Divorce – Being Less than Frank About Your Wealth Is Anything but Clever

Some divorcees sadly think it is clever to be less than forthcoming about the value of their assets, thus rendering a fair division much more difficult. In a vanishingly rare case, big money divorce proceedings had to be reopened not just once, but twice, due to a multi-millionaire husband’s dishonesty.

HouseFollowing the end of their 14-year marriage, the former couple agreed to a consent order whereby the wife received the former matrimonial home and a lump sum of £4 million. It later emerged, however, that the husband had failed to disclose the existence of two valuable trusts of which he was the principal beneficiary.

The consent order was in those circumstances set aside and, following a rehearing, a judge awarded the wife a further £6.42 million. However, that was not the end of the matter and, in what was probably a unique application, the wife sought to reopen the financial aspects of the divorce for a second time.

In upholding her application, the High Court found that the husband had failed to disclose information relevant to the valuation of his majority shareholding in two companies. The shares had been professionally valued during the rehearing at about £16 million, but a subsequent deal entered into by the husband revealed that a buyer was willing to pay more than £80 million for them.

The Court found that the astute businessman was well aware of his duty to make full and frank disclosure. In failing to reveal at the rehearing the extent of his continuing contact with the potential buyer of his shares, he had signally failed in that duty. His deliberate decision to withhold information and documents which he knew should have been disclosed was dishonest and amounted to fraud.

In allowing the wife’s application and directing a second rehearing in respect of her financial remedies, the Court noted that, due to the husband’s dishonesty, finality had yet to be achieved almost a decade after the marriage ended. The former couple had to date run up about £1.3 million in legal costs between them. The outcome was enormously regrettable from the wife’s point of view and the Court urged the former couple to seek a negotiated settlement rather than continuing to engage in a vortex of profligate spending and mutual destruction.