Separating Couples Property Settlement – Pre-action Procedures and Financial Disclosure

11/08/2016

Pre-action Procedures

The Family Law Act and the Courts have a system that requires separating couples to participate in pre-action procedures to attempt to resolve the dispute or narrow the issues of the dispute.  These procedures need to be carried out prior to the parties commencing proceedings in the Family Court of the Federal Circuit Court of Australia.  If the dispute can be resolved and the matter settles then the Courts will not need to hear the Application or if the matter cannot be settled the issues the Court will have to determine will be narrowed.

The pre-action procedures requirements apply to:

• Anyone considering starting a case.
• Anyone who is named as a Respondent in a case started by their spouse or partner. 
• The Lawyers of the respective parties to a property case. 

The parties are required to participate in such procedures as counselling, negotiation, conciliation or arbitration. If the above procedures are not successful then the parties are to set out their claim and make an offer. 

The parties also need to comply with their duty of full and frank financial disclosure. 

Financial Disclosure

The usual disclosure documents required to be disclosed to the other party for a property case are:

• The parties 3 most recent Taxation Returns and Assessments.
• Documents about any relevant Superannuation interest.
• If there is a company or business or trust or partnership financial statements for each of those entities. 
• In cases of companies the Business Activity Statements for the last 12 months.
• In cases of a company corporation the most recent annual returns listing of Directors and Corporations Constitution.
• For any trust a copy of the Trust Deed.
• For any partnership the Partnership Agreement and any variations to the Partnership Agreement.
• If there is any real estate then the parties need to agree on a value or obtain a market appraisal as to the value. 
• Any other relevant document.

Duty of Disclosure

The Duty of Disclosure is an ongoing duty and if information comes to light which is relevant to the financial case being conducted by the parties the party has a duty to disclose that information.

Recent Cases

In a recent case the Full Court of the Family Court determined an Appeal made by a Wife asserting a failure by the Husband to disclose his interest under a discretionary trust set up by his Father.  In these particular circumstances the Court declined to set aside the earlier Judgment on the basis that the Husband was estranged from his Father and did not have the capacity to obtain or demand a copy of the Trust Deed.  The Court found that his only obligation was to require production of the accounts to determine whether or not the trust had been administered fairly.

Please do not hesitate to contact Richard Watson our family lawyer at Watson & Watson who can assist you in the process of pre-action procedures and provide sound advice that will facilitate and assist you in navigating the sometimes daunting aspects of pre- action procedures that many separating couples may face.