Danie Mellas, Lawyer, outlines your duty to disclose financial information if you are a party to family law property negotiations or Court proceedings.
As part of the property (financial) settlement process in family law matters, one of the key elements is to exchange financial documentation and information, or what is commonly referred to as “disclosure” or “financial disclosure” between the parties.
Pursuant to the Rules of the Federal Circuit and Family Court of Australia (FCFCOA), both parties are obliged to comply with ‘pre-action procedures’, which are steps that must be undertaken before a party can commence property proceedings.
Parties to a family law case have a duty to make full and frank disclosure of all financial information relevant to the issues in dispute in a timely manner.
The disclosure should include:
- a schedule of assets, income and liabilities;
- a list of documents in the party’s possession or control that are relevant to the dispute; and
- a copy of any document required by the other party, identified by reference to the list of documents.
Documents the Court would consider appropriate to include in the list of documents for each party to exchange may include:
- 3 most recent taxation returns and assessments;
- documents relating to all superannuation interests;
- financial statements of any corporation or trusts for the past 3 financial years, including balance sheets, profit and loss accounts, depreciation schedules and taxation returns;
- each corporation’s most recent annual return that lists the directors and shareholders;
- each corporation’s constitution and any amendments;
- trust deeds, including any amending deeds;
- copies of business activity statements (BAS) for the past 12 months; and
- market appraisals of the value of any item of property in which the party has an interest.
If a party does not comply with the duty of disclosure, there are a number of things that can be done to have them disclose, including:
- applying pressure on them to provide the necessary disclosure;
- providing a notice of intention to commence a proceeding if there is still no compliance;
- issuing court proceedings for a property settlement and seeking specified and detailed orders for disclosure against the other party;
- if Court proceedings are on already on foot, then an application can be filed seeking enforcement of any orders for disclosure; and/or
- seeking an order to issue an unlimited amount of subpoenas to obtain the documents directly from the source (e.g. from the bank).
Lawyers have an obligation under the Rules to ensure that full and frank disclosure takes place. To that end, lawyers must advise clients of their duty to disclose their financial information and explain to them the requirements of the Court’s pre-action procedures as well as the cost consequences that may follow if they fail to fully comply with their obligations.
Have you been asked to disclose your financial information in a family law matter? Are you unsure about what you have is relevant or confused about what you should provide?
Call or email us to discuss how we can help you with this process.