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13 May 2019

Getting to the financial truth in divorce

It is crucial to the satisfactory resolution of financial disputes on divorce that each party gives full and frank disclosure of their financial circumstances. However, it is not uncommon for the court to be faced with a person who for one reason or another does not wish to provide the necessary information or documentation. The long running dispute between Catia and Oliver Thum is an example of a situation where the court has had to grapple with quite novel arguments put forward to justify alleged non-disclosure.

The latest instalment in Thum v Thum was heard by Mr Justice Mostyn and involved certain documents stored on a flash drive which Catia had found in the parties’ joint safety deposit box in Zurich in January 2016. It was password protected and there had been a dispute as to how Catia’s German lawyers had been able to access the flash drive.

Within the English proceedings Catia had asked Oliver to disclose the various documents on the drive and at a hearing in December 2018 Mostyn J had directed production of most of the documents on the drive. However, the documents were not disclosed. As Mostyn J said in his latest judgment ‘The court finds itself in the absurd situation where these documents are sitting on the flash drive which is in the possession of the husband’s solicitors as well as on a copy of the flash drive held by the wife’s German lawyers, but still they have not been produced either to the wife’s English solicitors or to the court’.

According to the judgment, Oliver put forward a number of reasons why the documents had not been produced including a ‘first excuse’ that he had ‘mislaid the flash drive’ and, in March 2019, Catia was compelled to issue an application to enforce the December order. Oliver’s response was to argue that he could not provide the documents and he applied for a stay of the December order. He produced two letters from German lawyers instructed by a small private equity firm founded and originally owned by him. The first letter stated that the company did not grant him any release from the confidentiality and secrecy obligations concerning the company’s affairs to which he was subject as managing director. It went on to assert that most of the listed documents were confidential documents of the company; that the company would not provide him with the documents for the requested purpose; and that it did not approve their submission to the family court in London. It argued that disclosure would be unlawful and even punishable under German law. The second letter referred to ‘the regulations for the protection of trade and business secrets’ and went on to explain that the company had filed a law suit against Catia with the aim of protecting the trade and business secrets contained on the flash drive from being used in the private divorce proceedings.

In short therefore, Oliver argued that it was effectively impossible for him to comply with the December order. Mostyn J gave directions for expert evidence on German law to be obtained and a further hearing took place at which the court was provided with written expert evidence on behalf of Catia and Oliver. The judge had made it clear in his order that the expert evidence was to address the risks faced by Oliver were he to produce the documents ‘pursuant to a non-consensual court order within confidential court proceedings’.

The judge found firmly in favour of Catia and against Oliver. The judge stated that he was ‘completely satisfied that the husband faces no risk whatsoever were the disclosure of the documents to be made. I am completely satisfied that the conduct of the husband amounts to an improper filibuster, mounted in bad faith, consistent with his attitude and conduct from the very dawn of this case’. He went on to hold that he was also satisfied on the strong balance of probability that there was no real, actual, risk of prosecution or civil sanction faced by the husband were he to comply with the order of 5 December 2018. Mostyn J was also dismissive of the husband’s application to seek release from the December order. He considered that Oliver had not acted promptly, he had not demonstrated that there was a material change of circumstances since the order of 5 December 2018, or that the facts on which that decision had been made had been mis-stated or that there had been a manifest mistake in the formulation of the order.

In an attempt to avoid further ‘spurious objections and obstacles’ the judge authorised the disclosure of the documents on the flash drive held by the wife’s German lawyers.

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