Alison Sharland has been granted permission to appeal her divorce case after the High Court found that her husband concealed the true value of his company.
The Court of Appeal had previously upheld the agreement despite Mr Sharland’s misrepresentation. The Supreme Court will look at the case again as it raises a point of law of general public importance.
It emerged that Mr Sharland’s company might be worth signifi cantly more than he originally disclosed (reports suggested up to $1billion whereas the shares in the company had been valued at between $48m and $72m).
Two of the three Court of Appeal judges felt that although Mr Sharland’s non-disclosure had been deliberate and dishonest and described his conduct as deplorable, it proved not to be “material” to the outcome of the case. They accepted Mr Sharland’s argument that Mrs Sharland would not have received a substantially different award had the court been in possession of the truth.
The third judge disagreed, saying that the husband’s fraud undermined the whole agreement. Lord Justice Briggs was concerned that as a matter of public policy, the court’s processes must be protected from fraud, and this was more important than economy and speed.
Alison Sharland had entered an agreement in the belief that she was receiving approximately half of the value of the matrimonial assets which would have been a fair result. However, Mr Sharland knew that the company was potentially worth significantly more than he had led the court to believe and that the shares could be realised much sooner than he had represented.
It has been said in the Sharland case that, “dishonesty in any legal proceedings should not be tolerated; the family court should not be an exception.”
This reinforces the need for transparency and honesty at the outset of financial remedy proceedings in divorce matters which involve the division of assets between spouses. Honesty to disclose the true
financial position should also continue throughout each case.
The case of Sharland v Sharland is due to be heard by the Supreme Court in June 2015.
When a marriage breaks down there is a common fear that one’s spouse will not be honest about their financial situation and hide assets in order to minimise the other spouse’s claims for a financial remedy.
It is essential that before reaching a financial settlement upon divorce that each spouse provides full and frank disclosure of all of their capital assets (including pensions), liabilities and income. Unless this disclosure has been provided, the court will not make a financial court order upon divorce, even if both spouses consent.
At the very minimum the court requires a completed Statement of Information Form from each spouse which gives a summary of their financial circumstances. More comprehensively a financial statement form, called a Form E, is commonly used instead. This form requires both spouses to provide evidence in support of their financial circumstances e.g. their last 12 months bank statements for all accounts, valuations of assets (such as property), shares and pensions and evidence of income.
The completion of either document requires spouses to have signed a Statement of Truth which means that, if the financial disclosure is found to be untrue, then the dishonest spouse could be found to be in
contempt of court which is punishable by way of fine or a term of imprisonment.
Legal advice is essential when it comes to examining what your spouse has disclosed to be their financial position. An experienced legal representative can help uncover irregularities or hidden assets and can ensure that assets are properly valued.
There may be a genuine oversight by one spouse to disclose an asset, but occasionally it is a deliberate attempt to hide or undervalue assets. Financial disclosure, if thoroughly examined, can make it very difficult for one spouse to avoid their obligation of full and frank financial disclosure. Essentially your solicitor can help you make cost effective decisions.
It is particularly important to consider whether it will actually make a difference in terms of the overall settlement and how much it will increase costs by. A solicitor can help you make an objective decision.
For more information
Please contact Cambridge family law solicitor Jackie Jessiman.