Elizabeth Biggs considers the decision of the High Court in the case of Thum v Thum [2019] EWFC 25 and the approach of the family courts to parties who do not comply with their financial disclosure obligations.

Background

These were protracted proceedings. The wife issued her divorce petition in October 2015. The husband challenged the English court’s jurisdiction at first instance and on appeal and lost in both courts. The matter finally came to the first hearing in the financial proceedings (the First Directions Appointment) in December 2018.

 

Historic non-disclosure

An issue arose regarding disclosure. The wife claimed that she had found a flash drive together with its password in a joint safety deposit box in January 2016. She and her German solicitors accessed the flash drive in May 2016 and discovered that it contained the husband’s financial documents.

The wife’s legal team disputed the husband’s claim that the documents were private and should not therefore be disclosed to the court. She contended that finding them in a joint safety deposit box together with the password resulted in the documents losing their confidential nature.  Nonetheless, she agreed to treat the documents as if they were confidential and gave the flash drive to the husband’s solicitors in November 2016. Unknown to the wife, her solicitors retained a copy in accordance with professional rules governing client documents.

The husband did not disclose the documents within the proceedings, thereby neglecting his obligation to give full and frank disclosure to the wife and the court.  The wife made an application for specific disclosure of the documents that she recalled seeing. She claimed not to have made notes of the documents yet asked for 18 specific documents or classes of documents to be disclosed.

 

Substantive hearing

Disclosure of the documents specified by the wife was ordered at the First Appointment in December 2018. Counsel for the husband stipulated during the hearing that any disclosure would be subject to corporate confidentiality restrictions, but this did not make it into the order. The husband failed to produce the documents.

The wife was forced to make an application to enforce the disclosure order and a hearing was listed for 3 April.

On 2 April 2019, the day before the hearing, the husband claimed that he could not provide the disclosure because they were subject to corporate confidentiality and German civil and criminal law prevented their disclosure. This was the first time he had raised this issue, despite being provided with the documents back in November 2016.

The husband produced a letter from his employer (who was also a close friend) stating that the husband was not permitted to disclose the documents to the English courts. The letter suggested that the company would issue proceedings against the husband and/or terminate his employment if he did so.

Mr Justice Mostyn gave both parties the opportunity to obtain expert advice on the matter of German law. Despite the question to the experts being clearly set out in the court order, the husband’s solicitors neglected to include in their letter of instruction to the expert that the order made was non-consensual and that the disclosure would be within confidential court proceedings. However, even on the basis of their limited instruction, the husband’s expert agreed that some documents were disclosable. In any event, the court found that the wife’s expert “convincingly demolished” the husband’s argument.

The court was therefore satisfied that the disclosure should be made without giving rise to civil or criminal proceedings in Germany.

Mr Justice Mostyn was not convinced that the husband would provide the documents required. To avoid further delay, he ordered that the wife could access the copies retained by her German solicitors. This removed any obligation on the husband to disclose the documents and any residual concerns he might still have as to breaching corporate confidentiality or criminal law.

Mr Justice Mostyn was unimpressed with the husband’s behaviour, finding that it was “improper filibuster, mounted in bad faith, consistent with his attitude and conduct from the very dawn of this case”.

Carly Kinch, partner, comments:

“The recent decision in Thum v Thum is a reminder that the court has little sympathy for parties who flaunt their disclosure obligations. A case cannot properly proceed if either party is refusing to give full and frank disclosure as to their worldwide assets. Parties must take care not to give the court a poor impression of their conduct or face the consequences.”

 


 

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