Zero tolerance of fraud in divorce cases

Last week the Supreme Court gave judgement in two cases in which wives had applied to reopen the financial settlements they received upon divorce. Both applications were made on the basis that their husbands had not been truthful about the extent of their assets when the settlements were negotiated.

Mrs Sharland’s husband owned shares in a company which were valued by her expert at £75 million and his expert at £50 million. Mr Sharland had given evidence to say that there were no plans for a public sale of the company and on that basis Mr and Mrs Sharland were able to agree the final settlement. However it later emerged that there were plans to sell the business which valued it at $750m to $1bn. Mrs Sharland therefore applied to have the final order set aside.

Mrs Gohil reached an agreement with her husband, despite having concerns at that he had not fully disclosed his assets and it was specifically recorded in the order that she did not believe he had been truthful about his financial position. Three years after the settlement was agreed Mr Gohil was convicted of fraud and laundering £25m. He was sentenced to ten years in prison and Mrs Gohil also applied to have the final order set aside.

Both cases succeeded and the wives now have the opportunity to pursue claims against their husbands, years after their divorces were finalised.

It may be that following these cases, it is easier to re-open financial settlements where one party can be shown to be dishonest. Further it is not possible for one party to absolve the other of the duty to provide full financial information. 

Rachel Baker who heads the family team at George Green says ‘there is often a temptation in divorce cases for parties misrepresent the extent of their assets, most do not go the lengths of Mr Sharland and Mr Gohil but the Supreme Court has made it very clear that such dishonesty will not be tolerated’.