A recent High Court decision has re-emphasised the obligations on a divorcing couple to provide full and frank disclosure to each other when sorting out their financial settlement. That obligation continues until the Final Order has been made, and does not come to an end just because an agreement has been reached at an earlier date – as the husband in EK v DK would have done well to note.
Here a settlement was reached, after a 7 day hearing, based on the husband’s evidence which, amongst other things, included a lack of liquidity and that he had no idea when/how he was going to be able to buy a new house. By the time the Consent Order was sealed the husband was well on the way to buying a new home, or an investment property which would make £3.5m to £6.5m in profit. This meant that he had concealed from the Court (and the wife) that he had had extensive dealings with estate agents and other professionals to buy a new property and made an offer.
In these proceedings the Court had to decide whether the Consent Order that had been entered into should be set aside because of the husband’s lack of financial disclosure. The Judge applied the maxim: “fraud unravels all”. He confirmed that if the husband had deliberately misrepresented his position then the wife would be entitled to have the Consent Order set aside as of right (unless he concluded that the fraud would not have been such as to influence a reasonable person to enter into the original agreement).
Here the Judge was clear that the husband had been dishonest and granted the wife’s application to set aside the Consent Order that had been entered into
This case serves as a reminder to all involved in litigation on divorce that concealing their true financial position and entering into an agreement based on that, may well undermine the Order that they had been so pleased to have achieved in the first place.
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