Goddard-Watts v Goddard-Watts

A final financial remedies order may be set aside for deliberate and dishonest non-disclosure where the concealed information deprived the other party of a real prospect of achieving a better outcome at a full hearing. The applicant need not prove that a substantially different order would certainly have resulted. The perpetrator bears the burden of establishing the narrow exception that the court would not have made a significantly different order had it known the truth. The duty of full and frank disclosure continues until the judgment is handed down and the resulting order is perfected and sealed. A previous division of disclosed assets does not prevent the court from reconsidering the case where later-disclosed information could materially affect the assessment under section 25 of the Matrimonial Causes Act 1973.

The wife applied for a second time to set aside a final financial remedies order made after the parties’ divorce. The first order had been set aside for the husband’s non-disclosure of trusts. On the subsequent rehearing, Moylan J adopted the approach in Kingdon v Kingdon [2010] EWCA Civ 1251, isolating the previously undisclosed trust assets while leaving the treatment of other assets substantially undisturbed.

Before that order was handed down and sealed, the husband and his company had resumed serious discussions with a potential purchaser concerning a sale of shares at a value substantially exceeding the valuation used at the rehearing. The information was not disclosed. The central issues were whether there had been deliberate non-disclosure and whether it was material under Sharland v Sharland [2015] UKSC 60.

1. Order set aside. The order made by Moylan J on 23 November 2016 and perfected on 1 December 2016 was set aside. A fresh determination of the wife’s financial remedy claims was ordered.
2. The husband remained under a continuing duty of full and frank disclosure until the judgment had been handed down and the order had been settled, agreed and sealed. The renewed contacts with FED, culminating in the proposal of 22 November 2016, were plainly disclosable.
3. The husband knew that the information was material and deliberately withheld it. Deliberate withholding by an intelligent adult of information known to require disclosure is dishonest and amounts to fraud for the purposes of the law on non-disclosure.
4. The distinction in Livesey v Jenkins [1985] AC 424 between innocent non-disclosure and fraudulent non-disclosure remains material. For innocent non-disclosure, the order is set aside only if the court would have made a substantially different order. In a fraudulent case, Sharland v Sharland [2015] UKSC 60 establishes that it is sufficient that the non-disclosure deprived the victim of a real prospect of doing better at a full hearing.
5. The exception identified in Sharland v Sharland [2015] UKSC 60 places the burden on the perpetrator to satisfy the court that, knowing the truth, it would not have made a significantly different order. That burden was not discharged. The court could not be satisfied that Moylan J would have adopted the same approach after considering the substantially greater potential value of the shares and all the circumstances required by section 25 of the Matrimonial Causes Act 1973.
6. The fact that the proceedings involved a second set-aside application, or that some increase in value reflected post-separation endeavour, did not eliminate the real possibility of a different award. Those matters were relevant to the fresh discretionary assessment but did not make the concealment immaterial.

The judgment was a first-instance decision. It records that:

• High Court (Family Division): Moor J set aside the original consent order in [2015] EWFC 64.
• High Court (Family Division): Moylan J conducted the rehearing and made the order later challenged, under [2016] EWHC 3000 (Fam).
• High Court (Family Division): The present court set aside Moylan J’s order and directed a further fresh determination.