A recent High Court judgment has provided a helpful reminder of the courts’ distain for non-disclosure and deliberate concealment of assets in a finance case following divorce.
The case of AP and RP EWFC98 (B) heard before His Honour Judge Vincent involved an Indian couple who had been married in 2003 and separated in 2018. The husband had built up and run a successful premium rate telephone service, deriving significant income and wealth from it. The husband had registered his wife as company director and himself as company secretary. His wife had little meaningful involvement in the company.
The business ran into difficulties in 2018, and the husband left the UK to start a new relationship in India.
Whilst the wife initially sought to make progress with her husband voluntarily and without the need of the courts’ involvement, the lack of progress prompted her to commence financial remedy proceedings at court in 2023.
The commencement of proceedings triggers a timetable requiring both spouses to provide full financial disclosure of their circumstances using a document known as a Form E. Whilst the husband provided a completed Form E, he did not produce any bank statements at all – in fact, he failed to disclose any bank statements throughout the entirety of the case. He disregarded orders that were made requiring him to provide responses to questionnaires and other basic disclosure requirements. He ignored requests for maintenance, notwithstanding the significant costs that the wife was continuing to incur for herself and the children, to include sizable mortgage costs. Instead, his focus was on a perceived failure on the part of the wife to share the little rental income she received.
By the time the case went to trial, the wife had been able to source information, very likely with the assistance of a Private Investigator in Mumbai. She had been able to unearth details of property in India that the husband had purchased and not disclosed, accounts he was holding and had not disclosed, and companies that he had incorporated and not disclosed.
Faced with an absence of information from the husband and a helpfully thorough account of the husband’s financial position from the wife, the judge at trial had little choice but to accept the wife’s position. He found that the husband had been concealing his true financial position. This he viewed as conduct that would be equitable to disregard.
Conduct is seldom taken account of by the courts, however there is a growing trend in the upper tiers of the Family Court to seek to make examples of serial non-disclosers in financial proceedings in reported family cases by recognising poor conduct through an adjustment in favour of the party who has been wronged. The judge in this case recognised the husband‘s poor conduct by dividing the confirmed assets 60/40 in the wife’s favour. Conveniently, this meant that she retained all the UK property, which, given its location in this jurisdiction, was much easier to secure and manage.
If the wife’s case in relation to the husband‘s financial position was to be believed and he indeed had around £3.4 million in undisclosed assets, the outcome arrived at by the judge left the entirety of this undisclosed assets in the husband’s sole name. Whilst he disputed the valued assigned to those assets by the wife, he had provided little of use in the way of competing evidence, leaving the judge with little choice but to favour the wife’s position.
Take away from the case
The wife and her team had done a very good job in this case sourcing information about the husband’s undeclared overseas wealth. Without that information there would have been little for the court to go on. When faced with a potential concealment of overseas assets, it is vital solicitors experienced in dealing with international issues and concealment are involved. It is not a straightforward process, and if it is not done properly, the opportunity to benefit from the non-disclosure is going to be curtailed.
In the husband‘s position, the best advice would always have been to provide that disclosure. His disregard for the court process in this case immediately put him on the back foot and in the crosshairs of the judge. All evidence he provided was treated with suspicion and particularly as against the strong evidence provided by the wife and her team, it was clear he was was going to be on a losing wicket.
Corrective action could have been taken by the husband at an early stage of the case had he sought legal advice. Far too often we find some people are glib about their disclosure obligations believing that concealment is the best form of protection. This could not be further from the truth.
If any of the issues covered in this case affect you or your situation I would strongly recommend that you seek advice. The sooner you act to protect your petition, the better that outcome is going to be. You can contact our Family Law team on 0345 450 5558 or enquiries@stephens-scown.co.uk