Why is disclosure important in financial matters?

Video transcript

Hi, my name’s Craig Turvey and I’m a special counsel in the Cooper Grace Ward family law team and today, I’d like to talk to you about disclosure and financial matters.

Disclosure obligations

There’s broadly a long list of disclosure documents that parties are expected to exchange in financial matters. Obviously, the more complicated your financial affairs are, so if you’ve got companies, trusts, self-managed super funds, various investments, those sorts of things, you’re going to have to provide more disclosure documents than someone who simply has a house, a super account, a bank account, a car and that’s pretty much it. Clients often get very upset or annoyed at requests for disclosures, so the other side will often send a request for what is usually standard documents that are exchanged in these sorts of matters and clients often say, ‘Why do I need to disclose that? They I know what my financial position is. I don’t need to send that.’ For one, you probably do, because the rules are quite broad in terms of what your disclosure obligations are, and the other side is entitled to see any relevant documents. And the other reason is because it actually protects you.

Consequences of not fully disclosing information

I’ve been involved in a number of cases where clients have come to us, where they’ve been represented by another firm in their property settlement. They haven’t gone through the disclosure process fully. They haven’t fully disclosed what their financial position was and they’ve reached an agreement. Then the other side’s realised after the fact. Well, hang on a second. I thought that their financial position was this when really, it’s something quite different. That can be the basis to set aside either a financial agreement or a consent order, if the other party discovers at some later point that you haven’t fully disclosed your financial position when you were negotiating the first-time round. So, not only is that obviously a problem in the sense that you may have to renegotiate your property settlement all over again, but it might mean that if your financial position is improved, that the other person is going to get a higher payout or a higher entitlement than they otherwise may not have received. So, there’s a lot of direct and indirect benefits to you in doing a proper job the first-time round. So, if you’ve engaged a lawyer or if you’ve been Googling and you’ve read about the different disclosure lists and what needs to be provided, it’s really better off that you just bite the bullet, put everything together, send it across, rather than selectively choosing documents which you think this doesn’t accurately show the financial position of a company, for example, but I’ll send that across. It might just be a tax return. It might not be a detailed financial statement. That’ll be enough. I’ve given them a document. It’s really not. And again, you want to avoid a scenario where you risk any settlement agreement you have getting set aside at a later point because it’s a lot of effort to negotiate your property settlement and no one wants to have to go through round two.

So, if you have any questions about your disclosure obligations or any property settlement matters, please don’t hesitate to contact me or one of the other family lawyers at Cooper Grace Ward.