Equally most people would understand that lying to government departments such as Centrelink in statutory declarations or other official documents may result in criminal charges being laid, including fraud.

What happens though when for one reason or another a person desires to “set the record straight” in a family law proceeding and give evidence contrary to what they might have previously told a department?

It happens quite a bit.

This situation arose in Benedict v Peake [2013] FCCA 332 (23 May 2013) when a de facto wife (“the wife”) who had previously asserted to Centrelink and the ATO she was not in a de facto relationship; now sought to lead evidence before the Federal Circuit Court that a de facto relationship had in fact existed for 17 years.

Solicitors for the de facto husband (“the husband”) raised as an objection to the wife’s evidence the “Elias principle”, a notion that “when a party has made representations of fact to third parties and has gained advantage from so doing, it is open for the court in subsequent proceedings under section 79 of the Family Law Act to decline to accept from that party evidence which contradicts those representations.[1]

The court in Benedict and Peake considered numerous authorities (including Chisholm J in Jordan & Jordan [1996] Fam CA 15) and found as follows with respect to the “principle”[2]:

1. In considering whether to apply the principle the court must take the wife’s case at it’s highest;
2. The wife’s case taken at its highest was that the husband had full knowledge of the false statements made to Centrelink and the ATO and that the wife’s evidence would show the existence of a de facto relationship of some 17 years;
3. While the wife received financial gain, taking her case at its highest, the husband also was aware of, and gained financially from the wife’s deception over 17 years;
4. It was not appropriate to draw any distinction between de facto and married couples in applying the principle because:
   1. A broad range of factors needed to be considered in both de facto property and matrimonial property adjustment proceedings;
   2. Findings of fact are inherent in the exercise of discretion in both applications under the Act;
   3. The findings of fact required for de facto property adjustment matter are no more broad or limited than matrimonial property adjustment proceedings (with one exception)
5. “Findings of fact are finding of fact”  the court did not accept a “Briginshaw[3]” like approach should be taken to differentiate between finding of fact or applications of rules in different contexts or for different purposes;
6. Whilst accepting that the “Elias principle” may well represent a rule of law to be applied within and specific to the operation of proceedings under the Family Law Act 1975, it must, as with all rules of law, be applied with discretion to the facts and circumstance of each individual case;
7. The Court must be particularly conscious to ensure that both the determination and the process of arriving at the determination is, and is perceived as, “just and equitable”. To apply the rule arbitrarily would be to equate law to justice and to treat them as equal and synonymous or one and the same. They are not. The law is a means by which justice is attained or sought to be attained not justice itself.
8. Whilst there is much force in reliance upon the equitable principle that “those whom come to equity must come with clean hands” in support of the rule, one must also be conscious of the general principle that “justice must not only be done but must be seen to be done”.
9. The principle or rule of law is not founded in and does not equate to the expression of a form of estoppel. If the principle or rule were to be applied arbitrarily and so as to exclude evidence in each case in which a false representation (or series of false representations) were found, then the rule would, in the absence of discretionary application by reference to the facts and circumstance of each case and the justice and equity of each case, be elevated to beyond, estoppel.
10. In circumstances whereby the wife suggests knowledge of the statements at the time they are being made and were by the parties jointly (again taking the wife’s evidence at its highest) the exclusion of that evidence would have far greater potential for injustice, inequity and offence of public policy than its admission.

In terms of the above, most importantly his Honour identified the rule did not act as an estopple; and the court always retained a discretion whether to apply the rule.

Judge Harman in Benedict v Peake examined High Court authority on the Elias point however His Honour failed to turn up the decision of Nelson v Nelson [1995] HCA 25.

In Nelson, McHugh J said courts should not refuse to enforce legal or equitable rights simply because they arose out of or were associated with an unlawful purpose unless:

1. The statute discloses an intention that those rights should be unenforceable in all circumstances; or
2. The sanction of refusing to enforce those rights is not disproportionate to the seriousness of the unlawful conduct;
3. The imposition of the sanction is necessary, having regard to the terms of the statute, to protect its objects or policies; and
4. The statute does not disclose an intention that the sanctions and remedies contained in the statute are to be the only legal consequences of a breach of the statute or the frustration of its policies.

Having regard to Nelson it is likely courts exercising jurisdiction under the Family Law Act 1975 would allow a party to lead evidence notwithstanding prior representations.

Of course, in the event that a party who has made false representations is successful in having findings to the contrary made, that may not be the end of the matter.

In Mariani and Mariani [2012] FamCA 518 Cronin J had the following to say:

“In P & P [Tax Evasion] (1985) FLC 91-605 Lindenmeyer J said that in his opinion, as a court exercising the judicial power of the Commonwealth, it had a duty to protect the revenue of the Crown and that duty extended to requiring the court to take steps as it was able to take to ensure the revenue laws of the Commonwealth were not defrauded or evaded by litigants or others who came before it. It is not sensible for the court to simply turn a blind eye to findings of fact which might assert or might find that breaches of the Commonwealth laws have occurred.[4]

By Peter Hooper (29 July 2013)

Peter Hooper and Hooper Mill Family Lawyers Brisbane are divorce lawyers in Brisbane advising in all areas of family law, matrimonial and relationship law.