Ex-wives who feel they were cheated out of proper payouts during their divorce may get another bite at the apple. The United Kingdom’s Supreme Court ruled that when a spouse commits fraud during divorce proceedings, and a property settlement results – the case may be reopened at a later date. Basically, if, after a divorce is closed, it is learned that one spouse lied about his or her assets and their value, the whole case becomes fair game again.
In the United States, a property settlement reached in a divorce proceeding is generally not modifiable. This means that, unlike child support and parenting schedules, the property settlement cannot change over time. If an ex-spouse wins the lottery the day after a divorce becomes finalized, the other ex is simply out of luck.
However, if it is shown that one spouse committed fraud during the proceedings, the case generally can be reopened and the property distribution can be modified based on the new evidence.
In England, that is now officially the case.
The case was brought by two ex-wives who found out after their divorces that their husbands hid their true wealth. Alison Sharland originally received approximately $16 million as part of her divorce settlement. She then learned that her husband was talking with banks and valued his company at much higher than he valued it at the time of divorce.
Judge Brenda Hale handed down the ruling in London on Wednesday and stated that, “By the husband’s fraud and the judge’s order, she had been deprived of her right to a full and fair hearing of her claims.” The Supreme Court remanded the case to the lower court so a new property division could be decided.
The other ex-wife, Varsha Gohil, settled her divorce in 2004 and agreed to receive about $417,000 as part of the deal. Her ex-husband was later convicted and imprisoned for money laundering up to $57 million. The Supreme Court ruled that the husband did not properly disclose all of his assets at the time the divorce settlement was reached and thus, the case should be reopened.
A lawyer at Barlow Robbins, Joanna Farrands, noted that the court’s decision could “open the floodgates for many previous divorce agreements to be revisited.”
Another attorney, Graham Coy, was pleased with the court’s decision. “Perseverance wins out. This is a victory for common sense and a defeat for dishonesty – it just goes to show that if you don’t put all your cards on the table when divorcing it might come back to bite you further down the road.”
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