We are often asked to address the issue of disclosure where jurisdiction is in issue.
What is jurisdiction?
Jurisdiction refers to the power of the court to hear and determine a dispute between parties.
When is jurisdiction relevant in Family Law Proceedings?
Jurisdiction becomes relevant, where the court needs to determine a threshold issue, in order to satisfy itself that jurisdiction to determine the overall matter exists.
The two primary situations where jurisdiction crops up as a threshold issue, are as follows:
- Where a party is seeking leave to proceed with an application for property settlement out of time (2 years from separation for de facto relationships and 1 year from divorce where married);
- Where a party of an alleged de facto relationship files an application for property settlement and the other party asserts that there was no de facto relationship in existence.
An example of (1) would be if Party A to a de facto relationship, makes an application to the Federal Circuit & Family Court of Australia for property settlement orders, 4 years after separation. Party A is two years out of time. Party A needs to apply for leave (permission) of the court to proceed with the application out of time. In these circumstances Party B may refuse to agree to leave for Party A to proceed with their application out of time. This is a jurisdictional issue. In this case, the Court will be required to first list the matter for a Discrete Hearing, to determine the threshold issue of whether leave is granted to proceed out of time.
An example of (2) would be if Party A to a de facto relationship, makes an application to the Federal Circuit & Family Court of Australia for property settlement orders and Party B responds to that application arguing that there was never a de facto relationship and therefore the Court does not have jurisdiction to hear the matter. This is a jurisdictional issue. In this case, the Court will be required to first list the matter for a Discrete Hearing, to determine the threshold issue of the existence of a de facto relationship and, if so, the time frames that the de facto relationship existed. If the Court determined that there was no de facto relationship, the Court would dismiss the application.
Often, where jurisdiction is raised as a threshold issue, the issues in dispute are a combination of (1) and (2) above, because Party B might agree that a de facto relationship existed, but dispute the time period within which a de facto relationship existed, and on that basis, Party B may argue that Party A’s application is made outside of the requisite time limit.
What is the duty of disclosure?
The duty of disclosure is the duty of both parties to disclose to the other party all information relevant to the case, which includes the obligation to disclose all earnings, interest, income, property and financial resources in a party’s possession and control. Traditionally, the obligation of disclosure includes, but is not limited to, disclosing the following financial documents as set out in detail in Rule 6.06(3) of the Family Law Rules:
- information on the assets each party owns or is in possession of, including valuations or appraisals of these assets;
- copies of pay slips, Group Certificates or Centrelink statements, as well as copies of tax returns, estimates or assessments;
- copies of bank and financial institution statements, including details of credit card accounts and loans;
- superannuation statements;
- shareholdings and other interests in any company and/or trusts.
For more information on your obligation of disclosure, check out the following articles:
- Duty of Disclosure – what information do I need to disclose
- How Failure to disclose can derail your consent order.
Do I need to provide to the other party my disclosure where jurisdiction is in issue?
This is an issue that commonly arises in matters where jurisdiction is in contest.
For example, in either of the examples above, Party B may argue that given jurisdiction is not agreed, and consent to proceed out of time is not given, they do not have an obligation to provide full and frank disclosure of their assets and financial circumstances until such time as the Court determines the discrete issue – that is, whether leave is granted to proceed with the application out of time, or whether there is a de facto relationship.
The simple answer to the question as to whether you are required to provide disclosure where jurisdiction is in issue, is not exactly. The obligation in Rule 6.06(3) of the Family Law Rules to provide full and frank disclosure does not arise until jurisdiction has been established: Rule 6.06(2).
This is not an ideal situation for multiple reasons. If Party B refuses to provide disclosure, there will be minimal to no prospects of resolving the dispute or narrowing the issues in dispute until the threshold issue of jurisdiction is determined, after which time disclosure may be exchanged. This drags out the dispute for both parties.
Secondly, the Court cannot progress the matter through the normal pathway to resolution, including mediation, until such time as the threshold issue is dealt with. Instead, the matter is required to be listed for a discrete hearing to determine the threshold issue. This significantly increases the legal costs of the parties and utilises precious court resources because a full blown hearing, with cross examination, is required to occur first, to determine the issue of jurisdiction, and until such time Party B may refuse to provide full and frank disclosure to party A.
Is there a workaround by the Court in relation to the issue of disclosure where jurisdiction is in issue?
Rule 6.06(2) of the Family Law Rules relevantly provides that the duty of disclosure does not apply to a party to a property proceeding who is not a party to the marriage or de facto relationship, except to the extent that the party’s financial circumstances are relevant to the issues in dispute.
In other words, the party arguing lack of jurisdiction still has a duty of disclosure, to the extent the Court has jurisdiction to order it, such duty being a lesser duty than the duty of a party to a marriage or de facto relationship. That duty of disclosure is to provide disclosure to the other party to the extent that that party’s financial circumstances are relevant to the issues in dispute.
When lawyers cite case law regarding there being no obligation on behalf of their client to disclose, until the jurisdictional issue is determined, in our experience, Judges take a pragmatic approach to the issue and the resolution of the dispute.
Judges often invite parties to exchange disclosure despite the jurisdictional issue, and cite Rule 6.06(2) with respect to the (albeit limited) duty of disclosure, and relevant case law which makes clear that the Court has the power to control its own process. We have often heard Judicial Registrars and Judges refers to the fact that the Court has power to determine such facts as are in issue in order to ascertain whether the court has jurisdiction to hear and determine the substantive dispute, and as a corollary of that, the Court has the power to make orders for the provision of specific documents, to determine the issues and thereby enable the Court to determine whether it has jurisdiction. The Court also has inherent jurisdiction to prevent an abuse of process.
In a matter before the Court recently, which involved a jurisdictional dispute, the Judge said to the parties and legal practitioners as follows:
“Both parties have a duty of disclosure to the extent that that the court has jurisdiction to order it. If jurisdiction not in issue, full disclosure is required, but given jurisdiction is an issue, I am against ordering full disclosure. I suggest that you seek orders in relation to specific documents about the critical issues in dispute.”
The Court then made orders as requested by the Respondent, for the provision of specific documents that were relevant to the issues in dispute and necessary to determine jurisdiction.
The minimum requirement regarding response documents where jurisdiction is in issue
Pursuant to rule 2.19 of the Family Law Rules, A respondent objecting to jurisdiction must file (at least) a Response and is not taken to have submitted to jurisdiction of the Court by seeking orders in response.
The objection to jurisdiction must then be determined before any other orders sought in the response.
Do I need to file a financial statement if jurisdiction is in issue?
This question was recently the subject of dispute in Court in the matter of Wilder & Wilder  FedCFamC1F 575.
In this case, the Wife applied for a property settlement one year out of time and the Husband refused to provide any disclosure to the Wife save for 3 payslips and a super statement, citing the lack of jurisdiction for the Court to make orders for disclosure.
The lawyer for the Husband made what the Judge called an extraordinary statement in correspondence that the Wife’s application “has not been ‘instituted’ as a consequence of the operation of section 44(3) of the Family Law Act 1975. Our client will therefore not be filing a Financial Statement, Financial Questionnaire, Undertaking as to disclosure nor a Genuine Steps certificate before the preliminary issue of whether your client has leave to proceed out of time has been determined.”
This was despite orders made by the Court previously in the proceeding, requiring him to file a Financial Statement and a Financial Questionnaire.
The Husband through his counsel maintained at trial that he did not have an obligation to file these documents, despite the Court order.
The Judge did not agree with the Husband’s submission and referred to the Family Law Practice Direction requiring parties who file a Response to a financial proceeding, to file a Financial Statement, a Financial Questionnaire and an undertaking as to disclosure. His Honour referred to the definition of financial proceedings in Rule 1.05 of the Family Law Rules as being an application relating to property of the parties of a marriage of a de facto relationship, including an application for permission to start a proceeding.
Having considered the Rules, Justice Schonell held that the current Rules make it clear that a Financial Statement is to be filed by both parties in an application pursuant to s 44(3) of the Family Law Act (Cth) (“the Act”) and that the Husband should have filed one.
Ultimately, the Judge granted leave for the Wife to proceed with her application out of time and was heavily critical of the Husband for failing to disclose his financial position.
What have we learnt about disclosure when jurisdiction is in issue?
What can be gleaned from the Rules and the approach of Judges cases where jurisdiction is in issue is that the Court has inherent jurisdiction to control its own process and the Court may make orders for certain specific documents to be disclosed by the Respondent to the extent that those documents are relevant to the issues in dispute.
It is also readily apparent from recent cases that a party cannot point to the jurisdictional issue in order to negate the obligation of that party to comply with Court Orders and the Practice Direction, which require the parties to file a Financial Statement.
If you would like more information on similar topics, check out the following information and articles:
- Application for Injunction to stop sale of property where jurisdiction in issue;
- Why you should formalise your property settlement
- When can future inheritances be taken into account
- How do I apply for property and financial orders
If you would like to know more information about injunctions and your rights in a financial settlement, contact us to book in a reduced rate initial consultation with one of our experienced Brisbane family lawyers to have a confidential discussion about your individual circumstances.