Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 31 October 2015.
Jim and Jane separate after a 14 year marriage. They have assets that total around $1 million.
They are unable to agree on a division of their assets and action is commenced in the Federal Circuit Court seeking property settlement orders.
Jim and Jane have very different views as to the value of Jim’s business. Jim claims that his business has a value of $300,000 but Jane believes the business is worth $600,000.
The court appoints an accountant to value the business but he declares himself unable to arrive at a value because Jim has failed to provide the information requested of him and because Jim’s business records are unreliable.
Jane also claims that Jim has covertly transferred $100,000 out of the business and claims that this money should be taken into consideration. Jane says that the money was used to purchase a property in the name of Jim’s new partner.
During cross-examination, the court finds that the testimony of Jim and his partner is untruthful and unreliable.
The court accepts Jane’s evidence that Jim had made statements to the effect that he would do whatever he could to ensure that she received as little as possible by way of property settlement. The court is also satisfied that Jane’s claim regarding the covert transfer is correct and includes the funds as part of the pool of assets.
Jim’s failure to disclose the assets of the business means that the court is unable to assess his contributions to the pool of assets. His untruthful testimony also means that the court is not prepared to accept his claimed future needs.
The court expresses a concern that there may be additional hidden assets and states that in circumstances of deliberate non-disclosure, “the court should not be unduly cautious about making a finding in favour of the innocent party”.
Ultimately, the court was unable to value Jim’s business and in adopting his claimed value, awarded him just 38% of the asset pool where an amount of over 50% might otherwise have been ordered if Jim had made a full disclosure.
