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Alan Foster

Senior Partner - Head of Family Department - Uckfield

25th June 2015

Cheats Never Prosper – or do they?

The Supreme Court is just about to hear two cases which may well go some way to answering the above question.

In both cases, it is said that the husbands of the two women concerned “cheated” by not disclosing the true value of their assets in divorce proceedings. The women are claiming that as a result of the husbands’ cheating, they have been deprived of what they believe to be their fair share of the husband’s assets in divorce proceedings.

In matrimonial cases, “cheating” inevitably centres upon the issue of financial disclosure. In financial proceedings in divorce both parties are under a duty to make a full and frank financial disclosure to each other. This is also taken to include “other relevant circumstances” and the position is that a failure to give full and accurate disclosure may result in any order the Court makes being set aside. Indeed, the starting point for any financial negotiations will be a full and frank financial disclosure to each of the parties as to what the other has. It is only once the size of the “pot” is established that one can look towards an appropriate and fair apportionment of those assets.

Simple enough, you might say. However, the financial disclosure process is fraught with difficulties, particularly where one of the parties, usually the husband, has business interests and shares in one or more companies. If some of those assets and bank accounts are held “offshore”, then that can raise particularly difficult issues.

For some, it is clearly tempting to hide assets or to lie or give misleading information as to their true value.

In cases where there are assets offshore or tied up in shares and trusts, an experienced lawyer is required to try to get to the truth of the other party’s position and to ensure that the Court has before it the full details of the other party’s assets.

Once an order is made, it is usually “full and final”. However, what if one party subsequently discovers that the other party has cheated and lied about the value of their assets? The answer at the moment is not necessarily as clear cut as one might imagine. It is not every lie that would enable a case to be reopened. That is because to be reopened, the lie must be what is termed “material” and of such significance that had the truth been told a different order would have been made. The lie therefore has to be a material one. What is, and is not, material, can of course be argued about considerably and at present the onus is very much upon the party seeking to reopen a Court Order to establish that the non-disclosure was material.

As is often the case in financial settlements in divorce proceedings, what is and is not material non-disclosure is case specific and each case will very much depend on its own facts. It is likely though that the Supreme Court will give some further guidance on this issue when it hears the current cases going before it. These two cases follow hard on the heels of Vince v Wyatt which established there was no time limit for a party making a financial claim after divorce proceedings and that the Court only had very limited power to strike out an application even though that application was being made many years after the divorce proceedings themselves. The coming judgments should provide lively reading and a further indication as to whether it is always true that “cheats never prosper”!

For further information please contact Alan Foster Senior Partner in our Family team at our Uckfield office on 01825 744436 or email alanfoster@rixandkay.co.uk.

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