Court in the Act

I wrote recently about two English decisions where husbands had misled their wives and the court, and the dramatic effect that this had on the family court orders that were procured by the misleading information.

In Australia there is a case with significantly less dramatic misleading information but equally dramatic results.

The husband and the wife in this case (Pearce [2016] Fam CAFC 14) agreed on orders for property settlement.  The court made orders as agreed by the parties.  The wife was told by the husband, and the husband's court document said, that a property he owned was worth $550,000.

The wife later found out that he had told the bank that the property was worth $700,000.

This is hardly a rare circumstance.  Whenever people go to banks for a loan, they have to fill out an asset schedule and because they want the loan, they generally put their property values as high as they can reasonably.  They often get caught out with the discrepancy if the other side's lawyers gets hold of the application to the bank.

In this case, the wife then applied to the court to set aside the orders, because there had been a miscarriage of justice brought about by the husband's lack of disclosure.

There has been some debate about the meaning of "miscarriage of justice".  One view was that if you wanted to set aside court orders and you needed to prove there was a miscarriage of justice, you had to show that the result, if the truth were known to the court and the other party would have been not just a little bit of difference but quite a bit different.

The Full Court of the Family Court saw it quite differently.  Even though the difference in value of the property was on the face of it only $150,000, even that did not necessarily represent a real difference in value.  As I said, people often put the value as high as they can make it and the real value of the property was not established.

However, what the court found was that had the wife known about the discrepancy, she might have made enquiries or even got a valuation and she was denied the opportunity to negotiate a settlement on different terms.

Moreover, and more importantly, the integrity of the court process was affected.  What the court decided was a miscarriage of justice was that the wife's consent was not a fully informed consent, and the judicial process was not able to be properly carried through.

This is a very high standard, and lawyers and their clients must now be very much aware of that high standard.

Contact PE Family Law to discuss property and financial settlements and other family law matters.