How to Eat Your Cake and Have It Too

Family Court cases sometimes take unusual forms and have unusual outcomes.  One of the problems that judges must deal with is where one of the parties, post separation, deals with cash or other property in a way so as to make it disappear.  For example by going on a spending spree.

The Courts have always allowed people to spend reasonably post separation but if they spend unreasonably, or make property disappear without a proper explanation, the court has to deal with property that once existed but no longer does.  And in some cases, for the sake of property settlements, it can bring the property back into existence.

This is called "notionally adding back into the pool".

In the case of Asher v Asher (not the real names of the parties) a number of these issues arose.  First, there was the red shoe box.  The report of the case does not make it clear whether this is a box for red shoes, or a red box for shoes.  Both parties agreed that when they split, there was $35,000 cash in the red shoe box.  I guess that meant there were no shoes.

At the trial the husband said that the wife took it and the wife said that the husband took it.

Then, in the post separation period it was clear to the judge that the husband spent a lot of money on his credit card and drew about $93,000 from his super. 

So the question for the court was in the first place did the husband have a reasonable explanation for his spending or did he still have the cash that he drew from the super fund and on what did he spend the credit card debts.  Then there was the question of who had the money in the shoe box.

Judges have to make decisions based on the evidence before them and also the way in which each of the witnesses gives his and her evidence, which is not scientific but based on long experience.  The judge believed the wife.

The husband was rude to the other barrister, did not answer questions, seemed to resent those that he did answer, refused to answer some questions and gave the judge the impression that he could do whatever he wanted with his money post separation without any scrutiny.  He actually said that the case and the cross examination were something he saw as a game in which he had to outstep the opposition.

Not only that, his explanation of spending almost $70,000 in credit card debt, the $93,000 from his super fund and, if he had it the money in the shoe box, was not credible. 

The husband said that it was almost all in cash, mostly on prostitutes and as he said "buying food, drinks and women".  He said that buying women was very expensive.

The judge plainly did not believe any of this. 

What he therefore did was to assume that the husband still owned the super that he says he spent, that he still had at least $23,000 from the shoe box and that he could wear his own credit card debts.

So what the husband said he'd spent, the judge decided he still had, and in the divorce asset division that meant he kept what he said he didn't have.

The court places a high premium on the duty to make full and frank disclosure of your finances.  If you do not, the court will not be too careful about the assumptions it makes against you when you yourself have the ability to give an explanation that is credible.