Courts have a wide range of powers at their disposal to deal with non-disclosure of assets in financial remedy cases. We’ve written about what happens in cases of non-disclosure before. It’s notable that many of the financial remedy cases that get reported are those where there are enough assets to justify full, lengthy court hearings. So-called ‘small money’ cases where matrimonial assets are limited, and which account for the vast majority of cases in the financial remedy courts, are rarely reported.
This can make it difficult for couples whose wealth is relatively modest to know how a court may approach their case when one spouse refuses to cooperate with the financial disclosure process. Technical points of law or argument may not arise and yet one party’s decision to ignore the court process can make such cases as complex and prolonged as those involving much larger sums of money. Without full court reports, couples are left with little guidance on how their case may be dealt with in such circumstances.
HJ and QY (2026) is one such case. A husband, without legal representation, did not engage with the court process to any meaningful extent and refused to properly disclose his assets. The couple had low incomes and assets. The judge took the unusual step of publishing a full, detailed judgment believing that this was in the public interest and would be of benefit to people involved in such cases. We discuss the case below. As we’ll see, even though the husband did not attend the final hearing, the court was able to make a significant lump sum order against him, despite what he contended were his limited resources.
Background to HJ and QY (2026)
The couple married in 2018 and separated in 2021. They had one child and the wife started financial remedy proceedings in September 2023. By the time of the final hearing in August 2026 there had been no less than 15 hearings – due solely to what the judge described as the husband’s ‘disengagement, defiance and obstruction’.
To put this in context, a typical case should resolve quickly, with no more than three hearings – a First Directions Appointment, a Financial Dispute Resolution hearing and then – only if necessary, a final hearing.
The husband barely attended any of the hearings and failed to provide a ‘scintilla’ of accurate financial disclosure. Using the tools at her disposal, the wife was forced to make multiple applications for disclosure against banks and other institutions.
Through these efforts the wife was able to provide the court with the following picture of the husband’s financial circumstances:
- He had an income of around £100,000 a year
- He wore designer clothes and enjoyed expensive holidays despite apparently earning less than minimum wage
- Transfers totalling £65,000 had been made to offshore holdings during the course of the marriage
- He received income from two businesses
- He owned several valuable cars
Faced with this information, and virtual silence from the husband, what could the court do?
Drawing adverse inferences from non-disclosure
In addition to formal orders for non-disclosure and being able to initiate contempt of court proceedings against an uncooperative spouse, the court can take a further, crucial step. It can draw adverse inferences from a spouse’s non-disclosure. In HJ and QY the ability to do so proved decisive.
The court made clear that when drawing adverse conclusions against one spouse in financial remedy proceedings it can do so robustly. Any uncertainty created by non-disclosure is resolved against the non-discloser.
So in what circumstances can a court draw these adverse inferences? The court provided three examples where its power to do so may arise:
- Where there is clear evidence of an asset that has not been revealed in Form E. For example the existence of a bank account
- Where there is non-compliance with court orders or vague, incomplete responses to legitimate enquiries about finances
- Evidence of a lifestyle that is wholly inconsistent with the financial resources disclosed
The Adverse Inferences in HJ and QY
The court established that overall there was a wholesale lack of disclosure by the husband. In fact, all of the situations described above arose:
- The husband had not provided details of bank accounts, and the wife established their existence only through disclosure orders.
- He also repeatedly failed to comply with court disclosure orders
- There was ample evidence of a lifestyle far in excess of that reported
In the circumstances the judge was able to infer the husband had significant undisclosed income and access to significant valuable assets. His high levels of spending were having a direct, detrimental effect on the wife and his child.
As a result a lump sum order of £110,000 in favour of the wife was made.
Comment
What does the case tell us about the court’s powers to deal with a spouse who simply refuses to provide the full and frank financial disclosure they are required to?
First and foremost it demonstrates that parties don’t have a choice when it comes to financial disclosure. It also shows that where there is a lack of solid evidence, an applicant such as the wife in HJ and QY can use disclosure and other orders to paint a particular picture for the court. This enables judges to make assumptions and draw inferences that will form the basis of a fair financial order.
While many are tempted to hide assets, they do so at their peril. If, as here, the non-disclosure is viewed as deliberate by the court, judges will not hesitate to take matters into their own hands and draw conclusions – no matter how damaging this may be financially to the non-discloser.