Supreme Court is to consider fraud in divorce settlements (10 June 2015)

Today, Rosina Hough looks at fraud in divorce cases being heard in the Supreme Court.

Two divorce settlement cases are currently being heard in the Supreme Court.  The cases are being brought in conjunction and the Court will look at whether deliberate dishonestly and concealment of financial circumstances in divorce hearings allows for future challenges if new information comes to light.

The Applicants, Varsha Gohil and Alison Sharland, claim that during the original divorce settlements their ex-spouses concealed the value of their assets.  The Applicants argue that they did not receive a fair division of the property owned between each couple, and therefore the original divorce settlement agreement should be revised.

Alison Sharland received £10m in her settlement agreement with her ex-husband, and Varsha Gohil received £270,000 plus a car.  However both women have since come to believe that their ex-husbands concealed assets during the original divorce proceedings and their wealth amounts to significantly more than was taken into account in the original financial agreements.  Both women believe they were substantially misled and this gives grounds for the courts to re-hear the cases.

Alison Sharland originally challenged her divorce settlement after it was revealed that her ex-husband’s company was not worth between £31 and £47m, but close to £656m. At the Court of Appeal, the three judges hearing the cases agreed that the disclosure of the true value of the company had been deliberately withheld.  However two of the three judges held that this would not have led to a significantly different outcome to the settlement figure and the original settlement agreement was to remain.  Ms Sharland is now asking the Supreme Court to set aside the original agreement.

Varsha Gohil found out, during the case which jailed her ex-husband for ten years in 2010 on fraud charges that her ex-husband has not disclosed his true financial circumstances during the original divorce proceedings. The High Court agreed to set aside the original settlement. However the Court of Appeal ruled in Mr Gohil’s favour stating that evidence from the criminal trial could not be used and therefore it could not be proved that Mr Gohil had acted dishonestly in the original divorce settlement.

The Supreme Court will be looking into the issues that will not only have an effect on those with very large settlement figures, but also those with smaller settlement figures, where it can be more difficult to fund appeal proceedings.  The judgment if likely to profoundly affect many people.

The hearing started on Monday 8 June 2015 taking place before seven Justices at the Supreme Court.  It is expected to last for three days.  The decision to be made is whether fraud in a matrimonial dispute allows for a revised divorce settlement agreement.

Judgment is expected to be released later this year.