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GUY HIDES ASSETS FROM EX BY PRETENDING TO HAVE SEPARATED WITH HIS CURRENT WIFE

SUTTON & LASKO & ANOR (No.5)

[2020] FCCA2183

 

This is a case involving property settlement between two women and one man. The man is accused of failing to make financial disclosure, of concealing his  assets, and of falsification of bank records. The man and one of the women is also thought to be still together despite claiming that they are already separated.

 

FACTS: 

 

Mr. Sutton and Ms. Lasko:

  • They met in 2009.
  • They started cohabitation in 2011.
  • In 2012, their first child, OO, was born.
  • In 2016, their second child, PP, was born.
  • On July 2017, they separated
  • On September 2017, Mr. Sutton commenced Court proceedings seeking parenting and property orders in relation to Ms. Lasko.

 

Mr. Sutton and Ms. Thompson:

  • They met in 2013.
  • They started living together in 2015.
  • In 2016, they got married and their first child, QQ, was born.
  • In 2017, their second child, RR, was born and they separated but briefly reconciled.
  • In 2018, they entered into a Deed of Settlement and Release.
  • In 2019, they separated on a final basis.
  • Ms. Thompson is then included as a respondent to Mr. Sutton’s application.

 

The properties involved in this case is the $1,500,000 worth of shares held by Q Pty Ltd in W Pty Ltd and the sum of $225,200 held in trust by Ms. Lasko’s solicitors. Ms. Lasko wants it to be transferred to her entirely, meanwhile, both Ms. Thompson and Mr. Sutton wants it to be sold and be divided equally between Ms. Lasko and Ms. Thompson.

 

ISSUE: How should the property be divided? Did Mr. Sutton give the correct estimate of his financial assets? Are Mr. Sutton and Ms. Thompson still together?

 

LAW: The preferred four-step process in property matters under the Family Law Act 1975 which was identified by the Full Court in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143.This approach was approved in the High Court decision of Stanford & Stanford (2012) HCA 52. It requires the Court to do the following:

  1. Identify the pool of assets and liabilities generally, and usually at the time of the hearing;
  2. Assess the relative contributions of both the financial, non-financial, direct and indirect nature as specified by section 79(4) of the Act;
  3. Consider the factors as are relevant contained in section 75(2) of the Act; and
  4. Determine whether the order that the Court proposes to make is just and equitable to both parties.

 

The Full Court in Chang v. Su [2002] FamCa 156 stated the  Court should not be ‘unduly cautious’ about making findings  in  favour  of  the  innocent  party  and in  circumstances  where there has  not been full and frank  disclosure of financial circumstances by   a   party,  it  is   open  to   a  Court  to  find  that   an  indeterminate undisclosed amount is  held  by one of the parties and to  make  property orders  without  reference  to  the  overall   pool.

 

ANALYSIS: 

 

  • Mr. Sutton has deliberately underreported his asset pool in order to prevent Ms. Lasko from getting her fair share. 
  • Mr. Sutton has consistently failed to comply with his obligations for full and frank disclosure despite numerous Court orders. 
  • There are legitimate concerns that Mr. Sutton has or may have transferred significant sums of money out of his accounts and/or accounts of his organisations to Ms. Thompson to dissipate the asset pool. 
  • Mr. Sutton has been charged with criminal offences, including fraud, delivering documents containing false information, acting as an agent without being registered and driving offences. 
  • Mr. Sutton also deliberately falsified bank records by altering  the date of a $9,000,000 bank deposit made into his account in order to hide money from Ms. Lasko. He admitted that the document about the bank deposit was indeed altered, however, he denied altering them and blamed it on Mr. A, a bank employee. However, Mr. A submitted an affidavit containing emails between him and Mr. Sutton showing that Mr Sutton has never requested bank statements from him. 
  • Mr Sutton never questioned this affidavit nor cross-examined the bank employee. Mr. A also submitted evidence that he was aware that both Ms. Thompson and Mr. Sutton created false invoices and false documents in their businesses. This was also not challenged by both Mr. Sutton and Ms. Thompson.
  • It also appears that Mr. Sutton and Ms. Thompson are still together, contrary to what they have claimed. The evidence given by them regarding their relationship and separation is confusing and ultimately unconvincing. 
  • They gave contradictory evidence where Ms. Thompson and her children live and how much time they spend with her and Mr. Sutton. Mr. Sutton claimed that their children spend every night at his house, meanwhile, Ms. Thompson claimed that Mr. Sutton sees the children everyday but they only spend some nights with him. 
  • Ms. Thompson also lied about her residence in a different proceeding. 
  • In said proceeding, she stated that she shares a home with Mr. Sutton and her children. 
  • She later on retracted and said that they are actually renting places separately. 
  • She has not actively sought to ascertain the amount of the asset pool. 
  • Ms. Thompson and Mr. Sutton’s business interests appear to be closely intertwined. 
  • Mr. A submitted evidence that Ms. Thompson was very involved in the running of businesses associated with Mr. Sutton.
  • This evidence was not challenged by either Mr. Sutton or Ms. Thompson.

 

HELD :

Given the serious discrepancies in the evidence given by Mr. Sutton and Ms. Thompson as to the conclusion of their relationship and the fact that their business interests are so closely intertwined, it is concluded that they are still in a relationship. Ms. Thompson will benefit from the nondisclosure of Mr. Sutton’s assets and the alleged separation is designed to undermine the claims of Ms. Lasko. And because they are still married, it will not be appropriate for there to be a property division in her favour and no separation of property is required between them. 

 

Due to the fact that Mr. Sutton has deliberately failed to make full and frank disclosure of his financial circumstances and has put Ms. Lasko to a substantial expense in seeking to either ascertain the relevant assets or to restrain Mr. Sutton from disposing of them, the case of Chang v Su is applied in favour of Ms. Lasko. The Court also notes that Ms. Lasko and her two young children with Mr. Sutton has significant future needs. M. Lasko is working as a customer service office and only receives a modest income. She has to provide for the needs of herself and her children on her own. And despite the large sums of money passing through Mr. Sutton’s hands, he does not provide financial support for his two young children with Ms. Lasko. Mr. Sutton is ordered to transfer the entirety of the shareholdings of Q Pty Ltd in W Pty Ltd  to Ms. Lasko and the funds held in trust by Ms. Lasko’s solicitors are ordered paid to Ms. Lasko as partial satisfaction of a cost order. These are the only available assets.

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