Pump Court Chambers

Spending £1.5 million on cocaine and prostitutes isn’t wanton says Moor J

Blog 8th July 2015

The recent case of MAP v MFP [2015] EWHC 627 (Fam) may have further restricted the availability of ‘add-back’ arguments by suggesting that the husband’s expenditure was part of his “complex character” which his spouse must accept as the downside to a personality which enabled him to make a great success of his business.

Suggestions that sums spent recklessly by one spouse should be nominally added back to his or her assets are frequently made in correspondence but perhaps more rarely persuade a judge to alter the order that he or she would otherwise have made. Typically “add-back” arguments meet with comments along of lines of “the money has gone hasn’t it?” In MAP v MFP the wife sought an add-back of £1.5 million for sums that the husband had spent over a two year period on credit cards, cocaine, rehab and prostitutes. In refusing to accept that it was fair that there should be an add-back Mr Justice Moor may have further restricted their availability to all but the most deliberate attempts by one spouse to spend money so that it is put beyond the reach of the other.

The first and perhaps the foremost difficulty faced by most of us when arguing that the court should consider an add-back is reflected in the comments of Wilson J in Vaughn v Vaughan [2008] 1 FLR 1108, namely that an add-back should not “extend to treatment of the sums reattributed to a spouse as cash which he can deploy in meeting his needs, for example, in the purchase of accommodation”. In other words the court will only consider adding back monies already spent where there is a surplus of assets. In the vast majority of “medium money”, “low money” or indeed “no money” cases any suggestion of an add- back is generally swept aside by considerations of the parties’ needs which, after all, where we are told that the search for the holy grail of fairness will generally begin and end.

Even where there is a surplus of assets arguments often stall at the requirement for there to be a “wanton” element to the spending in question. Generally speaking a party can spend his or her money as they choose and the court will only criticise expenditure which “recklessly depletes the assets and thus potentially disadvantages the other spouse” (Norris v Norris [2003] 1 FLR 1142). It was this requirement which provided the difficulty for the wife’s arguments in MAP v MFO. Moor J’s view is that add-backs amount to conduct arguments under s25(2)(g) so the behaviour in question must be both “obvious and gross” and sufficiently serious that it would be inequitable for the court to disregard it. The judge concluded that the husband’s complicated character”, “forceful personality” and “personal demons” meant that his expenditure was not “wanton” and could not therefore justify an add-back. Like many successful men the husband was “flawed” and could not “prevent himself” from spending the money because he was controlled by his addiction. A propensity to addiction was the downside to a complex personality the upsides of which had enabled the husband to make such a success out of his business and it would not be fair for the wife to share in the financial gains of the business without taking a proportion of the costs associated with the downsides to the husband’s personality.  In essence, husband’s expenditure, whilst perhaps morally culpable, was did not take place with the deliberate intention of defeating the wife’s claims and could not therefore justify him receiving a lesser share of the available assets.

Where does that leave add-backs? It seems that, not only must there be a surplus of assets over and above each party’s basic needs, but the spending in question must be deliberate and carried out with the clearest possible intention of reducing the other spouse’s claim. As Moor J points out “the most obvious example would be where a spouse deliberately dissipates a fund to prevent his or her former partner receiving a fair share of that fund. The court cannot permit such conduct”. Whilst accepting that there may be other situations where an add-back is appropriate Moor J stated that these will “undoubtedly be rare”.

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