Divorce, Fraud and the European Convention of Human Rights

Divorce|Family Law|September 1st 2009

A couple of recent decisions have caught my eye. Both cases involve divorce and draw upon Article 6 of the European Convention of Human Rights (ECHR).

Paraphrased, Article 6 reads as follows.

1.    In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.

2.    Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.

In Imerman v Tchenguiz and others (2009), EWHC2024, the fabulously wealthy claimant was businessman Vivian Imerman, who is estranged from his wife. He sued his brothers-in-law, the property billionaires Vincent and Robert Tchenguiz, with whom he previously shared business interests.

Mr Imerman claimed that the brothers had downloaded private information from a shared computer system without his authority. He claimed that they had then misused that information, by handing some of it to his wife and her lawyers. The information was deposited with the court after Mr. Imerman began divorce proceedings and will be the subject of a family court hearing in the divorce proceedings later this year.

Did the Tchenguiz brothers have a defence? They thought so. They contended that their actions were taken “in accordance with the administration of justice.” They argued that Mr. Imerman had no intention of making full and frank disclosure, that Mrs Imerman was entitled to “equality of arms” and that her rights under Article 6 required protection.

However there was no evidence that the husband had not intended to make full and frank disclosure. Furthermore, the brothers were not parties to the divorce. Even if the wife had tried to use an argument for “self help”, the brothers clearly couldn’t.

Predictably, their argument failed miserably in the High Court before Mr Justice Eady. The judge made the point that the brothers could not have legally obtained a court order for this information. He also reinforced the position that obtaining a search and seize order is only a remedy of last resort.

Mr Justice Tuggendaht, in the case of L v L, strictly counselled the use of legal remedies if a breach of Article 6 was suspected. The problem of course, is proving that the breach has taken place and that the proposed remedy is proportionate. Obtaining a “search and seize” order will only be granted in extreme circumstances where no other remedy will do. It is not only a difficult order to obtain, but it is also difficult to carry out, requiring an independent firm of solicitors to oversee the exercise. Therefore it is expensive and if it backfires, could have repercussions in costs and damages. Wives of wealthy husbands who have complex financial arrangements are often at a disadvantage, especially if the husband states that “of course” he will give full disclosure. How do you prove that he will not do so, or has not done so when the disclosure is handed over, if all the paperwork has disappeared in the meantime? It’s a risky business but if there are millions involved, obtaining an urgent remedy has to be at the forefront of any lawyer’s mind – as long as its legal.

As the Tchenguiz brothers discovered to their cost, the law does not operate on them taking the law into their own hands. Instead, they may now face criminal proceedings themselves.

Next, consider this… You have bank accounts in Switzerland. If Her Majesty’s Revenue and Customs find out, you will be prosecuted and could go to prison for a long time. Then your marriage fails and divorce proceedings begin. What do you do? Dare you disclose the information?

This was Mr K’s quandary. In R v K (2009) EWCA Crim1640, he did disclose information about his offshore assets in his Form E.

In a subsequent meeting in October 2001, attended by his solicitors and his wife’s, he made incriminating statements about the nature of the assets. He admitted that he had received a large sum of money from Switzerland, which he had not declared for tax purposes.

At a second meeting in April 2002, which was held “without prejudice”, proposals for settlement were discussed. During this meeting the husband noted that there was a “major tax problem” and a “real chance” that he could go to jail.

An “informer” then supplied the Form E and records of the meetings to HMRC. As the husband had rightly guessed, he was prosecuted.

Were his Form E and statements admissible as evidence? The Crown Court judge found that they were. The Court of Appeal took a different view, however.

Lord Justice Moore-Bick delivered an impressively reasoned judgment. It was held that Mr K had no choice in law but to tell the truth, the whole truth and nothing but the truth, on oath, in his financial disclosure within the divorce proceedings. The information was therefore given under compulsion. The Court of Appeal found that it would be a breach of Article 6 of the ECHR to take material that had been compulsorily given in divorce proceedings, to use against him in criminal proceedings. In this the Court followed other cases, most notably that of Ernest Saunders in the Guinness trial in 1991. The European Court of Human Rights later found that Saunders had been denied a fair trial: his human rights had been breached because information that he had been compelled to give to Department of Trade and Industry inspectors had subsequently been used against him at his criminal trial.

As for Mr K: were the statements that he had made in both meetings inadmissible? The Court of Appeal held that in the first meeting, Mr K had orally amplified the contents of his Form E with additional information. Otherwise he would have been compelled to provide the same information in written answers.  The information was therefore given under compulsion and was inadmissible

In the second meeting in April 2002, when he had made the incriminating statement about going to jail, the Court of Appeal found that he was not protected – even though the meeting was held “without prejudice”. The Court held that the use of the term “without prejudice” was powerful and that in civil matters, it would likely give protection to those who spoke frankly in meetings. In criminal cases, however, the interests of public policy outweigh the right to speak frankly and conclude private deals.

In summary: if the fullest incriminating information is given by a spouse by way of disclosure, including bank statements, this information cannot be subsequently used in a prosecution. This is because the person providing the information has been compelled to do so and has no choice.

Author: Stowe Family Law

Comments(2)

  1. High Court: care order in baby’s best interests - Marilyn Stowe Blog says:

    […] Justice Keehan considered the European Convention on Human Rights. Article 8 of the Convention governs the right to respect for “private and family […]

  2. Mother accused of child abduction loses extradition fight - Marilyn Stowe Blog says:

    […] case back to court, arguing that extradition would breach her human rights under Article 8 of the European Convention on Human Rights. This governs the right to respect for private and family life. Her lawyers also claim that she had […]

Leave a Reply

Close

Newsletter Sign Up

For all the latest news from Stowe Family law
please sign up for instant access today.

Privacy Policy