Gohil v Gohil

JurisdictionEngland & Wales
JudgeLord Justice McFarlane,Lord Justice Pitchford,Lady Justice Arden
Judgment Date13 March 2014
Neutral Citation[2014] EWCA Civ 274
Docket NumberCase No: B6/2013/1526
CourtCourt of Appeal (Civil Division)
Date13 March 2014
Between:
Bhadrseh Babulal Gohil
Appellant
and
Varsha Babul Gohil
Respondent

[2014] EWCA Civ 274

Before:

Lady Justice Arden

Lord Justice Pitchford

Lord Justice McFarlane

Case No: B6/2013/1526

B6/2013/1526 (A)

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT FAMILY DIVISION

Mr Justice Moylan

FD02D03678

Royal Courts of Justice

Strand, London, WC2A 2LL

Mr James Turner QC and Mr George Gordon (instructed by Duncan Lewis Solicitors) for the Appellant

Mr Christopher Wagstaffe QC and Ms Nicola Fox (instructed by Hodge Jones & Allen) for the Respondent

Hearing date: 10 December 2013

Lord Justice McFarlane
1

What is the jurisdiction, if any, of a first instance court in family proceedings to set aside a final order for financial relief following concluded divorce proceedings? Further, what, if any, relevance does the case law arising from the decision of Ladd v Marshall [1954] 1 WLR 1489, relating to the introduction of fresh evidence on appeal, have to such an application before a first instance court when determining whether to set aside an existing final order? These two related questions are the central focus of this appeal.

2

Mrs Varsha Babul Gohil issued a divorce petition in May 2002 based upon her husband's alleged adultery and unreasonable behaviour. Decree nisi was pronounced in March 2003 and made absolute, following conclusion of the financial relief proceedings, in 2004. If proceedings on the main suit for divorce were straightforward, the financial relief proceedings most certainly were not. Numerous hearings took place over the course of the two years prior to a financial dispute resolution hearing ['FDR'] before Mrs Justice Baron on 30 th April 2004. The principal issue between the parties related to the extent to which the husband had provided full, or even adequate, disclosure of his financial circumstances. At the time he was a solicitor in a small practice based in London ostensibly serving a modest number of high net worth private clients who lived outside the jurisdiction of England and Wales. The financial disclosure provided by the husband purported to demonstrate very limited financial resources in his own name, with other, again limited, resources ostensibly enjoyed by him but in fact owned by one or other of his parents. In contrast to the information disclosed, the wife asserted that the husband's expenditure and lifestyle indicated that his financial worth was significantly greater than the figures he had disclosed. Her difficulty was in proving that assertion.

3

In the event the financial relief proceedings were compromised by agreement at the FDR hearing on 30 th April 2004. One of the recitals (recital 14) to the final consent order reflects the wife's continuing reservations as to the validity of the disclosure that the husband had thus far provided, it is in these terms:

"And upon it being recorded that the petitioner [wife] believes that the first respondent [husband] has not provided full and frank disclosure of his financial circumstances (although this is disputed by the first respondent); but is compromising her claims in the terms set out in this consent order despite this, in order to achieve finality."

4

In order to simplify this short description of the background circumstances it is helpful to apply somewhat clichéd labels to the various elements of financial information.

5

Firstly there were "known knowns" being the relatively modest assets disclosed as being held by the husband in his own name.

6

Secondly there were "known unknowns" being assets the existence of which was established, but the ownership of which was in doubt. Into this category came funds held by a company known as Odessa Management Limited, a residential property in Chislehurst, Kent and two flats in India. In the event the compromise of the financial claims at the FDR involved the wife accepting that the husband had either no, or a minimal, share in these assets with the balance being owned variously by his father and/or mother.

7

It is now the wife's case that, at the time of the FDR, there were also "unknown unknowns". In this respect her case is based on very solid ground to the extent that it is apparent that at some stage prior to 2007 the husband became involved in offences of fraud and money laundering on an astonishing scale. In November 2010, following a Crown Court trial, the husband was found guilty on four counts of money laundering valued at over $20 million. Two weeks later the husband pleaded guilty to a number of further charges, including fraud and six counts of money laundering, valued at approximately $37 million. He was sentenced to a total term of ten years imprisonment.

8

I have labelled this latter category of information "unknown unknowns" because at the time of the FDR settlement order in April 2004 the wife apparently had no inkling whatsoever that the husband was connected, either criminally or otherwise, with assets of this value or anything near to it. Following the FDR hearing, however, she continued to question the validity of his financial disclosure when compared to his apparent lifestyle. Examples of the sort of spending that caught her attention within twelve months of the FDR order were the husband's celebration of his fortieth birthday in January 2005 at a newly opened Knightsbridge restaurant at which 150 guests were entertained. At around the same time the husband indicated that he wished all three of the family's children to be privately educated at his expense.

9

In April 2006 the wife applied for an upward variation of her maintenance payments and enforcement of certain terms of the original FDR order. In addition she applied unsuccessfully to the High Court for leave to appeal out of time against the 30 th April 2004 consent order.

10

Court proceedings continued thereafter for some twelve months travelling under the wife's application for upward variation of maintenance and enforcement of the original order.

11

On 3 rd July 2007 the wife issued a further application to set aside the consent order of 30 th April 2004 on the grounds of alleged serious material non-disclosure, fraud and misrepresentation by the husband. In the event that application to set aside the April 2004 order was not determined for over five years but concluded, on 25 th September 2012, with the decision by Mr Justice Moylan to grant the wife's application by setting aside one paragraph (paragraph 5) of the 2004 order. Paragraph 5 provides that, upon compliance with paragraph 1 of the order (payment to wife of lump sum of £270,000) and paragraph 4 (transfer of Peugeot motor car to her possession):

"the petitioner's claims for all forms of capital provision (to include property adjustment, lump sum and pension sharing orders), and pensions orders do stand dismissed."

The present appeal by the husband challenges Moylan J's order setting aside the 2004 order, together with an order on the same date requiring the husband to pay costs and the subsequent directions given to establish a fifteen day hearing in June 2014 for the re-hearing of the wife's financial relief application.

12

In the chronological account that I have thus far provided one key factual element has been deliberately omitted and it is this: the husband's criminal convictions relate to his association with one James Ibori, a former Nigerian State Governor. There is no evidence that the husband met James Ibori before the middle of 2005, one year and more after the consent order was made. In the criminal courts the husband is seeking to challenge his convictions. However in these proceedings his case is that the very large sums of money established by his various convictions can only relate to a period after mid 2005 and, in any event, they have been found to represent the proceeds of crime and are not therefore meet for distribution to the wife in financial relief proceedings.

13

A consequence of the introduction of Mr Ibori well after the consent order was made, and the apparent lack of hard financial evidence of material non-disclosure in relation to other "unknown unknowns" prior to April 2004, means that a significant part of the focus of the hearing before Moylan J in relation to material non disclosure was upon the 2004 "known unknowns", being Odessa Management Limited, the Kent property and the two properties in India, notwithstanding that their value is dwarfed by that of the husband's subsequent criminal activity.

14

I have deliberately restricted this summary of the various elements in the financial jigsaw to matters of category and concept because, in the event, the appeal that we have heard goes to matters of principle rather than detail. It will be necessary, in due course, to descend to some further detail about certain specific aspects of the couple's finances, but unnecessary to provide a comprehensive and detailed account of them in this judgment.

Disclosure from the CPS

15

The progress of this case before Moylan J has been procedurally complicated. Most of the wife's information about the husband's criminal activities comes from her attendance at the husband's Crown Court hearings. She therefore sought disclosure from the Crown Prosecution Service ("CPS") of certain key material. The application was opposed by the Home Secretary and the CPS on the basis that the documents sought by the wife contained information consisting of, or derived from, material received from foreign governments or other authorities pursuant to requests for "mutual legal assistance" ("MLA"). The Secretary of State and the CPS argued that disclosure under MLA was strictly bound by treaties,...

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