In family law proceedings, the duty of disclosure is the obligation that each party be transparent about their circumstances and disclose to the other party and the court all relevant information and documents related to the issues in dispute.

This duty applies to both parenting and financial matters and is an ongoing obligation that starts with the pre-action procedures and continues until the matter is finalised.

This article is an overview of the duty of disclosure, applicable documents, compliance with the duty, and the consequences of non-disclosure. It is discussed in the context of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), recently introduced under the new Federal Circuit and Family Court of Australia.

To find out more, read our article Duty Of Disclosure – A Family Law Perspective (pdf, 248 kb). A brief summary of the article is as follows:

Definition of Duty of Disclosure

The duty of disclosure requires parties in family law matters to provide “full and frank” disclosure of all relevant information, including finances and assets, in a timely manner. This applies continuously from pre-action stages until the case is resolved.

Rule 6.01 of the Rules outlines this obligation, emphasising that the duty applies to both parenting and property disputes.

Documents Required for Disclosure

Disclosure encompasses various documents, such as real estate ownership details, tax returns, bank statements, income records, and superannuation statements.

The rules detail specific documents that must be disclosed for both financial and property matters, including financial statements for businesses and motor vehicle registration certificates.

Legislation

Rule 6.06 provides, in summary, that a party to a financial case must make full and frank disclosure of the party’s financial circumstances, including at (3):

a) the party’s earnings

b) any vested or contingent interest in property;

c) any vested or contingent interest in property owned by a legal entity that is fully or partially owned or controlled by a party;

d) any income earned by a legal entity fully or partially owned or controlled by a party, including income that is paid or assigned to any other party, person or legal entity (eg income of a company which is fully or partially owned or controlled by a party

e) the party’s other financial resources;

f) In relation to a trust of which the party is the appointor or trustee, or eligible beneficiary as to capital or income, over which the party has any direct or indirect power or control or of which the party has the direct or indirect power to remove or appoint a trustee;

g) any disposal of property (whether by sale, transfer, assignment or gift) made by the party or an entity they control that may affect, defeat or deplete a claim

(i) in the 12 months immediately before the separation of the parties; or
(ii) since the final separation of the parties; and

h) liabilities and contingent liabilities.

Application

In practice, family lawyers generally request the following documents at first instance:

1. Particulars of any real estate owned by the party or in which a party has an interest.
2. Three most recent tax returns and notices of assessment.
3. Pay slips or records of earning for the last three months.
4. All bank account statements for all accounts (including but not limited to savings accounts, every day/ transaction accounts, credit cards, personal loans, mortgages, loans) in the party’s name (whether held solely or jointly with another person), or in which a party has an interest (be it legal or equitable) for the past twelve months.
5. Copies of any financial statements including Balance Sheet and Profit and Loss Statements of any company of which the party is a Director or Shareholder for the last 3 financial years.
6. Particulars of any trusts of which the party is the Appointor, Trustee or beneficiary, including copy of trust deed.
7. Particulars of any property disposed of by Sale, Transfer, Assignment or Gift for the past twelve months.
8. The statements of any Superannuation Interest held by the party for the three most recent financial years.
9. Any share statements.
10. Registration certificates of any motor vehicles owned either individually or jointly.
11. An estimate of the value of any contents and any other items of Property, Tools, Machinery or any other asset or liability held.

Orders for Disclosure

If a party fails to comply, the court can issue an order for further disclosure (Rule 6.18). This may include requests for additional documentation, inspection of documents, or general compliance orders. The court may even relieve a party of the disclosure duty if justified in the interest of justice.

Compliance with Disclosure

Parties must continue to comply with the duty throughout negotiations, mediations, or if consent orders are being sought. In financial cases proceeding to court, a sworn financial statement must be provided, detailing assets, income, and liabilities.

Undertakings

Rule 6.02 mandates all parties to file an undertaking of disclosure, a formal written promise to the court to comply with the disclosure obligation. Breaches can be treated as contempt of court.

Consequences of Non-Disclosure

Rule 6.17 outlines the penalties for failing to comply, such as barring evidence, contempt charges, cost penalties, or dismissal of a case. If non-disclosure is discovered after property settlement orders are made, an application can be made under Section 79A of the Family Law Act to set aside those orders.

Disclosure Requirements in Mediation

The duty of disclosure also applies in mediation, where full and frank disclosure of relevant documents is expected to facilitate fair settlements and avoid unnecessary litigation.

Summary

The duty of disclosure is central to ensuring fair outcomes in family law proceedings.

Understanding and adhering to this duty is essential for all parties involved. Failure to disclose can have significant legal ramifications, even after a case is finalised.