A person who has an affair during their marriage is obviously likely to feel extremely guilty for their actions.

If their spouse finds out they may, assuming they wish for their marriage to continue, seek to make amends for what they have done.

And one way to make amends is to make a gift to their spouse, as occurred in a recent case in the Family Court in London.

Husband’s affair

The case concerned the hearing of a financial remedies application by the wife, following the breakdown of her marriage.

The parties had met in 1991, and cohabited from 1992 or 1993. They married in 1998 and separated around the end of July 2020. The court therefore treated it as a marriage of some 27-28 years.

It was agreed that, save for one matter, up until the time of the separation this would have been a paradigm case for equality of division of the assets.

The one matter related to events in 2017, when the husband had had a short-lived affair with another woman. The husband ended the affair after about six weeks, and told the wife.

That commenced a period of acute stress for the family, because the husband’s former girlfriend began a campaign of public and private harassment, and stalking of both the husband and the wife. The effect of this was difficult for the husband, but it was acutely traumatic for the wife.

The husband was then told by the woman that she was pregnant by him.

The husband was advised that if the woman sought financial provision for the child from him, he would be likely to have to pay the sum of £1 million. He therefore decided to transfer that sum to the wife.

In fact, the woman was not pregnant.

The marriage subsequently broke down, and the wife made her financial remedies application.

Two issues

There were two main issues between the husband and the wife.

The first issue was in relation to how the £1 million payment should be treated by the court. The wife argued that it was a gift to her expressly to use as she wished, and made by way of partial amends for the husband’s misbehaviour. She therefore claimed that it would be inequitable if she should be required to share it with the husband.

The husband, however, argued that the court should treat the money as one of the resources available to the wife, and that it should be shared along with the other matrimonial assets.

The other issue was that the husband claimed that he had earned some £2.4 million since the separation, and that that sum should therefore be ‘ring-fenced’, so that it was not part of the assets to be divided between the parties.

As to the first issue, the court sided with the wife. The judge said that the payment was made by the husband to the wife “to make amends” for his behaviour, and the appalling aftermath. He accepted that the money was a matrimonial asset that was available for sharing, but the circumstances of its giving were highly relevant. There was no need for the husband to share in it, and it was fair to both parties that the wife should be entitled to keep it in its entirety, as was intended when it was given to her.

As to the second issue, the £2.4 million comprised the sums of £2.026 million earned in the year from 1 January 2021, and £407,000 in respect of the year beginning 1 January 2022. Following an earlier case, the judge found that he should not allow post-separation income to be classed as non-matrimonial unless it related to a period which commenced at least 12 months after the separation. He therefore only ring-fenced 50% of the sum earned in the second year.

The net result of this was as follows. The total assets were £24.183 million, exclusive of pensions. Removing one half of the husband’s 2022 income and the £1 million gift to the wife left a balance of £22.98 million, which was divided equally between the parties.