UKSC 61
On appeal from:  EWCA Civ 274
Gohil (Appellant) v Gohil (Respondent)
Lord Neuberger, President
Lady Hale, Deputy President
JUDGMENT GIVEN ON
Heard on 8, 9 and 10 June 2015
Sally Harrison QC
(Instructed by Irwin Mitchell LLP)
James Turner QC
(Instructed by Duncan Lewis Solicitors)
LORD WILSON: (with whom Lord Neuberger, Lady Hale, Lord Clarke, Lord Sumption, Lord Reed and Lord Hodge agree)
Jurisdiction of the High Court to set aside
"(1) Where any cause or matter, or any issue in any cause or matter, has been tried in the High Court, any application for a new trial thereof, or to set aside a verdict, finding or judgment therein, shall be heard and determined by the Court of Appeal, except where rules of court made in pursuance of subsection (2) provide otherwise."
Subsection (2) permits rules of court to provide otherwise where "no error of the court at the trial is alleged" but, as McFarlane LJ pointed out, the only rule ever made pursuant to the subsection did not extend to an application to set aside a financial order.
(a) The Court of Appeal has itself long recognised that it is an inappropriate forum for inquiry into disputed issues of non-disclosure raised in proceedings for the setting aside of a financial order: Robinson v Robinson (Practice Note)  1 WLR 786, 786, and Judge v Judge  EWCA Civ 1458,  1 FLR 1287, para 48. Indeed its observations to that effect in the Robinson case were quoted with approval by Lord Brandon of Oakbrook in Livesey (formerly Jenkins) v Jenkins  AC 424, 442. The Court of Appeal is not designed to address a factual issue other than one which has been ventilated in a lower court.
(b) That the Court of Appeal is an inappropriate forum is clearly demonstrated by the present case: there is no way in which it would have devoted its resources to the conduct of an intensive eight-day fact-finding hearing, upon controversial evidence given by live witnesses and contained in a mass of documents, such as was conducted by Moylan J.
(c) There is therefore need for definitive confirmation, whether by a rule made pursuant to section 17(2) of the 1981 Act or otherwise, of the jurisdiction of the High Court to set aside a financial order made in that court. A substantive order will bring the existence of ordinary civil proceedings to an end and will therefore require any attempt to set it aside to be made within a fresh action. But the same effect has never been attributed to a financial order made in divorce proceedings; so there is no need to provide that the jurisdiction of the High Court to set aside its financial orders be invoked by a fresh action, rather than by application within those proceedings. It is nowadays rare, however, for a financial order to be made in the High Court: it is normally made in the family court and, when made there by a High Court judge, he or she sits in that court as a judge of High Court level. It seems highly convenient that an application to set aside a financial order of the family court on the ground of non-disclosure should, again, be made to that court and indeed at the level at which the order was made; and this convenient solution seems already to have been achieved by the provision of the Matrimonial and Family Proceedings Act 1984 recently inserted as section 31F(6), under which the family court has power to rescind any order made by it.
(d) The minutes of the meeting of the committee on 20 April 2015 have been placed before this court. The committee's conclusion, which in my view this court should indorse, is that its "Setting Aside Working Party" should proceed on the basis that:
"(i) there is power for the High Court and the family court to set aside its own orders where no error of the court is alleged and for rules to prescribe a procedure;
(ii) the rule should be limited so as to apply to all types of financial remedy only;
(iv) applications to set aside should be made to the level of judge (including magistrates) that made the original order; and
(v) if an application to set aside can be made, any application for permission to appeal be refused."
Ladd v Marshall
(a) one avenue open to this wife would have been to seek to appeal out of time to the Court of Appeal against the order dated 30 April 2004;
(b) had she so proceeded, that court would have applied the criteria propounded in the Ladd case to any evidence which she wished to adduce in support of her appeal; and
(c) by choosing instead to apply to the High Court for the order to be set aside, the wife should not be able to bypass the evidential restrictions which would have confronted her in the Court of Appeal.
(a) The Court of Appeal would not have embarked on the disputed fact-finding exercise required by the wife's application: see para 18(b) above. So the rules for adducing fresh evidence before that court are irrelevant.
(b) The first criterion propounded in the Ladd case, namely that the evidence could not have been obtained with reasonable diligence for use at the trial, presupposes that there has already been a trial. It severely curtails a litigant's enjoyment of a second opportunity to adduce evidence. It is misconceived to apply it to the evidence adduced by the wife at the hearing before Moylan J, which was only her first opportunity to do so.
(c) The argument would not apply to an application to set aside a financial order made by a district judge, against which no appeal out of time would lie to the Court of Appeal in any event. But why should the level of the court which made the order precipitate different evidential rules?
(d) Overarchingly, the argument loses sight of the basis of an application to set aside a financial order for non-disclosure. It is that the respondent failed to discharge his duty to make full and frank disclosure. The Court of Appeal held that it was open to the wife in the present case not to have consented to the order on 30 April 2004; instead to have proceeded to a substantive hearing of her financial claims; and, if reasonably diligent, there to have adduced the evidence of the husband's resources which she adduced before Moylan J in 2012. But at that hypothetical hearing the onus would not have been on her to adduce evidence of the husband's resources. The onus would have remained on him.
The husband's father
(a) The father said that, although a flat in a suburb of Mumbai known as Bhayander, which had been purchased in 1994, had at the husband's request been placed in his, the father's, name, the husband had provided the purchase price. In the presentation of his resources on 30 April 2004 the husband had alleged that he had no interest in the flat in Bhayander.
(b) The father said that, although a flat in Ashoka, Mumbai, which had been purchased in 1999, had at the husband's request also been placed in his, the father's, name, the husband had provided the purchase price by paying a Mr Saldhana who had paid the builders. The father admitted that he had later sold the flat and kept the proceeds. In the presentation of his resources on 30 April 2004 the husband had alleged that he had never had an interest in the flat in Ashoka and that he had no interest in the proceeds of its sale.
(c) The father said that prior to 2001 the husband had purchased a car with funds taken from the Sunfor Trust. The evidence on 30 April 2004 suggested that the Sunfor Trust owned an offshore company, Sunfor Commercial Inc, which was the registered owner of a property in Sydney Street, Chelsea. But the husband had at that time alleged that he had no interest in the trust.
(d) The father referred to the husband's purchase of a new Mercedes SL Convertible in 1998 for about £43,000. In the presentation of his resources on 30 April 2004 the husband had alleged that the father had paid for the vehicle. But in his evidence to Moylan J the father denied that he had paid for any part of it.
(e) By letter sent to the wife soon after he had sworn his affidavit, the father referred to a BMW 300 motor car which, so he said, the husband had registered in his, the father's, name without his knowledge. Upon its sale in 1999 the price of £15,700 had therefore been payable to him, the father, and had been paid into his bank account in Orpington. With the letter to the wife, the father enclosed a copy of the letter which he had then sent to the bank in Orpington. He alleged that it was in the husband's handwriting and that he, the father, had done no more than to sign it. The letter instructed the bank to transfer £15,700 to an account in Mauritius for the benefit of Hempton International Ltd ("Hempton"). In the presentation of his resources on 30 April 2004 the husband had alleged that he had never had an interest in Hempton.
(f) To his affidavit the father exhibited a statement dated 5 April 1997 relating to an account in the name of himself and his wife ("the mother") with Banque Indosuez, Gibraltar. He averred that he had not opened the account and, until he had been shown the statement, he had known nothing about the account.
(g) The father referred to an account in the name of Odessa Management Ltd ("Odessa") with Bank Schroder, Geneva. The ownership of Odessa had been in issue in the proceedings which concluded on 30 April 2004. The husband had then alleged that he held a one-third interest in Odessa and that the father and the mother each also held a one-third interest. But in his evidence to Moylan J the father averred that he had never paid funds into Odessa and had no interest in it; and that his signature on a document dated 8 July 1996, by which he appeared to declare to the bank that he was one of its three beneficial owners, had been forged.
Transactions in Odessa
(a) on 25 May 2007 the husband stated, in answer to a questionnaire, that the accounts were almost depleted, retained only balances to cover guarantees for credit cards and were about to be closed; and
(b) on 3 July 2007 his solicitors stated that the accounts had been closed; but
(c) on 9 July 2007 £40,000 was paid into the sterling account; and
(d) on 18 July 2007 $90,000 was paid into, and then out of, the dollar account; and
(e) by November 2007 the sterling account held about £79,000.
Moylan J stated that the husband had been unable to explain the inconsistency between (a) and (b), on the one hand, and (c), (d) and (e), on the other. The funds identified at (c), (d) and (e) were, said the judge, relatively modest, although no doubt he did not, in this respect, forget the modesty of the capital provision agreed to be made for the wife on 30 April 2004. The judge found, however, that the husband's drawings from his solicitors' partnership, said by the husband to have been only £18,000 in 2004 and only £13,000 in 2005 and again in 2006, had been manifestly insufficient to generate these funds and that the husband had been unable credibly to explain their source. The judge proceeded to infer, in my view legitimately, that, had the husband been willing truthfully to explain their source, the trail would be likely to have led to the discovery of other assets which ought to have been disclosed in 2004.
Purchase of further flats
"In our legal system generally, the silence of one party in face of the other party's evidence may convert that evidence into proof in relation to matters which are, or are likely to be, within the knowledge of the silent party and about which that party could be expected to give evidence."
Lord Sumption added at para 45 that "judges exercising family jurisdiction are entitled to draw on their experience and to take notice of the inherent probabilities when deciding what an uncommunicative husband is likely to be concealing". The husband was well aware that the inquiry conducted by Moylan J was into the extent of his assets on 30 April 2004. It is clear that he held assets in 2006 and 2007 and he must have been aware of their origin. Had he demonstrated that they originated in or after 2005, they would have been irrelevant to the inquiry. Instead, however, he chose to obfuscate about their origin. In those circumstances it was reasonable for Moylan J to infer that a truthful explanation of their origin would have been probative of the existence of undisclosed assets on 30 April 2004 and that the husband's withholding of it should be no less probative.
"I have had regard to the combined effect of all the new evidence. However, the evidence to which I attribute the greatest weight is the evidence from the criminal proceedings and the evidence from the Odessa account statements. This evidence demonstrates that it is extremely unlikely that the husband's resources were limited to those disclosed by him in 2004, in other words, substantial debts and a very modest income. The husband, in my view, is very unlikely suddenly to have accumulated £35m of realisable assets from a negative base in 2004."