‘19. In relation to the [B Ltd] shares, please provide a full history of new investment received including purchaser, number of shares purchased, and price paid per share. Please provide documentary evidence in support to include, but not limited to, any investment or shareholder subscription agreement.’ ‘20. Please provide a copy of [B Ltd]’s most recent business plan and/or financial projections which have been presented to potential external investors. Please provide documentary evidence of any and all offers of investment in B Ltd or offers to buy the business received in the last 24 months and the status of any such discussions.’ …. ‘24. Please provide copies of the minutes of all [B Ltd]’s board meetings in the last 24 months.’ ‘25. Has anyone approached [W] or her representatives to buy [B Ltd] ? If so, please provide details.’ ‘26. Please provide details, together with documentary evidence, including any contracts or correspondence (including email) in relation to the oft publicized NHS and prison tagging contracts [B Ltd] is due to/has obtained. See attached articles from The Telegraph of26 April 2011 , The Telegraph of9 July 2011 , The Daily Mail article of4 November 2010 and The Telegraph of19 December 2010 .’ ‘27. In relation to the [B Ltd] shares, please provide a full history of sale and purchase price including for each transaction: a) The identity of the seller and buyer; b) price per share; c) terms; and d) the number of shares bought.’ …. ‘33. As of the last filed annual return for [B Ltd] (31 December 2009 ) Zinc Limited is listed as having 81,332 shares. What is the connection between [W] and [B Ltd] to Zinc Limited ?’ ’34. On14 September 2011 , 30,723 shares in [B Ltd] were sold for£11.59 per share to Zinc Limited. Please confirm how Zinc obtained the funds for this share purchase.’
“[W] sends a circular update to B Ltd investors, including of course to [H] as he owns 4% of its shares. In the circular she states that, “We raised a committed£2.2m during 2010, at£25 per share (valuing the business pre-money around£10m .”
‘Odey Asset Management, the$7bn (£4.4bn ) hedge fund run by Crispin Odey, has taken a multi-million pound stake in [B Ltd], the personal tagging firm led by [W].’ …. ‘The 20pc stake, which is believed to value [B Ltd] in “the tens of millions”, is designed to boost the company’s funds as it bids for a crucial Ministry of Justice (MoJ) contract to track previous offenders who have been released but remain tagged. The investment is an unusual one for Odey, which is better known for its stakes in BskyB, JP Morgan and Pendragon, and it is thought to be only the second time the fund has invested in a private company.’ ‘…. Odey’s Julian Wolfson will join [B Ltd]’s board as a result of the investment, sitting alongside Lord Stevens of Kirkwhelpington …. who joined as chairman in July 2011….’ ‘[B Ltd] is understood to be down to the final four for an [sic] MoJ contract to provide the technology to allow those who are tagged to be tracked using GPS.’ ‘… [W] confirmed the Odey investment, saying in relation to the MoJ bid: “We weren’t looking for money, but it has given us the financial support to win a contract like that.” She added [B Ltd] may need to raise additional funds if it succeeds in winning the MoJ contract, depending on the size of the deal.’
“25. I contacted [the journalist] and discussed [W] and her business history with him. Everything I discussed with him was information which can be found in Companies House records and from third parties willing to discuss the matter. However I realise that one of the documents I provided to [the journalist] was page 12 of [W’s] Form E in respect of her shareholding in B Ltd. The level of [W’s] shareholding can of course be found from Companies House though I of course appreciate that this should not have been provided to [the journalist].”
‘Were B Ltd to win, the deal would be transformational, and need an increase in manufacturing and executive management, not to mention investment. [W] is talking to potential investors, but rules out going public at any time in the near future.’
‘The current application is also of serious concern to the company because it is the subject of onerous confidentiality obligations in relation to commercial negotiations and early stage contracts which are ongoing with the British government and other governments and clients internationally. [H] is aware that the production of documentation bearing on those third parties will naturally cause them a high degree of concern at a particularly sensitive stage in our negotiations.’
“There has never been a Loan Agreement with Odey. Discussions envisaged an equity investment, subject to the majority of shareholders agreeing to give special shareholder rights to Odey. The shares ultimately granted to Odey at the end of February 2013, following their signature of the Deed of Adherence, are consequently more valuable than other Ordinary shares, as Odey’s shareholding cannot be diluted without their consent.”
“As [H] knows, I am not an accountant and have no financial training. However, I understand that shares cannot be issued, and an SH01 filed just because there is an “intention” of an investment. I was aware throughout 2012 that Odey had the right to ask for the return of their money at any time, and the consequences of that for the Company. Had Odey asked for their money back during that period, including 6 February when we reached the consent agreement, then [B Ltd] would have been insolvent. The company secretary, [SP], is responsible for all filings on behalf of the Company. The decision regarding the accounting treatment of the monies held on behalf of Odey was made by the Board of [B Ltd]. The decision was led by the economist Professor John Kay CBE FRSE FB in consultation with the company’s accountants, Mazars.”
“You pulled off a real coup with Odey; congratulations [he referred to W by her first name]; I would just have liked to know about it before I signed the consent order.”
“You have asked me to confirm that [B Ltd] has not recently received material external funding and that there are no commitments to provide such funding. The only external funding provided to the company in 2012 was a small loan from a US business and there are no outstanding commitments of any kind to provide further funding to the company. The board is content that you should give this information to [H].”
“For these reasons, Odey would consider, subject to the structure and terms of a Ministry of Justice Contract being awarded, providing [B Ltd] with a proposal for the Board to consider for the financing of this contract. Neither [B Ltd] nor Odey is able to estimate the likely requirement, if any, for such funding. No commitment has been made either by Odey to provide this finance, or by [B Ltd] to accept it, and the terms would have to be negotiated between Odey and [B Ltd] when the requirement arose. Odey would not make an offer to buy [B Ltd] or any or all of the founders’ shares in [B Ltd]. Such a transaction would not be consistent with Odey’s investment objectives. We look forward to discussing the financing with you as the process advances and are willing for you to share this letter with your legal advisers.”
“It is not every failure of frank and full disclosure which would justify a court in setting aside an order of the kind concerned in this appeal. On the contrary, it will only be in cases where the absence of full and frank disclosure has led to the court making, either in contested proceedings or by consent, an order which is substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside can possibly be made good. Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters, the disclosure of which would not have made any substantial difference to the order which the court would have made or approved, are likely to find their applications being summarily dismissed…”. 156. Lady Hale’s analysis of the position in Sharland is set out in paragraphs 29 to 35 of her judgment. I set these out in full not least because of the clarity of her Ladyship’s exposition. “29. It follows that the majority in the Court of Appeal in this case were correct to say that matrimonial cases were different from ordinary civil cases in that the binding effect of a settlement embodied in a consent order stems from the court’s order and not from the prior agreement of the parties. It does not, however, follow that the parties’ agreement is not a sine qua non of a consent order. Quite the reverse: the court cannot make a consent order without the valid consent of the parties. If there is a reason which vitiates a party’s consent, then there may also be a good reason to set aside the consent order. The only question is whether the court has any choice in the matter. 30. This may well depend upon the nature of the vitiating factor. We know from Dietz that innocent misrepresentation as to a material fact is a vitiating factor. The court set aside the order because the misrepresentation had induced the defendants to agree to the settlement. We know from Livesey that in matrimonial cases innocent non-disclosure of a material fact is a vitiating factor. The court set aside the order because the undisclosed fact undermined the whole basis on which the order was made. 31. Although not strictly applicable in matrimonial cases, the analogy of the remedies for misrepresentation and non-disclosure in contract may be instructive. At common law, the general effect of any misrepresentation, whether fraudulent, negligent or innocent, or of non-disclosure where there was a duty to disclose, was to render a contract voidable at the instance of a party who had thereby been induced to enter into it. This has now been modified by theMisrepresentation Act 1967 , which empowers the court to impose an award of damages in lieu of rescission for negligent or innocent misrepresentation. This does not, however, apply in cases of fraudulent misrepresentation, where there is no power to impose an award of damages in lieu. The victim always has the right to rescind unless one of the general bars to rescission has arisen. 32. There is no need for us to decide in this case whether the greater flexibility which the court now has in cases of innocent or negligent misrepresentation in contract should also apply to innocent or negligent misrepresentation or non-disclosure in consent orders whether in civil or in family cases. It is clear from Dietz and Livesey that the misrepresentation or non-disclosure must be material to the decision that the court made at the time. But this is a case of fraud. It would be extraordinary if the victim of a fraudulent misrepresentation, which had led her to compromise her claim to financial remedies in a matrimonial case,were in a worse position than the victim of a fraudulent misrepresentation in an ordinary contract case, including a contract to settle a civil claim. As was held in Smith v Kay (1859) VII HLC 749, a party who has practised deception with a view to a particular end, which has been attained by it, cannot be allowed to deny its materiality. Furthermore, the court is in no position to protect the victim from the deception, or to conduct its statutory duties properly, because the court too has been deceived. In my view, Briggs LJ was correct in the first of the three reasons he gave for setting aside the order His Lordship had held that Mr Sharland’s non-disclosure undermined the basis on which his shareholding had been valued and therefore the ability of Mrs Sharland to address the proportionality of agreeing a discount below her claimed 50% against the receipt of a larger share of the other family assets. . 33. The only exception is where the court is satisfied that, at the time when it made the consent order, the fraud would not have influenced a reasonable person to agree to it, nor, had it known then what it knows now, would the court have made a significantly different order, whether or not the parties had agreed to it. But in my view, the burden of satisfying the court of that must lie with the perpetrator of the fraud. It was wrong in this case to place upon the victim the burden of showing that it would have made a difference. 34. In my view, the second and third reasons given by Briggs LJ for setting aside the order flowed from the first. Sir Hugh Bennett had been clear that the misrepresentation and non-disclosure as to the husband’s plans for the company was highly material to the decision made in July 2012. Indeed, it could not have been anything else. It had coloured both valuers’ approach to the valuation of the husband’s shareholding. That in turn had coloured the wife’s approach to the proportionality of the balance struck between her present share in the liquid assets and her future share in the value of the husband’s shareholding. Sir Hugh may have been right to say, with the benefit of hindsight, that had he known the truth then he would have waited to see what transpired. But in doing so, he would have had to bear in mind the husband’s ability to manipulate the timing and manner of any offer to the public in a way which suited him best. Be that as it may, it is enough that Sir Hugh would not have made the order he did when he did had the truth been known. 35. It being clear that the order should have been set aside, it is also clear that Sir Hugh should not have gone on to re-make the decision then and there on the basis of the evidence then before him. The wife was entitled to re-open the case, when she might seek to negotiate a new settlement or a rehearing of her claims when all the relevant facts were known. Thus, in my view, Briggs LJ was also correct in the third reason he gave for allowing the appeal. The wife had been deprived of a full and fair hearing of her claims. …” 157. Gohil v Gohil[2015] UKSC 61 also concerned a case of fraudulent non-disclosure in relation to a financial consent order. In making his financial presentation to his wife and the court, Mr Gohil, a former solicitor, had asserted that all of his ostensible wealth represented assets which he held on behalf of his clients. He produced a balance sheet which he said was representative of his personal assets. Once his liabilities were set off against those assets, he claimed to have a net deficit of just over£310,000 . Despite misgivings that her husband had not disclosed the full extent of his wealth, Mrs Gohil was persuaded to settle her financial claims at an FDR hearing. The deal was struck in 2004. Under its terms, he was to pay her a lump sum payment in full and final settlement of her claims (which he eventually paid) together with periodical payments (which he stopped paying after about four years). The consent order which was approved by the court contained a recital recording the wife’s suspicions but stating that she had agreed to compromise her claims in order to achieve finality. Some three years later, in 2007, the wife applied to set aside the consent order on the basis of Mr Gohil’s fraudulent non-disclosure. He was charged with serious money-laundering offences dating back to mid-2005. A period of imprisonment followed his subsequent conviction. It was evidence which had emerged during the criminal proceedings which provided Mrs Gohil with the material on which she made her application to set aside the matrimonial consent order. Following a lengthy contested hearing Moylan J set aside the 2004 consent order on the basis of findings that Mr Gohil had been guilty of serious non-disclosure and the result would undoubtedly have been different had the court been in possession of the full facts. Mrs Gohil was permitted to rely upon the fresh evidence she sought to adduce on the basis that she had satisfied the well-known criteria set out in Ladd v Marshall[1954] 1 WLR 1489 . 158. Mr Gohil appealed and his appeal was allowed on the basis that the judge at first instance had incorrectly applied the Ladd v Marshall test. The effect of the order made by the Court of Appeal thus prevented Mrs Gohil from asking the court to revisit the capital provision made for her under the terms of the 2004 consent order. She appealed to the Supreme Court which unanimously allowed her appeal and reinstated the order made by Moylan J. 159. Of the recital in the consent order recording Mrs Gohil’s original suspicions about her husband’s financial disclosure, the Supreme Court held that it had no legal effect whatsoever. Lord Wilson of Culworth delivered the leading judgment. Leading counsel for Mr Gohil had relied on a recent Court of Appeal decision in a civil case called Hayward v Zurich Insurance PLC[2015] EWCA Civ 327 . The claimant alleged that he had sustained an injury at work as a result of the negligence of his employers. Their defence included an allegation that he had not been truthful and had exaggerated the extent of his injury. The claim was settled. Some five years later, the insurers received fresh evidence that the claimant had in fact made a full and complete recovery before settlement was achieved. They sought to reclaim most of the award in an action for deceit. The Court of Appeal held that their claim must fail. Having pleaded in the original action that the claimant’s presentation of his injuries had been dishonest, they could not be said to have relied on that presentation when they decided to enter into a settlement with him. Permission has been given to the insurers to appeal that decision in the Supreme Court. 160. Whatever the outcome of that appeal, Lord Wilson was clear that the reasoning in Hayward had no application to a case in which the dishonesty takes the form of a spouse’s deliberate non-disclosure of resources in financial proceedings following a divorce. The duty of each spouse to make full and frank disclosure of his or her resources is owed to the court (see Livesey) and without it the court is disabled from discharging its duty undersection 25(2) of the Matrimonial Causes Act 1973 . In the absence of full and frank disclosure, any order it makes is to that extent flawed: see paragraph 24. As his Lordship made equally clear, “one spouse cannot exonerate the other from complying with his or her duty to the court”. 161. As Lord Neuberger’s judgment demonstrates, materiality is still an ingredient in any application to set aside a consent order where the non-disclosure alleged does not amount to deliberate fraud. Mr Gohil’s egregious conduct might well have been at one end of the scale, but what of a situation where the failure to disclose a particular fact or set of circumstances is not deliberate but merely accidental or negligent (i.e. something which the relevant party ought to have known he should have disclosed but failed to do so) ? At paragraph 44, his Lordship said this: “The ultimate question in these proceedings is whether the 2004 order should be set aside, and that turns on whether the husband had been guilty of material non-disclosure in the proceedings leading up to the hearing at which the 2004 order was made. If there had been such non-disclosure, but it had been accidental or negligent, the wife would also have to establish that the effect of the non-disclosure was such that the 2004 order was substantially different from the order which would have been made (or agreed) if the husband had afforded proper disclosure – see per Lord Brandon in Livesey v Jenkins[1985] AC 424 , 445. However, as the non-disclosure alleged by the wife in this case is said to be intentional, then, if there was such non-disclosure, the 2004 order should be set aside, unless the husband could satisfy the court that the 2004 order would have been agreed and made in any event – see per Lady Hale in Sharland v Sharland[2015] UKSC 60 , paras 29-33. In other words, where a party’s non-disclosure was inadvertent, there is no presumption that it was material and the onus is on the other party to show that proper disclosure would, on the balance of probabilities, have led to a different order; whereas where a party’s non-disclosure was intentional, it is deemed to be material, so that it is presumed that proper disclosure would have led to a different order, unless that party can show, on the balance of probabilities, that it would not have done so.” 162. The issue of whether or not there has been non-disclosure is a question of fact which involves an evaluative assessment of the available admissible evidence: see para 49 of Gohil per Lord Neuberger. Part of that evaluation involves an assessment of the degree of culpability which should properly be attributed to the non-disclosing spouse. In an earlier case involving non-disclosure (not referred to in either of Sharland or Gohill), Thorpe LJ had this to say: “During the course of argument there has been some debate as to whether a distinction is to be drawn between the various vitiating factors including: fraud, mistake, misrepresentation, duress and material non-disclosure. The authorities suggest that in other fields fraud stands alone, such is the public interest in its suppression. However the duty of full and frank disclosure that operates in ancillary relief is distinctive. In almost every case the application to reopen will rest on an allegation of material non-disclosure. Litigants are invariably informed of the duty. I find it hard to conceive of non-disclosure, material because of its significant scale, that was unwitting or unintentional. At some level of consciousness the party in breach of the duty acts in the hope or with the intention of diminishing the other party’s allocation. Thus differing degrees of culpability depend upon either the scale of the undisclosed assets or the lengths to which the offender has gone. But distinctions important in other fields, such as the distinction between innocent and false misrepresentation, do not seem to me to have much validity in ancillary relief litigation. In practice there is probably but a single vice, namely intentional non-disclosure achieved either by active concealment or passive failure to mention.” see para [44](ii) in Shaw v Shaw[2002] 2 FLR 1204 , 1217. 163. The issue as to whether an objective approach, a subjective approach or one that has subjective elements should be adopted in determining whether or not a party would have agreed to a consent order being made had full and frank disclosure been made and whether, with or without the additional disclosure, had the agreed terms been put before the court, it would have made the order because in the court’s view it was in the range of fair orders, was considered at some length by Charles J. The case concerned a situation where a husband had failed to disclose during the course of negotiations which led to a consent order that he was in discussion with new employers in relation to a position which would have provided him with a significantly higher level of remuneration. Charles J’s judgment, reported at [2008] 2 FCR 527,[2009] 1 FLR 201 , recorded his findings that the husband was in breach of his duty in his failure to disclose the likelihood of his imminent move but he refused the wife’s application to set aside the order on the basis, inter alia, that the district judge would have approved the order had the parties reached the same agreement on the basis of the enlarged information. The Court of Appeal reversed that decision and allowed the wife’s appeal. In Bokor-Ingram v Bokor-Ingram[2009] EWCA Civ 412 ,[2009] 2 FLR 922 , Thorpe LJ said this at para 12: “The judge considered the duty of disclosure at some length in the context not only of the leading cases of Jenkins v Livesey (Formerly Jenkins)[1985] 2 WLR 47 ,[1985] FLR 813 and Robinson v Robinson (Practice Note)[1982] 1 WLR 786 ,(1983) 4 FLR 102 but also in the context of the Dreyfus v Peruvian Guano Company[1889] 41 Ch D 151 test and Part 31.6 of theCivil Procedure Rules 1998 . In our view, this insertion of the duty of disclosure in ancillary relief proceedings was unhelpful and unnecessary. The duty of disclosure in ancillary relief proceedings was well stated by Sachs J, as he then was, in the case of J v J[1955] P 215 ,[1955] 2 WLR 973 . The standard there set has never varied. As his Lordship expressed it at 288 and 984 respectively: ‘… it is as well to state expressly something which underlies the procedure by which husbands are required in such proceedings to disclose their means to the court. Whether that disclosure is by affidavit of facts, by affidavits of documents or by evidence on oath (not least when that evidence is led by those representing the husband) the obligation of the husband is to be full, frank and clear in that disclosure.’ ‘… it is as well to state expressly something which underlies the procedure by which husbands are required in such proceedings to disclose their means to the court. Whether that disclosure is by affidavit of facts, by affidavits of documents or by evidence on oath (not least when that evidence is led by those representing the husband) the obligation of the husband is to be full, frank and clear in that disclosure.’ 164. Later, at para 18 of his judgment, Thorpe LJ said this: “The court’s duty unders 25 of the Matrimonial Causes Act 1973 is to have regard amongst other things, to ‘(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future…’. The fact that the contract had not been signed by [the date of the consent order] was irrelevant to the question of whether the negotiations had to be disclosed. Disclosure was essential to enable the court to assess the husband’s future prospects. The duty to disclose extends beyond what is certain on the date that the order is made to any fact relevant to the court’s review of the foreseeable future.’ [my emphasis] 165. Thus, it is not for a litigant to judge the ambit of the duty to disclose or the consequences of disclosure; any information which is relevant to outcome must be disclosed. Also in play in these types of set aside applications is the important principle of the public interest in the finality of litigation. That this case has gone on for as long as it has after a marriage of such short duration, and at such significant financial as well as emotional cost to these parties, is little short of a tragedy in human terms. However, we are where we are and it falls to me to reach my findings and conclusions so that each can now move on in whatever direction the outcome of this case dictates. I. Findings and conclusions 166. I have rehearsed the evidence which was before the court at some length because I am keenly aware of the importance of this case to each of the parties in terms of outcome. H carries a heavy sense of grievance; he believes he was duped by W into an unfair settlement. That sense of grievance and injustice has only been exacerbated by her actions (as he sees them) over many months when she resisted making full disclosure of the true position in relation to Odey whilst, between May 2012 and May 2013, he sought through his lawyers to establish the facts. 167. W, for her part, is appalled by the prospect that she should be accused of fraud. She is concerned not only for her personal reputation but for the consequences and potential impact upon her commercial standing in the business community. In this context, it is important to remember that the subject matter of the allegations of non-disclosure in this case go to the manner in which she was operating her business in circumstances where, in addition to her duty of disclosure to H and the court, she had contractual obligations of confidentiality to B Ltd and its board of directors. Very frequently in cases involving applications for financial remedy orders such as these, courts will be dealing with individuals who are daily at the centre of sophisticated corporate activities which will inevitably involve commercially sensitive information and decision-making which has, or may have, the capacity to influence share value in the wider sense. Such is the modern coal face of today’s entrepreneurial world. Are all these dealings to be exposed to the glare of forensic scrutiny on the simple basis that the individual concerned is engaged in contested matrimonial proceedings ? At one end of the scale, the answer will be obvious. Even where the answer is less obvious, the duty of confidence which exists between the court and the parties as established in Clibbery v Allen will usually mean that disclosure is the safest route in cases of doubt. The information remains entirely private and confidential as between the parties and the court and the party making the disclosure will not be exposed to the risk that any order flowing from an agreement or court order made at the conclusion of contested proceedings may be liable to be set aside in the future. In cases of extreme commercial sensitivity, the information can, if the court considers it necessary, be protected by means of an injunction. 168. Here, as H accepts, part of W’s function as the CEO of B Ltd was to go out into the wider business world to seek ongoing funding for her company. It was part of her raison d’être in that role and it was a function she appears to have discharged with significant success. The annual reports or circulars which she sent to shareholders made regular references to her achievements in raising committed funding for the company. It was a start-up (and loss-making) technology company whose very existence depended on the financial lifeblood provided by its external “angel” investors. 169. Despite the wealth of sophisticated analysis which has been laid before the court as to the precise nature of the Odey investment, I take the view that this case is relatively straightforward. I have to look at the reality of the situation: per Glidewell LJ in Thomas v Thomas[1995] 2 FLR 668 at 678 and Moylan J in SK v WL Ancillary Relief: Post-Separation Accrual)[2011] 1 FLR 1471 at 1475. In my judgment, the spotlight in this case is properly focused on the First Appointment on6 February 2012 , the disclosure which was then available to the parties and the court, and the negotiations which took place on that day. Both parties arrived at court with first class teams of lawyers. Each had come armed with lengthy questionnaires and schedules of issues which might have suggested that any possibility of settlement on that day was remote. However, the parties took a view and decided to call a halt to the litigation. I have already alluded to the fact that one of W’s principal objectives was to secure the return to her control of the shares in B Ltd which H then held. She herself accepts as much. For her part she was willing to abandon her arguments about the extent of the marital acquest and her right to a share in that. It had been a very short marriage which had ended in the midst of much rancour and unhappiness. Each wanted to move on without the prospect of lengthy and expensive litigation hanging over their heads. 170. As part of their bargain, H agreed to transfer to W his 4.5% shareholding in B Ltd. To those shares he had attributed a value in his Form E of£225,000 on the basis of£11.59 per share. W’s own shares had been valued by her at£162,000 on the basis of£1 per share, the value she had received when, the previous year, she had sold 50,000 shares to finance her divorce litigation. Both parties were plainly prepared to take a view in respect of this differential as being an “unknown” which could be absorbed without further enquiry into the deal they were proposing to strike. 171. In terms of H’s state of knowledge at that time, he had the full company accounts for 2009 and 2010 together with a profit and loss sheet for the six months to June 2011. To the question in her Form E, “If any of the figures in the last accounts are not an accurate reflection of the current position, state why”, W had provided no response. At that point in time, she was fully aware that Odey had injected£3.5 million into the company and, regardless of the manner of its treatment (or proposed treatment) in the draft company accounts, there was the prospect of significant further funding from that source should B Ltd succeed in its bid for the contract with the Ministry of Justice. All the evidence I have read and heard points to the fact that, despite the fact that formal terms had not been agreed, Odey was likely to have supported B Ltd in meeting the ongoing costs of its contractual obligations had it won that contract. 172. The funds which had already been invested (which, on W’s case, were “monies held to the order of Odey”) in B Ltd by Odey might well have represented a significant increase in B Ltd’s notional share value. Mr Fletcher’s evidence is that Odey received a share certificate in return for what it considered to be an equity investment in the company. Professor Kay confirmed that to be the case despite the fact that he had been unaware of that fact at the time and the shares were not then registered in Odey’s name. Whatever W’s view may have been about the ability of Odey to demand repayment of its “investment”, she was clearly anxious to avoid that possibility and accepts that neither she nor B Ltd’s board of directors did anything to crystallise the position in relation to those funds to the possible detriment of the company. Happily, matters were resolved and, by February 2013 when Odey signed B Ltd’s Deed of Adherence, the shares were formally allocated. There had never been a formal loan agreement between Odey and B Ltd and, as W herself confirms, the discussions with Odey which took place prior to October 2011 when the cash injection was received envisaged that there would be an equity investment. That is the nature of the transaction which the Chairman of Odey thought he was undertaking at the time. 173. Whether or not a formal share valuation would have returned the figures for which H now contends had that exercise been conducted in February 2011, the fact of the matter is that in all likelihood Odey’s recent investment / injection of cash in B Ltd would have been a potentially material factor in any such valuation exercise. Throughout the course of the negotiations which took place on6 February 2011 , H remained in ignorance of that development. He was unaware of both the investment / cash injection and the identity of the investor. He says that had he been aware of those facts, he would never have agreed to surrender his shares as part of the overall deal which was agreed on that occasion. W points to the fact that the so-called “Odey effect” is pure illusion in terms of its impact on the fortunes of B Ltd. She relies on the hard figures represented in the company’s accounts. B Ltd was a loss-making making entity in 2011 and it has yet to make a profit to this day. Nevertheless, the shares in the company have continued to rise in value over the currency of this litigation. That fact, in itself, cannot be a reason for setting aside the consent order since the focus of the court’s enquiry must be on the extent to which W had complied with her disclosure obligations at the time agreement was reached. 174. The transfer of the B Ltd shares by H to W has to be seen in the context of the overall terms of their settlement. His state of knowledge at the time, as I accept, was informed both by the representations she had made in her Form E and from the foot of his own enquiries, those enquiries having resulted in his valuation of£11.59 per share.. In her Form E, W had attributed to her own shares a value which would suggest the company was worth no more than £½ million in very broad terms. In the weeks between signing off on her Form E and the negotiations at the First Appointment, no further representations had been made which might have alerted H to the investment / cash injection into the company by Odey. It is perfectly true that there was no legal or other requirement on W during that window to make any such representations or to update her disclosure. She is quite entitled to rely on her legitimate expectation at the time that any further issues or questions going to valuation would be the subject of further directions at the First Appointment. However, in my view, her duty in relation to disclosure continued as the day spent in negotiations progressed. It would have become clear by a certain point in those negotiations that the court was not going to be asked to make further directions since the agreement, once approved by the court, would operate to halt the litigation in its tracks. 175. W says to me that each agreed to “take a view” and that, in any event, the “anti-embarrassment clause” was there to protect H in the event that she were to sell her shares prior to31 December 2013 . She says that the figure of£5 million in paragraph 5(i)(a) of the consent order (the notional disregard in relation to calculating the sum due to H in the event of a sale) was a reflection of the higher value which H had attributed in his Form E to his own shares in B Ltd, a position which H accepts. 176. I do not accept, as W suggests, that the reference in one of the shareholder circulars to the appointment of Julian Wolfson to the B Ltd board was sufficient to put H on notice of Odey’s involvement with B Ltd. Notwithstanding H’s experience as an equity investor, W’s knowledge of the facts was what gave rise to her obligation to disclose the information about Odey to H. It was not for him to piece together the position from fragments of information which may or may not have been either in the public domain or disclosed to him as a shareholder of B Ltd. 177. I remind myself about the principles of law which I must apply. (i) The duty of each spouse to make full and frank disclosure of his or her resources is owed to the court and without it the court is disabled from discharging its duty undersection 25(2) of the Matrimonial Causes Act 1973 . In the absence of full and frank disclosure, any order it makes is likely to be flawed if the undisclosed fact or facts is/are material to outcome. (ii) In these circumstances, one spouse cannot exonerate the other from complying with his or her duty to the court. (iii) The court cannot make a consent order without the valid consent of each of the parties. If there is a reason which vitiates a party’s consent, then there may also be a good reason to set aside the consent order. (iv) Even innocent misrepresentation as to a material fact can be a vitiating factor if the undisclosed fact was material to the decision which the court made at the time and/or if it undermines the basis on which the order was made. (v) Any information which is relevant to outcome must be disclosed; it is not for a litigant to judge the ambit of the duty to disclose or the consequences of disclosure. (vi) The duty to disclose extends beyond what is certain on the date that the order is made to any fact relevant to the court’s review of the foreseeable future. (vii) The court’s duty unders 25 of the Matrimonial Causes Act 1973 is to have regard amongst other things, to ‘(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future…’. The fact that negotiations which might lead to the existence of a material matter or event remain uncrystallized or subject to further negotiations is irrelevant to the question of whether the negotiations have to be disclosed. Disclosure is likely to be essential to enable the court to assess one or other, or both, of the parties’ future prospects. Was the information provided by W full and frank ? 178. Thus, in answer to the first question which I must ask myself (was the information provided by W full and frank ?), on the basis of the totality of the evidence which I have read and heard, I find that it was not. But I am not prepared to go as far as finding that this was a deliberate fraud or deception perpetrated by W. Having listened to her evidence very carefully over the course of more than two days in the witness box, I am persuaded that she believed at the time that she had properly complied with her obligations of disclosure in the representations she made in her Form E. I am not prepared to find on the basis of the evidence before me that settlement was achieved at the First Appointment because of her anxiety to rush through an agreement so as to avoid having to disclose any further information about B Ltd as was suggested to her by Mr Yates. In my view, it was incumbent upon her to disclose the existence of Odey’s involvement with, and financial support for, the company prior to allowing H to commit to their agreement in ignorance of that fact. But I absolve her of any deliberate attempt to mislead him or the court on that occasion. 179. Where I believe W’s conduct does properly attract censure is her response to the enquiries which were subsequently raised on behalf of H. Much time and expense would have been avoided had she responded openly and at an early stage to his solicitors’ questions. I accept that their initial letter sought the answers to a significant number of questions and required her to produce documentation which was confidential to the company. Nevertheless, despite the constraints under which she was put by the demands of the B Ltd board and her obligations of confidentiality, her responses were, in my judgment, unhelpful at best and misleading at worst. I understand that, having concluded their agreement, she was extremely reluctant to become further embroiled with H in yet another round of litigation which was likely to be expensive and time-consuming (as it has proved to be). However, the rearguard action which she fought over many months to suppress his challenge to the consent order was, in my judgment, misplaced and gave rise to some exquisitely nuanced presentations which have not withstood the forensic scrutiny to which they were exposed. I find that she placed undue reliance on the terms of her employment contract in order to avoid some of the more penetrating questions which were asked of her. In this respect it is not without significance that her contract specifically provided for the provision of confidential information “where this is required by law”
“Odey would not make an offer to buy [B Ltd] or any of the founder’s shares”