Do I have to provide my new partner’s financial details to the Family Court? – The Relevance of 3rd party financial information

Did you know that financial disclosure of all relevant documents and information is an ongoing legal obligation for separated couples regardless of whether specific requests are made by the other party or not? Streeterlaw Family Lawyer, Maidei Kutsanzira, explains the impact and relevance of re-partnering prior to obtaining a financial settlement with the ex-partner.

In determining the final split of the parties’ assets, among other factors, the Courts in accordance with the Family Law Act are obliged to consider the following:

1. if either party is cohabiting with another person; and
2. the financial circumstances relating to that cohabitation when deciding what is fair when dividing property between them.

Interestingly, a new partner’s financial circumstances may be considered relevant when the Court assesses “future needs” and decides whether any adjustment may be necessary. For example, the following may be argued:

1. Costs of living are reduced when shared between two people (if the new partner has independent financial means).
2. Borrowing capacity and overall disposable income may increase; or
3. Costs of living may increase if the new partner is unemployed and/or there are children born to the new relationship who are also dependents. If a party seeks to rely on this argument, they will need to provide sufficient evidence to the Court, as provided below.

In  the case of Pates & Pates [2018] FamCAFC 171 the Full Court of the Family Court of Australia considered whether the parties to a Family Law dispute should give full and frank financial disclosure of their new spouse or partner’s financial circumstances.

The Full Court found that there is no legal obligation for a party’s new spouse or partner to provide disclosure documents as the Court rules do not extend the disclosure obligation to the parties’ new partners.

The exception to this is the requirement for the parties to provide information in their Financial Statements about the income of other members of the parties’ households and any expenses paid on their behalf by third parties, which the parties themselves must disclose.

However, if a party seeks to rely on their new partner’s financial circumstances, to seek a financial adjustment in their favour, they have the onus of proof, meaning they need to have their new partner provide evidence about their financial circumstances.

If a party fails to provide evidence from the new partner regarding their financial circumstances, and provides no explanation for the failure, the Court can infer that such evidence would not have assisted that party’s case. As such, the Court may make Orders in favour of the other party because of the non-disclosure and/or failure to call such evidence.

In a nutshell, if a party wishes to rely on their new partner’s financial circumstances to seek an adjustment in their favour, the party seeking the adjustment would need to do the following:

1. Provide full and frank disclosure of their new spouse or partner’s financial circumstances; and
2. Put the new partner ‘into evidence’ by having them file an Affidavit of their financial circumstances.

The Court adopts a great degree of discretion when considering what effect one party cohabitating with a new partner has on the property settlement and all cases are considered with respect to their own facts

It is essential to obtain specialist legal advice on separation and prior to re-partnering. Call and speak to our specialist Family Law team at Streeterlaw today on 02 8197 0105.