What a £110,000 non-disclosure case teaches separating couples 

It is clear that divorce can bring out the very worst in some people and their finances, or at least how honestly they disclose them, in particular. A recent Financial Remedies Court decision, HJ v QY, provides a striking illustration of what happens when one party decides to hide their money, rather than declare it, and why that strategy is generally unsuccessful. 

The case involved a husband and wife with a young child, referred to in the judgment as H, W and C. Over more than two years and fifteen court hearings, the husband repeatedly failed to provide full and honest financial disclosure.  

He claimed to be earning below minimum wage for his full-time working week, whilst living what the judge called a lifestyle “far in excess of that reported”. He owned three cars, designer clothes, took numerous foreign holidays and although still legally married to W, got remarried. Yet throughout, W and C were living with W’s parents because they couldn’t afford a home of their own. 

The gap between what H claimed and what he visibly enjoyed became the heart of the case. With help from her legal team, W pursued third-party disclosure applications against banks, the DVLA and other bodies to piece together the true picture of her husband’s financial position. 

What emerged was that H had received more than £88,000 into two current accounts over a single year and had transferred £65,000 to offshore holdings during the marriage. He also owed more than £35,000 in child maintenance arrears. 

At the final hearing that H did not even bother to attend, Deputy District Judge Nahal-Macdonald described H’s conduct as “deliberate and calculated” to leave W at such a disadvantage and ordered him to pay her a lump sum of £110,000 within 28 days.  

Why full disclosure matters in financial remedy cases 

Full and frank financial disclosure is central to how the Family Court reaches an equitable outcome when a marriage ends, with both parties expected to give a complete and honest account of their financial circumstances. 

Although this typically starts with a Form E and supporting documents, this isn’t a box-ticking exercise. The court needs a detailed overview of each party’s current and likely future resources to ensure assets are divided fairly – which only works if both sides are honest and transparent in their disclosures. 

It’s worth noting that none of this is confined to marriage. The Civil Partnership Act 2004 mirrors the disclosure duties and the court’s powers on divorce almost exactly, so civil partners going through a dissolution are bound by precisely the same obligations as married couples going through a divorce. 

When someone is clearly not open and honest, judges can order further disclosure, seek information directly from third parties, or in serious cases consider contempt proceedings. 

One of the most significant tools available is seeking that the court draws an adverse inference. This is when a judge decides that if a party fails to disclose assets, produce evidence or destroys documents, it can be assumed that the missing information would have damaged that party’s case. The court can infer the value of the assets in question based on the circumstances of the case.  

There must be an evidential basis for an adverse inference to be drawn, but it doesn’t have to come from a full paper trail. It can come from: 

• direct evidence of an undisclosed asset 
• a failure to comply with disclosure obligations 
• a lifestyle that does not match the resources someone claims to have. 

The third point often catches people out, as it did H, in the case of HJ v QY. Bank statements can be requested, vehicle records are traceable through DVLA and even social media posts of holidays can end up part of the picture a court builds when suspicions are aroused. 

As HJ v QY makes clear, uncertainty created by non-disclosure tends to be resolved against the person who failed to provide full and honest financial details, not in their favour. This case is a useful reminder that the harder someone works to obscure their finances, the more suspicious that behaviour looks to a judge and the more willing the court becomes to fill the gaps with inferences that favour the other party.  

For anyone going through separation, if there’s a genuine reason a document or information cannot be provided, explain the reason to the court and seek its advice. 

The court will show far less patience to someone deliberately hiding details and hoping the truth won’t surface. As this case shows, it usually does and then the non-disclosure can become as damaging as whatever it was meant to hide. 

About the Author: Victoria Walters is a Family Law specialist at Coodes and advises clients on all aspects of family law, with particular experience in proceedings involving the arrangements for children and specialises in helping clients deal with complex issues such as domestic abuse, social services involvement, care proceedings and adoption. She also deals with financial matters in divorce and acts in complex cases involving high-net-worth assets and pensions, including a variety of property assets. 

Get in touch: victoria.walters@coodes.co.uk or call 01736 362 294