In this article, our Family Law Team explains modern family law jurisdiction, which rests upon open dialogue between parties and the bench to delve into the heart of the dispute and resolve it in a timely and efficient manner. Transparency plays a pivotal role in family law matters, ensuring fair and just outcomes for all parties involved in the dispute.
Understanding duty of disclosure
Disclosure is fundamental to the operation of family law, underpinning the principles of fairness, transparency, and accountability. As a matter of principle, under the Family Law Act 1975 (Cth), parties to any family law dispute are legally required to provide each other with full and frank disclosure of all material facts, whether it’s a divorce, property settlement, or children custody dispute. In addition to the general duty of disclosure, parties are required to provide full disclosure of their direct and indirect financial circumstances in proceedings involving financial disputes.
Disclosure usually occurs prior to commencing a family law proceeding in court in order to attempt to resolve the issue out of court by way of agreement. Disclosure can occur by exchanging documents between parties and their legal representatives, inspecting documents, or answering each other’s related questions. This is usually done by producing the required document by each party and exchanging it via electronic means or via mail.
Implications in family law matters
The most profound implication of disclosure in financial cases is how to divide the financial assets and resources accumulated after separation for the purpose of property settlement. In parenting cases. The Court will consider factors such as each party’s financial contributions, future needs, and the care of any dependent children to determine just and equitable division of the assets and avoid disadvantages to the other party. For parenting proceedings, disclosure is vital to determine custody arrangement and child support and ensure the ‘best interest of a child’ is preserved.
The importance of disclosure in family law cases
- fairness and equity: full and frank disclosure assists the party to a dispute in having a complete picture of each other’s financial circumstances, thus ensuring parties can negotiate and reach agreements from a position of knowledge and fairness and avoiding unfair outcomes due to one party being disadvantaged by lack of disclosure.
- preserving trust and credibility: Disclosure is the foundation of trust, so it is essential for effective communication, negotiation, and conflict resolution.
- compliance with legal requirements: compliance with the legal requirements ensures the integrity of the legal process is preserved. Failure to comply with disclosure requirements can result in legal consequences, including sanctions, adverse inferences, or even dismissal of claims.
- court proceeding and mediation: disclosure is vital for an effective mediation negotiation and early and amicable settlement which means less legal fees paid. Additionally, being upfront and cooperative at early stages demonstrates to the court that you are acting in good faith and attempting to resolve the dispute as amicably as possible.
- informed decision making: A clear picture of the other party’s financial position is vital for parties and their legal representatives to make an informed decision regarding negotiation, settlement, or litigation strategies.
Legal Framework
Duty of disclosure is long settled, clear and basic. The duty applies at common law and is governed by Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Family Law Rules’). Chapter 6 of the Family Law Rules sets out the obligations for both parenting and financial proceedings.
Parties to a proceeding are required to file an undertaking with the court that binds them and requires them to comply with their duty of disclosure. They will continue to comply with this duty for the whole period of the case. Breach of this binding agreement constitutes contempt of the court.
Duty of disclosure in parenting proceedings
Separation is a difficult time for parents and children, and to ensure an amicable and efficient resolution, family law imposes a duty on parents to provide each other with all relevant documents and information at all stages in a proceeding. This duty is imposed by rule 6.05 of the Family Law Rules. It obliges parties to proceed to disclose child-related information, police intervention, and information relating to family violence.
The type of documents to be disclosed is case specific. However, documents might include but not limited to:
- medical reports related to the children;
- school reports;
- mental health expert reports;
- letters;
- text message exchange;
- photos
- drug related tests
- Apprehended Domestic Violence Order (ADVO).
Duty of disclosure in financial proceeding
Parties are required to disclose information regarding their assets, liabilities and financial resources. This duty can be found under Rule 6.06 of the 2021 Rules. A party to a financial proceeding must make full and frank disclosure of the party’s financial circumstances, including but not limited to:
- Earnings or income including wages, investment or income from rent;
- any vested or contingent interest in property;
- accounts in financial institutions;
- income earned by a legal entity which partially owned by the party to the proceeding;
- any trust of which the party has a direct or indirect legal connections such as being the beneficiary under that trust or the party to the proceeding is the spouse, child or de facto spouse of an eligible beneficiary or the party has a direct or indirect power to appoint or remove a trustee;
- any interest in property owned jointly, owned on behalf of the party or owned by a company of which the party have ownership of;
- superannuation arrangements or interest; and
- interest in shares or stocks
Documents required for financial disclosure
- certificate of title;
- bank statements;
- tax returns and notice of assessment;
- employment contract’
- superannuation statement;
- payslips;
- loan statements;
- trust deeds;
- share statement
- cryptocurrency statement;
- credit cards statements
Disclosure documents can be used when commencing a financial proceeding in court. A financial statement is filed with the court, which details the financial resources/ dealings of the party initiating the proceeding, which is usually accompanied by an affidavit. Financial statement can also be filed by the party responding to the application. Filing a financial statement does not discharge the parties’ duty to disclose as parties to the proceedings are required to disclose any new relevant information until the case is settled. Any changes to financial circumstances should be made within 21 days by filing a new financial statement or affidavit.
Consequences of not complying with duty of disclosure
Consequences for breaching duty of disclosure can include setting aside an order made by the court or an agreement reached privately between parties if there is evidence of the breach. Additionally, materials not disclosed prior to the proceeding cannot be used at a court hearing as evidence, the court might order cost against the party breaching the duty.
Disclosure is a fundamental aspect of Australian Family Law that contributes to the integrity of the legal process, promoting transparency, accountability, and fairness for the parties to the proceeding. Failure to comply with the requirement of disclosure can be detrimental to your family law case and attract court intervention.
RAMSDEN FAMILY LAW – HOW WE CAN HELP
If you face such a situation, consult our experienced family law specialists at Ramsden Family Law. We are here to provide you with the necessary legal support and guidance to protect your family’s best interests during this challenging time. Empathy and understanding are crucial to helping clients through these difficult situations.
Every family law case is unique. We provide customised solutions and legal strategies tailored to your specific circumstances. Ramsden Family Law has a strong track record of successfully handling family law cases, including divorce and property settlement disputes. Contact us today to schedule an initial consultation to discuss your family law matter.
The content of this article is intended to provide general guidance to the subject matter and must not be relied on as legal advice. Specific advice should be sought about your circumstances.
