What do I do if I think my spouse is hiding assets?

25 September, 2017

During financial remedy proceedings or as part of a voluntary process such as mediation, both parties will have a duty to the court and to one another to give full, frank and clear disclosure of their financial (and other relevant) circumstances. If a court is not provided with all of the information relevant to a certain case, it will not be able to properly exercise its discretion under section 25 of the Matrimonial Causes Act 1973, the relevant legislation, to determine a financial remedy order.

The court is very clear about this obligation from the outset of all proceedings and the Resolution Code of Practice requires all family lawyers to emphasise to clients the importance of being open and honest. Any failure to provide full disclosure could risk a final order being set aside and in extremely severe circumstances, criminal proceedings can be brought against the offending party if they are found to be deliberately untruthful. Unfortunately, these deterrents do not appear to be enough for some parties to stop and take note of their obligations and non-disclosure continues to be a problem for many divorcing couples. There is some light out there for the weaker party with the court offering the following assistance:

  1. During proceedings, you can invite the court to draw adverse inferences from the fact that your spouse has failed to disclose assets. In effect, you would be asking the court for a greater award on the basis that your spouse has sufficient assets and/or income to meet your proposal if a certain order is made. The starting point in all financial remedy proceedings is that each party bears their own costs. It is very rare that the courts depart from this rule, however, non-disclosure is one circumstance which may cause it to make an order that your spouse pay some of your legal costs.

 

  1. If you suspect that your spouse is being assisted by a family member or a business partner, for example, in hiding assets then it is possible to join that party into the proceedings or serve them with a witness summons to provide evidence at court and/or produce relevant documents to the dispute. If, however, a third party is joined to the proceedings and matters do not transpire as you anticipate, then it is important to bear in mind that you are at risk of a Judge making an order that you pay their legal costs.

 

  1. If there is a strong possibility that your spouse is likely to sell their business or a valuable asset and/or remove it from the jurisdiction, the court has the power to freeze its sale. A freezing injunction essentially allows you to preserve an asset so that the proceeds of sale are not dissipated before division of assets has been decided and a financial remedy order is made. This does of course require disclosure of the asset in the first place, however, if you have a strong suspicion of something such as this existing you should discuss whether a freezing injunction is appropriate with your solicitor.

Hand in hand with the question, what do you do if you suspect non-disclosure, is what you shouldn’t do. The Court of Appeal has made it clear; you cannot pry into your spouse’s private affairs and it follows therefore that they are entitled to retain their confidentiality and privacy. Any attempt to remove documents or information without your spouse’s permission is likely to be considered a breach of confidence which risks the imposition of civil or criminal sanctions. There are a number of other matters that must be considered in this regard therefore if you do have any concerns speak to your solicitor immediately.

If you would like help in determining whether any of the above actions are necessary in your case, please call Camilla Hooper on 01892 506 141 for a free telephone call to discuss your circumstances.