5 Jul 2023
Disclosure plays a critical role in family law proceedings in Australia. The term refers to the process of providing information and documents relevant to a case to the other party and the court. It is designed to ensure that everyone has access to the necessary information to make informed decisions and achieve a fair outcome.
Under the Family Law Act 1975, both parties in a family law case have an obligation to make full and frank disclosure of all information relevant to the case.
This means both parties have a responsibility to ensure that all documents and information that could affect the outcome and the fairness of the case are provided.
In addition, the disclosure obligation is a continuing one. Both people are obliged to provide information and documents as circumstances change, or as information becomes available.
Disclosure covers financial information such as income, assets and liabilities, but it also includes other relevant information, such as medical records and employment history.
The Family Law Rules set out the types of documents that are to be disclosed. There are different types of disclosure requirements, depending on the type of family law case.
For financial matters, parties are required to disclose all direct and indirect financial information, including assets, liabilities, income and expenses. They include, for example, tax returns from the last three financial years, copies of financial statements in relation to any business in which you have an interest, evidence of any motor vehicles or real estate owned by you, either solely or jointly, and evidence of all bank, building society and credit union accounts in your name, either solely or jointly.
In parenting cases, parties are required to disclose information relevant to the best interests of the child, including their relationship with the child, their parenting capacity, and any relevant medical or psychological issues. The documents required for these matters may include school reports, medical reports for the parent or the child, and criminal records, for example.
A question that clients often ask is how far back the documents need to go.
A starting point is to provide three years of disclosure (ie tax returns and bank records extending three years). However the question of timing becomes more complex for couples who have had a long separation before commencing divorce proceedings.
For parties that have been separated for many years, or even decades, while it is recommended they disclose documents and information from the time of separation, it is also understood that recovering historical documents and information from decades ago can be difficult, if not impossible.
In situations such as these, a retrospective valuation may need to be obtained for real property or other assets, such as superannuation balances. Alternatively, if the value of an asset is impossible or too expensive to obtain, the parties can agree on its value, provided they are fully informed that this figure may not be accurate.
Disclosure can be made voluntarily, or through a formal process called the discovery process. The discovery process involves a request for specific documents and information from the other party, which requires a response within a set timeframe.
Failure to disclose relevant information can result in serious consequences, including legal sanctions, adverse findings by the court and being ordered to pay legal costs.
In one family law case, the parties were married for 65 years, although it was an agreed fact they had lived separate lives under one roof for the last 30 years of the relationship. In the post-separation years, the parties continued to buy and sell real property together.
The decades-long relationship and the now advanced years of the parties meant that many difficulties were encountered in obtaining disclosure.
These difficulties included that specific and accurate information was lost and/or forgotten. Further, with the transition to the digital age, the parties required extensive assistance to obtain current information.
Assessing the parties’ financial position was further complicated by their children claiming they had also provided funds to their parents through direct gifts and shared business arrangements.
Cryptocurrencies are an evolving area for disclosure obligations. Cryptocurrency is often hyped to be secure, decentralised and “untraceable”. These distinctive features make it challenging to confirm the existence of cryptocurrency, and then to trace, track and value it.
Like other investments, the value of a cryptocurrency asset changes over time and can have tax implications. It can be tempting for a party to avoid disclosure of cryptocurrency due to these features and the significant investment the asset can represent.
However, in circumstances where a party is found to have concealed cryptocurrency, the court can include an estimated value for the asset in the pool, award the innocent party a greater percentage adjustment, and in serious cases, impose penalties and restrictions.
Sometimes difficulties can arise when financial disclosure documents are not readily available or do not exist. This situation might be due to events that happened a long time ago, or one where no documentary evidence is available at all.
For example, when parents contribute funds to the purchase of a house, it is often unclear whether these funds were intended to be a gift or a loan. Or the parties might have had an agreement that was only verbal and never formally documented, so that when they come to discuss the agreement later, there are conflicting accounts regarding the existence of the agreement and its terms.
There can be significant penalties for failing to give full and proper disclosure. For example, a court may make a costs order against a party based on their conduct in relation to production of documents, with breaches that affect the consequences for a trial being given more weight. (Please see Browne & Green [2002].)
The intentions of the person who did not disclose are not necessarily taken into consideration if the other person has incurred costs as a result of the failure to disclose.
However, in Penfold and Penfold [1980] 144 CLR 311, it was stated that presenting a false statement or causing another party to be put in the position of having to prove the true financial position justifies a costs order.
In a recent example, the husband invested in cryptocurrency which subsequently devalued. The husband did not provide any evidence for the reduced value of the cryptocurrency and the court decided that the significantly higher purchase price would represent the current value in the property pool. (Please see Powell & Christensen [2020) FamCA 944.)
In addition to the disclosure requirements under the Family Law Act, the Family Court of Australia has specific rules and procedures regarding disclosure.
The court may order parties to attend a conference or hearing to discuss disclosure matters, or appoint an independent expert to review the case and provide recommendations.
If you are involved in a family law case, it is important to understand the disclosure requirements and obligations. Consulting with a lawyer experienced in family law can help you navigate the disclosure process and ensure that obligations under the law are met.
NOTICE: This article is accurate as at the time of publication and does not constitute legal advice. Please see our legal notices page for more information. Information related to coronavirus can be outdated very quickly.
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Anneka joined Stacks Law Firm in Tamworth in 2013 and is now the director of the firm. Anneka’s main areas of practice are family law and commercial litigation. She also oversees wills, probate and conveyancing in the firm. With her general litigation matters, Anneka works with clients who have a complaint and wish to have their complaint or dispute resolved. She uses her negotiation and communication skills to ensure that clients are clear about possible outcomes, resulting in more amicable and cost-effective results for all parties. Anneka has assisted clients with damages disputes in a range of jurisdictions, including the property division of the Supreme Court, the Probate division, the District Court, the NCAT, as well as generally in the Local Court, Supreme Court and Federal Court. Anneka is experienced in managing complex litigation defences, cross claims and interlocutory applications and motions. As a realist and a people person, Anneka is able to see the real-life practicality of her clients’ legal problems. She establishes a great rapport with her clients, communicating in a friendly and compassionate manner and ensuring they have a good understanding of the legal process. Anneka has studied extensively to deepen her knowledge of her practice areas. She holds a Bachelor of Laws and Bachelor of Arts (Psychology) from the University of New England, a Graduate Diploma in Legal Practice from the College of Law and a Master in Applied Law majoring in Commercial Litigation. She has also completed the College of Law’s Legal Practice Management Course. Anneka plans to complete a specialist accreditation in Commercial Litigation in the near future. Anneka’s commitment to her clients, profession, community and studies have been recognised in recent years. She was selected for the Lawyers Weekly Women in Law Awards as a finalist in the “Young Gun” category in 2017, as well as the Lawyers Weekly 30 Under 30 Awards, where she was a finalist in the family law category in 2018. And in 2019, she was a finalist in the Lawyers Weekly, Women in Law Awards as “Senior Associate of the Year – SME”. Stacks Law Firm Tamworth was also nominated as a finalist in the Tamworth Business Chamber Awards for Excellence in Small Business. A strong believer in contributing to her local community, Anneka is a member of the Tamworth Business Chamber, the Tamworth Family Law Pathways Network, the Law Society of NSW and Tamworth Lawyers Inc, as well as the North and North West Law Society. She recently teamed up with another local young lawyer to raise charity funds for local causes by selling donated used clothing. Anneka is also the Social Media Officer for the Tamworth Junior Chamber board. Anneka actively mentors the firm’s younger lawyers, and is a volunteer mentor with the Mentor Institute and for the University of New England. Having grown up in the coastal town of Nambucca Heads, Anneka is a beach person at heart, so it’s the one thing she misses in Tamworth. Outside of work, Anneka enjoys spending time with her family, in particular her young daughter.
