Is Divorce a Cheat's Charter?

Couples going through a divorce are required to provide “full and frank financial disclosure” before negotiations about a financial settlement can begin.

The disclosure is usually provided by completing a lengthy document called a Form E.  Each person is under a duty to disclose all relevant financial information and, failure to do so, can constitute a ‘material non-disclosure’ which could result in any final order (by consent or otherwise) which is made being set aside/overturned in the future.

It is also worth remembering that if an agreement is not reached and the case proceeds to a contested hearing, then each party will almost certainly be cross-examined on the contents of their Form E.

Earlier this year the Court of Appeal heard the case of Moher v Moher [2019] EWCA Civ 1482. This case gave an important message to litigants who are guilty of non-disclosure, stating that such litigants should not obtain a more favourable outcome than if they had complied with their disclosure obligation. 

The ruling made it clear that the judges are not required to make a finding in respect of what they believe the non-disclosing litigant’s assets to be as this can involve a disproportionate level of enquiry.  Where it isn’t possible for the Judge to make a specific determination of the value of non-disclosing litigant’s assets, (s)he can infer that the resources are such that the proposed award represents a fair outcome.  In making this inference the Judge can use all material which is available as well as using his/her judicial experience of what is likely to be being concealed and the inherent probably, in deciding what the facts are.

This decision and the earlier 2013 decision of the Supreme Court in the case of Prest and Petrodel Resources Limited fall in line with the equitable maxim “He who comes to equity must approach the court with clean hands”.  It’s a welcome decision for those in litigation with spouses who try to hide their assets.

For more information about financial matters relating to a divorce please get in touch with our family team.

Sandra Marshall

Published on 03/12/2019