Full And Frank Disclosure Is The First Commandment

In protection of the first commandment - the Court's duty to draw adverse inferences.

In the most recent judgment in the case of Al-Baker v Al-Baker [2016], deputy High Court Judge, Nicholas Cusworth QC hearing the case, drew adverse inferences in assessing the extent of the matrimonial pot, where the husband had failed to provide full and frank disclosure of his assets in financial remedy proceedings.

The duty to draw adverse inferences in situations of material non-disclosure allows the court to decide that a party's undisclosed assets enable them to pay a higher award to their spouse. The duty is one piece of the Court's armour in protecting the principle of full and frank disclosure, a principle of great importance as highlighted in this memorable quote of Mr Justice Mostyn in NG v SG (Appeal: Non-Disclosure) [2011] EWHC 3270 (Fam),:

'The law of financial remedies following divorce has many commandments but the greatest of these is the absolute bounden duty imposed on the parties to give, not merely to each other, but, first and foremost to the court, full frank and clear disclosure of their present and likely future financial resources. Non-disclosure is a bane which strikes at the very integrity of the adjudicative process.'

The Court does not shrink away from utilising its power to draw adverse inferences notwithstanding the overall size of the matrimonial pot; in the case of Young v Young the Court found the husband to have hidden assets worth approximately £45m and in the case of Rabia v Rabia the court found the husband had £300,000 assets he had not disclosed.

Notwithstanding the application of adverse inferences, the number of cases before the Courts which include issues of non-disclosure remains high, and this raises the question whether the power is a sufficient deterrent to the would-be non-discloser? Some call for a more extreme response by the Courts - suggesting in the cases of non-disclosure that all assets are transferred to the 'innocent' party. Is this the way the Courts should be going?

Nicholas Cusworth QC's stance in the case of Al-Baker demonstrates a highly principled but perhaps cautious approach to the use of the 'draconian' power of adverse inference, and reflects the desire of the Courts to find balance between protecting the wronged party and meting out appropriate justice to the perpetrator. In applying the law, Mr Cusworth QC reminded himself of the principles that must be applied when looking at the law of...