Can couples hide assets from each other during divorce?
Couples are not allowed to hide their assets from each other during divorce and have a duty to disclose all relevant financial information to each other during the course of proceedings. Recent case law in this area has altered things but not to the extent that full disclosure is not required.
The Hildebrand rules
The ‘Hildebrand rules’ refers to a case between Mr and Mrs Hildebrand who, upon divorce and subsequent ancillary relief proceedings, Mrs Hildebrand took financial documents from Mr Hildebrand, copied them and kept the copies to use in court.
Mr Hildebrand claimed the documents should not be allowed to be used at court as they were his and had been taken from him against his will; the court ruled that they could be used.
The Hildebrand case therefore made it lawful to take your spouse’s documents, copy them and keep the copies so long as the originals were returned and the other party and their solicitors were informed.
This provided for a situation whereby it would be advantageous to search for your partner’s personal documents and copy them to use for your advantage and their detriment. The rationale for this was that both parties are under a duty to disclose to the other party details of their financial position and capabilities. This is so all parties are aware of the true position and the court can rule accordingly on how the financial assets could be split.
As the matrimonial assets are to be pooled together and then split in accordance with how the judge decides they should be, the rule in this case was seen as improving the chances that full disclosure would be made by both parties. It was argued that each party would not be disadvantaged by this rule as they would have the originals returned to them, be aware of what had been copied, and would have had to have disclosed the documents anyway.
Tchenguiz v Imerman
This recent case has dramatically reduced the scope in which this method of ‘self help’ can be used. Here it was held that the Hildebrand rules could not be justified in law and therefore could not be a justifiable way of obtaining evidence. This case has declared that the Hildebrand rules cannot be used to justify taking your partner’s documents and, should you do so, your partner would be entitled to an injunction preventing you from using them. This case is expected to be appealed in the Supreme Court, but at the moment it is the law and has dramatically reduced the power of self help when it comes to disclosure in ancillary relief proceedings.
The reason for the decision in Tchenguiz v Inerman was because the court could not justify what would be an illegal or actionable act being used to somebody’s advantage. It does not, however, mean that parties can not disclose their assets. Any party who does not make full disclosure is likely to find that the judge makes negative inferences as a result. Each party can also apply for specific disclosure form the other party, whilst repeated non-disclosure could result in criminal sanctions.
- Source:
- FindLaw
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