Re W

• Jurisdiction: Cayman Islands
• Judge: (Smellie, C.J.)
• Judgment Date: 06 September 2005
• Court: Grand Court (Cayman Islands)
• Date: 06 September 2005

Grand Court

(Smellie, C.J.)

IN THE MATTER OF W

Mrs. Z.M. Merren-Chin for the applicant, Mr W;

A.J. Jones, Q.C. for the firm of accountants;

D.T. McGrath for Mrs. W.

Cases cited:

(1) Ansbacher (Cayman) Ltd., In re, 2001 CILR 269, applied.

(2) Clibbery v. Allan, UNK[2002] 1 All E.R. 865; [2002] 1 F.C.R. 385; [2002] Fam. 260; [2002] EWCA Civ. 45, referred to.

(3) Parra v. Parra, [2003] 1 F.L.R. 942; [2003] 1 F.C.R. 97; [2002] EWCA Civ. 1886, dictum of Thorpe, L.J. applied.

(4) Uzzell v. Uzzell, 2001 CILR N[12], distinguished.

Legislation construed:

Confidential Relationships (Preservation) Law (1995 Revision) (Law 16 of 1976, revised 1995), s.3(1): The relevant terms of this section are set out at para. 7.

s.4(1): The relevant terms of this sub-section are set out at para. 6.

s.4(3): The relevant terms of this sub-section are set out at para. 9.

s.4(6)(a): The relevant terms of this paragraph are set out at para. 9.

Confidential Relationships-confidential information-information relat-ing to third parties-in matrimonial proceedings involving partner of firm of accountants, financial affairs of firm confidential information within meaning of Confidential Relationships (Preservation) Law, s.3(1)-partner may be ordered to disclose scope of own interests in firm but not firm”s own trading statements, balance sheets or cash flow statements

Civil Procedure-chambers proceedings-publication of proceedings-directions under Confidential Relationships (Preservation) Law, s.4(1) may be published with parties and firms concealed-power not useful if extent of disclosure so wide that identification inevitable and more limited disclosure may then be ordered

Confidential Relationships-application to court for directions-scope of court”s powers-no jurisdiction under Confidential Relationships (Preservation) Law, s.4(1) to make positive injunctive order restraining disclosure of confidential information, but only to give directions about giving it in evidence

The applicant sought directions under s.4(1) of the Confidential Relationships (Preservation) Law in respect of the disclosure of confidential information required under an order in proceedings for financial provision.

An order was made in financial provision proceedings, that the respondent, Mr. W, answer questions and provide supporting documentation relating to his position and entitlements as a partner of the local branch of a firm of accountants. The amount standing to the credit of Mr. W”s capital account and his current account with the firm had already been put in evidence together with evidence of his profit share over the past three years. The questions now asked required the disclosure of matters including the firm”s budget, all its documents of account and the number, type and value of partner units. Given the confidential nature of such information, Mr. W. sought the directions of the court.

Mrs. W submitted that (a) broad disclosure was necessary to allow forensic accountants to arrive at a complete valuation of Mr. W”s interest in the firm and its associated entities, which involved arriving at an overall valuation of the firm itself; (b) bare statements of Mr. W”s income

from the firm in previous years would be manifestly insufficient, as only complete partnership accounts would enable the court to form a complete picture of what Mr. W”s income was likely to be in future years; (c) Mr. W”s share in the firm was matrimonial property which needed to be valued, which was not possible in isolation; (d) the award was to include an element of future income which Mr. W was positioned, as a partner of the firm, to generate and this position would not have been attained but for the marriage and support of Mrs. W and therefore the future entitlements of his position were to be treated as matrimonial assets; and (e) full disclosure ought to be directed, as a party who obtained disclosure of confidential information for the purposes of civil proceedings could be prohibited from using that information for other purposes or publicizing it.

The firm submitted that the public disclosure of confidential information about its financial affairs would be immensely damaging, as it operated in a very competitive environment and the information which it was sought to obtain could be used in many ways to its detriment, such as by demonstrating the absolute and relative profitability of each segment of its business, its vulnerability from borrowing, potential problems with receivables, business strategy relating to investment decisions and full details of the firm”s capital structure, which would place partners in a difficult position competitively.

Held, directing only limited disclosure:

(1) Mr. W was obliged, before giving in evidence confidential information within the meaning of the Confidential Relationships (Preservation) Law (1995 Revision) required by the court order, to seek the directions of the court under s.4(1). The information required fell within s.3(1) of the Law as the partners of the firm, including Mr. W, were as between themselves to be regarded as professional persons owing the statutory duties of confidentiality imposed upon such persons by the Law (paras. 6–8).

(2) The court”s power to redact names in judgments and replace them with anonymous references, would not be useful where the information sought to be disclosed would reveal the identities of the parties and the firm. Moreover, the circumstances of the present case did not in fact justify the degree of disclosure which the scope of the previous order would have required. More limited disclosure, enabling Mr. W”s present and future interests in the firm to be valued, would therefore be ordered (para. 20).

(3) The stated objective of both parties was to achieve a clean break which might well have to be brought about by a lump sum award to Mrs. W, the calculation of which should be by the simplest and least expensive method, to avoid wasted time and costs. This meant that the ascertainment of Mr. W”s income and the extent of his share in the firm was...