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Supreme Court divorce ruling shows zero tolerance for non-disclosure

Two ex-wives have won a Supreme Court battle to set aside their divorce settlements due to non-disclosure, in a decision that lawyers say shows dishonesty will not be tolerated in the family courts.

In an outcome that is likely to have a wide-reaching impact, Alison Sharland (pictured, right) and Varsha Gohil (pictured, left) were today both granted the right to challenge their divorce settlements after the Supreme Court unanimously found that their husbands misled the courts in the original hearings.

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Divorce lawyer Ros Bever at Irwin Mitchell, who represented the two women, said that the judgment will have implications for many other cases, including those with less money at stake.

She said: ‘It’s inevitable that other wives, husbands or civil partners who feel that they too have been misled during divorce proceedings will seek to bring their cases back to court, and we can expect to see a significant rise in the number of challenges to existing divorce settlements.

‘But at the heart of these cases is a simple message: if you want finality in your divorce settlement (whether you agree it, or whether it is imposed by the court), don’t lie.’

Giving judgment in Sharland, Lady Hale said that the case was one of fraud. She said: ‘It would be extraordinary if the victim of a fraudulent misrepresentation in a matrimonial case was in a worse position than the victim of a fraudulent misrepresentation in an ordinary contract case, including a contract to settle a civil claim.’

She said it was clear that the judge would have made a different order than the one he gave in the absence of fraud and thus the case should return to the Family Division.

Rebecca Harling, a solicitor at Thomas Eggar, said that as courts are aware of the importance of certainty in financial proceedings there is a high threshold to set aside an order. But she agreed that this outcome would make it easier for wronged parties to reopen proceedings.

‘The outcome of these appeals sets an important precedent for cases of material non-disclosure. In short: it will not be accepted.’

Jo Edwards, chair of family law organisation Resolution, said the importance of the decision will lie in other cases where assets are suspected of having been concealed. ‘A few extra million pounds may be felt objectively to make little difference to Mrs Sharland’s standard of living, but access to share in concealed assets could make a huge difference in smaller money cases that are heard by judges every day.’

Tony Roe, a family solicitor, said the case ‘serves as a reminder that there is no scope whatsoever for a client to be anything other than absolutely honest when disclosing their financial position.’

Previously the law had been unclear about when a lack of disclosure is enough to set aside an agreement.

Marilyn Stowe, a senior partner at Stowe Family Law said: ‘Justice is about having a fair hearing in every respect, and if fraud is proved then it should be immediately pounced upon and set aside. The Supreme Court has today demonstrated that justice comes first and all credit to them for it.’
Readers’ comments (6)

Auntie Eadie14 October 2015 05:50 pm

I find the fuss over this decision perplexing. It has always been possible to re-open ancillary relief orders when the disclosure has been fraudulent or grossly incorrect. Clients have always been warned of this. What’s new?

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Anonymous14 October 2015 06:03 pm

What’s new is that in both cases the Court of Appeal had held that matters could NOT be re-opened.

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Anonymous14 October 2015 10:22 pm

The problem is not the ruling per se – it’s the new level of enforcement. Instead of a new level of challenges as per the fevered wishes of Ros Bever I predict a new level of emigration to sunny climes of spouses seeking not to go through the whole intrusive process of retroactive audit for real or spurious suspicions and a host of new, suddenly non-financed ex-spouses with a solicitor’s bill and no income. Double savings for the absconder anda Job Seekers allowance for the ex-spouse.

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David Crawford15 October 2015 07:29 am

“Hell hath no fury…”

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Scep Tick15 October 2015 08:20 am

Moore-Bick in the CoA, who also was part of the court that found the Zurich couldn’t open a settlement because of fraud. He seems to think that the end justifies the means.

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Anonymous15 October 2015 09:16 am

Now for a pragmatic view on self help to avoid the circus, waste of time and money, lack of transparency – effectively support of fraud -that presently exists.

 

Source ; http://www.lawgazette.co.uk/law/supreme-court-divorce-ruling-shows-zero-tolerance-for-non-disclosure/5051579.fullarticle

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