Family Law property proceedings can be complex and time-consuming, especially when one or both parties do not cooperate in providing their financial documents. Some people decide to transfer their assets to family members prior and during separation, undervaluing assets, using offshore accounts or creating fraudulent debt.
According to The Federal Circuit and Family Court (Family Law) 2021 (“Family Law Rules”) specifically Rule 6.01, the involved parties have an obligation to provide full and frank financial disclosure and relevant information in a reasonable timeframe.
Therefore, both parties must disclose to each other their assets, including properties, superannuation, companies, businesses, trusts, bank account, digital assets, liabilities and other financial resources where they have control or benefit from.
When a party hides assets or fails to provide financial disclosure, it can delay negotiations, increase legal costs and even require the other party to commence proceedings to finalise the property settlement. The consequences for failing to meet disclosure obligations include:
- Court Re-evaluation
The Court may re-evaluate the property pool upon discovering that a party failed to provide full frank disclosure. There is a strong likelihood that the Court will issue an unfavourable ruling against the non-complying party.
- Cost Orders
According to Section 117 of the Family Law Act 1975, each party is usually responsible to pay their own legal costs. However, failure to meet the duty of full and frank financial disclosure is an exception of this rule. This breach could extend to the Court making orders to the non-complying party to pay the other party’s legal costs.
- Penalties
In serious cases of non-disclosure or misleading financial information, the Court has the authority to impose fines and penalties. Concealing assets or failing to disclose financial information is considered contempt of court and may lead to severe consequences.
Is your ex-partner hiding assets during the divorce process?
If your ex-partner is using strategies to hide assets or is reluctant to provide financial disclosure in a reasonable time, please contact our office to ensure that the other side complies its obligations. Our family law team is available to provide legal advise and finalise your matter by Binding Financial Agreement, Consent Orders or Court Proceedings.
