What is the duty of disclosure?
Under the Family Law Act there are specific rules concerning the obligation parties have to provide full and frank disclosure of their financial positions in property matters. The Court requires disclosure of all sources of income, assets, liabilities and any financial resources, whether held in a party’s sole name, jointly with others, held in corporations, trusts, or in any other manner.
Often parties may not be completely aware of the financial circumstances of their former partner, and as such, exchanging documentation which evidences both parties’ financial positions is an important step in working out the property available to be divided and negotiating a settlement.
The duty of disclosure is an ongoing duty that continues until the Family Law matter is resolved. The duty requires parties to advise the other if their circumstances change, should they dispose of any property or come into the possession, power or control of any further assets or liabilities.
The duty to provide disclosure is not only in relation to information that is requested by the other party, but extends to all information and documents relevant to an issue in the case.
Documents and information to be disclosed
The usual documents exchanged by parties in a property matter include the following:
- A list of assets, detailing income and liabilities, including any property owned by either party inside or outside of Australia, either in their sole name or jointly with others.
- Three most recent Income Tax Returns and Notices of Assessment.
- Three most recent payslips.
- Copies of any bank statements (savings, mortgage, loan accounts etc) for the period 12 months prior to separation to present, for all accounts held either in their sole name or jointly with others.
- Copies of credit card statements for each credit card held either in the party’s sole name or jointly with others, for the period 12 months prior to separation to present.
- Superannuation:
- A copy of the superannuation statements from the date of separation to present;
- For self-managed superannuation funds the Trust Deed and the last three Financial Statements.
- A recent life insurance or other insurance policy statement.
- Details of any motor vehicle(s) including make, model and registration number along with a valuation, such as RedBook.
- Documents evidencing any interest held in any Company, Trust, Partnership or Business:
- Financial Statements (including Balance Sheets, Profit & Loss accounts for the last three years);
- Depreciation schedules, Tax returns and Business Activity Statements for the last three financial years;
- Any Company Constitutions or Deeds of Amendment;
- Any Trust Deeds.
- A recent statement for any shares owned either in the party’s sole name or jointly with any other person.
- Disclosure as to any financial resources or entitlements held including personal injury claims, long service leave entitlements, redundancy payouts etc.
Penalties for failing to disclose
There are serious penalties for failing to provide full and frank disclosure or for giving misleading or false information including:
- The Court may refuse to allow a party to rely upon any information or documentation not previously disclosed as evidence in their case.
- The Court may stay or dismiss all or part of the case.
- The Court may make a costs order against a non-disclosing party.
- There may be potential for any Orders made by the Court to be challenged in the future.
- In serious cases, fines or imprisonment if a party is found guilty of contempt of Court.
It has long been an established principal that a party cannot rely upon their lack of disclosure to prevent the making of an order against them.
Cases have held that the duty to provide full and frank disclosure is fundamental to the whole operation of the Family Law Act in financial cases (Oriolo and Oriolo (1985) FLC 91‑653).
Weir & Weir [1992] FamCA 69
This case held that “where there is clear evidence of non-disclosure …the Court should not be unduly cautious about making findings in favour of the other party.”
Black and Kellner [1992] FamCA 2
In this case it became clear that the evidence the Husband had provided as to his income and the value of his business were not accurate, and in fact the Husband’s assertions amounted to little more than a blatant lie. As such, the assets of the parties could not be ascertained in full, as a result of the obvious non-disclosures by the Husband.
Another issue that the Husband’s non-disclosures created was that they prevented the Court from being in a position to be able to properly consider both parties section 75(2) or “future needs factors”, as a result of the uncertainty as to the Husband’s income.
At trial the Court awarded the Husband a sum which represented some 6.3 percent of the known property pool.
The Husband appealed the decision in relation to the percentage awarded to him, and was unsuccessful.
What to do if you suspect the other party has not provided full and frank disclosure
Where concern is held that a party has not been full and frank in disclosing their financial circumstances, there are options available to the other party to obtain the information:
- Issuing subpoenas to banking institutions, accountants, the ATO or other bodies to obtain the documents and information sought (subpoenas can only issue where Court proceedings are on foot).
- Conducting ASIC or land registry searches to ascertain any interests held by a person in a corporation or in real property.
- Issuing a request to a person’s superannuation fund for information about their interests.
- Anton Pillar Orders – which are orders to enter and search a Respondent’s premises to inspect, remove or make copies of documents or other items which might form evidence in a case. These Orders are rare however, and won’t be made if a subpoena or interlocutory injunction would be sufficient.
If you have any further queries in relation to the duty of disclosure and the avenues available to investigate the financial interests of your former partner, please do not hesitate to contact our family law team.
Disclaimer: This article is intended to provide general information only, and is not to be regarded as legal advice. Formal legal advice should be sought in relation to particular transactions or circumstances.
