A common concern following the breakdown of a relationship is that the other party may be attempting to hide assets available for distribution or alternatively that they are hiding their income. In some cases, concern may be warranted, as some parties may attempt to hide assets or minimise their true value to benefit their financial position when the time comes to negotiate property settlement. In order to ensure progress in negotiations and proceedings, both parties have an ongoing duty of disclosure to each other and to the Family Court of Western Australia.
What is the Duty of Disclosure?
The duty of disclosure requires that all parties involved in a family law dispute to provide each other full and frank disclosure relevant to all issues in dispute in their matter. Disclosure is not just limited to paperwork, it includes information recorded stored by other means such as computer storage devices or phones. This duty starts with the pre-action procedures before either party commences proceedings and continues until property settlement is finalised.
As a party, it is important to remember that the duty of disclosure is a continuing duty, therefore you must continue to provide disclosure as circumstances change, more documents are created or further documents come into your possession, power or control. Generally, compliance occurs through the parties or their lawyers preparing a list of disclosure documents which is provided to the other party following which both parties can request copies of documentation from that list from the other party.
The duty of disclosure applies to each document that:
- Is or has been in the possession, or under the control of the party disclosing the document;
- Is relevant to an issue in the case; or
- Concerns any property disposal (whether by sale, transfer, assignment or gift) that was made in the year immediately before the separation of the parties or since the final separation and that may affect, defeat or deplete a claim.
Generally in financial cases, parties will have to disclose the following documents at a minimum:
- Bank, mortgage and credit card statements, since the date of separation;
- Pay slips for the last 6 months;
- Most recent superannuation statement;
- Taxation returns and notices of assessment for the last 3 financial years;
- Redbook valuations of any motor vehicles;
- 3 appraisals of any real estate;
- Evidence of assets at cohabitation (if any);
- Evidence of any inheritance, gift or compensation payment;
- Evidence of any assets disposed of since separation;
- Household expenses and accounts.
In cases where spousal maintenance is sought, documents demonstrating the expenses and liabilities of the party seeking spousal maintenance will be required. The list above is not exhaustive, and depending on the issues in a case, the parties may have to disclose additional documents.
What happens if I don’t comply with the duty to disclose?
Your obligation to provide disclosure is designed to ensure that assets cannot be hidden, undervalued or disposed of without notice to the other party. This in turn, allows parties to negotiate more effectively. It also allows the Court to make Orders with the confidence that the asset pool that has been identified is accurate.
The Court has the power to make Orders in relation to those that do not abide with their duty of disclosure. For example, in Sheehan [2008] FMCAfam 655, the wife sought to freeze a bank account when the husband refused to give an undertaking not to reduce it below $229,000. The Court made orders that the husband deposit $114,500 into an account in Australia in the names of the solicitors as trustees pending the final resolution of the proceedings to protect the funds.
This is general information only, and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please contact our office on Freecall 1800 609 945 or Email us now.
