Full disclosure

Roocroft v Ball [2016] EWCA Civ 1009 concerned a couple, Helen Roocroft and Carol Ainscow, who separated in September 2009. In the proceedings for dissolution of their civil partnership they entered into a consent order to settle financial remedy proceedings. The consent order included maintenance for two years, then Roocroft would have no further claims against Ainscow or her estate. Ainscow died intestate in 2013.

Roocroft became concerned about the disclosed level of assets at the time of the consent order in 2010 and applied to set it aside based on material non-disclosure by Ainscow of her true financial position. His Honour Judge Barnett refused that application as ‘without merit’ and ‘doomed to failure’. He said that allowing the case to proceed would be contrary to the court’s overriding objective and his duty to actively case manage an application.

However, the Court of Appeal recognised that the judge had not had the benefit of the subsequent decisions by the Supreme Court in Sharland v Sharland [2015] UKSC 60 and Gohil v Gohil [2015] UKSC 61 (relating to setting aside on the basis of material non-disclosure) and Wyatt v Vince [2015] UKSC 14 (on striking out and summary dismissal in cases brought under the Family Procedure Rules 2010).

Wyatt principles

• These principles apply equally to an application to set aside a consent order in financial remedy proceedings as to applications for the making of a financial remedy order;

• The court’s power to strike out (under FPR 4.4(1)) is of limited reach. An application is not an abuse of process by reason of the fact it has no real prospect of success;

• An application has no reasonable grounds for the purpose of FPR 4.4(1)(a) if it is not legally recognisable in the sense that it is incoherent or because the applicant has remarried; andThere is no summary judgment procedure under the FPR. The court may, however, exercise its case management powers to make directions for an abbreviated hearing following a provisional evaluation of the issues.

The Court of Appeal held that the judge had given a summary judgment for which he had no jurisdiction under the rules.

Sharland and Gohil

Sharland and Gohil considered the impact of fraud on a financial settlement. The Supreme Court held that fraudulent non-disclosure vitiates an agreement reached in financial relief proceedings. In Sharland, Lady Hale confirmed that her observations apply equally to civil partners as to husband and wife.

Before an order can be set aside, the court must be satisfied that the non-disclosure was material and would have resulted in the making of a substantially different order. The burden of proof shifts depending upon the nature of the non-disclosure. Mistaken non-disclosure places the burden on the applicant to show that proper disclosure would,

on the balance of probabilities, have led to a different order. Intentional or fraudulent non-disclosure places the burden on the non-discloser.

In Roocroft, the Court of Appeal found that Gohil is unequivocal in saying that one party cannot exonerate the other from complying with their duty of disclosure. The judge had erred in law in taking the approach that the appellant’s consent rendered the deceased’s lack of disclosure irrelevant and immaterial.

It was submitted that the delay in making the application by Roocroft should prove fatal to the application. The Court of Appeal disagreed. The application is not an appeal subject to time limits and mere delay cannot justify the striking out of an application pursuant to FPR 4.4(1)(c). Lady Justice King added: ‘Further, it is hard to see how, in the event that a finding was made that the deceased deliberately misled the appellant and the court, that conduct could be saved by a delay on the part of an appellant to have discovered the fraud.’ Roocroft denied that there was any delay once she became aware of the alleged non-disclosure.

The Court of Appeal held that the directions hearing did not serve as an abbreviated hearing and had all the hallmarks of summary judgment. The judge rightfully held that he had the power to strike out the application but he wrongly applied the test that the application had no reasonable prospects of success. Similarly, the judge erred in his failure to make findings of fact as to the materiality of the non-disclosure and whether that non-disclosure was deliberate or inadvertent.

The appeal was allowed and the case is remitted to the Family Division for further consideration. Roocroft will ask the court to make directions for a fact-finding hearing to consider the deceased’s non-disclosure in light of the decisions in Wyatt, Sharland, and Gohil. In the event that the consent order is set aside, Roocroft’s claim will be made under the Inheritance (Provision for Family and Dependents) Act 1975.

Margaret Windram is an associate at Irwin Mitchell, which represented Helen Roocroft

@irwinmitchell www.irwinmitchell.com