On 29 July 2010, the Court of Appeal handed down a ground breaking judgment in the eagerly awaited case of Tchenquiz & Ors. v Imerman. The ruling removes the protection previously afforded to divorcing parties regarding the discovery and use of documents in financial proceedings.

The Court of Appeal decision undermines the so called 'Hildebrand rules' which permitted that documents obtained, copied and immediately returned could be used in ancillary relief proceedings. Parties must now be aware that in the future, any attempt by one party in a divorce to take documents without permission may result in not only a punitive cost award but potential civil and criminal proceedings against them and even their legal advisors.

The decision has been described as a 'cheat's charter' whereby the financial stronger party has been incentivised to hide their assets on divorce.

Facts

The Husband, Vivian Imerman, shared business premises and a computer system with his Wife's two brothers, Robert and Vincent Tchenguiz. Shortly after the Wife had petitioned for divorce in December 2008, the brothers downloaded password protected files belonging to the Husband from the office server running to the equivalent of between 250,000 and 2.5m pages. The documents were handed to the brothers' solicitor. The solicitor handed the eleven lever-arch files to a barrister to examine them and remove any potentially privileged documents. The remaining seven files were copied and passed onto the Wife's matrimonial solicitors who in turn disclosed them to the Husband's matrimonial solicitors some seven weeks later.

The Husband made an application in the Queen's Bench Division for an order precluding the brothers and their solicitor from communicating and disclosing the documents to third parties (including the Wife and her solicitors) as well as an order restraining the copying of the documents and requiring the return of all copies. Eady J gave summary judgment and granted the injunction against the brothers in the Husband's favour. In the Family Division, Moylan J ordered that the Wife's matrimonial solicitors return the seven files to the Husband to enable him to check for privilege but no more, after which the files were to be returned to the Wife's solicitors. Both parties appealed.

Judgment

The Court of Appeal upheld the decision of Eady J. Furthermore, the order of Moylan J was varied so that the Wife was ordered to return the files (and all copies) to the Husband's solicitors who would retain them until further order. The Wife and her solicitors were also restrained from using any of the information (for the time being at least) they may have gained by reading the files.

The assumption hitherto under the so-called 'Hildebrand rules', has been that, provided no force is used, a spouse may obtain and copy documents belonging to the other spouse so long as they return the original(s) and disclose the existence of the copies. The Court of Appeal held that Hildebrand is not authority for what is in fact illegal 'self-help disclosure' and that there are no rules which dispense with the requirement that a spouse obeys the law.

It was held that to obtain documents in this way would give rise to an actionable breach of confidence, even between spouses. It may also be a breach of criminal law (it was suggested that the brothers may have committed offences under the Computer Misuse Act 1990 and the Data Protection Act 1998).

Although one spouse may have legitimate concerns that the other will not provide full and frank disclosure of their assets, this fear 'cannot be justification for riding roughshod over established legal rights' particularly when the spouse has recourse to legitimate safeguards such as search orders (Anton Pillar) and/or freezing orders. This may be of little comfort to those of less means than the Imerman family, as such orders are very expensive to obtain and execute and in some cases the cost-effectiveness, or proportionality, of seeking such an order may be questionable.

Finally, the Court of Appeal was particularly critical of the Wife as at the time the information was taken unlawfully, the Husband was under no obligation to disclose his assets still less to disclose private documents relating to those assets. The Court said that it was unacceptable to countenance the Wife taking the law into her own hands to take a premature advantage. The disclosure and discovery of documents is closely regulated by the Court. The Court also decides which evidence can be admitted and has the power to exclude documents whose existence has only been established by unlawful means.

Although the Imerman case may be an extreme example, (even the Court described it as 'an invasion of privacy in an underhand way on an indiscriminate scale') the case necessarily changes the advice all family law practitioners must now give to their clients about 'self help' discovery.

It is understood that an application for leave to appeal has been made to the Supreme Court.

Katie Longmate, Solicitor

11 August 2010