Disclosure Disaster: Husband’s “Black Box” Companies and Coercive Financial Control Drive a 77.5/22.5 Property Outcome

In Pryor & Pryor (No 2) [2026] FedCFamC1F 77, Austin J (FCFCOA Division 1) determined a defended Pt VIII property dispute after the post-10 June 2025 amendments. The husband’s serious disclosure failures (personal income and corporate finances not independently verifiable) and findings of coercive and controlling family violence (notably financial control and post-separation conduct) materially shifted both the contributions assessment and the s 79(5) adjustment, producing a final entitlement of 77.5% to the wife.

🧩 Facts and Issues

Facts: The parties married in 2005 and finally separated in mid-2022. The wife commenced proceedings in March 2023. She received interim distributions totalling $190,000 ($40,000 from the husband’s own property; $150,000 from joint sale proceeds). Parenting orders made in July 2025 provided the two children live predominantly with the wife. A November 2025 trial was vacated (on the husband’s application) due to his non-compliance, with costs thrown away ordered against him; the trial proceeded in February 2026.

Issues (in substance):

1. What were the parties’ existing property interests and liabilities, given the husband’s incomplete/late disclosure and “draft” financial documents?
2. How should contributions be assessed, including whether family violence affected either party’s “ability” to contribute under s 79(4)(ca)?
3. What s 79(5) adjustment (if any) was justified, particularly given the wife’s position as primary carer, housing insecurity post-sale, and the husband’s disclosure default?
4. How should orders be structured (cash vs super split), given the husband’s wealth sat largely in private corporations and was hard to liquidate?

⚖️ Applicable Law – Legislation, Regulations, Rules

Family Law Act 1975 (Cth) (as amended from 10 June 2025):

• Identify existing interests/liabilities: s 79(3)(a); threshold “just and equitable”: s 79(2).
• If adjustment warranted: consider contributions (s 79(3)(b)(i), s 79(4) including s 79(4)(ca)) and current/future circumstances (s 79(3)(b)(ii), s 79(5)).
• Statutory disclosure duty: s 71B (and s 71B(9) referenced).

Evidence / procedure:

• Evidence Act 1995 (Cth) and the “suspension” mechanism in family law context: s 102ND(3)(b) (application failed).
• FCFCOA (Family Law) Rules 2021 (Cth): r 6.06(8) (disclosure compliance referenced); r 8.15(3)(e) (annexures not evidence unless tendered).

📌 Precedents Relied On

For the consequences of defective disclosure and being “not unduly cautious” in favour of the innocent party:

• Black and Kellner (1992) FLC 92-287
• Weir and Weir (1993) FLC 92-338
• Chang v Su (2002) FLC 93-117

🧠 Analysis

Issue

What final property adjustment was just and equitable where the husband’s corporate/personal financial position could not be independently verified, his disclosure was late and incomplete, and the wife established coercive financial control and post-separation conduct affecting her capacity to contribute and her future circumstances?

Rule

Under the post-amendment framework, the Court:

1. identifies the parties’ existing property interests and liabilities (s 79(3)(a)), and considers whether any adjustment is “just and equitable” (s 79(2));
2. assesses contributions (s 79(4) including family violence impact under s 79(4)(ca));
3. considers current and future circumstances (s 79(5)); and
4. then makes orders that achieve that outcome.

Where disclosure is seriously deficient, the Court may apply the long-standing caution-relaxing approach in Black & Kellner / Weir / Chang (not being unduly cautious in allocating known property to the innocent party).

Application

1) The property pool was “known” but compromised by non-verification

Austin J found the husband failed to comply with s 71B and produced only late, unsigned “draft” corporate and tax material with internal inconsistencies (e.g., a $230,000 dividend appearing in a draft return but not reflected in company records), giving it little probative weight. The Court emphasised disclosure is of “information and documents”, not merely dumping bank records without explanations.

On the “known divisible” pool:

• Wife’s divisible property assessed at $392,121 (after disregarding her loan for legal fees in the adjustment exercise).
• Husband’s known divisible property assessed at $746,153 (after excluding his legal-fees loan and quarantining a large unexplained increase in post-separation credit card debt).
• Total known divisible assets + super: $1,138,274.

2) Contributions: 57.5% to the wife

The Court assessed contributions at 57.5% to the wife, relying on factors including:

• the wife’s inheritance contribution (spent on the household),
• her primary care of the children (including periods where the husband lived overseas),
• her continuing primary care post-separation,
• and crucially, the husband’s financial control and other control hampering her ability to contribute.

The wife’s evidence of post-separation stalking/property interference and resultant stress was accepted, and the Court inferred her non-financial contribution capacity was adversely affected by financial control, residential insecurity and safety concerns. The husband’s reliance on the wife’s admitted 2016 assault did not establish a nexus to any curtailment of his contribution capacity.

3) s 79(5) adjustment: +20% to the wife

Austin J made a significant 20% adjustment in the wife’s favour, noting:

• her poorer psychological health, primary care responsibilities (including a child with special needs), and limited income sources; and
• the husband’s far greater earning capacity and implausible income collapse claims (given his history, capital expenditure, and self-promotion).

The Court also compared the wife’s interim access ($190,000, with substantial residue remaining) with the husband’s access to and use of about $450,000 from company funds post-separation (with large unexplained expenditure), reinforcing the fairness of a strong adjustment.

The Court expressly applied the “not unduly cautious” disclosure authorities to justify a generous allocation of known property to the wife given the husband’s derelict disclosure.

Conclusion

The Court concluded the wife was entitled to 77.5% of the known net assets and superannuation ($882,162), and the husband to 22.5% ($256,112).

Orders were structured to deliver the wife an additional $490,041 (above what she already controlled), achieved by:

• the wife receiving the entire residue trust sale proceeds from the former matrimonial home (cash $288,873), and
• a super split of a $200,000 base amount from the husband’s super (valued at $302,012), leaving him with about $102,000 super and giving the wife about $236,000 super.

🧠 Take-Home Lesson

If a party runs a “black box” financial case—late, incomplete disclosure; unsigned drafts; no independent verification—the Court will not reward the uncertainty. Combine that with proven coercive financial control and post-separation conduct that increases the other party’s burden, and the Court may deliver a very strong s 79(5) adjustment and a heavily one-sided final outcome.