Family Court Overturns Property Settlement: Husband’s Financial Misconduct Unveiled

Case Citation: Curtain & Curtain (No 4) [2024] FedCFamC1F 348

Introduction:

In a notable decision, the Federal Circuit and Family Court of Australia overturned a property settlement previously agreed upon in 2016, citing significant non-disclosure of financial information by the husband. Justice Mead’s judgment emphasized the imperative of full and frank disclosure in family law proceedings, setting a precedent for future cases involving financial misconduct.

Facts:

In 2016, a property settlement order was made between Mr. and Mrs. Curtain, following their separation. Mrs. Curtain later discovered that Mr. Curtain had failed to disclose substantial financial assets during the original proceedings. She filed an application under section 79A of the Family Law Act 1975, seeking to set aside the 2016 orders on the grounds of non-disclosure and misrepresentation.

Issues:

1. Whether the husband’s failure to disclose financial information constituted a significant enough breach to set aside the original property settlement.

2. Whether the non-disclosure had led to a substantially different order than would have been made if full disclosure had occurred.

Applicable Law:

- Family Law Act 1975, sections 79, 79A, 79A(1)(a).

- Relevant cases cited include : Riley & Pateman [2000] FamCA 1296 and Barker & Barker [2007] FamCA 13.

Analysis:

Non-Disclosure and Misrepresentation:

Justice Mead highlighted the seriousness of the husband’s failure to disclose his financial assets. Paragraph 215 encapsulates the court’s stance: "It is not every failure of frank and full disclosure which would justify a court in setting aside an order... it will only be in cases when the absence of full and frank disclosure has led to the court making... an order which is substantially different from the order which it would have made if such disclosure had taken place".

Impact on Original Order:

The judgment underscored that the non-disclosed assets would have significantly affected the court’s original decision. As stated in paragraph 123 of **Barker & Barker**: "In order for a claim under s 79A(1) to succeed, the non-disclosure must be material enough to have led to a different outcome".

Judgment:

The court concluded that the husband’s non-disclosure had indeed resulted in a substantially different order. Justice Mead ordered the original settlement to be set aside, mandating a new hearing to reassess the property division with all financial information properly disclosed.

Take-Home Lesson:

This case reinforces the critical importance of full and frank disclosure in family law proceedings. Non-disclosure can lead to significant legal consequences, including the overturning of settlement orders, emphasizing the need for transparency and honesty in financial declarations during divorce settlements.