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The case of Sharland v Sharland [2015] UKSC 60 

This appeal was heard in the Supreme Court and the Judgement given on 14 October 2015. Please read the case below: 

(Supreme Court, Lord Neuberger P, Lady Hale DP, Lords Clarke, Wilson, Sumption, Reed and Hodge, 14 October 2015).

Background leading to the appeal:

This appeal considers the impact of non-disclosure on a financial settlement agreed between a husband and wife on divorce, especially where the agreement is embodied in a court order. 

The parties were married in 1993 and separated in 2010. They have three children together, one of the children has severe autism and will require constant care from Mrs Sharland throughout his life. Mr Sharland is an entrepreneur who has a substantial shareholding in a software business, called AppSense Holdings Ltd, which he developed. During the financial proceedings the value and manner of distribution of this shareholding was the principal matter in dispute. Both parties instructed valuers, who produced valuations on the basis that there were no plans for an Initial Public Offering (IPO) of the company. 

In July 2012, during the course of the trial in the High Court, after Mr Sharland gave evidence confirming that there was no IPO ‘on the cards today’, the parties reached settlement where Mrs Sharland agreed to receive 30% of the net proceeds of sale of the AppSense shares whenever that took place, together with other assets. The judge approved the agreement and a draft consent order was drawn up. However, before it was sealed, Mrs Sharland became aware that AppSense was being actively prepared for an IPO which was expected to value the company at a figure far in excess of the valuations prepared for the hearing. 

Mrs Sharland immediately invited the judge not to seal the consent order and applied for the hearing to be resumed. During the hearing of her application in April 2013 the judge then found that Mr Sharland’s earlier evidence had been dishonest and, had he disclosed the IPO plans, the court would have adjourned the financial proceedings to establish whether it was going ahead. However, by the time of the hearing, the IPO had not taken place and an IPO was not now in prospect. The judge refused to set aside the Consent Order on the ground that he would not have made a substantially different Order in the financial proceedings, applying the decision of the House of Lords in Livesey (formerly Jenkins) v Jenkins [1985] AC 424.

The Court of Appeal upheld the judge’s order (Briggs LJ dissenting) leaving no option but for Mrs Sharland to appeal to the Supreme Court. 

Judgment

The Supreme Court unanimously allows Mrs Sharland’s appeal. The consent order will not be sealed and Mrs Sharland’s application for financial relief will return to the Family Division of the High Court for further directions. Lady Hale gave the only judgment. 

This judgement is a welcome news because it gives warning to those who frudulently and dishonestly do not disclose fully and frankly their assets in order for the parties to reach fair settlement.

Fosters Legal LLP welcome this judgement on behalf of our clients.  

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