The importance of honesty in matrimonial proceedings

Every matrimonial solicitor will continually stress to clients the need for full and frank financial disclosure when dealing with matrimonial finance cases and the importance of this has been confirmed by two appeals recently handed down in the Supreme Court. These two cases were in relation to consent orders and therefore even when matters are agreed between the parties the need for honesty has been confirmed.

The first case related to a consent order sealed in 2004. The Husband (H) was subsequently imprisoned for money laundering and the trial of that case highlighted the fact that he had not been honest about his financial position during the matrimonial settlement. Interestingly, the consent order recorded that the Wife (W) did not believe that H had made full disclosure but entered the agreement reached as she wanted to get matter resolved. W later applied to set aside the Order on the basis of fraudulent non-disclosure on behalf of H. Her application was successful but was later successfully appealed by H leading W to bring the current appeal before the Supreme Court.

The second case related to a consent order that was signed in 2012 but not sealed as the W claimed that she had discovered H’s fraudulent non disclosure just prior to a Judge sealing the order. H was a business man and was said to have mislead W and those valuing his business as to his intentions to float his company on the stock exchange. H requested that the Judge sealed the Order in any event, which he did and W appealed first to the Court of Appeal and then to the Supreme Court.

The Supreme Court allowed the appeal by both W’s with the affect that both cases will be reopened and the Court will be asked to decide which financial orders should be made in each case. This is particularly significant in the first case given that the original order was sealed some eleven years ago. The Supreme Court confirmed the principal that the duty of full and frank disclosure in matrimonial cases is to the Court and cannot be dismissed by agreement between the parties. The Supreme Court confirmed that the correct approach to take is where there has been fraudulent non-disclosure the Court should set aside the consent order unless it can be satisfied that at the time of the consent order was entered into the fraud would not have influenced a reasonable person to agree to it.

Upon the handing down of these decisions the media have questioned whether the “floodgates” will be opened in terms of applications for the setting aside of consent orders. This is, it is hoped, unlikely. Fraudulent non disclosure still has to be evidenced by the party seeking to set aside the consent order and the non disclosure would have to be of relative significance to justify the return to Court. What is hoped is that these decisions will remind all involved of the importance to provide full and frank disclosure when resolving matrimonial finances, be it by consent or otherwise, to ensure that the consent order cannot be unravelled at a later date.

Louise Ballantyne

Senior Solicitor – Family Team

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This article has been prepared for general interest and information purposes only; it does not constitute legal advice and should not be relied on as such. While all possible care has been taken in the preparation of this article, no responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by the firm or the authors.