Introduction
In family law disputes, transparency is paramount. Whether the issue relates to the division of assets, spousal maintenance, or parenting arrangements, the success and fairness of any resolution hinges on the principle of full and frank disclosure. In New South Wales (NSW), this duty is governed by the Family Law Act 1975 (Cth) and codified in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”).
Disclosure ensures that all parties—and the Court—have access to the information needed to make informed decisions and reach just outcomes. This article explores the legislative framework, obligations, and practical considerations surrounding disclosure in family law matters in NSW.
What is Disclosure in Family Law?
Disclosure in the family law context refers to the legal obligation of each party to provide
complete, accurate, and timely information and documents relevant to the issues in dispute.
This applies to both financial and parenting matters.
According to Rule 6.01 of the Rules:
“Each party to a case has a duty to the court and to each other party to give full and frank
disclosure of all information relevant to the proceeding, in a timely manner.”
The importance of this principle was affirmed in Penfold v Penfold, where the High Court found that a failure to disclose financial information amounted to a miscarriage of justice and justified the setting aside of property orders under s 79A of the Family Law Act 1975 (Cth).
Types of Disclosure
Financial Disclosure
In financial proceedings, parties must disclose their complete financial circumstances, including:
Earnings: All sources of income, including those assigned to another party or entity.
Interests in Property: Vested or contingent interests in any property.
Financial Resources: Details of any financial resources available to the party.
Trusts and Companies: Interests in trusts or companies, especially where the party has
control or benefits from such entities.
Liabilities: All current and contingent liabilities.
This comprehensive disclosure ensures equitable property settlements and accurate assessments for child support or spousal maintenance. In Weir v Weir, the Family Court held that where disclosure is lacking, the court may make notional adjustments in the property pool or draw adverse inferences about the non-disclosing party’s financial position.
Non-Financial Disclosure
In parenting matters, non-financial disclosure may include information about living arrangements, employment status, and other factors relevant to the child’s best interests.
Mandatory Disclosure
The Rules specify mandatory disclosure requirements, such as:
Filing a Financial Statement.
Providing documents like tax returns, bank statements, and superannuation details.
Updating disclosed information if financial circumstances change during proceedings.
Legal Framework Governing Disclosure
Family Law Act 1975 (Cth)
The Act is the foundational piece of legislation in Australian family law. It outlines obligations during financial negotiations and formal settlements. Where disclosure is lacking, the Act provides mechanisms for redress:
Section 79A – permits a party to apply to set aside property orders if the other party has failed to disclose relevant information.
Section 90K – allows financial agreements to be set aside where non-disclosure amounts to a miscarriage of justice.
Section 90G(1)(b) – states that financial agreements are not binding unless both parties received independent legal advice and full disclosure occurred.
In Black v Black, the Court set aside a financial agreement under s 90K due to the husband’s failure to disclose significant financial interests. The Court held that the agreement could not be said to reflect a fair bargain where material information was withheld.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
The Rules detail how disclosure should occur, what must be disclosed, and the consequences of failing to comply. Key provisions include:
Rule 6.01 – General duty of disclosure
Rule 6.02 – Mandatory undertaking of disclosure
Rule 6.06 – Specific financial disclosure requirements
Rule 6.17 – Consequences for failure to disclose
Rule 6.18 – Orders the court may make to compel or manage disclosure
What Must Be Disclosed?
Financial Disclosure – Rule 6.06
In Chang v Su, the Court reinforced that failure to disclose financial interests held via trusts or companies may result in adverse inferences and costs orders.
This rule outlines in detail what parties must disclose in financial cases. It includes (but is not limited to):
Personal and business income
Real estate holdings, vested or contingent
Interests in companies or trusts, including income diverted through entities
Trust entitlements and control over appointors or beneficiaries
Superannuation balances and entitlements
Disposals of property made within:
o 12 months before separation; or
o The time since final separation
Liabilities and contingent liabilities (e.g., loans, debts, guarantees)
Examples of Common Disclosure Documents:
Tax returns and notices of assessment (last 3 years)
Recent pay slips
Bank and loan account statements (past 12 months)
Company financials (Balance Sheets & Profit & Loss)
Trust deeds and beneficiary details
Superannuation statements
Shareholding certificates
Valuation of vehicles, tools, business assets, or personal property
Non-Financial Disclosure
In parenting matters, parties may be required to disclose:
Living and schooling arrangements
Health and educational records
Employment status
Any circumstances relevant to the child’s welfare
Compliance with the Duty of Disclosure
Undertaking – Rule 6.02
All parties (excluding Independent Children’s Lawyers) must sign and file a written
Undertaking of Disclosure. This confirms:
Their understanding of the duty
That they have complied and will continue to comply
Acknowledgement that breaching this undertaking may amount to contempt of court
Consent Orders and Disclosure
Even when a matter is resolved by consent, disclosure is vital. The Application for Consent
Orders and accompanying Statement of Truth require parties to provide a comprehensive
account of their income, property, liabilities, contributions, and future needs.
Failure to disclose truthfully may render Consent Orders susceptible to challenge under s 79A
of the Family Law Act.
Consequences of Non-Disclosure
The Court takes non-compliance seriously. Under Rule 6.17, sanctions may include:
Exclusion of undisclosed evidence
Costs orders against the non-disclosing party
Adverse inferences drawn by the court
Contempt of court findings
Dismissal or stay of all or part of the case
Furthermore, post-settlement, if non-disclosure comes to light, the court may set aside orders or invalidate financial agreements, potentially re-opening matters previously resolved.
In the Marriage of Black and Kellner, the Court highlighted that lack of disclosure also impacts credibility, which can influence both financial and parenting orders.
How the Court Enforces Disclosure – Rule 6.18 ?
If a party fails to provide disclosure, the other party may apply for a disclosure order. The Court can order:
Production or inspection of documents
Compliance with a request for a list of documents
Orders partially or wholly relieving a party from disclosure (only if just and appropriate under Rule 6.18(2)
International Disclosure
Disclosure obligations are not limited to assets in Australia. Rule 6.06 explicitly requires disclosure of all financial interests—whether in Australia or overseas.
This includes:
Offshore bank accounts
Foreign-held business interests
International trust structures or companies
Overseas real estate
Due to jurisdictional challenges in accessing or verifying foreign documents, parties should seek early legal advice. Failing to disclose overseas interests may amount to a breach of the Rules and lead to the setting aside of orders under s 79A, which permits a property settlement order to be overturned where a miscarriage of justice has occurred, including due to fraud or suppression of evidence or s 90K, which allows a financial agreement to be set aside for similar reasons, including failure to disclose material financial information.
The Court addressed asset concealment in Oriolo v Oriolo, where property had been transferred overseas to defeat the other party’s entitlements. The Court found such conduct justified setting aside financial arrangements and bringing the asset back into the pool.
Disclosure in Mediation and Pre-Trial Negotiations
The duty of disclosure also applies in alternative dispute resolution, including mediation and conciliation. To negotiate meaningfully, both parties must provide:
Key financial records
Documents supporting their position or claims
Authorities for third parties (e.g., banks or accountants) to release information
Effective disclosure at this stage can save considerable legal costs and reduce the need for litigation.
Conclusion
The duty of disclosure is not a mere formality—it is the foundation for fairness, transparency, and efficiency in family law. Whether a dispute proceeds to trial or is resolved through agreement, compliance with this duty ensures that outcomes are informed and just.
The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and The Family Law Act 1975 set out clear expectations and serious consequences for non-compliance.
Individuals engaged in family law disputes must understand and uphold their obligations from the outset. With the assistance of legal advice, proactive and complete disclosure can pave the way for a smoother process and more equitable outcome.
If you are involved in a family law dispute with complex family law issues, contact Pannu Lawyers today for expert legal advice and representation. Our team is dedicated to providing clear, strategic guidance to navigate multi-jurisdictional family law issues, ensuring that your case is handled in the most appropriate legal setting.
Whether you need assistance with child custody, property settlements, or other family law matters involving jurisdictional challenges, we are here to advocate for your best interests.
