The recent case of Joy v Joy – Morancho and others reminds us once again that a full, frank and honest disclosure of your financial circumstances must be provided to one another and to the court before financial claims can be either negotiated upon or decided by the court. In this case the court took a hard line against the husband when it became apparent that he had lied to the court about the true extent of his assets and had set out with the deliberate intention of concealing the truth of his situation. The judge in the case, Sir Peter Singer, ordered that the husband should pay the wife’s costs for proceedings since 1st May 2013 amounting to approximately £334,000 to be paid within fourteen days stating that such an order was no less than the conduct deserved.
Why is financial disclosure so important?
The extremes that this husband went to are rare and usually we do receive a full and frank disclosure from the other party without too many issues having to be raised. I get asked why a disclosure in such detail is necessary as clients sometimes feel they know their partner’s financial situation.
I always explain that you both need to have full financial information before you can agree how your financial arrangements should be separated out. It is impossible to know what a fair financial settlement is without seeing a full financial picture before you negotiate or put forward an offer to settle. It may be that you were unaware of a change or, as in a recent case of mine, that someone had inherited a property but not disclosed this to their spouse.
When you issue a financial relief application at court, you have to complete a Financial Statement known as a Form E. At the end of that form you have to verify the information with a statement of truth that you have to sign. Deliberately providing untruthful information may be a criminal offence and is contempt of court. If a court order is later found to have been made on inaccurate information it is possible to ask the court to reopen the case and make a new order.
This recent case provides added weight to argue that the costs of the case be paid by the person who was not truthful from the outset. If you are asked to complete a Form E, financial disclosure document make sure you fill it in fully and honestly. The potential penalties for not doing so are too great to risk.
Family Law Solicitors