Goddard-Watts v Goddard-Watts (Rev 1)

On rehearing a financial remedy application after a final order has been set aside for non-disclosure, the court has broad discretion to determine a fair procedure and outcome. It need not automatically begin again on the parties’ current assets. The court may isolate the undisclosed resources, preserve the sound parts of the original order, and make an additional award addressing the resulting defect. The assessment must consider all the circumstances, including the original division, the effect of the non-disclosure, current resources and post-separation endeavour. Property from a source wholly external to the marriage is not ordinarily shared where its significance has not diminished through mixing or matrimonial use. Trust assets are marital resources to the extent that the evidence shows they are available to the spouse. Post-separation growth attributable to that spouse’s endeavour is not thereby shared again.

The wife sought financial relief following the setting aside of a 2010 final order for the husband’s material non-disclosure of interests in two trusts. The husband accepted that an additional award was required, but contended that it should be calculated by reference to the wife’s lost share at the time of the original order, with an allowance for delay. The wife sought a rehearing based on the parties’ current resources and an equal share of the trust assets and business interests.

The central issues were whether the court should start from scratch, how to treat trust assets derived partly from the husband’s parents, whether post-separation increases in business value were shareable, and what award would cure the effect of the non-disclosure.

1. The application was allowed in part. The court conducted a rehearing but held that a rehearing did not require a fresh division of all current assets.
2. Following Sharland v Sharland [2015] 2 FLR 1367 and Kingdon v Kingdon [2011] 1 FLR 1409, the court had substantial flexibility. It could isolate the resources affected by the non-disclosure and leave the effective parts of the original order undisturbed where that produced a fair result. The 2010 division of the disclosed assets remained fair, subject to accelerating the unpaid instalments.
3. The shares contributed by the husband’s parents came from a source wholly external to the marriage. No circumstance had diminished the importance of that source, so those shares were excluded from sharing. The remaining trust assets were marital property and, to the extent available to the husband, constituted financial resources within the approach in Charman v Charman [2006] 2 FLR 422.
4. The court rejected the contention that the wife retained an entitlement to post-separation growth in the husband’s businesses. The increase reflected the husband’s subsequent endeavour, and the disclosed business interests had already been divided in 2010. Loans or indirect assistance from the trusts to the business were too remote to create a further share.
5. The court assessed that 65% of the trust assets represented marital resources. The wife’s share was 32.5% of the relevant assets, producing £6.22 million before adjustment. A further £200,000 was awarded for delayed receipt and acceleration of the outstanding instalments, making the additional lump sum £6.42 million. Child maintenance was left for the form of the order.

First-instance determination on rehearing after the earlier final order had been set aside. The judgment records that Moor J set aside the 2010 order on 8 July 2015 for non-disclosure.