There Needs To Be Full Financial Disclosure
When consent orders are signed by separated spouses, there is a legal requirement that both spouses provide ‘full and frank disclosure’ about their financial affairs. This means, not keeping any property information secret. If one spouse fails to fully disclose, and has suppressed evidence about their financial affairs, the consent order may be set aside by the court.
The Full Court recently heard an appeal on this point. A husband and wife entered into consent orders in 2003. In the documents, the husband declared his interest in a family trust as “unknown”. The wife received approximately 74% of the pool, not including the family trust.
The evidence before the court was that the husband’s interest in the trust at that time was valued at $980,000. The question was whether the husband had failed to disclose this and had supressed evidence about the true value of the trust.
There was evidence that, at around the time he signed the consent order, he had prepared a Financial Statement for the trust, which showed that the trust had assets totalling $812,000. Shortly after the consent orders were made, the husband applied for a loan, the application for which included the trust value as $1.8 million.
The husband argued that the wife was aware of what assets the trust held. At first instance, the judge found that the husband had not suppressed evidence and incorrectly determined that the wife failed to prove that she entered into the consent orders due to the husband’s misrepresentation. The Full Court found that this was incorrect, and that the determination related only to whether the relevant evidence had been suppressed. The Full Court found that the evidence had been suppressed.
