“a spouse cannot be allowed to fritter away the assets by extravagant living or reckless speculation and then to claim as great a share of what was left as he would have been entitled to had he behaved reasonably.”

Where Bennett J added back £250,000 of overspend to the husband’s assets.

“Why should the wife be disadvantaged in the split of the assets by the husband’s reckless expenditure? A spouse can, of course, spend his or her money as he or she chooses, but it is only fair to add back into that spouse’s assets the amount by which he or she recklessly depletes the assets and thus potentially disadvantages the other spouse within ancillary relief proceedings” (at para 77).

Where the husband had dissipated wealth by gambling. The Court of Appeal considered the circumstances in which one party’s dissipation of assets should be taken into consideration by the courts and ultimately determined that £100,000 should be added back. However, Wilson LJ highlighted that caution should be adopted before the court adds back to the asset schedule money that no longer exists and stated that there must be “clear evidence of dissipation (in which there is a wanton element)”.

There is therefore a two-stage test; (i) there must be evidence of dissipation, and (ii) the dissipation must have had a wanton element.

“For the avoidance of doubt I make clear that the wife has not discharged the burden of proving any alienation of matrimonial funds by the husband with the intention of defeating or reducing her claim, nor of wanton and reckless behaviour... ”

The wife alleged that the husband was spending £6,000 a week on drugs (cocaine) and further large sums on prostitution. Moor J held that whilst the husband’s spending, particularly on drugs and prostitution, was morally culpable, it was not deliberate or wanton dissipation within the meaning formulated by the authorities. He had not overspent to reduce the wife’s claim. It was down to his flawed character. A spouse had to take his or her partner as he or she found them. He said the following:

"Many very successful people are flawed. This is true of this husband. I have decided that it would be wrong to allow the wife to take advantage of the husband’s great abilities that enabled him to make such a success of the company while not taking the financial hit from his personality flaw that led to his cocaine addiction and his inability to rid himself of the habit. It may have been morally culpable. Overall, it was irresponsible. But I find that this was not deliberate or wanton dissipation.”

Where the court has taken a more robust approach to add back in the context of over-spending on legal costs.

The court considered whether, in allowing the husband to bring up a child in the belief that he was the natural father (when he was not), the wife was guilty of conduct that it was inequitable to disregard. Cohen J concluded that her actions did amount to conduct so egregious that it would be inequitable to disregard, but how it should be taken into account was a much more difficult issue. He accepted that it could have the effect of reducing the wife’s award and also that reflecting in financial terms the cost of the emotional damage to the husband of the sort inflicted by the wife was like comparing apples and pears. Ultimately, he found that the husband’s disclosure had been seriously deficient and that there were undisclosed, unquantified assets. He determined that he would not try to put a monetary figure on the husband’s undisclosed assets, but equally would not reduce the wife’s award by giving her a lower percentage of the disclosed assets as to do so would be a double jeopardy.

The Judge found that by communicating with the founder of the company for whom the husband worked in an effort to prevent or delay the release of units to the husband, the wife was guilty of gross and obvious conduct which the court was entitled to take into account. The wife’s conduct was a factor considered by the judge when assessing the wife’s needs.

Rule 28.3(7) sets out the factors which the court must take into account when considering whether the conduct of a party during the proceedings justifies a departure from the general rule. Those factors include failure to comply with the FPR or court orders, unreasonably pursuing particular issues, or any other aspect of a party’s conduct in relation to proceedings which the court considers relevant.

In which the husband was penalised for unreasonably pursuing a case that a prenuptial agreement should be disregarded and DP v EP (conduct: economic abuse: needs) [2023] EWFC 6, in which the judge found the wife’s presentation of her case to be dishonest. In the latter case, even though the wife had already been penalised for her conduct during the marriage by the unequal division of the assets in the husband’s favour, the judge also made an order for costs against her.

“The conduct may be so serious that it prevents the court from satisfying both parties’ needs. If so, the court must be entitled to prioritise the party who has not been guilty of such conduct.”

The Court of Appeal held that it was not unfair for the party who is guilty of misconduct ultimately to receive a sum less than his or her needs would otherwise demand.

Incurring excessive costs