Sunday 25 September 2016

Husbands who lie about their wealth during divorce 'could see their settlements ripped up' after landmark ruling

Published 14/10/2015 | 13:28

Varsha Gohil (left) and Alison Sharland (right) outside the Supreme Court in Westminster central London
Varsha Gohil (left) and Alison Sharland (right) outside the Supreme Court in Westminster central London

Two ex-wives who say they should get more money after divorcing have won a Supreme Court victory which legal experts think will have wide implications.

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Alison Sharland, 48, from Wilmslow, Cheshire, and Varsha Gohil, 50, from north London, both said their ex-husbands had misled judges about how much they were worth.

Both wanted their claims re-analysed at fresh hearings. Their ex-husbands disagreed.

Supreme Court justices, who analysed the disputes at a hearing in London in June, ruled in favour of the women.

File photo dated 08/06/15 of Varsha Gohil, from north London
File photo dated 08/06/15 of Varsha Gohil, from north London

Mrs Sharland said she hoped that the ruling would send a message to divorcing couples. Mrs Gohil said other wives owed her lawyers a debt of gratitude.

READ MORE: Two ex-wives win landmark case after saying they should have gotten more money from former husbands

Legal experts said the ruling could "open the floodgates" and "fire the starting gun".

The Supreme Court heard that both women had reached agreements with their ex-husbands after beginning litigation, but both subsequently thought that they had been misled.

Mrs Sharland had accepted more than £10 million in cash and properties from ex-husband Charles, 54, three years ago.

Mrs Gohil had accepted £270,000 plus a car from ex-husband Bhadresh, 50, more than a decade ago.

The court heard that Mrs Sharland claimed she was misled her over the value of a business.

Lawyers said she had thought the business was valued at between £31 million and £47 million but reports in the financial press put the value at £1 billion.

Mrs Gohil's husband had been convicted of money laundering following their divorce.

Neither woman has yet said how much they now want.

Supreme Court justices indicated that both women's claims would return to the High Court for further consideration.

Mrs Sharland said she was "relieved and delighted" and hoped that the ruling sent a "message to everyone going through a divorce".

"My legal battle has never been about the money, it has always been a matter of principle," she said.

"I entered into an agreement with my estranged husband thinking that it was a fair one.

"I believed that the net result was an equal division of our assets which had accrued during our marriage and so, in my opinion, 50% was fair.

"Unfortunately, the evidence was manipulated by my estranged husband and it was not therefore possible to rely on the evidence of either of our accountants when considering the value of what I believe was and is the most valuable asset.

"The proceedings have dragged on and, at times, I have considered whether it was the right thing to do to continue my appeal, especially as there has been criticism about my pursuing the appeal because of the amount of the award which I originally received.

"However, I know that there are potentially others who are not in the same position as me financially, those who cannot afford to pursue a principle."

She added: "I hope that I can now begin to move on with my life safe in the knowledge that my future divorce settlement will be based on the true value of our assets."

Mrs Gohil said: "There are absolutely no winners in divorce and more than a thought has to be given to the children of families locked in this type of litigation. The price they pay is a very heavy one. The emotional strain of it is huge on everyone, the drain in financial resources is enormous and none of it serves the family."

She added: "All spouses subject to deceit and deliberate financial skullduggery in a divorce owe a huge debt of gratitude to the tireless efforts of the legal team here today."

Mr Sharland was said to be "disappointed".

"We believe that this decision marks a fundamental change in the law," said lawyer James Brown, a partner with JMW Solicitors, who represented Mr Sharland.

"Family law is complicated and entirely discretionary and there could be a danger that this change may open the floodgates to thousands of couples revisiting the agreements they reached.

"On a personal level Mr Sharland is bitterly disappointed that his family will continue to be locked in litigation for the foreseeable future.

"Mr Sharland's primary objectives have always remained the same - to arrive at a fair settlement with Mrs Sharland and to make generous provision for his children.

"It is perhaps ironic that Mrs Sharland may actually end up with less as a result of the ongoing legal action than originally agreed more than three years ago.

"That arrangement provided her with three substantial properties, many millions of pounds in cash and 30% of what Mr Sharland gets from the sale of his business whenever it sells.

"We still maintain that settlement was perfectly fair and ensured Mrs Sharland was very well looked after by any standards."

Legal experts said the ruling would have implications.

"This is a victory for common sense and a defeat for dishonesty - it just goes to show that if you don't put all your cards on the table when divorcing it might come back to bite you further down the line," said lawyer Graham Coy, a partner at law firm Mundays.

"Importantly today's decision could open the floodgates for more people to try and renegotiate historic divorce settlements."

He added: "However, whether the money is still there and readily available for Mrs Sharland and Mrs Gohil is another matter entirely - they could still have a significant struggle on their hands to recoup assets which they are entitled to and were unfairly duped out of."

Lawyer Claire Blakemore, a partner at Withers Family Law, added: "The principle of full and frank honesty in court is what was at stake in these cases. The judgments may fire the starting gun for other cases involving non-disclosure which have been waiting in the wings for the outcome of this case."

A panel of seven Supreme Court justices, including Supreme Court president Lord Neuberger and deputy president Lady Hale, analysed each case separately.

Lady Hale said the Sharland case was a "case of fraud" and she said Mrs Sharland had been a "victim of a fraudulent misrepresentation".

She added: "By the husband's fraud, (Mrs Sharland) has been deprived of her right to a full and fair hearing."

Another justice, Lord Wilson, said Mr Gohil, a solicitor, had a "duty to make full disclosure".

Judges in the High Court and Court of Appeal had already analysed the woman's claims.

Mrs Gohil said she hoped that there would be a fresh High Court hearing soon.

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