Part of the process to deal with matrimonial assets and to reach a fair and reasonable settlement for both parties, is to complete full and frank disclosure. This is the process where all assets and liabilities of both parties are disclosed and where there is any family business in existence, a proper and accurate valuation of the business is necessary.
Without full and fank disclosure, it will be difficult to establish the matrimonial pot and move on to negotiate appropriate settlements.
Full and frank disclosure is necessary whether there is a court application, the parties agree to use a form of NCDR (Non-Court Dispute Resolution) or you are dealing with matters on a voluntary basis. In short it is essential before you embark on any negotiation, and you should give appropriate opportunity for your spouse to take legal advice.
If either or both of these are missing then there is a risk of the agreement reached may be challenged at some time in the future and on the ground material facts were not disclosed at the time of the agreement but, had they been disclosed, the agreement would have been different; a spouse could ask the court to set aside the original agreement and consider an alternative fair and reasonable settlement in substitute of it. Of course, if significant time has lapsed between the agreement being reached and the challenge being launched, this will cause considerable stress, and significant work may have to be completed to unravel any of the changes made to implement the terms of the original agreement.
Even once an agreement is reached, the continuing obligation of disclosure continues to the time the order is made by the court whether that is by agreement or a judicial decision; this was confirmed in the recently decided case of ON v ON [2024] EWFC 379.
The ON case was a particularly sobering case insofar as it involved a decision made in arbitration (a form of NCDR) and the husband thought his duty of disclosure came to an end but he was wrong in his assumption and it lasted until the time the court made an order; the arbitration decision is binding on the parties but needs to be made into an order to be enforceable.
In the ON case, from the time the adjudicator finalised the award, there was a huge delay to agree the terms of an order, reached an impasse and, after 8 months from the time the arbitrator finalised the award, the wife applied for directions on the remaining issues. In the case was a family business run by the husband and the status of one of the companies change and affected the value of the business assets in the case.
This change came to light and the wife argued, amongst other things, there had been fraudulent non-disclosure by the husband, and it was material to the outcome of the award at arbitration. The husband continually denied the allegation.
The judge decided the husband’s failure to disclose was deliberate and amounted to fraud, ordered the wife receive an additional £ 1.6m and made a costs order of £ 200,000 in her favour; the cost order could have been higher, but the wife failed to prove most of her arguments.
The judgement is not long but it confirms the duty of full and frank disclosure continues until the time the court makes an order and beyond any agreement or award from arbitration, any application to set aside an arbitral award must be focused, realistic and confined to matters making a material difference, and the approach to costs in these types of applications will be akin to those applied to any appeal i.e. you will only recover the costs on the issues you succeed in and you run a risk of as cost order on the issues you lose on.
This case reinforces the duty to full and frank disclosure continues until a court order is made.
Fairhurst Menuhin & Co do not intent this article to be legal advice. We can help to work through your options to help find the best solution for your individual circumstance. Get in touch to arrange an appointment and to get your peace of mind.
Tariq M Ahmad FCILEx
Partner and Head of Family
© May 2025