A recently reported case from the High Court has offered up a few valuable lessons for couples trying to settle financial agreements upon divorce.
The case is centred around a wealthy business tycoon who, as the Daily Telegraph reported, was untruthful about his wealth and his former wife who was keen to move on quickly when their relationship finally broke down.
The couple, who cannot be named, originally divorced in 2009. At the time of the original negotiation, which took place without the benefit of independent legal advice, the wife had been led to believe that the husband was simply an employee of a ‘nil value company’. The result of their private settlement discussion was a £1.8m settlement.
The wife later found documentation that painted a very different picture of her former husband’s financial situation. This documentation included evidence that the businessman had shares worth up to £740,000 in one company which had a £50 million turnover. It also emerged that a further £800,000 investment had not been disclosed.
Judge Sir Paul Coleridge has ordered for the original divorce settlement to be “ripped up,” after reportedly saying that the man had been “deliberately false” when negotiating with his former spouse.
As a result of not providing full-and-frank disclosure, the settlement agreement will now have to be re-negotiated with a high chance of a greater capital payment to the wife.
This case offers a perfect example of situations where independent legal advice would have been of benefit. The greatest lesson however, is that honesty really is the best policy, unless you want to risk further financial penalties.