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Husband wins Sharland appeal 2:1

Date:10 FEB 2014

The Court of Appeal has just handed down judgment in the case of S v S (Financial Remedies: Non-Disclosure: Materiality) [2014] EWCA 95, [2014] 2 FLR (forthcoming) (reported at first instance as S v S (Non-Disclosure) [2013] EWHC 991 (Fam), [2013] 2 FLR 1598).

Their Lordships found that although the husband was guilty of fraudulent misrepresentation, in the event it proved not to be material to the outcome of the case, and the wife would not have received a substantially different award had the court been in possession of the full facts.

Mr and Mrs Sharland had both given evidence during the trial before Sir Hugh Bennett in July 2012, but they reached an agreement during the course of the hearing and the judge approved the heads of agreement. The draft order was not sealed. The wife discovered very shortly afterwards that, in direct contrast to what he had said in evidence up to and during the trial, the husband had been in preparations for an IPO (initial public offering) and there was media speculation that the company was worth between $750m and $1bn as opposed to the £50m - £75m it had been considered worth during the proceedings.

The wife argued she would not have settled on the terms she did if she had known the true position and sought the setting aside of the unperfected order and resumption of the final hearing.

The judge was able to look again at the position since the order had not been sealed, and having received further affidavit evidence from the husband agreed that the wife and the court had been badly misled. However he concluded that since an IPO had not actually taken place and now was unlikely to do so for some time, he would not have made a substantially different order from that which the parties had agreed.

The Court of Appeal upheld the judge's order by a majority of 2 to 1. Lord Justice Briggs dissented considering that as a matter of public interest the court's processes must be protected from fraud.

Lady Justice Macur agreeing with Lord Justice Moore Bick added that the husband's conduct might be punished in other ways such as by costs penalties, contempt proceedings or criminal prosecution. She considered that the court system might grind ever more slowly if every fraudulent misrepresentation permitted a case to be reopened.

A detailed article by Ros Bever (who represents Mrs Sharland) and Hayley Trim of Irwin Mitchell will appear in the April edition of Family LawS v S (Financial Remedies: Non-Disclosure: Materiality) [2014] EWCA 95 will be reported in FLR.