Women challenge 'unfair' divorce settlements

Alison Sharland and Varsha Gohil Image copyright PA
Image caption Alison Sharland (left) and Varsha Gohil (right) claim their ex-husbands lied about their wealth during their divorces

Two women who say they were "duped" into accepting "unfair" divorce settlements are appealing to have them overturned in the Supreme Court.

Alison Sharland and Varsha Gohil both argue their ex-husbands misled judges about how much they were worth.

If the court rules in their favour, it could pave the way for many more people to seek to re-negotiate settlements.

Lawyers for one of the husbands, Mr Sharland, said the provision he made for his wife was "fair and reasonable".

However the lawyer representing both women, Ros Bever from Irwin Mitchell, said courts had turned a "blind eye" to dishonesty in divorce proceedings for too long.

Image copyright PA
Image caption Entrepreneur Charles Sharland dismissed valuations of his company Appsense at £600m as "pure conjecture"

She said the outcome of the hearing, which started on Monday and is expected to last three days, could have "wide-reaching" consequences.

The court will decide whether divorce settlements can be re-negotiated if either side is found to have been dishonest, or whether they can only be re-opened if the dishonesty was "material" - meaning it was significant enough to have impacted the settlement decision.

Concealed assets

Ms Sharland, 48, from Wilmslow, Cheshire, accepted £10m from her husband Charles when they separated in 2010 after 17 years of marriage.

She believed it to be about half of his fortune, but it later transpired the internet entrepreneur had lied about the value of his company, Appsense, and plans for a future flotation.

The financial press valued it at more than £600m. In subsequent court proceedings Mr Sharland dismissed the valuations as "pure conjecture".

The Court of Appeal ruled that the misleading evidence would not have led to a significantly different outcome.

Analysis by Clive Coleman, legal affairs correspondent

Today's cases go to the heart of the family justice system. They are about honesty when divorcing.

England and Wales, and London in particular, is seen by many as the divorce capital of the world. The reason is that for most marriages of any significant duration, there is a 50/50 split of the couple's wealth.

That means that there is a huge incentive not to disclose assets and to not put them into the pot to be divided up.

A court order approving a financial settlement can be set aside if one person fails to disclose assets, but it must be what the lawyers call "material" non-disclosure - that's "significant" to you and me. In other words it must be such that the court would have made a different order.

Some argue that means the courts have been too tolerant of people not disclosing their assets. Should the fact of the dishonesty itself allow one partner to re-negotiate the settlement?

This is the first time in a generation that our most senior court has looked at the issue. Expect some strong guidance.

Varsha Gohil, 50, from north London, accepted £270,000 and a car as a settlement when she divorced her husband Bhadresh in 2002.

In 2010, Mr Gohil was convicted of money laundering and jailed for 10 years. At his criminal trial, evidence revealed he had failed to disclose his true wealth during divorce proceedings.

However, the Court of Appeal ruled that information that emerged at his criminal trial could not be used to overturn the couple's settlement.

Image copyright Met Police
Image caption Bhadresh Gohil was convicted of money laundering

Divorce lawyer Mark Harper told the BBC it was "surprisingly easy" for people to lie during divorce proceedings, but said "if people lie, the court system can't function".

"A surprising number of people do hide money. Because it's 50/50 of what can be found.

"This is a very important case for the general public. Is one lie enough to tear up an agreement, or does it only matter if the lie was material?"

'Fair and reasonable'

Ms Bever, a specialist family and divorce lawyer representing both women, said the outcome of the case would affect many people going through divorce settlements, including those involving "more modest" assets and sums.

"To both women these cases are about a matter of principle and justice," she said.

"Surely most people would hate to be in a situation where their former partner has been able to withhold information during their divorce proceedings; and for there to be no opportunity to challenge this when new information comes to light.

"The current situation sends out completely the wrong message in what is and is not acceptable in terms of disclosing financial information."

Image caption The three-day hearing will take place at the highest court in the UK, the Supreme Court in London

A panel of seven Supreme Court justices are expected to deliver a ruling later in the year.

Mr Sharland's solicitors, James Brown and Beth Wilkins at JMW LLP, said it would be inappropriate to comment in detail before the case had been heard.

"We are confident, however, that the Supreme Court judges will follow the example of their colleagues in the High Court and the Court of Appeal in agreeing that the provision made by Mr Sharland for both his family and his ex-wife was fair and reasonable," they said in a statement.

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