Freeze! How a Mareva Injunction could prevent a party from disposing of assets during a property settlement.

When going through a separation, it is often a concern of one party that the other may sell, transfer, dispose of or conceal assets prior to a final settlement being reached. This can ultimately affect what assets are available for division at the time of a final property settlement and prevent a fair outcome. In extreme circumstances, it may be open to a party to apply for a Mareva injunction, otherwise known as a freezing order, to preserve the property pool pending settlement.

What is a Mareva injunction/freezing order?

A Mareva injunction is an order that restrains a party from selling property or disposing of assets to ensure either performance of an obligation or to preserve the state of a property pool. This application can be made ex parte or without notice to the party upon whom the order is intended to apply.

In what circumstances can a Mareva injunction be made?

Mareva Orders are an extreme remedy available to the Family Court under section 114 of the Family Law Act 1975 (Cth). To be granted a Mareva injunction, you need to have strong evidence that there is a real risk that assets may be dissipated and that the benefit of the Mareva injunction to one party will outweigh the harm caused to the other. This is partly because applications are often heard ex-parte or without notice, meaning the other party does not have an opportunity to put forward evidence to the contrary.

A Mareva injunction might be granted when a party is from overseas or is looking to move overseas (along with any Australian assets) or if there are concerns that one party might misappropriate funds.

How do I get a Mareva injunction?

In the family law space, a Mareva injunction can be sought as part of an Initiating Application or as an Application in a Proceeding. A party may also choose to apply for a Mareva injunction as an interim or a final order.

An Affidavit would need to be filed in tandem with any Court application for a Mareva injunction. Pursuant to rule 5.23(3) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, any affidavit would need to include evidence as follows:

1. A description of the nature and value of the respondent's property, so far as it is known to the applicant, in and outside Australia;

2. The reason why the applicant believes:
   a] property of the respondent may be removed from Australia or may be dealt with in or outside Australia; and
   b]  removing or dealing with the property should be restrained by order;

3.  A statement about the damage the applicant is likely to suffer if the order is not made;

4.  A statement about the identity of anyone, other than the respondent, who may be affected by the order and how the person may be affected.

If you have concerns that your partner might sell, transfer, dispose of or conceal assets, and you are going through a separation, Robinson + McGuinness can provide you with assistance.

Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

All About Conciliation Conferences, Dispute Resolution Conferences, and Judicial Settlement Conferences

As part of your family law proceedings, the Federal Circuit and Family Court of Australia has the option to order that you, and any other parties in your matter, attend a Conciliation Conference (for property matters), a Dispute Resolution Conference (for parenting matters) or a Judicial Settlement Conference. The purpose of these conferences is to assist parties in resolving their matter without being put to the costs or stress of the matter progressing to a hearing.

The three types of conference all adopt a similar method and procedure. Their key differences are that Conciliation Conferences and Dispute Resolution Conferences are convened by a Judicial Registrar, and often occur earlier in the ligation process. Further, a Court Child Expert may also attend the Dispute Resolution Conference to provide their perspective and assistance to the parties. Contrastingly, a Judicial Settlement Conference is convened by a Judge, and is typically utilised as a ‘last resort’ option prior to the parties participating in a Final Hearing.

These conferences are a form of dispute resolution, in which the Deputy Registrar or Judge acts as mediator between the parties. You do not have to be legally represented to attend one of these conferences, however it is generally beneficial to engage a lawyer who can then provide you guidance and advocate for you to receive the best possible outcome. The expertise and experience of the convening Deputy Registrar or Judge can contribute to the quality of negotiation which occurs between you and the other party. 

Attending a conference organised by the Court provides parties with the opportunity to negotiate in a safe and controlled environment. Additionally, any final orders resulting from the conference will be made by consent.  This means that the final outcome of your matter is one you have agreed to, even if you have made some concessions from your original position, and you will likely feel a greater sense of control over the result than if you had proceeded to Final Hearing. Additionally, if your matter does settle during or after the conference, you will be able to avoid the significant costs and time associated with your matter remaining in the Court system.

If you have been ordered to attend a court-based conference, or it is an option you would like to know more about, we recommend you seek legal advice. To make an appointment with one of our experienced family lawyers please contact our office on (02) 6225 7040 or by email on info@rmfamilylaw.com.au or get started now online.

When your former partner resists a Property Settlement

Dealing with the breakdown of a relationship is difficult.  If you have intermingled your finances, you must also consider how to ‘sever’ your financial relationship.  This can be especially complicated if your former partner is not on the same page as you with respect to how you progress your separation.   For example, your former partner may not ‘accept’ your separation and put their ‘head in the sand’ by choosing to ignore communications from you.  Your former partner may also be unable to progress matters as a result of mental incapacity, such as due to cognitive decline or poor mental health, or physical disability.

If you have done some research on what happens after separation, you will be aware that the Court usually adopts a ‘4-step approach’, being to determine what the property ‘pool’ is (through understanding the assets, liabilities and superannuation), to assess contributions (including initial, during the relationship and post-separation), future needs and whether the outcome is ‘just and equitable’.  For more information, you can review our blog post about the 4-step process.

Notwithstanding which step you are at in the property settlement process, if you experience difficulties in engaging with your former partner, there are options available to you to ensure that your matter progresses.  

You can engage a lawyer to communicate with your former partner.  This can help to take the heat out of communications and to focus your communications on progressing your matter.  Your lawyer can also advise you about whether you need to commence Court proceedings.

If your former partner refuses to respond or is unable to progress matters, you may need to commence Court proceedings.  Once you are involved in Court proceedings, you are still able to continue negotiations outside of the Court process. 

Once in Court, if your former partner continues to refuse to engage and there is no evidence about any incapacity to make decisions, your matter might progress to an undefended hearing.  This would mean that the Court ultimately makes a decision about how any property should be divided, based on the evidence before it, in the absence of your former partner.

If there is evidence that your former partner may be unable to progress matters due to some incapacity, the Court may appoint a litigation guardian as a last resort.  A litigation guardian acts on behalf of a party and ‘stands in the place’ of a party, including making decisions about the conduct of the proceedings. 

A litigation guardian is usually a third party with no adverse interests to the person in need of a litigation guardian, such as a close friend or in some instances, a family member.  The public trustee can also be appointed as a last resort.

If you are concerned about the progress of your matter, you should contact a family lawyer to obtain advice.  Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Anika Buckley

Financial resources and how they impact property settlements

The definition of “property” in the context of a property settlement in Australia is outlined in section 4 of the Family Law Act 1975 (“FLA”). It defines the “property" as:

(a) in relation to the parties to a marriage or either of them--means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion; or

(b) in relation to the parties to a de facto relationship or either of them--means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.

The property pool that is considered available for division between separated couples usually includes assets such as cash in bank accounts, real properties, shares, investments, superannuation, motor vehicles, furniture, jewelry, business interests, etc.

While the definition of financial resources differs from assets when considering a property settlement, the FLA does not provide a specific definition for it. In the High Court case of Hall & Hall [2016] HCA 23 defined a financial resource as “a source of financial support which a party can reasonably suspect to be available to him or her to supply a financial need or deficiency”.

A financial resource may have the potential to generate future income or to give access to capital, which may not be immediately divisible but can influence the financial situation of a party in the future.

The Court may take into account financial resources of the parties and may adjust the division of the property pool having regard to those financial resources. Such adjustments will usually be based on the future needs of each party, ensuring a fair distribution that accounts for both current assets and future financial prospects.

Financial resources may include:

• Future Inheritances: Expecting to receive an inheritance even if not in the near future, can still be considered a potential financial resource. It can significantly impact a party's future financial security/position.

• Trust Beneficiaries: Interests in trusts, especially where an individual is a discretionary beneficiary, may not provide immediate financial benefits but can be regarded as a potential future income stream or cash flow, depending on what has happened in the past.

• Superannuation Interests: A superannuation interest is generally treated as property and can be available for spitting if necessary. However, the defined benefit superannuation schemes, known for their (at times, generous) pension phase, may generate significant income for one party upon retirement. Therefore, this entitlement is considered more as a valuable financial resource than mere property, especially in the long term. Consideration must be given to the nature of the interest at the time (i.e. whether it is in the growth phase or payment phase).

• Employment Leave: Significant periods of leave, such as long service leave may be seen as financial resources. This perspective was supported by Baker J in the Whitehead case (1979), where it was concluded that accrued long-service leave entitlements constitute a financial resource rather than an asset.

• Pending Legal Claims: An anticipated payout from litigation, such as a personal injury claim or other litigation where a financial settlement is expected, are likely to be included as they represent a future financial benefit.

• Loan Repayments: The expected repayment of loans owed to an individual can improve their financial position once received, and therefore be taken into account.

• Business Goodwill: The value associated with a business’s reputation and client relationships, particularly if it could generate financial gain beyond tangible assets, can also be considered as a financial resource.

• Tax Losses: Tax losses that can be used to offset future taxable income, therefore improving financial status, can also be seen as a financial resource.

• Support from Family Members: Regular or reliable financial support or expected support from family members, while not a formal asset, can be considered a financial resource due to its potential effect on an individual's financial position.

In summary, the consideration of relevant financial resources is essential for achieving a fair and equitable property settlement when negotiating a property settlement with a former spouse. The identification of these resources is important and should not be overlooked.

If you are exploring a property settlement and you need family law advice it is beneficial to see a specialist. To make an appointment with a member of our team please contact us today at (02) 6225 7040 or by email info@rmfamilylaw.com.au.

Valuations and the Asset Pool

One of the first questions when completing a property settlement is “What is the asset pool?” By quantifying the assets, liabilities, superannuation, and financial resources of the parties, parties can then start to think about how the asset pool will be divided between them, having regard to their respective contributions and future needs.

It is important that the asset pool is identified before any settlement negotiations take place, the parties attend a mediation/conciliation conference, or the matter proceeds to a hearing.

The value of some assets, such as bank accounts, shares, and accumulation superannuation interests, are usually easily identified by obtaining the most recent account statement. The value of other assets however can be more difficult to identify, examples of such assets include:

• Motor vehicles;

• Collectable items, including antiques and vehicles;

• Real estate;

• Businesses; and

• Defined benefit superannuation interests.

If parties can agree on the value of the above types of assets, the agreed value can be adopted for the purposes of the balance sheet and the property settlement. For example, parties may agree upon the value of a car by obtaining a RedBook valuation, or the value of real estate by obtaining a market appraisal from a real estate agent.

If there is no agreement as to the value of a certain asset, the parties will need to engage an independent expert to value the items. When obtaining a valuation, it is important to:

• Agree upon who will carry out the valuation – the valuer should be appropriately qualified to carry out the valuation;

• Agree upon who will pay for the valuation – it is common for valuation fees to be shared equally between parties;

• Jointly instruct the valuer in writing – it is inappropriate for parties to individually speak with/instruct the valuer; and

• Request that the valuer provide their valuation in writing.

If no agreement can be reached about the appointment of a valuer, and the matter is in Court, the Court has the power to appoint a valuer (known as a Single Expert).

If the matter is in Court, once a joint valuation has been obtained, the parties are bound by the value unless otherwise agreed or ordered by the Court. If one party does not accept the valuation, they can ask questions of the valuer in accordance with Division 7.1.6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021; obtain a second valuation and/or seek permission from the Court to rely upon a second valuation (known as an Adversarial Expert Report); this is not a straightforward process, and specialist family law advice should be sought prior to making an application to rely upon an Adversarial Expert Report.

If you have questions about valuations and your property settlement you should obtain specialist family law advice. Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Peta Sutton, Senior Associate

How is an inheritance dealt with in a property settlement?

When completing a property settlement, one of the considerations made is “what contributions were made by the parties?” Contributions come in all shapes and sizes, and can include inheritances which were received prior to the relationship, during the relationship, and following the breakdown of the relationship. When the inheritance was received, its quantum, and how the inheritance was applied will impact how much weight/credit is given to the contribution. It is common for an adjustment of the property settlement to be made in favour of the party who received the inheritance, however there is no set formula, and the weight/credit applied is at the discretion of the judicial officer hearing the case.

Another consideration in a property settlement is the future needs of the parties, including any changes to their financial circumstances by way of impending inheritance. If a party is a beneficiary of a deceased estate and awaiting distribution of the estate, the nature and quantum of the inheritance could be relevant to the outcome of the property settlement. If there is going to be a discrepancy in the parties’ financial circumstances as a result, it may be appropriate for an adjustment of the property settlement to be made in favour of the party who is not receiving the inheritance; again, there is no set formula, and the adjustment applied (if any) is at the discretion of the judicial officer hearing the case.

What is not as clear is what weight/credit, if any, should be applied to the possibility of a party receiving an inheritance. For example, this question arises where one party has an elderly parent and can expect to receive an inheritance upon their parent’s passing. Consideration needs to go beyond the possibility of a party receiving the inheritance and consider the probability of the party receiving the inheritance. If the party’s parents are elderly, but otherwise healthy, well and have testamentary capacity (meaning they have the capacity to amend the terms of their Will at any point in time) then the fact that the party is to receive an inheritance at some time in the future will likely only be deemed a mere expectancy; a mere expectancy will have little if any weight in a property settlement. However, if that party’s elderly parent is unwell and has lost capacity (meaning they are unable to amend the terms of their Will), the fact that the party to the property settlement is due to receive an inheritance at some point is likely to be seen as a relevant factor when considering the parties future needs.

If you need advice about how any inheritances, received or due, may be dealt with in your property settlement you should obtain specialist family law advice. Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Peta Sutton

Caveats in Family Law

When a relationship ends, figuring out who gets to keep certain property can be a cause of concern, especially if you have been contributing to mortgage repayments on a property owned solely in your former partner’s name. What happens if you break up? Can your partner just sell the house without telling you? This is where a caveat may assist, in certain circumstances.

What is a caveat?

A caveat is like a public record indicating an interest in real property. If you lodge a caveat on a property, it means that the registered proprietor is unable to sell or deal with the property without the caveat being removed from the title.

Why and when to lodge a caveat?

In certain circumstances, including where you can establish an equitable interest in a property, a caveat may be used to protect your interest, or to delay certain dealings with a property that you may not know about or consent to. The Family Court has dealt with cases involving caveats in the past and has determined that a mere interest in a property as a result of an arguable case for an adjustment of property interests between separated parties may not (of itself) be a caveatable interest. Care must accordingly be taken when exercising such a right or taking such a step to lodge a caveat over a property not legally owned by you.

How to lodge a caveat?

To lodge a caveat, you must be able to demonstrate that you have a legal or equitable interest in the property. This may include by having made financial contributions towards the acquisition or improvement of the property. The application process involves completing specific forms and submitting them to the land titles office, as well as paying a fee. It is very important to seek legal advice before you do so, as lodging a caveat without a proper basis can have consequences, including in some circumstances financial penalties.

Does a caveat expire?

In jurisdictions like the ACT, a caveat remains on the title of a property once registered, until the caveator takes steps to remove it or the registered proprietor of the property applies for the lapsing of the caveat. If a caveat is disputed, the issue may need to be resolved in the Supreme Court, where a judicial officer decides whether the caveat is valid based on the evidence presented to the Court.

If you have a query about lodging a caveat and you are separated or considering separating, you should seek specialist family law advice.

Our team at Robinson + McGuinness is ready to guide you to ensure your rights and interests are prioritised. Contact us today to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Property Settlements: The death of a party

When one party of a breakdown relationship is terminally ill, it can have significant implications to the distribution of their property, if the party passes away. Whilst a morbid and uncomfortable topic, it is an extremely important one to consider, as it can have serious consequences on a party’s assets, and how they are dealt with after a party’s death.

Death prior to commencing proceedings

Where neither party has commenced court proceedings in the Family Law jurisdiction, the matter will be dealt with under the estate law of the applicable state or territory of Australia. This might mean that if the terminally ill party did not update their will after separation, their former spouse (if provided for in the deceased’s will) may inherit from their estate. This may or may not be the intention of the deceased party.

Seeking legal advice becomes even more pertinent in family law matters when one party is terminally ill. Generally most parties will attempt to resolve their matter outside of the Court system, through independent negotiation and sometimes formal mediation. These pre-action procedures still apply despite the ill-health of a party.

However, if the matter is unable to be resolved through these means, sometimes the only alternative course of action is to make an application to the Federal Circuit and Family Court of Australia to resolve the matter.

Death after commencing proceedings

So, what happens when a party dies prior to a matter being resolved, but after filing an application? Where proceedings have commenced in the Family Law jurisdiction, and a party dies, Section 79(8) of the Family Law Act 1975 (Cth) and Rule 3.19 of the Family Law Rules 2021 apply. The Court may allow for the substitution of the deceased party by their legal personal representative - usually the executor of their estate, or another appropriate party - to ensure the legal proceedings can continue.

The personal legal representative will usually engage in Family Law proceedings with the view of recovering the deceased’s share of the matrimonial property pool for distribution according to their will. However, it is important to remember that the Orders that the Court will ultimately make are likely to be significantly different to the Orders the Court would have made if the party had not died. One example of how such a difference in outcome occurs is that the Court cannot consider the future needs of a party if they have passed away.

Family law and the death of a party can be complex and nuanced. In the event you are faced with this circumstance, you should obtain specialist family law advice. Contact Robinson + McGuinness to arrange an appointment on 02 6225 7040 or by email at info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Lauran Clifton

Trusts & Family Law

Trusts, and specifically discretionary family trusts, are commonly utilised as means of holding income generating assets and distributing that income to beneficiaries, who are often family members. When a relationship breaks down, and one or both of the parties hold assets in a trust, questions often arise as to how the trust, and the property of the trust, will be dealt with in the family law settlement. Trusts can be a complex area in settlements, as sometimes they are used by one party to protect or exclude assets, or to prevent the other party from accessing their share of the property.

There is a misconception that if assets are held in a trust, they are to be excluded from the property settlement. This may or may not be the case depending on the structure, composition and set up of the Trust.

There are two ways trusts are likely to be dealt with by the Court- it can be treated as an asset to be included in the matrimonial asset pool or as a financial resource. Trusts are more likely to be considered an asset for distribution if the Court is satisfied that the Trusts’ assets form part of the property of the parties to the marriage or de facto relationship. Under section 4 of the Family Law Act 1975 (Cth) “property” holds a very broad meaning, and the Court has demonstrated its willingness to include trust assets in a property division where certain factors relating to “control of the trust” exist. Where one party has effective control of the trust (i.e. if one party is the trustee, or an appointor) it is more likely to be included as property to be distributed in a family law settlement (see Kennon v Spry [2008] HCA 56 (3 December 2008)).

The Court has also demonstrated that where trust assets do not fall within the definition of property, the Court can still consider whether the parties have received benefits or distributions from the Trust and whether they are likely to in the future, notwithstanding a lack of control over the trust. In this scenario, the Court is likely to consider Trust property as a financial resource of that party under section 75(2) of the Act when determining the overall settlement.

Trusts are a complex area of family law and can require the input and advice of financial advisors, accountants, and solicitors. Whether a trust asset will form part of the matrimonial asset pool available for distribution and whether it is outside of the reach of a property settlement in the context of family law will depend on the specific circumstances of your matter.

For specialist family law advice, including the effects of trusts in a family law property settlement, contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email at info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers to obtain advice.

Author: Lauran Clifton

Assessing contributions

Assessing contributions is an important step in determining how to arrive at a just and equitable property settlement between separated couples.

What contributions does the Court consider? 

Section 79 and 90SM of the Family Law Act 1975 requires an assessment of the following contributions:

1. Financial contributions towards the acquisition, conservation, and improvement of property. These contributions may include financial contributions received by way of income, inheritances, redundancy payments, compensation awards, and windfalls such as lottery wins;

2. Non-financial contributions made towards the acquisition, conservation, and improvement of property. These contributions may include a party conducting renovations toward real property at no cost; and

3. Contributions made towards the welfare of the family through homemaking and parenting contributions.

When does the Court assess contributions? 

The Court assesses contributions made at the commencement of the relationship (in particular, whether one or both parties had significant assets at the commencement of the relationship), during the relationship, and post-separation (if relevant).

What weight is given to contributions made by either party? 

The weighing of contributions is not a mathematical exercise. Weighing of contributions has been described by the Court as being a holistic assessment of the myriad of contributions that are made by parties throughout the course of their relationship.

Each case is different, and all contributions made by parties are unique to their own circumstances. The Court has the discretion to make an adjustment in favour of either party after assessing those contributions.

The size of the adjustment given to a party based on their contributions will depend on a range of factors including the contribution that was made relative to the asset pool that exists (in the case of a financial contribution) or the passage of time since that contribution was made, and importantly, weighing the relevant contribution against contributions made by the other party to the relationship or marriage.

Do some contributions carry more weight than others?

Historically, the Court placed more weight upon financial contributions (by way of income) over contributions made as homemaker and parent, in cases where it was said that the primary income earner exercised “special skill” in order to make those financial contributions. In traditional relationships at that time, this would advantage the primary breadwinner (often the Husband) and disadvantage the party who had made contributions within the home that prevented them from earning an income (often the Wife). The Court has since disapproved of that approach and “special skills” are no longer recognised as being a particular category of financial contribution.  

For specialist advice regarding your property settlement, contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers. The sooner you seek advice the better – so you can make informed decisions about your options.

Author: Margot McCabe

Enforcement of Financial Orders

The Family Law Act sets out options available to parties to seek enforcement of Orders in relation to financial matters. Regrettably, in some cases, it can become necessary to seek enforcement of Orders where a party is not compliant with Orders of the Court.

When can I seek enforcement of Orders?

Enforcement can be sought where pursuant to Orders, maintenance agreements or Binding Financial Agreements made pursuant to the Family Law Act:

1. There is an obligation on a party to pay money;

2. There is an obligation on a party to sign a document;

3. A party is entitled to possession of real property; or

4. A party is entitled to transfer or delivery of personal property.

Although less common, there are other circumstances in which a party can take enforcement action against a non-compliant party, such as there where a party has registered an arbitral award, a child support liability or where there is an overseas maintenance order that has been registered in Australia.

How do I enforce Orders?

Methods of enforcement available to a party seeking compliance with Orders pursuant to the Family Law Act include:

1.  Appointing a Registrar of the Court

   A Registrar of the Court can be appointed to sign documents in place of a non-complaint party, such as Transfer documents in order to progress the transfer of a house, transferring shares or, closing bank accounts.

2. Third Party Debt Notice

   A Third Party Debt Notice requires a third party to discharge a debt by redirecting funds to which the non-compliant party would otherwise be entitled, to the party seeking enforcement. For example, a party seeking enforcement could seek that the non-compliant party’s wage be directed to them instead over a period of time in order to satisfy a debt.

3. Trustee for sale of real property

   If an Enforcement Warrant has been obtained in relation to real property in which the non-compliant party has an interest, a party can seek to be appointed as Trustee for Sale of real property. If a party is appointed as Trustee for sale it will generally be necessary to also seek that a Registrar of the Court be appointed to execute documents on behalf of the non-compliant party (as above).

4. Warrants for possession of property

   A party seeking enforcement of Orders can apply for a warrant for possession of real property, personal property, or for the seizure or detention of property owned by the non-complying party, which can then be sold, for example, to satisfy a debt.

There are other forms of relief available to a party seeking enforcement of Orders, including sequestration of property, receivership and seeking that a non-complaint party be declared bankrupt. It is likely that the Court would only adopt such methods of enforcement if other attempts at enforcement had been exhausted or there were circumstances justifying forms of enforcement that could be considered severe or prejudicial to the non-compliant party.

Can I seek that my legal costs be paid by the non-compliant party?

The Court has general powers of enforcement, including the power to make Orders that one party pay the other party’s costs. Although costs to do always “follow the event” i.e., the winning party does not always get their costs reimbursed, the Court is sometimes more inclined to order that a non-compliant meet the other party’s costs of enforcement, arising out of the non-compliant party’s failure to comply with an Order of the Court, as it has been unfair that the applicant has had to pursue such steps.

For specialist family law advice including about enforcement, contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Margot McCabe

Stages of your Property Settlement

If you are recently separated, it is advisable to become informed about your property settlement, particularly if you wish to reach an amicable agreement and avoid litigation. Unfortunately, there is no set timeframe as to how long a property settlement negotiation may take, there are however common stages in almost every property settlement:

Disclosure and information gathering stage

Before providing comprehensive advice about the range of potential outcomes in your property settlement, your family lawyer will first need to know about the values of all assets, liabilities and superannuation that you and your former spouse or partner have an interest in.

Parties have an obligation to provide full and frank financial disclosure of their financial circumstances to the other. This might extend to exchanging personal financial documents (such as taxation returns, bank statements, payslips), or a more informal exchange of disclosure whereby parties provide estimated values of their assets, or a screenshot of their bank account balances.

In order to determine the values of assets such as real properties, businesses, defined benefit superannuation or other significant assets, parties will generally obtain joint valuations from suitably qualified experts.

Your lawyer may also recommend that you seek advice from other professionals before you begin negotiating your property settlement, such as financial or accounting advice.

Obtaining advice

Once your family lawyer has received all of the necessary information about the asset pool, they will be able to provide you with advice about the potential range of outcomes in your property settlement, based on your instructions.

Your family lawyer should provide advice about your likely entitlement with reference to the “four step process”, which is (generally):

1.  Identify and value assets, liabilities and superannuation owned by each party or in which they have an interest;

2.  Assess the contributions made by the parties, including financial contributions, contributions made as homemaker and parent and non-financial contributions;

3.  Identify matters relevant to the future needs of the parties, such as whether there may be a basis for an adjustment in favour of either party, having regard to matters such as age, health, income and income earning capacity;

4.  Consider the effect of the above steps and to determine a just and equitable outcome overall.

Negotiating

Negotiating your property settlement can be the most difficult stage in your property settlement. Unfortunately, for some, they are not able to negotiate their property settlement either directly with their former spouse or partner, or with the assistance of a lawyer, and they will need to litigate in order to have a judge determine the outcome.

Negotiations may also occur through more traditional forms of negotiation, such as making written offers of settlement.  Negotiating may involve participating in forms of dispute resolution such as mediation or conferences, to attempt to reach agreement.

Formalising your agreement

Once you have negotiated your property settlement, it is usually advisable to formalise your agreement.

The options to formalise your property settlement are to enter into Consent Orders or a Binding Financial Agreement. The most common and cost-effective option to formalise your property settlement is by entering into Consent Orders. Consent Orders are lodged with the Federal Circuit and Family Court of Australia, and will become approved by the Court, if the Court is satisfied that the outcome of the property settlement is just and equitable.

You should obtain specialist advice early, to understand your options and in order to be able to make an informed decision about your particular circumstances.

For advice in relation to your property settlement, contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Margot McCabe

Formalising your Property Matter: How to do it and is it necessary?

When you separate, you will often hear stories from family, friends or even friends of friends of their experience going through a separation or divorce. These stories are sometimes the ‘worst case’ scenario, involving lengthy litigation and long paths to resolution. However, this is not the only way. Where you have reached an agreement, you are not always required to enter the Court system.

Whilst some matters require the Court’s intervention, there are many matters which can resolve by direct negotiation, through correspondence via lawyers or at private mediation. Once you and your former partner have reached an agreement as to how to divide your assets, liabilities and superannuation, you will likely want to formalise that agreement as there are benefits in doing so. To do so, you have a number of options.

The most common approach is the ‘consent orders’ process. You and your former partner ( or your lawyers) complete an Application for Consent Orders (which provides the Court with some information about what you each own and the proposed property settlement), along with the Orders you seek that the Court makes to ‘effect’ your property settlement. The Court then sets a date to review the documents and if approved, will grant the Orders that you are seeking. If the Court does not consider that the outcome is ‘just and equitable’, the Court may decline to make the Orders you seek and request you to provide the Court with further information.

Another option is to enter into a Binding Financial Agreement. This is a private agreement which requires you and your former partner to each obtain independent legal advice from a lawyer. The Court does not review the agreement reached between you and you remain outside of the Court system. Due to the requirements of a Binding Financial Agreement, this option can be more expensive however it can be preferable in certain circumstances, and more private.

In some instances, you and your former partner may decide that you are willing to part ways without formalising your agreement. Any agreement reached should at least be communicated between you and your former partner in writing. This option may only be suitable in limited circumstances.

It is important to seek legal advice from a specialist family lawyer as to the most appropriate way to formalise the agreement reached between you. For example, there may be stamp duty exemptions applicable if you transfer property pursuant to a Court Order or a Binding Financial Agreement. If your property settlement involves a superannuation split, there are extra steps that you must take to ensure the Trustee of your super fund has been accorded ‘procedural fairness’ so they can (and will)  implement the superannuation agreement you have reached.

Robinson + McGuinness can provide advice on whether the agreement you have reached is a ‘just and equitable’ outcome, as well as the best way to formalise the agreement based on your individual circumstances. Contact us to make an appointment on (02) 6225 7040 or by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Anika Buckley

Steps to Consider Before Taking the Next Step.

It is an exciting milestone in a relationship to move in with your partner. Your partner may be moving in to your property, or you might be thinking about renting a property together.  

Whilst seeing a family lawyer can seem less romantic than picking out a new lounge, it can be useful to understand your rights in the event of relationship breakdown, particularly if you own a property or have significant savings or assets such as a share portfolio. 

People often have a misconception that if you own your property prior to living with your partner, you will automatically “lose” 50% of your property when you break up or that you will be able to “quarantine” it in the event of a separation. No relationship is the same and there is no hard and fast rule which entitles your partner to half of your property in the event of a relationship breakdown. Nor may your property interests be protected from a claim by your partner if you separate. 

When dealing with a claim for property settlement following the breakdown of a relationship (whether you are ‘de facto’ or married), the Court will first look at whether it is ‘just and equitable’ to make any alteration of your property interests. The Court then assesses contributions and future needs. 

For example, say you own a property in Canberra with your partner. You bought it 3 years prior to moving in together. During your relationship, you and your partner share finances and your partner starts to help you in repaying the mortgage. You decide to renovate the property and each contribute $100,000 towards improving the property (i.e. your partner is making financial contributions to the property). Each weekend, your partner spends hours out in the garden and does landscaping (they may be considered as non-financial contributions). You then split from your partner 20 years later. 

In this scenario, it may be ‘just and equitable’ to divide your interests in the property and your partner is likely to be entitled to a ‘share’ in your property as a result of their contributions (both financial and non-financial). 

Take another scenario where you owned your property outright prior to the relationship, having inherited it from your parents. Your partner moves in and you live together for 3 years. Throughout your relationship, you and your partner maintain separate finances and your partner makes no contributions towards your property. You ultimately break up after 3 years. In this alternate scenario, the Court may not consider it ‘just and equitable’ to alter your interests in that property as your partner may not have been seen to have made any contributions to it. 

There are a number of factors that may impact on the outcome of these scenarios, including what other assets, liabilities or superannuation are in the ‘property pool’, whether you have children together and each of your ages, health and other future needs. 

Whether you have been dating for 3 months or for a few years, if you are considering cohabitation, it would be beneficial to see a family lawyer to understand how the law operates and the impact moving in together may have on you / your assets.  You can make an appointment with us on (02) 6225 7040 or by email on info@rmfamilylaw.com.au or get started now online  with one of our experienced lawyers to obtain advice.  

Author: Anika Buckley

How Long is Too Long? Court Dismisses Property Settlement Application After 30 Years

In the case of Estes & Holmes [2022] FedCFamC1F 267, the court summarily dismissed an application by the wife for an adjustment of property interests.  

The parties had separated 1985 after a 14 year marriage. The parties were involved in family law proceedings in 1988 and in 1989 a hearing occurred without the husband being present. Orders were made adjourning the property settlement proceedings until such time as the husband received his superannuation entitlements, which were the only property of any value at the time of those proceedings. At the time, it was anticipated that the husband may receive his superannuation entitlements in or about 2006. 

The Wife sought to commence proceedings in 2020 seeking orders for an adjustment of property interests. At that time, the parties had been divorced for 31 years. 

The Wife’s application was summarily dismissed, as a result of:

1. The delay in bringing the application. The Wife could have sought to have the 1989 proceedings relisted at an earlier time;

2. The Wife did not offer an explanation for the delay in bringing a fresh application for property settlement (or explaining her reasons for not having sought to relist the 1989 proceedings);

3. The Husband’s superannuation in 1989 was approximately $150,000 but he was now in receipt of the age pension and had minimal property in his name;

4. The Wife was not able to demonstrate that the Husband had been served with the Orders made in 1989 adjourning the proceedings, noting that he was not present at Court on that date, and was not legally represented. 

Although the Court has the ability to grant leave to parties who have applied for a property settlement “out of time”, there is no guarantee that any such application would be successful. In any event, bringing an application out of time results in increased legal costs whilst the Court determines the threshold issue of whether a party should be granted leave to bring such an application. In the case of Skelton & Lindop [2022] FedCFamC1A 47, the de facto wife applied to the Court when the parties had been separated for 2 years and 9 months (9 months “out of time”). 

At first instance, the primary judge dismissed the de facto wife’s application. On appeal however, the first instance decision was set aside, and the Court granted leave for the de facto Wife’s application to proceed out of time. Notably, it had taken over three years for the Wife’s application to be determined, by which time the parties had been separated for 5 years and incurred considerable legal costs, and the outcome of the property settlement itself had not yet been determined. 

What does this mean for you?

 The above cases demonstrate the risks associated with delay in formalising property settlements.

 It is important to know that there are time limits which impact your ability to seek an adjustment of property interests after separation or divorce.   

1. If you have been in a de facto relationship, you have two years from the date of separation to formalise your property settlement by entering into Consent Orders, or to bring an application to the Federal Circuit and Family Court of Australia, seeking orders for an adjustment of property interests.

2. If you are married (or divorced), you have 12 months from the date that a divorce order comes into effect to formalise your property settlement by entering into Consent Orders, or to bring an application to the Federal Circuit and Family Court of Australia, seeking orders for an adjustment of property interests. 

If you are a party to dormant family law proceedings which have been adjourned pending the retirement of one party, or until such time as a superannuation split can be effected, you should seek urgent advice in relation to your circumstances. 

It is prudent to obtain advice tailored to your circumstances from a family lawyer, ideally as soon as possible after separation, in order to preserve your interests. Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Margot McCabe

Family Lawyer Property FAQ’s

Navigating a separation is difficult. Whilst every relationship is different, there are a series of questions that clients often ask in their first appointment with a family lawyer. Today, we answer some frequently asked property questions.

What do we do with our joint accounts?

If you have joint accounts, you may have a claim for an equal share of the monies held in that account. How much you are entitled to (and whether you are entitled to any) will ultimately depend on the likely division of your property pool, based on factors including the length of the relationship, your contributions and your respective future needs.

If you are worried about your former spouse ‘emptying’ the accounts, you can contact your bank and ask them to place a dual authorisation on the account (i.e. a ‘2 to sign’ feature) so you can review and authorise any transactions.

It can be prudent to avoid distributing funds from a joint account until you have reached an agreement, however this will not work for every matter as sometimes a party needs to access joint funds to support themselves or the children.

Can I still sell the house before we have negotiated a property settlement?

Sometimes people are concerned about achieving the best possible sale price, particularly in circumstances where there is a decline in the property market. If your property is in joint names, you should usually not sell your property without the agreement (or knowledge) of your former spouse. You might also need to obtain your former spouse’s agreement to sell the property even if the property is in your sole name.

If you both agree to selling a property, you can ask the conveyancers to hold the net proceeds of sale in their trust account. Trust account rules provide that conveyancers will then only release funds on your joint written instructions (similar to a ‘2 to sign’ feature).

What if I don’t know what we own?

We often see people who are not sure about what their property pool includes. This may be where a couple has not shared finances, or where one party has managed the finances throughout the relationship. If your matter is not in Court, you can utilise tools such as the national property ownership search or ASIC searches to understand an individual’s business or property interests in Australia.

Can I just get divorced without a property settlement?

You are not required to go through a formal property settlement before you apply for a divorce. It is important to know that limitation periods will commence upon your divorce, meaning you have 12 months from the date of your divorce to apply for a property settlement with the Court.

There are limited circumstances in which you can apply to the Court after this time, however it is a more costly exercise and there is no guarantee that the Court will allow your application (particularly if you do not have a good reason for the delay).

If you are not married but in a de facto relationship, you have 24 months from the date of separation to apply to the Court for a property settlement.

If you have separated and are looking to negotiate a property settlement, or if you have particular questions about what you should and shouldn’t be doing when it comes to your joint assets, you should seek specialist advice about your particular circumstances. Call us to make an appointment on (02) 6225 7040 or by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers to obtain advice.

Author: Anika Buckley

Superannuation and Pensions in Property Settlements in Australia

In most property settlements, each party will have superannuation entitlements with one or more superannuation funds. After the breakdown of a marriage or de facto relationship, it is prudent to obtain advice as to whether to seek an adjustment of superannuation interests, including pensions in payment phase.

Is it necessary to value superannuation?

One of the first steps in the property settlement process is to identify and value all of the assets, liabilities and superannuation owned by each party, or in which they have an interest. It is generally not necessary to value superannuation funds, except where one party has an interest in a defined benefit scheme or fund. The value of a defined benefit fund is determined by reference to a number of considerations, such as the salary of the member spouse over a certain period of their employment, and other factors such as age and gender.

It is prudent to value defined benefit interests in superannuation, so that parties negotiating a property settlement have certainty about the value of superannuation interests.

Can superannuation be split by the Court?

The Court has the power to order that superannuation entitlements, and pensions, be split by a superannuation fund. Before the Court can order that a superannuation interest be split however, the Court must be satisfied that it is just and equitable for there to be an adjustment of the superannuation pool.

Superannuation can also be split by entering into a Superannuation Agreement or Binding Financial Agreement pursuant to the Family Law Act.

What is the effect of a superannuation splitting order?

A superannuation splitting order could provide for three different outcomes of a superannuation split:

1. To create a new membership with the superannuation fund for the incoming spouse, where the superannuation interest is held;

2. To rollover the superannuation interest into another fund; or

3. To payout the superannuation interest as a lump sum payment.

Superannuation splits must occur in accordance with the Rules of a superannuation fund. For example, some superannuation funds will not permit a non-member spouse to make employee or voluntary contributions to their superannuation fund, whereas the member spouse may be permitted to make those contributions to their own superannuation fund.

How is superannuation treated in a property settlement?

In most cases, a superannuation interest will be treated as a capitalised asset available for division in the property settlement.

This approach is not appropriate however in cases where a party has an entitlement to a non-commutable invalidity pension, which is a pension that is not able to be split. It is well-settled in case law that as such pensions are not able to be split, they should be treated as a permanent and ongoing financial resource available to a party as an ongoing income stream, as opposed as being treated as a capitalised asset which is available for division.

Superannuation splitting in family law matters is a highly specialised and technically complex area of law. You should seek specialist advice about superannuation splitting if you are considering it as part of a property settlement with a former spouse or as part of a pre-nuptial agreement, known as a Binding Financial Agreement.

If you are seeking advice in relation to property settlement matters, contact us to arrange an appointment on (02) 6225 7040 or by email on info@rmfamilylaw.com.au or get started now online to make an appointment with one of our experienced family lawyers.

Author: Margot McCabe

International Prenuptial Agreements in Australia

A prenuptial agreement or Binding Financial Agreement (BFA) as they are known in Australia, is a document that sets out how your assets and liabilities will be divided in the event of a separation. A BFA can be entered into before, during or after a relationship.

Prenuptial agreements are common in many different countries and are tailored to the law of each country. If you entered into a prenuptial agreement overseas, you should be aware that it will not automatically be recognised if you are separating in Australia.

For a financial agreement to be binding in Australia, it must comply with the requirements of the Family Law Act 1975.

Part VIIA of the Family Law Act sets out the requirements of a BFA, including:

1. That the agreement be in writing and signed by both parties;

2. That each party obtain independent legal advice prior to signing the agreement;

3. That each party is provided with a signed statement by the legal practitioner who provided them with independent legal advice; and

4. That the signed statement is provided to the other party under the agreement.

Even if an agreement is binding in the country of origin, it may not be enforceable in Australia if it does not comply with the above requirements. In absence of an agreement, the division of property between married couples is governed by section 79 of the Family Law Act 1975, which takes into account the contributions and future needs of each party, among other things. You may wish to inform your lawyer or the Court that a prenuptial agreement exists, but the Court is not bound to follow the terms of the agreement. The Court may, however, take the agreement into account in determining whether orders are just and equitable.

If you would like the terms of your international agreement to apply in Australia, you should enter into a BFA that complies with Australian law. If you have assets overseas, or are a citizen of another country, it is also important to consider the laws of the respective countries to determine how those assets may be dealt with if you separate with your partner. You should obtain specialist family law advice to help you understand how the law applies to your situation.

If you would like to discuss your matter and how we can assist you, please contact us today on (02) 6225 7040 by email info@rmfamilylaw.com.au or get started now online.

Author: Amy Davis

Assets and Financial Resources You May Not Be Considering in a Property Settlement

Each party negotiating a property settlement has a duty to the Court and to each other to give full and frank disclosure of all information relevant to their financial circumstances in a timely manner. When identifying assets that form part of a property pool with your former spouse or partner, it is typically categorised by any interest held in:

• Real property;

• Bank accounts and cash;

• Cryptocurrency;

• Shares;

• Trusts interests;

• Mortgages and/or loans/lines of credit;

• Motor vehicles;

• Superannuation interests; and

• Inheritances.

Beyond these, there are further assets and financial resources that often fail to be considered by parties which may be relevant in determining the entire property pool available for division. These may include:

• Loyalty point programs such as:

1. Frequent Flyer Points; and

2. Hotel points.

• Long service leave entitlements;

• Windfalls such as lottery winnings and/or personal injury compensation payouts;

• House contents such as:

1. Furniture;

2. Electronics;

3. Artwork;

• Pets; and

• Debts such as gambling or personal loans through friends or family.

Some of these items can be difficult to value, given subjectivity, depreciation, or their assumed nil cash value. Whilst frequent flyer points and hotel points may have nil cash value, they still hold a value and they can usually be transferred between parties.

Long service leaves accrued during a relationship may be considered valuable and relevant to the property pool, particularly if it has been accrued over a number of years.

Household contents and furniture are typically valued by their second-hand sale worth, with artwork and other sentimental items often having a higher value to a party, depending on when or how they were acquired (or if for example, they were inherited).

Pets are a complicated ‘asset’ and may have a significant emotional value between parties. This can include the pet’s monetary value from a breeding perspective to a simply strong emotional attachment. ‘Custody’ issues can also arise about jointly owned pets.

Personal loans through family or friends or gambling debts may have been hidden by a spouse from their partner. It is important to identify if these exist so that the entire property pool can be accurate determined and dealt with as part of any settlement.

It is important to note that the above information is relevant to family law and may not be accurate under other areas of law, such as in cases of bankruptcy.

If you or someone you know is considering your assets and financial resources between an ex-spouse or partner, it is important to seek support and advice from those best qualified to help you. Robinson + McGuinness is available to assist you with your family law matters, no matter how complex.

If you would like advice in relation to your family law matter, contact our office at (02) 6225 7040 or by email at info@rmfamilylaw.com.au or get started now online to make an appointment with one of our experienced family lawyers.

Author: Emily Nicholls

Interim Property Orders - Do I Have to wait wntil the Final Hearing to ask the Court to sell the house?

The Family Law Act 1975 gives the Court power to make Orders dividing up your and your ex-partner’s assets, liabilities, and superannuation entitlements after you separate. As with all family law issues, what Orders will be made (if any) will turn on the specific facts of each case.

Generally speaking, the Court will exercise its power to make these types of Orders on a final basis. This means that once any necessary transfers have been made, bank accounts closed and superannuation split, you will have your separate ‘pool’ of assets that you can do whatever you want with, your ex has theirs, and you each then go your separate ways with the matter finalised and behind you.

In some cases, however, people simply cannot wait years for a final hearing to determine what will happen to their assets on a final basis. The asset pool might be diminishing because the parties cannot pay the mortgage, or a party may need access to funds that are locked up in a frozen bank account to pay a tax debt or other liability, or legal costs. In those cases, the Court may be asked to step in and make interim or ‘partial’ property Orders.

The Full Court in the matter of Strahan (2011) set out the two-step process that the Court will generally follow when asked to consider these types of applications.

Firstly, the Court must consider whether the interests of justice require the exercise of its power on an interim basis and whether it would be ‘appropriate’ to make that Order, with the interests of justice being the overarching consideration. Though an applicant does not need to show “compelling” circumstances, the Court will have regard to the fact that usually property orders are made after a final hearing. 

In the second stage, the Court must turn its mind to making a conservative assessment of what the range of possible outcomes may be on a final basis so that whatever property is left over after the interim order is made will still be enough to meet the ‘legitimate expectations of both parties. In other words, what one person is given on an interim basis must be less than what they could possibly be entitled to on a final basis, or the order must be capable of being reversed so that the Court does not wind up deciding that the other person is entitled to more than what is then left available (and is appropriate) for the division at the end of the hearing.

Successfully applying to sell a house on an interim basis is, therefore, possible, but of course, will depend on the facts of your own case. You should seek specialist family law advice before going ahead with an interim application. If you would like to discuss your matter and how we can assist you, please contact us today on (02) 6225 7040 by email info@rmfamilylaw.com.au or get started now online.