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“I don’t want to tell’. Financial Disclosure and your obligations under the Family Law Act.

“I don’t want to tell’. Financial Disclosure and your obligations under the Family Law Act.

21 November 2019

If you are involved in a property matter you will have heard of the term “financial disclosure” and the phrase “full and frank financial disclosure”. In this article we look at the obligations for parties to provide financial disclosure. 

 
 

 What documents should be provided?

The Federal Circuit Court Rules (“FCC Rules”) require parties to property proceeds exchange a full and frank financial disclosure.[1] Unlike the Family Court Rules, the FCC Rules do not provide a list of specific documents you need to provide to your former partner.

Instead, the FCC Rules require the parties provide details of: -

  1. any interest (whether legal or equitable) the parties has in any property including superannuation;
  2. any income they receive from all sources;
  3. any financial resources they have;
  4. any trust which they or a child of the marriage has an interest in;
  5. any property they have given away or otherwise disposed of since separation.

There is a requirement under the FCC Rules to provide three (3) years of recent financial statements and the last four (4) BAS statements for any partnership, trust or company.

To ensure you provide the right information, we provide all clients with an easy to work through checklist of documents to collect at the beginning of their matter.

What if I do not provide financial disclosure?

Not providing financial disclosure can have significant consequences for the non-complying party. It is never a good idea to try to avoid your disclosure obligations.

There can be financial penalties against the non-complying party, for example a Cost Order (where they have to pay some of their former partners legal fees) or the non-complying party receiving less from the property pool.

Failing to disclosure documents can also make your case significantly harder to run. If you hold do not provide a document to the other party and later try to rely on it at a Final Hearing, the Court may refuse to accept the document. This can mean a key piece of evidence for your case is not available for consideration.

In our view, one of the more significant consequences is the potential for the other party to re-open your property matter – potentially several years later. Generally, property orders are final. However, if it is found that one party did not provide a full financial disclosure the Court can set aside previous orders.[2] You may find yourself having to relitigate the matter which not only costs you more in legal fees (and potentially having to pay your ex-partners legal fees if you did not comply) but you may also have to pay your ex-partner more money.

How do we view your disclosure obligation?

Because of the importance of providing financial disclosure, the solicitors at Mastronardi Legal take the view that they have a positive obligation to ensure our clients comply with their disclosure obligations. We remind our clients of their obligations to ensure the best outcome for your case. If we ever believe a client is trying to hide assets, or intentionally withholding information, we cease acting for them.

Please note: the information in this article is general in nature. For specific advice about your matter, make an appointment with one of our solicitors. We have focused on the requirements under the Federal Circuit Court Rules in this article.  

Author 
Melissa Mastronardi
Director 

 

 


 [1] FCC Rules, r 24.03.

[2] Family Law Act s79(1)(a).