EWCA grants wife deceived by husband's non-disclosure chance to revise consent order

Thursday, 16 February 2023
Julia Goddard-Watts (the appellant) has won the first stage of her appeal against an England and Wales Family Court (EWFC) judgment that left her with less than 10 per cent of the assets from her 14-year marriage to businessman James Goddard-Watts (the respondent).
Divorce scrabble

The appellant had accepted this division of the assets, keeping the family home while her husband retained his business interests, in a consent order when they divorced in 2010. This order gave her GBP7.6 million in money or ‘moneys-worth’ and the respondent received the equivalent of approximately GBP9 million. However, the appellant later discovered that the respondent had failed to disclose substantial assets held in trusts of which he was admitted to be the principal beneficiary. In 2016, she successfully applied to have the consent order set aside and was awarded an additional GBP6 million to compensate for the non-disclosure.

However, it then emerged that the respondent had still not revealed the full extent of his worth, in particular the likely proceeds of the impending sale of his business. The associated share disposals could amount to between GBP25 million and GBP75 million. In 2018, the appellant again went to court to have the second award set aside. This request was granted the following year.

A further hearing was held in the EWFC in 2022 to determine yet another award for her. It was heard by Cohen J, who decided not to start with a clean sheet on how the assets should be divided but took the limited approach used in the 2011 case of Kingdon v Kingdon, with consideration given only to the non-disclosed assets.

Cohen observed that the dispute between the couple was now purely about the value and realisation of the respondent’s shares, which had not been an issue at the time of the original consent order in 2010. The appellant had received her fair share of the non-disclosed trusts in 2016 and her share of the other assets in 2010, said Cohen. He based the additional award of GBP1.1 million he gave her only on his assessment of her needs, rather than the extra GBP13 million she was claiming. He noted that the respondent’s company had come close to insolvency in late 2019–20, in which case the respondent would not have been able to resuscitate a claim against the appellant. 'He took the shares in the company as part of the settlement and whether the company succeeded or failed would have made no difference to the outcome of the case. This illustrates that the sharing of the company took place in 2010 and there is no cause to revisit.'

The England and Wales Court of Appeal (EWCA) has now overturned Cohen's ruling. It found he was wrong to take the Kingdon approach and that in non-disclosure cases the court retains a flexibility to adapt its approach to the individual case. It would be 'wholly unjust' to disregard the husband's fraud, said the EWCA.

'I regard the husband's fraudulent non-disclosure in 2016, particularly when seen in the context of his previous fraudulent non-disclosure, to be so far reaching that it positively required the judge to consider “the entire financial landscape” completely anew', said Macur LJ, giving the EWCA's unanimous judgment.

Accordingly, the EWCA allowed the appeal and referred the case back to the EWFC for a further full hearing (Goddard-Watts v Goddard-Watts [2023] EWCA Civ 115).

Sources

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