It is common knowledge that government agencies rely upon the truthfulness of their customers when their assessments. Lying to or deceiving government agencies such as Centrelink, Child Support and the Australian Tax Office (“ATO”) are considered serious offences when used to obtain financial gain.

Falsifying information to government agencies to obtain financial gain may be considered fraud and may lead to a criminal investigation which could result in criminal charges and incarceration. Although these offences are serious in nature, they occur more commonly then one would think.

How does the Court deal with situations where one party has declared information to a government agency in order to obtain financial gain and later declares different information to the Court during their family law proceedings?

The case

The Elias principal originates out of the case Elias & Elias (1977) FLC 90 – 267 (“Elias”) heard in the Family Court of Australia before Justice Goldstein. This case concerned property settlement proceedings where the husband sought to rely upon evidence which was contrary to what he had previously declared to the ATO. In this case, the husband declared to the ATO that the smash-repair business was owned in partnership with his wife, however, the wife received no income from this arrangement. In fact, the company had a substantially lower tax liability as a result of the partnership arrangement.

The husband’s evidence in the family law proceedings asserted that the smash-repair business was solely his own. Justice Goldstein concluded that the husband could not have it both ways and assert two different positions. The Court did not accept the husband’s position that he was the sole owner of the business and therefore did not accept evidence that was contrary to this position as previously asserted to the ATO.

The principal

The principal enunciated a rule of law “that a party who makes representations of fact to third parties and gains an advantage from doing so, cannot, in proceedings under s 79 of the Family Law Act 1975 (Cth), lead evidence that contradicts those representations”.

Application of the Elias Principal

Benedict v Peake [2013] FCCA 332 (“Benedict”)

Benedict was a recent case further discussing the application of the Elias principal. This case was initiated by the applicant who sought a declaration that the parties were in a de facto relationship in order to establish jurisdiction for the Court to hear the applicant’s application for property settlement. The applicant sought a declaration that the parties de facto relationship commenced in 1992 and concluded on 18 February 2010. The respondent sought a declaration that the de facto relationship never existed or that the relationship between the parties ceased in 2006.

The applicant had previously asserted to Centrelink and the ATO she was single and received benefits based on her declared circumstances. The applicant then sought to rely upon evidence before the Federal Circuit Court that a de facto relationship had existed up until 18 February 2010. The applicant sought to rely upon evidence which was contrary to the position submitted to these government agencies which was opposed by the respondent, relying upon the Elias principal.

The Court ultimately held that the evidence was admissible in the circumstances including that it would be contrary to the interest of justice to exclude such evidence. The Court held that this rule of law permits Judges to exercise their discretion on whether they would accept such evidence. After the evidence of both parties were heard, the Court concluded that the applicant’s evidence was not credible in comparison to the respondents. The declaration was not made, and the jurisdiction was therefore not established to hear this matter. The applicant was warned through her Counsel of the Court’s ability to and the probability to refer the matter to the government agencies to enable consideration for fraud.

The take-away

If you have lied to Centrelink, Child Support or the ATO and you then wish to rely upon your misrepresentation in property settlement proceedings, you may want to think again. It is highly likely that your evidence may not be accepted or may be viewed as less credible and may even result in your case being referred to the government departments for further investigation.

The above information is intended as general information and is not intended to be relied on as legal advice. If you are facing criminal charges or going through a family law dispute, contact one of our experienced solicitors on (02) 9920 1787 to discuss how we may assist you to achieve a favourable outcome. Our principal is named as leading Family and Matrimonial Lawyer of the Year by Acquisition International in their 2019 leading Adviser Awards. Pannu Lawyers are conveniently located in Blacktown and practice extensively in Family Law, Criminal Law, Commercial Law and Conveyancing.