Wife of software millionaire fails in bid for new settlement

Divorce|News|February 10th 2014

The former wife of a software company founder has failed in her bid to secure a new financial settlement despite the husband’s failure to disclose important financial information.

Alison Sharland and husband Charles divorced in 2012, 19 years after their marriage. Mrs Sharland ran an autism charity while her husband’s business, AppSense, became highly successful.

She accepted a settlement worth £10.4 million on their divorce, along with 30 per cent of her husband’s shares, giving up her right to half the company on the understanding, she claimed, that it would not be floated on the stock exchange for a period of time. She and her husband’s accountants had disputed the value of his shares in Appsense.

But Mrs Sharland later discovered plans to take the company into an Initial Public Offering (IPO) after all, and media speculation also suggested that the company was worth much more than had been suggested. She took her former husband to court, alleging “fraudulent non-disclosure” and claiming she would not have settled on the terms she did if she had known the true situation.

But he judge ruled in favour of the husband. He said:

“It has now been established (and is not challenged on this appeal) that this was a fraudulent misrepresentation by the husband both to the wife and to the court about a matter highly material both to the value of the husband’s shareholding, and to the time at which it might be realised.”

However, he concluded that she would not have received a substantially different settlement if the husband had declared the IPO, which had in the event not taken place as planned.

Mrs Sharland took the case to the Court of Appeal, and Lord Justices Moore-Bick and Briggs, along with Lady Justice Macur, have now issued a two to one ruling, also in the husband’s favour, upholding the original ruling of Sir Hugh Bennett.

Lord Justice Moore-Bick declared:

“It may be unusual for a judge to conclude that despite a deliberate failure by one party to give full and frank disclosure the resulting order should not be set aside, but ultimately that must depend on the nature of the non-disclosure and its effect on the outcome of the proceedings. In this case the husband’s non-disclosure was deliberate and dishonest, but because of the rather unusual circumstances there were good reasons for concluding that it had not resulted in an order significantly different from that which the court would otherwise have made at the conclusion of the proceedings. In my view the judge was entitled to hold that the wife had not made out sufficient grounds for re-opening the hearing. That called for an exercise of judgment on his part and in my view his decision was one that was open to him.”

Lady Justice Macur said that, in the circumstances, the husband “may be subjected to criminal prosecution, civil contempt  proceedings and/or a costs penalty. In these latter respects the abuse of the court process is penalised and deterrent measures achieved.” But his non-disclosure had not been relevant to the financial settlement, she said.

But Lord Justice Briggs dissented, insisting that the husband’s misrepresentation was indeed material and declaring that he would have allowed the appeal.

“There is a public interest in the protection of the court’s processes from fraud which transcends other case management considerations, such as finality, economy and speed.”

Author: Marilyn Stowe

The founder of Stowe Family Law, Marilyn Stowe is one of Britain’s best known divorce lawyers. She retired from Stowe Family Law in 2017.

Comment(1)

  1. Luke says:

    She’s going to get about 15m quid and feels aggrieved – I think we are supposed to sympathise with her but I’m afraid I can’t manage it.

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