When parties separate, it is not uncommon for a party to have little knowledge about the other party’s individual financial affairs or even the joint finances of the parties. This may arise where one party was responsible for administering the parties’ finances during the course of the relationship. Financial disclosure enables parties to identify the joint and financial position of their former partner in order to make informed decisions regarding the division of property.
Separated individuals who wish to initiate or are parties to family law proceedings in the Federal Circuit and Family Court of Australia must comply with the duty of disclosure. This duty involves the provision of full and frank disclosure which obliges parties to provide important and relevant financial documentation disclosing all sources of income, expenditure, property and other financial resources.
Parties can satisfy this duty by way of completing a Financial Statement (a sworn statement verifying their current financial circumstances) and providing the other party with source financial documents. The specific types of documents to disclose will vary depending on a party’s unique factual circumstances but commonly requested documents include:
- Bank, loan and credit card (held jointly, individually or by any company or Trust under that party’s control) statements for all bank accounts;
- Employment contracts and pay slips;
- Tax Returns and Notices of Assessment;
- Superannuation statements;
- Settlement statements regarding the purchase or sale of properties before, during or after cohabitation;
- Valuations or appraisals for property either or both parties have an interest in;
- Purchase contracts;
- Loan and finance contracts; and
- Financial Statements for entities or Trusts under a party’s control.
A party’s duty of disclosure materialises with the initiation of the pre-action procedures pursuant to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. It occurs prior to the commencement of the case and continues until the property settlement is finalised. A party must continue to provide all relevant information as circumstances may change or more documents are created or come into parties’ possession, power or control. This duty applies to any assets and or financial resources that the parties have an interest in such as a family trust or business (eg. where a party is a trustee or beneficiary). Parties are also required to disclose documentation regarding any disposal of property that was made, whether by sale, transfer or gift and can include documents from prior, during or after the relationship.
A failure to provide full and frank disclosure may impede efforts to resolve matters and can also lead to the Court exercising its discretion to make a costs order against the non-complying party.
If parties have finalised their property settlement arrangements by way of a Final Court Order but it is discovered that there has been a miscarriage of justice by reason of fraud or suppression of evidence (including the failure to disclose relevant information), the Court can set aside the final property orders aside pursuant to s79A of the Family Law Act 1975.
For parties documenting their final property settlement arrangements in a Binding Financial Agreement, the document may be set aside by the Court if it is determined that it was obtained by fraud by way of a party’s failure to disclose material assets or liabilities at the time the Agreement was made pursuant to s90K and s90UM of the Family Law Act 1975.
The obligation to effect financial disclosure is broad and it is usually the case that any document relevant to the dispute should be produced.
If you are unclear about what financial disclosure you are obligated to provide or your former partner refuses to provide financial disclosure, advice from an experienced family lawyer should be sought. You should contact our team of expert solicitors to obtain advice on your individual circumstances if you are intending to or are separating from your former partner.