Case highlights importance of financial disclosure in property settlement

A recent case in England has highlighted the need for parties involved in property settlement proceedings in the Family Court to be frank with their finances and disclose all financial information.

A property tycoon in London was sentenced to six months imprisonment for contempt of court in January 2013, having repeatedly and purposely failed to make full and frank financial disclosure.

The judgment of Young and Young [2013] EWHC 34 has been welcomed by family lawyers in the UK as a deterrent towards uncooperative behaviour when disclosing financial information in property settlement cases.

The husband failed to respond to financial questionnaires back in 2009 and received a six-month suspended sentence. The husband had declared himself penniless and bankrupt. But the wife claimed he was a wealthy man with assets totalling $600 million.

The judge stated that to decide the true financial position, the parties must make full and frank financial disclosure of their assets.

However, the husband failed to comply on several occasions with his obligation of financial disclosure. The judge ruled in favour of the wife, adding that neither a fine nor a suspended sentence would be a sufficient penalty.

Australia is fairly strict in its enforcement of disclosure and it’s quite possible for similar proceedings to take place here.

These proceedings are a sign that family courts in the UK are cracking down on those who defy orders to reveal their hidden wealth.

There is also a duty of disclosure in the Australian Family Court. This duty starts before the case starts and continues until the case is finalised.

Parties are required to disclose all sources of earnings, interest, income, property (vested or contingent interests) and other financial resources. This includes all property, financial resources and earnings owned by or received by some other person or beneficiary (for example, the party’s child or de facto partner). It also applies to the party’s interests in corporations, trusts, companies or other such structures.

If you fail to disclose, the Court may:

• refuse to allow you to use that information or document as evidence in your case; or
• stay or dismiss all or part of your case; or
• order costs against you; or
• fine you or imprison you on being found guilty of contempt of court for not disclosing the document.

To find out more about your obligations under the Family Law Rules and to ensure you are complying with your duty of disclosure, contact Streeterlaw on 8197 0105 or email advice@streeterlaw.com.au