John and Alexandra had been married for 32 years before they decided to separate. During the course of the marriage John was the primary bread winner was self-employed as a financial advisor. Alexandra worked part time as a teacher and provided the primary care for their now three adult children. Given the nature of John’s employment he exercised control over the finances. John transferred a portion of his income into a bank account which Alexandra could access for living expenses and to pay household expenses.
After John and Alexandra separated, she attended at our office to obtain legal advice regarding her property division entitlements. Upon hearing a basic background, it was clear the main initial issue to address was that Alexandra had limited knowledge as to the current finances. As far as Alexandra was aware she and John owned their home, had nominal savings and had both had superannuation entitlements held in a self-managed superfund. Given that Alexandra was not completely aware as to the quantum of the asset pool, we wrote to John on her behalf and requested that he furnish financial disclosure documents.
After some reluctance, John provided us with copies of bank statements, business statements, credit card statements as well as his pay slips and tax returns. After we received the documents Alexandra was shocked to learn that John was in significant debt and had obtained several loans in the last few years. Alexandra and John also had minimal savings in the bank. Alexandra and John had paid off their mortgage 5 years earlier and given John’s income, Alexandra expected that they would have significant savings and superannuation entitlements. Upon further review of John’s bank statements it was noted that he was that making large withdrawals up to three times per week at the local RSL and TAB. After forensic review of the bank statements it was noted that in the last 3 years alone John had withdrawn approximately $350,000 of savings. Furthermore John had entered into debt of approximately $300,000.
Alexandra was distraught when she found out that John had entered into debt and significantly depleted the asset pool. Alexandra wanted to know her rights and her subsequent liability given that she was not privy to John’s actions.
Alexandra was advised that financial losses incurred by either a husband or wife during the course of the marriage, whether such losses occur joint or separately, is generally shared. Alexandra was advised however that in certain circumstances the losses that are incurred may be either shared disproportionately or not shared at all in certain circumstances. These circumstances include:
Alexandra had a good argument with regard to the above two points. Unfortunately, John remained resolute in his position that Alexandra should share all debt, and the case went to trial. The final decision of the Judge was in Alexandra’s favour, and she was able to seek an order for costs against John.
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