Navigating the labyrinth of family law can often feel daunting, especially when it comes to financial disclosure. It is easy to feel overwhelmed by the sheer volume of paperwork, the intricate details, and the seemingly endless process. While it may be tempting to cut corners, the importance of comprehensive financial disclosure in family law matters cannot be overstated. In this article, Partner Reece Ramsden and Law Clerk Isabella O’Connor explain the intricacies of financial disclosure, why it is important, and what happens when you fail to disclose something.

Understanding Financial Disclosure 

Financial disclosure is the process where both parties in a family law matter—be it divorce, separation, or child support—reveal their complete financial situation. Under Rule 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 parties must disclose their financial circumstances, this includes providing details on income, expenses, assets, liabilities, and any other relevant financial information. It is important that the parties to a matter carefully read Chapter 6 of the Rules to understand their full obligations about disclosure, including ensuring that it is full and frank. This refers to complete transparency of their total direct and indirect financial circumstances.

The Tedious Yet Necessary Process 

For many, the task of financial disclosure is burdensome. It involves gathering bank statements, tax returns, loan documents, and other financial records. The accuracy and completeness of this information are paramount, as any discrepancies can lead to delays, additional legal costs, or even allegations of dishonesty.

Examples of financial disclosure documents include:

  • Income statements, such as tax returns and payslips, provide insight into an individual’s earnings.
  • Financial statements, like bank statements and credit card statements, offer a comprehensive view of financial transactions, savings, and expenditure patterns.
  • Asset and liability statements, detailing the ownership of properties, vehicles, investments, and debts.
  • Superannuation statements are essential for understanding one’s retirement savings.
  • Business financial records, if applicable, to capture the financial status of any business interests.

Why Financial Disclosure is Vital

1. Ensures Fair Division of Assets: In matters of divorce or separation, a fair division of assets is crucial. Without full financial disclosure, one party may be left disadvantaged, resulting in an inequitable distribution of property and finances.

2. Supports Fair Child and Spousal Support: Determining appropriate child and spousal support hinges on accurate financial information. Transparent disclosure ensures that support payments are fair and reflect each party’s financial capacity and the needs of the dependents involved.

3. Reduces Conflict and Misunderstandings: Financial matters are often a significant source of conflict in family law cases. Honest and comprehensive disclosure can help to reduce misunderstandings and build trust between parties, making negotiations smoother and more amicable.

4. Compliance with Legal Obligations: Financial disclosure is not merely a suggestion—it’s a legal requirement. Failure to comply can result in serious legal consequences, including court sanctions or the imposition of unfavourable judgments.

Consequences for Failing to Provide Disclosure

In a family law matter, failing to provide full and frank financial disclosure can have serious consequences. The court relies on accurate and complete financial information to ensure a fair distribution of assets and proper determination of support payments. If one party withholds financial information or provides false or incomplete disclosures, the court may impose penalties. These can range from unfavourable rulings, including the presumption that the non-disclosing party’s financial position is as the other party claims, to financial penalties or even imprisonment for contempt of court. Additionally, it can cause delays in the proceedings, increased legal costs, and damage to the party’s credibility and reputation. Transparency and honesty are crucial in family law matters to facilitate fair and just outcomes for all involved.

When producing a financial disclosure, the Court requires that all parties file an undertaking. This is to ensure that parties are aware of their duty to the Court to give full and frank disclosure of all relevant information to their knowledge and ability, as well as exemplify acknowledgment that breach of the undertaking may be contempt of the Court.

In the instance that parties fail to disclose or file an undertaking, or file a false undertaking, the Court may:

  • Refuse to allow the party to utilise that information as evidence in their case
  • Stay or dismiss all or part of the party’s case
  • Order costs against the party

Fine or imprisonment on being found guilty of contempt of the Court for not disclosing the document or for breaching their undertaking

Case Law

One prominent example highlighting the critical importance of financial disclosure in family law is the case of Cantanor v Beidenhope. In this case, the respondent husband failed to fully disclose all his assets, which significantly impacted the court’s decision. The court found that the wife had made substantial contributions as a homemaker and parent, continuing as the sole parent after separation. Due to the husband’s failure to disclose his financial circumstances, the court adjusted the property settlement in favor of the wife, granting her an additional 15% of the property interests (Cantanor v Beidenhope [2013] FamCA 243).

Another notable case, Kanan and Mirza, underscores the importance of financial disclosure. In this instance, the respondent wife contended that the husband failed to provide proper financial disclosure, including mortgage statements and bank account details. The court noted that the failure to disclose relevant financial information could lead to adverse inferences against the non-disclosing party and a more robust approach in making findings favorable to the opposing party (Kanan and Mirza [2022] FedCFamC2F 130).

How Ramsden Family Law Can Assist You

While the process of financial disclosure in family law matters may seem tedious and challenging, its importance cannot be ignored. It is the cornerstone of achieving a fair and equitable resolution for all parties involved. Our family lawyers can assist you with putting together correct and honest disclosure that can help to protect your rights, ensure fairness, and foster a more constructive and cooperative legal process.

You do not need to face the daunting task of financial disclosure alone. Let us provide the support and expertise you need to achieve a fair and just resolution in your family law matter. If you would like to speak with one of our experienced family lawyers, please do not hesitate to contact us. We offer a free 30-minute initial consultation.

Resources

For more information on financial disclosure in the Family Court –

Written by Reece Ramsden

Posted in: Divorce, Latest News

March 31 2025