The Price of Hiding: How Non-Disclosure May Result In Indemnity Costs

In the complex world of family law property settlements, full and frank disclosure is not optional — it is a legal obligation. A 2025 decision of the Federal Circuit and Family Court of Australia serves as an unambiguous reminder of what happens when that obligation is deliberately ignored.

The Case: Barbieri & Barbieri (No 3) [2025] FedCFamC1F 573

In this matter, Justice Schonell was asked to determine who should pay the costs of lengthy and bitterly contested proceedings — and on what basis.

The underlying facts were stark. The parties separated in 2018 and eventually reached a financial settlement, formalised in consent orders made on 16 September 2022. Those orders were intended to bring their financial dispute to a close. They didn't.

Within months, the wife filed an application pursuant to section 79A of the Family Law Act 1975 (Cth) seeking to have the consent orders set aside. Her case was that the husband had deliberately concealed information she was legally entitled to know.

What the Husband Hid

The central assets in dispute were two commercial units with a combined value that was anything but straightforward. In September 2021 — just weeks before a court-ordered mediation — the husband received a market appraisal from a real estate agent estimating the sale price of the two units at an average of approximately $14.7 million combined. The formal valuations being used by both parties at the time placed the same units at $10.1 million combined.

The husband did not disclose the appraisal to the wife.

When asked why, he said he treated the agent's figures as inflated and commercially motivated. He also admitted, candidly, that he did not want to derail the mediation.

The Court found that reasoning unacceptable. The husband had previously provided market appraisals to the wife on two earlier occasions — demonstrating he understood they were relevant and disclosable. He had also, once settlement appeared likely, re-engaged the same agent to begin preparing the units for sale — a fact he also never disclosed, despite being required to do so by an interim court order made in April 2021.

By late 2022, after the consent orders were signed, the husband sold both units for $10.3 million and $6.7 million respectively — figures that bore out the very appraisal he had chosen to conceal.

The 79A Proceedings: Setting Aside the Consent Orders

The Court accepted the wife's case. Justice Schonell found that the husband's non-disclosure amounted to suppression of evidence, and that the wife's consent to the orders was therefore not informed consent. The consent orders were set aside.

Following that decision, the Court made adjustive property orders under section 79 of the Act, dividing the pool — worth approximately $22 million — 58% to the wife and 42% to the husband. This required the husband to pay the wife an additional $3,131,398.

The husband appealed. The Full Court dismissed the appeal in March 2025, and the matter returned to Justice Schonell for determination of costs.

The Costs Decision: Indemnity, Not Party/Party

The wife sought her costs on an indemnity basis — a higher standard of costs recovery that goes beyond the usual party/party basis. The husband argued each party should bear their own costs.

Justice Schonell ordered the husband to pay the wife's costs on an indemnity basis for two distinct periods:

• From 25 October 2021 (the day the husband chose not to disclose the appraisal before mediation) through to the making of the consent orders on 16 September 2022; and

• From 7 December 2022 (when the section 79A application was filed) through to 23 August 2024 (the last day of the hearing at first instance).

Why indemnity costs?

The Court was satisfied that the husband's conduct was not merely negligent — it was deliberate and egregious. Justice Schonell found that the husband knew the information was relevant, knew the wife would have wanted it, and made a conscious decision to deprive her of it. His failure to disclose also extended to breaching a court order requiring him to notify the wife of any new lease for the units — a lease that was signed in mid-2022 without the wife's knowledge.

The Court noted that from 25 October 2021, the wife was negotiating without the benefit of information the husband held — information that materially affected the value of the assets she was settling for. Every dollar of costs she incurred from that point was a direct consequence of his conduct.

As Justice Schonell observed, the entirety of the section 79A proceedings arose because of the husband's failure to comply with his disclosure obligations. An order on an ordinary party/party basis would have been an inadequate measure of compensation.

What This Case Means for You

Whether you are currently involved in family law proceedings, negotiating a settlement, or considering consent orders, this case carries important messages.

If you are receiving a settlement: You are entitled to full and frank disclosure from the other party. If you have reason to believe information is being withheld — particularly about the value of assets — that concern is worth exploring with a lawyer before you sign anything.

If you are providing disclosure: The obligation is broad. It covers not just formal valuations but any information that is relevant to the proceedings, including market appraisals, agent communications, and steps taken toward the sale of assets. The test is relevance, not whether you personally regard the information as reliable.

If consent orders are already in place: The Barbieri case demonstrates that those orders can be set aside where non-disclosure has led to a miscarriage of justice. Section 79A exists precisely for situations like this.

In proceedings where non-disclosure is established, courts have clear authority to make costs orders — including orders on an indemnity basis — as a consequence of that conduct. The financial exposure is significant.

At Surge Legal, we assist clients across all stages of family law property matters — from initial disclosure and negotiation through to consent orders, contested hearings, and section 79A applications. If you have concerns about whether you have received adequate disclosure, or about the validity of existing orders, we encourage you to get in touch with our team.

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For more information about property settlements and your disclosure obligations, visit our Property Matters and Consent Orders pages.

This article is a general summary of Barbieri & Barbieri (No 3) [2025] FedCFamC1F 573 for information purposes only. It does not constitute legal advice. Please contact Surge Legal to discuss your individual circumstances.