DIY And Divorce And Disclosure
Published on 21 February, 2023 | Matt Hodgson
There are few elements of our personal and professional lives which have not benefited from the great surge in technological advances over the last few decades.
Smartphones which sit neatly in our hands enable us to forge relationships with and remain connected to individuals on the other side of the world, if we’re so inclined.
Those same devices can also allow us to administer the divorce process should those arrangements sadly founder.
The online submission of petitions to end a marriage has proven enormously popular, as the latest figures from the Ministry of Justice make clear (https://www.gov.uk/government/statistics/family-court-statistics-quarterly-july-to-september-2022/family-court-statistics-quarterly-july-to-september-2022#divorce).
An increasing proportion of all divorce applications are digital. Between July and September last year, 96 per cent of 27,868 petitions were submitted in this way – up from 81 per cent in the same period in 2021.
Some of those were handled directly by the men and women who concluded that their marriages were over.
Even these so-called ‘DIY divorces’ require the input of experienced family lawyers to ensure that the division of joint marital assets is fair.
The confluence of DIY and divorce has surfaced in a slightly different fashion in relation to a long-running dispute which has recently been considered by the Court of Appeal (https://www.bailii.org/ew/cases/EWCA/Civ/2023/115.html).
It featured James Goddard-Watts, whose family had founded the hugely successful hardware business Screwfix, and his second ex-wife, Julia.
Prior to marrying in 1996, the couple had been together for nine years. After raising three sons together, they separated in 2009 and divorced the following year.
Under the terms of a June 2010 settlement agreed on assets which her former husband disclosed as part of the divorce process, Mrs Goddard-Watts was awarded cash and property totalling £7.6 million, while he retained £9 million.
Yet, it subsequently emerged on two occasions that Mr Goddard-Watts had deliberately underestimated his true wealth.
As Lady Justice Macur set out in the latest ruling, after misrepresenting his assets, he had then failed to disclose “likely significant capital accumulations in the foreseeable future”.
That “fraudulent non-disclosure” was, the Court concluded, so severe that it renders a fresh assessment of the “the entire financial landscape” essential.
The outcome is a telling reminder of the importance of spouses going through a divorce being completely honest about their assets.
It should not really come as a surprise, given the instructions on the document – Form E – in which such information is supposed to be set out (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1128798/Form_E_0123_save.pdf).
For the avoidance of any doubt, it states that: “you have a duty to the court to give a full, frank and clear disclosure of all your financial and other relevant circumstances.”
The significance of any omission “may result in any order the court makes being set aside” and, furthermore, if someone is deliberately untruthful, “criminal proceedings may be brought against you for fraud”.
So far, so stark.
There can be no selectivity either. Another notable Appeal Court dating from 2009 hinged on a husband’s reasoning that key details were “not information that he thought he had a duty to disclose”.
Lord Justice Thorpe, a former Vice-President of the Family Division of the High Court, explained that it wasn’t for spouses to decide what should or shouldn’t be disclosed or what consequence such deliberations would have.
“Any information that is relevant to the outcome”, he insisted, “must be disclosed” (https://www.bailii.org/ew/cases/EWCA/Civ/2009/412.html).
The need for candour, then, is absolute and isn’t only confined to the initial financial positions set out in Form E but continues throughout the entire divorce proceedings.
Where it comes to the kind of business interests dealt with in the Goddard-Watts’ case, it can, for instance, encompass bonuses, shareholdings in or the sale of a business, dividends and promotions.
In a purely domestic context, it might relate to inheritance, lottery wins or even Premium Bonds.
I should mention that the review of an agreed divorce settlement is not a routine process but is only really an option in circumstances where there has been a material non-disclosure of relevant facts.
As with Mr and Mrs Goddard-Watts, the failure to be full and frank can lead to substantial inequality and unfairness.
The length of their case reinforces the position of the Supreme Court that there is no time limit on re-examining settlements, if it is found that non-disclosure has been deliberate.
Even so, there are practicalities to contend with. The longer that it takes to uncover wrongdoing, the harder it might be to piece together the evidence which can justify a settlement being reopened.