Disclosure in Family Law & Dirty Deeds
In Family Law proceedings about property, everyone involved is required to comply with a duty of financial disclosure. This is an ongoing legal obligation to provide full and frank disclosure of all relevant information and documents, i.e. bank accounts, property values, shares, etc. If you’d like to know about common misconceptions and misunderstandings about financial disclosure obligations, consider having a look at our FAQ here.
Non-compliance with these obligations can have consequences, ranging from the Court refusing to allow the non-compliant party to use any material they did not provide to the other side as evidence, freezing or dismissing some or all of the case, ordering the non-compliant person to pay some of the other person’s costs, fining the non-compliant party or even ordering their imprisonment in some extreme circumstances. You can read more on the consequences of non-compliance here.
Popova (No 2)
Popova (No 2) was a fairly recent property law matter, where Mr & Ms Popova could not agree on the values of properties owned by Mr Popova’s company or at what date the properties values were to be set at. To try and resolve this, property valuers were hired, however despite three different valuers being consulted, a value and a could not be agreed. The valuation process was also complicated by Mr Popova refusing to provide feasibility reports to Ms Popova and the valuers.
Mr Popova refused to provide the feasibility reports, as he said that he had entered into a deed of confidentiality with a potential tenant for the property and because of this he could not legally provide them without breaching the deed which would have financial consequences for him. He also refused to provide a copy of the confidentiality deed. He also claimed that his company would be at risk of suffering commercial harm if the documents were provided.
As you would imagine, Ms Popova did not agree. In her opinion, the material had to be produced because the documents were directly relevant to the case and as a result, Mr Popova had to comply with his obligations and provide the feasibility reports. She also claimed that there was no risk of commercial harm as she only wanted the documents for the current court case.
With neither party prepared to give ground, the case ended up before a Judge to make a decision and get the matter moving. When looking at Mr Popova’s position that the company would suffer commercial harm, court determined that the broader picture of the matter and how Mr Popova had acted needed to be taken into account.
One of Mr Popova’s arguments was that he could not provide a copy of the confidentiality deed to Ms Popova because it was confidential. However, Mr Popova had previously provided snippets from the deed to Ms Popova, undermining his argument. When the Court asked Mr Popova why he was able to provide snippets of the deed but not the entire document, he was unable to answer why.
The court also asked Mr Popova whether he had contacted the other person who had signed the deed and when he told the court that he had not, the court asked why. Mr Popova’s answer was that he did not think they would agree to it, and because he did not think they’d agree he decided not to contact them. Had Mr Popova contacted them, it is possible that they would have agreed to the reports being provided and the parties could have avoided having to go to court. That Mr Popova had not done this and was unable to provide a good reason for why he had not, did not impress the court.
When looking at the argument that the confidentiality deed prevented Mr Popova from producing the documents, the court reminded the parties that the financial disclosure obligations are an absolute and continuing obligation and that parties could not sidestep that by doing something that would prevent them from complying. The court was very critical of the fact that Mr Popova could have contacted the potential tenant at any time to discuss the confidential documents but did not, as this was considered a self-imposed restriction.
When looking at the argument that producing the documents would result in his company suffering commercial harm, the court determined that there was no evidence that either Ms Popova or her lawyers intended to use the material for anything other than the family law proceedings.
After considering the parties’ positions and the evidence before the court, the Judge ordered that Mr Popova was to provide the feasibility reports so a property valuation could be prepared.
So, what is the key takeaway of this case?
The key takeaway of this case is that the court is switched on to parties trying to sidestep their financial disclosure obligations and has made it abundantly clear that parties cannot try to limit their financial disclosure obligations by imposing obstacles or restrictions.
So why does it matter?
It matters as it reinforces that financial disclosure is a mandatory part of property proceedings. As the court so succinctly put it financial disclosure obligations are absolute and continuing.
It is our experience at Voice Lawyers that there is a significant danger of increases costs if the other person or both refuse or resist the necessary exchange of financial disclosure. The issue of financial disclosure remains problematic in many cases, and it is an area that Voice Lawyers have considerable experience with from the many complex financial matters we have worked on.
Voice Lawyers: Your Voice in Family Law Matters
This update is general in nature and is not legal advice. If you need help dealing with a parenting dispute or require assistance with a family law matter, at Voice Lawyers, we hear you.
If you are experiencing or contemplating separation, we suggest you seek legal advice as early as you can, even if you do not intend to separate for a few months or even years. We offer a 90-minute early separation strategy session Voice Lawyers — Divorce, Separation and Family Law to prepare and inform clients of the process. Every family’s situation is different, and advice tailored to your
specific circumstances can assist you in achieving your best possible outcome. We can assist if you would like a second opinion.
We help people navigate the complexities of family law with confident, practical advice. You can contact us at office@voicelawyers.com or call 02 9261 1954 to book a consultation to speak with one of our lawyers.
By Kayte Lewis & Enda Byrne