Bokor-Ingram v Bokor-Ingram

In ancillary relief proceedings, each party must give full, frank and clear disclosure of every matter relevant to the outcome. The obligation extends beyond facts which are certain when the order is made. It includes advanced negotiations and other facts relevant to income, earning capacity and financial resources likely to be available in the foreseeable future.

A material breach cannot be treated as harmless where proper disclosure would realistically have caused the hearing to be adjourned or the proposed settlement to be reassessed. The disclosure obligation is governed by the established family law standard, rather than the rules controlling disclosure in ordinary civil litigation.

The wife applied to set aside a consent order made at a financial dispute resolution appointment concerning ancillary relief for herself and the parties’ children. Shortly after the order, the husband left his employment and entered a substantially more remunerative contract. Before the order, negotiations for that move were already advanced, but he had not disclosed them.

Charles J found that the husband had breached his duty of disclosure but dismissed the application, holding that the evidence did not establish that disclosure would have changed the agreement or order. His judgment was reported at [2008] 2 FCR 527 and [2009] 1 FLR 2001.

The parties settled before the appeal was heard and invited the Court of Appeal to set aside the consent order and substitute revised orders. Because the judgment below was likely to cause difficulty, the court explained why its preliminary conclusion was that the appeal would have succeeded in any event.

1. The appeal was allowed and the consent order set aside. Although the parties had compromised the appeal, the court explained its preliminary conclusions because the reported judgment below was likely to mislead practitioners and judges. Those conclusions were necessarily tentative because the court had not heard full argument.

2. The husband was required to disclose his advanced negotiations for substantially better-paid employment. A formal offer was a real and imminent possibility, and the negotiations were relevant to what he would or might earn. It was not for the husband to determine the ambit of his duty or the consequences of disclosure. Any information relevant to the outcome had to be disclosed.

3. The governing family law duty required disclosure to be full, frank and clear. The introduction of the Peruvian Guano test and Part 31.6 of the Civil Procedure Rules 1998 was unhelpful and unnecessary. The established ancillary relief standard stated in J v J [1955] p215 had not varied. Charles J was nevertheless correct to find that the husband had breached that duty.

4. The breach materially affected the outcome. With proper disclosure, it was inconceivable that the wife would not have sought more favourable provision or that the district judge would have regarded the information as irrelevant. The realistic course would have been to adjourn the financial dispute resolution appointment until the negotiations concluded. Alternatively, any immediate assessment would have had to assume that the contract would be signed while allowing an appropriate discount for the risk that negotiations might fail.

5. Under section 25 of the Matrimonial Causes Act 1973, the court must consider the income, earning capacity, property and other financial resources which a party has or is likely to have in the foreseeable future. The absence of a signed contract did not remove the duty to disclose. Disclosure extends to uncertain facts which are relevant to the court’s assessment of the foreseeable future.

6. The court expressed no view on whether Charles J had been entitled to investigate what occurred at the privileged financial dispute resolution hearing. His judgment was not to be treated as a precedent or followed insofar as it went beyond, or was inconsistent with, the Court of Appeal’s judgment.

1. Court of Appeal (Civil Division): Permission to appeal was granted by Wilson LJ. Following the parties’ comprehensive settlement, the court allowed the appeal, set aside the consent order and made revised orders. It also explained why the appeal would probably have been allowed after a contested hearing: [2009] EWCA Civ 412.

2. Principal Registry of the Family Division: Charles J dismissed the wife’s application to set aside the consent order and refused permission to appeal. The decision was reported at [2008] 2 FCR 527 and [2009] 1 FLR 2001.

3. District Judge: A consent order determining ancillary relief claims was made at a financial dispute resolution appointment on 20 July 2006.