Which case won?

casea
The case for the husband
  • The notations to the consent orders fully disclosed that I intended to acquire an interest in company E. I was not hiding that fact and my estimate of the share value at the time was based on the company figures for the previous financial year, which were entirely accurate. There was no guarantee the company would outperform those figures in future years.
  • I’m not a professional valuer and my ex-wife agreed at the time with the estimated values for company E and property D.
  • The law allows people to form their own views as to the arrangement of their affairs. My ex-wife was free to seek professional advice as to the value of various assets but she chose not to do so.
  • The new valuations of the assets that my ex-wife has now obtained are retrospective and have no relevance.
  • There has been no miscarriage of justice and the original consent orders should stand.
caseb
The case for the wife
  • I was not aware at the time I signed the consent orders that there was any information or documents that my ex-husband had not disclosed to me.
  • It would have been significant to me at the time if I had known each of those things that were not disclosed, and I would have made further enquiries before I agreed to any property settlement.
  • The failure to disclose meant that I lost the opportunity to make further enquiries, which may have included professional valuation advice.
  • The consent orders I signed are so far outside the ambit of what is just and equitable that the court may infer that I acted under duress, in ignorance or as a result of incompetent advice.
  • My consent was not free and informed, and this caused a miscarriage of justice. Therefore, the consent orders should be varied in my favour, and our property should be divided based on the valuation evidence I have now obtained.

So, which case won?

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Case B won. You were right!

How people voted
a43%
b57%

Expert commentary on the court's decision

“The failure by the husband to disclose information and documents denied the wife the opportunity to make such enquiries as she might choose so as to render her consent to the orders a fully informed consent.”
Full Court of the Family Court of Australia finds in favour of wife

At the initial trial held some 10 years after the original property settlement, the judge in Pearce & Pearce [2014] FamCA 1120 found there had been a miscarriage of justice under section 79A of the Family Law Act 1975, as the husband had failed to disclose information and made false representations in relation to the value of property D and company E.

Section 79A allows a court to set aside previous orders where there has been a miscarriage of justice. Had the wife been provided with accurate information about D and E, she would have made further inquires as to their true value. The trial judge set aside the original consent orders and made an award in the wife’s favour of almost $2 million more than what the parties had originally agreed.

Husband appeals trial judge’s finding of miscarriage of justice

The husband appealed the decision of the trial judge and the Full Court of the Family Court of Australia dealt with the appeal in Pearce & Pearce [2016] FamCAFC 14.

The basis of the husband’s appeal was that there was no relevance to the retrospective valuations and therefore there could not be grounds for a finding of a miscarriage of justice. The husband argued that something more is required because otherwise there had not been a non-disclosure.

The Full Court of the Family Court dismissed the appeal and the husband was ordered to pay the wife’s costs of and incidental to the appeal.

Wife not given opportunity to undertake further investigations

Significantly, the court emphasised that the problem was not with the difference in value of property D and company E, but rather that the wife was not afforded the opportunity to undertake further investigations and had the information been available to her, then she would have done so.

In property matters parties are required to make full and frank disclosure pursuant to rule 13.04 of the Family Law Rules 2004. This disclosure is critically important for any family law settlement.

This case identifies that even when an agreement is formalised by way of consent orders and several years have passed, if you do not properly disclose financial information, there is a risk that the orders will be set aside. This could have significant consequences.

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