Family law legislation in Australia is designed to make the court process as quick and smooth as possible. Part of this is a principle called the duty of disclosure.
The duty of disclosure means that each party has a responsibility to disclose documents and information that would affect the outcome and fairness of the case.
The term is most often applied to financial cases but is also an important part of parenting cases.
When a person discloses all the required documents and information, this is known as “discovery.” All sorts of documentation relevant to the matter, whether stored electronically or on paper, come under a person’s duty of disclosure.
Failure to make a full and frank disclosure of all required information can have serious consequences, including being charged with contempt of court.
The purpose of the duty of disclosure is to identify the key issues that need to be resolved, establish each party’s position, determine the best interests of the child in parenting matters, and reach the most equitable conclusion.
What do I disclose in financial matters?
When it comes to financial matters, the truth of a person’s assets, liabilities and income may only be apparent in documents to which only they have access. This makes the duty of disclosure incredibly important, as it affects the fairness of the case’s outcome.
The items to disclose will vary depending on your individual circumstances and the specifics of your case. However, any or all of the following may be subject to the duty of disclosure:
- Centrelink statements
- Group certificates
- Details of assets, including valuations or appraisals of the assets
- Tax returns
- Bank statements
- Statements from other financial institutions such as a building society or credit union
- Credit card statements
- Details of loans
- Superannuation statements
- Details of interests in any company or trust
Remember that you have a duty to disclose assets that belong expressly to you and from which you benefit directly, such as salary or an investment property in your name, as well as assets that may be in another person’s name and from which you benefit indirectly.
For example, this might include assets held in trusts, corporations, company or other similar structures, as well as assets that are owned directly by someone like your child, married partner or de facto partner.
Parties are also required to disclose information about the disposal of any assets in the year prior to or the year following separation. Disposal of an asset includes selling it, offering it as a gift or transferring ownership of it to somebody else. This includes information about anything else purchased with the funds from the sale of the asset.
If you do not believe that a particular document or item is relevant to the case, you can make a request to the court that it be made exempt from the duty of disclosure.
Failure to provide a full and frank disclosure of all documents and information required by the court is typically seen as evidence of hiding assets.
In certain previous cases, the court has acted on this assumption and made orders in favour of the innocent party.
What do I disclose in parenting matters?
In parenting matters, parties have a duty to disclose any information relevant to the care and welfare of the child and the parenting capacity of the parents.
This can include the following:
- School reports
- Medical reports
- Expert reports
- Details about the amount of a time a child spends in a parent’s care
The duty of disclosure also applies to any information or documentation about family violence or the intervention of the police or any custody agencies.
In parenting cases, disclosing the required and relevant documents allows the court to accurately determine the best interests of the child and make orders that best promote their wellbeing.
Duty of disclosure in legislation
The main legislation for family law is the Family Law Act 1975, but the regulations regarding the duty of disclosure are in the Family Law Rules 2004.
The details about the duty of disclosure are in Chapter 13 of the Family Law Rules.
Each party should read this chapter of the legislation.
Undertakings about disclosure
According to Rule 13.5 of the Family Law Rules, all parties must file an undertaking, which is a formal pledge or agreement.
The parties must state in their undertaking that:
- They have read Parts 13.01 and 13.02 of the Family Law Rules
- They are aware of their duty to give a full and frank disclosure of all information relevant to the case, in a timely manner
- To the best of their knowledge, they have complied with the duty of disclosure
- They acknowledge that a breach of the undertaking may be contempt of court
Consequences of failing to disclose
There can be significant penalties for failing to make a full and frank disclosure.
If you do not disclose a particular document or piece of information, the court may refuse to allow you to use that document as evidence in your case.
The court has the authority to stay or dismiss all or part of a case if a party does not appropriately disclose the required information, and they are also able to order costs against that party.
In more extreme cases, the court may fine or imprison someone for contempt of court if they fail to make a full and frank disclosure or breach their undertaking.
Earlier this year, a Brisbane-based judge at the Federal Circuit Court imprisoned a man for a maximum of 12 months because he had not disclosed all the necessary financial records.
However, the Full Court of the Family Court overturned this decision. The father of two was released from the maximum-security prison in which he had spent six days.
The judges of the Family Court stated that imprisonment is a “last resort” in cases of contempt of court.
Nevertheless, it is important to take the duty of disclosure seriously in order to make the court process run smoothly and reach a fair outcome.