Disclosure

As I sat waiting for my matter to be called before the Judge this morning matter after matter involved solicitors standing up and asking the Court to make an Order that the other party provide full disclosure.

“Full disclosure” is a term family law solicitors and Judges use multiple times per day. It is a concept that is enshrined in legislation and is a basis tenant of property division matters in Australia.

But exactly what does it encompass and why is it important?

Chapter 13 of the Family Law Rules and Part 14 of the Federal Circuit Rules set out obligations that both parties are under to be open and honest about their respective assets, debts and financial circumstances.

This includes providing information and disclosure about the following:

•  the value you say is attributable to items owned or interests in any assets
•  the amount owing on any mortgages, loans or credit cards
• the value of your superannuation interests
• monies received, or earned, during the relationship and/or since separation
• if you have already received an inheritance, or if you are about to receive an inheritance,
•  if you have or will obtain a work payout or an insurance or compensation claim
• if you receive employee share benefits
• items (including cash) you have given away (at market price, at a lower price or for free),
• if you expect to commence/leave/change jobs and earn a significantly different amount.

That is not an exhaustive list.

So why is disclosure important?

The other side, and the Court, needs to know all the facts – the full picture – in order to make an informed decision (or in the case of the Court, a judgment) about how to divide the assets, what the true effect of the division is, and what each party will walk away with.

While the process of providing full disclosure may feel invasive, if a party does not make full disclosure, or even deliberately hides them from the other side, the impact on the end result can be significant. In coming to a decision a Judge can make adverse findings against the person not making full disclosure – that is, a finding that they are not to believed about anything. And the Judge, if persuaded that the non-disclosure was deliberate, can in fact increase the share of property to the other party to reflect the impact and, usually costs, of the intentionally poor behavior of the non-disclosing party.

But it’s not just during a matter that lack of disclosure can be significant. If a decision has already been made, or an agreement reached, a Court can re-open the proceedings on the application of the party who has since learned that there has been a lack of disclosure, set aside the existing Orders and make new Orders. Additionally, a costs order can be made against the non-disclosing party.

In addition to the above, I always say to clients two things:

• In today’s digital world, there is almost nothing which cannot be found out – if necessary by subpoena - so you are better to be upfront. You are better to be honest than caught revealing something for the first time in the witness box, or even worse, when a review application is brought; and
• Disclosing new assets does not automatically mean your ex will share in those assets. The division will still depend on all the other contributions and future needs/resources being considered.