Recorder Laura Moys. 41-page decision following a three-day final hearing. H is a litigant in person. The parties’ relationship lasted 18 years and the marriage for 16 years. There are two children of the marriage (ages 17 and 12). The net assets in this case are c.£2.5m. The overall legal fees incurred, described as ‘excessive’ in the context of this case, are £243,258.

Issue I: Valuation

H challenges SJE evidence. H states that the addendum expert report was filed late and did not attach examples of comparables, which suggested that the SJE had failed to consider any comparables before reaching his conclusion about value. Recorder Moys rejects this criticism. There was a tight timetable and the parties had sight of a draft addendum report (two weeks before the start of the hearing). The delay in providing the comparables was due to SJE formatting his report and wanting to get a draft over to the parties as quickly as possible. H’s questions went far beyond the permitted scope of ‘clarification’; therefore SJE was entitled to tell the parties he did not consider it appropriate to provide a written response to H’s written questions. H was permitted to cross-examine SJE instead.

Issue II: Conduct/add back

Peel J emphasised in Tsvetkov v Khayrova [2023] EWFC 130 at [46] that ‘conduct’ allegations need to be properly pleaded at the earliest opportunity ‘with particularised specificity’. Had this been done, the difficulty with some of W’s assertions would have become apparent earlier.

Of what allegations remained, H accepted that through spread betting he lost £406,821. W learned about this during the disclosure process. Recorder Moys found c.£287,000 to be matrimonial: £156,821 from the sale of shares formerly owned by H; and in the absence of a cogent alternative explanation from H, an unaccounted-for amount of £130,000 derived from resources built up during the marriage.

The test for notional reattribution as set out by Wilson LJ in Vaughan v Vaughan [2007] EWCA Civ 1085: ‘clear evidence of dissipation (in which there is a wanton element)’. Moylan J clarified in Evans v Evans [2013] EWHC 506 that the Vaughan test is not the end of the ‘story’ because ‘reattribution must be justified in the context of the case. It is a form of conduct and as such it must be inequitable to disregard it’. See Mostyn J’s assertion in BJ v MJ (Financial Remedy: Overseas Trust) [2011] EWHC 2708, that the problem with notionally reattributing ‘is that it does not recreate any actual money. It is in truth a process of penalisation.’

Particular emphasis is given to the caution that should be exercised in ‘needs’ cases (US v SR (No 3) (Adverse Influences: Costs Order Reflecting Litigation Misconduct) [2014] EWFC 24 (Fam); GS v L [2015] 175 (Fam). King J (as she then was) noted in GS v L that it may also be appropriate to account for the extent, timing and nature of any alleged wanton dissipation and set it against the backdrop of the (over)spending of both parties. Moor J considered whether the husband in the case had overspent ‘with an intention to reduce the wife’s claim’ in MFP v MAP [2015] EWHC 627 (Fam). Recorder Moys states there is some level of ambiguity in the jurisprudence about the level of ‘intention’ required.

Fair to view H’s conduct in the context of long relationship where both parties made positive contributions. Majority of deposits by H were prior to separation and in circumstances where H was trying to maintain the parties’ lifestyle including expensive private education for the children and running a house worth £1.65 million. This fact seems to me to have some relevance, if not on the issue of ‘wantonness’ then certainly on the issue of whether it would be ‘inequitable to disregard’ H’s conduct. H did not set out to deliberately hide assets from W and was not motivated by a desire to put assets beyond W’s reach. H placing £40,000 into spread betting account post-separation when he had incurred significant losses was reckless, particularly as H had not been able to pay the school fees and W had taken out a loan to pay them. W’s excessive legal fees of £195,00 should be considered.

Recorder Moys decides it would be inequitable to disregard the £40,000 post-separation deposit into the spread betting accounts, but not the earlier amounts.

NB: Recorder Moys undertakes an extensive analysis of the s 25 factors; [125]–[172].

Held

After paying their debts and meeting housing needs, W is left with £240,000 and H with £220,000 and H is left with a £38,000 loan which the judge declines to top-slice so as to reflect H’s dissipation of £40,000 matrimonial assets via the spread betting account. This adequately marked H’s conduct, in view of all other balancing factors (inc. H’s £300,000 inheritance which was non-matrimonial).

Overall effect. W awarded 50.39% of the remaining assets and H 49.61%.

W’s £240,000 not required for debts/housing to make up shortfall of £1,778 between her income needs and earning capacity. Clean break from completion of the sale of the family home. NB: in the interim W to amortise a modest proportion of her capital to meet her income needs.

An education trust is to be established for the benefit of the children (from the sale of a rental property), enabling school fees to be paid. Both parties to be trustees despite W’s concerns re H’s reckless financial behaviour so as not to create an impression in the minds of the children that H does not contribute/is not involved to the same extent as W.