Disclosure is an important part of legal proceedings, requiring each party to the legal action to provide information relevant to the dispute to each other.
In family law proceedings disclosure takes on the nature of a ‘duty’. Whether the legal issue is to determine a property settlement, resolve parenting arrangements or work out spousal maintenance, disclosure of directly relevant information between former spouses or de facto partners is crucial to the Court’s process in making a decision that is fair and just to both parties.
Disclosure is an ongoing commitment that begins well before any hearing of the legal issues in Court, meaning that information must continue to be exchanged between parties if and when their circumstances change, up to and including a Court hearing.
What are the main reasons for disclosure?
Disclosure is the process of making facts and other information known to the other party to the dispute, and to the Court. The aim of disclosure is to help the parties focus on genuine issues, reduce cost and encourage settlement.
The type of estrangement between two people that requires a Court to resolve their dispute is generally characterised by distrust and suspicion in their relations.
Disclosure provides both parties with clarity as to the assets which should relevantly be part of the division of property. It also reduces the suspicion by one party that the other might be hiding assets (an inheritance or a share portfolio, for example) which they believe should rightfully be part of the marital ‘pool’ to be divided between them.
The information disclosed by both parties assists the Court in making a decision that is fair to both in resolving the dispute. Disclosure also assists the legal representatives to provide their client with advice as to their rights and entitlements.
If uncertain about the information you are required to disclose, the guidance of an expert family lawyer is essential.
What are the rules around disclosure in family law cases?
The information a party to a family law case needs to disclose to the other party will depend on the individual factual circumstances of the dispute. Under the Family Law Rules of the Federal Circuit and Family Court of Australia, each party must Undertake that to the best of their knowledge and ability, they have complied with their duty of disclosure. A breach of such undertaking can attract penalties (see below).
Chapter 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 sets out the obligations of disclosure of a party to a case.
In parenting matters disclosure is of ‘all information relevant to a parenting case’, at all stages in a case. The relevant information and documents will be case specific. For example, they may include medical reports about a child or parent, school reports, letters and drawings by the child, photographs, a diary.
In property settlement cases, disclosure must be of a party’s ‘total direct and indirect financial circumstances’. This includes all sources of earnings, interest, income, property (vested or contingent interests) and other financial resources. Disclosure of this information applies whether the property, financial resources and earnings are owned by or come to the party directly, or go to some other person or beneficiary (such a as child from the relationship or de facto partner) or are held in corporations, trusts, a company or other such structures.
Examples of documents which may be provided under the duty to disclose include:
- information on the assets each party owns or is in possession of, including valuations or appraisals of these assets;
- copies of pay slips, Group Certificates or Centrelink statements, as well as copies of tax returns, estimates or assessments;
- copies of bank and financial institution statements, including details of credit card accounts and loans;
- superannuation statements;
- shareholdings and other interests in any company and/or trusts.
Information about any property disposal made in the year immediately before the separation of the parties or since the final separation, including a sale, transfer, assignment or gift, must be disclosed if it is relevant to resolving the claim.
Consequences of failure to disclose
A failure to provide information or documents or giving a false undertaking in response to a request for disclosure, has potentially severe consequences. In response, the Court may:
- refuse a party to use the non-disclosed information as evidence in the case;
- stay or dismiss all or part of the case;
- make an adjustment of property interest in favour of the other party;
- order costs against the non-disclosing party;
- impose a fine or order a term of imprisonment if found guilty of contempt of Court.
There were a line of cases leading up to the decision of the Full Court in Black v Kellner (1992) FLC 92-2872, where the Court pointed out that that it is the duty of a party involved in property proceedings to make a full disclosure of their financial affairs. A husband’s failure to provide full and frank disclosure affected his assessed entitlements from the known asset pool.
In the decision of Kannis & Kannis (2003) FLC 93-135) the full bench emphasised the “absolute” nature of the duty to disclose. Whether a failure to disclose is either purposeful or accidental is ‘beside the point’.
In other words, the Court may draw inferences as to the asset pool and the entitlements of each party without regard to the cause of the failure to disclose and make costs orders and adjustments to entitlements on this basis.
As recently as August 2022 in the case of Jia & Yong  FedCFamC1F 591 the case of Kannis was accepted as authority for the Court to make an adjustment in favour of the wife on account of the non-disclosing husband’s failure to disclosure.
The importance of specialist legal advice
Uncertainty and confusion over what information a party to a family law matter must disclose is a very common problem. The methods by which a person can be requested to produce documents – such as a subpoena, a notice to produce or a list of questions from the other party – can also cause anxiety.
Relying on the experience of an expert family lawyer is highly advisable in meeting the duty of disclosure. Our team at Delaney & Delaney will help clarify the issues involved in disclosure to help you meet your obligations and avoid the serious consequences for failing to disclose relevant information. Contact us today for a consultation about disclosure.