Sharland v Sharland [2015] UKSC 60 (14 October 2015)
Citation:Sharland v Sharland [2015] UKSC 60 (14 October 2015)
Rule of thumb: .
Background facts:
The facts of this case were that Mr and Mrs Sharland had started Court proceedings for getting a divorce. They had been involved in setting up a successful software business which meant that they were a rich family. Mrs Sharland agreed to a £10 million settlement as well as 29% of the proceeds of the sale of Mr Sharland’s shares in his software company, and this was confirmed in Court proceedings. After this had been agreed Mrs Sharland discovered that Mr Sharland had lied about the value of his shares in his business – indeed grossly understating how much his shares were worth because he said that he had no intention/ possibility of floating the business on the stock exchange due to the nature of the business not being suitable for this when this actually was a possibility. This meant that the shares were much more valuable than Mr Sharland let on to Mrs Sharland and to the Court.
Parties argued:
Mrs Sharland stated that she wanted the agreement ended due to this act of fraudulent misrepresentation as her negotiating strategy would have been different if she had known just how much the shares were worth. Mr Sharland argued (and this was accepted by the Court of Appeal but not by the UK Supreme Court) that this was indeed misleading but that it had absolutely no impact on the settlement – Mrs Sharland had agreed to a percentage of the proceeds of the sale of the shares rather than a fixed fee for them which meant she was still getting value. Mr Sharland argued that this was just a general lie in general conversation largely which was not relevant to the settlement had absolutely no impact on the negotiations whatsoever. Mr Sharland argued that personal bar prevented his former wife from re-negotiating.
Judgment:
The Supreme Court reversed the decision of the Court of Appeal and stated that this was a lie which would have changed Mrs Sharland’s negotiating position – this was not a lie of no material relevance. The Court stated that the settlement had to be struck down and renegotiated and confirmed that misrepresentation can be used to reduce even Court documents.
Ratio-decidendi:
'allied to the Court’s responsibility to safeguard both parties’ and the public interest is the parties’ duty to make full and frank disclosure of all relevant information to one another and to the Court... extraordinary if the victim of a fraudulent misrepresentation, which led her to compromise her claim to financial remedies in a matrimonial case, were in a worse position than the victim of a fraudulent misrepresentation in an ordinary contract case, including a contract to settle a civil claim’, Lady Hale
'the victim of a fraudulent misrepresentation ... including a ... civil claim', Lady Hale
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.