The Importance of Family Law Disclosure

Family law legislation in Australia is designed to make the court process as quick and smooth as possible. Part of this is a principle called family law disclosure, or, the duty of disclosure. 

The main legislation for family law is the Family Law Act 1975, but the regulations regarding the duty of disclosure are in the Family Law Rules 2004.

The details about the duty of disclosure are in Chapter 13 of the Family Law Rules. 

Each party should read this chapter of the legislation.

The duty of disclosure means that each party has a responsibility to disclose documents and information that would affect the outcome and fairness of the case. 

The term is most often applied to financial cases but is also an important part of parenting cases. 

When a person discloses all the required documents and information, this is known as “discovery.” All sorts of documentation relevant to the matter, whether stored electronically or on paper, come under a person’s duty of disclosure. 

Failure to make a full and frank disclosure of all required information can have serious consequences, including being charged with contempt of court. 

The purpose of the duty of disclosure is to identify the key issues that need to be resolved, establish each party’s position, determine the best interests of the child in parenting matters, and reach the most equitable conclusion. 

Financial Disclosure

When it comes to financial matters, the truth of a person’s assets, liabilities and income may only be apparent in documents to which only they have access. This makes the family law duty of disclosure incredibly important, as it affects the fairness of the case’s outcome. 

The items to disclose will vary depending on your circumstances and the specifics of your case. However, any or all of the following may be subject to the duty of disclosure:

• Payslips
• Centrelink statements
• Group certificates
• Details of assets, including valuations or appraisals of the assets
• Tax returns
• Bank statements
• Statements from other financial institutions such as a building society or credit union
• Credit card statements
• Details of loans
• Superannuation statements
• Details of interests in any company or trust

Remember that you have to disclose assets that belong expressly to you and from which you benefit directly, such as salary or an investment property in your name, as well as assets that may be in another person’s name and from which you benefit indirectly.

For example, this might include assets held in trusts, corporations, companies or other similar structures, as well as assets that are owned directly by someone like your child, married partner or de facto partner.

Parties are also required to disclose information about the disposal of any assets in the year before or the year following separation. Disposal of an asset includes selling it, offering it as a gift or transferring ownership of it to somebody else. This includes information about anything else purchased with the funds from the sale of the asset.  

If you do not believe that a particular document or item is relevant to the case, you can request the court that it be made exempt from the duty of disclosure. 

Failure to provide full and frank disclosure of all documents and information required by the court is typically seen as evidence of hiding assets. 

In certain previous cases, the court has acted on this assumption and made orders in favour of the innocent party. 

When Is Financial Disclosure Required?

Financial disclosure is required in family law proceedings where financial matters are disputed. This can range from property settlements and spousal maintenance claims to child support issues.

The parties must provide a detailed account of their financial standing through a family law financial statement, ideally utilising a financial statement kit to ensure accuracy and compliance.

Also read: Mistakes People Make in Family Court

How is Financial Disclosure Used in Family Law Proceedings?

Financial disclosure is crucial in determining the equitable distribution of assets and liabilities among the parties. It enables the court and the involved parties to attain a holistic view of the financial landscape, facilitating informed decisions related to asset division, alimony, child support, and other financial matters.

This detailed financial portrayal prevents potential discrepancies or hiding assets in a divorce, ensuring all parties are on a level playing field. For instance, gifts, often a subject of contention, are meticulously assessed to ascertain whether they should be incorporated into the divorce settlements. 

Family Law Disclosure for Parenting

In parenting matters, parties must disclose any information relevant to the care and welfare of the child and the parenting capacity of the parents. 

This can include the following:

• School reports
• Medical reports
• Expert reports
• Letters
• Photos
• Notes
• Drawings
• Details about the amount of time a child spends in a parent’s care

The duty of disclosure also applies to any information or documentation about family violence or the intervention of the police or any custody agencies. 

In parenting cases, disclosing the required and relevant documents allows the court to accurately determine the best interests of the child and make orders that best promote their well-being. 

Consequences of Incomplete or Incorrect Disclosure

The stringent law seeks to dissuade any attempts to conceal or misrepresent financial information by levying considerable monetary penalties on the offending parties, which could escalate depending on the extent of non-disclosure or misrepresentation.

1) Cost Orders

Beyond fines, offending parties may be subject to cost orders, where they may be required to cover the legal costs incurred by the other party due to the incorrect or incomplete disclosure.

This can be significantly financially draining, adding to the existing financial strain of the legal proceedings.

2) Imprisonment

In severe cases where the misrepresentation or concealment of financial information is particularly egregious, imprisonment can be a consequence.

This underlines the gravity with which the law views accurate and complete financial disclosure in family law matters, aiming to uphold the principles of fairness and justice in family law proceedings.

3) Reevaluation and Alteration of Settlements

If inaccuracies are discovered post-finalisation of settlements and orders, it can warrant a reevaluation and possible alteration of the initial agreements.

This can mean that assets, liabilities, spousal maintenance, and child support arrangements may need to be reassessed and re-negotiated, potentially making outcomes less favourable to the offending party.

4) Ensuring Compliance with Financial Statement Family Law Mandates

These severe consequences underscore the imperative need to diligently adhere to the mandates relating to financial statement family law.

Full and frank disclosure of all assets, liabilities, incomes, and other relevant financial resources is a legal obligation and crucial in ensuring fair and equitable resolutions in family law proceedings.

Every detail, no matter how seemingly insignificant, must be accurately reported. A conscientious approach to financial disclosure can aid in averting adverse outcomes and fostering a smoother, more amicable resolution process.

Need Assistance with Financial Disclosure Family Law?

If you are grappling with financial disclosure in family law, seeking professional advice is imperative. At Justice Family Lawyers, we specialise in providing expert legal advice and representation to assist you through every step of your family law matters, from financial disclosures to property settlements and beyond.

Our dedicated team of lawyers is committed to helping you achieve the best possible outcome in your family law proceedings. Contact us today to discuss your situation and explore how we can assist you in unravelling the complexities of financial disclosure in family law.