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MNV v CNV : financial remedy, low value case, add back considered interestingly by DDJ Bradshaw. (Judgement handed down, 19.6.25)
Judgements get longer, a short sound bite note cannot replicate everything. This note is a guide to law, almost a nutshell type of reference. The facts may almost be irrelevant, but I will give a short resumé.
H applicant, W respondent. H 54, W 45. They met in 2007 and cohabited from 2008. Their son S was born in 2009, they married in August 2014. They separated in or around October or November 2022. H returned to homeland and looked after his mother (effect of this considered in judgement but not here but see Judge v Judge [2008] EWCA Civ 1458, [2009] 1 FLR 1287,). H then failed to maintain son.
Not a pension sharing case. The equity in the FMH was £138,814. Incomes each circa £48k gross (lorry drivers). As of April 2023 there was at least £50,000 in assets (car, motorbike retained by H) other than the house. At trial W’s net debit position about £11,300.
Parties agreed FMH to W. H wanted release from mortgage. H sought a lump sum of £65k (W raise by increased mortgage) plus clean break W disagreed.
The main issue was effect of H retaining/using car assets and should there be add back.
Law
DDJ made reference to HHJ Hess in P v Q (Financial Remedies) [2022] EWFC B9 re hard and soft loans.[1]
DDJ adopted the very thorough and helpful summation set out by Peel J in WC v HC (Financial Remedies) [2022] EWFC 22, reported at [2022] 2 FLR 1110, at paragraph 21, which all financial remedy practitioners will be familiar with !
Re ‘add back’ he said ‘The genesis of the modern principle of add-back is found in the judgment of Cairns LJ in Martin v Martin [1976] Fam. 335, at 342GH’.
He referred to Norris v Norris [2003] 1 FLR 1142, as per Bennett J at [77].
He stated Both Martin and Norris were considered by the Court of Appeal in Vaughan v Vaughan [2008] 1 FLR 1108. Wilson LJ (with whom Mummery and Ward LJJ concurred) referred to both cases and went on to qualify the principle as follows at [15]:
‘The only obvious caveats are that a notional reattribution has to be conducted very cautiously, by reference only to clear evidence of dissipation (in which there is a wanton element) and that the fiction does 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’.
The DDJ then added his own formulation of words:
‘It is apparent that the test for the add-back jurisdiction is as follows:
The expenditure must be either reckless; or have a wanton element.
The expenditure must disadvantage the other spouse.
The 'notional reattribution' must be applied cautiously.
The 'notional reattribution' cannot be considered as cash available to meet the needs of the party against whom it is applied’.
He ‘distinguished’ MAP v MFP [2016] 1 FLR 70 in that it was a high value case and the percentage of spending equated to a very low percentage of assets.
The DDJ then stated:
‘The expenditure must be either
a) reckless, when assessed in the context of the party in question; or
b) have a wanton element, when measured in proportion to the matrimonial assets’.
Applying the above test, the DDJ decided:
The husband's conduct was, in the context of the financial circumstances at the time, reckless. He was aware that there were no other liquid or readily-realisable assets available than the money in savings and the VW van. He took them both, the van directly and the money by way of a 'gift' to his brother that was repaid when the Husband was established in Country X. Although it was not disputed that the Husband acted with his mother's welfare in mind, it was also the case that he did so with complete disregard to the welfare of the Wife and of S.
The husband's behaviour had a wanton element when considered in the context of the matrimonial assets. By contrast with the situation in MAP v MFP, where the dissipated funds were a small fraction of the matrimonial assets, the Husband in this case took what amounted to a quarter of the total assets and effectively all of the non-property assets.
The DDJ returned to the final stage of the test as summarised by Moor J (MAP case), which was that the sum added back cannot be considered as cash available to meet the needs of the party against whom it is applied.
He then added:
As I have explained I am not going to deduct the notional add-back of £47,000 against the Husband because this would extinguish the lump sum payable to him and so would frustrate the purpose of meeting his accommodation needs. The notional add-back becomes relevant though when considering the net effect of the division of assets and the extent of the departure from equality.
|
194 |
1. Husband |
1. Wife |
|
1. Property |
1. - |
1. £138,814 |
|
1. Assets |
1. £14,500 |
1. £6,000 |
|
1. Liabilities |
1. (£11,000) |
1. (£17,300) |
|
1. Lump Sum |
1. £6,500 |
1. (£6,500) |
|
1. Add Back |
1. £47,000 |
1. - |
|
1. Total |
1. £57,000 |
1. £121,014 |
|
215 |
||
The effect of this is to give the Husband 32% of the assets, including in that calculation the £47,000 he has already had the benefit of and which I add back for the purposes of assessing net effect, and the Wife 68%. I consider that to be a departure from equality that reflects the lower cost of the Husband's housing need and the immediate needs of the Wife and S for accommodation.
So it is add back tempered by needs. On the financial facts of this case, the DDJ was able to bring add-back in, and meet the needs of both parties.
Respectfully, this is a DDJ decision which helpfully sets out the law on add back, and I hope it is of some assistance to financial remedy practitioners. And as said at the beginning this is a soundbite to make you aware of the case and the possible use of the law on add-back, but it is not intended to be a substitute for looking at the case yourself.
[1] 'hard' loans which a party is under a firm obligation to repay whereas the latter are more likely to be 'soft' loans where the obligation to repay is more moral than .legal
