20/10/2015
A landmark ruling on two divorce settlements could open the floodgates to thousands of claims of financial misrepresentation.
Alison Sharland and Varsha Gohil won their case against their ex-husbands who they claimed deliberately hid their wealth to avoid paying out on their divorce settlements.
In 2010, Ms Sharland accepted £10 million from her former husband, Charles while Ms Gohil received a car and £270,000 from her ex, Bhadresh in 2002.
Although the Supreme Court indicated that both claims would return to the High Court, the significance of these cases could have massive consequences for divorce proceedings.
“In essence, the judgment of the Supreme Court sends a clear signal of the importance for full and frank disclosure of assets in divorce proceedings”, said Rebecca Muirhead, family law specialist at Russell & Russell Solicitors. “The decision makes clear that where full disclosure doesn’t take place, it could affect the terms of a settlement so the court can reconsider the decision and overturn a previous order. If ever there was a case for honesty being the best policy, this is it.”
The ruling was based on the fact that Ms Sharland believed that the money she received from her husband’s company represented half his wealth. She also accepted 30% of the proceeds of shares held by her husband when he sold them. In fact, Charles Sharland’s company had been estimated to be worth around £600 million by the financial press, despite the value being used in the divorce as just £47 million. There were also plans to float the company on the stock market.
In Ms Gohil’s case, her husband’s deception was revealed when he was prosecuted for money laundering. His true wealth came to light during the trail and he was later jailed for 10 years.
Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published.