The consequences of fraudulent non-disclosure in financial relief proceedings
The consequences of fraudulent non-disclosure in financial relief proceedings
When you apply to the court for financial relief to resolve your matrimonial finances upon divorce, you are entitled to expect fairness and justice to prevail. So, when your spouse fails to disclose all of their assets or intentionally undervalues them, what will the court do?
Two women, Alison Sharland and Varsha Gohil accepted a financial settlement with their respective spouses on the basis of the financial disclosure that their spouses provided at the time, however, they later found out that their spouses had lied about their assets or the value of their assets. Therefore these women applied to the court to have their settlements set aside and claim that they are entited to a lot more money than they had originally accepted.
Mrs Sharland and Mrs Gohil have been involved in a lengthy legal battle. The Court of Appeal held that the settlements must be upheld despite the behaviour of their spouses during proceedings. Fortunately, their appeals were allowed and their cases were heard by the Supreme Court in June 2015.
A summary of Mrs Sharland’s case
During court proceedings, Mr Sharland gave dishonest evidence when he confirmed that there were no plans for an Initial Public Offering (IPO) of his software business, AppSense Holdings Limited. On that basis, Mrs Sharland agreed to a financial settlement in the sum of £10.3 million. It later transpired that AppSense was being prepared for an IPO which meant that Mr Sharland’s shareholding was worth significantly more.
A summary of Mrs Gohil’s case
In 2004 Mrs Gohil accepted a financial settelement providing her with £270,000 plus a family car and periodical payments. In 2007 Mrs Gohil applied to set aside part of the settlement on the ground that her husband failed to disclose all of his assets. In 2008 Mr Gohil was charged with money laundering offences which dated back to 2005 and for which he received a conviction in 2011.
Supreme Court Judgments
On 14th October 2015, the Supreme Court unanimously allowed both appeals.
Mrs Sharland’s settlement was set aside due to fraudulent non-disclosure by Mr Sharland.
Part of Mrs Gohil’s settlement was set aside due to Mr Gohil’s material non-discloure of his assets.
Mrs Sharland and Mrs Gohil will now have their cases re-examined to determine what order should be made. They will have an opportunity to argue that they are entitled to a lot more money.
Impact of the Judgments
The Judgments in these cases will have a significant impact on financial relief proceedings both already concluded and those yet to be heard.
For those already concluded, it is likely to open the floodgates to many others in their position who will argue that their cases should be reconsidered.
For the cases yet to be heard, it is hoped that these judgments will send a strong message to spouses that they will not get away with lying about their financial wealth and that there will be consequences for failing to comply with the duty to provide full and frank disclosure.
Contact our divorce and family law experts today
If you would like to discuss any aspect of divorce and family law, or want to draw up a pre or post-nuptial agreement or cohabitation agreement, call our mediation, divorce and family dispute resolution solicitors in absolute confidence on 03456 381381. Alternatively, email us at familylaw@ibblaw.co.uk.
