Page | 1
Disclosure in Family Law Cases –
Getting It Right
Family Law Residential 2013
Alison Ross
Partner
HopgoodGanim
Sydney Williams
Barrister-at-Law
INTRODUCTION
[1] Lying at the heart of the administration of justice, and the determination by the Family Law Courts of cases to achieve an outcome which is “just and equitable” (or, in parenting matters, an outcome which is in a child’s best interests), is a party’s compliance with a duty of disclosure.
[2] There is nothing new in that statement; nor have there been any radical alterations to the Family Law Rules 2004 (Cth) (the Rules). Rather, it is too often the case that in emotionally charged matrimonial proceedings a party’s duty to make full and frank disclosure can become blurred or lost. As this paper will attempt to demonstrate, the duty is onerous in its terms, has its temporal limits (particularly with third parties or cases involving wills and trusts or overseas elements), and provokes ethical considerations for the lawyers acting for a party who is not so frank in the discharge of that duty.
LAWYERS’ RESPONSIBILITIES
[3] Various obligations are cast upon a lawyer acting for a party to proceedings in the family law jurisdiction. This paper does not attempt to define all of those duties, but emphasises the responsibility a lawyer assumes in a party’s compliance with their disclosure obligations. That responsibility is made plain by rule 1.08 of the Rules where it is specified that a party has a responsibility to promote and achieve the main purpose of the Rules by, inter alia, complying with the duty of disclosure (rule 1.08(1)(b)), and a responsibility is burdened upon a lawyer for a party to comply, as far as possible, with the party’s responsibilities to promote and achieve the main purpose of the Rules: see rule 1.08(2).
[4] Consequently, a legal practitioner’s ethical duties necessarily come into focus in the discharge of that responsibility.
[5] It remains long established that a legal practitioner’s primary duty is to the Court, and which is paramount to the duty owed to a client: see Giannarelli v Wraith (1988) 165 CLR 543; also, Rondell v Worsley [1969] 1 AC 191 at 227. The rules of professional conduct in Queensland (and each other Australian State and Territory) now entrench that principle: see Australian Solicitors Conduct Rules 2012; Barristers Rules 2007 (Qld).
[6] At times, the discharge of that duty may take some courage on the lawyer’s part, insofar as the performance of that duty may be to the disadvantage of the client, or require the legal practitioner to act in a manner contrary to the client’s instructions: see Giannarelli v Wraith (supra) per Mason CJ.
[7] A long-standing or warm relationship to a particular client, or a desire to see that client succeed in litigation, cannot, under any circumstance, erode that duty to the Court. Occasions arise where legal practitioners have, for whatever reason, arguably lost sight of that principle: see, for example, Lambert v Jackson & Anor [2010] FamCA 357 per Watts J at [189] – [201] and [2011] FamCA 275 (costs judgment).
[8] As that authority under reference demonstrates, such conduct will not be tolerated and will promptly result in a practitioner being referred for disciplinary proceedings: see, also, Kyle v Legal Practitioner’s Complaints Committee [1999] WASCA 115 per Ipp J.
[9] It is necessary that a legal practitioner acting for a party to proceedings advise the party of the duty to make full and frank disclosure, the ongoing nature of that duty, and the possible consequences of any breach of same. Occasions may arise where a client refuses to accept that advice and, if desirous of not disclosing a fact or document that is relevant to the case, or which is otherwise required to be disclosed by the Rules, the legal practitioner is obliged to take appropriate action, and which may include the cessation of their continuing to act for that party.
THE DUTY OF FULL AND FRANK DISCLOSURE
[10] Chapter 13 of the Rules governs a party’s disclosure obligations in the Family Court of Australia and includes, inter alia, the mechanisms for disclosure, the class of documents which are exempt from disclosure (rule 13.12) as well as service of specific questions (Part 13.3).
[11] Hence, Chapter 13 effectively categorises three classes of disclosure, namely: a duty of disclosure with respect to financial cases (Division 13.1.2); a duty of disclosure of documents in “all cases” (Division 13.2.1) and the ability in certain cases to serve a request to answer specific questions (Part 13.3).
[12] Similar provisions are contained in the Federal Circuit Court Rules 2001 in relation to proceedings in that Court.
Overarching Duty
[13] Whilst some distinction is drawn between the disclosure obligations accruing in a financial case as opposed to a parenting case, as we have addressed below, there is an overarching duty of disclosure in all cases that disclosure be made of each document that is or has been in the possession, or under the control, of the party disclosing the document and is relevant to an issue in the case: see rule 13.07.
[14] In Oriolo and Oriolo (1985) FLC 91-653, the Full Court confirmed the clear obligation on parties to make full and frank disclosure of all relevant financial circumstances, citing with approval the judgment of Smithers J in Briese and Briese (1986) FLC 91-713 as follows:
“in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. … full and frank disclosure was required as a matter of principle in light of the fact that it was the duty of the Court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or Court rules required.
In my view it is fundamental to the whole operation of the Family Law Act in financial cases, that there is an obligation of the nature to which I have referred.”
[15] There are, however, limited class of documents which are exempt from the breadth of that disclosure obligation, as specified in rule 13.12 and which include:
n a document for which there is a claim for privilege from disclosure; or
n a document a copy of which is already disclosed, if the copy contains no change, obliteration or other mark or feature that is likely to affect the outcome of the case.
[16] It is plain that rule 13.12 preserves a party’s common law right to exempt from disclosure documents which are the subject to a valid claim for privilege.
[17] The duty to make disclosure starts with the pre-action procedure for a case and continues until the case is finalised, whether by a judgment or compromise: see rule 13.01(2). It is important that parties to litigation, who are likely to be unfamiliar with their duty to disclose, be reminded that the duty to make full and frank disclosure is a continuing obligation.
[18] The obligation of disclosure under the Rules (or the Federal Circuit Court Rules as the case may be) is quite unique. The administration of justice in those Courts depends upon the making of full and frank disclosure between spouses of their financial affairs. The duty is “unique” in the sense that it may be contrasted to common law or civil litigation between strangers and where the obligation to make disclosure only arises by the relevant Rules of Court or statute.
[19] Regardless of whether the proceedings concern property or parenting matters, a party is obliged by rule 13.15 to declare their awareness of the duty to the court, and to each other party, to give full and frank disclosure of all information relevant to the issues in a case, in a timely manner, and to proffer an undertaking that, to the best of that party’s knowledge and ability, compliance has, and will be, achieved of that duty: see rule 13.15. That undertaking must be filed at least 28 days before the first day before the Judge: see rule 13.16.
Financial Cases
[20] Division 13.1.2 of the Rules regulates the duty of disclosure required by parties to a financial case in the Family Court of Australia. The term “full and frank disclosure” is defined by rule 13.04(1) as:
“Full and frank disclosure
(1) A party to a financial case must make full and frank disclosure of the party's financial circumstances, including:
(a) the party's earnings, including income that is paid or assigned to another party, person or legal entity;
(b) any vested or contingent interest in property;
(c) any vested or contingent interest in property owned by a legal entity that is fully or partially owned or controlled by a party;
(d) any income earned by a legal entity fully or partially owned or controlled by a party, including income that is paid or assigned to any other party, person or legal entity;
(e) the party's other financial resources;
(f) any trust:
(i) of which the party is the appointor or trustee;
(ii) of which the party, the party's child, spouse or de facto spouse is an eligible beneficiary as to capital or income;
(iii) of which a corporation is an eligible beneficiary as to capital or income if the party, or the party's child, spouse or de facto spouse is a shareholder or director of the corporation;
(iv) over which the party has any direct or indirect power or control;
(v) of which the party has the direct or indirect power to remove or appoint a trustee;
(vi) of which the party has the power (whether subject to the concurrence of another person or not) to amend the terms;
(vii) of which the party has the power to disapprove
a proposed amendment of the terms or the appointment or removal of a trustee; or
(viii) over which a corporation has a power mentioned in any of subparagraphs (iv) to (vii), if the party, the party's child, spouse or de facto spouse is a director or shareholder of the corporation;
(g) any disposal of property (whether by sale, transfer, assignment or gift) made by the party, a legal entity mentioned in paragraph (c), a corporation or a trust mentioned in paragraph (f) that may affect, defeat or deplete a claim:
(i) in the 12 months immediately before the separation of the parties; or
(ii) since the final separation of the parties; and
(h) liabilities and contingent liabilities.
(2) Paragraph (1)(g) does not apply to a disposal of property made with the consent or knowledge of the other party or in the ordinary course of business.
(3) In this rule:
"legal entity" means a corporation (other than a public company), trust, partnership, joint venture business or other commercial activity.”
[21] In the Federal Circuit Court of Australia, the relevant provision is contained in rule 24.03 of the Federal Circuit Court Rules, which is in substantially similar terms.
[22] A party starting, or filing a response or reply to, a financial case must file a Financial Statement at the same time and, if that does not fully meet the duty of disclosure, the party is obliged by rule 13.5(2) to file an affidavit providing further particulars.
[23] A Financial Statement (or affidavit if particulars are provided therein) is required to be amended within 21 days after a significant change of circumstances from the information originally set out therein: see rule 13.06. Hence, the continuing nature of the duty.
[24] There are additional obligations cast upon parties to a property case, and in particular requiring the exchange of specified documents at least 2 days before the first court date (see rule 12.02) and facilitating the exchange of certain documents (as ordered) in addition to other documents mentioned in rule 12.02 which have not been exchanged, within 28 days after a case assessment conference (see rule 12.05).
[25] There is an intimate connection between the operation of rules 13.04 (full and frank disclosure) and 12.02 (property case – exchange of documents before first court date). In particular, rule 13.04 provides the broad obligation to make full and frank disclosure of that party’s financial circumstances. Rule 12.02 thereafter mandates the specific documents which fall under the umbrella of the disclosure required by rule 13.04.
[26] The Rules in the Federal Circuit Court of Australia reflect similar obligations upon a party’s obligation to make full and frank disclosure. While there are rules for disclosure, however, the Federal Circuit Court is intended to operate as informally as possible and there are therefore limitations on a party’s right to seek disclosure and, for example, issue interrogatories in proceedings before that Court.
[27] Section 45(1) of the Federal Circuit Court of Australia Act 1999 (Cth) provides that:
“Interrogatories and discovery are not allowed in relation to proceedings in the Federal Circuit Court of Australia unless the Federal Circuit Court of Australia or a Judge declares that it is appropriate, in the interests of the administration of justice, to allow the interrogatories or discovery.”
[28] Section 45(2) then provides that, in determining whether or not to make such a declaration, the Court must have regard to:
n Whether allowing the interrogatories or discovery would be likely to contribute to the fair and expeditious conduct of the proceedings; and
n Such other matters as the Court may consider relevant.