Disclosure requirements in family law – what am I meant to provide?
Disclosure plays a critical role in family law proceedings in Australia. The term refers to the process of providing information and documents relevant to a case to the other party and the court. It is designed to ensure that everyone has access to the necessary information to make informed decisions and achieve a fair outcome.
What are disclosure requirements in family law?
Under the Family Law Act 1975, both parties in a family law case have an obligation to make full and frank disclosure of all information relevant to the case.
This means both parties have a responsibility to ensure that all documents and information that could affect the outcome and the fairness of the case are provided.
In addition, the disclosure obligation is a continuing one. Both people are obliged to provide information and documents as circumstances change, or as information becomes available.
Disclosure covers financial information such as income, assets and liabilities, but it also includes other relevant information, such as medical records and employment history.
Documents to be provided under disclosure requirements
The Family Law Rules set out the types of documents that are to be disclosed. There are different types of disclosure requirements, depending on the type of family law case.
For financial matters, parties are required to disclose all direct and indirect financial information, including assets, liabilities, income and expenses. They include, for example, tax returns from the last three financial years, copies of financial statements in relation to any business in which you have an interest, evidence of any motor vehicles or real estate owned by you, either solely or jointly, and evidence of all bank, building society and credit union accounts in your name, either solely or jointly.
In parenting cases, parties are required to disclose information relevant to the best interests of the child, including their relationship with the child, their parenting capacity, and any relevant medical or psychological issues. The documents required for these matters may include school reports, medical reports for the parent or the child, and criminal records, for example.
How far back do disclosure documents need to go?
A question that clients often ask is how far back the documents need to go.
A starting point is to provide three years of disclosure (ie tax returns and bank records extending three years). However the question of timing becomes more complex for couples who have had a long separation before commencing divorce proceedings.
For parties that have been separated for many years, or even decades, while it is recommended they disclose documents and information from the time of separation, it is also understood that recovering historical documents and information from decades ago can be difficult, if not impossible.
In situations such as these, a retrospective valuation may need to be obtained for real property or other assets, such as superannuation balances. Alternatively, if the value of an asset is impossible or too expensive to obtain, the parties can agree on its value, provided they are fully informed that this figure may not be accurate.
Discovery process and its role in disclosure
Disclosure can be made voluntarily, or through a formal process called the discovery process. The discovery process involves a request for specific documents and information from the other party, which requires a response within a set timeframe.
Failure to disclose relevant information can result in serious consequences, including legal sanctions, adverse findings by the court and being ordered to pay legal costs.
Disclosure difficulties following decades-long relationship
In one family law case, the parties were married for 65 years, although it was an agreed fact they had lived separate lives under one roof for the last 30 years of the relationship. In the post-separation years, the parties continued to buy and sell real property together.
The decades-long relationship and the now advanced years of the parties meant that many difficulties were encountered in obtaining disclosure.
These difficulties included that specific and accurate information was lost and/or forgotten. Further, with the transition to the digital age, the parties required extensive assistance to obtain current information.
Assessing the parties’ financial position was further complicated by their children claiming they had also provided funds to their parents through direct gifts and shared business arrangements.
Challenges to disclosure posed by cryptocurrency assets
Cryptocurrencies are an evolving area for disclosure obligations. Cryptocurrency is often hyped to be secure, decentralised and “untraceable”. These distinctive features make it challenging to confirm the existence of cryptocurrency, and then to trace, track and value it.
Like other investments, the value of a cryptocurrency asset changes over time and can have tax implications. It can be tempting for a party to avoid disclosure of cryptocurrency due to these features and the significant investment the asset can represent.
However, in circumstances where a party is found to have concealed cryptocurrency, the court can include an estimated value for the asset in the pool, award the innocent party a greater percentage adjustment, and in serious cases, impose penalties and restrictions.
Problems caused by lack of documentation
Sometimes difficulties can arise when financial disclosure documents are not readily available or do not exist. This situation might be due to events that happened a long time ago, or one where no documentary evidence is available at all.
For example, when parents contribute funds to the purchase of a house, it is often unclear whether these funds were intended to be a gift or a loan. Or the parties might have had an agreement that was only verbal and never formally documented, so that when they come to discuss the agreement later, there are conflicting accounts regarding the existence of the agreement and its terms.
Penalties for failure to disclose
There can be significant penalties for failing to give full and proper disclosure. For example, a court may make a costs order against a party based on their conduct in relation to production of documents, with breaches that affect the consequences for a trial being given more weight. (Please see Browne & Green .)
The intentions of the person who did not disclose are not necessarily taken into consideration if the other person has incurred costs as a result of the failure to disclose.
However, in Penfold and Penfold  144 CLR 311, it was stated that presenting a false statement or causing another party to be put in the position of having to prove the true financial position justifies a costs order.
In a recent example, the husband invested in cryptocurrency which subsequently devalued. The husband did not provide any evidence for the reduced value of the cryptocurrency and the court decided that the significantly higher purchase price would represent the current value in the property pool. (Please see Powell & Christensen [2020) FamCA 944.)
Specific rules and procedures regarding disclosure in the Family Court
In addition to the disclosure requirements under the Family Law Act, the Family Court of Australia has specific rules and procedures regarding disclosure.
The court may order parties to attend a conference or hearing to discuss disclosure matters, or appoint an independent expert to review the case and provide recommendations.
If you are involved in a family law case, it is important to understand the disclosure requirements and obligations. Consulting with a lawyer experienced in family law can help you navigate the disclosure process and ensure that obligations under the law are met.