F is for Financial Disclosure – A-Z of Family Law

An essential, non-negotiable part of the family law process is financial disclosure. In fact, it is one of the first things your lawyer (or your ex’s lawyer) will ask from you.

The purposes of disclosure are varied: to value the net property pool as at the most current date, to ensure that all assets are accounted for, and to allow past contributions to be assessed, to name a few.

However, it is also one area of the process which is frequently lacking and a source of consternation between parties, usually from the very first letter until being before the court at a Final Hearing.

Previously being solely found in Chapter 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the duty of disclosure has recently also been codified into the Family Law Act 1975 (Cth) under section 71B to ‘increase awareness … and compliance’ (Second Reading, Family Law Amendment Bill 2024). Under section 79A, non-disclosure is even a basis upon which orders can be set aside.

Where non-disclosure is present, it can be difficult to then determine an appropriate, practical consequence to same.

Justices Aldridge, Gill and Christie of Division 1 of the Federal Circuit and Family Court of Australia recently released their decision on the appeal case of Zha & Wun (No 2) [2025] FedCFamC1A 101 which touched on, notably, financial non-disclosure by the husband.

It was discussed that a variety of consequences of non-disclosure are available to a primary judge, including:

• A declaration that, upon the evidence, other assets exist within the pool
• An adjustment to one party who has established non-disclosure by the other spouse
• An order that one party receive all known assets
• An order that one party receive all known assets and a cash payment, which assumes the existence of undisclosed assets or income
• An order that one party pays the other party’s costs

The wife put forward a variety of grounds of appeal regarding the husband’s non-disclosure and how the primary judge approached this issue.

The judgment provides some insightful statements regarding the cruciality of disclosure and the Court’s perspective of a lack thereof:

• The obligation on parties to give accurate and full disclosure is of single importance in maintaining the integrity of the judicial process. (citing Cantrell & North) [56].
• (A) finding that one spouse has not made full and frank financial disclosure allows a more robust approach to fact finding but it does not and cannot fill evidentiary lacunae, nor does it dictate the pathway or pathways which will be appropriate in any given fact scenario [80].
• Making an adjustment merely because there has been non-disclosure is not an approach sanctioned by the Act or the jurisprudence [117].
• (N)ot designed to punish for non-disclosure or to require further adjustment in all cases of non-disclosure … any adjustment must be “principled” and “not reactive” [126].

At first instance, the primary judge ultimately agreed with the wife that an associated entity, worth around $500 million, was an ‘alter ego’ of the husband; therefore, the entity was included on the balance sheet. The value of the pool skyrocketed from around $50 million to $550 million.

On appeal, the wife submitted that:

• The primary judge did not go far enough in making consequences about non-disclosure; that this finding was simply ‘appropriate fact finding’. However, the Court disagreed and considered it to be both a consequence and an appropriate finding.
• The primary judge’s approach was inadequate at considering the husband’s total wealth, particularly when considering the wife’s contributions to the pool.
• A section 75(2) adjustment should have occurred, which the primary judge had declined to do, nor to assume the existence of further assets on the balance sheet.

The court found that the primary judge was entitled to make the conclusions that were made, given the discretion afforded at first instance and the options available to the primary judge in circumstances of non-disclosure.

Guiding case law was cited when considered the grounds, with specific reference to the fact that the Court is ‘not punitive’.

Notably, the primary judge had also made costs orders on an indemnity basis against the husband due to his conduct. The Court again considered that this was a valid option available to the primary judge in the circumstances.

The court ultimately considered that the wife’s underlying appeal was that she disagreed with the primary judge, which is not in and of itself a valid ground.

Some take-aways are:

1. Disclosure is a non-negotiable and must be attended to by all parties.
2. There are options available as a consequence of non-disclosure, which parties should consider carefully before making reasonable submissions in support.
3. If the Court takes a different approach, however, this simply reflects judicial discretion.