Gohil v Gohil & Sharland v Sharland
Gohil, along with Sharland, was an important judgment in relation to fraudulent non-disclosure. The parties had divorced in 2002 and reached a settlement in 2004, even though the wife believed that the husband had significant undisclosed assets. Following the divorce, the husband was subject to criminal proceedings for aiding in the laundering of assets fraudulently sequestered from the government of Nigeria. As part of the criminal investigation, it became apparent that the husband had left a large amount of his assets undisclosed during the divorce proceedings.
The wife appealed the decision to the Supreme Court. In a joint judgment with the case of Sharland, the court held that the husband was guilty of fraudulent non-disclosure and that the wife was entitled to have her case reheard.
As part of these combined judgments, the court departed from previous case law and made it easier to challenge an order where there had been fraudulent non-disclosure. The court ruled that deliberate and fraudulent non-disclosure will be presumed to be material (that is, important to proceedings) unless the person who lied can demonstrate otherwise.
Sharland v Sharland, along with Gohil v Gohil, was an important case on the issue of fraudulent non-disclosure – when one spouse deliberately hides assets away from the other during divorce proceedings.
Mr and Mrs Sharland married in 1993, separating in 2010. During that time, the husband built up a valuable technology business. The exact value of the business could not be agreed by the experts on the case. As part of this process, the husband was asked whether the business was going to be subject to an initial public offering (i.e flotation on the stock market). He said no, but the wife later discovered that there were advanced plans for an IPO.
The wife ultimately appealed to the Supreme Court. The court held that as both parties owe a duty of full and frank disclosure to the court then “fraud unravels all” and the agreement between the parties should be set aside.
This was a departure from the previous case law, which had held that any disclosure had to be shown to be material. Instead, the burden now lies on the dishonest party to show that their lies made no difference to the outcome of proceedings. This is a great benefit for those who are victims of dishonest conduct and non-disclosure, making it much easier for proceedings to be re-opened if one party has lied.