Duty of Disclosure - What Is Required?
Financial disclosure is a term that you will often hear used by lawyers and/or by the court where parties are trying to resolve a financial settlement. It refers to the duty of disclosure owed by both parties to disclose to the other party all information relevant to an issue in the case. This includes information recorded in a paper document or stored on a computer also includes documents that the other parties may not know about.
This duty of disclosure starts before the case begins and continues until the case is finalised. A party must continue to provide such information as circumstances change or more documents are created or come into their possession, power or control.
What Specific Documents Does the Duty of Disclosure Required To Be Disclosed?
Duty of disclosure covers all sources of earnings, interest, income, property (vested or contingent interests) and other financial resources. This applies whether the property, financial resources and earnings are owned by or come to the party directly, or go to some other person or beneficiary (for example, the party’s child or de facto partner) or are held in corporations, trusts, company or other such structures.
If a party is involved in court proceedings and fails to provide full and frank disclosure, the court may:
- refuse to allow the party to use that information or document as evidence in their case;
- stay or dismiss all or part of their case;
- order costs against the party.
Financial disclosure can be a daunting concept. A party should seek legal advice from an experienced family lawyer as to their rights and obligations.
The Family Law Rules
Rule 6.01 of the Federal Circuit and Family Court of Australia Rules 2021 (‘the Family Law Rules’) provides that each party is obligated to provide full and frank financial disclosure of all information relevant to their property matter, to the other party, in a timely manner. This includes disclosure from the time the matter starts until it is finalised.
Rule 6.06(8) of the Family Law Rules provides that in a property matter, each party must serve on the other party, prior to the first court event:
- a copy of the party’s 3 most recent taxation returns and assessments;
- documents showing superannuation interests;
- If the party has an Australian Business Number (ABN), a copy of the 4 last business activity statements (BAS) lodged;
- If there is a partnership, trust or company (other than a public company) in which the party has an interest: a copy of the 3 most recent financial statements and the last 4 business activity statements lodged.
Under Rule 6.06(1) of the Family Law Rules the duty of disclosure requires that each party must further disclose:
- Their earnings and income;
- 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;
- financial resources including a trust;
- whether any party has disposed of assets following separation; and
- liabilities and contingent liabilities.
For advice or representation in any legal matter, contact Armstrong Legal.