Be wary of concealing assets in financial proceedings

Year Published: 2012

A recent Judgment has seen a Consent Order set aside on the basis that an ex husband did not disclose all of his assets at the time of the original financial proceedings.

The husband and wife had been married for 20 years before separating in 2000. Under the terms of the original Consent Order, the wife received £176,000 on a clean break basis.

Although the wife had since remarried, in 2009 she applied to have the Consent Order set aside on the basis of material non-disclosure. The wife submitted that a property purchased for £250,000 in the name of the parties’ son, was in fact beneficially the husband’s. The property was now worth £1.3million and the wife stated that the husband did not disclose the fact that the property was his when the settlement was initially reached.

The husband gave evidence that 80% of the purchase costs of the property had derived from his own assets, however also declared that this was a gift to the parties’ son and that he was “broke”. The judge made adverse findings in respect of the husband’s credibility; he went on to find that the property was beneficially the husband’s and awarded the wife a further lump sum of £384,000.

Non disclosure of assets is a common problem in financial proceedings. Parties often resent having to disclose to their husband/wife what assets they own. There is no obligation for couples to disclose their financial situation to each other at any time during the marriage and therefore people often feel aggrieved about the obligation to do so when separated.

There are few circumstances when Consent Orders can be set aside but as in the above case this can be done if one party has been found to have concealed assets. Some people believe that if the other party does not know about a certain asset they can ‘get away with it’. In the above case it was a costly mistake to the husband as not only was he ordered to pay a further lump sum, he was also ordered to pay the legal costs of the wife which would have been substantial.

It certainly pays to be honest and to provide full and frank financial disclosure at an early stage when a financial settlement is being discussed. It should also be noted that if both parties are seen to be transparent in financial disclosure then settlements can often be negotiated out of court. Court proceedings are often instigated by a lack of trust between the parties.

If you require advice or assistance on a financial issue or any family matter, please contact Shelley Chesworth in the Private Client team on 0161 475 7682.

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