When there are financial proceedings underway in the context of a divorce both parties are under a duty to fully and frankly disclose their respective financial positions. However, it is common for spouses to suspect that the other party is not fully disclosing their assets. What can a spouse do to obtain further disclosure in these circumstances?
At one time, the law had permitted spouses to take and make copies of financial documents in some circumstances where it would otherwise be unlawful. Such actions were rather euphemistically called ‘self-help’, where in reality a breach of confidence was taking place.
However the Court in Imerman took a different approach and ruled that there should be no matrimonial exemption to the law of breach of confidence. In other words, where one spouse takes or uses documents in a way that would otherwise be unlawful, the family courts will not turn a blind eye. Helping yourself to your spouse’s financial information is no longer always permissible.
So the question is when will it be unlawful for a spouse to take and use financial documents? The answer is not as black and white as one might like. The key phrase is ‘reasonable expectation of privacy’. In other words, it will be unlawful to take any information over which you should appreciate that your spouse had a reasonable expectation of privacy.
The sorts of information that one would reasonably expect to be private will vary from case to case, but a key point is that the confidential nature of document will arise from the nature of the document itself.
So, for example, a key document concerning the acquisition of your spouse’s company by another company marked ‘confidential, private, to be opened by the addressee only’ is substantially more likely to be considered confidential than an annual pension projection update. This may even be the case where the highly confidential document is found in an unlocked drawer, though this will depend on the particular circumstances of the case.
Where a document is found to be confidential, the “snooping spouse’s” legal team may not rely on the document in Court, and the Court may order the return or destruction of the document. The snooping spouse’s legal team may even be barred from acting further in the proceedings.
Even where a document is not protected by a reasonable expectation of privacy, but does belong to the other spouse, the legal team of the “snooping spouse” will be under a duty to return such documents to the spouse to whom they belong.
However, where a spouse has significant and legitimate concerns that their spouse is not fully and frankly disclosing their financial position, there are actions their legal team can take to obtain further disclosure. These include:
- Writing to the other party with a warning of the potential for an application for a costs order for litigation misconduct;
- Asking the Court to draw adverse inferences from non-disclosure; and
- An application to the Court for a search order permitting the search of a spouse’s property for documents suspected to have not been disclosed.
Such action may lead to the disclosure of a significantly greater asset pool than previously thought. Contact our expert family finance team now to arrange a meeting to discuss your options.