Non-disclosure: haven’t we been here before? by John Bolch

Divorce|Stowe Family Law|February 13th 2014

I posted here on Tuesday about the case S v S (also being referred to as Sharland v Sharland), which involved a fraudulent non-disclosure by the husband. As I noted then, the case has caused a few raised eyebrows. It has also led to some debate, including a reply to my post from Marilyn Stowe (and Marilyn, I stick by what I said – if the result would not have been materially different, then I don’t see the point in ‘going through the motions’ of a re-hearing, just for the sake of a point of principle).

The case of Bokor-Ingram v Bokor-Ingram was mentioned in the course of the S v S judgment. Now, I confess that I had forgotten the details of Bokor-Ingram when I wrote my post on Tuesday. However, by pure coincidence, I have since been looking at the judgment in connection with something else, and it is almost like a case of déjà-vu.

Bokor-Ingram was mentioned here by Marilyn Stowe in this post. I think it is worth re-visiting now, in the light of S v S.

Bokor-Ingram concerned a wife’s application for what was then called ‘ancillary relief’, and what we now call ‘financial remedies’ on divorce. The application was settled by agreement at the Financial Dispute Resolution (‘FDR’) appointment and a consent order was made, setting out the terms of the agreement.

However, about ten days after the consent order was made the husband resigned from his job and took up new employment at a significantly higher level of remuneration. It transpired that he had been in advanced negotiations with his new employers when the FDR took place, but did not inform the court of this fact.

The wife applied to have the consent order set aside, but her appeal was dismissed by Mr Justice Charles. He found that whilst the husband had failed to disclose the situation regarding his possible new employment to the court, it would have made little difference to the outcome of the case.

The wife appealed to the Court of Appeal. However, before her appeal was heard the matter was settled when the parties agreed to set aside the consent order.

Despite this, the Court of Appeal proceeded to give their judgment setting out why they would have allowed the appeal, as they were concerned that the judgment of Mr Justice Charles “was causing, or was likely to cause, difficulty for specialist practitioners and judges in this field of ancillary relief.” Does this ring any bells with the current situation regarding S v S?

The reason that the Court of Appeal would have allowed the appeal, however, had nothing to do with the issue of whether or not the husband should be allowed to ‘get away’ with the breach of his duty to make full disclosure. The Court of Appeal would have allowed the appeal because it considered that Mr Justice Charles “was wrong to conclude that the breach of the duty had no effect upon the outcome of the case.”

Which brings us back to S v S. Had the majority of the Court of appeal in S v S considered that the result would have been materially different if the husband had made full disclosure, then they would surely have allowed the wife’s appeal. In other words, the crux of the matter in cases such as these is whether the non-disclosure made any difference.

This, in my view, is the correct approach. After all, in a very large number of cases there is some level of non-disclosure by one or both of the parties. Are all of those cases to be re-opened? As Lady Justice Macur said in the final paragraph of her judgment in S v S:

“Litigants may lie for any number of reasons and not necessarily to obscure assets or the proper evaluation of an ex-spouse or partner’s claim. It is not unknown for the wealthiest of litigants to fraudulently conceal comparatively small amounts to conceal the source or existence of an undisclosed and covert lifestyle. The amount might be inconsequential in the scheme of things but on the basis of [Lord Justice Briggs’] judgment would require any award to be set aside. The court system would grind increasingly slowly. The impact would be more far reaching than upon the parties concerned.”

That, at least, is the current state of play so far as the courts are concerned in these cases – an echo, if not a repeat, of what happened in Bokor-Ingram five years ago. It seems to me that little has changed during that time although, as I indicated at the end of my previous post, the Supreme Court may yet decide that the time for change has come.

Author: John Bolch

John Bolch often wonders how he ever became a family lawyer. He no longer practises, but has instead earned a reputation as one of the UK's best-known family law bloggers.

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