Legal Update
21 October 2020

Conduct in financial remedy proceedings: does deception produce ‘the gasp factor’?

An analysis of the recent case of FRB v DCA [No. 2] [2020] EWHC 754 (Fam) in light of the applicable law and authorities on conduct.  Cohen J found that the wife’s actions in deceiving the husband about whether the child was in effect his biological child would amount to conduct ‘so egregious that it would be inequitable to disregard’, but refused to reduce the wife’s award in light of the husband’s seriously deficient disclosure.  The husband’s litigation conduct and the wife’s reprehensible personal conduct therefore cancelled each other out. This begs the question of whether, had the husband fully complied with his disclosure obligations, her award would have been effectively reduced as a result of her deception.  The case itself featured numerous complexities and was heard over the course of 15 days (the husband having instructed 2 QCs). Cohen J described the dispute as a ‘gladiatorial combat’ and observed ‘I know of no other case where the breakdown of a marriage has engendered litigation on the scale witnessed in this case’.  Facts in brief: both parties came from extremely wealthy Indian families, spending approximately £10m per year and flying around the world in private jets. At the time of the financial remedy proceedings, it was known that the child thought to be the child of the marriage was in fact another man’s child. The parties had married in 2003 and the child had been born in 2011. After the marriage broke down, the husband heard a rumour that the wife had had an affair. A paternity test was conducted in 2018 and confirmed that the husband was not the child’s biological father. The wife admitted to the liaison, but claimed that she had no suspicions that the child was anything other than the husband’s biological father.  The husband pleaded that the wife’s deception amounted to conduct that would be inequitable to disregard under section 25(2)(g) MCA 1973. The husband argued that the wife’s share to the matrimonial assets should be reduced by 50%, given that the child had been conceived mid-way through the marriage and, had he known at the time, he would have terminated the relationship.  Section 25(2)(g) MCA 1973 requires the court to consider the conduct of each party, if the conduct is such that it would be inequitable to disregard it. This section was introduced by reason of MFPA 1984.  Prior to this, the court was required to exercise its powers to grant financial remedies  'as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other'. The guidance in Wachtel v Wachtel [1973] 1 All ER 829 provided that, short of the conduct being 'both obvious and gross', the court should not decline to award any financial support or to reduce its order for financial provision merely because of what was formerly regarded as guilt or blame.  In Miller / McFarlane [2006] UKHL 24, Lady Hale endorsed the Wachtel guidelines and stated that this approach is ‘not only just, it is also the only practicable one. It is simply not possible for any outsider to pick over the events of a marriage and decide who was the more to blame for what went wrong, save in the most obvious and gross cases.’  What, then, are the most ‘obvious and gross cases’? Since the introduction of section 25(2)(g), the courts heard a flurry of cases which have ranged from the ‘standard’ bitter divorce to the utterly unbelievable. Some examples include: attempted murder resulting in 12 years’ imprisonment (H v H (financial relief: attempted murder as conduct) [2005] EWHC 2911 (Fam)), a knife attack disabling the wife from working (Jones v Jones [1976] Fam 8), GBH and attempted rape (H v H (financial provision: conduct) [1994] 2 FLR 801), ‘grave marital misconduct’ which included keeping an elderly husband in a smaller part of the house whilst cohabiting with her lover, coercing the husband into transferring significant sums of money, coupled with the refusal to accept a generous open proposal (Clark v Clark [1999] 2 FLR 498).  The expression ‘gasp factor’ derives from the case of S v S (non-matrimonial property: conduct) [2007] 1 FLR 1496, where the court heard about a number of significant incidents of domestic violence. In one of these incidents, the husband had chased the wife up to bathroom, where she had fallen against the shower rail, cutting her head; moments earlier she had smashed his grandfather clock (who has not come across a dispute about the grandfather clock?). The judge concluded that the sad history of the marriage may leave him with what might be called a 'gulp gasp? factor' arising out of what each of the parties did to each other, verbally and physically. He was not, however, left with the ‘gasp factor’ as eloquently argued by Mr Mostyn QC (as he then was).  Against the backdrop of the above extreme examples on conduct, it is surprising that Cohen J would have been prepared to accept the husband’s argument, were it not for the fact that the husband himself had engaged in litigation misconduct. Cohen J had accepted that the wife did not know she had carried another man’s child, but found it impossible to believe that the thought had never crossed her mind. His Lordship accepted that the wife ‘was very anxious to believe that the husband was the father and as time went on put the alternative to the back of her mind’. Cohen J concluded that the consequences of her deception on the husband had been ‘devastating’, but did not reduce her award because to do so would have been a ‘double jeopardy’ in light of the husband’s conduct.  Courts have historically discouraged parties from relying on conduct, only accepting the argument in the most extreme cases. It is hard to reconcile this approach with Cohen J’s analysis, especially because the wife’s reprehensible personal conduct did not have any significant financial consequences on the husband.