Dishonesty in divorce: the importance of full financial disclosure
In the case of Mr & Mrs Byrne in 2019, Mrs Byrne wanted to avoid her husband knowing about money she inherited from her father.Read more
The applications were made by Ms Sharland and Ms Gohil.
Ms Gohil originally settled her claims against her husband back in 2004. A recital was included in the order stating, “the (wife) believes that the (husband) has not provided full and frank disclosure of his financial circumstances (although this is disputed by the (husband), but is compromising her claims in the terms set out in this consent order despite this, in order to achieve finality.”
The order dated 30 April 2004 provided for Mr Gohil to pay a lump sum of £270,000 to Ms Gohil together with maintenance at the rate of £6,000 per annum during joint lives until her remarriage or further order. Mr Gohil eventually paid the lump sum due but stopped paying maintenance in 2008.
In 2008, Mr Gohil was charged with offences of money laundering to a value of circa £35m. He was found guilty of the offences in 2010. In a second trial, Mr Gohil pleaded guilty to six further counts of money laundering and conspiracy to defraud. During the trial, evidence revealed that Mr Gohil had failed to disclose his true financial position during the divorce proceedings.
Ms Sharland’s settlement was far bigger but her husband had also failed to give a full account of his true wealth. Mr and Ms Sharland were married for 17 years and have three children, one of whom has severe autism and will require care from Ms Sharland throughout his life.
He is a software entrepreneur and Ms Sharland was led to believe that her settlement of £10m represented half of his wealth. Mr Sharland told the court that there were no plans for his company to be floated. This was untrue and Ms Sharland later discovered that active steps were being taken to float the company and its value was substantially greater than the valuations produced for court.
Both Ms Gohil and Ms Sharland have been given permission to appeal. In her Judgement, Lady Hale said Ms Sharland had been “deprived of a full and fair hearing” because of “her husband’s fraud”.
The Judgement of the Supreme Court sends out a clear message, if you mislead the court, there is a very real risk that your case will be re-opened. As said by Ms Sharland; ‘My legal battle has never been about the money, it has always been a matter of principle. I entered into an agreement with my estranged husband thinking that it was a fair one.” The husbands’ reputations have been badly damaged and both wives will now have the upper hand in seeking settlements that really are fair. There will surely also be severe costs consequences for both Mr Gohil and Mr Sharland which will be bitter pills to swallow.
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