Disclosure of documents from AR proceedings – HMRC v Charman and Charman

An interesting case in recent weeks has been that of HMRC v Charman and Charman.

In the original Ancillary Relief proceedings, a question regarding the Husband’s tax liability was raised. Following the conclusion of the AR proceedings, HMRC made an application for disclosure of various documents and statements which had been produced during the course of the AR proceedings. Whilst the Wife consented to the disclosure of those documents, the Wife objected.

HMRC’s application for disclosure went before Mr Justice Coleridge, who had also heard the original AR proceedings. In his judgement in this application, he stated that:

“As a general rule documents and other evidence produced in ancillary relief proceedings (now called financial remedy proceedings) are not disclosable to third parties outside the proceedings save that exceptionally and rarely and for very good reason they can be disclosed with the leave of the court. The fact that the evidence may be relevant or useful is not by itself a good enough reason to undermine the rule. ”

As there was no suggestion of tax evasion being put forward by HMRC, and the disclosure was sought as part of a routine tax assessment by HMRC, there was “no discernable compelling reason” for such disclosure.

It is worth bearing this mind in circumstances where a third party is seeking such disclosure.

At the very end of the judgement (which can be found at http://www.bailii.org/ew/cases/EWHC/Fam/2012/1448.html), Mr Justice Coleridge added the following caveat:

“If, of course the husband himself wishes to rely upon documents/evidence he produced during the hearing in front of me he may have leave to do so but in that event all relevant material must be produced to the Tribunal not just highlights he selects which support his case.”

So if you are tempted to pick and choose excerpts of a Court transcript or a witness statement to disclose to a third party, my advice would be not to do so unless you are content to provide the entire document and all other relevant material.

Jasvir Degun

1 Essex Court

20th June 2012

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