No Benefit Granted To Spouses Who Fail To Disclose Assets Moher v Moher [2019] EWCA Civ 1482

It is well established that during the financial settlement stage of the divorce process, both parties are legally required to make a ‘full and frank disclosure’ of their financial interests.  Failure to disclose or hide assets of any kind may result in the Courts intervening and forcing the information to be provided and potentially making a larger award.

In Moher v Moher [2019] EWCA Civ 1482, the Court of Appeal had to consider whether if a judge did not quantify the scale of a husband’s undisclosed financial resources and then ordered a larger payment, should the amount should be reduced because of the failure to determine the extent of the funds?

Background to Moher v Moher

The parties, who married in 1995 and had three dependent children, decided to divorce in 2016.  The wife (45) worked in a part-time role and looked after the family home, while the husband was the primary income earner.  Due to assault and harassment by the husband towards his wife, it was determined that a ‘clean-break’ divorce was essential.  The wife was of the understanding her husband had a net financial worth of £1.7m, however, the judge at first instance found that the financial disclosure he made had been ‘comprehensively’ misleading and inadequate.

The judge awarded a £1.4m lump sum which was subject to accruing interest from a set date.  A periodical payment of £22,000 was ordered until either the grant of a ‘Get’ (a document used in Jewish law to finalise a divorce) or full payment of the lump sum including any interest owing, whichever came later.

What was the basis for appeal?

An appeal was brought by the husband which rested on the lack of consideration of his actual financial resources and the needs of the wife when making the award.  The primary determination for the Court of Appeal was whether due to the lack of proper financial disclosure by the husband, the court should have used a precise figure or bracket for the undisclosed assets prior to determining the amount of the financial remedies order.  It was also argued that imposing interest amounted to an overreaching of the Courts powers as it effectively compelled the husband to grant the Get.

How did the Court of Appeal consider the case?

Consideration of non-disclosed financial assets

On the matter of non-disclosure and the effect this had on the payments order at first instance, it was initially argued that a judge must determine the scale of the undisclosed financial resources by either giving a figure or a bracket in every case.  It was, however, reasoned that there are several types of non-disclosure, and hence it was not necessarily the case full quantification was warranted in every situation.  It was determined that it was only necessary to infer that there were sufficient financial resources and that the “award made does represent a fair outcome”.

Accrual of interest on the lump-sum payment

On the question of whether interest was due on the lump sum if not paid by a set date, it was clarified that interest could be carried prior to the date for its payment.  This is accordance with section 23 of the Matrimonial Causes Act 1973 which states, “the court may order that the amount deferred or the instalments shall carry interest at such rate as may be specified by the order from such date, not earlier than the date of the order, as may be so specified, until the date when payment of it is due”.

Did the periodical payments compel the granting of a Get?

It was ruled that the Court did have the right to order the payment of periodical payments until a Get was granted by the husband.  This didn’t compel him to grant a Get, however, as per section 10a of the Divorce (Religious Marriages) Act 2002, according to Lord Justice Moylan, ” the court is merely providing that unless and until he grants a Get he cannot obtain a civil divorce.  In the same way in this case, the husband is not being compelled to grant a Get.  How he responds to the order is a matter for him.  In the same way, as provided by section 10A, the structure of the order in the present case does not compel the husband to act in a certain way.  The court order provides only that until he grants a Get he has to pay periodical payments to the wife”.

Final words

This case highlights the importance of making a full and frank disclosure from the outset of divorce financial proceedings.  Doing so will ensure that the award made is based on the actual financial resources available and avoids the risk that an award may exceed any un-disclosed assets.  As ever, it pays to be open and honest; failure to do may have unforeseen and unintended consequences.

Rosie Bracher is a specialist family law firm based in Barnstaple.  We have the knowledge and expertise to advise you on a divorce settlement and all other family law matters.  Please contact our office on 01271 314 904 and arrange to speak to one of our team