Yesterday a judgment, long awaited by many family law practitioners, was heard in the Supreme Court. This was in relation to appeals by two women that the financial agreements they had each reached when getting divorced should be set aside due to the fact that their respective husbands had hidden their true worth during the proceedings.
Case 1: Sharland v Sharland
Mr and Mrs Sharland had been married for 17 years and had three children, one of which had severe autism and requires care from Mrs Sharland for the rest of his life. Mr Sharland is an entrepreneur with a substantial shareholding in a software business. For the purpose of the divorce proceedings, Mr Sharland’s worth was valued at approximately £47 million. On that basis, Mrs Sharland reached a settlement with Mr Sharland whereby she would receive an outcome worth approximately £10 million. Shortly thereafter it transpired that Mr Sharland’s shareholding was worth significantly more than earlier valuations had suggested. Mrs Sharland therefore applied to the Court for the agreement to be revisited on the grounds that her husband’s earlier evidence had been dishonest. After initially being rejected by the Court of Appeal, the Supreme Court allowed the appeal and confirmed that the agreement reached would not be upheld and that this case was one of fraud.
Case 2: Gohil v Gohil
Mrs Gohil used to be married to Mr Gohil who was a former solicitor. They had divorced in 2002, at which time Mr Gohil had claimed that all of his wealth represented assets held by his clients. Mrs Gohil agreed a settlement worth approximately £270,000. It was stated within this agreement that Mrs Gohil did not think that Mr Gohil had provided full disclosure of all of his finances. In 2008 Mr Gohil was charged with serious money laundering offences and eventually convicted and committed to prison. The previous order was set aside on the basis that Mr Gohil had not disclosed all of his assets and had he disclosed everything the outcome would have been different. Mr Gohil appealed this decision and was successful and so Mrs Gohil appealed again to the Supreme Court. The Supreme Court have now allowed the appeal on the basis that Mr Gohil had not provided full and frank disclosure of his assets.
There has been a lot of criticism through social media and news reports that these women are effectively greedy gold diggers, and assertion which I believe many people have made without fully appreciating and understanding the full facts of each case.
The first thing to note is that it has not been decided that Mrs Sharland or Mrs Gohil should, or how much they should, receive in their financial settlements going forwards. The main point in both of these cases is that the agreements reached were unfair because of the fact that the value of the matrimonial wealth, on which the agreements were based, is incorrect. You wouldn’t accept a refund for faulty good of £100 when you had originally purchased them for £200. Or accept a tax rebate from HMRC for £300 when there is actually £800 sitting there. Or even accept a prize holiday to Bognor Regis if you knew the real prize holiday was to the Caribbean (not that there is anything wrong with Bognor Regis per se, but you get my drift). The issue is that these women didn’t know what the matrimonial pot of money was worth, so how can they say that the agreements they reached were fair and reasonable in all the circumstances. When one considers that Mrs Sharland initially received a settlement of around £10m, this does sound like a lot, I admit. However to think Mr Sharland has therefore potentially walked away with £990m…well that is a very significant difference.
Another point to note is that this case is not just about women. The same principal applies to men. If there is a wife that has hidden her assets and wealth during financial proceedings then her husband is equally entitled to bring matters back to court to be reviewed.
As to whether this will ‘open the floodgates’ to disgruntled husbands and wives marching their ex-spouse back to court to reconsidered their financial settlements and orders, well, only time will tell. However when you think that in both the cases of Sharland and Gohil there seems to have been very clear evidence that the husbands had hidden their worth, I don’t think that a sneaky suspicion that one party hid money due to the fact that they are now driving around in a higher spec BMW 3 years post-divorce will be enough to satisfy the courts that their case should be reviewed. However, where there is real need for cases to be reconsidered due to non-disclosure and incorrect information having previously been submitted to the courts, these cases at least bring some justice to those who have, unbeknown to them, reached unfair settlements when going through a divorce.
Sharland and Gohil will now be reheard in the family courts to decide what a fair and reasonable financial settlement would be taking into consideration all of the circumstances of the case, including those previously hidden.