Even someone castaway on a tropical island will have heard of the Young divorce case which has been played out in the international press.
In one corner was Scot Young who was worth £400m in 2006 but says that his finances took a sharp downturn and led to his bankruptcy in 2010. In the other corner was his estranged wife who has been trying for many years to uncover a true picture of her husband’s financial circumstances.
Judgment was given by Mr Justice Moor on Friday 22 November who awarded Mrs Young £20 million. It was also made clear that she would be likely to recover her legal costs amounting to some £6.4m. This was by any standards an extraordinary case. The case took 6 ½ years and involved not less than 65 separate hearings.
In applications for financial remedies in divorce there is a duty of full and frank disclosure on both parties.
As Mr Justice Mostyn says in the case of NG v SG 2011 EWHC 3270 (FAM):
“The law of financial remedies flowing divorce has many commandments but the greatest of these is the absolute bounden duty imposed on the parties to give, not merely to each other, but first and foremost to the Court, full frank and future financial resources….. Without full disclosure the Court cannot render a true certain and just verdict.”
What can the court do in cases like this where one party fails to provide proper or any disclosure?The family courts are able to draw adverse inferences against the non-disclosing party.
Paraphrasing what Mostyn J says in NG v SG the court has to consider whether funds have been hidden. And if it does feel this then it should attempt a realistic and reasonable quantification of those funds. The court will look firstly for direct evidence such as documentation and observations made by the other party. The court will then look to the scale of business activities and lifestyle.
In Young the judge formed the view that Mr Young had assets of around £45m. The judge commented that “it was impossible to produce any sort of schedule of the Husband’s assets in 2006 due to the significant number of lies told by the Husband to so many people”. As for the present position the judge found that his lifestyle was not consistent with him being a “penniless bankrupt. He continues to live in Central London in an expensive flat paid for by a “friend”. He and Ms Reno (his girlfriend) eat out roughly twice a week. He has wads of cash in his possession”. He referred to an e mail where a business associate said “X looks after Scott’s properties which of course he “doesn’t have technically any more”. One document showed a company called Intrasales had £3,146,614 in its account in November 2011. Whilst the judge accepted he could not find the money belonged to the Husband it was another unanswered query.The judge concluded:
“Whilst I accept it is very difficult for the Husband to prove a negative every time the Wife makes a fresh allegation against him, taken together all these loose ends and threads build up a convincing picture that the Husband has indeed failed to give a full and frank and that he is hiding the truth.”
Mr Justice Moor accepted that Mr Young had debts of £5m and therefore placed Mr Young’s net assets at £40 and awarded Mrs Young £20m i.e. one half. This is what he also assessed Mrs Young’s reasonable needs generously assessed. This seems on the face of it a sensible approach. The judge also gave an indication that it is probable that he would make a costs order on an indemnity basis i (so that Mrs Young should have nearly all her legal costs paid) n view of the husband’s substantial non disclosure.
However it appears from press reports that Mrs Young is not satisfied with the judgment.
Whether Mrs Young will be able to enforce this judgment remains to be seen. What is certain is that it is unfortunately unlikely that this will be the last appearance of the Youngs before the family courts.