It’s common in family law proceedings in the Family Court or Federal Circuit Court for issues relating to taxation to arise, including evidence of tax irregularities that can have significant consequences for the parties.
Parties in Family Court proceedings have an obligation of full and frank disclosure of all matters relevant to their proceedings.
The Courts have a public duty to bring to the attention of the Australian Taxation Office evidence which discloses a breach of Commonwealth laws (including taxation laws).
In the recent case of Commissioner of Taxation & Darling [2014] FamCAFC 59 the Full Court determined an appeal by the Commissioner of Taxation who was seeking access to documents on a court file. The trial Judge refused access to information disclosed by the husband in his affidavit.
In making the decision the Full Court was obliged to weigh the public interest against the concern that the Commissioner having the use of those documents may discourage the parties from making full and frank disclosure.
The Full Court granted that access in circumstances where there was already a pending audit of the taxpayers involved. This was subject to the restriction against publication of any such material (absent a further Court order) but the Commissioner was granted relief from the implied obligation not to use the documents obtained from the file.
The ATO has since issued a Decision Impact Statement accepting that:
- There is an implied obligation not to use the documents unless leave of the Court is granted;
- The ATO will not seek to inspect or copy court documents without seeking an order to do so;
- The Commissioner will seek release from the implied undertaking not to use the documents in appropriate cases.
If you need advice in relation to tax issues and family law, please contact one of our family law specialists.
