What is the duty of disclosure in family law matters in Australia? This pertains to the legal obligation of divorcing parties to provide full and frank disclosure of all relevant information/documents.
Such information and documents that pertain to each party’s financial circumstances such as assets, liabilities, income, and financial resources. These financial circumstances are critical when making decisions about:
1. Property settlement: This is the legal process of dividing a divorcing couple’s assets and finances that existed in their relationship.
2. Spousal maintenance: This is a type of financial support given to a lower-earning spouse. However, lower-earning spouses must meet certain criteria in order to qualify for spousal maintenance.
3. Child Support: This is financial support given to children after divorce or separation. This usually includes necessary childcare expenses on food, housing, school, medical treatment, and transportation.
Full and frank disclosure also applies to parenting matters which are important when making custody decisions. Such information or documents may include:
- Criminal records or police reports of one party
- Documents filed in intervention order proceedings pertaining to a party
- A party or a child’s medical reports
- School reports
The obligation to provide full and frank disclosure continues throughout the entire legal process. This is from the initial filing of the case to the final resolution. Parties are also required to update their disclosure if there are any changes to their financial circumstances. Read on to know more about the duty of disclosure in family law matters in Australia.
Full and Frank Disclosure vs Undertaking as to Disclosure
“Full and frank disclosure” and an “undertaking as to disclosure” are two different legal concepts in Australia, particularly in the context of family law proceedings. Essentially, full and frank disclosure refers to the duty of parties to financial cases to provide all relevant information and documents relating to their financial circumstances.
The full and frank duty of disclosure requires parties to be honest and forthcoming about their financial circumstances, and to update their disclosure if their circumstances change. Failure to comply with the duty of full and frank disclosure can result in serious consequences. This may include:
- Court orders to provide the information
- Criminal charges for perjury; or
- Contempt of court
- Order costs against the party who is not complying
- Stay or dismiss all or part of the case
- Set aside orders made or the financial agreement
An undertaking as to disclosure, on the other hand, is a promise made by a party to a legal proceeding. This promise relates to the concerned party who will provide certain information or documents in the future.
Unlike the duty of full and frank disclosure, an undertaking as to disclosure is a specific commitment to provide certain information or documents by a particular date or in response to a specific request.
What Does the Law Say?
Chapter 6 of the Federal Circuit and Family Court of Australia Rules 2021 (Family Law Rules) governs disclosure. The key provisions of Chapter 6 include:
- Duty of disclosure (6.01): Parties are required to provide full and frank disclosure of their direct and indirect financial circumstances. This includes disclosing all assets, liabilities, income, and expenses, regardless of whether they are in Australia or overseas.
- Timeframe for disclosure: Parties must provide their initial disclosure within 90 days of the first court date, unless the court orders otherwise.
- Supplementary disclosure: Parties are required to update their financial disclosure if there are any significant changes to their financial circumstances during the proceedings.
- Expert evidence: Expert evidence can be used to assist the court in determining the value of assets, businesses or other financial matters. The Family Law Rules set out the requirements for the use of expert evidence. This includes the qualifications of an expert/practitioner along with their report.
- Notices to produce: The court can issue a notice to produce, requiring a party to disclose documents or information that is relevant to the proceedings.
- Financial statements: The rules provide for the preparation of financial statements by parties to the proceedings, setting out their financial circumstances.
- Property settlement: The rules provide guidance on the factors that the court should consider when determining a fair property settlement, including the contributions of each party and their future needs.
Complying With Duty of Disclosure
Chapter 13 of the Family Law Rules 2004 sets out how to comply with the general duty of disclosure. This includes everything from producing documents to complying with disclosure orders and answering specific questions. Parties must use specific forms for their disclosures.
Let’s use an example of financial circumstances. Blair is in the property settlement phase of her divorce proceedings with her ex-husband Chuck. She must file a financial statement that includes specific information about her financial situation. This may include accurate and up-to-date details of her:
- Income salary, wages, bonuses, and investment income
- Property, shares, and other investments
- Bank account and credit cards
- Self managed superannuation fund
- Tax returns from the last 3 years
- Other financial resources such as inheritance or gifts
Identification of Non-disclosed Interests
Practitioners frequently use the options listed below outside of the duty of disclosure process to identify or verify the interests disclosed in family law matters:
- Conducting a variety of searches with the Australian Securities and Investment Commission. This may include current and historical company and/or personal name extract searches;
- Conducting property searches with relevant land and titles office departments. This identifies any real property held by either party, whether personally or through corporate entities, as well as any mortgages or caveats registered against those properties;
- Using forensic accountants to determine the connections between various entities or to identify business interests that one of the parties may have.
Practitioners have several options for identifying or confirming assets once court proceedings are underway. For instance, a party may:
- Seek procedural guidance or an order requiring disclosure.
- Issue and serve subpoenas on third parties to produce documents to the court;
- Send the other party a Notice to Produce;
- Demand that the other party provide a disclosure undertaking.
- Send the other party a Notice to Admit facts.
Importance of Seeking Legal Advice
The duty of disclosure is a fundamental aspect of Australian family law matters. It requires parties to provide full and frank disclosure of their financial circumstances to each other. The effect of the disclosure can help with the following:
- Fairness and equity in family law proceedings
- Achieve a resolution
- Saves time and money
- Encourages cooperation
- Ensures compliance with legal obligations.
JB Solicitors is a family law firm that has experience with various family law matters like property settlement, divorce, and child custody. We ensure that each party discloses their assets and finances in order to reach an amicable decision during property settlement.
Our lawyers can also provide mediation and arbitration sessions for disputed couples who want out-of-court arrangements. Contact us today if you need help with your family law dispute such as financial and parenting cases.
