Wife’s claims adjourned based on “dodgy” documents in divorce

Before the pandemic and the unexpected and life-changing lockdown of March 2020, the majority of family lawyers conducted their cases using paper files and original documents.  Only a very few solicitors and barristers used digital documents and electronic files.  However, the need to work from home, and conduct court hearings remotely quickly meant that the use of modern technology increased exponentially.  Who had even heard of Zoom prior to March 2020?  Suddenly, we were all experts.

Almost overnight, solicitors and barristers became accustomed to using scanned or downloaded documents, and electronic bundles at court.  It became common to download documents such as bank statements from website as pdfs, and case “papers” were routinely emailed between firms of solicitors, barristers’ chambers and courts where once lever-arch files would have taken their chances in the post.  Coincidentally, in early March 2020 in the Family Division of the High Court and in the Family Court, Mostyn J sent out an “e-bundles protocol” permitting the use of electronic bundles with the court’s permission and directing how those bundles should be prepared.  Two years on, it is unusual for the court to request a hard copy of a bundle, and rare for solicitors to exchange paper copies of documents.

As a result of this recent significant change in practice there are increasing concerns about the ability of parties to manipulate and fabricate documents being presented in evidence in financial proceedings.

Of course, in the majority of cases, parties will be honest and provide genuine documents by way of their disclosure.  However, a recent case determined by His Honour Judge Hess, X v Y [2022] EWFC 95, has been published ‘to draw wider attention to the ability of dishonest parties to manufacture bank statements (and other documents) which, for all practical purposes, look genuine, but which are in reality not in that category’.

In this particular case, the husband had failed to provide proper financial disclosure, and it was in fact determined that he had dishonestly and falsely manufactured a bank statement showing a multi-million deposit paid for his company, in order to mislead his wife into giving up work and relocating to the UK some time before.  Was the husband dishonest in saying that he had money then, or was he being dishonest in saying he had no money now? The court was unable to draw any firm conclusions about whether the husband had been successful in business, or was making it up.  Even though there was some photographic evidence of a luxury lifestyle, there was no hard evidence of any assets held in the husband’s own name.  The court simply could not draw a firm conclusion either way, which left the wife in a very perilous position.

The wife argued that her capital claims against her husband should be adjourned until better evidence of the husband’s financial position could be obtained.  It is very unusual that the court can be persuaded to leave a party’s claims “open”, or deferred.  There is a common objective that litigation should be final and conclusive, and adjourning one party’s claims against the other flies in the face of that objective.  However, it is possible for that common objective to be overridden in some circumstances.

There is a principle arising from MT v MT [1992] 1 FLR 362; AW v AH [2020] EWFC 22; Quan v Bray & Others [2018] EWHC 3558; and Joy v Joy-Marancho and Others (No 3) [2015] EWHC 2507 that:

‘If a litigant engages in conduct, which may include full or partial non-disclosure, which causes the court to conclude that a once-off division of capital now is likely to cause unfairness and injustice to the other party then the court, in exception to the normal practice, has a discretion to decide that the normal desirability of finality in litigation should be overridden to preserve the possibility of a fair outcome for the parties.’

In the case of X v Y the Judge determined that the test above had been met, and therefore the wife’s capital claims were adjourned for a decade in view of dishonest fabrication of bank statements by the husband, and uncertainty as to assets.

The outcome of this case highlights the real difficulties the family courts have in dealing with parties who flaunt the rules and gain a dishonest advantage.  The wife was left with no capital immediately, and while the Judge did what he could to remedy this, it might be considered that even though she has the ability to return to the court to pursue her claims in the future, the husband has in fact “won”.  It is no wonder that a disadvantaged party will wonder why the courts do not take a tougher line in relation to poor or dishonest disclosure.

Determining the reliability of documents provided electronically is fraught with difficulties.  Metadata can be examined, but will often be misleading, particularly when documents have been shared from clients to their solicitors, perhaps printed, scanned and shared again with the other party’s solicitor, barrister and the court.  However, inconsistent metadata has led to the discovery of manipulated and forged documents in the past.

What does this all mean for anyone going through a divorce today?  That they should seriously consider having the support of an experienced lawyer who specialises in financial settlements to ensure that their best interests are met is a given.  But while the court system and processes catch up with the ever-evolving world we are practicing in, having a lawyer who will be alert to the unusual, and considerate of the risks which now present themselves, is more relevant than ever before.

For anyone going through a separation, legal advice is strongly recommended, and our specialist lawyers will be very happy to assist you.