14th Oct 2015

"How much can you lie about your assets and still get away with it in divorce?"

That was the headline that I woke up to on BBC radio news this morning. It certainly made me sit up.

I realised it was the long-awaited judgment in the case of Mrs Sharland and Mrs Gohil, which has just been delivered by the Supreme Court. We are still waiting for full details to be released but, again, thanks to our friends in the national media we understand the following.

"By the husband's fraud and the judge's order, she had been deprived of her right to a full and fair hearing of her claims," one justice, Lady Hale, said of Mrs Sharland's case. The Supreme Court justices indicated that both women's claims would return to the High Court for further consideration.

It's interesting to see that these two estranged wives have found their divorce lives intertwined, where their financial circumstances appear very different. Judges are forever cautioning family lawyers not escalate litigation and allow cost to see exceed the benefits to the clients but, if as Mrs Sharland says, it's a matter of principle and establishing the truth, then often that does come at a very significant cost; both financially and emotionally.

We will have to wait and see what the Family Division (re)determines the proper awards should be for both of these estranged wives, knowing more now of the true position of their husbands. Their settlements aren't the headline. The headline is that you have to give full and frank disclosure going through a divorce. Note that that isn't news; it has always been the position and remains fundamental to resolving settlements post-separation whether you do it in mediation, do it yourselves, do it by collaborative law or do it through the litigation process in the court. Lawyers work hard to get it right and we warn of the consequences of not doing so. This case is a warning to ignore this advice at your own peril.

Family finances post-separation or divorce will always be determined at a specific point in time; usually the point at which it comes before the court. There are often arguments as to what was acquired before the marriage and whether this should be excluded, what has been generated post-separation and, as here, the biggest area of debate is often what will happen with regards to finances in the future. There have been lots of cases where people have come back and said that what transpired was different from what they envisage would happen in the court has usually firmly rejected this as speculation and not sufficient to change the original order that was made. To set aside an order because of material non-disclosure is a two stage process:

  • The court must establish whether there has been material non-disclosure.
  • If there has been material non-disclosure, the court must determine whether a substantially different order would have been made had the first instance court been aware of the non-disclosure.

The appeal by Mrs Sharland and Mrs Gohil suggests to me that, as in other areas of family law, we've simply reached a high water mark - such that the family court feels it needs to send out a warning message. It has done this today, loud and clear, pronounced very much at Mr Sharland and Mr Gohil's expense; this won't be tolerated.

So to answer the question that was posed by BBC news – not to the tune of several million pounds!!

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