Landmark judgment, a cheat's charter for non-disclosure on divorce.

30th July 2010

In a judgment handed down from the Court of Appeal yesterday, the basis upon which financial disclosure has been conducted for years in divorce proceedings was literally turned on its head.

This will affect every divorce where one party believes the other is likely to hide their assets, or lie about their finances, to prevent a fair division of resources.

Until yesterday, the Court routinely accepted covertly obtained evidence that a party had not fully disclosed their assets.  For example, if one party believed the other had undisclosed bank accounts, then they could show the Court copies of bank statements for those accounts, which they had photocopied without the other person's knowledge or consent.

This was pursuant to the case of Hildebrand and Hildebrand [Hildebrand v Hildebrand 1992 1 FLR 244] and the usual practice was that, provided the information had not been obtained using force, then it was admissable in Court.

The ruling in the case of  Vivian Imerman and his wife Elizabeth  [Imerman v Imerman 2010 EWCA Civ 908] has changed that premise.

The judgment runs to 49 pages and travels through confidentiality law, on a journey which starts in 1849 with a case involving Prince Albert.  In essence, the Court found that there is no assumption of joint information between husband and wife, but rather that parties are entitled to assume that the other will not look at their private papers even if they are left around the house in plain view.

In the case of Mrs Imerman, she believed her very wealthy husband would try to hide his assets, and so her brothers apparently took action on her behalf, by accessing her husband's computer records to procure over 250,000 documents showing his financial position. 

The Court also indicated that in future, parties should make more use of the commercial remedies available, in the form of freezing injunctions and "search and seize" injunctions to obtain undisclosed documents.

The informal approach taken by the Court previously, and the "blind eye" which was turned as to how documents had been obtained, worked well for the financially weaker party for nearly 20 years, and acted as a deterrent to the party who had in mind to hide their wealth.  By contrast, the approach now required by the Court will be cumbersome and certainly much more expensive for the weaker financial party.

We believe this will result in potential injustice on a frequent basis, since a party who for no real outlay could obtain copies of documents from within the matrimonial home will now instead have to employ solicitors, barrister and experts to make a complex and extremely costly application to Court for an injunction - and no guarantee that the application will be granted.

Hazelwoods will continue to campaign for the Court to provide a fully level playing field for all parties to family litigation, to ensure fair outcomes, regardless of ability to fund proceedings.