Supreme Court ruling may mean divorce settlement cases can be re-opened (15 October 2015)

The Supreme Court has ruled in two cases in which ex-wives challenged their divorce settlements, after claiming that their husbands had concealed assets during the divorce hearing.

On Wednesday (14/10/15), the court found in favour of Alison Sharland and Varsha Gohil.

Alison Sharland, 48, married in 1993, but separated from her husband Charles Sharland in 2010. The couple have three children – one of whom has severe autism and will require lifelong care from Mrs Sharland.

Mr Sharland is an entrepreneur who has a substantial shareholding in a software business, AppSense Holdings Ltd, which he developed.

During negotiations over the multimillion pound divorce settlement, Mrs Sharland – from Cheshire – disputed her husband’s assertions about the value of his company. At the centre of the dispute was the possibility of an Initial Public Offering (IPO) of the company.

In the High Court in July 2012, Mr Sharland gave evidence confirming that there was no IPO “on the cards today” – and a settlement was agreed, under which Mrs Sharland received 30% of the net proceeds of sale of the AppSense shares whenever the sale took place, together with other assets.

The judge approved the agreement and a draft consent order was drawn up.

However, before it was sealed, Mrs Sharland became aware that AppSense was being actively prepared for an IPO, which was expected to value the company at a figure far in excess of the valuation prepared for the divorce hearing. Mrs Sharland then applied for the divorce hearing to be resumed.

In April 2013, a judge found that Mr Sharland’s earlier evidence had been dishonest and – had he disclosed the IPO plans – the court would have adjourned the financial proceedings to establish whether the IPO would go ahead. However, by the time of the hearing, the IPO had not taken place and an IPO was not in view. As a result, the judge declined to set aside the consent order for the settlement, as Mrs Sharland had requested.

After the Court of Appeal upheld the judge’s decision, Mrs Sharland then appealed to the Supreme Court and won her right to have her divorce settlement re-opened.

In the second case heard on Wednesday, Mrs Varsha Gohil, 50, was married to former solicitor Bhadresh Gohil, with whom she has children. She petitioned for divorce in 2002 – but her husband claimed that that all of his ostensible wealth consisted of assets held on behalf of his clients.

Mrs Gohil agreed to a settlement in 2004 after a Financial Dispute Resolution meeting. The settlement provided for her to receive a lump sum payment and periodical annual payments, which Mr Gohil stopped paying in 2008.

In 2004, Mrs Gohil had asserted that her former husband had not provided “full and frank disclosure of his financial circumstances” – and in 2007, she applied to set aside the divorce settlement on the grounds that her ex-husband “had fraudulently failed to disclose his assets”.

In 2008, Mr Gohil was charged with serious money-laundering offences dating from 2005 – and was convicted and jailed in 2011. There are ongoing confiscation proceedings against him.

Mrs Gohil’s divorce settlement was set aside in 2012, but her ex-husband won his appeal against this. The Supreme Court ruling overturns the appeal ruling – and both women will now be able to re-open their cases.

The judgments in both cases could also enable other divorce settlement cases to be re-opened, where it is found that one partner concealed assets during negotiations over the divorce settlement.

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