What happens if your ex-husband or wife lies about their financial position on divorce?
The recent decision in Thum v Thum is a reminder that both parties must give full and frank disclosure of their financial circumstances in any financial dispute on divorce. In this blog, I look at the law in general relating to such disclosure and the decision in the Thum case.
The case is a reminder that the court will not take kindly if a party tries to conceal their true financial position.
You won't be surprised to learn that some people are reluctant to give a full picture of their financial position when embroiled in a divorce. It is not unusual for people to blatantly lie, and/or conceal or refuse to hand over important documents. The latter was the situation in the latest hearing in what is turning into a long-running divorce saga being fought out in the UK courts.
The case involves banker Oliver Thum (the husband) and his wife Catja (the wife) who issued a divorce petition against her husband after discovering he had taken his mistress to an office party.
The latest proceedings between them involve documents stored on a flash drive that Mrs Thum found in the couple's joint safety deposit box in Zurich in 2016. Her German lawyers managed to access the password protected flash drive (although there a dispute about how they did this). The drive contains documents Mrs Thum wants to be disclosed in relation to her financial claim. In December last year, Mr Justice Mostyn directed Mr Thum to produce most of the documents on the drive. He failed to do this.
In March this year, Mrs Thum issued an application to enforce the judge's order. Mr Thum countered by saying that to produce the documents would put him in breach of German law. He claimed to have confidential obligations to the company of which he is managing director and that he couldn't hand them over even if he wanted to.
In his judgment, Mr Justice Mostyn pointed out that the parties, their German lawyers and the husband's UK lawyers had seen the documents but neither the wife's English solicitors nor the court had. He described the situation as "absurd".
After hearing evidence on German law, Mr Justice Mostyn said it was clear the husband faces no risk if the documents are disclosed and ordered him to hand them over. The judge said: "I am completely satisfied that the conduct of the husband amounts to an improper filibuster, mounted in bad faith, consistent with his attitude and conduct from the very dawn of this case."
The case is a reminder that the court will not take kindly if a party tries to conceal their true financial position. The law requires a full, clear and frank disclosure so that the court can make a financial order that is fair to both parties taking into account their needs and those of any children. Failure to do so can result in the court setting aside any financial order that has been made. The court's powers and sanctions can be extremely serious.
A few years ago, in the case of KG v LG, a wife successfully appealed against a financial consent order on the grounds that her ex-husband had made a material non-disclosure. After the order had been made, she discovered that trusts that her husband claimed had been set up for their children benefitted him instead. He had withdrawn around £9m from the trusts for himself in the four years since the divorce. The court set aside the consent order and the wife was able to apply for a revised financial settlement.
If you would like to discuss any issue relating to divorce or financial proceedings on divorce, please contact me at [email protected].