One of the more mundane but critical components of the separation process within the Court system is each participant’s duty of disclosure.

That is, the requirement that you hand over to your ex (and their lawyer) copies of all relevant documents.

Many people find this to be a time consuming, intrusive, and objectionable process. But putting it off, or doing it half-heartedly, only tends to result in delays or problems that can impact your ability to finalise your separation sooner rather than later.

When Does the Duty of Disclosure Apply?

Similar to other types of dispute, the disclosure rules apply to all parties to a family law dispute.

That includes both parenting and financial matters, although we will focus on financial disclosure in this article.

Importantly, the duty of disclosure can sometimes apply even before formal Court proceedings have been commenced, so you can’t assume that it’s OK to be cagey about disclosing documents just because there isn’t something filed in Court just yet. For more information on this, you can see the pre-court procedures page published by the Family Court.

What do you Have to Disclose?

The big picture rule of disclosure is that you have to make “full and frank” disclosure – relevantly for us, of your financial circumstances.

This means you both have to disclose everything relevant and do so in a way that isn’t misleading. This is embodied in the financial statement document you have to submit towards the start of the process, requiring you to sign it to say that the contents are truthful.

While the list isn’t exhaustive, that’s going to include documents that show:

1. What you earn, including money that you may get paid to other accounts;
2. Any interest you have in property of any kind;
3. Any interest you have in property owned by, or income earned by, a company of which you are a shareholder;
4. Other financial “resources” you have access to;
5. Any relevant trusts of which you are an appointor, trustee or beneficiary;
6. Debts you have, or might have (including things like personal guarantees).

The best way to approach this question is this: if it relates to money you can access now, could access in the future, or debts you have or might have, you should give your family lawyer the documents.

For individuals, then, this is going to include things like:

• Tax returns and assessments;
• Superannuation statements;
• Bank records; and
• Payslips.

For businesses and companies that are covered by the need to disclose, that will include:

• Financial statements – profit and loss, balance sheets, depreciation schedules, tax returns)
• Annual returns showing directors and shareholders;
• The company constitution;
• Relevant trust deeds;
• Any partnership agreements.

What about Things you Sold Recently?

As well as your current financial resources, you will also have to disclose information and documents about any assets you have “disposed” of in some cases.

So, for obvious reasons, if you gifted a house to a close friend three days before you separated – then you have to disclose that.

This rule applies to property you disposed of within the 12 months before your separation began unless it was with your ex’s consent, or in the “ordinary course of business” (for example, if you run a business selling clocks, then you don’t need a line by line list of clocks you have disposed of).

Again, it’s best to err on the side of caution here and let your family lawyer know all of your circumstances. If you have specific concerns about disclosing a particular item, then you can discuss it with them first.

What if My Situation Changes?

Your duty of disclosure in family law proceedings is ongoing.

So, if your financial situation changes significantly, you will need to provide updated documents or information as the process continues.

At a practical level, of course, your actual cash-on-hand will change on a day to day basis. That does not necessarily require fresh disclosure each day. However, you should disclose material changes in your situation. Again your lawyer can help you know what, and when, to disclose if your situation is changing.

What if I Don’t Disclose?

Most people don’t feel like handing over all of their documents to their ex – particular if suspicion and mistrust are high at the time.

That said, the Courts require it and you are bound by the rules of the Court.

If you don’t follow them, then you can expect several things to happen.

First, the Court can exclude the evidence. So if it was actually to your benefit, the Court might simply ignore it if you don’t disclose it property and in a timely fashion.

Next, you might be sanctioned by the Court. Failing to follow the rules is, basically, contempt of Court. Many times this might first be a warning and a direction to comply, but with continued failures it could result in fines, costs orders against you or even jail time.

At a more practical level, you’re going to put the Court offside.

Think of it this way - if you are the person the Court knows hid things from their ex during the disclosure process, how do you think it will go if there is an issue where the Court has to decide who is telling the truth? It’s difficult to be non-compliant and sign a misleading financial statement on the one hand, but then ask the Court to believe you over your ex in a contentious issue later.

In short: complying with disclosure rules is your best play, even though you may not like it.

Can My Ex Use my Documents to Damage my Reputation?

Both you and your ex are under a duty not to use documents disclosed in the separation process for any purpose other than the Court proceedings.

This is the protection that the Courts have developed to counterbalance the fact that you are compelled to give documents to your ex that you don’t really want to give them.

Bite the Disclosure Bullet

Disclosure isn’t a fun process. Still, it’s a critical component to ensure that separation proceedings are fair and consider all the relevant material that the parties have to offer.

Given the time it can take to gather documents and information in more complex circumstances, it’s good to discuss early with your lawyer the disclosure requirements so that you understand the full scope that might apply in your circumstances.

Give us a call today if you need help with your disclosure obligations or have concerns about non-disclosure by your ex.