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Wednesday, 13 July 2016

Wife takes a win after Husband’s failure to disclose his financial dealings

Judge Loughman in the Federal Circuit Court at Sydney was recently called upon to consider a matter where there had been very significant financial mis-dealings by a husband, in the case of  Rosario & Rosario [2016] FamCA 170 (22 March 2016) (http://www.austlii.edu.au/au/cases/cth/FamCA/2016/170.html).


Over the course of two years of litigation, the Husband appeared to disregard Court orders providing for him to deposit funds, not deal with funds, or arrange for the sale of shares and for funds to be paid to the Wife.

Instead, funds were apparently applied to pay a debt to another company that was poorly described by the Husband.

In the meantime, mortgages were defaulted upon and the Wife was left to attempt to keep the banks at bay on her very modest income.

The Husband throughout this time failed to make adequate disclosure, explain to the court precisely what debts he claimed to be paying or provide appropriate evidence to the Court.

What makes the case somewhat unusual is that as a way of recognising the significant injustice to the Wife of this situation, Judge Loughman determined that a percentage adjustment of what was left in the asset ‘pool’ should be made in favour of the Wife in light of the non disclosure.

Making reference to the matter of Weir & Weir (1993) FLC 92-338, Judge Loughman, held that ‘The authorities have it that in the case of significant non disclosure, the Court should not feel unduly constrained in making provision, within the identified assets for the other party.’

Even though the parties had agreed to ‘add back’ some of the funds that the Husband had taken without the Wife’s consent, the Court found that the ‘extraordinary circumstances of the untenable debt are not resolved by $495,000 being added back to the balance sheet. The husband’s refusal to fully disclose the circumstances of the alleged debt prevents any scrutiny of transactions with matrimonial funds by the wife or by the Court.’

Making reference to section 79(4)(e) and to section 75(2)(o) of the Family Law Act 1975 which provides that matters to be taken into account include ‘any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account’, the Judge made an adjustment of 5% to the Wife, even taking into account that the Husband received a small adjustment because he was eight years older than the Wife.

The case is significant because it provides some recourse or solution to parties who are struggling with a difficult or intransigent opponent who refuses to provide appropriate material.

Clearly every case is different and whether your situation meets the standard required in this case is a question that we can assist in answering – call Nevett Ford Lawyers Melbourne on 03 9614 7111 for a confidential discussion of your situation or email Melbourne@nevettford.com.au

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