The UK supreme court is in the process of considering the effects of fraud on divorce settlements, following the investigation into cases involving women who claim their ex-husbands provided misleading accounts of their assets during divorce proceedings.
Varsha Gohil and Alison Sharland seek to re-open divorce cases to investigate whether their ex-husbands concealed wealth and assets during original proceedings. Both maintain that they were ‘duped’ by their ex-husbands, and a three-day hearing will examine the issue of non-disclosure in divorce cases.
In 2004, Varsha Gohil settled for £270,000 and a car during her divorce to Bhadresh Gohil. However, Bhadresh was subsequently tried and jailed for fraud and money-laundering, revealing that his assets were far greater than he had previously stated during the divorce.
‘Throughout the proceedings the husband denied that he had any assets,’ Varsha’s council Sally Harrison QC explained, while the criminal trial revealed that Bhardresh was ‘an out and out rogue involved in financial criminality on an eye-watering scale.’
‘Despite these findings, Varsha (who has three financially-dependent children) has no remedy to secure fair distribution of the assets which the parties owned in 2004,’ Harrison stated. Following the trial, the courts ruled in Bhadresh’s favour, since evidence from criminal proceedings were not allowed to be used in the divorce case. Harrison asserts that should the order stand, Varsha ‘would be deprived of a fair hearing and a fair outcome.’
In a separate case, Alison Sharland received £10 million and property from her ex Charles when they separated in 2010 after 17 years of marriage. During these proceedings, Charles’ software company AppSense was valued between £31 and £48 million, however the true value of the company has now been estimated at £656 million, prompting Alison to re-open her case and claim non-disclosure against her ex. Martin Pointer QC, Alison’s counsel, says that Charles ‘laid a false trail by his dishonest evidence’, and his non-disclosure was judged deliberate at a court of appeal, however two of the three judges believed the original settlement should stand since the outcome would not have been ‘significantly different’ had the evidence been present.
Sadie Glover from Frances Lindsay & Co claims that divorce courts have long turned a blind eye to fraud through non-disclosure, and supports the plans for the reopening of these cases to enable re-negotiation of settlements.
In many divorce cases, a 50/50 split of wealth is recommended – prompting the hiding of certain assets in order to reduce the amount in the shared pot. The penalties for non-disclosure are mild, which may embolden parties to take the gamble and neglect to reveal the true value of assets. They may also be relying on their ex’s reluctance to pursue the re-opening of a case to avoid ongoing litigation.
‘The fair resolution of these cases is about more than money,’ Glover stated, ‘It’s understandable that these women feel betrayed by the actions of their former husbands, and it should not be acceptable for one party to withhold information during divorce proceedings – especially when the other is unable to challenge this discovery after the event.’
It is Glover’s hope that the re-opening of the Gohil and Sharland cases will raise serious issues over the way the court handles non-disclosure, suggesting that the hiding of assets should be classed as perjury and result in more severe penalties. It is expected for judgement to be reserved until later in 2015, but the resolution of these cases could pave the way for others to seek the re-negotiation of settlements, even those involving ‘more modest’ sums, and ensure greater honesty in disclosure.Tags: divorce lawyer Thames Valley, divorce solicitor Windsor, non-disclosure