By Rebecca Brun, Lawyer

The Full Court of the Family Court recently dismissed an appeal, finding that both parties in Long & Peng (2020) FLC 93-948 failed to disclose their true financial position in respect of certain funds that the wife submitted should be available for distribution between the parties.

The case demonstrates that if parties fail to disclose their true financial position and do not provide documentation to the court, certain assets will not be included in the asset pool and consequentially will not be available for distribution between the parties.

The facts are as follows:

• The parties were married in 1990 and had one child together;
• The parties jointly owned one Australian property and owned other properties individually;
• There was a dispute as to when the parties separated however the parties were divorced in China in 2015 after the wife discovered the husband had married another woman in China in 2012 and whom he had a child with; and
• The parties entered into consent orders in relation to the parties’ property in China, however these orders did not deal with the assets of the parties in Australia.[1]

Amongst other arguments, there were two disputes between the parties in relation to the source and disposition of certain funds:

1. A bank account of $500,000 that the wife argued the husband held in his name and should be included in the asset pool and which the husband submitted were held on trust for his parents. [2] Despite the husband’s mother giving affidavit evidence supporting the husband’s submission, no documents were produced in relation to the account and the Court agreed with the primary judge that such evidence in relation to the account was “wholly unsatisfactory”.[3]
2. A term deposit of $600,000 that the husband argued the wife depleted in late 2005.[4] Save for only one bank statement, no documents were produced by either party in relation to the account. There was no evidence that the funds continued to exist and it was found “the disposition of the Citibank funds remains a mystery”.[5]

The Court upheld the primary judge’s decision that the funds were not to be included in the asset pool due to the evidence of both parties being deficient.[6] The courts will be critical of a party’s failure to produce financial records and have noted that parties must not tailor their evidence to achieve his or her desired outcome “irrespective of the truth”,[7] nor can the court “operate in a vacuum”.[8]

[1] Long & Peng [2019] FCCA 1987 [2]-[8].

[2] Ibid [123].

[3] Ibid [126]; Long & Peng (2020) FLC 93-948 [32].

[4] Long & Peng [2019] FCCA 1987 [115].

[5] Ibid [120].

[6] Long & Peng (2020) FLC 93-948 [32], [35].

[7] Ibid [140].

[8] Ibid [1].