Gohil v Gohil: A battle over disclosure

Non-disclosure is at the heart of the Gohil v Gohil appeal.

In 2004 Mrs Gohil (W) settled her financial claim with Mr Gohil (H) for a lump sum payment in final settlement of the wife’s capital claims (which was eventually paid), and periodical annual payments (which stopped in 2008).

Throughout the proceedings, W had maintained that the husband’s disclosed income did not account for his lavish lifestyle. Indeed the 2004 Order included a recital that ’the believes that the has not provided full and frank disclosure of his financial circumstances (although this is disputed by the husband) but is compromising her claims in the terms set out in this consent order despite this in order to achieve finality’.

It later emerged that the husband had been embroiled in fraud and money laundering. He was eventually convicted and sent to prison for ten years in 2011.

W applied to have the 2004 Order set aside on the grounds of non-disclosure. At first instance, Moylan J set aside the 2004 Order, holding that there had been material non-disclosure, such that full and frank disclosure would have affected the outcome of the case, and the principles in Ladd v Marshall were satisfied for the admission of fresh evidence.

H applied to the Court of Appeal, which allowed his appeal, holding that Moylan J had incorrectly applied the Ladd criteria, but maintained that they was still relevant in order to establish the admissible evidence the wife could rely on to establish material non-disclosure. W took the case to the Supreme Court.

In a unanimous decision, the Supreme Court allowed W’s appeal. They held that Moylan J’s Order should be reinstated. The Court clarified the application of the Ladd criteria (which they held had been incorrectly applied in previous decisions):

the principles propounded in the Ladd case have no relevance to the determination of an application to set aside a financial order on the ground of fraudulent non-disclosure.

The Court held that Moylan J had relied on evidence from the criminal proceedings, but that even if he had relied on evidence admissible to the family court, he still would have held that H was guilty of material non-disclosure.

The Supreme Court reiterated the fact that parties to financial proceedings owe a duty to the court to make full and frank disclosure of their resources, without which the court is unable to discharge its duty under s.25(2) of the Matrimonial Causes Act 1973. The recital to the 2004 Order could not have legal effect, as one spouse cannot exonerate the other from complying with the duty of full and frank disclosure.