P-S v C

JurisdictionJersey
CourtRoyal Court
JudgeBailhache, Bailiff and Jurats Le Brocq and Allo
Judgment Date09 October 2006
Date09 October 2006
ROYAL COURT
Bailhache, Bailiff and Jurats Le Brocq and Allo

A.D. Robinson for the representor;

A.D. Hoy for the respondent.

Cases cited:

(1) Barder v. Barder (Caluori intervening), [1988] A.C. 20; [1987] 2 All E.R. 440; [1987] 2 FLR 480, considered.

(2) Burns v. Burns, [2004] 3 F.C.R. 263; [2004] EWCA Civ. 1258, applied.

(3) Livesey v. Jenkins, [1985] A.C. 424; [1985] 1 All E.R. 106, applied.

(4) Robinson v. Robinson, [1982] 2 All E.R. 699n; (1982), 4 FLR 102; 126 Sol. Jo. 360, applied.

(5) Shaw v. Shaw, [2002] 2 FLR 1204; [2002] EWCA Civ. 1298, applied.

(6) T v. T (Consent order: Procedure to set aside), [1996] 2 FLR 640; [1997] 1 F.C.R. 282, applied.

(7) White v. White, [2001] 1 A.C. 596; [2001] 1 All E.R. 1; [2000] 2 FLR 981; [2000] 3 F.C.R. 555, referred to.

Family Lawfinancial provisionappealsleave to appeal out of time may be granted if (a) new events invalidate basis on which award made, or (b) material non-disclosure by party prior to awardapplication to be made promptlyif (b), time allowed to comprehend extent and consequences of different facts (with professional accounting advice if appropriate), obtain legal representation and possibly public funding6-month delay between intention to challenge order and application may be excessive

Family Lawfinancial provisiondisclosure of assetsparties to make full and frank disclosure of assetsduty of highest importance and enables clean breakorder set aside if non-disclosure material, i.e. substantially different order otherwise madenon-disclosure may be active or passiveno defence that other party could have discovered truth

The representor applied for a lump sum awarded to her in matrimonial proceedings to be set aside and the amount reassessed.

The representor (the wife) and the respondent (the husband) were married for 28 years and separated in 2001. The husband, who was an accountant and a senior partner in a business group, had become very wealthy during the marriage, whilst the wife brought up their children and managed the domestic affairs. In divorce proceedings in July 2003, the Royal Court awarded the wife 56% of the matrimonial assets, totalling 4,855,921, which included a lump sum of 2.2m. that the husband was ordered to pay within five years.

The wife had considerable difficulty obtaining financial information from the husband in those proceedings. In particular, he failed to provide detailed information concerning the extent of the transfer of business from Jersey to Switzerland and instructed his adviser to ignore the group's Swiss business when assessing his financial position. The wife's advisers and the court valued the Swiss business at 42,846.

Some time after the July 2003 order was made, the wife discovered that the group's Swiss business had in fact been valued at 1.8m. in December 2003. She therefore suspected that the husband's financial position had been underestimated in their matrimonial proceedings. She instructed an English forensic accountant in October 2004 and by January 2005 intended to challenge the lump sum awarded to her on the ground of the husband's material non-disclosure. The present application was not made until July but, in the meantime, she had difficulty enforcing the 2003 order and obtained a freezing order against the husband's assets.

The wife submitted that the lump sum of 2.2m. awarded to her in the 2003 order should be set aside and reassessed as the husband had failed to disclose financial information which had resulted in a significant undervaluation of his assets.

The husband submitted in reply that (a) the wife's application should not be heard on the merits because of her delay; and (b) the lump sum should not be reassessed as he had disclosed that some business had been transferred to Switzerland and would have provided further details if he had been requested to do so.

Held, finding for the wife:

(1) The wife's application for leave to appeal against the financial provision order on the ground of the husband's material non-disclosure would be heard despite the delay in bringing the proceedings, as it was not excessive in the circumstances. A financial provision order could be set aside because of material non-disclosure by a party or a supervening event which invalidated the basis on which the order was made, but proceedings had to be brought reasonably promptly. If material non-disclosure were alleged, an applicant should be allowed time to comprehend the extent and consequence of the discovery (including acquiring professional accounting advice where appropriate), obtain legal representation and, where necessary, public funding. In the circumstances, it had been reasonable for the wife to have instructed an English forensic accountant and the time spent in doing so was not excessive. In addition, whilst the delay of six months between declaring her intention to challenge the award and making the application might ordinarily have been considered too long, it was not excessive in the present case ( paras. 6-8; paras. 10-14).

(2) The husband had failed to make full and frank disclosure of his assets in the 2003 proceedings and, since his non-disclosure was material, the lump sum of 2.2m. ordered in favour of the wife would be set aside and the amount reassessed. As a party to financial relief proceedings, the husband had had a duty to make full and frank disclosure of all relevant information. It was a duty of the utmost importance and enabled a clean break to be made between parties, which the court sought to achieve whenever possible. In order to do so and as finality in litigation was also in the public interest, an order would only be set aside if a party's non-disclosure was material, i.e. if the order made was substantially different from the order that would have been made if there had been full and frank disclosure. Non-disclosure could be active, by giving false information, or passive, by failing to give relevant information. It would not, therefore, be a defence to an allegation of non-disclosure for a party to claim that the information which he had failed to disclose could have been discovered by the opposing party, as the latter was not required to act as a ferret. In the present case, as a result of the husband's material non-disclosure his financial position had been underestimated in the 2003 proceedings. The 2.2m. lump sum would therefore be set aside and, in the absence of agreement between the parties, argument would be heard and a new figure substituted ( paras. 16-21; paras. 39-40).

1 BAILHACHE, BAILIFF:

Introduction

On July 9th, 2003, the court delivered its original judgment in this cause ("the 2003 judgment"). In brief summary, the court found that this was a long marriage of 28 years to which neither party brought financial assets of any significance. At the time of their separation in 2001, the respondent husband (to whom we shall refer for convenience as "the husband") had become a wealthy man through his business endeavours. The petitioner ("the wife") had devoted herself to bringing up their four children and managing the family's domestic affairs. The court adopted and applied the reasoning of Lord Nicholls of Birkenhead in White v. White (7).

2 The application of the principles set out in White to the facts of the case led to a division of family assets which is described fully at paras. 24-29 of the 2003 judgment and which we will not repeat here. Suffice it to say that the wife received 56% of the matrimonial assets, totalling 4,855,921, including a lump sum payment of 2.2m. to be paid on or before July 9th, 2008.

3 The husband is an accountant by profession and the senior partner in an enterprise which we described in the 2003 judgment and shall continue to call "the CCB Group." One of his partners was NB, who was himself embroiled in matrimonial proceedings which were compromised in May 2001. On August 26th, 2003, NB's former wife ("Mrs. B") applied to set aside the consent order on the ground of NB's failure to give full and frank disclosure of his assets prior to the compromise agreement.

4 Mrs. B is friendly with the wife and discussions between them led the wife to suspect that the husband in this cause had equally failed to disclose the extent of his assets in a material way. She employed forensic accountants to investigate her suspicions and that led in due course to the issue of a representation dated July 13th, 2005 seeking to set aside that part of the 2003 judgment which awarded her a lump sum payment of 2.2m., and a fresh adjudication of that part of the award. The basis of the application is that the husband had been guilty of material non-disclosure of financial information.

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