Partner Article

Divorce ruling could result in repeat cases

A landmark divorce ruling could open the door for other cases where parties discover they have deliberately been given false information, according to a Midlands solicitor.

Justin Creed, partner in the Family Team at Leamington-based law firm Wright Hassall, said the outcome of the case brought to the Supreme Court by Alison Sharland and Varsha Gohil emphasises the duty to be honest in producing financial information when negotiating settlements on divorce.

Sharland, who accepted £10 million in her divorce settlement, and Gohil, who was given £270,000, argued they were misled by their ex-husbands and should get more money in their divorce settlements.

The women have both been successful and the cases have been remitted back to the High Court for a final decision on distribution for further settlements.

Creed said: “In divorce cases involving the division of assets, both parties are under a duty to act with integrity and make honest, full and frank disclosure of their financial circumstances before reaching an agreement.

“In these two cases, the husbands were dishonest in that they did not comply with the duty to be full and frank and misled the court and their wives as to their true financial positions. The wives therefore settled their cases on false facts which amounted to fraud in the Sharland case.

“Both wives sought to have their original settlements set aside because of their husband’s fraud or non-disclosure.

“The High Court and Court of Appeal declined to set aside the orders on the basis that the agreement or order would not have been substantially different had the true financial position been known.

“The Supreme Court has made it clear the High Court and Court of Appeal was wrong and the ruling now paves the way for further cases where there has been fraud in the sense of deliberate misrepresentation of financial positions at the time an agreement to be overturned at a later date - irrespective of when the order was made.

“The same applies where there has been non-disclosure of material information which would otherwise have influenced a settlement.

“The case emphasises that dishonesty will not be tolerated, and the duty to be honest in producing financial information when negotiating settlements on divorce.

“The outcome could certainly now open the door for further cases where parties have subsequently discovered that information given by a spouse at the time of settlement was deliberately wrong.”

This was posted in Bdaily's Members' News section by Matt Joyce .