Full and Frank Disclosure

Full and Frank Disclosure essentially means providing the other party and the Court with a true and accurate statement of your assets and all of your financial interests. In Divorce proceedings disclosure is made by both spouses by way of a statement on oath of all monies and assets s/he has received or earned, usually in the last two years before the court application or hearing.  This would include disclosure of an inheritance or employee share benefits for example, either spouse received during that time frame.

Disclosing new assets does not automatically mean your spouse will share in those assets.  The Court has absolute discretion as to how assets are dealt with and will consider the circumstances surrounding the acquisition of each and every asset.

Full and Frank Disclosure and the Court’s Duty – Why it is important

There are strict rules that require both spouses in divorce proceedings to make full and frank disclosure of their financial affairs at the outset of proceedings and to continue to do so until the final conclusion of the matter (section 38(6) Family Law (Divorce) Act 1996).

The Court has a statutory and Constitutional obligation (Article 41.3.2. and s. 5 Family Law (Divorce Act 1996) to consider what constitutes proper provision for the spouses and their dependants at the time when it is asked to grant a decree of divorce, or to order that a settlement – in the context of divorce proceedings –  constitutes proper provision.  This it can only do when it is fully familiar with the true financial position of each spouse.

Effect of Failure to make Full and Frank Disclosure – The Consequences

If a court finds that one spouse has deliberately hidden assets from the other the impact of a Court decision could be very significant.

If such a finding is made, the Court could find that the non-disclosing spouse cannot be relied upon and could decide that the reality of that spouse’s financial position will never be known. In such a situation, a Court could make a decision of what the non-disclosing spouse’s assets are on the ‘balance of probabilities’ and award the lion’s share of the property of which the court is aware to the other spouse.

This is even more likely if the non-disclosing spouse is otherwise a financially savvy person and ‘expected to know better’. In those circumstances a Court is less likely to believe that a simple, innocent mistake was made and would not allow a non-disclosing spouse to benefit from his/her concealment.

In cases where a concealment of assets has been proved at the time a divorce Decree was granted, the Court has jurisdiction to re-open the divorce proceedings on the application of the other spouse (who has discovered new information), and to set aside the existing orders and make new orders in their place. A costs order can be made against the non-disclosing spouse which could run to hundreds of thousands of euros.

Recent Supreme Court Case

In a recent Supreme Court case, reported in the press in July 2014 a husband was found to have ‘consciously and deliberately’ concealed assets to the value of approximately €5.6 million from a former wife during divorce proceedings.  The Divorce Decree was handed down in 2001.  The Wife subsequently discovered the existence of the assets and issued High Court proceedings setting the Divorce Decree aside and seeking further relief.  The Supreme Court awarded €2.26 million euro to his former wife.  This was in circumstances where the original Divorce order was made in 2001 and the former husband had remarried.  The Supreme Court decided against setting aside the original divorce decree in 2001.

Summary

Where a party to family law or divorce proceedings has not disclosed all relevant financial circumstances, the best thing to do is to file an amended financial statement, or updating affidavit, drawing the attention to the new circumstances. It is far better to be open and upfront about the new information than find you are telling the court (and your lawyer!) this for the first time, under cross-examination, in the witness box, fourteen years after a Decree of Divorce was made.

In today’s digital world, there is almost nothing which cannot be uncovered either by subpoenas issued to banks, examining loan applications, reviewing an HR file from an employer to see where the remuneration goes, looking at superannuation statements to see if any superannuation was rolled out into another fund, and the list goes on.

Do not disclose at your peril!

The net effect of the “old” “In Camera” Rule

The net effect of the “old” in camera rule was that family law and child care proceedings were not adequately reported on and there was sparse information available to parties facing family law and child care proceedings to help them know how their case would be dealt with by a court.  In addition, the “old” “in camera” rule was said to be instrumental in hindering complaints to professional bodies about the quality of representation and preventing the disclosure of orders to third parties where this is absolutely necessary (i.e. prospective purchasers of family homes).  The balance between the two rights referred to above was seen to go further than reasonably necessary to protect the right of the family to privacy.

The modified “In Camera” Rule

In an effort to address the perceived imbalance of the two rights the 2013 Act now permits bona fide members of the media to attend family and child care hearings and to report on same.  The “modified” “in camera” rule specifically prohibits publication of material that could lead the public to identify the parties to such proceedings.

Under the 2013 Act a Court is permitted to make an order excluding members of the press entirely where it considers such an order necessary (i) to preserve the anonymity of the parties or any child to the proceedings; (ii) by reason of the nature or circumstance of the case; or (iii) as it may be otherwise necessary in the interests of justice.  The foregoing three grounds are very broad however the 2013 Act states that when making such an order, the Court shall have regard to the desirability of promoting public confidence in the administration of justice and to any other matter that appears to be relevant.  Accordingly the 2013 Act guides a Court to make an order that would restrict the public’s right to transparency in the administration of justice in as less a way as possible.

Will my family law case be reported on in a newspaper or academic publication?

It is ultimately for the member of the press or their superiors to decide whether or not to publish a report or an article on your family law or child care case.

As explained above members of the press are restricted from publishing any material which would be likely to lead members of the public to identify the parties to your case.   A breach of this provision is a criminal offence and on conviction on indictment (in the Circuit or High Court) it can result in a fine up to €50,000 or a term of imprisonment of up to 12 months, or to both.    The severity of these sanctions is a strong incentive for the media to protect your anonymity.  A member of the press can unilaterally decide to publish a material which it considers to fall outside of the above restriction unless it is prohibited by a court order.

If you have a concern that the publication of a report on all or any aspect of your case will identify you or members of your family, disclose certain personal or commercially sensitive information or hinder you or any of your witnesses from giving evidence you should apply to the court for an order restricting the publication at the first available opportunity, or discuss doing so with your solicitor.  As explained above, when making an order the Court shall have regard to the desirability of promoting public confidence in the administration of justice and in this regard, it is likely to be more amenable to making an order restricting reporting of certain aspects of your case rather than an absolute prohibition on same.

How do I go about making an application to restrict the reporting of my family law or child care case?

Such an application can be made to the Court at any time during a hearing of your case be it a motion date (hearing in relation to a matter before trial) or the full trial.  Such an application is usually made by raising the issue with the judge at the outset of the hearing.  There are currently no formal court rules as to how to make such an application however new rules regulating such applications are expected to be introduced soon.

When will a Court grant an order restricting a report of my family law or child care case?

A Court can take into account any matter that it considers relevant to protect the interests of the family and children.  The 2013 Act provides that restrictions may be made in order to protect personal and commercially sensitive information.  Personally sensitive information is generally considered to be a party or a child’s medical history, tax affairs, high net worth or sexual orientation.