When is conduct of the parties relevant in Cayman Islands Divorce Proceedings?

In financial proceedings following divorce in the Cayman Islands, parties frequently wonder whether their spouse’s misconduct — whether violence, infidelity, or other wrongdoing — will affect the financial settlement. Under the Cayman Islands Matrimonial Causes Act (2005 Revision), the court may consider a party’s conduct if, and only if, it would be inequitable to disregard it. But the case law makes clear that this is a high threshold, reserved for truly exceptional circumstances.

Recent English Authority

The recent English case of N v J [2024] EWFC 184 (Peel J) is a useful restatement of these principles. That case involved a same-sex civil partnership in which N alleged that J had lied about serial infidelity with paid sexual partners, which had contributed to N’s significant mental health decline and hospitalisations. N argued this conduct should influence the financial outcome. The assets were substantial (about £32 million), and the relationship had lasted around 17 years.

The court firmly stated that conduct should only be taken into account if it is “obvious and gross” and if it meets the high statutory threshold of being inequitable to disregard it. Further, there must be a demonstrable financial consequence flowing from the conduct — for example, a loss of earning capacity, a dissipation of assets, or the creation of exceptional needs. Peel J declined to allow the allegations of J’s infidelity to proceed as a conduct claim, finding the alleged wrongdoing did not meet the required threshold, and that any needs created by N’s mental health would be addressed through the normal s25 factors regardless of fault.

This decision is a recent confirmation that English courts will not indulge in moral blame-setting in assessing financial claims and will instead only look at misconduct if it clearly and materially affects the financial outcome.

Cayman Islands example

The same strict approach was followed in Vaughan v Hall (Grand Court, FAM 144 of 2019), where the husband had seriously assaulted the wife prior to separation, causing permanent disability. At the final ancillary hearing, the Grand Court considered how the husband’s conduct should affect the distribution of the matrimonial estate under sections 19 and 21 of the Matrimonial Causes Act. It considered whether this domestic violence should justify depriving the husband of a share of the matrimonial assets. It confirmed that the court’s function is not to be punitive or confiscatory for its own sake but rather to adjudicate on whether the conduct was so “gross and obvious” that it displaced the otherwise equal sharing rules.

The court indeed found this vicious assault to be “obvious and gross” misconduct. Given the seriousness of the violence and its effect on the wife’s ability to retain her employment, diminution of her sense of security and welfare, the judge concluded it would be inequitable to allow the husband to share in the matrimonial property. As a result, the court exercised its discretion to deny him any entitlement to the matrimonial estate.

Conclusion

Both N v J in England and Vaughan v Hall in the Cayman Islands reaffirm that conduct is only relevant to financial provision in divorce where it is exceptional, obvious, and causally linked to a financial consequence. Judges are not in the business of moral condemnation but rather of fair financial distribution.

Accordingly, while parties may perhaps understandably wish to raise wrongdoing on the part of the other, the courts will not adjust the financial outcomes on these grounds other than in truly exceptional circumstances where the misconduct demonstrably impacts the finances. Otherwise, the standard factors — needs, resources, contributions, and fairness — will govern the division of assets.

If you want to ensure your financial position is secure — whether before, during, or after marriage — speak to a family law specialist today. Hampson and Company offers trusted, tailored advice on all aspects of family law, from financial settlements to complex asset protection. Our team is committed to helping you navigate divorce or relationship breakdown with confidence, clarity, and care.