Show Me the Money

When it comes to determining the assets available for distribution between the parties to a family law property settlement, it is not uncommon for there to be an allegation that one party has been siphoning money out of the visible asset pool. Particularly where parties have failed to make full and frank financial disclosure, it can be a difficult task for the Family Courts to identify the true extent of the parties’ assets.

The de facto wife in the recent matter of Gao & Wang [2016] FamCAFC 183 appealed against an order that had been made in the Federal Circuit Court of Australia to divide the assets between her and her de facto husband on the basis of the de facto husband receiving approximately 71% of the total asset pool. This was following a finding in relation to the sum of $1,250,000.00 that went missing from the asset pool, where the Judge determined that the de facto wife “has lost it gambling or has hidden it somewhere for her own use”.

As is often the case in these matters, there was no evidence about what had actually happened to the $1.25 million. However, it is a large amount of money to lose, and the de facto wife did not provide any plausible explanation as to where the money had been spent. As such, in the absence of any proper disclosure about the funds, and where there had been evidence that the de facto wife had a gambling problem, it was open to the Judge to make a finding that the money was either lost by gambling and/or hidden by the de facto wife for her own use.

The de facto wife’s appeal was unsuccessful and the Full Court of the Family Court of Australia upheld the original Judge’s decision.

Once again, the “take home” is the critical importance of providing full and frank disclosure about all relevant financial matters in property proceedings before the Family Courts. Failure to do so by a party invites the Court to make adverse inferences against that party and, to quote the Full Court in this case, “Having failed to undertake proper disclosure, neither party can complain about the primary judge taking a robust approach to the division of their property”.

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