Getting To The Truth (Or Filling The Gaps)
When a couple divorce and are going through the process of trying to sort out their finances, there is a responsibility on each of them to provide the necessary information to enable the discussions to take place in an informed manner. Since 1985 it has undeniably been the case that the parties to financial proceedings are under an obligation to make full and frank disclosure of all relevant circumstances. Such disclosure is invariably given in the first instance by both parties completing detailed financial statements known as Form E's. These statements contain what is known as a 'statement of truth'. This recites that the person who completes the form confirms that the information contained in it 'is a full, frank, clear and accurate disclosure of my financial and other relevant financial circumstances'. Signing such a statement knowing it to be untrue is a contempt of court. The punishment for contempt can be as severe as one month's imprisonment (up to two years in a higher court) or a fine of £2,500.
All too often, however, one or other of the parties (or sometimes both) feels that the other has not been entirely candid in their presentation. Sometimes this is borne out of the lack of trust which is all too prominent at such times but often there is good reason for believing that the information given is misleading or lacking in important respects. On many occasions it is said that the parties' lifestyle or spending habits during the marriage was at complete odds with the financial information given in the disclosure process.
A suspicion that the other party is attempting hide things can often be the trigger for the commencement of financial proceedings. Once financial proceedings have been started this duty to give disclosure is owed to the court as well as the other spouse and judges have certain powers available to them to try and secure compliance. In addition, over the years, the judiciary has developed a method of trying to 'fill in the gaps'. Judges who deal with financial claims exercise a quasi-inquisitorial function. When faced with evidence of non-disclosure they are entitled to draw inferences adverse to the non-discloser and make awards based on those inferences. As long ago as 1955 Sachs J stated:-
[where a husband] "seeks to minimise the wife's claim, that husband can hardly complain if, when he leaves gaps in the court's knowledge, the court does not draw inferences in his favour. On the contrary, when he leaves a gap...
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