Financial Disclosure, Criminal Investigation and the case of Gohil v Gohil [2014] EWCA Civ 274

5857331527_dc8ae729bb_mIn the last few days I have heard a lot about the case of Gohil v Gohil [2014] on the legal grapevine and so as I finished off for the day yesterday I decided to take a closer look. After reading the case I now understand the hype: in short summary the Husband in this case applied to the Court of Appeal, after his ex-wife successfully appealed to the High Court to have the original consent order in the financial remedy proceedings set aside. During the original financial remedy proceedings the wife was adamant that the husband was not fully disclosing his personal assets, the husband lived a somewhat lavish lifestyle despite his apparently limited means. However, the wife and husband signed the consent order and the divorce was finalised in 2004. Only three years later the husband was arrested and in November 2010 he was convicted of numerous accounts of fraud and money laundering amounting to over $57 million. The wife’s appeal to the High Court resulted in the setting aside of the 2004 consent order and an order as to costs against the husband. However, the Court of Appeal upon hearing the husbands case for appeal allowed his appeal and stated that while their sympathy went out to the wife the judge at the court of appeal had been wrong to go ‘from the preliminary stage of allowing the reception of fresh evidence to making an order actually setting the 2004 order aside, without any proper fact-finding hearing and on the basis of findings of non-disclosure that were not, on the material available, open to the court.’[i] Despite the husbands complete lack of disclosure the order from the High Court was dismissed along with the costs order and the original 2004 order now stands.

So what exactly happened here? In May 2002 based upon the husbands suspected adultery and unreasonable behaviour the wife issued for divorce. The Decree Nisi was pronounced in March 2003, this being made absolute following the conclusion of the financial proceedings in 2004. The financial proceedings were far from straight forward, and the husband’s financial disclosure showed limited means and assets, with a number of resources allegedly owned by his parents but enjoyed by him. Despite his apparent limited means the husband appeared to be leading a somewhat lavish lifestyle indicative of wealth beyond that disclosed. The financial remedy proceedings were however concluded by consent on 30 April 2004. In April 2006 the Wife applied for an upward variation of her maintenance order and in addition she applied to the High Court for leave to appeal out of time against the 2004 consent order. This appeal was denied. Proceedings in relation to the upward variation continued and on the 3 of July 2007 the wife issued an application to set aside the 2004 consent order on ‘the grounds of alleged serious material non-disclosure, fraud and misrepresentation by the husband.’ (Gohil v Gohil [2014]). The husband was arrested in 2007 and later found guilty in November 2010 of money laundering. ‘The husband was found guilty on four counts of money laundering valued at over $20 million and later pleaded guilty to a number of other charges, including fraud and six counts of money laundering valued at approximately $37 million. He was sentenced to ten years imprisonment.’ (Gohil v Gohil [2014]). It was alleged that the husband assisted James Ibori, a former Nigerian State Governor, to squirrel away large amounts of money into bank accounts across the world.

Interestingly, and slightly off point here, in 2012 numerous newspapers reported on a phone hacking security firm with links to Scotland Yard, with one newspaper stating that ‘anti-corruption detectives [were] examining allegations that two RISC executives bribed officers on an anti-money-laundering unit (SCD6) for information about the case they were building against their Nigerian client, James Ibori, a former state governor, and his British solicitor Bhadresh Gohil.’[ii] Following this Mr Gohil ‘lodged grounds of appeal after the standard investigation revealed claims of corruption during the probe by Scotland Yard’s SCD6 unit into him and Ibori.’[iii] And ‘in a further twist, Gohil also claims he had discovered that one of the jurors deciding his case was a “senior employee of the Department for International Development” — the Whitehall department which funded the Met’s SCD6 investigation into Ibori.’ (The Evening Standard).

Back to the current case in hand, following his arrest the wife sought disclosure of key material from the crown prosecution service (CPS), this application being ‘opposed by the Home Secretary and the CPS on the basis that the documents sought by the wife contained information consisting of, or derived from, material received from foreign governments or other authorities pursuant to requests for ‘mutual assistance’ (Gohil v Gohil [2014]).’. Disclosure of such material being ‘strictly bound by treaties, conventions and inter-state schemes’. (Gohil v Gohil [2014]).  On the 30May 2012, Moylan J order the CPS to disclose the requested and relevant material arguing that to do so would be proportionate. This order was then appealed by the CPS and the Secretary of State and on the 26 November 2012[iv] the appeal was upheld. However, ‘the Court of Appeal decision on disclosure post dates Moylan J’s substantive determination of the issue to set aside the April 2004 consent order which was given in a reserved judgement handed down on the 25th September 2012 ([2012] EWHC 2897 (Fam)). and it ‘follows that that decision, which is the decision currently under appeal, was determined without recourse to the disclosure that had been ordered from the criminal proceedings and which, as a result of the Court of Appeal decision, will not now take place.’ (Gohil v Gohil [2014]).

In June 2012 the issue of whether to set aside the consent order came before Moylan J in an eight day hearing, at the end of which Moylan J stated that there were two bases on which the wife could seek to set aside the 2004 consent order:

“a) That there has been non-disclosure which had led to the court making an order which is substantially different from the order which would have been made if proper disclosure had been made: Lord Brandon in Livesey v Jenkins [1985] FLR 813 at 830; and/or

b) That there is new evidence which is such as “would probably have an important influence on the result of the case”. Denning LJ (as he then was) in Ladd v Marshall.” (Gohil v Gohil [2014]).

At the conclusion of the case it was held that the husband had failed to give full and frank disclosure of his financial circumstances which resulted in the granting of the wife’s appeal and the setting aside of the order. Furthermore an order as to costs was handed down against the husband. It was held that the degree of non-disclosure was such that the court would have made a substantially different order had they known all of the facts.

The husband’s counsel, James Turner QC, upon appealing to the Court of appeal made various submissions the most important being that ‘there are two distinct stages involved in a Livesey v Jenkins application: determining as, a matter of fact, whether there has been material non-disclosure and, secondly, if so, determining whether the original order should be set aside. Any consideration of whether fresh evidence should be admitted can only be within the first stage, and, probably, at a preliminary point in that stage.’ (Gohil v Gohil [2014]). This was picked up on by the judge and upon upholding the husband’s appeal it was stated that it was not ‘legally permissible… to go… from the preliminary stage of allowing the reception of fresh evidence to making an order actually setting the 2004 order aside, without any proper fact-finding hearing and on the basis of findings of non-disclosure that were not, on the material available, open to the court.’ (Gohil v Gohil [2014]). Therefore, whilst admitting sympathy for the wife, the court held that ‘the judge’s order (including the provisions for costs) must be set aside and be replaced with an order dismissing the wife’s application.’ (Gohil v Gohil [2014]). The decision was agreed upon by both Lord Justice Pitchford and Lord Justice Arden.

With the case read and my blog post written I left the office and began to walk home. The air was filled with the smell of smoke, early this morning a fire broke out at Prezzo Restaurant in Harrogate and was still blazing at 5pm. Thankfully no one was hurt and we can only hope that Prezzo, the surrounding buildings, and flats are back to their former glory in the near future

[i] Gohil v Gohil [2014] EWCA Civ 274,

[ii] ‘Phone Hacking’ security firm linked to Scotland Yard forced to hand over secret informants list, Daily Mail,

[iii] Money laundering lawyer in £50m case appeals after met bribe claim, The Evening Standard,

[iv] Gohil v Gohil [2012] EWCA Civ 1550, [2013] Fam 276,

Photo by Images_of_Money via Flickr under a Creative Commons license.

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