What is full and frank disclosure in family law

What is a full and frank disclosure in Family Law?

What is a full and frank disclosure in Family Law?

All parties to a family law dispute are required to make full and frank disclosure of information and documentation that is relevant to the matter. This duty to disclose information relates to both paper and electronic documentation and/or information in your possession or control.

It is important that parties comply with their duty to provide full and frank disclosure. Doing so can help parties effectively identify and even reduce the issues in dispute. If the dispute goes to Court they can be compelled to disclose documents and information and be penalised if they don’t comply.

The specific information required to be disclosed will vary depending on whether the matter is a parenting or a financial matter and on the individual details of each case.

Oblig­a­tion to dis­close

Family Law cases are decided in either the original Family Law Court or the Federal Circuit Court.

The oblig­a­tion to disclose for Family Court is set out by rule 13.04 of the Fam­i­ly Law Rules, which says that a par­ty to finan­cial pro­ceed­ings needs to make full and frank dis­clo­sure of their finan­cial circumstances.

For pro­ceed­ings in the Fed­er­al Cir­cuit Court of Aus­tralia, there is a sim­i­lar pro­vi­sion found in rule 24.03 of the Fed­er­al Cir­cuit Court Rules, which pro­vides that a par­ty to finan­cial pro­ceed­ings must file a finan­cial state­ment or affi­davit of finan­cial cir­cum­stances pro­vid­ing full and frank dis­clo­sure of that par­ty’s finan­cial circumstances.

What do I disclose?

These rules mean that you need to dis­close any infor­ma­tion rel­e­vant to your finan­cial posi­tion including:

  • any inter­est you have in any prop­er­ty
  • any income you receive from your employ­ment or busi­ness interests
  • any inter­est in a trust, either as an appointor, trustee or ben­e­fi­cia­ry or if you are a share­hold­er or direc­tor of a cor­po­ra­tion which is the ben­e­fi­cia­ry of a trust
  • any inter­est in a cor­po­ra­tion
  • any gift you have made or prop­er­ty you have transferred or dis­posed of since separation
  • any finan­cial resources such eg pending inheritance pay-out from a deceased estate, inter­est in a fam­i­ly trust as a dis­cre­tionary ben­e­fi­cia­ry, enti­tle­ment to a pension both in Australia or overseas

 

Duty to disclose in financial matters

When it comes to financial matters, the duty to disclose relates to any information as to earnings, interests, property, or any other financial resources to which a party has access whether directly or indirectly.

This could include:

  • Details of assets including valuations of these assets
  • Copies of Pay slips, Group Certificates and/or Centrelink statements
  • Copies of tax returns, estimates or assessments
  • Copies of bank statements, building society and/or credit union accounts
  • Copies of credit card statements and of any loans
  • Superannuation statements and
  • Details or interests in any company and/or trust and supporting documentation.

Parties are also required to disclose information relating to the disposal of any assets. If an asset was disposed of during the year prior to separation or since separation, this must be disclosed. This includes items sold, transferred, assigned, or gifted as well as any items purchased with funds acquired from the disposal of the asset.

Disclosure in parenting matters

When it comes to parenting matters, the duty to disclose to the other party relates to all information relevant in considering the care and living arrangements for the children. This can include medical or expert reports, school reports, letters, photos, notes, drawings or any information relating to the care of the child or parenting capacity of the parties.

Both parties have an obligation to provide the Court with information relating to family violence, police intervention or the intervention of any custody agencies.

The extent of disclosure in both parenting and financial matters will be dependent on the individual circumstances of the specific case.

When do I disclose?

The duty to disclose is ongoing during the dispute. Parties are required to provide timely, updated disclosure to the other party if additional information becomes available or if circumstances change which could affect the proceedings.

The obligation to disclose only stops when the Court makes final orders or when parties reach an agreement.

How do I make full and frank disclosure?

The Family Law Rules provide for a number of ways to exchange disclosure while complying with your obligations. Disclosure can be exchanged by way of:

  • Production of documents
  • Inspection of documents
  • Copying of documents
  • List of documents
  • Orders for disclosure
  • Answers to specific questions

The most commonly used method for disclosure is for the parties to provide a list of documents for disclosure and the required documents being produced to the other party upon request. This can be done by electronic means or in paper form.

Consequences of non-disclosure

The oblig­a­tion to dis­close con­tin­ues through­out the pro­ceed­ings. It is impor­tant that par­ties take these respon­si­bil­i­ties seri­ous­ly. Fail­ure to dis­close can result in a divi­sion of assets which is unfavourable to the par­ty who has not dis­closed appropriately.

Failure to provide full and frank disclosure can also result in severe penalties. Failure to disclose will most likely result in an order to comply with disclosure. If failure to disclose continues or you are found to be providing false or misleading information, this can result in the Court making orders to stay or dismiss the proceedings or for you to pay costs to the other party. Failure to provide full and frank disclosure may also lead to being found guilty of contempt of Court for non-disclosure or for breaching an undertaking as to disclosure. The Court could impose a fine or a term of imprisonment for contempt of Court.

If Court pro­ceed­ings have been finalised and it is dis­cov­ered after the fact that one of the parties did not dis­close their true asset posi­tion, there may be grounds for the Court to set aside the pre­vi­ous prop­er­ty orders and make new orders based on the true finan­cial position.

An example of this is if a party failed to disclose an additional superannuation fund that was substantial.  The other party may be able to reopen the property case and ask the Court to deal with the super fund for further division orders or a reassessment of the entire case possibly. In these sorts of situations, it is recommended that you obtain legal advice about the merits of your case to re-open the property settlement.

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