Each party to family law proceedings has an obligation to make full and frank financial disclosure to the other party(ies) of all information relevant to an issue in dispute.
In a property settlement, the obligation is wide, and includes income, earnings, vested and contingent interests in property, whether those interests come to a party directly, or through a third party, beneficiary, or corporation. You are also required to provide disclosure about any disposal of assets immediately before or following separation.
This obligation to make full and frank financial disclosure is embedded in the Family Law Act 1975 and the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
In a recent appeal decision, Sarto & Sarto (No 2) [2025] FedCFamC1A 142, the Court was required to consider if being a named beneficiary in a Will, or an Attorney for another were captured by a party’s duty of disclosure.
The Applicant initially brought proceedings on 3 December 2024 seeking to reopen the property settlement proceedings which were settled by consent between the parties on 25 May 2023. This application was summarily dismissed and the Applicant sought to appeal the decision.
In bringing the Application in December 2024, the Applicant asserted that the Respondent’s father changed his Will on 9 May 2023; that the Respondent was appointed as executor and trustee; and that the Respondent was named as a beneficiary. The Applicant claimed that the Respondent had an obligation of disclosure given that she had a vested interest in the estate and an imminent inheritance, and he failed to comply with the duty leading to a miscarriage of justice, such that the final property settlement orders should be set aside.
The Respondent’s father had passed away in early 2024. At the first instance hearing, the Will was produced. The Will provided that the Respondent was 1 of 3 executors and trustees and that the entire estate was bequeathed to the Respondent’s mother, provided she lived for 30 days following the Respondent’s father’s death (which she did). Failing which, the Respondent would inherit 1/3rd of the estate.
The hearing was summarily dismissed due to there being no evidence that the Respondent inherited from the estate and the Court was not satisfied that the Respondent was deficient in complying with the obligations to provide financial disclosure, or that the Respondent father’s health was relevant to the earlier property settlement proceedings.
On appeal, the Court upheld the first instance decision, indicating that, “Except in exceptional cases, such as mutual wills, a beneficiary under a will obtains no property interests in the property of the deceased. Even after the testator dies, the beneficiary acquires no interest in property until an interest vests in them. Until that time, the right is simply one as to proper administration”.
In relation to the Applicant’s assertion that the Power of Attorney for the Respondent’s father should have been disclosed, in rejecting this assertion, the Court held that, “… a power of attorney is a delegation of power and authority and not a transfer or creation of property rights” and it did not need to be disclosed.
The appeal was dismissed and an order was made for the Applicant to pay the Respondent’s costs.
This won’t be the case for everyone and disclosure can be a complex process. There can be significant consequences for failing to comply with the obligation of full and frank disclosure, such as the reopening of proceedings like the Applicant was seeking in this matter. If you are unsure about your duty of disclosure, it is important that you seek advice early from a family law solicitor.
Contact us today for expert advice tailored to your unique situation.
Written by
Ashlea Taylor
Family Law Solicitor
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