Do you think that your ex-partner has, or is trying to, hide assets in your property settlement?

This is a common complaint when parties are going through a property settlement. Sometimes it is a valid concern, and in some cases, it is simply the case that the concerned party was unaware of the financial position because they did not deal with the finances during the relationship.

So what can you do if you are concerned that your partner is not being frank about the assets available for division? The first step is to speak with a lawyer who specialises in family law who can assist you in uncovering hidden assets.

We discuss below: –

  1. The duty to provide disclosure;
  2. How assets can be hidden;
  3. What you should do to uncover any hidden assets;
  4. What happens to assets you discover; and
  5. The consequences for non-disclosure or non-compliance.

Duty of Disclosure

Pursuant to Rule 6.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, each party has a duty to provide full and frank disclosure of all information that is relevant to the proceedings in a timely manner.

The duty of disclosure also applies from the start of a proceeding until the proceeding has been finalised.

When parties commence proceedings, each party is required to file an Undertaking as to Disclosure which acknowledges your understanding of the duty of disclosure. However, even if your matter is not in Court, the duty of disclosure still applies.

The Pre-Action Procedures which are contained in Schedule 1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 provides the steps that parties must follow prior to filing any application. Even at this stage, the Pre-Action Procedures state that parties are to provide full and frank disclosure.

Although there is an obligation to provide full and frank disclosure, there are circumstances where parties may not be truthful or try to hide some of their assets.

How Assets Can Be Hidden

Assets can be hidden in many ways. For example: –

  1. By opening new bank accounts and not disclosing them.
  2. Transferring money to new partners, family members, children, or friends.
  3. Removing assets that are in the home so they cannot be valued.
  4. Transferring assets into other people’s names.
  5. Lending large amounts of money to other people.
  6. Removing cash from accounts and stockpiling cash.
  7. Taking out loans but not disclosing where the funds have been applied.
  8. Selling assets and retaining cash.
  9. Overpaying credit cards or tax liabilities.

So how can you uncover assets that your ex-partner is trying to hide?

How To Uncover Hidden Assets

It is important that you obtain disclosure from your ex-partner.

As explained above, there is a duty to provide full and frank disclosure of all information relevant to the dispute.

The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 at Rule 6.06 also provides a list of documents that parties in financial proceeding are to disclose. It is important to note that this is not an exhaustive list.

We provide below some helpful tips to keep in mind when you are reviewing disclosure material and what you can do to obtain further disclosure or information:

  1. Search through your ex-partner’s bank account statements to determine whether: –
    • Funds are being transferred to/from accounts that have not been disclosed.
    • Funds are being transferred to family, friends, children or a new partner.
    • There are large amounts and/or consistent cash withdrawals.
  2. Look at your ex-partner’s payslips to: –
    • Determine what bank accounts their pay is being deposited into.
    • Which account their superannuation is being deposited into.
  3. Obtain copies of your ex-partners Notices of Assessment and Tax Returns to look at: –
    • Any distributions they receive from shares or trusts that may be in existence.
    • Their total income and whether all income streams have been disclosed.
  4. File a Subpoena
    • A subpoena is a legal document requesting that another party produce material and/or give evidence. For example, you could subpoena bank statements if your ex-partner has refused to disclose same. It is important to note that a subpoena can only be issued if proceedings are on foot.
  5. Serve a Notice to Admit
    • A Notice to Admit is a form that is used by one party to request from the other party whether the facts contained in the document are true and/or the documents are genuine.
  6. Seek a Court order for disclosure (if proceedings are on foot).

What To Do If Assets Are Discovered

Assets discovered will form part of the property pool and be available for division.

If you discover that your ex-partner has sold or disposed of assets that cannot be recovered, you may be entitled to treat the assets as an addback where the asset is treated as an asset to be retained by your ex-partner.

Consequences of Non-Disclosure and Non-Compliance

The Court places significant emphasis on complying with the relevant Acts and Rules, and Court Orders.

If your ex-partner fails to comply with either their obligations under the Acts or Rules, and/or a Court Order (for example not providing disclosure), there may be a costs order against them. This means that your ex-partner may be required to pay some or all of your legal costs.

For the most serious breaches or non-compliance, the Court can hold your ex-partner in contempt of the Court, which may be punishable by imprisonment.

Seek Assistance

If you are worried that your ex-partner is hiding assets or has attempted to deplete the property pool, you should contact our office and speak with one of our solicitors for assistance.