N v J

Factual and Procedural Background

This judgment concerns financial remedy proceedings between two male civil partners, referred to as the Applicant and the Respondent. The case involves allegations of domestic abuse and personal misconduct raised by the Applicant against the Respondent within the context of their civil partnership. The partnership lasted approximately 14 to 17 years, depending on the contested date of cohabitation. The Applicant had pre-existing mental health issues which allegedly worsened due to the Respondent's conduct, specifically the Respondent's dishonesty about paid sexual encounters during the relationship. The parties entered into a Partnership Agreement in 2012, which provided the Applicant with significant property interests. The couple separated in July 2023, and substantial assets are involved, estimated at £32 million net.

The Applicant initiated financial remedy proceedings in October 2023, initially reserving his position on conduct allegations. The case was allocated to High Court level in January 2024, with directions to address the conduct issue at a case management hearing before the trial judge. The litigation has been highly contentious and costly, with combined legal costs approaching £1 million at the time of the hearing.

Legal Issues Presented

1. Whether the Applicant's conduct allegations against the Respondent meet the high threshold required to be taken into account under the Matrimonial Causes Act 1973 and the Civil Partnership Act 2004 in financial remedy proceedings.
2. Whether the alleged domestic abuse and personal misconduct have a direct and identifiable financial consequence sufficient to impact the financial remedy award.
3. Whether the conduct allegations should be excluded from consideration at the final hearing on grounds of proportionality and materiality.
4. The appropriate case management approach to conduct allegations in financial remedy proceedings involving domestic abuse claims.

Arguments of the Parties

Applicant's Arguments

• The Applicant alleges that the Respondent engaged in domestic abuse through deceit and infidelity, which caused a significant deterioration in the Applicant’s mental health, necessitating medical treatment and hospitalisation.
• The Applicant contends that the Respondent’s conduct should be considered as part of the financial remedy proceedings, potentially impacting the distribution of assets and the terms of the Partnership Agreement.
• The Applicant initially reserved his position on conduct allegations in his Form E, a practice the court has criticized.

Respondent's Arguments

• The Respondent denies that the conduct alleged meets the high threshold of exceptionality required for conduct to be taken into account in financial remedy proceedings.
• It is argued that the Applicant’s mental health issues have multiple contributing factors unrelated to the Respondent’s behaviour, undermining any causal link between conduct and financial consequences.
• The Respondent maintains that the conduct allegations would not materially affect the financial outcome and that pursuing them would be disproportionate and unnecessarily increase costs and complexity.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Tsvetkov v Khayrova [2023] EWFC 130	Outlined a two-stage test for conduct claims: (1) proof of conduct meeting a high threshold with identifiable financial impact; (2) balancing conduct in financial remedy outcome under s25.	The court applied this framework to assess the conduct allegations, emphasizing the need for particularity and financial consequence.
OG v AG [2020] EWFC 52	Identified four categories of conduct relevant in financial remedy cases, emphasizing the rarity of conduct affecting financial awards unless there is financial impact.	The court relied on this categorization, focusing on personal misconduct and the necessity of financial consequences for conduct to be considered.
Wachtel v Wachtel [1973] Fam 72	Established that conduct must be “both obvious and gross” to be considered in financial remedy cases.	The court reaffirmed this high threshold for conduct claims, including those involving domestic abuse.
Miller v Miller; McFarlane [2006] UKHL 24	Confirmed that conduct is only reflected in financial awards in very rare circumstances and must be gross and obvious.	Supported the high threshold and the principle that conduct without financial consequence is unlikely to affect awards.
Clark v Clark [1999] 2 FLR 498	Recognized that emotional and financial abuse with direct financial consequences may be relevant in financial remedy proceedings.	Used as an example of conduct with a direct financial impact justifying reflection in awards.
DP v EP [2023] EWFC 6	Found economic abuse with direct adverse financial effects relevant to conduct claims.	Illustrated the necessity of financial consequences for conduct to be taken into account.
Seales v Seales [2023] NI Master 6	Domestic abuse including serious criminal conduct impacting employment prospects and future needs relevant to conduct claims.	Demonstrated that conduct with clear financial impact can be reflected in financial remedy outcomes.
Goddard-Watts v Goddard-Watts [2023] EWCA Civ 115	Discussed the role of financial consequence in conduct claims and suggested some ambiguity regarding conduct without direct financial impact.	The court interpreted this authority as not departing from the established principle that financial consequence is necessary.
FRB v DCA (No 2) [2020] EWHC (Fam)	Conduct causing financial and emotional damage relevant where inequitable to disregard.	Referenced to show conduct may be relevant if it causes financial harm, though not always reflected in awards.
Al Khatib v Masry [2002] EWHC 108	Conduct involving child abduction reflected in award due to litigation costs and financial impact.	Used to illustrate conduct-generated need affecting financial remedy awards.

Court's Reasoning and Analysis

The court began by reaffirming the established legal framework requiring conduct to meet a high threshold of exceptionality and to have an identifiable financial consequence before it can be considered in financial remedy proceedings. The court emphasized that this principle remains undisturbed despite increased societal awareness of domestic abuse.

Applying these principles to the facts, the court assumed the Applicant's allegations at their highest for the purpose of this hearing but found that the alleged conduct did not meet the high threshold. The Respondent’s infidelity and dishonesty, while morally objectionable, did not constitute conduct of the "obvious and gross" nature required.

The court noted the difficulty in establishing a direct causal link between the Respondent’s conduct and the Applicant’s mental health deterioration, given the Applicant’s long-standing mental health issues and multiple contributing factors. The only direct financial consequence pleaded was increased medical costs, which the court considered to be a needs issue rather than a conduct issue, as health needs are accounted for in the statutory criteria regardless of causation.

The court further reasoned that even if the conduct were proven and had a financial consequence, it would not materially affect the financial outcome, which would primarily depend on the sharing principle and the Applicant’s needs. The conduct claim was therefore disproportionate and would add unnecessary complexity, cost, and delay to the proceedings.

Finally, the court highlighted the broader implications of litigating conduct claims involving domestic abuse, including increased costs, resource burdens, and the potential for protracted and acrimonious litigation, which runs contrary to the overriding objective of dealing with cases justly and proportionately.

Holding and Implications

The court excluded the Applicant’s conduct claim from consideration at the final hearing.

The direct effect is that the financial remedy proceedings will proceed without the conduct allegations being taken into account, focusing instead on the statutory criteria such as needs, resources, and the sharing principle. No new precedent was set; rather, the judgment reaffirmed the existing high threshold for conduct claims and the necessity of identifiable financial consequences in such claims. The decision also underscores the court’s commitment to proportionate case management and the avoidance of unnecessary litigation over conduct allegations that do not materially affect financial outcomes.