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Review of Property Settlement – Do You Need a Second Opinion? Did You Get a Fair Settlement – Undisclosed Assets?

20/09/2021

The wife approached Watson & Watson Lawyers as she had been unhappy with the outcome of the property division from the time the Orders were made. The Orders had been made 5 years earlier after both the wife and the husband filed an Application for Consent Orders in the Family Court of Australia.

Some years after the Orders were made the wife found out that at the time the Family Court made the Orders, the husband had assets that he did not disclose. These undisclosed assets were not property or money held in bank accounts.

The undisclosed assets were assets held by other persons on behalf of the husband or were interests in various trading companies and ventures.

These undisclosed assets were not taken into account in the financial settlement between our client and her husband.

The wife sought advice from Watson & Watson as to her rights to reopen the property settlement. After discussing the matter with Watson & Watson, the wife provided the information in relation the additional assets and also provided information as to the duress and pressure applied to her at the time of settlement that resulted in her consenting to the Family Court making the Orders.

The Marriage

The marriage had been a traditional marriage.  The husband had earned the income.  The wife had stayed at home and cared for the children.  The wife relied on the husband for financial support and the husband managed the family’s finances.  The husband ran a successful business.  His family had always run businesses and had investments.  A number of the businesses were incorporated and there was a complex shareholding structure for the businesses.  The husband was in business with his father and with a brother.  The marriage did not succeed and by the time of separation, the children were young adults and living independently. 

The husband and wife agreed to separate and the wife remained in the former matrimonial home.  The husband and wife discussed settlement of their property division. 

The husband proposed that Lawyers not be used and that they both make an Application to the Family Court for approval of Consent Orders. 

What is an Application for Consent Orders?

An Application for Consent Orders is an Application made to the Family Court for approval of Orders dividing the property of the husband and wife.  The Application must:

(a)      Include details of the assets, liabilities and financial resources of each of the parties;

(b)      Set out the effect of the orders requested to be made; and

(c)      State the overall amount for each of the wife and husband.

If the Court approves the Orders then the Orders are final and binding and the case is over however it is subject to a right to reopen the case, on certain but limited grounds.

In circumstances where the Family Court/Federal Circuit Court does not know the extent of the assets, namely all assets and their value, the liabilities and the net assets available then there is potential for Orders to be made which are not fair or equitable. 

Circumstances surrounding the Application for Approval of Consent Orders-Wife relies on husband

The wife had always deferred to the husband in relation to financial matters and whilst reluctant to enter into the Orders thought that the easiest way to achieve settlement was to consent.  She relied on the husband to have the Application prepared and the Orders drafted.

The husband and wife signed the Application and Orders and lodged the Application in the Family Court of Australia.  The Application was sent to a Registrar of the Court for consideration and potential approval of the Consent Orders.  The Court did not in the first instance approve the Orders, but requisitioned the parties and sought more evidence in relation to the Application so far as the percentage outcome as to the allocation of the net assets of the proposed Orders.

The Court requested additional evidence from each of the parties in relation to the Orders.  The Court required them to file Affidavits. 

Both the husband and wife filed Affidavits confirming that they agreed to the Orders and they were just and equitable. 

The husband retained his own Lawyer who prepared his Affidavit. 

The husband selected and arranged to have a different Solicitor prepare an Affidavit on behalf of the wife.  He drove the wife to that Solicitor and she signed the Affidavit. 

The Affidavits were filed in the Family Court of Australia and the Orders were made. The case was over.

Watson and Watson - Advice and Action

Watson & Watson based on the information available, advised the wife that the Orders could be set aside.  On the basis of the instructions provided, the Consent Orders had been made in circumstances where there had not been full and frank financial disclosure from the husband and also in circumstance where the husband had applied pressure and submitted the wife to duress in order to have her sign the Orders. 

Applications to Set Aside Property Orders- Section 79A Family Law Act 1975

Section 79(A) of the Family Law Act 1975 allows the Family Court or the Federal Circuit Court to set aside property Order when:

  1. There had been a miscarriage of justice by reason of fraud, duress on suppression of evidence (non-disclosure of financial matter); or
  2. Circumstances that arose after the making of the Order made it impractical for the Order to be carried out; or
  3. A person defaulted in carrying out an obligation imposed on the person; or
  4. The circumstances that arise relate to the care, welfare and development of a child. 

Watson & Watson – Investigation and Search

Watson & Watson investigated certain financial transactions which were carried out prior to settlement transferring ownership of assets from the husband to a third parties Watson & Watson also ascertained the husband had an interest in other assets that existed prior to settlement but had not been disclosed.

The wife had settled for less than the amount to which she was likely to have received if the case had been heard by the Family Court on the basis of evidence of all of the assets.

The settlement was not fair and equitable.

How Watson & Watson prepared the case and how the case proceeded

Watson & Watson carried out searches of the Australia Securities and Investment Commission as well as the Land Registry Services NSW to obtain Company Searches and Land Title Searches.  The searches showed that the husband in fact had interests (shareholdings) in companies and was a registered proprietor of real estate all of which was not disclosed to the wife prior to settlement and not included as part of the list of assets in the “asset pool” in the Application for Consent Orders. 

Watson & Watson wrote to the husband indicating the results of the searches that had been obtained.  The husband was advised that the wife intended to make an Application to set aside the Consent Orders on the basis of Section 79(A) of the Family Law Act

The husband retained solicitors and the response received from those Solicitors was that the matter should be resolved.  It was apparent that the husband’s solicitors based on a consideration of the material assembled by Watson & Watson had indicated to their client that the Application to set aside the Orders was likely to be successful.

Outcome

The wife and husband through their lawyers were able to negotiate and ultimately a reach a fair and equitable settlement.  The settlement reached was on the basis of a division on the whole of the assets/property that existed at the time of separation and at the time the original Consent Orders were made. 

The original Consent Orders were vacated and the Family Court made fresh Consent Orders.

Pursuant to new Consent Orders the wife received significantly more in terms of assets than she had received at the time of the first settlement and at the time of the first orders.

The case highlights the need to ensure that full and frank financial disclose is obtained and verified before final Orders are made.  At Watson & Watson Lawyers our Senior Family Solicitors can assist you with financial/property settlement including investigations, whether you are in the process of entering into negotiations with your spouse/de facto partner or have finalised your financial settlement and believe it is inequitable. 

Do not delay, please contact Richard Watson Senior Family Lawyers or his Personal Assistant Shereen Da Gloria to discuss your matter and seek timely 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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