Catch Me If You Can
To disclose or not to disclose, that is the question!
A recent Family Court Judgment delivered in April 2016 serves as a timely reminder for those professionals advising people immediately following a separation regarding disclosure of all assets to their former spouses.
The basic facts of the case were:
- The husband and wife for married for 31 years and had three adult children;
- The husband refused to fully disclose his financial circumstances;
- The Court found that contributions between the parties were equal during the marriage;
- The net assets available for distribution between the parties was approximately $1,200,000.00;
- The husband withdrew over $600,000.00 in joint funds immediately following separation and then claimed $495,000.00 of it was used to repay a debt;
- The Court found that the husband deliberately failed to make full financial disclosure and much of the evidence he gave was not believable and when challenged, he prevaricated and dissembled and refused to point to any documents that would assist the Court in establishing the existence of a $495,000.00 debt he said existed at separation.
In the end, because of the husband’s lack of financial disclosure and because of the poor impression he left upon the Trial Judge, the wife’s evidence was preferred and a five percent (5%) adjustment was awarded in favour of the wife with the effect that the assets would be divided 55:45 in favour of the wife.
All of the money that the husband refused to account for was treated as monies already had and obtained by the husband and added to his side of the balance sheet.
This case is an important reminder that when first speaking to clients who have recently separated to remind them of their obligation to make full and frank disclosure of their financial position or risk having significant adverse findings made against them and potentially adverse outcomes in the event of a Judge’s decision being required.