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Financial statements in court: the important of disclosure

By March 21, 2016No Comments

By Gianna Huesch

A recent case has highlighted the need to be very frank, honest and open with the court when providing financial evidence. This case serves as a reminder to all parties and lawyers in family law property cases to comply with the statutory duty of disclosure.

In Southers & Southers [2016] FamCA 67, a husband who may have played loose with figures was given a firm warning by the  court dealing with wife’s application for urgent interim spousal maintenance. Such applications are dealt with ‘on the papers’ with no ability to cross examine the parties as to their evidence. That would happen later, at a final hearing.

The court found the husband did have the capacity to pay maintenance and that his ex-wife did demonstrate the immediate need for assistance. In addition, and unusually, an order for departure from a Child Support Assessment was made, together with an Order for temporary spouse maintenance calculated at $2,000 per month.

The court found that the wife had prima facie established a need for spousal maintenance.

While the husband’s credit card statements did not “show expenditure which suggests an extravagant lifestyle”, some transactions did “suggest the husband has the capacity to entertain himself at a level which is not available to the wife”.

Crucially, the wife was able to provide additional documents which evidenced a capacity of the husband to meet a spouse maintenance order in her favour.

She was able to challenge a number of the husband’s items listed in his Financial Statement, including significantly, the husband’s statement of income. For example, it appears the husband did not include his annual “incentive bonus” of $63,000 from his employer in his income. The court delivered a stern word of warning to the father:

There has been a misrepresentation by the husband in his Financial Statement of his true income position. It is not appropriate at this time to determine whether that was a conscious attempt to deceive or an honest attempt to inform the Court of a current income position. It is not possible to determine. Should it transpire in the fullness of time that a Court concludes the former position was intended by the husband he should be on notice that serious consequences may flow as a result of any such determination.”

Having such a comment made by a Judge hearing an interim application is not a good look. In cases where a Judge finds a party to have little credibility, there is a real risk that the non-disclosing person ends up with very little of the available assets because of the suspicion that there are other assets or income which hasn’t been disclosed. A poor spouse in such circumstances may be given more of what is visible and readily available because the true picture may never be known.

Do you need help negotiating spousal maintenance or discussion about duty of disclosure? Please contact Alliance Family Law on (02) 6223 2400—your first, no-obligation conference is free.



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