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Nothing but the Truth

Nothing but the Truth

Nothing but the Truth

Date: January 11, 2016

On the 14 October 2015 Alison Sharland and Varsha Gohil won their Supreme Court battle to overturn their divorce settlements on the basis that their husbands had dishonestly and deliberately misled them and the courts and had hidden the extent of their wealth.

Mrs Sharland

In 2010 Mrs Sharland divorced her husband of 17 years and accepted £10 million in full and final settlement and 30% of the net sale proceeds of his company whenever Mr Sharland decided to sell. She believed that this represented 50% of her husband’s wealth. In the final financial hearing Mr Sharland had declared that his business was worth between £37 and £41 million. On this basis a consent order was drawn up and approved by the judge. However, before it was sealed Mrs Sharland discovered that Mr Sharland has knowingly misled the expert valuers and the business had been undervalued. It was actually worth £600 million. She therefore applied to the court to resume the hearing of her claim.

Mrs Gohil

Similarly, in 2004, Mrs Gohil accepted £270,000 and a car in full and final settlement in her divorce, again, believing that this was fair. However, in 2010, Mr Gohil was convicted of money laundering and during his criminal trial it was revealed that he had been dishonest about his wealth during divorce proceedings which was estimated at being £35 million. Mrs Gohil therefore applied to the High Court on the basis that Mr Gohil had not given full and frank disclosure during financial proceedings.

Although the Court of Appeal decided in favour of the Husbands, the wives won their cases in the Supreme Court. It held that the Court of Appeal had been wrong in making the conclusion in that non-disclosure was not material and held that the duty to make disclosure which is full and frank is absolute and cannot be avoided by the parties by agreement.

Both cases are now being returned to the High Court where the consent orders will be reconsidered. We therefore await the financial outcome of these decisions but the decision of the Supreme Court has set a precedent which will impact all existing and future cases in the Family Court.

So where do we stand now?

On the one hand, these cases may open the floodgates to thousands of couples who will now apply to the courts to revisit their divorce settlements, regardless of when they were agreed. On the other hand, this judgment will act as a clear deterrent to those husbands who are tempted to defraud their wives, or vice versa.

Either way, the clear message from both of these cases is that the courts will not tolerate non-disclosure of financial assets in divorce proceedings. You must be open and honest during financial negotiations or you may end up rerunning the whole process and paying your ex-spouses’ legal fees in addition.

If you need advice regarding your financial settlement either before or after an agreement has been reached please speak to one of our friendly family lawyers who will offer you a free 30 minute consultation.

Katie Ward