Informed Consent Crucial for Family Law Financial Settlements
Brett Hartley Family Law Specialist
Managing Director at Hartley Family Law
“It is now, clear, that not only is the identification of each and every proprietary interest and resource necessary, together with a proper basis to estimate of value, but also, what needs to be disclosed to the other spouse is all negotiations, information and other dealings in relation to all proprietary interests that may or may not affect the value and interests that have been dealt with in any proposed property settlement Consent Order.”
A Case earlier this year highlights the massive dangers facing litigants who do not disclose all details about a financial settlement that are relevant to enable the other party to make a fully informed consent before signing off on a deal.
In a Court of Appeal decision of the Family Court, in early 2016, a property settlement Consent Order was entered into by the parties in 2005. Some nine years later, the wife sought to set aside that Consent Order and re-litigate the issue of property settlement.
If a property settlement Order is set aside under the Family Law Act, then the Court re-hears a property settlement based on current day values and existence of property and makes a new Order. The Court is not confined to assets that existed ten years ago, nor their value ten years ago.
In this Case, the wife received property and other interests, together with a cash payment in 2005 of $185,000.00.
Ten years later, she was successful in her Appeal and upon re-hearing, despite only receiving 35% of the net assets, she received a further cash payment of $2 million. Read more.
Exec. Chairman, HHG Legal Group | Founder, HHG Giving Back | Mediator | 'Best Lawyers' - Peer recognised (2019-25) & Family Lawyer of the Year (WA) 2023 | Lawyer of the Year, 2017 (Law Society WA) | Family Law | AgriLaw
8 年An excellent refresher on this critical issue for all family lawyers. I would only add I am not convinced any of this is new; the bar has long been set this high if we are talking 'best practice'. On that note, a good follow up article might focus on the second aspect of informed consent with consent orders or BFAs - comprehensive legal advice, and the evidence of it. This might be clear with BFAs, but how many family lawyers still file applications for consent orders with the statement of independent legal advice signed? In the situation, what is stopping that lawyer's client turning around later and saying 'I did not give informed consent. I did not have comprehensive legal advice, so how could I understand what I was signing?' This is why I never let opposing counsel file said application before they sign off on it (not just their client).
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8 年Great article. However, I must say that I am not surprised by the outcome - it is patently clear that in family law property settlement matters there is an ongoing duty of full and frank disclosure. The fact that participants continue to think they can be "clever" unsurprisingly results in Orders subsequently being set aside.
Great article, Brett. It is interesting that the Court appeared not to place any importance on the nature of confidential communications between a banker and its customer. I have not yet read the case but did the Husband submit that the loan application containing the understated value, was not discoverable due to confidentiality, or was privilege from disclosure on the basis of confidentiality waived?
Forensic Accountant, Valuation Software Founder, Business Valuation Specialist (CAANZ), Court Expert
8 年This is a fantastic article Brett Hartley. As a forensic accountant I am often frustrated and bemused by business owners refusing to fully open their books even when I am appointed under a court order in family law cases. I get the feeling that their lawyers have not warned them sufficiently of the potential ramifications.