Full and Frank Disclosure in Family Law When a marriage or de facto relationship breaks down, it is necessary to provide proper disclosure to determine how assets and liabilities will be split. In order to properly determine an appropriate split, the rules of disclosure can be found in the Family Court Rules 2004.
What is the Duty of Disclosure?
The Duty of Disclosure is governed by Chapter 13 of the Family Law Rules 2004. Those Rules require each party to provide to the other full and frank disclosure of all information that is relevant to determine the asset and liability ‘pool’ and to do so in a timely manner.
The Duty of Disclosure is limited to relevant information to prevent what is sometimes referred to as ‘a fishing expedition’. Parties are only required to give full and frank disclosure of relevant information to ensure that the asset pool and contributions can be determined. This excludes information that may be privileged, such as legal advice.
It is important to remember that there is an ongoing duty to disclose until your circumstances change until any dispute is resolved, such as by a Binding Financial Agreement or Orders of the Court.
In addition to disclosing assets and liabilities, each party must provide full and frank disclosure of their financial circumstances (Rules 13.04 and 12.02). This includes disclosure of all sources of earnings, interest, income, property and other financial resources, whether the source is owned by you solely, came to you directly or indirectly, if it is to go toward the care of another dependent person (for example a child) and if it is held in some sort of structure (for example a trust or company).
You must also disclose of the disposal, transfer, assignment of gift of any assets in the year prior to your separation or since the date of final separation.
If your matter is before the Court, you will also be required to file a Financial Statement.
Exchange of Documents
If parties are in dispute as to the asset pool, contributions and the appropriate split, pre-action procedures should be followed. Usually each party should promptly exchange copies of relevant documents such as tax returns and assessments for the last 3 years, bank and superannuation statements, a schedule of assets and current income and liabilities.
Other documents that may need to be disclosed include BAS and financial statements of any business, trust or partnership, any trust deeds or partnership agreements and market appraisals of property.
Disclosure can be given effect by producing documents through your solicitor for inspection, having a verified list of documents, obtaining an order or subpoena from the Court or issuing specific questions for response (known as interrogatories).
Undertakings about Disclosure
Under Rule 13.15, each party is required to file an undertaking with the Court stating that you have read Parts 13.1 and 13.2 of the Family Law Rules and that you acknowledge and are aware of your duty to the Court and to the other party to give full and frank disclosure. It is important that you do not sign an undertaking or statement, knowing that it is false or misleading.
If you breach an undertaking as to disclosure, you may be found to be in contempt of Court.
Consequences of failure to Disclose
If you fail to provide full and frank disclosure or if you do not file an undertaking or file a false undertaking, the Court may refuse to allow you to use information you may seek to rely upon. The Court may also dismiss all or part of your case, have a costs order against you and may even fine or imprison you if you are found guilty of contempt of Court.
If you are involved in attempting to settle a split of property and financial interests in settlement of the breakdown of your marriage or de facto relationship, avoid the risk of error and obtain professional advice from your solicitor.
Chelsea L. Schaefer,
Solicitor – Legal Minds.
This story was published in issue 66 of the Manning-Great Lakes Focus