Case Study - The Defrauded Spouse

Situation: 

John and Mary separated after a 15 year marriage and each went to lawyers to negotiate a financial settlement.  John was a teacher and Mary was a partner in a large accounting firm.  They equally shared the care of their children.

John saw Greg Oliver in our office for advice about a financial settlement and Mary was represented by another firm of solicitors. 

The financial affairs of Mary were rather complex and the pool of family assets was about $5,000,000.00 in value.  Agreement was reached for John to receive 55% of the pool of assets and a binding financial agreement was drawn up to put this into effect.  This was signed by John and Mary and the two lawyers.  It was then implemented with the title to the house being transferred to John, superannuation being formally split between the parties and various other payments were made to effect the division. 

18 months later John was surprised to read an article in the Financial Review which described Mary and her role in an extremely successful business which was based in America.  It even described the fact that she held 100,000 shares in the business.  After doing some internet searching John established that these shares were worth $55.00 each, a total value of $5,500,000.00.  John was fascinated to hear that Mary was the brains behind the business which had started six years ago, well before the parties separated. 

Mary had mentioned this business in passing to John during the marriage but had said that it hadn't gone anywhere.  John was afraid that he wouldn't have any entitlement since he had signed his financial agreement but went to speak to Greg about this. 

Response:

 Greg advised that if there is a material non-disclosure or fraud on the part of a signatory to a binding financial agreement the agreement can be set aside.  We took legal proceedings to set aside the agreement which were successful. 

Outcome: 

John received another $1,500,000.00.  (Factored into the amount payable was the borrowing taken out to fund the shareholding and also the fact that the shares had grown substantially in value post separation.)