20 Nov Family Law Property Settlement – Disclosure
Disclosure- this has to be the one issue that causes me more grief in acting for a party to a Family Law Property Settlement matter whether it is contested litigation in the Family Law Courts or a negotiated property settlement. There is a principal in Family Law property matters that each party to a property settlement must provide what is known as “full and frank disclosure” of their financial affairs. I won’t bore you with the specifics (unless you are a current client and then I will) but essentially the Rules which govern property settlements require each party to provide sufficient information so that the other party can confidently negotiate a property settlement aware of all of the relevant information and facts to make an informed decision. Picture this not too uncommon scenario – one spouse has controlled all the finances of the relationship then after separation that person makes a settlement offer to the other party who has had no involvement in the couple’s finances. How is the spouse who has had no involvement in the parties’ finances supposed to make an informed decision as to whether that settlement offer is fair and reasonable if they (or their lawyers advising them) have no understanding of the parties’ financial affairs? In short, a party to a property settlement is required to provide (depending on their particular circumstances) copies of documents such as:
- Income tax returns
- Bank and credit card statements
- A current superannuation statement
- Business records, family trust returns and any other documents necessary to let the other know their actual financial circumstances
Here is where my problem begins. For whatever reason clients believe that despite the advice to the contrary:
- They don’t have to comply with the Rules
- Their former spouse has no business knowing about their financial affairs
- They just “want it sorted” and don’t understand why I am saying “please provide the following documents….”
In short, the obligation is there if you don’t comply with it and provide the documents sought you potentially face:
- The Court making costs Orders against you for failing to comply with the Rules
- A property settlement agreed on incomplete disclosure being set aside by the Court (often many years later).
I have acted for parties on both sides of what is known as a section 79A Application (an application to set aside a prior Court Order, whether by agreement or after a hearing based on a party’s failure to disclose their financial affairs. These are the worst case because the parties’ positions are so apart. The party feeling ripped off has had years to “stew”. The other party has often repartnered and got on with their life only to find that their ex is bringing them back to Court. The hostility is rife and settlement is often impossible. As unpleasant as it may be, please just provide the documents sought by way of disclosure, you have an obligation to provide them and if you don’t you may find a nasty surprise years later. Take it from me, I’m a Family Lawyer, I have seen it all, nothing you tell me will shock me! If you are asked by me or your former spouse’s lawyer to provide documents regarding your financial affairs, just do it – it will save you a lot of grief in the long run. If I believe something sought is irrelevant I can f=raise objections but don’t try to outsmart me, believe it or not, I’m on your side. It makes my job of helping you so easier if you follow the advice and do what you are asked…it might even save you from the judge ripping into you!