The former wife of a software company founder has failed in her bid to secure a new financial settlement despite the husband’s failure to disclose important financial information.
In a recent reported case, Alison Sharland and her husband divorced in 2012, after 19 years of marriage. Mrs Sharland ran an Autism charity whilst her husband ran a highly successful business called AppSense.
Upon their divorce, Mrs Sharland accepted a settlement worth £10.4 million, and 30% of her husband’s shares, relinquishing her right to half the company on the understanding that it would not be floated on the stock exchange for a period of time.
However, despite the agreement, Mrs Sharland later discovered plans to float the company on the stock exchange by way of an Initial Public Offering (IPO) and media speculation also suggested that the company was worth much more than had been suggested. She took her husband to court on grounds of his ‘fraudulent non-disclosure’ and claimed she would not have settled on the terms she did, had she been made aware of all the facts.
A judge, however, ruled in her husband’s favour and Mrs Sharland therefore took the matter to the Court of Appeal. The appeal has however been unsuccessful.
The judges in their ruling stated that, despite the husband’s clear deliberate and dishonest non-disclosure, the unusual circumstances of the case meant that there were good reasons for concluding that it had not resulted in an order significantly different from that which the court would otherwise have made at the conclusion of the proceedings. The non-disclosure was deemed as not relevant to the ultimate financial settlement.
The decision has unsurprisingly opened up an interesting debate on whether or not someone can ‘get away’ with non-disclosure. As family lawyers disclosure is something that we deal with on a day to day basis and it is something that is often crucial to the successful progression of a client’s case. Without full disclosure the settlement may be flawed or biased in one persons favour.
This Court of Appeal decision suggests that everything relies upon whether the result would have been materially different if full disclosure had been made. It also demonstrates the seriousness of these issues and the fact that the courts will re-open cases if the non-disclosure is discovered and to consider if such non-disclosure makes a material difference to the outcome.
It is clear from this case that financial settlements from can be extremely complex and seeking advice from an experienced family lawyer at an early stage can help you to understand all of your options. For specialist legal advice on divorce and related financial issues please do not hesitate to contact us.