Family Law Blog

Non-disclosure in financial proceedings

13 May 2014, by Taylor King Family Law Solicitors

As family lawyers we constantly advise our clients that they have a duty to provide full and frank financial disclosure to the court. However there have been two recent cases that give rise for concerns where one party does not provide full disclosure and deliberately holds back information or misleads the court.

In the case of Sharland v Sharland Mrs Sharland wanted to refer the matter back to the court after she discovered that her husband had kept vital information from her and the court and had not been open and honest about his financial position. She sought to ask the court to consider the new information and to set aside the previously agreed order. However, the court would not set aside the order on the grounds that the agreement which was incorporated in the order would have substantially the same had there been full disclosure and the non disclosure was found not to be material. Mrs Sharland’s application to set aside the order was dismissed and she took the matter to the Court of Appeal. Although sympathetic the Court of Appeal were not inclined to intervene and the matter will now be dealt with by the Supreme Court in 2015 to find out whether or not the husband’s fraudulent non disclosure was material enough to set aside the final court order.

In the case of Gohil v Gohil there was a consent order in 2004. The wife, upon discovering that there had been incomplete disclosure, sought to set aside the order. When the matter first came before the court the judge was satisfied that the husband had failed to give full and frank disclosure of his financial circumstances and the order was set aside. The judge considered that the non disclosure was material and took into account fresh evidence. On appeal to the Court of Appeal it was decided that the judge did not have jurisdiction to set aside the original order.

There are very limited circumstances in which a final order, whether made by consent or following a contested final hearing, can be overturned. As long ago as 1985 it was stated that parties who apply to set aside orders on the grounds of failure to disclose relatively minor matters which would not have made any substantial difference to the order are likely to find their applications being dismissed and have an order for costs made against them.

The court, in the following circumstances, could overturn an order:

  1. Fraud, mistake or material non-disclosure – this will be the focus of the Sharland case in the Supreme Court. It is not enough to prove fraud, mistake or material non-disclosure. You have to prove that it materially affected the outcome of the case.
  2. New unforeseen and supervening events – this needs to be extreme and needs to occur shortly after the making of the order. One such example was the case of a wife who killed herself and her children five weeks after the making of an order. The loss of employment or the increase or decrease of the assets of the parties is not sufficient.