Merritt & Merritt

This case involved the husband, the appellant, and the wife, the respondent, in property settlement proceedings before the Federal Court of Australia. The central dispute was over the inclusion of a liability for renovations to the R property in the husband's financial statement. The husband's counsel argued that the liability should be accepted based on the sworn financial statement, but the Federal Magistrate ruled against it due to the lack of supporting evidence. This decision was later challenged by the husband on appeal.

The key legal issue before the court was whether a liability, only mentioned in a recent financial statement without additional evidence, could be accepted as fact in property settlement proceedings. The husband argued that the court should accept the liability based on his financial statement, while the wife contended that the lack of corroborative evidence meant the liability could not be accepted. The court had to determine whether the lack of evidence justified rejecting the liability.

The court found that while it is generally accepted that a sworn financial statement can establish the existence of a liability, there are exceptions. In this case, the husband's financial statement was recent and there was no other evidence to support the liability. Additionally, the husband's own evidence cast doubt on the nature of the liability. Therefore, the court was entitled to reject the liability based on the lack of evidence. The appeal was allowed, and the orders were set aside. The case was remitted for a new hearing by a different Federal Magistrate. Costs were awarded to both parties for the appeal and for the new trial.