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Setting Aside/Re-opening Property Settlement - New Evidence - Failure to Disclose Assets

25/01/2021

A property settlement between husband and wife or de facto partners will usually be documented by a Court Order or a Binding Financial Agreement. 

In any property division, a fair and equitable outcome is required. Both parties must provide full and frank financial disclosure so that either the Family Court of Australia or the parties’ legal representatives can be in a position to decide or confirm that the division of property is fair. 

In cases where one party does not disclose the existence of assets or financial resources, the result of the property division may not be just and equitable.  In other words, where one party has hidden assets or fails to disclose the existence of those assets the other party may seek to re-open the case.  Watson & Watson Lawyers have conducted a number of cases where an Application to reopen the property settlement was made to the Family Court of Australia. 

Watson & Watson acted for the wife in one such application where over five (5) years after the property settlement, the wife learnt that at the time of settlement the husband had interests in various companies that had significant assets.  Initially the matter settled on the basis of the parties making an application for approval of Consent Orders to the Family Court of Australia.  The Family Court of Australia approved the Consent Orders.  The application made to the Court did not include or disclose the companies in which the husband had an interest. 

The wife re-opened the property case successfully and after negotiations, the husband agreed to consent to the setting aside of the first Order for property division and agreed to enter into a new Order which was one, which took into account the existence of the additional and undisclosed assets.  The wife received a large additional payment.  

When Will a Court Set Aside Property Orders

Section 79A of the Family Law Act 1975 sets out the circumstances in which the Family Court may set aside a Court Order. 

Where, on application by a person affected by an Order made by a Court under section 79 in property settlement proceedings, the Court is satisfied that: 

(a)      There has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or

(b)      In the circumstances that have arisen since the Order was made, it is impracticable for the Order to be carried out or impracticable for a part of the Order to be carried out; or

(c)      A person has defaulted in carrying out an obligation imposed on the person by the Order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the Order or to set the Order aside and make another Order in substitution thereof; or

(d)      In the circumstances that have arisen since the making of the Order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or where the applicant has caring responsibility for the child (as defined in subsection (lAA)), the applicant, will suffer hardship if the court does not vary the Order or set the Order aside and make another Order in substitution for the Order; or

(e)      A proceeds of crime Order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime Order has been made against a party to the marriage;

The Court may, in its discretion, vary the Order or set the Order aside and, if it considers appropriate, make another Order under section 79 in substitution for the Order so set aside.                                

What if the Property Division Was Settled by the Parties Entering into a Binding Financial Agreement

The Family Law Act 1975 Section 90K allows the Court to set aside a Binding Financial Agreement.  The Court may set aside a Binding Financial Agreement:

(1) A Court may make an Order setting aside a financial agreement or a termination agreement if and only if, the Court is satisfied that:

(a)      The agreement was obtained by fraud (including non-disclosure of a material matter); or

(aa)    a party to the agreement entered into the agreement:

(i)       for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or

(ii)      with reckless disregard of the interests of a creditor or creditors of the party; or

(ab)    a party (the agreement party) to the agreement entered into the agreement:

(i)       for the purpose, or for purposes that included the purpose, of defrauding another person who is a party to a de facto relationship with a spouse party; or

(ii)       for the purpose,  or  for  purposes  that  included  the  purpose,  of  defeating the interests of that other person in relation to any possible or pending application for an Order under section 90SM, or  a  declaration  under  section 90SL, in relation to the de facto relationship; or

(iii)      with reckless disregard of those interests of that other person; or

(b)      the agreement is, void, voidable or unenforceable; or

(c)      in the circumstances that have arisen since the agreement  was made it is impracticable for the agreement or a part of the agreement to be carried out; or

(d)      since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or

(e)      in respect of the making of a financial agreement - a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or

(f)       a payment flag is operating under Part VIIIB on a superannuation interest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by a flag lifting agreement under that Part; or

(g)      the agreement covers at least one superannuation interest that is an unsplittable interest for the purposes of Part VIIIB.

Watson & Watson Lawyers are highly skilled Family Lawyers who are able to review and advise in relation to the fairness of a settlement.  Watson & Watson Lawyers can advise on the merits of success of an application pursuant to section 79A and section 90K.  If you are proposing to re-opening your property settlement or another party is seeking to re-open the property settlement and you are in need of advice or assistance, please contact Richard Watson Senior Family Solicitor or his Personal Assistant Shereen Da Gloria to discuss your matter and seek appropriate advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.

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