Before one can finalise a property settlement between a separated couple, regardless of whether they were married, the Australian Family Law requires each party to be transparent as to their financial situation and imposes a duty of “full and frank disclosure”.

What is a duty of disclosure?

The duty of disclosure as outlined in Rule 6.01 of the Family Law Rules requires that all parties must provide each other with all the information and documents relevant to the case. You and your former spouse/partner are required to make full and frank disclosure of your financial circumstances, including:

  • your earnings/income including wages, investment income such as dividends or rent, and income from a business or trust;
  • any interest in property owned by you personally, jointly with someone else;
  • any interest in property owned by a business, company or trust that you have ownership or control of;
  • any interest in property that someone may hold on your behalf; and/or
  • any gifts, inheritances or windfalls received by you during the relationship; and
  • any entitlement to a pending inheritance or compensation payment.

You are also obliged to disclose any purchase or disposal of property by you (whether sold, transferred or gifted), since separation or in the 12 months immediately before separation.

What should I disclose to my ex-partner?

Typically, the parties must exchange the following documents:

  • Bank Statements;
  • Tax Returns and Notice of Assessment;
  • Payslips;
  • Superannuation Statements;
  • Share Statements;
  • For a corporation, or any company, trust, partnership or other legal entity in which a party has an interest, the Financial Statements for that entity for the 3 most recent financial years, including balance sheets, profit and loss statements depreciation schedules and taxation returns;
  • Trust deeds;
  • A market appraisal as to the value of any property in which a party has an interest.

The duty of disclosure commences when the parties start negotiating their property settlement and this duty continues until the matter is finalised.

What if I do not disclose my financial situation?

A failure to provide full and frank financial disclosure in a property matter may result in severe penalties. The other party may apply to the Court to set aside any consent Orders reached on the basis of non-disclosure. In circumstances where a party fails to comply with the duty to provide full and frank disclosure during court proceedings, the Court may

  • make costs orders against a non-disclosing party;
  • dismiss part or all of their case;
  • in extreme circumstances, make Anton Pillar Orders allowing an authorised party to enter and search an offending party’s premises to inspect, remove or make copies of documents or other items which might form evidence in a case;
  • in serious cases, order that fines or imprisonment be imposed if a party is found guilty of contempt of Court;
  • exclude a document from evidence, which may impact on a property division.

Black and Kellner [1992] FamCA 2

In the case of Black and Kellner, the husband failed to make full disclosure of his financial position and his income during the proceedings. As such, the assets of the parties could not be ascertained in full by the trial judge due to the obvious non-disclosure on the part of the husband. Additionally, his non-disclosure hindered the Court from considering ‘future needs factors’ properly.

Due to the husband’s failure to disclose, the court made an order to award only approximately 6.3% of the parties known net asset pool to him by way of property settlement. This case highlights how seriously the Court takes the parties’ duty of full and frank disclosure of their financial situations. The offending party may be penalised by the Court by way of a less favourable split of the asset pool.

 

Get Help

If you require legal advice in any family law matter or if you wish to discuss your disclosure obligations or need our legal assistance to investigate your former spouse/partner’s financial circumstances; our highly experienced and qualified Family Lawyers at Genesis Edge can help you. Please do not hesitate to contact us on 1300 559 888 or fill out the enquiry form here.