A secret history
Date: 13 August 2010
Authors: Amy Taylor
Issue: Vol 160, Issue 7430
Categories: Features, Family, Divorce
Ever since the judgment in Hildebrand v Hildebrand [1992] 1 FLR 244 the so-called “Hildebrand rules” have guided the approach family practitioners have taken towards access by one spouse to documents belonging to the other spouse. Wives (for ease of reference, this article assumes the wife is seeking ancillary relief from the husband) have long been advised to take copies of any significant documents belonging to their husbands provided that the originals are returned and no illegal act is committed in the process.
The recent Court of Appeal judgment in Tchenguiz v Imerman; Imerman v Imerman [2010] EWCA Civ 908, [2010] All ER (D) 320 (Jul), however, has revealed the Hildebrand rules to be nothing more than a myth, condemning them as “unlawful”. Consequently, action previously condoned by Hildebrand could now lead to practitioners and their clients being subject to civil and even criminal sanctions.
The Imerman story
In Imerman, the Court of Appeal ruled on two interlocutory appeals from the Queen’s Bench Division and the Family Division which arose in the context of ancillary relief proceedings between Elizabeth and Vivian Imerman.
Mr and Mrs Imerman were married in 2001. On 30 December 2008, Mrs Imerman petitioned for divorce. According to Mrs Imerman’s brothers, Robert and Vincent Tchenguiz, from the autumn of 2007, as the marriage began to unravel, Mr Imerman made a number of threats regarding his finances, allegedly stating that in the event of any ancillary relief proceedings being brought against him, his assets would be “concealed” and that Mrs Imerman “would never be able to find [his] money” because “it was well hidden”.
Significantly, between 2003 and 2009 Mr Imerman shared an office space and a computer system with Robert Tchenguiz. By virtue of the fact that he leased and owned the office and the server, Robert Tchenguiz had unrestricted access to the computer server which served Mr Imerman’s office. The computer system serving the office was also linked to the office of Vincent Tchenguiz.
Six weeks after Mrs Imerman petitioned for divorce, Mr Imerman was evicted from his office by Robert Tchenguiz. Prior to Mr Imerman’s eviction (apparently provoked by Mr Imerman’s threats in 2007), Robert Tchenguiz, with assistance from others, accessed the computer server on at least nine occasions and made electronic copies of e-mails and other documents stored by Mr Imerman on his computer. It appears to be accepted that Vincent Tchenguiz was aware of what his brother was doing, and was shown copies of some of the material.
The Tchenguiz brothers handed most, if not all, of the electronic copies which they made to their lawyer, Mr Zaiwalla. From these electronic copies, Mr Zaiwalla prepared 11 lever arch files of the documents he considered could be of relevance to the ancillary relief proceedings. On 9 February 2009, a barrister instructed by Mr Zaiwalla, examined the files and removed any documents which it was considered Mr Imerman could claim to be privileged. The 11 files were thereby reduced to seven. The seven files were copied and handed to Mrs Imerman’s solicitors, Withers. On 18 February 2009, Withers sent copies of the seven files to Mr Imerman’s solicitors, Hughes Fowler Carruthers.
On 26 February 2009, Mr Imerman issued proceedings in the Queen’s Bench Division against the Tchenguiz brothers, their lawyer and the two IT managers who assisted with the downloading of the electronic copies. In June 2009 Eady J found in favour of Mr Imerman’s application and made orders preventing each of the defendants from communicating or disclosing any information contained in the documents, or obtained from the server, to third parties, and requiring the defendants to hand over all copies of the documents to Mr Imerman.
In the meantime, in the ancillary relief proceedings, Mr Imerman made an application for the return of the seven files held by Withers. The application came before Moylan J in November 2009 who decided that the seven files should be handed back to Mr Imerman to enable him to remove any material over which he claimed privilege but, once the privileged documents had been removed, the remainder of the files should be returned to Mrs Imerman for her to use in the family proceedings.
The two decisions highlight the different approaches taken in the Chancery and Family Divisions; both decisions were appealed. On 29 July 2010, judgment was given in the conjoined cross-appeal cases. The Court of Appeal upheld Eady J’s order, but varied Moylan J’s order. They required Mrs Imerman to deliver the seven files to Mr Imerman’s solicitors and prohibited the retention of copies. In addition, Mrs Imerman and her solicitors were restrained from using any of the information they had gleaned from the files.
The Hildebrand rules
The Court of Appeal in Imerman has comprehensively thrown out the Hildebrand rules, with only one small element of the rules (regarding the timing of exchange of disclosure) remaining intact. Moreover, it is clear from Imerman that self-help (upon which the rules were predicated) can no longer be cited as a defence to the obtaining of such documents, indeed: “nothing in the Hildebrand rules can be relied upon in justification of, or as providing a defence to conduct, which would otherwise be criminal or actionable”. The clear result of Imerman is that family solicitors should no longer advise wives to copy documents belonging to their husbands.
Perhaps more seriously for family practitioners, the abandonment of the Hildebrand rules means there will be no defence for a practitioner who is handed copies of confidential documents by a wife. According to the Court of Appeal, possession of such documents could lead to the removal of the solicitor from the case. Moreover, the appeal judges went on to state that: “A solicitor who receives, reads and passes on such documents, particularly knowing that they have been taken from the claimant unlawfully may well be an appropriate defendant.” Family practitioners beware: it is clearly no longer advisable to catch sight, let alone take possession of, copy documents obtained by wives.
The law of confidence
As the law now stands, according to Imerman, it is a well established fact that there is a right to privacy and confidence enshrined in the English law. The question which then inevitably follows in the sphere of family law, is how, if at all, this law of privacy applies to an institution such as marriage in which a couple lead what is widely accepted to be a shared existence.
It was submitted on behalf of the defendants that Mr Imerman could not assert a claim of breach of confidence against Mrs Imerman because they were husband and wife at the time the server was accessed and therefore no right of confidence existed between them (“there is no such duty, no such right enforceable against the other”). Put simply, the Court of Appeal did not agree with this proposition, dismissing it as “simply unsustainable”.
Somewhat complicating that clear proposition, the Court of Appeal did concede, however, that there were times when the fact of cohabitation, civil partnership or marriage would influence whether the information contained within documents was deemed to be confidential. This would (as is so often the case in family proceedings) depend upon the facts of a particular case. It appears from the tenor of Imerman that if documents were left in what could be considered communal areas (the bedroom, kitchen or living room for example) they are more likely to lose their confidential character than if they were left in the husband’s personal study.
The rise of the Anton Piller Order
In place of the Hildebrand rules, it is suggested by the Court of Appeal that wives should place reliance on the court’s ability to detect dishonest disclosure, to make adverse inferences thereon and, perhaps most controversially, to apply for Anton Piller (or search) Orders and Mareva Injunctions. There are three essential pre-conditions for the making an Anton Piller order:
- there must be an extremely strong prima facie case of anticipated non-disclosure;
- the damage, potential or actual must be very serious to the applicant; and
- there must be clear evidence that the defendants have in their possession incriminating documents and there is a real possibility that they may destroy such material before any application inter partes can be made.
Interestingly, in Imerman, the Court of Appeal makes reference to (and expressed puzzlement about) the extreme rarity of these orders in the Family Division. However, even a cursory review of the case law provides ample explanation for their rarity. Over time Anton Piller orders have been deemed by judges in the Family Division to be “exceptional” (T v T [1994] 2 FLR 1083) and “a rare weapon to be used in extreme or exceptional circumstances…oppressive…[and] unnecessary” (Burgesss v Burgess [1996] 2 FLR 34).
Given that the wife also faced the risk of an adverse costs order if her application failed, one can perhaps see why such applications were not made more widely. Moreover, in order to ensure that such an application is actually successful in preserving documents which the wife fears will be lost, such an application will need to be made prior to, or at the very beginning of proceedings, potentially raising the level of conflict significantly from the very outset of the divorce. The Court of Appeal also suggested that in the event a wife sees a “confidential” document relating to her husband’s finances, she could rely on her memory of the contents of the document (but not the document itself); but how much is a wife supposed to remember? In those instances such as Imerman for example, where the documents amount to seven lever arch files or more, it cannot be a realistic proposition for a wife to remember the entirety of the contents; and how reliable will her evidence be deemed when it is based only on her memory?
The Court of Appeal in Imerman therefore seems to be suggesting that if wives discover documentation, they are to rely upon their memory of the documents seen or embark upon a course of action well after the horse has bolted which could prove prohibitively expensive, and which has previously been judged “oppressive” and “a rare weapon for use in extreme or exceptional circumstances” (Burgess v Burgess).
It remains to be seen how Imerman will affect family proceedings in the future, and indeed whether any appeal will be made to the Supreme Court. For the moment, however, wives must be warned against the taking or copying of documents, solicitors warned against the possession of such documents and husbands may, it seems, be free to do whatever they want with their documents.
Amy Taylor, associate, Manches LLP.
E-mail: amy.taylor@manches.com
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