Dishonesty in divorce no longer tolerated

What can you do if you suspect your spouse concealed some of their assets during your divorce in order to reduce the amount they had to pay you?

When a couple divorce, there is a complex procedure known as disclosure. Both spouses have to sign a financial statement revealing the full extent of their income and assets to each other before they agree how to divide their finances. Previously, once a financial agreement had been ratified by the court as a consent order, it would rarely be overturned, save for very limited circumstances.

In October 2015 the Supreme Court ruled that such concealment amounted to ‘fraudulent misrepresentation’ and permitted two spouses to return to court to renegotiate their divorce settlements.

Catherine Polli, Head of the Family Law Department at Pinney Talfourd Solicitors in Essex, says ‘the implications of these two cases are very important – as they allow any spouse who believes that they have been cheated out of their rightful financial settlement to challenge the original court order. They should speak to a specialist family lawyer for advice on their particular circumstances.’

The two women, Alison Sharland and Varsha Gohil, had both made divorce settlements in good faith with their husbands, only later to find out that they had been deliberately misled about their financial worth.

In 2010 Alison Sharland, from Wilmslow in Cheshire, signed a consent order accepting a divorce settlement from her then husband Charles of £10 million and 30 per cent of the net proceeds of the sale of his company, whenever that took place. Charles owned his own software company, which was valued at £47 million at the time of the divorce on the basis that he had no plans to sell it.

Mrs Sharland later discovered the company was actively being prepared for sale on the stock market at an estimated worth of £600 million. The Supreme Court considered the principle that ‘fraud unravels all’ and found that Mrs Sharland was the victim of fraudulent misrepresentation and she would not have consented to the original order if she had known the truth. The case will now go back to the family court for Mrs Sharland’s settlement to be re-examined.

In a separate case heard at the same time, Varsha Gohil from London accepted £270,000 in her divorce settlement only later to find out that she could have got much more. Her husband later admitted to intentionally misleading the court and Mrs Gohil about the extent of his wealth, when he was found guilty of fraud and money laundering of £37 million. The financial settlement was set aside and will again be returned to the family court.

If you believe that your ex was dishonest about their finances at the time of your divorce, you should take legal advice immediately. Pinney Talfourd Solicitors can help you to make further enquiries and even enlist the services of professionals, such as private investigators and forensic accountants.

For more information about divorce settlements and disclosure please click here to contact our Family Law Department or call 01708 299444.

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice, and the law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice on their own particular circumstances.