Families, finances and fraud The Supreme Court recently heard appeals bought by Mrs Sharland and Mrs Gohil. Both cases concerned alleged non-disclosure by husbands with the wives alleging that they received smaller settlements as a result. At the time of the divorce, Mrs Sharland accepted a settlement that saw her receive £10.3million. After the agreement was reached and the consent order drawn up, she discovered that, contrary to what he had said in evidence, Mr Sharland had been holding discussions with various investment bankers as part of active preparations for an initial public offering of a successful company. The financial press put the value of the business at some £620million. Mrs Sharland made an application to the court 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 misrepresentation. Her application was dismissed, with the judge finding that she would not have secured a substantially different award had the true position been known. Mrs Sharland appealed, but this too was dismissed by the Court of Appeal. In fact, by the time the Court of Appeal case was heard, it had become clear that the flotation would not go ahead.
Bulletin Summer 2015 Contact the authors:
Alan Kaufman Consultant: Private Client & Family T: +44 (0) 20 3755 5538 E: alan.kaufman@howardkennedy.com
As for Mrs Gohil, she accepted £270,000 and a car in 2004. Six years later, her ex-husband, London solicitor Bhadresh Gohil, was jailed for money laundering and evidence arose in the criminal proceedings that revealed he had not disclosed his true wealth during the divorce. Whilst the High Court rescinded the order, Mr Gohill successfully appealed. Now, both Mrs Sharland and Mrs Gohil have taken their fight to the Supreme Court. The court will be considering the impact of fraud in financial remedy proceedings, what remedies should be available, and whether a refusal to set aside the order in cases where fraud and/or material non-disclosure is established deprives the victim of a right to a fair trial. The correct approach to setting aside a final order made in financial remedy proceedings due to material non-disclosure will also be considered. Presently, non-disclosure will only be considered where it was material to such an extent that the court would have made a different order had full disclosure been made. It's unsurprising that ex-spouses feel aggrieved in situations where they learn that their ex-partner has not been entirely frank and yet it makes little or no difference to the outcome. Why, they may ask, should their ex be held to a different set of rules? If they abide by their duty of full and frank disclosure, is it right that their ex, who has chosen not to do the same, often escapes with nothing more than a slap on the wrist?
Lois Langton Partner: Private Client & Family T: +44 (0) 20 3755 5559 E: lois.langton@howardkennedy.com
Many commentators are calling for the courts to take a robust approach. Proportionality must, however, be kept in mind. If the outcome is unlikely to change, the cost of a full retrial would be disproportionate and could create costly legal bills with little or nothing to show for it. Whatever the outcome, practitioners can expect guidance on the issues in these two cases. Unfortunately we will have to wait a little longer, as judgment has been reserved until later in the year. For now though, non-disclosers should beware. If successful, Mrs Sharland and Mrs Gohil’s cases could have far-reaching implications for family law.
Surrogacy – the need for reform A recent High Court decision involving a mother and a same sex couple has highlighted again the fundamental problems surrounding this country's surrogacy laws. In this particular case concerning a 15-month old baby, the mother claimed that there was an artificial conception agreement whereby she would be the "main parent and carer". If you would like more information on our services, please visit www.howardkennedy.com here you will find all our latest news, publications and events. This material is for general information only and is not intended to provide legal advice. © Howard Kennedy LLP 2015
However, the biological father, who was in a same sex relationship, categorically denied this and said that he and his partner had asked the woman, whom he had known for many years, to act as a surrogate and that he and his male partner were to be the child's co-parents. Ms Justice Russell, who heard the case, criticised the "offensive language" the woman had used towards the couple throughout the proceedings and found that she had "deliberately misled the father and his partner about her intentions or changed her mind as the pregnancy progressed". The Judge concluded that "while to move a young child from her mother is a difficult decision and is one which I make with regret as I am aware it will cause the mother distress, I conclude that the father is the parent who is best able to meet the girl's needs both now and in the future". As a result, Ms Justice Russell ruled that the child is to live with the father and his partner and is to have supervised contact with the mother. The case only goes to emphasise once again why surrogacy law cries out for reform. The lack of regulation means that all those involved in the process have to trust that everyone will keep their word. It's a concept that would be alien to virtually any other area of the law. If the surrogate changes her mind, as happened here, it has to be left to the court to intervene and to determine what is in the child's best interests. The situation could readily be addressed by reforming the surrogacy laws in this country to bring them into line with the social realities of the 21st century.
Living in unwedded bliss The Office for National Statistics recently released figures for Marital Status and Living Arrangements in England and Wales. The figures confirmed that between 2002 and 2014, the percentage of the population cohabiting who had never been married or civil partnered increased from 6.8% to 9.1%, whilst the percentage of those cohabiting who had previously been married or in a civil partnership remained at around 2.9%. This is nothing new to family practitioners, and the upward trend of unmarried cohabitation has featured in the legal and political press frequently over the last decade. Whatever the reasons for the ongoing increase in cohabitation, one thing is clear: there is no indication that the law is likely to change to reflect social reality any time soon. There exists though a remarkably high level of misconception amongst the public as to the legal status of cohabitants. In England and Wales, the notion of common law marriage is a myth and carries no weight in law. The truth is that cohabitants have no financial claims against each other arising from the fact of their cohabitation. This is a messy and incoherent area of the law, and the patchwork of legal remedies currently available is complex and unsatisfactory. In the absence of a change in the law, unmarried couples face a minefield of legislation if they wish to make any claims in respect of property. They do not have the remedies available to them had they been married. The limited options available to unmarried couples on the breakdown of a relationship can be hugely uncertain and often lead to costly litigation. A properly drafted cohabitation agreement can seek to avoid this minefield. Unmarried couples should consider this when looking at their living arrangements, and may find that this also allays any concerns of parents or other family members who are helping them financially to get on or move up the property ladder. Importantly, such agreements could help avoid a lot of heartache and uncertainty in the future.
If you would like more information on our services, please visit www.howardkennedy.com here you will find all our latest news, publications and events. This material is for general information only and is not intended to provide legal advice. Š Howard Kennedy LLP 2015