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New Judgment: Sharland v Sharland [2015] UKSC 60

On appeal from: [2014] EWCA Civ 95

The Supreme Court unanimously allowed Mrs Sharland’s appeal to stop the Court from sealing the consent order drawn up from her divorce proceedings with her husband because he had been dishonest about his financial position by failing to disclose that he had actively prepared an Initial Public Offering (IPO) of his shareholding in the small software business, AppSense.

The High Court and the Court of Appeal declined to set aside the consent order on the basis that Mr Sharland would not have made a substantially different order in the financial proceedings, applying the decision of the House of Lords in Livesey (formerly Jenkins) v Jenkins [1985] AC 424.

In giving the lead judgment, Lady Hale stated that Family proceedings differ from ordinary civil proceedings in two respects: a consent order derives its authority from the court and not from the consent of the parties and the duty of full and frank disclosure always arises. The consent of the parties must be valid. If there is a reason which vitiates a party’s consent there may also be good reason for the court to set aside a consent order.

Lady Hale reasoned that the present case is one of fraud. It would be extraordinary if the victim of a fraudulent misrepresentation in a matrimonial case was in a worse position than the victim of a fraudulent misrepresentation in an ordinary contract case, including a contract to settle a civil claim. She therefore concluded that, on the facts of this case, it is clear that the judge would not have made the order he did, when he did, in the absence of Mr Sharland’s fraud, and the consent order should have been set aside. The judge had misinterpreted Livesey, which had drawn a distinction between triviality and materiality at the date of the order and not at some later date. He had also been wrong to deprive Mrs Sharland of a full and fair hearing of her claims by re-making his decision at the hearing of the application on the basis of the evidence then before him. The consent order should not be sealed and the matter should return to the Family Division for further directions.

For judgment, please download: [2015] UKSC 60
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watching the hearing please visit: Supreme Court website

 

New Judgment: Gohil v Gohil [2015] UKSC 61

On appeal from: [2014] EWCA Civ 274

The Supreme Court unanimously allowed Mrs Gohil’s appeal to set aside the final settlement order in her divorce proceedings with her husband on the basis that he had fraudulently failed to disclose his assets.

The proceedings were stayed largely because Mr Gohil charged with serious money-laundering and convicted and sentenced to prison in 2011, but finally in Sep 2012 Moylan J decided to set aside the order on the basis that there had been material non-disclosure, if Mr Gohil had made full disclosure the outcome would have been different, and because Mrs Gohil had satisfied the evidence criteria is Ladd v Marshall. The Court of Appeal allowed Mr Gohil’s appeal of Moylan J’s decision on the basis that he had wrongly applied the decision of Ladd criteria.

In delivering the lead judgment Lord Wilson stated that The Ladd criteria have no relevance to the determination of an application to set aside a financial order on grounds of fraudulent non-disclosure He reasoned that the Court of Appeal was wrong to accept an argument that the criteria should apply to determine what evidence could be adduced because they had not conducted a fact-finding exercise and the first Ladd criterion presupposes that there has been a trial whereas, in this case, Mrs Gohil’s first opportunity to adduce the evidence was at the hearing before Moylan J. Lord Wilson also highlighted that the argument would not apply to an application to set aside a financial order made by a district judge and the evidential criteria should not depend on the level of court.

Lord Wilson concluded that in light of the erroneous approach to the admissibility of the wife’s evidence, the dismissal of her set aside application cannot stand.

For judgment, please download: [2015] UKSC 61
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watching the hearing please visit: Supreme Court website