Her Honour Judge Vincent is known for publishing her judgments. Whether they relate to children disputes, child protection and care proceedings or – as here in JB v MB [2020] EWFC B69 – financial provision on divorce, they are always clearly written and easy to understand. In fact, even though we have summarised it below with our own comments, the judgement is worth reading yourself. You’ll find it here.
As Her Honour is a circuit judge rather than a higher-level judge, her decisions do not create legal precedent – the rules and principles that higher courts impose on lower courts. That doesn’t mean that judgments at this level are not worth reading. They’re excellent examples of the kinds of decisions made in local courts around the country and models of clarity. The publication of a judgment in a financial remedy case is also very useful. This is an area where judges have to make an order that is objectively fair, but where a number of different outcomes would fall into the range of fairness meaning that judges have a wide discretion. The principles that guide them are drawn from a number of important cases, but these cases involved wealthy (sometimes extremely wealthy) people because those are the only people who can afford to appeal a case to the higher courts. We therefore see relatively few lower level financial remedy cases involving ‘average’ assets.
JB v MB involved a couple aged 67 (husband) and 59 (wife) with a long marriage that that has ended very unhappily. The judge notes that ‘both parties reflect on the thirty years or so they were together with bitterness and regret.’ The marriage ended following an assault by the wife on the husband, and since that time the wife lived with her mother (who since died) and stepfather while the husband remained in the former matrimonial home. The issue was what financial remedy order should be made.
Section 25 of the Matrimonial Causes Act 1973 sets out the factors courts have to take into account in dividing the assets. Here, the following factors were relevant:
- The parties’ ages: the husband had retired and was unable to work due to ill health; and the wife was ill with alcohol-induced liver cirrhosis and a life expectancy of only a few years.
- The parties’ children were grown up so the court did not have to consider them.
- The parties’ needs: each party needed somewhere to live and enough money to live on.
- The parties’ contributions: this was a long marriage and the court makes no distinction between the contributions of a breadwinner and a homemaker, so each party was deemed to have made an equal contribution, but the wife’s contribution was reduced by the fact that she had dissipated a large amount of money
- The parties’ conduct: the wife’s misconduct in dissipating or hiding assets was relevant
Judge Vincent goes through the factors explicitly, explaining what effect they have.
The starting point of any divorce after a long marriage is equal division of the assets. In this case, there were a lot of debts that also needed to be taken into account. If a party needs more than half of the net assets, then they would usually receive what they need.
In this case, the wife had a reduced need by virtue of a short life expectancy. That doesn’t mean a person who is terminally ill should be limited to only their needs, because they are entitled to share in any assets leftover once both parties’ needs have been met. However, she had also behaved badly, in a way that ‘it would be inequitable to disregard’. That’s not a reference to the domestic abuse because in this jurisdiction almost all forms of domestic abuse do not reach the level required to be taken into account in distributing the assets: the leading cases where abuse was relevant involved attempted murder by one spouse of the other, so that is a very high standard.
However, we treat financial misconduct differently. The wife had refused to give full and frank evidence about her assets and what had happened to a lot of the parties’ money. It appeared that she had snaffled tens of thousands of pounds of money inherited by the husband and probably used it to refurbish her mother’s and stepfather’s home. She had failed to use the husband’s earnings to pay into his pension while telling the husband that she had (she managed all their finances), so his pension was less than expected. She had an undeclared source of income. She had taken out a secret mortgage on their joint home. She had run up significant debts, some of which the husband was having to pay. The judge estimated she had reduced the husband’s assets by £160,000. That is the amount after the judge had taken into account that some of what she had dissipated was her own money.
In deciding what effect this should have on the financial outcome, HHJ Vincent found that the wife’s needs for accommodation for the duration of her remaining life would be met either by the state by way of a care home or by her stepfather with whom she had been living, and that she had an income from benefits and a secret source. She decided to give the wife £160,000 more than she needed as her share of the matrimonial money. She added back the £160,000 that the parties’ should have had, if the wife had not already spent it, and then gave that money to the wife with the husband taking the house instead. But remember, this was the money the wife had actually already spent. It did not actually exist any more. In reality, the wife got no capital.
This process is called adding back. Where someone has hidden, disposed of, or frittered away money, the court can work on the basis that they still have that money (even if they do not) and make it part of their divorce settlement. In this case, the judge decided the husband should have the house and the wife should have the other assets. Unfortunately for the wife, she’d already spent all of those assets.
The husband’s needs were met by the home (giving a 62% split of the assets in his favour) and his pension. The pension – reduced by the wife’s failure to pay into it – only just met his needs. The house was worth £286,000 and while the husband could downsize, this would not free up a great deal of money. In any case, he also had debts and some of these had been run up by the wife.
This is an atypical case in the sense that it is rare for there to be such a high level of asset dissipation in a case where the assets are modest, and thus the amount lost was proportionately vast and could have changed the parties’ lives. For that and other reasons, this makes it a very sad case.
We have a small favour to ask!
The Transparency Project is a registered charity in England & Wales run largely by volunteers who also have full-time jobs. We’re working hard to secure extra funding so that we can keep making family justice clearer for all who use the court and work within it.
We’d be really grateful if you were able to help us by making a small one-off (or regular!) donation through our Just Giving page.
Image: Creative commons GotCredit on flickr
Thanks for reading!