Under Australian family law, both parties to a divorce or property-settlement proceeding owe a duty of full and frank financial disclosure. Concealing assets or providing misleading information breaches that duty and can result in severe legal and financial penalties. The Family Law Act 1975 (Cth) and the Federal Circuit and Family Court of Australia (FCFCOA) treat such conduct as a direct attack on the integrity of the judicial process.
Legal Duty of Disclosure
Rule 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 imposes an ongoing obligation on each party to disclose their entire financial circumstances — including property, liabilities, income, superannuation, and any financial resources or interests in trusts or companies.
This duty extends:
- From the commencement of proceedings until final resolution;
- To all forms of property control or benefit, not only legal ownership; and
- To both Australian and international assets, whether physical or digital (including cryptocurrency and offshore accounts).
Failure to comply allows the Court to draw adverse inferences and impose corrective or punitive measures to restore fairness.
What Constitutes Hiding Assets?
Under Australian family law, hiding assets refers to any deliberate or negligent act that prevents the Federal Circuit and Family Court of Australia (FCFCOA) or the other party from understanding the true financial position of a spouse.
It breaches the duty of full and frank disclosure required under Rule 6.06 of the Family Law Rules 2021 and may amount to fraud or contempt of court.
Legally, a person is considered to be hiding assets if they:
- Fail to disclose property, income, superannuation, or financial resources — including interests held in companies, partnerships, or trusts.
- Transfer assets to relatives, associates, or new entities for nominal or no value to conceal ownership.
- Create or exaggerate debts to artificially reduce the value of the property pool.
- Undervalue assets such as real estate, businesses, or investments in financial affidavits.
- Withhold documents or information about offshore accounts, cryptocurrency holdings, or digital assets.
- Dispose of property during proceedings to defeat the other spouse’s potential claim (a contravention under Section 106B of the Family Law Act 1975 (Cth)).
The key legal test is whether the conduct intentionally or recklessly distorts the financial information relied upon in the property-settlement process.
If proven, the Court can infer dishonesty, reopen property orders under Section 79A, and impose cost or punitive adjustments to restore fairness and uphold the integrity of the proceedings.
Consequences and Penalties for Concealment
Australian courts have broad discretionary powers to remedy or penalise non-disclosure. Depending on severity, outcomes may include:
- Adjustment of the property division: Hidden or dissipated assets may be “added back” into the asset pool. The Court can re-allocate assets to ensure the honest party receives a fair share.
- Adverse cost orders: A party found to have concealed property may be ordered to pay the other’s legal and expert-witness costs, particularly where forensic accounting or investigative work was necessary.
- Setting aside or varying previous orders: Under section 79A, final property orders or consent orders obtained through deception can be reopened and re-determined. The dishonest party may lose the benefit of their original entitlement.
- Contempt of court or criminal prosecution: Serious or deliberate concealment can constitute perjury, fraud, or contempt of court. While imprisonment is rare, it remains legally possible where dishonesty undermines the administration of justice.
- Damage to credibility: A finding of dishonesty can influence related proceedings, including parenting orders and spousal maintenance, as the Court assesses overall reliability and candour.
Relevant Case Law
Australian jurisprudence confirms that concealment of assets is treated as a fundamental breach of fairness:
- Black & Kellner (1992) FLC 92-287 – The Full Court held that intentional non-disclosure justifies a rehearing and adjustment of property orders.
- Chang & Su (2002) FLC 93-117 – The Court found that a husband’s concealment of shareholdings warranted cost penalties and a 10 percent adjustment in the wife’s favour.
- Simons & Simons (2010) FamCA 349 – The Court reaffirmed that “the duty of disclosure is continuous and absolute,” and deliberate omission is equivalent to fraud on the Court.
- Mullins & Birch (2018) FamCA 434 – Demonstrated that concealment discovered post-settlement can justify setting aside final orders under s 79A(1)(a).
These authorities illustrate that concealment not only attracts sanction but can permanently undermine finality of orders.
Procedural Remedies Available to the Innocent Party
A spouse suspecting hidden assets may apply for discovery, subpoenas, or injunctions to restrain disposal of property. Legal options include:
- Freezing orders (Mareva injunctions) under s 114(3) to prevent dissipation of assets before final determination.
- Subpoenas directed to financial institutions, accountants, or company officers for production of records.
- Forensic accounting investigations to trace unexplained transfers or hidden income streams.
- Application under s 79A or 90SN to set aside fraudulent property orders post-judgment.
Prompt legal action is critical — delay can compromise recovery, particularly where assets have been transferred offshore or dissipated.
Practical Steps to Ensure Compliance
Parties can mitigate risks of penalty or dispute by:
- Preparing a comprehensive balance sheet including all personal, joint, and business interests
- Disclosing superannuation statements and trust documents early
- Maintaining transparency in communication with solicitors and accountants
- Seeking early independent legal advice if asset concealment is suspected.
LegalFinda assists Australians to find a family lawyer experienced in property-settlement disputes, asset tracing, and disclosure compliance.
Frequently Asked Questions
Before finalising or disputing a property settlement, many separating spouses have practical questions about how asset concealment is proven, what penalties apply, and what legal remedies are available. The following Frequently Asked Questions clarify these recurring issues under the Family Law Act 1975 (Cth) and the procedures of the Federal Circuit and Family Court of Australia (FCFCOA), providing concise, evidence-based guidance for anyone navigating the disclosure process.
What are the legal consequences of not disclosing assets in an Australian divorce?
The Court may impose cost orders, reopen settlements under s 79A, or refer the matter for contempt or criminal prosecution. Concealment directly affects fairness and is taken seriously.
How does the Family Court treat hidden assets once discovered?
The Court can add the concealed assets back into the pool, adjust the division, and penalise the party responsible through cost and credibility consequences.
What evidence can prove hidden assets?
Documentary evidence includes bank statements, business records, trust deeds, property transfers, and expert forensic reports showing discrepancies between declared and actual assets.
Can hiding superannuation be treated differently from hiding property?
No. Both are governed by the same disclosure duty. Superannuation is “property” under Part VIIIB, and failure to disclose it carries equivalent penalty exposure.
Can hiding assets result in imprisonment?
While uncommon, deliberate perjury or fraudulent concealment may constitute contempt or criminal conduct punishable by imprisonment under federal law.
How can a person prevent a spouse from hiding assets before settlement?
Immediate steps include seeking injunctions, subpoenas for disclosure, or interim property orders to preserve the status quo pending final resolution.
Conclusion
Hiding assets during divorce proceedings in Australia is not merely unethical — it is a breach of statutory duty and judicial trust. The Family Law Act 1975 (Cth) empowers courts to rectify injustice through adjustment, cost penalties, and in grave cases, contempt sanctions.
For anyone facing suspicion of concealed assets or needing assistance with disclosure compliance, obtaining early expert legal advice is essential.
Through LegalFinda, individuals can find a good family lawyer who specialises in property-settlement disputes, forensic asset tracing, and enforcement of financial disclosure obligations — ensuring outcomes remain fair, lawful, and enforceable.
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