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As family solicitors, we invest time in carefully explaining to our clients the importance of clear, full and frank disclosure. But what we typically have in mind are those people who think they can hide from the Court’s (or, more precisely, their spouse’s) prying eyes in divorce proceedings that secret bank balance saved for a rainy day, an offshore fund they think will be impossible to track, or the beneficial ownership of a company hidden behind a corporate structure.
Full and frank disclosure is not just essential when it comes to financial proceedings on divorce. It is important in the preparation of a pre-nuptial agreement too. It is in both parties’ interests to disclose their position properly – for the financially stronger party to try and maximise what is their ‘separate property’ and therefore protected by the agreement, and for the financially weaker party to demonstrate their vulnerability and, potentially, the unfairness of the agreement, should they wish to try and challenge the application of the pre-nup in the future.
It was therefore surprising to see the recent case of WW v HW  EWHC 1844 (Fam) in which the financially weaker party substantially exaggerated their financial resources before the marriage. The facts of the case were as follows:
The judge had no difficulty in finding that it would be fair to hold the husband to the parties’ agreement (albeit he had to make sure his needs were met). Those needs were, however, not interpreted generously. One of the judge’s reasons for this was that the pre-nuptial agreement had not provided for needs, presumably at least in part because the husband’s disclosure had shown him to be self-sufficient and able to “stand on his own financial feet”. The judge concluded that the husband had to accept responsibility for the disclosure he chose to give, true or otherwise.
The Court has long penalised non-disclosers and tellers of half-truths by drawing adverse inferences against them and, for example, making findings that their assets are greater than stated. It is interesting that, while coming from a very different angle, the family Court has once again emphasised the importance of upfront, honest disclosure and has penalised the party who failed to do this. This is perhaps not surprising given that the overarching goal of achieving ‘fairness’ can only properly be attained when the Court knows what it’s dealing with.
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