For many years it has been the law that those who have to turn to the courts to resolve the financial aspects of divorce proceedings (or following the breakdown of any relationship) are expected to display complete honesty and straightforwardness in the information which is given to the court and the other party. It should be emphasised that this duty applies equally to both parties.
The reason for stringent observance of this obligation is clear. The court is required to ensure that the outcome is fair to both parties and appropriate for any children. A judge can only discharge that obligation and achieve fairness if the full financial position of both parties is revealed quite clearly.
During the course of such proceedings, both parties are required to set out their financial position as it is at that time and how each expects it might develop in the mid-term future. Once the initial exchange of information has taken place, written questions can be raised, provided that the questions are approved by the court and are directly relevant to the issues to be decided. Again, scrupulously honest replies must be given to such questions, which are treated as being part of the evidence to the court.
Further investigation may be required in some more complex cases, sometimes from experts. This evidence can relate to such issues the value of a business or of investments, including property or pensions or other assets (for example jewellery or stamps or vintage cars or private aeroplanes etc.). It may also relate to the health of one (or sometimes both) of the parties, if it is said that ill-health may prevents them from working. The purpose of such enquiries is to ensure that when the case gets to court, the judge has all the required information to enable a completely fair analysis of the overall situation to be undertaken.
In the absence of an agreement, the case will go to trial in court before a judge. It is usual for each party to give oral evidence and they can be cross-examined by the other party. Such evidence will be given after the party has sworn the oath to tell the truth. If, later, it is discovered that deliberately false evidence has been given, that party could be prosecuted for perjury. In addition the case could be reopened and a judge could impose a different solution.
Some people find the process intrusive and unnecessary. Intrusive it certainly is, but it is required for the reasons given above. It will, however, never be unnecessary because the judge, in the pre-trial enquiries and at the trial itself, will only allow those investigations and questions which are required and directly relevant to arrive at a fair result.
By way of example, the Supreme Court has considered a case in which there was not a huge sum of money involved and the parties came to an agreement before the final trial. However, the wife felt so anxious about the failure by her husband to tell the full truth about his financial position that she insisted that there should be included in the wording of the settlement agreement a statement saying that she did not believe he had been honest and frank. The husband responded by including a denial of that allegation. Later, after the husband had been sent to jail for money laundering, it was discovered that the wife’s suspicions were well-founded. The husband had deliberately failed to disclose the existence of certain assets and had falsely denied owning others.
The Supreme Court decided that the wife was entitled to reopen her case. One of the judges pointed out that it would be entirely wrong, even though the parties had reached a settlement, for the wife to receive a much lesser sum than she would have done if the husband had been honest. It would offend any reasonable sense of justice if the husband was permitted to benefit from his dishonesty.
In another case, there was the potential for many millions of pounds to be involved. In the proceedings between him and his wife, the husband denied any plans for a floatation of his company. The parties came to an agreement based on the husband’s denial of any such intention, but before the court order recognising that agreement had been drawn up the wife discovered information leading her to the conclusion that the husband had lied in giving his evidence on this issue. To make matters even worse for the husband, at a later date, after the wife had made an application to set aside the agreement which the parties had reached, the husband made a written statement which confirmed the terms of his original evidence even though it was plainly disproved by the documents which he himself attached to his statement. However, the judge declined to set aside the agreement which the parties had made.
The Supreme Court said that it would be wholly unfair on the wife if the husband were to benefit from his own deception. In addition, great emphasis was placed on the fact that any court dealing with financial proceedings after a divorce was legally obliged to investigate the situation independently. The original court could not, in this case, have been satisfied that the agreement was fair and reasonable to both parties unless it was working on all the relevant information, including the potential value of the shares in the husband’s company.
The majority of people involved in such cases are honest and just want the proceedings over and done with as quickly and fairly as possible. Some people, however, think that they can bend the rules, even in the face of good legal advice. They may just find that they pay dearly for any deception. They are also at much greater risk of having to pay both their own costs and those of the other party.
If you think that you have been affected in the ways mentioned in this piece, you are recommended to take good legal advice as soon as possible.