“Gold digger” husband’s solicitor apparently helped him hide assets

“Gold digger” husband’s solicitor apparently helped him hide assets

The solicitor who apparently set up a “deliberate and fictitious strategy” to help  her client cover up his real worth, may be referred by a Family Court judge to the Legal Services Commission. Her client, the husband, demonstrated what he thought of the wife by calling the wife in bank deposit documents “gold digger”.

In the recent Family Court case of Lambert and Jackson, the husband, who later gave an undertaking to stop calling his ex “gold digger” on all documents, had a business partner, Mr EN, who wanted to retire. The judge found that on its face the husband contrived with his solicitor to cook up a plan to cover up the retirement.

The reason for this was simple: a valuation of the husband’s interest in the company had already been prepared, and if the buy out of Mr EN’s interest became known, then a new valuation would have to be prepared, meaning that the wife would have to be paid more.

The trial judge, Justice Watts, stated that “by the end of the hearing the husband’s creditability was in tatters” and:

The husband had told those advising him that no concluded agreement with Mr EN had been reached when that was not true. Mr EN’s demands had been accommodated by the husband by the commitments he had made to Mr EN. The husband does not have to be a lawyer to know that it would be unsafe to rely upon advice given upon factual information which the husband knew was wrong.

The judge ordered that the solicitor, Ms Y, have an opportunity to respond before he took the step of referring her to the Legal Services Commission. His Honour stated:

Ms Y was not a party to these proceedings and has not yet been heard. Any prima facie findings about her involvement in non disclosure so far as they relate to any disciplinary proceedings against her are subject to any evidence she might wish to give and evidence others might give about relevant matters.

I am mindful that any inquiry by the Legal Services Commissioner may involve hearing from the husband, counsel for the husband, [his commercial lawyers] and Mr EN.

There is prima facie evidence that on the morning of 6 August 2009 Ms Y had a conversation with the husband’s commercial lawyer… about “the [R] deal”. [The commercial lawyer] recorded Ms Y’s initial concern that any alteration of the partnership or corporate group would see the wife calling for a new valuation.

There is prima face evidence that, later on 6 August 2009 Ms Y and the husband met. I infer that on 6 August 2009 the husband and prima facie Ms Y concluded that it would not be advantageous in this case for the husband to disclose his arrangements with Mr EN because it would inevitably cause a revaluation of the husband’s interests and the husband and prima facie Ms Y had concluded that that valuation would be a higher value. They both rang [the commercial lawyer] to discuss a strategy which had as its central purpose, eliminating the risk of discovery by the wife and the court of the agreement which had been reached between the husband and Mr EN OR alternatively, structuring the documentation so it appeared that “discussions” and “negotiations” continued, when in reality an agreement between Mr EN and the husband for Mr EN, to relinquish his interests, had been reached.

On 6 August 2009 Ms Y wrote an email to [his commercial lawyers]. Prima facie, that email was written in furtherance of the strategy that had been developed between the husband and Ms Y on that day. She sought a confirmation from the husband’s commercial lawyers. She never received such a confirmation. They were not prepared to give the confirmation that Ms Y sought.

On 7 August 2006 Ms Y received an email at 11.21am setting out the details of a staged deal. Stage 2 of that deal was that the execution of all remaining documents and final adjustments would be deferred until AFTER the family law settlement, which was expected to be in October 2009.

Prima facie, there was a deliberate and fictitious strategy devised by Ms Y where she contrived with the husband to deceive the wife and the court.

On 7 October 2009 Ms Y electronically filed an Undertaking as to Disclosure… The undertaking as to disclosure … was prepared by Ms Y and signed by the husband. Ms Y provided a certificate in the following terms:

“I am the lawyer for the person giving the undertaking and I certify that I have explained to the person giving the undertaking:

(a) the nature and terms of the undertaking; and

(b) that the undertaking is a promise to the court to comply with its terms; and

(c) the undertaking has the same effect as an order of the court; and

(d) that a breach of the undertaking may be a contempt of the court punishable by a fine or imprisonment.”

Ms Y prepared an affidavit sworn by the husband on 23 October 2009 and took the husband’s oath before he swore that affidavit. The primary purpose of this affidavit was to address allegations that the husband had failed to make full and frank disclosure. It did not mention anything about the agreement which had been reached between the husband and Mr EN, nor anything about any of the transactions that the husband had actually been involved in with Mr EN.

On 23 October 2009 Ms Y also prepared and took the husband’s oath when he verified his financial statement. That financial statement did not disclose the agreement that had been reached between the husband and Mr EN.

Ms Y instructed counsel for the husband at the hearing and was present at the bar table during the four days of the hearing (26 – 29 October 2009). On 27 October 2009 and again on 28 October 2009, the husband gave false oral evidence about the agreement which had been reached between the husband and Mr EN. Prima facie, Ms Y knew that the evidence was false but, remained silent and continued to act for the husband to the conclusion of the hearing.

As I indicated on the final day of the hearing, the matter will be relisted so Ms Y has an opportunity to lead evidence and/or address me, if she wishes to, as to whether she should be referred to the Legal Services Commission.

Counsel for the husband’s prima facie lack of knowledge about the deception

I have nothing to indicate counsel for the husband received any instructions from the solicitor for the husband about her knowledge of the arrangements between Mr EN and the husband.

In final submissions and before the [husband’s commercial lawyers] files arrived, counsel for the husband said “you have, in my submission, sufficient evidence to know that Mr [EN] is not going to walk away for nothing”. I infer from that counsel for the husband had no idea about the discussions that his instructing solicitor had with the husband’s commercial lawyers.

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