Tuesday, November 10, 2015

Fraud and the Supreme Court's Decision in Sharland

The case of Sharland v Sharland in the Supreme Court confirms that fraud will not be tolerated in the Family Courts and the previous Consent Order was set aside with an order for a re hearing of the wife's claim.
 What does this mean for the rest of us?

If you are found to have committed fraud - for example, deliberately not disclosed assets, undervalued them, lied about your employment - or as in the Sharland case not revealed that you were planning on selling your company shares 100s of millions - then you will have to go through the whole procedure again - or if possible only the steps necessary to  deal  with the issue of fraud. You will also probably be responsible for your ex's legal costs in getting the matter re listed. However, there is no guarantee even if you win an appeal that you will get all of your costs so this is a risk for both sides.

The lower courts in Sharland had not allowed the appeal on the basis that the substantial non disclosure would not have resulted in a different order and therefore it was a waste of time to re hear the matter as the court would arrive at a similar conclusion.

The Supreme Court disagreed and held that the husband's non disclosure was material and the judge would have made a different order if he had known about it. The Court of Appeal had made their decision on the evidence before them but the key is what would the evidence have been before the trial judge so the Courts should not have removed the possibility of a fair hearing from Mrs Sharland.

It will be interesting to see what happens - company could have been floated for £600 million but husband said it was worth £47 million - but they did not go ahead - the valuation of his shares will no doubt be the focus of the re trial but how much is hope value - what if he never sells? The wife already had 30% of his shares awarded to her. What I don't understand from her perspective is if she was prepared to settle for 30% of £47 million why is 30% of £600 million not enough?

So, setting aside the difficulties of uncovering the fraud in the first place what should the everyday lawyer and client take from this? If you are seeking justice and Mrs Sharland is quoted as saying it was a matter of principle not money then the court is available to give you a fair trial. However, most people do not have £10 million to back up their principle. If you uncover fraud - clearly you need legal advice as to whether it is worth going back to court. Each case is judged upon its own facts and each case has a different judge whose interpretation of fair differs from each other.

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