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The case concerned an appeal of the decision where, on the basis of the husband’s non-disclosure, the first instance judge awarded the wife £1.4 million of the parties’ £1.7 million visible assets. The husband’s principal argument was that the court should not have made the award because it had failed to first evaluate the scale of the undisclosed assets. The Court of Appeal (Lady Justice King, Lord Justice Moylan and Lady Justice Rose) found that the court is not obligated to quantify assets before drawing adverse inferences; while quantification is desirable it is not always possible or proportionate.

The husband (53) and the wife (45) had been married for 21 years with three dependent children [7]. The husband was a successful businessman and the wife cared for the parties’ children [8]. At the final hearing, there were visible assets of £1.7 million [9]. The husband’s proposal was that the wife should receive £960,000. The wife’s cases was that, due to significant non-disclosure, she ought to receive £1.5 million [12].

The judge accepted the crux of the wife’s case: the husband’s undisclosed wealth. He found the case had been unnecessarily complicated by “the failure of the husband to provide adequate disclosure” [19]. He described the husband as being “generally obstructive in order to obfuscate and to prevent an accurate evaluation of the parties’ assets” and his evidence as “unreliable” [20].

As a result, the judge ordered the husband to pay the wife a lump sum of £1.4 million [14] on a clean break basis. He also ordered that until the lump sum had been paid and the husband had granted the wife her Get, the husband must pay the wife periodical payments of £22,000 pa [15]. The judge stated that this award allowed the husband “to provide for himself to a reasonable standard” [30]. A costs order was also made against the husband [15].

The husband appealed. Although there were five grounds of appeal [4] the argument relevant to the issue of non-disclosure was that the Judge had failed to carry out (i) an evaluation of the parties’ resources and (ii) a reasoned explanation for his award”. The husband claimed that, as per [16 (iii)] of NG v SG [2012] 1 FLR 1211, “If the court concludes that funds have been hidden then it should attempt a realistic and reasonable quantification of those funds, even in the broadest terms” [32]. The husband maintained that while not every case required an evaluation of the assets, this case did [35]. Therefore, without carrying out such an assessment, the judge was not able to conclude that the husband’s remaining resources were sufficient to meet his needs.

The court dismissed the appeal on all five grounds [116]-[131].

In the judgment, the court first carries out a thorough review of the law on non-disclosure and adverse inferences [64]–[79]. It then concludes that the answer to the question “Must the court give a figure or bracket for the undisclosed wealth?” is no: the court is not under that obligation [80]. The court points out that: 1) assets do not have to be positively available (Baker v Baker [1995] 2 FLR 829); and 2) the very fact of non-disclosure makes quantification difficult (Behzadi v Behzadi [2009] 2 FLR 649) [81].

The court then addresses the husband’s reliance on [16 (iii)] of NG v SG and concludes that not only does NG v SG not support the husband’s case, but [16 (viii)] contradicts it [82]:

I also do not consider that his submission is supported by NG v SG. To propose, as Mostyn J does, that the court “should attempt” quantification of the non-disclosed resources does not mean that the court must do so even when the evidence is not sufficient to support such an exercise. Further, to place the court under the obligation advanced by Mr Molyneux would be to place it in a straightjacket which would be inconsistent with what Mostyn J rightly said in [16(viii)], namely that the “court must be astute to ensure that a non-discloser should not be able to procure a result from his non-disclosure better than that which would be ordered if the truth had been told”.

Two further observations are made. First, imposing such a strict obligation of quantification on the the court is inconsistent with the overriding objective of proportionality [84]. Second, in most cases quantification is possible, but that does not mean it is a requirement [85].

The court then sets out guidelines for approaching non-disclosure [87] –[90]:

  • Generally, the court should try and determine the assets.
  • While the court should try and justify adverse inferences, that does not merit a disproportionate inquiry.
  • The court is not required to give a figure, or even a bracket, for the non-disclosed assets.
  • If the assets are uncertain, the court is entitled to infer that the non-discloser has sufficient resources and therefore the award represents a fair outcome (the approach in Al-Khatib v Masry [2002] 1 FLR 1053 and Ben Hashem v Al Shayif [2009] 1 FLR 115). This contradicts [16(viii)] of NG v SG where Mr Justice Mostyn says such a technique should not be the “sole metric of quantification”.

In line with previous authorities, it is reiterated that while the court must not jump to conclusions about undisclosed wealth, it is better an order is unfair to the non-disclosing party than the other party [91].

The court then proceeds to address the following grounds of appeal found at [4].

  • The judge was wrong to award interest on the lump sum and periodical payments.
  • The judge was wrong to order periodical payments until the the grant of the Get.

First, the court can order interest to accrue prior to the date of its payment [97]. While the court should be aware of the risk of double counting when ordering periodical payments until the date of payment of a lump sum, it can use a broad brush approach [101]. Second, the court has the jurisdiction to order periodical payments until payment of the Get [105], in particular in light of s10A of Matrimonial Causes Act 1973 (the provision which allows the court to delay granting a decree absolute until a husband has granted a wife the Get) [109]. Further, an obligation to pay periodical payments until the Get is granted does not compel the husband to grant the Get, he still has a choice [111].

  Although the husband’s submission that the judge had not provided a reasoned explanation for the size of the award were rejected, at [114] the court advises that, for clarity, a financial remedies judge should: set out his/her conclusion on the S25 factors; provide a schedule of the visible assets; set out how the award has been calculated.

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