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Gohil and Sharland: Supreme Court rules dishonesty will not be tolerated

Court of Appeal judgment described as a 'rare aberration' by UK's top judges

14 October 2015

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The Supreme Court has unanimously allowed the appeals of two women duped into accepting 'unfair' divorce settlements from their former husbands.

Varsha Gohil and Alison Sharland claimed their husbands had deliberately misled them and the court by providing false information as to the true extent of their wealth during the original hearings.

Lawyers for the women had asked the Supreme Court to set aside the divorce settlements on the basis of the dishonesty.

Speaking after the judgment, Irwin Mirchell partner Ros Bever, who acted for both appellants, said: 'These cases were about a matter of principle and justice for both women and the issues raised in the Supreme Court will have implications in many other cases.

'Our clients feel vindicated. Dishonesty in any legal proceedings should not be tolerated. We are thrilled that the Supreme Court has confirmed that the Family Court is not an exception to the general rule and that it is no more acceptable to lie there than it is in any other court.'

Sharland had agreed to a 50/50 split in her divorce settlement after 17 years of marriage. But it later became apparent that her ex-husband had misled her and the courts over the value of his business and his plans for a future IPO flotation.

Instead of being valued at between £31m and £47m, his business was reported in the financial press as being ready to float at a value of $1bn.

The Court of Appeal agreed the non-disclosure had been fraudulent, but two of the three judges believed they should not overturn the original settlement because Sharland could not show it would not have led to a significantly different outcome.

The Supreme Court, however, said the appeal court was wrong to place the burden on the petitioner, who was the innocent victim of her husband's fraud. Similarly, in Gohil, the petitioner discovered that her husband had not fully disclosed his finances during their divorce. He was later convicted of fraud offences and jailed for ten years in 2010.

In June 2012, Mr Justice Moylan, sitting in the High Court, agreed to scrap the settlement. The Court of Appeal, however, ruled that Gohil's evidence to establish non-disclosure was inadmissible.

The Supreme Court has now overruled that decision, describing the judgment as a 'rare aberration'.

Sandra Davis, head of family law at Mishcon de Reya, commented: 'Having been denied by the Court of Appeal, it is telling that the Supreme Court have today unanimously allowed the appeals.

'This decision upholds and reinforces the principle of full and frank disclosure and should be seen as a stark warning to all those that would seek to deprive their spouses and the court of it.'

Jo Edwards, chair of family law organisation Resolution, said the judgment was a clear indicator that anything less than full and frank disclosure to the court will not be tolerated.

'This has significant implications for other cases where assets are suspected of having been concealed, and could see many other recently finalised cases being reopened,' she added.

There has been concern in some quarters that the overturning of settlements will open the floodgates to overturn divorce proceedings by 'greedy ex-spouses'.

'It is arguably in these cases, rather than the dealings of the multi-millionaire Sharlands, that the importance of this judgment lies,' remarked Edwards.

'A few extra million pounds may be felt objectively to make little difference to Mrs Sharland's standard of living, but access to a share in concealed assets could make a huge difference in smaller money cases that are heard by judges every day. This is even more important where, on the face of it, the assets available are not enough to meet the parties' needs.'

John van der Luit-Drummond is deputy editor for Solicitors Journal
john.vanderluit@solicitorsjournal.co.uk | @JvdLD

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Divorce Courts & Judiciary