Beware: your sins will find you out!

The Supreme Court today has now given judgement in the cases of Gohill v Gohill and Sharland v Sharland. Both cases were taken to the Supreme Court by wives who said that their ex-husbands had lied about their finances in their original divorce settlements, and therefore the wives argued that they should get another hearing and more money based on the husbands dishonesty/lack of proper information.

From a Family Law point of view, this is a very significant ruling as it means that one of the parties in any matrimonial agreement is dishonest, or if they mislead people about what the true value of their assets are, then the decision today gives a very clear signal that the other party can go back to Court and have the original agreement set aside to have the whole thing considered again.

Brief background to the cases

Mrs Gohill originally settled her divorce case in 2004. She believed that her husband had acquired substantial capital during their marriage, however, her husband disclosed to the Court that he only had a modest income and no capital assets. Mr Gohill said that the assets which the wife said were his belonged to other people. Mrs Gohill therefore accepted a settlement which gave her capital of £270,000 together with Child Maintenance. Within a short period of time it became clear to Mrs Gohill that the standard of living that the husband enjoyed could not be supported by version of events her husband had disclosed to the Court. In 2006 she began a court case to try to overturn the original settlement. In 2012, the High Court agreed with Mrs Gohill and set the 2004 agreement aside, and Mrs Gohill was able to make a claim on the assets which her husband had “hidden” from her and the Court. The husband, however, appealed to the Court of Appeal which ruled in his favour, leaving Mrs Gohill stuck with the original agreement. The final and highest UK Court, the Supreme Court, today overruled the Court of Appeal decision and have restored the High Court Order in the wife’s favour, i.e. enabling Mrs Gohill to claim on the hidden assets.

With regard to Mrs Sharland, she had sought an equal division of the assets after a long marriage in which the parties had had three children. Indeed, Mrs Sharland believed that she had been given equal share of the assets overall. However, after the Court Order was made she discovered that her husband had misled her and the Court as to the value of his shareholding in an IT company – and that it was worth far more than he had said. Mrs Sharland applied to the Court to overturn the original settlement. Initially, both the High Court and the Court of Appeal disagreed and ordered that she be held to the original agreement. However, she appealed again to the Supreme Court, and her case was heard alongside the Gohill case. The Supreme Court agreed that the husband had been dishonest and found that Mrs Sharland should no longer be held to the original settlement on the basis of her husband’s lack of honest/truthful disclosure.  

In every divorce case, whatever the value of the assets, there is an obligation on both the husband and wife to give truthful, honest, full and frank disclosure to the Court. Subsequently, if it is shown that one party has failed to do that, then even if the original order was made by consent, the “innocent party” can apply to set aside the order. Through these cases a new test has effectively been established which will enable the Court to make adverse inferences in the face of an uncommunicative husband or wife who does not wish to disclose the value/extent of their wealth. Furthermore, if the Court finds that the party has intentionally failed to disclose their assets, it will be presumed that full and frank disclosure would have led to a different financial order being made, unless the non-disclosing party can prove otherwise. 

For more information contact:

Ruth Jones – Head of Family Law

Smith Partnership Solicitors

Derby

DE1 1LS