Each party to a case has a duty to the Court and to each other to disclose all information relevant to the case. Specifically, rule 13.04 of the Family Law Rules 2004 requires parties to make ‘full and frank’ disclosures of their financial circumstances including:
- any interest in property;
- any income received from employment or business interests;
- any interest in a trust;
- any interest in a corporation;
- any gifts made or property disposed of since separation; and
- any other financial resources.
In addition to the Family Court, parties to a case in the Federal Circuit Court also have financial disclosure obligations. Rule 24.03 of the Federal Circuit Court Rules 2001 requires an applicant or respondent to make full and frank disclosures of their financial circumstances in any financial statement or affidavit filed under Rule 24.02.
Consequences of non-disclosure
Unfavourable findings
In Weir v Weir (1992) 16 FamCA 69, the Full Court of the Family Court stated where there is clear evidence of non-disclosure, the Court should not be unduly cautious in making findings favourable to the incident party.
Once there is evidence of non-disclosure, the Court can ascribe a value for a non-disclosed interest or asset, or make an adjustment in favour of the other party taking into account the effect of the non-disclosure, under section 75(2)(o) of the Family Law Act 1975 (Cth) (the Act).
Costs Order
Section 117(1) of the Act sets out the general rule as being that each party is to bear his or her own costs. However, subsection (2) gives the Court a discretion to make an order for costs if there are circumstances that justify it in doing so.
In Penfold v Penfold (1980) HCA 4, the High Court stated that the primary judge’s decision to exercise its discretion to award costs to the appellant was justified on the basis that the respondent had not been frank about his financial position during the hearing.
Setting aside a previous order
Under s 79A(1) of the Act,any person affected by an order made by a Court under s 79 may apply to have that order varied or set aside where there there has been a miscarriage of justice by reason of suppression of evidence (including failure to disclose relevant information).
In Pearce & Pearce (2016) FamCAFC 14, a husband had failed to make full and frank disclosure regarding an interest in a business and real property when his wife consented to a property settlement order. The Full Court found there was a miscarriage of justice because the wife’s consent was not ‘free and informed’.
Other consequences
Rule 13.14 of the Family Law Rules 2004 provides that failure to comply with the duty to disclose may also result in a stay or dismal of a party’s case or a finding of contempt.
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