HHJ Booth (now retired), sitting as a High Court judge, considered whether the duty of full and frank disclosure ends at the arbitration hearing, the judgment, and also whether the arbitral award should be treated as a ‘judgment’. Held: the duty of full and frank disclosure continued until the final disposition of the claims by the court.

Summary

H and W early 50s. Long marriage (24 years). Four children of the family, three largely independent, one minor. H was the managing director of companies building and developing land and property. W had not worked outside the home but was a director of H’s principal business and was paid a salary.

W’s Form A issued in February 2021, pFDR in November 2021, arbitrator appointed, and arbitration directions made on 28 February 2022. Arbitration on 16–19 May 2022. Draft award circulated on 26 July 2022. Points of clarification were raised by both parties, and the parties asked for other issues to be decided. The addendum to the award was delivered in its final form on 2 January 2023.

The parties could not agree the terms of the order. W applied to the court for directions, then on 21 August 2023, having reached the conclusion that H had not provided full and frank disclosure during the arbitration process, W applied to have the arbitral award set aside.

Law and discussion – full and frank disclosure after an arbitral award

HHJ Booth considered whether the duty of full and frank disclosure is owed by the parties to each other and the court in financial remedy litigation until the court order is sealed. The case law considered by HHJ Booth is seen in [20]–[33].

HHJ Booth identifies there is a difference between cases where there is little/no time between judgment and final order. HHJ Booth considered the impact of an arbitral award not being a ‘judgment’ or an ‘order’. The judge identified that a delay between the date of the award and the court being asked to make an order in terms of the arbitral award would impact on the duty for full and frank disclosure.

HHJ Booth made the following observations:

1. Where there was an immediate application to the court to make an order in terms of the arbitral award, there was no reason why the duty of full and frank disclosure should not end with the award as if it were a judgment; [35].
2. Where there was delay between the arbitral award and an application to make it an order the duty would continue; [36].
3. Once the proceedings were before the court, the duty of full and frank disclosure continued; [37].

HHJ Booth concluded at [38] that in this case, due to the delay, the duty of full, frank and clear disclosure continued throughout, and continues following the Financial Remedies Court’s judgment until an order is endorsed by the court.

Law and discussion – H’s failure in his duty of full and frank disclosure

HHJ Booth made a finding of fraudulent non-disclosure; [70].

Held

The duty of full and frank disclosure continued until the final disposition of the claims by the court; [23], [38], [101], [102].

Key takeaways for practitioners

HHJ Booth concluded his judgment with a section titled ‘Lessons to be learned’, which neatly summarises what I often include in FRJ summaries as key takeaways for practitioners.

‘102. The first lesson is that the duty of full and frank disclosure continues beyond an arbitral hearing, beyond an arbitral award/judgment and until the court has approved an order reflecting the arbitral award. Secondly, any application to set aside an arbitral award needs to be focussed, realistic and confined to those matters that make a material difference. Thirdly, the approach to costs in these circumstances is likely to mirror that of an appeal, where a party will only recover the costs in the appeal on issues they succeed in and are at risk of being ordered to pay costs in relation to issues where they lose.

103.⁠ Finally, this case should be a salutary reminder of the need to negotiate and to settle on realistic terms in a timely fashion. Otherwise, the outcome, as here, can be ruinous.’