In the latest judgment in the long-running matrimonial dispute between Mr Farkhad Akhmedov and Tatiana Akhmedova, the Honourable Mrs Justice Knowles determined how confidential documents should be dealt with where the owner of the documents is not legally represented (in this case Mr Akhmedov, the husband). In this article, Ellie Hampson-Jones examines the recent decision in Akhmedova v. Akhmedov  EWHC 3140 (Fam).
This is the sixth reported judgment in this matter, following the substantive determination of the wife’s financial claims before Mr Justice Haddon-Cave in 2016. The case was heard by the Honourable Mrs Justice Knowles sitting in the High Court of Justice Family Division who observed that the case is part of long-running matrimonial litigation which has been distinguished by two key features:
- It is the largest financial order in favour of a wife within this jurisdiction; and
- The husband has failed to pay a penny of that award.
This litigation has led to a plethora of case law for practitioners spanning a number of areas, including disclosure, privilege, enforcement, joinder, extending jurisdiction and company law to name but a few. The latest case provides clarification for practitioners in relation to the treatment of so-called Imerman documents and the guidance on how these should be treated under UL v BK (Freezing Orders: Safeguards: Standard Examples)  EWHC 1735 (fam), particularly in circumstances where the other party is not represented or is choosing not to engage in the proceedings.
The law – how illegally obtained documents should be treated
Before considering the background to this case, it is worth revisiting the principles established in Tchenguiz & Ors v Imerman  EWCA Civ 908 and UL v BK. Imerman came first and established that one party (or others on their behalf) cannot “self-help” when it comes to disclosure, i.e. if a document is confidential to one party and has been illegally obtained by the other, there are strict rules about whether or not such document(s) can be relied upon. UL v BK followed the judgment made in Imerman and sought to clarify what practitioners should do if documents are illegitimately obtained. Mr Justice Mostyn set down the guidance that:
“If a wife supplies such [illegally obtained] documents to her solicitor then the solicitor must not read them but must immediately seek to obtain all of them from the wife and must return them all, and all copies (both hard and soft) to the husband’s solicitor (if he has one). The husband’s solicitor, who owes a high duty to the court, will read them and disclose those of them that are both admissible and relevant to the wife’s claim, pursuant to the husband’s duty of full and frank disclosure.
“If the husband does not have a solicitor, the wife’s solicitor must retain the documents, unread, and in sealed files, and must approach the court for directions. Those directions will likely be to the effect that the wife shall pay for an independent lawyer to be instructed to determine which of those documents are admissible and relevant to the wife’s claim.”
Background to this case
As identified in the previous article, there are, in effect, three ‘strands’ of assets to these proceedings: a superyacht, a cash and securities portfolio (previously held by UBS in Switzerland through a company known as ‘COTOR’), and an art collection.
This judgment concerned documents given to the wife by the former sole director and employee of COTOR, Mr Ross Henderson. Mr Henderson was previously employed by the husband, having met him when he was a banker at UBS in Switzerland. In August 2014, Mr Henderson took on the role to establish and manage his family office. During this employment, Mr Henderson was privy to email exchanges between the husband and his English solicitors (Kerman and Co). The husband dismissed Mr Henderson on 24 August 2015 after a breakdown in their relationship and in mid-2017 Mr Henderson copied emails and documents from the hard drive of his office computer and his server. In November 2017, Mr Henderson provided a USB stick of documents relating to the husband’s “evasion” strategy to the wife’s Liechtenstein and then Swiss lawyers.
The wife’s then matrimonial lawyers (Withers) instructed an independent barrister to review the documents and identify which documents were privileged to the husband and which were reviewable by the wife and her legal team. The barrister concluded that the majority of the documents were, prima facie, privileged. However, the veil of privilege should be pierced because the fraud/iniquity exception applied (i.e., where communications are conducted with the intention of pursuing a fraudulent purpose, they should not be protected). The majority of the documents were, therefore, deemed to be reviewable.
The guidance set down in UL v BK is that where a party is not represented, the first stage should be to obtain directions from the court. The court may then direct an independent review of the documents.
In this case, this first stage had not happened. When the wife instructed new solicitors (PCB) and these solicitors began proceedings for a freezing injunction before the Honourable Mrs Justice Knowles, it became apparent that this step had not been taken. Accordingly, PCB issued an application to deal with these documents.
The Honourable Mrs Justice Knowles made it clear that UL v BK “leaves no room for doubt” that an application to the court in relation to documents obtained in the manner they were is mandatory. However, the judge did not punish the wife for the failure to comply with this procedure given that:
- To date the wife had not deployed the documents and sought directions from the court before making use of them in the legal proceedings;
- Doing so would potentially deprive the wife of evidence which might assist in the unravelling the husband’s elaborate schemes to avoid compliance with court orders;
- Conducting a new, independent third-party review now would simply increase costs and delay without achieving a useful purpose.
It was directed that the wife could retain the documents and use them as if the husband had disclosed them in the proceedings.
Guidance for practitioners
The Honourable Mrs Justice Knowles’ judgment provides specific guidance to practitioners in circumstances where the owner of the documentary material in issue is not represented by a solicitor and/or is failing to engage with proceedings. She suggested that:
- First, an application to the court for directions must be made;
- Any application should be made as soon as practicable after the documents come into the other party’s possession; and
- If the court directs that there should be an independent third-party review of the documents, it is (usually) appropriate to allow the owner of the documents to make written representations to the independent lawyer that the material is subject to legal professional privilege.
If there is a disagreement in relation to point three above, this should be referred to the court for determination.
If the reviewing lawyer considers that the court’s assistance is required, they should provide a report explaining the basis of any referral to the court.
The Honourable Mrs Justice Knowles also provided observations as to the format of Family Division search orders: consideration of this point is not explored in this article.
The judgment also invites practitioners to give consideration to matters of privilege. In this respect, practitioners should also consider the recent case of Jet 2 and this is examined in the following article.
Richard Hogwood, Partner, Stewarts says: “The Honourable Mrs Justice Knowles’ judgment provides welcome reassurance that those who seek to evade orders of the court will not obtain an upper hand in matrimonial litigation.”
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