Financial Proceedings in the Family Court : Dishonesty Doesn’t Pay : Part II
It will have been difficult to miss the recent significant press coverage relating to the Supreme court landmark judgment redefining the law where one party to a marriage or civil partnership alleges that the other has failed to make full and frank disclosure of their assets.
Both cases were issued by women with slightly different facts who argued their financial claims should be re analysed due to the fact their ex Husbands had been dishonest about their finances when the settlements were agreed. Mrs Sharland’s Divorce was a “big money” case worth £31 – £47 million as presented by the Husband as the time of settlement whereas Mrs Gohil’s was more modest which had been decided some 10 years ago. Both cases however were able to subsequently ascertain the outcome of their financial settlements had been made on the basis of inaccurate values being placed upon the Husbands resources which over time had shown to be quite significant.
The Supreme court agreed the duty of disclosure is with the court and not the parties – one spouse cannot exonerate the other from complying with this duty. If there is a reason that vitiates a party’s consent there may also be good reason to set aside a consent order. The fact parties may well consent to a financial settlement does not abrogate the duty of both parties to produce full and frank disclosure of the financial affairs. Any attempt by the non-disclosing party to debar future claims by his spouse or civil partner to set aside the order are unlikely to have legal affect.
Where there are issues relating to Fraud in Family Proceedings as there was in Mrs Gohill’s case, 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.
Both Mrs Sharland and Mrs Gohil have followed a lengthy, arduous and no doubt very expensive route to the Supreme Court, the highest court in the land. The High Court and the Court of Appeal had upheld the original financial settlement between Mr and Mrs Sharland despite his deceit, mainly as they were not sure that a different decision would have been imposed even if he had told the truth. Mr Gohil’s defence was based on fairly technical arguments about whether criminal evidence from his money laundering case was admissible as evidence. These complicated legal and technical points appear to have camouflaged the real point of both cases – how can it be right for any party to be able to get away with lying?
The Supreme Court has given a resounding answer – they can’t. They upheld both wives’ rights to have their cases re-examined, emphasising that any settlement which is later shown to be based on misrepresentation of the true facts of the parties’ finances must be dispensed with as it is based essentially on fraud.
The court expects complete openness and transparency in relation to your financial affairs being an ongoing obligation up to and including the day of settlement however this be achieved and in the absence of this expect the court to be willing to unpick the settlement and re distribute the assets more fairly with penalties in costs.
The supreme court despite the above emphasised it is in the interests of all members of a family that a matrimonial case should be settled by agreement rather than adversarial battles in court. Mrs Gohill herself agreed with this and emphasised the cost of the adversarial route was not just quantifiable in money terms. There is always the emotional turmoil and impact upon the children which also needs to be taken into consideration. However if the court is requested to intervene and adjudicate an outcome then they will. Dishonesty and deceit simply will not be tolerated.
Hear what Mrs Gohill had to say about her victory:-