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30 Jan 2023 Concealment of assets in divorce case

The 's-Hertogenbosch Court of Appeal recently ruled in a case concerning the division of a dissolved matrimonial community of property, in particular whether the wife had a share in real estate in Russia and, if so, whether she had intentionally concealed it.

Concealment
Upon divorce, spouses depend on each other's information about the extent of the community of property. It may then be tempting to try to keep certain assets out of the division by not saying anything about them. This is not wise, as there is a sanction for this.

Pursuant to article 3:194 paragraph 2 of the Civil Code, a spouse who "deliberately conceals, misplaces or conceals property belonging to the matrimonial community of property" forfeits his or her share in that property to the other spouse. Thus, if the other spouse later finds out that property has been concealed, the one who concealed the property loses everything.

For prenuptial agreements, the law has a similar provision. In the event that spouses are obliged to set off assets against each other under the prenuptial agreement at the end of the marriage, Article 1:135 paragraph 3 of the Dutch Civil Code stipulates that a spouse who intentionally conceals, misappropriates or conceals an asset belonging to the property to be set off, as a result of which its value is not included in the settlement, should not set off the value thereof, but should compensate the other spouse in full.

Position of proof
A claim of concealment is not often made given the difficult position of proof. Because of the severity of the sanction, high requirements are placed on the burden of proof, both of which lie on the spouse who has been aggrieved. The intent to conceal must be proved. Thus, the spouse who concealed something must also know that the property belongs to the community. Simply forgetting is not penalised.

Therefore, it frequently happens that a spouse fails to prove that an asset was intentionally concealed. In that case, however, the other spouse can still claim half the value of the asset. If, after the distribution, it turns out that certain items were not included in the distribution but were forgotten, they will still have to be distributed. There is no limitation period for this.

Facts
The issue before the 's-Hertogenbosch court of appeal involved the following. During the divorce proceedings before the court, the wife consistently denied that she was co-owner of a flat in Russia. According to the wife, this flat was owned by her parents based on a gift agreement from 2002.

A Russian extract from the State Registration on the ownership of the property was brought into the proceedings by the husband, which showed, that the wife had acquired 1/3rd ownership of the flat in 2002, as had her parents who had also each acquired 1/3rd. It was only during the oral hearing that the accuracy of the documents submitted by the husband was acknowledged by the wife.

The gift agreement referred to by the wife had been registered on 18 June 2018, a date after the reference date for determining the extent of the community, so it was concluded that on the reference date (31 January 2018), the wife was co-owner of the flat and her 1/3rd share belonged to the parties' marital community to be divided.

The documents submitted by the husband further showed that on 18 June 2018, the wife had transferred her share to her father, who then held 2/3rds. Shortly before, namely on 1 June 2018, the husband (in the divorce proceedings) had applied to the court to require the wife to provide, among other things, a statement of her real estate in Russia.

Judgment of the Court of Appeal
Based on the foregoing facts and circumstances, the court, like the district court, held that the husband had sufficiently substantiated that the wife had intentionally concealed her co-ownership. She had to pay the value of her share in the flat (€50,000) to the husband. The woman thus drew the short straw here. Had she been honest, she would have had to pay only half to the husband.

Do you have questions or need advice on division in divorce or divorce in general? Feel free to contact one of our lawyers. We will be happy to assist you.

SPEE advocaten & mediation Maastricht

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