Many people will have read the headlines of wife securing an increase to her earlier financial settlement by millions. This is a real success story and one that inspires confidence in the powers of the family court. Further it shows that the family judges are willing to apply the full force of the law to ensure fairness. In this article, Legal Director Teena Jones explains the facts and implications of fraudulent non-disclosure.
In 2002, Varsha Gohil (Ms Gohil) the former wife of Bhadresh Gohil (Mr Gohil) learnt of his extramarital affair. She was further horrified to discover that the affair spanned two years. She was granted a mere £170,000 in the financial proceedings following the divorce. This left her destitute forcing her to live with her three children (all under the age of ten) at her parents’ home.
Ms Gohil felt that the lifestyle she and the children enjoyed during their marriage was not reflective of the financial disclosure Mr Gohil provided. Ms Gohil remained firm in her opinion that he had failed to provide full disclosure of his financial position. The final court order made in 2004 records that Ms Gohil did not believe he had provided full disclosure. Despite this recording the order was approved, and she was given a lump sum payment of a mere £170,000.
Ms Gohil then pursued several appeal applications in her quest to prove that Mr Gohil had been dishonest in his financial disclosure. In 2010, whilst pursuing her applications, she learnt that criminal charges had been brought against Mr Gohil. Some of the charges were in respect of:
- money laundering;
- forgery, and
- conspiracy to defraud.
He was convicted of five charges and pleaded guilty to another eight. He was imprisoned for a period of ten years.
Competently and tactfully, Ms Gohil decided to sit in the public gallery listening, watching and noting the financial disclosure put forward by the CPS in respect of the criminal charges against Mr Gohil. The list of assets from the CPS revealed the magnitude of his wealth. Further, he reportedly benefited to the sum of c£42,000,000 in respect of his criminal activities.
Ms Gohil was subsequently, successful in her application to the family court to set aside the order made in 2004 for fraudulent non-disclosure. The assets held in the names of third parties, were tantamount to fraudulent non-disclosure. At the hearing to re-determine Ms Gohil’s financial claims, the family court calculated that the total undisclosed pot of matrimonial assets available for division were just under £10,000,000. Ms Gohil was awarded assets worth £6,833,172 (including £170,000 already awarded).
The Gohil case strengthens an applicant’s application when pursuing a set aside of an order based on fraudulent non-disclosure and in turns lays down new precedents in relation these applications. In summary, the evidential burden has been relaxed, a party cannot opt out of financial disclosure. Further the burden is now on the party that failed to provide material disclosure to prove that the court would not have made a different order had this disclosure been provided in the first instance. There will be a fresh hearing in such cases now and cost orders against the material non-disclosure remain. The best advice for our clients is to provide full financial disclosure at the onset, a failure to do so could lead to their financial detriment.
If you require any further information about divorce, financial settlements on divorce or any other family matter please contact Teena Jones at teena.jones@daviesandpartners.com
Disclaimer: The above is merely general guidance and should not be relied on as formal advice. We suggest you take professional advice before taking any action relation to the issues discussed above.
