Updated: Jun 16, 2022
Full and Frank Disclosure is required to be undertaken by both parties to a Family Law Property Settlement dispute. The question for many clients is what is it and why do I need to do it? Well, Rule 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 requires each party to a proceeding to provide documents which evidence their financial position.
What documents do I need to provide?
The Rules provide a list of evidence which includes the following:
the party’s earnings, including income that is paid or assigned to another party, person or legal entity;
any vested or contingent interest in property;
any vested or contingent interest in property owned by a legal entity that is fully or partially owned or controlled by a party;
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;
the party’s other financial resources;
of which the party is the appointor or trustee; or
of which the party, the party’s child, spouse or de facto spouse is an eligible beneficiary as to capital or income; or
of which a corporation is an eligible beneficiary as to capital or income if the party, or the party’s child, spouse or de facto spouse is a shareholder or director of the corporation; or
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; or
of which the party has the power (whether subject to the concurrence of another person or not) to amend the terms; or
of which the party has the power to disapprove a proposed amendment of the terms or the appointment or removal of a trustee; or
over which a corporation has a power referred to in any of subparagraphs (iv) to (vii), if the party, the party’s child, spouse or de facto spouse is a director or shareholder of the corporation;
any disposal of property (whether by sale, transfer, assignment or gift) made by the party, a legal entity referred to in paragraph (c), a corporation or a trust referred to in paragraph (f) that may affect, defeat or deplete a claim:
in the 12 months immediately before the separation of the parties; or
since the final separation of the parties;
liabilities and contingent liabilities
As you can see, the list is quite extensive to ensure that all relevant documents are provided. Ultimately, having a clear understanding of each parties financial position assists the Court in determining the justice and equity of an agreement or when making a decision at a final Hearing. It is also vitally important to enable you to receive accurate legal advice.
What happens if either party is dishonest and does not disclose assets?
Where parties fail to disclose all of the necessary information or sign documents that are false or misleading (where they have signed statements confirming they have provided full and frank disclosure but have not), the Court may impose penalties such as:
Ordering payment of some of the Costs of the other party
Not allowing certain information to be used as evidence;
If you are found to be in Contempt of Court, more serious penalties such as fines or imprisonment.
In relation to Superannuation specifically, from 1 April 2022 changes to The Treasury Laws Amendment (2021 Measure No. 6) Bill 2021 (Schedule 5) enable the Australian Taxation Office to release superannuation information to the Federal Circuit and Family Court of Australia upon request. For more information check out our blog about the changes here.
What if a Final Order has been made and more information comes to light?
If final Court Orders have been made (whether by the Court or by Consent) and one party has failed to provide full and frank disclosure prior to Orders being made, the outcome may be that the Orders are set aside or varied.
If you become aware of information that the other party has failed to disclosed, you can make an application to the Court to set aside the Orders or to have them varied to reflect the information that was not disclosed initially.
It is important that you seek legal advice from a specialist family lawyer in relation property settlement matters generally but especially if you or the other party failed to disclose assets. It is important that you understand your duty of disclosure as fail to disclose may cause significant problems for your matter. If you require legal advice in relation to your property settlement matter, contact us on (08) 7084 3060 or email us at email@example.com to book an obligation free appointment.