Sharland v Sharland [2015] UKSC 60

In this case the Supreme Court considered the impact of fraudulent non-disclosure on a financial settlement agreed between a husband and wife on divorce, and embodied in a court order by consent. In the course of the financial proceedings Mr Sharland gave evidence confirming that there were no plans for an initial public offering (IPO) for the company he had established, and his shares in the company were valued on this basis. Mrs Sharland agreed to settle her claim on terms that she would receive 30% of the proceeds of any future sale. She discovered shortly afterwards that the company was being actively prepared for an IPO with an expected value far in excess of the valuations prepared for the hearing, and she applied for the hearing to be resumed. By the time her application was heard it was known that the IPO did not in fact go ahead. The Court held that the fraudulent breach of the duty of full and frank disclosure in financial proceedings vitiated Mrs Sharland’s consent and entitled her to rescind the agreement embodied in the consent order. The only exception to the rule that ‘fraud unravels all’ was where the fraud would not have influenced the consent given at the time. Mrs Sharland was entitled to a full and fair hearing of her claims.

(www.supremecourt.uk/docs/annual-report-2015-16.pdf)