Divorce settlement to be reviewed due to husband’s non-disclosure

A divorce settlement is to be re-examined by the Family Court because of the husband’s fraudulent non-disclosure of his assets.

Julian Nelson, Director in our Family Law Team reports on this recent case.

The couple had settled by consent during their divorce in 2010. However, it was subsequently found that the husband had misrepresented his assets, in particular the value of his company.

The 2010 order was set aside and, following a second determination in 2016, the husband was ordered to pay the wife a further lump sum.

It then emerged that the husband had failed to make appropriate disclosure of likely significant capital accumulations in the foreseeable future. The 2016 order was set aside, and the court conducted a further rehearing of the wife’s claims in 2022.

The judge decided to tailor her award on the basis of the 2016 order, which he found reflected the wife’s appropriate share in the husband’s company, given that its increase in value resulted from the husband’s endeavour, not marital endeavour.

The wife contended that the judge had failed to accord due weight to the husband’s fraud when considering the approach to take in determining her restored financial relief application.

She could not receive a fair resolution of her claim without a root and branch investigation of all financial matters from scratch; to do otherwise meant that the husband benefited from the fraud he perpetrated.

The Court of Appeal ruled in her favour.

It held that the husband’s fraudulent non-disclosure in 2016, particularly when seen in the context of his previous fraudulent non-disclosure, was to be regarded as so far reaching that it positively required the judge to consider the entire financial landscape completely anew.

The judge had consequently been wrong to have determined the wife’s application effectively on the basis of the capital award agreed in 2010 and confirmed in 2016: that was too blunt a division of her claim.

She was entitled to have her application considered in full knowledge of the disclosable facts. The matter was remitted for a rehearing.

If you would like more information about the issues raised in this article or any aspect of family law please contact Julian on 01228 516666 or click here to send her an email.