Hide and seek

The Supreme Court's appeal decisions in Gohil v Gohil (No 2) [2015] UKSC 61and Sharland v Sharland [2015] UKSC 60 have sent out a clear message to those dishonestly failing to disclose their true wealth. Any agreement reached by divorcing couples must be based on honesty. Any court order made in reliance on dishonest disclosure can be reconsidered and ultimately set aside.

The starting point for parties seeking to enter into a financial arrangement to allocate the marital assets, whether achieved by consent or with the court's intervention, is to make full and frank disclosure of their assets and liabilities. Should such disclosure be found to be less than full and frank or indeed fraudulent, these court decisions demonstrate how the issues of fairness and justice underpin our legal system.

The only situation where fraud would not lead to the setting aside of a consent order or part of a consent order is, as set out by Lady Hale in Sharland: 'Where the court is satisfied that, at the time when it made the consent order, the fraud would not have influenced a reasonable person to agree to it, nor, had it known then what it knows now, would the court have made a significantly different order, whether or not the parties had agreed to it.'

An upheaval of cases?

This decision reminds us that the court retains jurisdiction over a marriage, even after it has ended and has the power to vary, suspend or set aside any order.

Only time will tell whether these decisions will open the floodgates for those seeking a second bite of the cherry, in situations where a different financial circumstance should have been taken into consideration. Mrs Gohill's original order was made over 11 years ago, which shows that a vast number of cases that may be revisited under the remit of these decisions.

On the other hand, the fact that an order will not be overturned if, on an objective basis, the court is satisfied that it would not have influenced the other party's decision to consent, means that an influx of cases for unmeritorious claims is unlikely.

A greater equality?

The cases should, however, provide confidence to those who feel that they have been the victim of fraudulent non-disclosure, and provide a warning to those who believe that they can hide their assets without repercussions.

One of the first cases likely to feel the impact of the above decisions is that of multi-millionaire property investor Giles Mackay, which had been stayed pending the outcomes of these decisions, but will be heard later this year. Here it is alleged that although Mr Mackay's assets had been valued at £20m, his shares in the firm Hometrack were in fact worth considerably more.

Although the above cases refer to high-net-worth individuals, it has been argued that these judgments will not solely effect the very wealthiest in society. At the heart of these decisions is the enforcement of compliance with the basic principles of fairness and honesty in all cases of disclosure.

These cases may in fact prove to be equally important for those who are the primary carer of children, and who must rely on a true calculation of assets to ensure that fair division is made to ensure proper provision for them and the children is secured.

In short, if in financial proceedings it was found that the needs of each party cannot be met, these recent decisions may be the survival tool for parties whose former spouse has concealed their true wealth, thereby resulting in settlement both short of fair decision, and one that can meet the needs of the financially weaker party.

Mei-Ling McNab is a partner at Brachers

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