The relationship between a Solicitor and their client involves a large amount of trust between the two and the onus is on the client to be completely honest. The duty of full and frank disclosure is paramount and continues throughout the course of the proceedings. It would be impossible for a Solicitor to advise a client of any realistic outcomes in a particular case if that client is withholding valuable information which can change the course of the case. As can be seen below failure provide full and frank disclosure can lead to concluded/clean break agreements being overturned (albeit highly specialist advice will be required to consider merits in each individual case in a timely fashion).
Two landmark cases in recent years reiterate this point; Gohil v Gohil [2015] UKSC 61 and Sharland v Sharland [2015] UKSC 60. The former is a case whereby a settlement was reached at a Financial Dispute Resolution hearing between the parties on the basis of the disclosure given at the time of that hearing. The Applicant Wife was keen to resolve this matter to achieve finality, and in doing so she agreed to a recital being placed within the order to the effect that she believes that her husband had not provided full and frank disclosure but yet she agrees to the terms of the order regardless.
What could not have been foreseen is the extent to which the husband had attempted to mislead the Court by not providing full disclosure of his assets and financial situation. The Judge in this case had in fact sided with the Applicant Wife in allowing her to set aside the original consent order. Whilst the Judge did use evidence which was inadmissible when making his decision, it was decided in the Judgement of Lord Wilson that the overriding objective was fairness and therefore the decision of the Court of Appeal was overturned. Lord Wilson stated that ‘even if he had referred only to the evidence admissible before him, Moylan J would still properly have found the husband to be guilty of material non-disclosure’.
This notion of ensuring that a party receives a fair outcome is further evident in the case of Sharland v Sharland. This case involved a Husband who held a substantial shareholding in a software business. There was a dispute over the value of the business (and therefore the true value of the Husband’s share within the business, and both parties obtained their own expert valuations which valued the company at a price far lower than previously thought. An agreement was reached on the basis of those expert valuations and Husband had argued that it was difficult to know when his shares can be realised, as he did not have an exit strategy in place.
However, whilst an agreement was reached there was no sealed Order. During this time, an article appeared in the news stating that the Husband’s business was being prepared for an IPO (Initial Public Offering) and the value of the company was expected to be between £600-900 million more than previously thought. The matter was listed for a further hearing regarding Husband’s material non-disclosure. When Husband gave his affidavit in response to this matter, he exhibited materials which damaged his case and were proof that an IPO was well underway.
The Judge at this hearing stated that the Husband had been ‘misleading’ and ‘dishonest’, and further, his entire credibility in this case had been jeopardised. Whilst Husband tried to argue that the new material did not make a difference to the agreement which had been reached, it was agreed that had the Judge at the time of the initial hearing discovered the news he would not have consented to such an Order being made.
The issue of non-disclosure will continue to be debated. However, Lord Brandon summarised this matter best when commenting on Robinson v Robinson (Practice Note) [1982] 1 WLR 786, whereby he stated that not every failure to make full and frank disclosure will mean an Order can be set aside, but ‘only in cases where the absence of full and frank disclosure has led to the Court making…an order which is substantially different from the Order it would have made if such disclosure had taken place’.
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