Amandeep Gill's Analysis of <i>Imerman</i>

29 JUL 2010

The Imerman Effect - A Cheat's Charter?

Amandeep GillThe Court of Appeal this morning delivered judgment in the long awaited case of Tchenguiz and Others v Imerman [2010] EWCA Civ 908. In an extensive judgment running into 49 pages the court considered all manner of legal and equitable principles including  breach of confidentiality and copyright, tortious liability, criminal conduct, the Family Proceedings Rules 1991, S25 Matrimonial Causes Act 1973 and the European Convention of Human Rights.

In essence the Court held that Hildebrand remains good law in so far as a litigant (usually the wife) who has accessed documentation unlawfully or clandestinely should disclose said documentation promptly when asked by the husband's solicitors or at questionnaire stage in Ancillary Relief proceedings. Hildebrand does not however provide a defence to criminal or otherwise actionable conduct committed by litigants or their representatives who take possession of such documentation. 

The Court considered that the correct course of action would have been for Lisa Imerman to have applied for freezing, search and seize (Mareva and Anton Piller) orders. Lord Neuberger commented that "There is no reason why such orders should not be sought or granted..." He recognised that "Many litigants in all jurisdictions are driven by their greed or other unworthy motives to lie and cheat. The rules and the judges' application of the rules must be robust to prevent such conduct."

All Ancillary Relief practitioners are aware of the several thousands of pounds rapidly incurred in costs when applying for such draconian orders. Practitioners are duty bound to raise the question of costs with clients at the outset of proceedings and advise upon the implications of the cross undertaking as to damages required to be given by the client when pursuing injunctive relief. Cost considerations often prove to be a fatal knock out blow in relation to applying for Mareva and Anton Piller orders at the outset. 

Secondly, in theory it is all well and good for the judiciary to say that the law should be applied robustly to preserve assets and compel disclosure. The reality is however very different. A strict application of the law cannot always guarantee an effective outcome. For example, a Mareva injunction commonly excludes dealing with assets in the ordinary course of business or trade.  Accordingly an allegedly ‘bad' business decision can quite legitimately deplete assets even where a Mareva injunction has been granted. Equally, how can practitioners acting for wives begin to enforce Mareva injunctions when they and their clients are not aware of the full extent of the assets in question.      

Whilst Hildebrand as we knew it, prior to this judgment, was not an ideal solution it was a necessary evil which ensured against "a gross iniquity perpetrated on both the wife and the court" as described by Mostyn J in FZ v SZ & others [2010] EWHC 1630. Without it the Imerman effect will serve as "a cheat's charter" for non-disclosing spouses, as noted in Withers press release today.   

The hope therefore is that the Court of Appeal decision will be appealed. There is no indication as yet from Withers whether Lisa Imerman will do so. This in itself throws another perspective into the mix. 

Marcus Dearle and Withers are named as co-defendants in proceedings, pursued by Marco Pierre White for damages in respect of trespass to goods and conversion. In White v Withers LLP & Dearle [2010] 1 FLR 859 Ward LJ held that the defendants could not rely upon the rule in Hildebrand as a defence to a claim in tort. Will the Imerman effect also be the prompt settlement of the Pierre White case? Watch this space...

Amandeep Gill is a Professional Training PSL at Jordan Publishing.

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