Joanne Major, Leading lawyer in the North East and Principal of niche specialist family law firm, Major Family Law, comments in the Luxe magazine if you’ve ever been divorced and been frustrated that no one seems to believe you that your soon-to-be ex spouse is patently lying, deceitful, and manipulative, specifically when it comes to finances, then you may well have believed you had cause for celebration when the news recently featured the judgment of the Supreme Court in two high profile divorce cases, setting a precedent for divorce settlements to be reconsidered where one spouse has concealed assets or income.
The cases of Sharland and Gohil respectively, were different in terms of circumstances, the former being a long marriage with the parties’ assets comprising significant liquid capital and a company eventually floated on the stock market; the latter involved the husband being prosecuted and convicted of money laundering after financial settlement had been reached in divorce proceedings.
Notwithstanding the differing circumstances of each case, the ultimate judicial decisions have finally put beyond doubt the right of one party to reopen a matrimonial financial settlement if it can be shown that the other party failed to disclose financial information.
It has always been expressly required that both parties give full and frank disclosure of their financial circumstances within divorce financial proceedings. These two cases reinforce that principle and confirm that the duty continues throughout legal proceedings right until the final Order is made and sealed by the Court. In particular, this clarifies that an agreement reached by consent is not binding on either party until the terms have been ratified by the Court in a formal Order.
Where there has been non-disclosure of financial assets by one party, the other party is entitled to apply to the Court in which the original Order was made to have that original Order set aside, even where the non-disclosure was unintentional or accidental.
The nature of divorce being what it is, it’s natural therefore to assume that these judgments will open the floodgates for wronged spouses to go back to Court to ask for their original financial Order to be reconsidered. Is that really the case though? It’s unlikely because there are a number of factors which potential applicants need to bear in mind:
Critically, the applicant needs to be able prove that their former spouse lied in the course of the original proceedings. If the applicant has no actual evidence of this, then an application would be futile. In both the cases cited, the evidence was irrefutable. In the first case because the company actually floated some time after the divorce proceedings, and in the second because the husband was tried and convicted of money laundering and documents were ordered to be produced from the CPS.
The second consideration must be whether the effect of such concealment (if proved) would make any material difference to the outcome of the original case. This may seem like a strange statement, but for many people with modest means, it is entirely possible that the Court would still make the same – or much the same – Order even knowing of the concealed assets because the value of those assets is not particularly or sufficiently great to make a difference. Remember also that the cost of making and pursuing the application may well outweigh the potential benefit of the final outcome.
Finally, a word to the wise: don’t play the Lottery during divorce proceedings, because if you win before your financial settlement is finalised by the Court, you will have a duty to disclose your winnings and for them to be taken into consideration. And yes, that duty extends even to a £10 win!