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Seek help before you help yourself

It has been a long been established in what came to be known as the ‘Hildebrand Rules’ (Hildebrand v Hildebrand [1992] 1 FLR 244) that the family courts will not penalise either spouse for secretly obtaining, taking and copying each other’s documents in financial remedy proceedings – provided they not been taken by force – and that these documents, even if wrongfully taken, will be admitted in evidence. This is because there is an overarching duty on the parties to give full and frank disclosure. Allowing these documents to be admitted as evidence would enable cases to be dealt with fairly, by providing the Court with all the relevant financial information. This is no longer the legal position following the judgement of the Court of Appeal on the 29th July 2010 in the case of Imerman (Tchenguiz v Imerman; Imerman v Imerman [2010] EWCA Civ 908).

The facts of this case revolve around South African-born Mr Imerman, 53, who was in business with his ex-wife’s brothers, property tycoons Vincent and Robert Tchenguiz, and shared an office and computer facilities in Mayfair. In 1999 Mr Imerman sold a major stake in the tinned-fruit firm Del Monte for £380 million.

His wife, Lisa Tchenguiz, 43, issued a divorce petition in December 2008 and within a few weeks Mr Imerman was evicted from the business premises owned by one of his brothers-in-law. It emerged that the brother-in-law had also taken from the husband’s password protected computer system vast amounts of material stored in the form of emails or attachments (estimated between 250,000 and 2.5 million pages).

The issues to be determined were whether the documents secretly obtained from Mr Imerman’s computer should be returned to him and whether his wife’s solicitor should be restrained from making use of the information contained in the documents.

Mr Imerman initially successfully claimed that the brothers, two IT staff and a solicitor had no right to retain or use the material which was downloaded without his knowledge. The brothers and other parties appealed.

In a further hearing in December 2009 Mr Justice Moylan ruled that although the documents were privileged, the wife could use information contained in the files to prove her husband’s wealth. The decision was appealed.

The Court of Appeal ruled that the ‘Hildebrand Rules’ have ‘no basis in law and could not be relied upon to justify a defence to conduct which would otherwise be criminal or actionable in a civil court. It was made clear that if information is confidential it is entitled to protection.

But this leads us to an important question; what are confidential documents? Confidential documents are papers which your spouse reasonably expects to be private to include bank statements, investment/policy documents, or letters addressed solely to your spouse. However, if your spouse leaves documentation, such as bank statements, lying around the house, they may well lose their confidential nature. The Court would then have to consider the nature of the relationship between the parties and the way the parties lived and conducted their personal and business affairs. Thus, if the parties each had their own study, it would be less likely that a Wife could copy the statement without infringing the Husband’s confidence if the statement had been left in the study rather than in the marital bedroom.

It seems that the test for confidentiality is very low. A bank statement left lying in the living room might lose its confidential status, but the fact that it was left in a Husband’s own study, even if it was not under lock and key, may adequately prove that the Husband expected it to be confidential.

Any unauthorised copying, communicating or simply retaining confidential documents belonging to your spouse in financial remedy proceedings is unlawful. It has now been established that in future any attempt by one person in a divorce to obtain documents without permission could result in heavy costs orders against them or possible criminal sanctions.

This decision could mean that some spouses are disadvantaged: even if they know that the other spouse has deliberately hidden assets, they can do nothing about it – they are prevented from showing documents to their lawyers or the Court.

So what happens when you know your husband or wife is secretly hiding a bank account or another asset and you can easily obtain a copy of their bank statement to prove their dishonesty?

It may still be possible to rely upon documents that are left lying around the home, and not taken by force, provided that originals are not retained and an opponent spouse is informed that copies have been taken. Nevertheless, after Imerman this is still liable to attack. Be warned, it is an actionable breach of confidence for a person without the other’s authority to examine, make, retain or supply to a third party a copy of another’s information and documentation.

You may have to rely upon your recollection of information in the confidential documents to argue that your spouse has not fully disclosed the assets. You cannot use the documents you have seen but you could use your memory of them.

The implications of this case are far reaching and are likely to incentivise the financially stronger party to conceal their assets.

The Court does appear to be trying to balance the pursuit of justice with the privacy and rights of the individual. There was clear conflict of procedure between the Civil and Family Courts prior to Imerman and one thing that has now been achieved is more uniformity between the different divisions.

All is not lost and there are available remedies available if you fear that your spouse will not provide full and frank disclosure in financial remedy proceedings as there are lawful ways to obtain evidence showing your spouse’s true wealth.

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