Divorcing wife wins compensation for unfair dismissal

Divorce|March 19th 2015

The wife of a wealthy property manager has been awarded compensation for unfair dismissal in her financial settlement.

MAP v MFP concerned a couple who were both in their 60s. They married in 1972 and had four children, before separating after 40 years together. In his judgement, Family Court Judge Mr Justice Moor noted that:

“This was therefore a very long marriage by any standards.”

The wife filed for divorce and a decree nisi was issued in December 2013. But by the time of the family court hearing earlier this month, the divorce had still not been made absolute.

The estranged husband been in property management for his entire career. He and his wife built up a successful property management firm which is now worth £26 million. The husband owned 95 per cent of the company while the wife owned the remaining five per cent. She had worked as company secretary and financial control manager for the firm.

The husband struggled with addictions to alcohol and cocaine, but despite treatment at rehabilitation clinics, he had been unable to stop using the substances.

After the couple separated, the wife remained in the couple’s former home, a property worth £2.3 million. Then, following a dispute, she was dismissed from her position at the company.

This development meant that she would no longer be able to take advantage of the tax relief available to company founders when she sold her shares, costing her a substantial £271,800.

The wife applied for a financial settlement consisting of 50 per cent of the joint assets, including both the couple’s former home and one of their two properties in Spain. She also sought an additional sum, legally termed an ‘add-back’, of £750,000 in recognition of the husband’s alleged “reckless and wanton expenditure over the last seven years”, insisting that the matrimonial assets would be double their current level if he had “acted responsibly”.

Mr Justice Moor agreed to compensate the wife for the loss of tax relief on her shares. She had been dismissed at the instigation of the husband, the Judge declared, and he had chosen not to pursue any alternative solutions to the issue. The wife should not be penalised for this, the Judge concluded.

However, he ruled against the wife’s request for an add-back. Spouses must accept their partner’s flaws, the Judge insisted, and it would wrong to allow the wife to enjoy the financial benefits of her husband’s professional skills without also bearing some of the consequences of his failings.

“Many successful people are flawed”, declared Mr Justice Moor. Expenditure related to the husband’s addictions may have been “morally culpable” and “irresponsible” but it had not been “ deliberate or wanton dissipation.”

The wife received £12.3 million of the couple’s joint assets, plus additional payments for maintenance arrears and a dividend payment she would have received had she not been dismissed from the company.

Read the judgement here.

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