Buried Truths and Family Fortunes: The Battle of Jepson & Jepson Ends with Hard Lessons in Disclosure and Equity

🔍 Introduction:

The case of Jepson & Jepson (No 8) [2025] FedCFamC1F 146, presided over by McClelland DCJ in the Federal Circuit and Family Court of Australia, is a striking illustration of the complexities of property settlements in family law—especially when clouded by issues of non-disclosure, mistrust, and questionable credibility. Stretching over nearly a decade, this tumultuous dispute between Mr and Ms Jepson, with the involvement of the husband's mother, touches on everything from hidden assets to media manipulation, criminal allegations, and buried cash. Ultimately, the court was asked to balance legal principles under section 79 of the Family Law Act 1975 with competing narratives, fractured trust, and a deeply fractured marital history.

📜 Facts and Issues:

Key Facts:

• Mr and Ms Jepson were married in 1998 and separated around 2011–2015 (disputed).
• They had two children and amassed significant assets, including valuable properties and collectibles.
• Mr Jepson, a businessman, was the primary earner; Ms Jepson was primarily a homemaker.
• Disputes arose over valuation and sale of property, motor vehicles, alleged fraudulent financial activity, and post-separation entitlements.
• The husband’s mother, Ms B Jepson, intervened seeking compensation for financial contributions and the wrongful sale of valuable cars.

Central Issues:

1. Division of Property: What constitutes a just and equitable property division under s 79 FLA?
2. Credibility and Disclosure: How do the parties' credibility and failures to disclose affect the asset pool and entitlements?
3. Addbacks and Restitution: Should assets like legal fees or disputed motor vehicles be added back to the pool?
4. Restitution to the Second Respondent: Was the wife liable to repay the husband’s mother for the vehicles she sold?

⚖️ IRAC Analysis:

Issue:

Whether the court should adjust the property interests of the parties under s 79 of the Family Law Act 1975 (Cth), considering their respective contributions, post-separation conduct, credibility, and third-party claims.

Rule:

• Under s 79(1) FLA, the court can make property adjustment orders that are “just and equitable.”
• The four-step approach from Hickey & Hickey (2003) FLC 93-143 [39] and endorsed in Bevan & Bevan (2013) FLC 93-545 [60]–[71] was applied:

1. Identify asset pool.
2. Assess contributions (financial and non-financial).
3. Consider future needs (s 75(2) factors).
4. Evaluate the justice and equity of the outcome.

• Credibility and full disclosure are critical (see Dickons v Dickons [2012] FamCAFC 154; Kopsen & Carroll, 2017 Fedeal Law Review 97).
• Armory v Delamirie (1722) 1 Str 505 supports inferences in favor of the owner when a wrongdoer withholds valuation evidence.

Application:

• Credibility: The judge found the wife gave deliberately false testimony, especially regarding the sale of valuable motor vehicles (paras [71]–[84]). She buried $120,000 cash under the house and failed to prove the sale price or process, casting doubt on her entire account.
• Contribution: Both parties made significant pre- and post-marriage contributions. The husband brought substantial assets and support from his mother; the wife contributed primarily as caregiver (para [9], [66]).
• Asset Pool: Split into two pools: (1) joint matrimonial assets, to be divided equally; (2) the wife’s inheritance and superannuation, retained entirely by her (para [3]).
• Addbacks: The husband’s legal fees from criminal proceedings were not considered wasteful or reckless, so not added back. However, the wife’s non-disclosure and actions impacting the property sale price were weighed under s 75(2)(o) (paras [2], [39]).
• Restitution: The sale of motor vehicles constructed by the husband and owned by the second respondent led to a $130,000 compensation order against the wife (paras [81]–[83]).

Conclusion:

The Court found that it was just and equitable to:

• Divide joint property equally.
• Exclude the wife’s inheritance and superannuation from the divisible pool.
• Award the husband $1,214,541 from the Suburb P property sale and a further $456,609 lump sum.
• Order the wife to pay $130,000 to the second respondent for the vehicles.
• Assign insurance policies and sever remaining financial ties (Orders 2–5).

📚 Reasoning and Precedents:

• The Court drew heavily on Hickey and Stanford for its framework, with emphasis on proportionality and overall fairness (paras [64], [68]).
• Applied Armory v Delamirie (1722) for the presumption of highest reasonable value where one party withholds valuation evidence (para [83]).
• Credibility analysis was critical: both parties' testimonies were approached with caution, but the wife’s was notably compromised due to implausible narratives and non-disclosure (paras [71]–[85]).
• The Court gave minimal weight to hearsay allegations of fraud against the husband due to evidentiary rules (paras [104]–[119]).

🎓 Take-Home Lesson:

Full and frank disclosure is non-negotiable in family law proceedings. Courts are empowered to draw adverse inferences and make financial orders where a party fails to disclose, fabricates evidence, or acts recklessly. Moreover, property settlements are not determined by moral judgments alone—claims of fraud and criminality must be substantiated with admissible, credible evidence. In lengthy and complex cases like Jepson & Jepson, procedural discipline, transparency, and a clear legal strategy are critical to achieving a just outcome.