The duty of disclosure and its proactive nature runs through financial remedy proceedings like letters through a stick of seaside rock. It appears on the face of the Form E. It has been set out in numerous cases. As was noted in Bokor-Ingram v Bokor-Ingram [2009] 2 FLR 922 by Thorpe LJ at [12], the duty was ‘well stated’ by Sachs J (as he then was) in J v J [1955] P 215 at 228/229 and ‘[t]he standard there set has never varied’:

‘it is as well to state expressly something which underlies the procedure by which husbands are required in such proceedings to disclose their means to the court. Whether that disclosure is by affidavit of facts, by affidavits of documents or by evidence on oath (not least when that evidence is led by those representing the husband) the obligation of the husband is to be full, frank and clear in that disclosure …’

Thorpe LJ also made it clear at [11] that:

‘We would only observe that it was not for the husband to judge the ambit of the duty or the consequence of the disclosure. Any information that is relevant to the outcome must be disclosed.’

And at [18] that:

‘The duty to disclose extends beyond what is certain on the date that the order is made to any fact relevant to the court's review of the foreseeable future.’

The above paragraph from J v J – now nearly 70 years old – was recently cited in Williams v Williams [2024] EWFC 275 per Moor J at [67].

Moor J also cited the same judgment at p.227 as being one of the authorities as to how the court should deal with cases involving alleged non-disclosure:

‘In cases of this kind, where the duty of disclosure comes to lie upon the husband; where a husband has – and his wife has not – detailed knowledge of his complex affairs; where a husband is fully capable of explaining, and has the opportunity to explain, those affairs, and where he seeks to minimise the wife’s claim, that husband can hardly complain if, when he leaves gaps in the court’s knowledge, the court does not draw inferences in his favour. On the contrary, when he leaves a gap in such a state that two alternative inferences may be drawn, the court will normally draw the less favourable inference – especially where it seems likely that his able legal advisers would have hastened to put forward affirmatively any facts, had they existed, establishing the more favourable alternative.’

As Moor J observed at [68] these passages were approved in Baker v Baker [1995] 2 FLR 829, where Butler-Sloss LJ (as she then was) said that the principle of the court being entitled to draw appropriate inferences had been accepted for over forty years, where a spouse was found to have lied and to have been guilty of material non-disclosure of relevant financial information.

Moor J was clear that this principle ‘continues to apply’. He stated that ‘it is up to the respondent to open the cupboard door and show that the cupboard is bare. If he does not do so, the court can draw the inference that the cupboard is not bare.’ He emphasised that this is not an improper reversal of the burden of proof which is on he or she who seeks to assert a positive case as to disputed facts. However, a failure by the respondent to discharge the duty of providing full and frank disclosure can lead the court to draw inferences that are appropriate.

The leading appellate case remains Moher v Moher [2019] 1 FLR 255. Per Moylan LJ (cited in Willams at [68]):

‘[86] My broad conclusions as to the approach the court should take when dealing with non-disclosure is as follows. They are broad because, as I have sought to emphasise, non-disclosure can take a variety of forms and arise in a variety of circumstances from the very general to the very specific. My remarks are focussed on the former, namely a broad failure to comply with the disclosure obligations in respect of a party’s financial resources, rather than the latter.

[87]⁠(i) It is clearly appropriate that, generally, as required by s 25 of the 1973 Act, the court should seek to determine the extent of the financial resources of the non-disclosing party.

[88]⁠(ii) When undertaking this task, the court will, obviously, be entitled to draw such inferences as are justified having regard to the nature and extent of the party’s failure to engage properly with the proceedings. However, this does not require the court to engage in a disproportionate enquiry. Nor, as Lord Sumption said, should the court ‘engage in pure speculation’. As Otton LJ said in Baker v Baker, inferences must be ‘properly drawn and reasonable’. This was reiterated by Lady Hale in Prest v Petrodel Resources Ltd [2013] 2 FLR 732, at para [85]:

‘the court is entitled to draw such inferences as can properly be drawn from all the available material, including what has been disclosed, judicial experience of what is likely to be being concealed and the inherent probabilities, in deciding what the facts are.’

[89]⁠(iii) This does not mean, contrary to Mr Molyneux’s submission, that the court is required to make a specific determination either as to a figure or a bracket. There will be cases where this exercise will not be possible because the manner in which a party has failed to comply with their disclosure obligations, means that the court is “unable to quantify the extent of his undisclosed resources”, to repeat what Wilson LJ said in Behzadi v Behzadi.

[90]⁠(iv) How does this fit within the application of the principles of need and sharing? The answer, in my view, is that, when faced with uncertainty consequent on one party’s non-disclosure and when considering what Lady Hale and Lord Sumption called “the inherent probabilities”, the court is entitled, in appropriate cases, to infer that the resources are sufficient or are such that the proposed award does represent a fair outcome. This is, effectively, what Munby J did in both Al-Khatib v Masry and Ben Hashem v Al Shayif and, in my view, it is a legitimate approach. In that respect, I would not endorse what Mostyn J said in NG v SG (Appeal: Non-Disclosure) [2012] 1 FLR 1211 at [16⁠(vii)].

[91] This approach is both necessary and justified to limit the scope for what Butler-Sloss LJ accepted could otherwise be a “cheat’s charter”. As Thorpe J said in F v F (Divorce: Insolvency: Annulment of Bankruptcy Order) [1994] 1 FLR 359, although not the court’s intention, better an order which may be unfair to the non-disclosing party than an order which is unfair to the other party. This does not mean, as Mostyn J said in NG v SG, at para [7], that the court should jump to conclusions as to the extent of the undisclosed wealth simply because of some non-disclosure. It reflects, as he said at [16⁠(viii)], that the court must be astute to ensure that the non-discloser does not obtain a better outcome than that which would have been ordered if they had complied with their disclosure obligations.’

In addition to the need to consider the question of whether a party has deliberately not told the truth there is always the separate question of if so, why they did so. As Moor J noted at [70], ‘[t]he mere fact that someone tells a lie is not, in itself, evidence that the person concerned had undisclosed assets’. Hence the need for judges to give themselves the so-called Lucas direction that an individual may lie for many reasons. As Moor J put it at [70];

‘They may possibly be “innocent” ones in the sense that they do not denote a false presentation of the current financial position. They may be lies to bolster a true case; or to protect someone else; or to conceal some other disreputable conduct or out of panic, distress or confusion.’

The requirement to give full disclosure and the consequences of failure to do so have teeth. As Moor J found in Williams at [93] the husband:

‘gave inaccurate and incomplete disclosure. His oral evidence was woeful and peppered with untruths. I am entitled to draw adverse inferences against him and I will be doing so.’

Ultimately, parties ignore the words on the face of the Form E at their peril.