When it comes to any proceedings before the Family Court a failure to disclose - whether it be between the parties or in relation to third parties - can lead to any orders being set aside.
A recent decision of the Full Court of the Family Court is a timely reminder that when parties wish to enter into Consent Orders, honesty is the best policy, and Consent Orders made chiefly for the purposes of defeating creditors, can be set aside by the Court.
In a recent case of Cantrell v North, a couple entered into Consent Orders which provided that the former matrimonial home be transferred to the wife. However, the parties had not disclosed the fact that there was a creditor who was owed some $381,000.00, perhaps hoping to cheat the creditor by having the property transferred to the wife. The parties ought to have disclosed the interest of the creditor because in such cases, the Court must know whether there are any creditors who are entitled to become a party to a case before approving and making any orders, including Consent Orders, which may affect such creditors.
After the parties had approved Consent Orders, and thought they were safe, the creditor made an application to the Supreme Court, obtaining an order declaring that the transfer of the matrimonial home pursuant to the Consent Orders, was void. The couple appealed that decision in the Full Court and argued that the Supreme Court had not considered whether substantially different orders would have been made, had the husband and wife made proper disclosure. However, the Full Court of the Family Court did not accept this argument and said that in circumstances where there had been a failure to disclose to the Court the existence of a significant creditor who was entitled to join the proceedings, the Court was not obliged to consider what final property orders would have been made had there been proper disclosure.
It was the Court's view that any Consent Orders obtained on the basis of false information, was enough of a circumstance to justify an order varying or setting aside those Consent Orders, and the appeal against the Supreme Court's orders was dismissed.
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