Duty of Disclosure

What is the duty of disclosure?

In financial (property settlement) matters, each party has a duty of disclosure which requires all parties to give full and frank disclosure to the court and each party of all documents relevant to the case. This includes information and documents that the other party does not know about.

This duty is embedded in the Family and Federal Circuit Court Rules which govern family law proceedings.

When does the duty of disclosure arise?

The duty first arises in the pre-action stage of proceedings (i.e. before the case starts) and continues until final orders are made and the case has finalised.

If you are a party to family law proceedings or in a family law dispute where court proceedings have not yet been commenced, the duty of disclosure applies to you.

What information do I have to disclose to discharge my duty of disclosure?

As a party in a financial case, you are required to make full and frank disclosure of your financial circumstances, including:

1. Your earnings, including income that is paid or assigned to another party, person or legal entity (e.g. a corporation, trust, partnership, joint venture, business or other commercial activity);
2. any vested or contingent interest in property;
3. Any vested or contingent interest in property owned by a legal entity that is fully or partially controlled by you;
4. Any income earned by a legal entity fully/partially controlled by you, including income paid to any other person/entity;
5. Any other financial resources;
6. Any trust over which you are a beneficiary/trustee/appointor or otherwise have direct or indirect power or control;
7. Any disposal of property in the twelve months prior to separation or since separation.
8. All liabilities and contingent liabilities.

What exact documents do I need to provide to discharge my duty of disclosure?

The duty of disclosure requires you to provide all information regarding your income, assets (e.g. property, shares, cars, chattels), superannuation, debts and evidence of your income and income earning capacity.

A summary of the usual disclosure documents that you will likely be requested to provide to the other party’s lawyer, in satisfaction of your duty of disclosure, are as follows:

1. Three most recent ATO tax returns and notices of assessment;
2. Two recent payslips;
3. statements for all bank accounts in your name or joint names with another party for the last twelve (12) months;
4. A copy of your current superannuation statement;
5. If you are a member of a self-managed superannuation fund, a copy of the trust deed and financial statements for the last (3) financial years;
6. Mortgage statements for all property owned by you/on your behalf for the last twelve (12) months;
7. Credit card statements for the last twelve (12) months;
8. Personal loan statements for all loans in your name, for the last twelve (12) months;
9. A copy of any loan agreements regarding loans between family/friends;
10. At least one real estate appraisal for all properties in your name or which you have an interest in;
11. Redbook or other valuation for all motor  vehicles in your name;
12. Valuation/appraisal for all other assets of significance in your name (e.g. boat/tractor/jet ski);
13. Evidence of the disposal of any property in the twelve months prior to separation or since separation;
14. If you have an interest in a trust:
    1. A copy of the trust deed;
    2. financial statements for the 3 most recent financial years; including balance sheets, profit and loss accounts, depreciation schedules and taxation returns;
    3. any business activity statements for the past 12 months.
15. If you have an interest in a private company
    1. financial statements for the three (3) most recent financial years, including balance sheets, profit and loss accounts, depreciation schedules and taxation returns;
    2. a copy of the corporation’s most recent annual return that lists the directors and shareholders;
    3. if relevant, a copy of the corporation’s constitution;
    4. any business activity statements for the past 12 months.
16. If you are involved in a partnership:
    1. The partnership agreement;
    2. financial statements for the three (3) most recent financial years, including balance sheets, profit and loss accounts, depreciation schedules and taxation returns;
    3. any business activity statements for the past 12 months.

The above is not an exhaustive list and you may have a duty to provide further disclosure documents depending on your particular financial circumstances and the assets, liabilities and superannuation that you own or have control over.

What if I fail to comply with my duty of disclosure?

If you fail to comply with your duty of disclosure, the court may make a costs order against you. This means you may be required to pay the other party’s legal costs of the family law case. In more extreme cases, the court can impose a fine, you may be charged with a criminal offence (e.g. fraud) or you may face a term of imprisonment.

If final court orders have been made and you have failed to provide full and frank disclosure to the other party prior to these orders being made, you may be at risk of the other party applying to have those orders varied or set aside and new orders made having regard to the information that was not disclosed by you.

Want more information?

Check out the family court fact sheet entitled Duty of Disclosure. 

Seek legal advice proactively

If you have separated you should seek legal advice as soon as possible to ensure you understand and comply with your duty of full and frank disclosure.

Contact our experienced family law team to take advantage of our reduced rate consultation to discuss your individual circumstances.