When couples separate, dealing with the legal processes can feel overwhelming. Among the many responsibilities that arise, one of the most crucial—and often misunderstood—is the duty of disclosure. This legal obligation requires both parties to provide full and honest information about their financial circumstances. More than just a rule, it’s a fundamental requirement that ensures fair and just outcomes in family law matters.
Failing to meet this obligation can have serious consequences, from financial penalties to court orders being overturned. Understanding how and when to disclose information can make all the difference in achieving a fair settlement and avoiding unnecessary legal battles.
What Is the Duty of Disclosure?
The duty of disclosure is a legal requirement that mandates both parties in a family law matter to share complete and accurate financial information. This duty applies to property settlements, spousal maintenance, child support, and parenting matters where financial circumstances play a role.
Under Rule 6.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, both parties must provide “full and frank disclosure of all information relevant to the proceeding, in a timely manner.” The court relies on this transparency to make fair and equitable decisions. Without complete disclosure, judges cannot accurately assess financial positions, which can lead to unjust outcomes.
Importantly, this duty applies whether or not a matter proceeds to court. It begins early in the separation process and continues until final orders are made. If financial circumstances change—such as receiving an inheritance, changing jobs, or acquiring new assets—updates must be provided promptly.
When Does the Duty of Disclosure Begin and End?
Many separating couples assume that disclosure only becomes relevant once they enter the courtroom. In reality, the obligation begins much earlier—often before legal proceedings even start.
This duty applies from the moment separation occurs and legal matters are being considered. It remains in effect throughout negotiations, mediation, and any court proceedings. Even after agreements are reached, if a party fails to disclose relevant information, final orders can be challenged or overturned.
Key Legal Principles on Disclosure
The Court emphasised several important principles about disclosure in family law matters:
- Objective Test: The duty to disclose is objective, not subjective – a party’s personal belief about the relevance of information doesn’t negate their disclosure obligations.
- Full and Frank Disclosure: Parties must make full and frank disclosure of all relevant financial information – this is essential to how the Court operates.
- Informed Consent: Consent to property orders must be informed consent. If consent is based on misleading or inadequate information, a miscarriage of justice may occur.
- Relevance of Non-Disclosed Information: Information is relevant if it might directly or indirectly enable the other party to advance their case or damage their opponent’s case.
- Test for Setting Aside Orders: Orders will only be set aside when the non-disclosure has led to orders substantially different from what would have been made with proper disclosure.
Remember, parties in family law proceedings have an absolute obligation to disclose all relevant financial information, regardless of their subjective views about the information’s importance or reliability.
What Must Be Disclosed?
Disclosure requirements extend beyond basic salary details. The court expects full transparency about all financial resources, including assets, liabilities, and financial transactions.
Here’s what must be disclosed:
Financial Matters
- Income: Salary, bonuses, rental income, dividends, government benefits, trust distributions, and business profits.
- Assets: Properties, vehicles, investments, cryptocurrency and other digital assets, superannuation, and shares.
- Liabilities: Mortgages, credit card debt, personal loans, tax obligations, and business liabilities.
- Financial resources: Trust entitlements, inheritances, or expected financial benefits.
- Transactions: Any significant asset sales, gifts, or transfers within 12 months before separation or at any time after.
- Business interests: Ownership, shares, partnerships, or any control over a business.
Parenting and Child Support Matters
For cases involving children, disclosure may include:
- School and education expenses
- Medical records relevant to a child’s needs
- Work schedules impacting parenting arrangements
- Evidence of any risks or safety concerns affecting children
If you’re unsure whether a particular document or financial detail needs to be disclosed, it’s best to err on the side of transparency.
Essential Documents for Meeting Disclosure Obligations
Providing comprehensive and timely documentation is key to fulfilling the duty of disclosure. Typical documents required include:
- Financial Statement (Form 13): A detailed summary of your financial position
- Tax returns and assessments for at least the past three years
- Recent payslips and bank statements (covering the previous 12 months)
- Superannuation statements
- Property valuations from licensed professionals
- Credit card and loan statements
- Business financial records (if applicable)
- Trust deeds and financial records of any trust you benefit from
- Documents showing any asset transfers or major financial transactions post-separation
Providing these documents early can help avoid delays, reduce disputes, and promote fair negotiations.
What Happens If You Don’t Disclose?
Failing to comply with disclosure obligations is a serious legal breach with potentially severe consequences. If the court determines that a party has failed to provide full disclosure, it may:
- Draw negative inferences: The court may assume the person is hiding assets and adjust property division accordingly.
- Impose financial penalties: The non-compliant party may be ordered to pay the other party’s legal costs.
- Suspend or dismiss their case: Until proper disclosure is made, legal proceedings may be halted.
- Find them in contempt of court: This can result in fines or, in extreme cases, imprisonment.
- Set aside final property orders: If hidden assets or financial information come to light after a settlement, the court may reopen the case.
For instance, when a spouse neglects to reveal an impending inheritance during property settlement talks, the court might later invalidate the agreement. This can resulting to a re-evaluation of asset distribution, financial penalties, and loss of credibility in court.
Case Highlight: Barker & Barker [2007] FamCA 13
In Barker & Barker [2007], the Full Court of the Family Court ruled in favour of a wife who sought to overturn a property settlement agreement. She successfully argued that her husband had failed to disclose important financial information before they agreed on their property division.
The dispute centred on a rural property valued at $1.65 million in their original settlement. However, soon after finalising the agreement, the husband sold the same property for $2.65 million. The wife challenged the orders, stating that:
- The husband had received an offer of $2.3 million for the property before the settlement but did not disclose it.
- He was aware of a recent property sale in the area that significantly increased local property values.
- The large difference between the valuation used in the settlement and the actual sale price created an unfair outcome.
The Court agreed that the husband should have disclosed the offer, regardless of whether he thought it was serious or planned to sell. Since the settlement was based on an undervalued asset, the Court found that failing to disclose this information resulted in an unfair outcome and set aside the original orders.
This case underscores that full financial disclosure is a strict requirement in family law. If a party withholds relevant financial details, the court may overturn property settlements and reassess asset division to ensure fairness.
How to Ensure Compliance with Disclosure Obligations
To meet your duty of disclosure and avoid legal repercussions, consider these practical steps:
- Start early: Gather financial records as soon as separation occurs.
- Be thorough: List all assets, liabilities, and financial resources.
- Keep records: Retain copies of all disclosed documents for future reference.
- Stay updated: Inform the other party of any financial changes during the process.
- Seek legal advice: An experienced family lawyer, such as PD Law’s Family Lawyers, can guide you on disclosure requirements specific to your situation.
- Address non-disclosure by the other party: If you suspect your former partner is hiding assets, your lawyer can request specific disclosure orders, subpoenas, and forensic investigations into financial records.
Why Disclosure Matters
The duty of disclosure is more than just a legal formality—it’s a safeguard ensuring that family law matters are resolved fairly. Accurate financial disclosure allows the court to:
- Determine a fair division of assets.
- Ensure proper financial support for children and former spouses
- Protect vulnerable parties who may have had limited knowledge of financial matters during the relationship
Without complete disclosure, negotiations and court decisions are based on incomplete information and may lead to unfair outcomes.
Conclusion
The duty of disclosure is a fundamental principle in Queensland family law that demands full and honest financial transparency. While the process may feel invasive, it is essential for achieving fair settlements and avoiding costly legal battles.
Whether you are negotiating a property settlement, applying for spousal maintenance, or determining parenting arrangements, compliance with disclosure obligations is crucial.
We Help You Move Forward
At PD Law, our expert Family Lawyers Bowen and Family Lawyers Cannonvale are here to guide you through every step of the duty of disclosure process. If you need assistance with gathering financial documents, ensuring compliance, or addressing concerns about your former partner’s disclosure, we’re ready to help.
Book an appointment today to protect your interests and secure a fair outcome.
Want to learn more about family matters?
For more information about property settlements, read our FREE article here. If you’re interested in knowing more about parenting matters, see our article here or listen to our podcast here.
