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Wives appeal to Supreme Court over dishonest financial settlements

Two matters are proceeding to the Supreme Court to consider whether original decisions in relation to financial settlements are to be overturned following parties’ dishonesty.

Two matters brought by wives further to them accepting settlements in financial proceedings will be heard in the Supreme Court commencing 8th June 2015.

*UPDATE – DAY ONE*

The hearing of the two matters has now begun and submissions on behalf of the wife in Sharland v Sharland have been made.

The QC appearing on behalf of the wife has put forward submissions that the wife has been deprived of the opportunity of a fair trial and that where there is material fraud, there should be a hearing of these issues.

The Supreme Court considered that where a wife’s consent to an agreement is obtained by fraud, it seems proper that there should be an opportunity for a re-hearing. However, they will retain their discretion as to whether to set the original order aside and if fraud is established, it would be difficult to show that a different original order would have been made.

Submissions also began in the matter of Gohil v Gohil focussing on whether the evidence was indeed admissible. Submissions will continue into day two.

*UPDATE – DAY TWO*

The QC on behalf of Mrs Gohil continued submissions in respect of whether the evidence was admissible. In particular, that the husband had disclosed in the earlier financial proceedings information as to the extent of his criminality and this had been before the Judge.

The point on whether the wife had been denied a fair trial was also raised. Although the Court commented that, if the wife were to succeed on her main argument in respect of the evidence, this point would fall away.

The QC highlighted the issue that there is a need for clarification on whether, where there is fraud, family proceedings can be set aside and fresh proceedings commenced.

Mr Sharland’s QC also made his submissions yesterday, noting that the heart of the issue was ‘what difference would it have made?’ He also addressed the point that it is common for parties to regret the bargain they have made and there is a need to develop tests to stop the floodgates from opening.

Mr Gohil’s QC also began submissions yesterday. The points of the need for finality in litigation and the need to achieve justice in a fair trial process were addressed. The husband’s case is about whether non-disclosure had in fact taken place, which is disputed.

*UPDATE – DAY THREE*

Mr Gohil’s QC continued their submissions on day three, suggesting that there should be a trial of whether there had been non-disclosure and thereafter, a re-hearing.

He went on to suggest that Mrs Gohil could have been told by a judge before the order was approved, to investigate her suspicions. The Court however commented that the onus is on Mr Gohil to disclose. The Court summarised Mr Gohil’s argument that it was now not open to the Court to make findings that were not made in earlier proceedings.

In closing submissions, Mrs Gohil’s QC put forward that there was more than enough evidence which was untainted to found Mrs Gohil’s challenge and for the order to be set aside. It was also put forward that if it were to be acceptable to fail to produce proper evidence, this would be misleading the Court.

The QC on behalf of Mrs Sharland put forward in closing submissions that the husband induced the wife to enter into agreement on a false basis from which he gained and avoided risks. The QC also highlighted the non-performance of the order which suggests the need for the case to return to Court regardless of the outcome of this hearing.

The Court commented that these points were to be dealt with ‘if and when’ they allowed the appeal.

The proceedings have now been adjourned for the Supreme Court Judges to consider their decision.

The background to the matters are that since both their financial proceedings settling, the wives have uncovered false information had been provided during the proceedings by their husbands.

The first matter of Sharland v Sharland involved the wife receiving what she believed to be a 50/50 split. A Consent Order was agreed and approved by the Court. Although, the wife was later made aware that although the husband had estimated his business as being valued at between £31 - £47million, he had been involved in discussions surrounding his business being floated at £1billion.

The wife took the matter to the Court of Appeal however, whilst the Judges commented that the husband’s non-disclosure was deliberate, this did not amount to enough in order to overturn the original order. The Judges noted that although the evidence the husband provided was ‘seriously misleading’, it would not have led to a significantly different outcome.

The wife is now asking the Supreme Court to overturn the Court of Appeal’s decision.

The second matter of Gohil v Gohil concerns a wife who, two years after her divorce was finalised, found that her husband had failed to fully disclose his finances. Based on the husband’s original disclosure, the wife had accepted a settlement figure of £270,000 together with a car.

Some six years following the divorce, the husband was convicted of fraud. During his criminal trial, evidence of his non-disclosure emerged.

Whilst the High Court agreed with the wife and decided to revisit the original decision, the husband’s lawyers took the matter back to the Court of Appeal. The basis of their argument was that the Court was precluded from using evidence from the husband’s criminal trial and therefore, could not prove his dishonesty.  The Court of Appeal ruled in favour of the husband.

Both matters will now proceed to the Supreme Court to consider whether the original decisions should be set aside based on the husbands’ dishonesty and their misleading of both the wives and the Court.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Beverley Jones

Partner - Head of Family Department (Liverpool)

Heading the family team in Liverpool, I am a family and matrimonial expert who deals with all aspects of family law.