Dishonesty in divorce and dissolution settlements will not be tolerated, even after death

When a couple divorce, each person will have to sign a financial statement revealing the full extent of their income and assets before they agree how to divide their finances.

But what can you do if you suspect your spouse concealed some of their assets during your divorce in order to reduce the amount they had to pay you? Is the answer to this question the same if, rather than being married, you were in a civil partnership? And what happens if your spouse or former partner has since died?

Following a recent ruling by the Court of Appeal, which builds on a decision made by the Supreme Court last year, the answer to all three questions is that, in theory at least, you can go back to the court and ask it to reconsider the financial provision agreed.

Michelle Uppal, Partner and family law solicitor at Miles & Partners in the City of London, explains what you should do if you believe your former spouse or partner may have misled you.

Supreme Court reopens financial settlement following dishonesty in divorce

In October 2015, in two separate cases involving Alison Sharland and Varsha Gohil, the Supreme Court ruled that concealment of your true financial position amounted to ‘fraudulent misrepresentation’ and as a result allowed the women to return to court to renegotiate their respective divorce settlements.

Both Mrs Sharland and Mrs Gohil had made divorce settlements in good faith with their husbands, only later to find out that they had been deliberately misled about their financial worth.

In 2010 Alison Sharland signed an agreement accepting a divorce settlement from her then husband Charles of £10 million and 30 per cent of the net proceeds of the sale of his company, whenever that took place. Charles owned his own software company, which was valued at £47 million at the time of the divorce, calculated on the basis that he had no plans to sell it.

Mrs Sharland later discovered the company was actively being prepared for sale on the stock market at an estimated worth of £600 million. The Supreme Court considered the principle that ‘fraud unravels all’ and found that Mrs Sharland was the victim of fraudulent misrepresentation and that she would not have consented to the original order if she had known the truth. The case was therefore sent back to the Family Court for Mrs Sharland’s settlement to be re-examined.

In Varsha Gohil’s case, she had accepted £270,000 in her divorce settlement only to later find out that she could have got much more. This followed her husband’s admission that he had intentionally misled the court and his wife about the true extent of his wealth, something which came to light following his prosecution for fraud and money laundering to the tune of £37 million. As a result of this the financial settlement was again set aside and sent back to the Family Court for reconsideration.

Court of Appeal paves the way for the reopening of a financial settlement following the dissolution of a civil partnership where former partner had since died

In October 2016, in a case involving Helen Roocroft, the Court of Appeal ruled that the same principles applied in the context of financial settlements reached following the dissolution of a civil partnership, even in circumstances when the civil partner alleged to have been dishonest has since died.

In this case Helen Roocroft and Carole Ainscrow had dissolved their civil partnership in 2010. Ainscrow was the provider in the relationship and was fairly wealthy, having previously made it onto The Times rich list.

At the time of the dissolution, Ainscrow claimed that her wealth had been seriously diminished as a result of the global recession; however, following her death in 2013 Roocroft discovered that this was not the case. Following the Supreme Court decision, the Court of Appeal directed that the financial provision made for Helen Roocroft should be reconsidered.

What to do if you believe your former spouse or civil partner has been dishonest

If you believe that your former spouse or civil partner was dishonest about their finances at the time of your divorce or the dissolution of your civil partnership, you should take legal advice immediately. It is entirely possible that if dishonestly is found to have occurred, steps can be taken to force the reconsideration of your previous financial settlement. A good solicitor will help guide you through the process and, if necessary, help you instruct a private investigator and forensic account to substantiate your claim.

For more information about divorce settlements and disclosure and the dissolution of civil partnerships and disclosure, as well as family and relationship matters generally, please contact Michelle Uppal on 02074260400 or email mu@milesandpartners.com.

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.