England’s second-highest court has granted an ex-wife a THIRD bite at the cherry – 12 years after the divorce, because her ex-husband kept lying about (not disclosing) his assets.
In February 2023, Julia Goddard-Watts (the wife) won the first stage of her appeal against an England and Wales Family Court judgment that left her with less than 10 per cent of the assets from her 14-year marriage to businessman James Goddard-Watts (the husband).
The wife 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.
However, the wife later discovered that the husband 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 substantial sum to compensate for the non-disclosure.
However, it then emerged that the husband had still not revealed the full extent of his worth, in particular the likely proceeds of the impending sale of his business.
In 2018, the wife again went to court to have the second award set aside. This request was granted the following year.
A further hearing was held in 2022 to determine yet another award for her. Initially the Judge who heard the application decided not to start with a clean sheet on how the assets should be divided but took a limited approach with consideration given only to the non-disclosed assets.
That Judge observed that the dispute between the couple was now purely about the value and realisation of the husband’s shares, which had not been an issue at the time of the original consent order in 2010.
The wife had received her fair share of the non-disclosed trusts in 2016 and her share of the other assets in 2010. He based the additional award only on his assessment of her needs, rather than the extra she was claiming.
He noted that the husband’s company had come close to insolvency in late 2019–20, in which case the husband would not have been able to resuscitate a claim against the wife.
‘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.’
However the higher Court – the England and Wales Court of Appeal (EWCA) has now overturned the ruling from the first Judge. It found he was wrong to take the limited 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’, the EWCA said in its unanimous judgment.
Accordingly, the EWCA allowed the appeal.
So … the takeaway is: Do NOT be tempted to hide assets from the Court – even if you really, really hate your ex – because eventually your ‘unexplained wealth’ will come to light, and can still be attacked by your creditors and your ex, even decades later.
NB an ex-spouse is very unlikely to be able to claim against your assets years after a property settlement UNLESS fraud is involved. In other words, it is the very act of hiding (not-disclosing) your assets at the time of the settlement, that can leave you exposed to long-tail liability and litigation.
PS Even though this Court decision occurred in England, it is very likely to (eventually) be followed in Australia. You have been warned.
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