Two divorcees win Supreme Court battle to get MORE money from their husbands – because they had LIED about how rich they were
Euan Mclelland Mail Online
- Alison Sharland and Varsha Gohil both said ex-husbands lied about wealth
- Took their battle for higher divorce settlements to Supreme Court justices
- Judges agreed they were misled and paved the way for new proceedings
- Landmark ruling could ‘open floodgates for previous divorce agreements to be revisited’ – with legal firms preparing to be inundated by divorcees
Two ex-wives who say they should have been paid more in divorce settlements from their wealthy husbands have won their Supreme Court battle – paving the way for the floodgates to open with legal claims from aggrieved divorcees who believe they too were short-changed.
Alison Sharland, 48, from Wilmslow, Cheshire, and Varsha Gohil, 50, from north London, both said their ex-husbands misled judges about how much they were worth. They each wanted their claims re-analysed at fresh hearings, potential proceedings their ex-husbands were staunchly against, but a desire the Supreme Court justices today ruled in favour of the women.
The judgement is being hailed as landmark as it confirms the right of a former spouse to challenge an earlier settlement. However, they would still need to be able to prove that their former partner had lied to the extent that a judge would have made a different order at the time of their settlement. Mrs Sharland and Mrs Gohil will now be able to push on with appeals that could see them claim to receive millions of pounds more from their former partners. The ruling means husbands who try to hide their wealth from their ex-wives in future – or have in the past – could be dragged through the court and made to pay-up.
At the time of her divorce, Mrs Sharland accepted more than £10million in cash and properties from ex-husband Charles – with whom she had three children – three years ago, justices were told.
However, she claimed that her ex-husband misled her over the value of a business. Lawyers said she thought the business was valued at between £31million and £47million, but reports in the financial press put the value at £1billion. Varsha Gohil accepted £270,000 and the family Peugeot from solicitor Bhadresh Gohil in 2004 after divorcing him for alleged adultery and unreasonable behaviour.
But in 2010 he was jailed for ten years for money laundering after a court heard he helped millionaire Nigerian politician James Ibori steal around £50million from the oil-rich state he governed.
Supreme Court justices were told that both women had reached agreements with their ex-husbands after beginning litigation and that both subsequently thought that they had been misled.
Both the High Court and Appeal Court accepted that the men had lied but refused the women to claim higher divorce settlements.
However, today’s ruling, by the highest court in the land – involving seven Supreme Court judges – will now allow both to appeal that decision. Neither woman has yet said how much they want, but both say their claims should be re-examined and all evidence now available considered.
Mrs Sharland said after the ruling: ‘I am relieved and delighted that the Supreme Court judges have ruled in our favour. I hope that their decision sends out a message to everyone going through a divorce that they cannot lie in the family courts and get away with it. My legal battle has never been about the money, it has always been a matter of principle. I entered into an agreement with my estranged husband thinking that it was a fair one. I believed that the net result was an equal division of our assets which had accrued during our marriage and so, in my opinion, 50 per cent was fair. Unfortunately, the evidence was manipulated by my estranged husband and it was not therefore possible to rely on the evidence of either of our accountants when considering the value of what I believe was and is the most valuable asset.’
She added: ‘The proceedings have dragged on and, at times, I have considered whether it was the right thing to do to continue my appeal, especially as there has been criticism about my pursuing the appeal because of the amount of the award which I originally received. However, I know that there are potentially others who are not in the same position as me financially, those who cannot afford to pursue a principle, and I wanted to pursue my appeal to ensure that they too are not faced with a situation where their spouse tells lies which potentially affects the outcome and interferes with achieving a just and fair settlement for either their husband or their wife and their family. The courts have at last demonstrated that the English legal system will not allow dishonest spouses to mislead the court or their former partner. I believe that justice has been done. ‘I hope that I can now begin to move on with my life safe in the knowledge that my future divorce settlement will be based on the true value of our assets.’
Mrs Gohil from North London said: ‘There are absolutely no winners in divorce and more than a thought has to be given to the children of families locked in this type of litigation. The price they pay is a very heavy one. The emotional strain of it is huge on everyone, the drain in financial resources is enormous and none of it serves the family. The court process is unfortunately geared towards those with financial means and I consider myself fortunate that to have been able to conduct most of my case on my own. All spouses subject to deceit and deliberate financial skulduggery in a divorce owe a huge debt of gratitude to the tireless efforts of the legal team here today.’
Their specialist divorce lawyer Ros Bever at Irwin Mitchell said the two women believed they were duped into accepting ‘unfair’ divorce settlements, based on knowingly false information provided by their ex-husbands. She said: ‘This judgement sends out the clear message that dishonesty will not be tolerated. Both women found themselves in an unfair situation where they were duped into accepting a smaller settlement than they may have been entitled to. Our clients feel vindicated. Dishonesty in any legal proceedings should not be tolerated. We are thrilled that Supreme Court has confirmed that the Family Court is not an exception to the general rule and that it is no more acceptable to lie there than it is in any other court.’
Judge Lady Hale said the Sharland case was one of ‘fraud’. She said: ‘It would be extraordinary if the victim of a fraudulent misrepresentation, which led her to compromise her claim to financial remedies in a matrimonial case, were in a worse position than the victim of a fraudulent misrepresentation in an ordinary contract case. The court too has been deceived.’
Toby Hales, from law firm Seddons – and who represented Mrs Gohil at both Court of Appeal hearings – said: ‘Today’s decision represents some welcome and long-overdue clarity in what is, ultimately, a complex and convoluted process. It reflects the feelings of most practitioners, and is an example of the Supreme Court taking a common sense approach to these complex issues which will be welcomed and understood by most people who have occasion to come into contact with the Family Justice system. For the individuals involved, however, the sense of relief may be fleeting. As the Court’s judgment makes clear, there are enormous still obstacles ahead of Varsha Gohil before she is able to achieve a fair outcome to her case. Having struggled for over a decade to achieve some measure of justice, whilst bringing up two children alone while their father was in prison, Varsha will now have to begin her claim again from scratch in proceedings that may stretch to four or five different legal jurisdictions. Hopefully these decisions will act as a warning to people to think twice before intentionally failing to disclose their assets. Justice has – quite rightly – been upheld.’
Other legal experts say the cases raise serious questions and could affect other divorced couples.
Joanna Farrands, family partner at law firm Barlow Robbins, said: ‘This ruling will most likely open the floodgates for many previous divorce agreements to be revisited, which will have a lasting impact on the divorce mechanisms in England and Wales. The fraudulent activity has been taken under conduct; a legal process that enables the court to depart from an award in favour of one party to take account of that conduct. It is only in rare cases that conduct is taken into account which truly shows the sincerity to which the courts are dealing with such drastic cases of non-material disclosure in divorce.’
John Darnton, a partner at law firm Bircham Dyson Bell, added: ‘The decision of the Supreme Court will be of huge interest to individuals who feel that their partner may have tried to mislead the court within financial proceedings on divorce, but it could have far wider implications on the effects of non-disclosure in divorce.’
And Lawyer Renato Labi, a partner at law firm Hughes Fowler Carruthers, said: ‘As the law currently stands, if a spouse has been found to have lied about his or her finances, family courts can only overturn a financial order if those hidden assets or income would have made a substantial difference. The Supreme Court will decide whether that is fair, or whether any dishonesty – however small – can reopen an order. A change in the law could mean even more lengthy and expensive litigation.’
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