Duty of Disclosure in Family Law – What is it?
The most common question that arises following a separation is: Can I refuse financial disclosure to my former partner? The answer is NO!
This obligation is in accordance with Chapter 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”).
Parties in a family law matter have a duty to make full and frank financial disclosure of all information relevant to the issues in the case, in a timely manner. This duty commences with the pre-action procedure before the case starts and it is ongoing at all stages, including before Court proceedings are commenced and ends when the case is finalised. You are required to update your former partner in situations your circumstances change, or additional or new documents emerge. For instance, where you are no longer employed and in receipt of Centrelink benefits or if you have been lucky enough to win a lottery or are in receipt of an inheritance, such information must be disclosed.
Disclosure in Financial Matters
Further to the requirements of general financial disclosure above, there are also specific rules regarding full and frank disclosure of your direct and indirect financial circumstances. In context, indirect financial circumstances include assets that are not in your name but in someone else’ name but are retained for your interest or assets held in trusts, company or other such structures. You and your former partner have an obligation to provide to each other, documents relating to all of the assets, liabilities, and financial resources.
Such documents include the following:
- Documents evidencing earning capacity (tax returns, notice of assessments, payslips, employment contracts;
- Superannuation statements;
- Documents detailing any interest in a company, trust or partnerships;
- All complete banks statements including credit card statements and mortgage statements;
- Details and records of any investments including stocks and shares;
- Documents evidencing any interest in real estate;
- Appraisals or valuation of real estate;
- Appraisals of chattels including motor vehicles;
- Evidence of any assets disposed of (whether by sale, transfer, assignment or gift) in the year immediately before the separation or post separation;
- Evidence of any assets acquired post separation; and
- Other financial documents as deemed relevant.
Complete and accurate disclosure of documentation enables you to ascertain the asset pool and subsequently engage in genuine steps to negotiate to settle your financial affairs by exchanging settlement offers. Having knowledge of your former partner’s financial circumstances and understanding the asset pool allows you to establish whether a property settlement is in your best interest.
Disclosure in Parenting Matters
The Rules also refer to parties making full and frank disclosure of all information relevant to a parenting matter, at all stages in a matter. Documents considered “relevant” are specific and may vary from matter to matter. The documents that may be required to be disclosed may consist of medical reports about a child or party, criminal records of a party, school reports and documents filed in intervention order proceedings concerning a party.
Undertakings about Disclosure
Since the newly merged Federal Circuit and Family Court of Australia on 1 September 2021, there is now a requirement that all parties must file an undertaking that to the best of their knowledge and ability, they have complied with the duty of disclosure; and acknowledge that a breach of the undertaking may be contempt of court.
There are serious consequences if you do not comply with their duty of disclosure or fail to file an undertaking or file a false undertaking. In such circumstances, the Court has the power to:
- Fine or imprison you on being found guilty of contempt of court for not disclosing document or for breaching an undertaking;
- Order costs against you;
- Refuse to allow you to use that document or information as evidence in a case;
- Stay or dismiss all or part of the case
To avoid the above, it is imperative that you take your obligations seriously and provide full and frank disclosure of your documents, even if you really don’t want to!
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The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.