Dissipation of Marital Assets/Conduct
The Court has an obligation to ensure that proper financial provision is made for both spouses in Separation and Divorce proceedings. The Family Law Act 1995 and the Family Law (Divorce) Act 1996 give the Court discretion in determining proper financial provision for the spouses having regard to a list of factors set out in each of the Acts.
The Court’s discretion in making proper provision is considered to be wide ranging except when it comes to considering the conduct of the parties which can only be considered relevant to the issue of proper provision if it would be unjust to disregard it. The conduct must be of an exceptional nature for it to be taken into account by the Court.
It is clear from caselaw that in certain circumstances the Court may deem it necessary to reflect on the financial misconduct of one of the spouses when determining proper provision, particularly where such financial misconduct has led to the dissipation of marital assets.
In the case of H v O’N, the husband’s financial misconduct had significantly depleted the marital assets such that the Court’s ability to make proper provision was weakened. The Court reflected on the husband’s conduct in their decision to the extent that the wife was awarded a slightly higher percentage of the assets than would otherwise have been the case.
For assets to be added back and reattributed to a spouse the Court must be satisfied that there has been a deliberate dissipation of assets by the other spouse. Furthermore, the Court will only ‘add back’ assets that have been deliberately dissipated if it is required to achieve fair proper provision.
In conclusion, the general rule is that conduct is irrelevant to the Courts when determining proper financial provision. It is only where such conduct is relatively exceptional and would be unjust to ignore that it may be taken into account by the Court.
If you require any advice on any family law matter, please do not hesitate to contact Brendan Dillon on 01 2960666