy application. No prior decision is stated in the judgment.