Wednesday, October 14, 2015

Sharland and Gohil: Appeals allowed

The Supreme Court

The Supreme Court has today handed down its decisions in the related appeals of Sharland and Gohil.

The Issue -Sharland
(1) What is the impact of fraud on:-
i. an agreement to compromise ancillary relief proceedings; and/or
ii. a consent order made following such agreement?
iii. Is it different from, or the same as, it would be in other civil proceedings?
(2) In proceedings for ancillary relief, does fraud give rise to separate remedies to those available in other instances of non-disclosure?

(3) Where either fraud and/or material non-disclosure is established, does the refusal by the court to rescind the order (and so reinstate the trial process) wrongly derogate from the victim’s right to a fair trial?

The Facts - Sharland
Following her divorce, the appellant wife brought a claim for financial provision against the respondent husband. The claim came on for hearing in the High Court. Both the husband and wife gave evidence. During the course of the hearing, the parties were able to reach agreement and the hearing was brought to an end. The terms of a draft order were settled and approved by the judge. The wife later discovered that, contrary to what he had said in evidence, the husband had been holding discussions with various investment bankers as part of active preparations for an initial public offering of a successful company. The husband owned about two-thirds of the shares in that company. The wife’s solicitors made an urgent application to the court not to seal the order. The wife made an application to resume the hearing of her claim for financial provision on the grounds that her agreement to the proposed order had been obtained by fraudulent non-disclosure on the part of the husband. Her application was dismissed by the judge, the judge finding that she would not have secured a substantially different award had the true position been known. The wife’s appeal was dismissed in the Court of Appeal. The wife now appeals to the Supreme Court.

The Issue - Gohil
The correct approach to a party’s application to set aside a final order made in ancillary relief proceedings on the basis that there has been material non-disclosure by the other party.

The Facts - Gohil
In 2004 the appellant wife’s claim for financial relief from the respondent husband was concluded by way of a consent order. The respondent was subsequently convicted of money laundering. The appellant applied to set aside the 2004 order on the basis that at the time it was made he failed to disclose the true extent of his financial assets.

The Decisions
The Supreme Court unanimously allowed both appeals. In the case of Sharland it held that the husband's non-disclosure vitiated the wife's consent and the case was therefore sent back for reconsideration. In Gohil the order of Moylan J setting aside the 2004 order was reinstated.

A press summary of the Sharland judgment is available here, and the full judgment here.

A press summary of the Gohil judgment is available here, and the full judgment here.

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