21 Oct 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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