Irwin Mitchell | The Price of Deceit

It's not unusual for people to have extra-marital affairs. It's tough for someone whose spouse has been unfaithful to hear that their adultery won't impact the financial award that a court would make on divorce.

That's the advice that family lawyers generally have to give, because it's rare for the courts to take into account someone's behaviour when deciding how to divide up assets. It happens sometimes where the behaviour has had a direct and deliberate financial impact, such as if a party has tried to hide significant assets, or has recklessly gambled away large portions of the family funds; and it can also happen where the conduct is extremely serious, such as attempted murder. The measure the court applies is "conduct that is so egregious that it would be inequitable to disregard it".

In a recent case, the court found that there had been such egregious behaviour by a wife who had allowed her husband to believe that the child born in 2011 was his son. In fact she had had an affair at the time of the child's conception. In 2018 after the parties separated the husband heard rumours and sought a DNA test which showed that the child was not his.

The husband and wife were both from extremely wealthy Indian families – each said the other's family was worth about £2 billion – and the standard of living during the marriage had been extraordinarily high.

When the husband discovered that he wasn't the father of the child, he brought numerous different claims against the wife, including suing her for deceit and seeking damages for the money he'd spent on the child in the civil court. He spent £6.5m on legal costs. The judge observed that he knew of no other case where the breakdown of a marriage had engendered litigation on the scale witnessed in this case.

Orders were made relating to the child and the communication of his true paternity to him. Ultimately it was in his interests to know the truth, but how and when it was communicated had to be carefully handled. The biological father of the child had said he wanted nothing to do with him, but the husband who had brought the child up as his own wanted to maintain his relationship with him. This ongoing paternal relationship didn't sit well with him seeking to claim back what he had spent on the child, and those civil claims weren't pursued to a conclusion.

The judge in the Family Court looking at the financial position between the parties was faced not only with the wife's conduct, but with an extremely complex financial position. The husband's wealth was very fluid as between him and other family members, it comprised companies, trusts and properties all over the world. It was very difficult for the judge to reach conclusions as to the value and extent of the husband's share in many of these assets. This wasn't assisted by the fact that, as the judge found, the husband's disclosure had been seriously deficient and he also had undisclosed wealth. The judge therefore had to form his own conclusions informed by such evidence as there was.

How should the judge quantify the wife's conduct financially? There were no previous cases which offered guidance, and the judge didn't accept the husband's suggestion that any award to the wife should be reduced by half because the child was conceived halfway through the marriage. He said that trying to reflect emotional damage in financial terms would be like "comparing apples and pears".

However, the husband's non-disclosure provided the answer. The judge found that the husband's behaviour within the financial proceedings shouldn't be disregarded either, and he effectively set one party's behaviour off against the other. He made an award based on an equal sharing of the matrimonial assets that he'd been able to identify; the result was the wife received £64 million.

In addition, the court held that the husband, who was the child's psychological (though not biological) parent, should pay his school fees and all associated educational expenses, and the sum of £60,000 per year. It would be up to the wife to obtain whatever financial assistance she sought from the child's biological father.

Had the husband's conduct been exemplary, it's very difficult to say how the judge would have quantified the wife's conduct. It remains to be seen how judges will grapple with this issue in the future.

Published: June 2020

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June 2020

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The Price of Deceit

June 2020

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The Price of Deceit

June 2020

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