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The Duty to make full and frank Financial Disclosure – This is Fundamental in for Family Law Property Cases


A fundamental basis of property cases in the Family Court of Australia and Federal Circuit Court is the duty of disclosure.  Parties in family law financial cases have a duty to disclose to the other party and to the Family Court or Federal Circuit Court particular financial information, which is relevant to an issue in their case and which is relevant to their financial position generally. 

What Does This Apply To?

This is not limited to information and documents in their possession but also applies to documents that are within their authority to require or within their ability to obtain.  The duty commences immediately at the commencement of the case and until the case is resolved or the Family Court or Federal Circuit Court makes an Order on a final basis. 

Why is Disclosure Important?

The Family Law Act requires property division to be just and fair.  In order to determine whether a division of property is just and fair the parties need to be in a position where they have all relevant financial information so that they can determine how the pool of property is constituted and how it can be divided fairly.  In circumstances where disclosure is not provided, the parties are not in a position to know if the offer being made to settle is a proper offer.  The parties could hide assets or so arrange their affairs to put assets in the control of other persons, trusts or companies. 

The Family Law Act also provides an obligation to provide information in relation to property which has been disposed of before proceedings are commenced.  There could be a circumstance in which prior to separation and prior to one party becoming aware, that there was a potential disposal of properties and the person gives the property away.  The Rules requires disclosure of all property gifted and/or transferred in the year prior to final separation.  It could of course be the case that a process of disposal of property began very early in the marriage and in those circumstances, the disclosure may lead to a need for forensic examination of disposal of property. 

What Documents and Information Do I Have to Provide?  The Rules Require That:

(1) A party to a financial case must make full and frank disclosure of the party's financial circumstances, including:

(a) the party's earnings, including income that is paid or assigned to another party, person or legal entity;

(b) any vested or contingent interest in property;

(c)       any vested or contingent interest in property owned by a legal entity that is fully or partially owned or controlled by a party;

(d)      any income earned by a legal entity fully or partially owned or controlled by a party, including income that is paid or assigned to any other party, person or legal entity;

(e)      the party's other financial resources;

(f)       using specific particulars of any trust of which the party is the appointor or trustee of which the party, the party's child, spouse or de facto spouse is an eligible beneficiary as to capital or income as well as other information. 

(g)      any disposal of property (whether by sale, transfer, assignment or gift) made by the party, a legal entity mentioned in paragraph (c), a corporation or a trust mentioned in paragraph (f) that may affect, defeat or deplete a claim:

(i)        in the 12 months immediately before the separation of the parties; or

(ii)       since the final separation of the parties; and

(h)       liabilities and contingent liabilities.

What Happens if There is Not Full and Frank Financial Disclosure?

If a party fails to provide financial disclosure, an Application to the Family Court or Federal Circuit Court can be made for Orders requiring disclosure.  The method of obtaining missing disclosure documents and information would be the issue of a Subpoena to the person or other entity who may hold documents and records in relation to the missing disclosure. 

If you have any concerns or queries regarding full and frank disclosure in your financial settlement or seek assistance in navigating financial/property settlement with your spouse or de facto partner, please do not hesitate to contact Richard Watson Senior Family Law Solicitor or Shereen Da Gloria his Personal Assistant to discuss your matter and seek appropriate advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.

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