Slee Blackwell Barrister Roderick Moore takes a look at the Supreme Court’s decisions in two leading cases, Sharland v Sharland and Gohil v Gohil , which set down new principles to be applied in divorce cases where one party has been prejudiced by fraudulent misrepresentation or non-disclosure of key financial information by another.
In summary, the cases of Sharland and Gohil establish that where an agreement to compromise an ancillary relief application in a divorce case has been reached on the basis of a fraudulent misrepresentation or failure to provide full and frank disclosure of all relevant information and documents, it will be automatically unravelled.
This is encouraging news for parties to divorce proceedings who have lost out as a result of their former spouse intentionally hiding or restricting key documents and information about the extent of their finances so as to deceive the court.
The only exception to this new rule is if the perpetrator of the fraud can prove that the fraud would not have influenced a reasonable person, and that, regardless of what the position of the parties would have been had there been full disclosure, the Court would not have made a significantly different order.
However, Livesey was not a case of fraud, and the essence of the recent appeals was whether, in cases of fraud, the innocent party should face a lower hurdle in seeking to unravel agreements and consent orders.
b) that the Court would have not have made a significantly different order.
It is suggested that, unless the non-disclosure is utterly trivial, the burden on the guilty party will often be challenging to discharge. It is very hard to prove a negative.
There has been for many years a good deal of uncertainty as to the correct route to challenge a consent order procured by fraud. It has been described as a “procedural quagmire”. However, following Sharland, it is now clear that there is a simple choice: either appeal (out of time if necessary), or apply to vary, suspend or rescind the consent order under s31F(6) of the Matrimonial and Family Proceedings Act 1984.
In making the choice, it is important to note that the Court of Appeal itself has recognised that it is an inappropriate forum for an inquiry into disputed issues of fact; plainly many applications of the kind under consideration will involve factual disputes.
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