In a case relating to the division of assets under a pre-nuptial agreement (PNA), the Family Court has ruled that a wife should be allowed to amend her case to formally plead conduct under Section 25(2)(g) of the Matrimonial Causes Act 1973.
It was common ground that the husband was entitled to more than £6.4 million under the PNA. However, the wife alleged that he had taken £2.8 million of her money and £1.4 million from their joint account without her knowledge or approval, and he should therefore be treated as having already received £4.2 million of his entitlement under the PNA. She also claimed that he had fabricated three emails with the deliberate intention of misleading her and the Court in respect of his assertion that she had known about and consented to one of the transfers.
The order made by the Court at the First Appointment had recorded that the wife was not advancing a case relying on allegations of conduct pursuant to Section 25(2)(g). The husband accepted that the wife should be permitted to argue that his award should be reduced because he had already received funds. However, he claimed that, in the absence of Section 25(2)(g) conduct having been formally relied upon, she should not be able to explore his motivation and whether he had acted in bad faith. Her case must be formally pleaded as conduct if it was to be fairly pursued. The wife denied that she was seeking to run a changed case from that which she put at the First Appointment, except that she was now augmenting it by relying on the emails, which the husband had produced subsequently.
The Court noted that it had always been the wife’s position that the husband had either taken the money without telling her or, if she was ever told, that she had never understood the full picture, and that the husband had fully intended that that would be the case. There was no sense in which the husband was being taken by surprise. It also remained possible that the Court would not find the Section 25(2)(g) threshold met, but that its findings about what had happened would affect the eventual outcome of the case.
Allowing the wife to amend her case, the Court observed that there will always be cases where it will be genuinely inequitable to disregard how one of the parties has behaved, and fair in all the circumstances for that behaviour to have an effect on the financial outcome. There was no doubt that, if what the wife alleged was proved to be Section 25(2)(g) conduct, it would have a financial consequence. In any case, behaviour did not need to surmount the Section 25(2)(g) threshold in order to be relevant to the fair implementation of a PNA.