Consequences of Non-Disclosure in Family Law Property Settlement Proceedings

Home News Consequences of Non-Disclosure in Family Law Property Settlement Proceedings

In a recent Full Court decision of Trang Kingsley (6 July 2017) the Family Court delivered a stark reminder about its wider powers to deal with who failed to provide in full and frank disclosure of their financial affairs in property settlement proceedings.

In this particular case the marriage was of some 22 years in duration and there were 3 children aged 13, 17 and 18 at trial. It was determined that there was a net pool of assets (readily identifiable and valued) at close to $800,000. A significant issue at trial was that the Wife’s use of close to $250,000 of monies both before and after separation and a failure to account and disclose properly as to what those monies were spent on and where they now were. Further, there were concerns about the identity and value of any property interest the Wife may have overseas. The trial judge determined that it would not be just and equitable to alter any interest in property and therefore the identified pool of close to $800,000 remained with the Husband and the Wife received none of that property.

The Full Court agreed with the trial judge’s approach and dismissed the appeal by the Wife. Contributions in this marriage were probably not equal anyhow as the Husband did suffer an accident during the relationship that prevented him from engaging in employment and assumed the primary care of the children. The Husband also received a substantial amount of inheritance of about $240,000 from his parents during the marriage and applied those monies for matrimonial purposes. The Full Court noted the Wife’s abject failure to make full and frank disclosure of her financial circumstances together with significantly adverse credit findings made against her and her evidence by the trial judge. Some of the trail judges findings in respect to the Wife and her evidence included … That the Wife used supposed language difficulties to give evasive evidence … Despite 2 opportunities to file a comprehensive picture of her financial circumstances and history of the marriage, the Wife acknowledged during close examination significant errors in her Affidavit evidence similar … the Wife embellished evidence on disputed issues of facts, the Wife gave deliberately misleading evidence as to the ownership of property overseas.

In a very short space of time a … separation and 2 years since the Wife disposed of over $250,000 or amounts which probably exceeded $250,000.

In this case the Full Court said that not only did the Wife’s failure to make full and frank disclosure render precision about the total amount of funds involved in the Wife’s dealings unattainable, it also rendered the identification and valuation of the Wife’s property interest attainable.

In cases such as these, it is not often a correct approach to notionally add back or the Court may think a party has failed to disclose, they may have overseas. In cases such as this, because of the evasiveness of the evidence, it is simply impossible to ascertain with precision the assets and liabilities the Wife had under her control.

The Full Court has previously dealt with cases such as this, such as the 2002 case of Chang-v-Su where the Full Court held in an order can only be just and equitable because measured again the whole of the available assets of the parties. The available assets of the parties in this case are those that are known including the assets overseas but to achieve justice for both parties the Court has to deal as best it can with what the Wife had and has disposed of and thus the justice and equity of any order must be measured against both the known and the potential notional figures.

Therefore, in this case the trial judge proceeded on that basis. The trial judge had to look at what the actual assets were and what was identified and what the potential notional figures would be. …, the trial judge has looked at the fact that there was at least $250,000 unaccounted for plus an overseas property. In those circumstances the trial judge correctly found (having regard to other contributions) that it would not be just and equitable to alter interest in the actual identified and available property being the property worth approximately $800,000 under the Husband’s control. The Court’s power to make adjustments specifically arises under Section 75(2).

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