The Importance Of Financial Disclosure In Family Law Property Settlements

Eales & Mackenzie Lawyers Melbourne

We all know that separation, and its aftermath, is really challenging.  People can make bad decisions.  Dysfunction of any kind (poor mental health, misuse of alcohol and drugs, antisocial behaviours) can all get worse.  Animosity is common.  So it is natural that separated spouses, wanting to create their own space, and in the context of that emotional environment, want to keep their business to themselves and want to guard their personal information, especially pertaining to whatever has gone on after separation.

If there is a financial aspect to your separation, the law imposes obligations on you to provide what the law calls “full and frank financial disclosure”.  This can include information which you consider private, or irrelevant, or also that which your former partner simply does not want you to know about. There are however court rules which provide a minimum level of disclosure, and these rules apply even if you are not actually in court.  They apply to all former partners who have a financial dispute.  If you are unfortunately in the court system, judges regularly make orders requiring the provision of documents and, in really serious cases of non-compliance with these obligations, the Family Court can send a habitual non-provider of relevant information to gaol.  This is extremely rare, but the fact that there is the power to imprison a person for failing to provide documents shows how important the process is to the resolution of family law disputes.

Former spouses, who are in dispute about money, must show each other all relevant documents about their assets, income, liabilities, expenses, and superannuation.  Clients frequently tell us that they want to limit the access their former partner has to various kinds of documents, like post-separation bank accounts, documents which involve third parties like inheritance or trust documents, or documents which might be damaging or embarrassing like bank statements which show expenditure which a person might not want their former partner to know about.

Like everything else in family law, it is possible to argue about the provision of documents.  There are some things which are given: recent tax returns, super statements, banking records, pay slips – these are all routinely provided to your former spouse or their lawyer and any argument about not providing them is bound to fail. Other arguments might be given some air, such as:

  • How far back should the obligation go?  How far back is too far?
  • Are all company documents relevant?
  • Can I delete any personal information which identifies me? (for example, a victim of domestic violence may have concerns about disclosing their current address).
  • Not all documents asked for are always relevant, like for example, wills of third parties.
  • Are the documents requested relevant to the particular argument you are having?

There is a good reason why all this personal financial information needs to be exchanged.  Only when you know the relevant financial history, the value of the assets, the levels of expenditure, and the current circumstances, will you know if an offer, or a proposal of some other kind, is fair and worthy of consideration or acceptance.  If you do not know what things are worth, or how much income is being earned, etc, then you will have no objective base to judge any settlement offer against.  So, if you are the more financially savvy partner from your relationship, you can expect to have to provide a significant amount of information so that your former partner and their advisors understand the background well enough to consider any settlement proposal you want to make. However, if you have historically taken a back seat in the family’s finances, you are entitled to know what has been going on and if you do not get the answers you require you can take steps to make sure that you do.

Of course, we live in Australia, not a totalitarian regime. If you want to settle everything up quickly, or have received an offer which you know will meet your needs, or have some other personal reason for doing so, you can proceed to an agreement without knowing the ins and outs of the financial history and that agreement can probably be made binding. The point is however that no-one can force you into accepting an offer if there has not been financial disclosure and there will be no negative ramifications against you if your former partner makes an offer to you which, because of a lack of financial disclosure, you cannot weigh up objectively.

Most people understand this obligation and there is little dispute with appropriately advised former partners about this issue.  If there are problems, the means of obtaining information can be time consuming, involving complicated legal arguments and multiple court hearings.  You should obtain legal advice about your options if you have encountered difficulty getting answers from your former partner. Please contact Gordon Ainger or Charlotte Black for further information about this or any other family law issue. Get in touch today or call (03) 8621 1000.

Enquire Now
close slider
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
This field is for validation purposes and should be left unchanged.