23 November 2016
Consideration of the court’s approach when rehearing a financial claim following a final order being set aside for non-disclosure.
Facts
- A final order was set aside because of the husband’s non-disclosure in respect of his interest in two trusts. The wife’s financial remedy application was listed for rehearing.
- The parties’ total assets, excluding the undisclosed trust assets, were between £22.8m and £24.2m. The trust assets were £12.67m.
- The wife sought an equal share in the parties’ resources at the time of the rehearing, being a lump sum of £14m. Additionally, in the event of the sale of a company, an additional sum equal to 40% of any excess value over its current value.
- The husband’s case was that the wife should receive a share of the value of the trust assets as at the date of the final order, plus an amount to compensate her for not receiving her share on that date. He proposed that she should receive a lump sum of £3.65m, which represented a third of the value of the trust assets as at the date of the final order, plus 15% as “compensation”.
Held
- There is “enormous flexibility” in the court’s approach to a rehearing (Sharland v Sharland [2015] UKSC 60). Whilst some cases will require the court to start from scratch, others will not (Kingdon v Kingdon [2010] EWCA Civ 1251) [4].
- The court must determine what is fair at the time of the rehearing by reference to all the circumstances of the case, which include the current resources available to the parties, the original division of the assets and the fact that the original division was procured by non-disclosure [88].
- Moylan J held that the original division of non-trust assets was fair and remained fair (save for the order to pay £1m over a period of 8 years) [95].
- He found that the non-disclosure of the trust assets was a discrete element that could be dealt with in isolation by way of a further lump sum order [94].
- He ordered the husband to pay to the wife a total lump sum of £6.42m. He awarded £6.22m, which was 50% of the trust assets that he deemed to be matrimonial property. He made an uplift of £200,000 to reflect the late payment of the trust assets, and the fact that £1m of the original award had been paid over a period of 8 years.