HC 270/04
THE HIGH COURT
FAMILY LAW
RECORD NO. 36 M/2003
IN THE MATTER OF THE JUDICIAL SEPARATION AND FAMILY LAW REFORM ACT, 1989 AND IN THE MATTER OF THE 
FAMILY LAW ACT, 1995

BETWEEN
F. D.
APPLICANT
and
P. J. D.
RESPONDENT
DECISION of the Master of the High Court delivered on the 28th day of July, 2004
 For many years now, the process of exchanging material financial information and supportive documentation in matrimonial proceedings has developed along lines which no longer closely resemble the standard discovery procedures.  That in itself is not necessarily to be criticized.  If practitioners have found themselves a satisfactory, efficient and transparent way of transacting business in the best interests of their clients the interests of justice are well served.  Problems arise, however, when the informal (furnishing of “general discovery” documentation with or without affidavit) or rule-based affidavit of means (with vouching to follow), system is thought by one party or the other to have been treated rather too informally!  Then, often as not, the Court is asked to adjudicate the matter in the context of an application for further and better discovery.  At this point in the litigation, principles should be consistently applied.  Reported precedents are, however, few and far between.
Rules of Court for matrimonial proceedings (0.70) have sought to keep pace with practices generally observed in this area of litigation.  Discovery for other areas of litigation has developed along different lines, and the two are now rather difficult to marry (no joke intended!), when the Court is asked to deal with a motion for further and better discovery (0.31). 
General (in the sense of category non-specific) discovery is still the default option in matrimonial proceedings.  Partly this is because to formulate and specify categories seems pointless when discovery is almost invariably exclusively limited to financial aspects of the litigation.  Partly, it is because, since the proceedings are Special Summons proceedings grounded (and, in theory, also tried) on affidavit, there is no exchange of pleadings from which “issues” can be listed, and which then form the basic ingredients of category specification. 
But developments in both fields have had as their objective the curtailment of onerous discovery save where necessary.  Thus we see in Order 70A (introduced in 1997), the requirement that parties in matrimonial litigation each file an Affidavit of Means along with the grounding affidavit, coupled with the provision that a party may “request the other party to vouch all or any items…etc.” O.70A, r. 6 (3).  It seems clear from the language of rule 6 (4) that the discovery application which may be prompted by default in either filing the Affidavit of Means or in vouching if requested, is discovery of documents pertaining to the means of the respondent party.  The new rules for discovery in general litigation, introduced in 1999, requiring a preliminary letter seeking voluntary discovery, and discovery by reference to specific categories linked to “reasons” (a mixture of issue and evidential difficulties) is, in practice, rarely operated or invoked in matrimonial proceedings. 
This presents practitioners with the somewhat artificial difficulty of establishing the baseline of non-compliance which is the prerequisite for applications for further and better discovery.  I see no good reason for allowing such a technicality to interrupt the adjudication of such applications.  It is, however, particularly helpful to the Court if perceived deficiencies in discovery are flagged in open correspondence prior to the issuing of the motion, encouraging the filing of a corrective or supplemental affidavit and the saving of the costs which a motion would otherwise entail.  
Inevitably, however, a certain lack of rigour has crept into general (means/financial) discovery in matrimonial cases at this point.  More often than not the “further and better” discovery sought is not on the basis of any analysis of evidential difficulties, or issues, or “necessity”, but simply on the strength of whatever the party’s accountant/expert (sometimes referred to as a forensic accountant) has found to be missing in the documentation already furnished/discovered. 
In Evans v. Evans (1990) 1 WLR 575 Booth J. had this to say:
“While it is necessary for the legal advisers to have sufficient knowledge of the financial situation of both parties before advising their client on a proposed settlement, the necessity to make further inquiries must always be balanced by a consideration of what they are realistically likely to achieve and the increased costs which are likely to be incurred by making them”.
And elsewhere in the same judgment, 
“While it might be necessary to obtain a broad assessment of the value of a shareholding in a private company it was inappropriate to undertake an expensive and meaningless exercise to achieve a precise valuation of a company which would not be sold”. 
In short, the stated requirements of the accountant are not the determining factor.  The lawyers, and ultimately the Court, must weigh the significance of the missing jigsaw pieces in the overall picture before ordering their discovery.  The mere fact of omission is insufficient to persuade the Court of the need for discovery.  There ought to be fairly clear evidence that a party may have concealed a materially significant portion of income or wealth if the Court is to be persuaded to grant a further and better discovery order.  (The evidence may of course be inferential).  The UK Divorce Registry Form D270 “Notice to Solicitors” includes the following exhortation 
“No Further Affidavit will normally be necessary unless it (a) deals with a serious allegation made by the other party or (b) sets out a change of circumstance”
It is a practice direction I am inclined to adopt here.
It may be useful to consider the identification of such a “serious allegation” as essentially the same as the identification of an “issue”.  The materiality of the issue/allegation, and the probative qualities of the documents being sought can then be assessed by the Court with the assistance of a recital of the “reason” for such discovery either in the letter complaining of inadequate initial discovery, or in an affidavit grounding the application to the Court.  In the absence of helpful materials of this sort, the Court may have to either reject the application or apply its own experience to the weighing of the necessity for further and better discovery.  
In this case, the wife’s solicitor, writing in October, 2003, complained about tardy delivery of an Affidavit of Means, and went on to request voluntary discovery (per S.I. 233 of 1999) of documentation in eight categories listed in a schedule to the latter.  These were, as follows:-
1.	All tax returns, tax assessments and all correspondence with the Revenue for a period of five years prior to the date hereof.
2.	All bank statements held by the Respondent or in which he has a beneficial interest or jointly by him with another person and all other statements of account in building societies, credit unions or other financial institutions, either inside or outside the jurisdiction held by the Respondent either solely or jointly with another person or in which he has a beneficial interest for a period of five years prior to the date hereof.
3.	All financial records and accounts of G. Limited and of all the subsidiary companies for a period of five years prior to the date hereof. 
4.	All documentation vouching the ownership of the Respondent of properties at (a), (b), (c), (d), and (e) and all documentation vouching all borrowings in relation to these properties and mortgage statements and full documentation regarding any other property in which the Respondent has had an interest for a period of five years prior to the date hereof.
5.	All documentation vouching shareholding and investments owned by the Respondent or in which he has a beneficial interest.
6.	All documentation in relation to the life policies and pension funds stating the contributions made by or on behalf of the Respondent for a period of five years prior to the date hereof. 
7.	Full financial statements of E Limited and G Limited for a period of five years prior to the date hereof. 
8.	All documentation vouching and relevant to the Respondent’s assets, income, liabilities and outgoings which have not been included in the above Schedule including credit card statements, statement of expenses paid on his behalf by any company, documents vouching guarantees and indemnities for a period of five years prior to the date hereof.
Writing on 25th May, 2004, the same solicitor complains of there being “a number of items outstanding from our letter for voluntary discovery namely all your client’s company accounts for a period of three years, valuations of the properties, and updated details of his borrowings on the properties, full financial disclosure in relation to your clients affairs etc.”.
In the affidavit grounding this application for discovery the solicitor states that “having looked at the Affidavit of Means I am advised and truly believe that the documents requested in my letter dated the 7th day of October, 2003 are still necessary in order to vouch the |Affidavit of Means….  I say that to date I have received no reply from the letter”.  Even as of January, 2004, when this affidavit was sworn, this assertion is clearly not correct.  I have a booklet of correspondence which demonstrates otherwise.  
The motion was adjourned from time to time from 11th February last, and documents and files eventually started to flow!  The respondent’s affidavit of discovery was sworn on 11th March, 2004.  It follows that, notwithstanding the terms thereof, this motion now before the Court can properly be considered to be a motion for further and better discovery.  There is no supplemental (or, indeed, corrective) affidavit acknowledging this or the flow of documentation or identifying particular gaps.  Instead, we find same ultimately listed in a letter of 17th May, 2004 together with a response thereto of 19th May and a less than robust, rather uncertain, follow-up of the 25th May.
There are on file affidavits of the applicant dated 22nd and 26th March, 2004 to which reference may usefully be made.  They were filed perhaps in the context of a 
s. 35 application but equally serve to provide some background against which the significance of the outstanding documentation may be gauged.  At para. 8 of the letter she states that “it was only on the 6th February, 2004 that vouching documentation was furnished to this deponent and I and my legal financial advisors have been struggling to make sense of the respondent’s financial position since then.”  In both these affidavits the applicant makes the case that she is a beneficial shareholder in the companies listed in the respondents affidavit of means - a case not made in the applicant’s own affidavit of means - and presses for access to up to date documentation relative thereto.
But this is not the stuff of a serious allegation of concealment of assets or understatement of income.  The wife’s concerns are not about the company’s balance sheet, or indeed the value of the shares, but rather about share ownership – an entirely separate line of inquiry.  And there may be something in what she asserts, though from his description (which is hardly disputed) of the business and trade of the companies, the underlying net asset values may be small.  There is the usual assertion that the husband’s company credit cards mask personal income and expenditure and there is an allegation to the effect that the husband has in recent years funded an extravagant lifestyle by, in effect, asset stripping his companies by re-mortgaging 
property – a matter relevant only to an interlocutory application - but apart from these, the application for further and better discovery of documentation pertinent to the means of the husband reduces to requests for updating of previously furnished accounts.  There is no suggestion that such updating will transform the financial picture.  The request for discovery is prompted out of a desire for completeness rather than to uncover any deliberate falsehoods or disingenuousness on the husband’s part.  It is a general discovery type demand rather than one which is focussed on any particular “issue”.
I am dismissing the application.  The parties should each consider whether corrective Affidavits of Means are called for at this stage.  If the wife’s financial advisors eventually “make sense” of the husband’s financial position, and can point to evidence in support of a “serious allegation”, an application for further and better discovery may be renewed.
 There is every probability that the days of competing forensic accountants may be drawing to a close.  The recently signed Civil Liability and Courts Act, 2004 allows the Court to appoint a single expert to report to it (an “examiner”, by any other name), requiring parties’ co-operation in the preparation of a single overview of the available evidence, (in these cases, as to the means of both parties).  This will lead, one hopes, to less expensive and perhaps speedier litigation!  Sanctions for non co-operation will need to be punitive.