Sharland and Gohil: Full and frank disclosure in divorce proceedings

Ex-wives Alison Sharland and Varsha Gohil have won the right to open up their divorce settlements. Seven Supreme Court Justices unanimously ruled Mrs Sharland and Mrs Gohil could seek larger settlements from their former husbands because their former husbands had not fully disclosed the value of their assets at the time their previous divorce settlements were achieved. Lady Hale, the Deputy President of the Supreme Court, confirmed that the principle “fraud unravels all” applies as much to divorce as it does to commercial contracts. She said that there was no “special magic” in family cases which means that different principles should apply.

Mrs Sharland’s settlement obtained approximately three years ago was worth approximately £10.3million but she claimed that her husband had not fully disclosed the value of his assets. Mrs Gohil agreed to receive £270,000 and a car in her 2004 divorce settlement six years before her ex-husband was charged for his role in the multi-million money laundering scam with a Nigerian politician.

In both cases the Courts had ruled that the husbands had not fully disclosed their assets but nevertheless would not reopen the divorce agreements. The Supreme Court has now ruled that the Court can now open up the settlements and both women will be able to seek new settlements. Is this a good thing?

It is a long standing principal that both parties should provide full and frank financial disclosure. This duty to disclose continues up until the point a voluntary agreement is reached or a Court order made. Sometimes there can be many months between the time when disclosure is provided and the time where an agreement is reached.

This case is certainly a warning to those who may be tempted not to provide full disclosure. Whether the Courts will now see numerous applications for parties seeking to open up previous settlements remains to be seen.

If you have any queries or concerns in relation to financial settlements then our specialist Family Law solicitors at Holmes & Hills Solicitors can advise you. Please contact us on 01376 320456.