Jun 30, 2022 | Family Law
We will all be involved in a dispute at some point in our lives. We may even reach a point where we want to take someone to court in order to reach an outcome that we desire.
Have you wondered what happens if the other person is not able to pay up if you win against them? If you reasonably believe that the other person is going to sell their property in an attempt to avoid paying if they lose a court dispute, asset freezing orders (also known as asset preservation orders or Mareva orders) are one way to make sure your opponent has enough resources to meet a judgment against them.
There are lots of misconceptions about when and how you can get an asset freezing order.
Myth 1: Their purpose is to seek security for a pending judgment
Too often, applications for a freezing order are made with the sole intention of seeking security for a judgment which a plaintiff hopes to gain in the future. There are certain requirements you must meet before the court will make a freezing order.
Myth 2: They’re easily lodged with few requirements
This is an extreme order which will not be granted lightly. There are a variety of requirements that must be satisfied before the court will allow the order.
- Firstly, there is a minimum standard to which the case must be The case must be a ‘good arguable case’, that is, you must be able to convince the court that you have a serious issue to be tried by the court.
- Next, the plaintiff must prove that there is a real danger that the other person may dispose of their assets in order to avoid paying if you win. You will be required to provide significant evidence to support this claim. Any judge hearing such an application will ask: ‘is there an imminent transaction and have you given notice to the other side?’
- Finally, the court will also consider the nature of the defendant’s assets – for example they may consider the financial standing of the defendant, including their credit history.
Myth 3: You can freeze all assets held by the respondent
When applying for a freezing order, the plaintiff cannot simply request a blanket freezing order over all of the known assets a defendant possesses. The value of the assets covered by the freezing order cannot exceed the likely maximum amount of the reasonable claim by the plaintiff.
The order must also exclude assets for dealings by the respondent for legitimate purposes. This may include payments for ordinary living, business expenses or dealings in the discharge of contractual obligations, that were incurred before the freezing order was made.
Seeking legal advice
It is imperative that you are accurately informed of the obligations and requirements of a freezing order before lodging an order with the court. If you would like further information regarding freezing orders or general litigation advice, please do not hesitate to contact one of our experienced litigation solicitors on 9963 9800 or via our contact form.
Jun 21, 2022 | Family Law
Like the breakdown of a marriage, the breakdown of a de facto relationship may require court involvement to settle financial and/or parenting disputes. This is a prominent concern considering how 10.4% of the Australian population were registered as being in a de facto relationship in 2016.
When making a property settlement order in a de facto relationship, the jurisdiction of the Federal Circuit and Family Court of Australia (‘Family Court’) relies upon definitive evidence of a breakdown. This can cause disputation, as the Family Law Act 1975 (Cth) (‘Family Law Act’) does not include an exhaustive definition of a breakdown. In light of this, we explore how the Family Court determines the breakdown of a de facto relationship by reviewing the High Court decision of Fairbairn v Radecki [2022] HCA 18.
What is a De Facto Relationship?
A de facto relationship is defined in the Family Law Act as being between persons who:
- are not legally married; and
- are not related by family; and
- have a relationship as a couple living together on a genuine domestic basis.
In determining whether a relationship is that of a “couple” and is entitled to weight in court, the Family Court will refer to a set of circumstances appropriate to the case. These circumstances may include the following:
- the duration of the relationship;
- the extent of a sexual relationship;
- the degree of financial independence;
- the use and acquisition of their property;
- the degree of mutual commitment; and
- whether they cared for and supported children.
What is a Breakdown of a De Facto Relationship?
Section 90SM of the Family Law Act stipulates that the court may only initiate a property settlement order once there has been a ‘breakdown of a de facto relationship’. Despite this condition, the Family Law Act does not exhaustively specify what is comprised within a breakdown. As a result, the definition of a breakdown is determined by case law.
In referring to case law, however, there are various ambiguities regarding the determination of a “breakdown”. This poses a concern as the conclusive breakdown of a de facto relationship is necessary for the court to be able to determine whether they may exercise jurisdiction in property settlement proceedings.
Fortunately, the decision of Fairbairn v Radecki [2022] HCA 18 (‘Fairburn v Radecki’) on 11 May 2022 has aided in clarifying the circumstances involved in the breakdown of a de facto relationship.
Fairburn v Radecki
Chronology
2005: Fairbairn and Radecki commenced a de facto relationship.
2010: Fairbairn and Radecki executed a Cohabitation Agreement which specified that they had to ‘quarantine their respective property’. Whilst they agreed to keep their assets separate, they chose to live in a house owned by Fairbairn.
2015: Fairbairn was diagnosed with dementia.
2017: Fairbairn’s capacity to make long-term decisions was ‘largely, if not completely, absent.’
2018: In January, the NSW Civil and Administrative Tribunal appointed the NSW Trustee and Guardian (‘the Trustee’) to make health and welfare decisions on behalf of Fairbairn. In March, the Trustee decided to move Fairbairn into an aged care facility. The Trustee sought to sell the home to fund Fairbairn’s ongoing care, although this decision was opposed by Radecki. As a result, the Trustee sought property settlement orders from the Family Court which included orders for the sale of the home.
Primary Issue
To have jurisdiction over the alteration of property settlement orders, the Family Court required sufficient evidence that a de facto relationship had broken down pursuant to section 90SM of the Family Law Act.
Holding
In their Cohabitation Agreement, Fairbairn and Radecki agreed that their assets would be kept separate. In 2017, however, Radecki took various actions which contradicted this agreement.
For example, Radecki sought to create a new Enduring Power of Attorney which would give him significant control over Fairbairn’s assets. He also procured a revised Will whilst Fairbairn was hospitalised and as a result, she was unable to act in her own best interest.
It was held that Radecki was acting contrary to Fairbairn’s interests because he was no longer making decisions which benefitted her emotionally, physically or financially. As Radecki was not making the ‘necessary or desirable adjustments’ which would have evidenced a mutual commitment to a shared life, it was held that the relationship had broken down pursuant to section 4AA(2) of the Family Law Act.
Judgement
With reference to Stanford v Stanford [2012] HCA 52, the High Court held that mere physical separation is not sufficient in justifying the breakdown of a de facto relationship. A de facto relationship may continue even if the parties are residing at separate locations.
An impaired mental capacity is also insufficient in justifying the breakdown of a de facto relationship. The will or ability to make ‘necessary or desirable adjustments’ to support a shared life is not contingent upon mental capacity. Adjustments must be made in accordance with the other party’s interests to support the continuation of a de facto relationship. When these adjustments act in opposition to the interests of the other party, it may be concluded that a mutual commitment to a shared life has ceased.
How Etheringtons Solicitors can help
A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you are party to a de facto relationship which has broken down and would like to have a confidential discussion, contact Etheringtons Family Lawyers in North Sydney on (02) 9963 9800 or via the form here.
Jun 17, 2022 | Family Law, Property Law
When parties separate, it is important to make sure that assets are protected before a family law property settlement is formalised. One way that matrimonial assets can be protected is through the lodgment of a caveat.
What is a caveat?
A caveat is a note that is recorded on the title of a property that protects any interest that the maker of the caveat may have on the property. This notice can be used as a way to delay a property transaction. If your ex-partner is the registered owner, a caveat can prevent them from adversely dealing with the property such as by selling, transferring, mortgaging or encumbering it until the court has determined whether you have an interest in the property. A person who lodges a caveat is known as the ‘caveator’.
When should a caveat be lodged?
A caveat may be lodged if a party has a caveatable interest in the property. This may occur if both parties to a relationship have an interest in the property but there is only one party’s name on the title of the property. This interest may be present if, for example, both parties contributed to paying the mortgage or have contributed to the property through other means throughout the relationship. This can include non-financial means such as property maintenance. If the person making these contributions does not have their name registered on the title of the property, then it is likely that they will not gain any benefit from that property, if it were to be sold by the proprietor.
How is a caveat lodged?
A caveat is lodged by way of a caveat form, which can be completed for electronic lodgment by a solicitor or conveyancer, or in hard copy with NSW Land Registry Services. Basic requirements of the caveat include the name and address of the person lodging the caveat, the name and address of the person who owns the property and the interest claimed by the person lodging the caveat. It is important to complete the caveat correctly the first time as once it is lodged as you cannot lodge another caveat on the same grounds unless you are granted leave by the court.
What happens after a caveat has been lodged?
Once a caveat is lodged NSW Land Registry Services will then examine the documentation, and if an interest is adequately made out, they will record the caveat against the title of the property. They will then serve notice to both the caveator and the registered proprietor of the property. Subsequently, the registered proprietor will be entitled to serve a lapsing notice on the caveator, requiring them to commence court proceedings immediately in order to establish their interest to that property. Failing to attend to this within fourteen (14) days will result in the caveat lapsing.
How do you remove a caveat?
A caveat can be removed by bringing an application to the Registrar of Titles. This application must be in writing, and have a supporting certificate signed by a legal practitioner. This application must also include a statement confirming that the caveator does not own the property and has no claim to it. If proceedings are not commenced by the caveator to protect their caveat, then the caveat will lapse after three months as a result of the application lodged with the Registrar. Once the caveat has lapsed the owner of the property can then lodge a form to formally remove the caveat.
Family law matters can get very complex. Get Legal Advice.
When drafting a caveat, it is important all proper protocols are followed to ensure that the caveat is permitted by the relevant authority.
Our experienced family lawyers are ready to assist you with your matter and take the stress out of your divorce or other family law matters. If you need any assistance please don’t hesitate to contact Etheringtons Family Lawyers in North Sydney via this form or on 02 9963 9800.
Jun 13, 2022 | Family Law
If you and your partner separate, you must consider what will happen to the property you own and how it will be divided between the two of you. The process of deciding what assets, financial resources and liabilities to divide is known as a property settlement.
Property settlements can be done between parties have been married as well as couples who have been in a de facto relationships. A property settlement can be dealt with between the parties, or with the intervention of the court. In this blog, we discuss property settlements, particularly in relation to what happens to superannuation during the property settlement process.
What is property?
It is commonly accepted that property can include, but is not limited to, physical property, money, superannuation entitlements, inheritances and business interests.
What happens to superannuation in property settlements?
Superannuation is commonly included in property settlement matters. This may be undertaken by way of an agreement between the parties, which can be implement through Consent Orders or a Binding Financial Agreement, or by the intervention of the court.
However, it is important to note when dealing with a superannuation interest, the first step is to ascertain the value of the superannuation interest. In most situations, this will be done according to various methods set out in the Family Law (Superannuation) Regulations 2001. A particular method to be used in each individual case will depend on the superannuation fund. If the parties are dealing with a fund for which there is no specific method of valuation provided in the Regulations, the court will determine the value as it considers appropriate. Once the superannuation is valued, it is included in the property pool (assets that arose out of the relationship) either amongst the other assets or as a separate list, depending on particular circumstances.
Consent order
Once the superannuation fund is valued, it can then be ascribed a value in the matrimonial property pool and can be dealt with by way of a consent order. A consent order is a written agreement that is approved by a court, which can finalise financial arrangements between the parties. A consent order can contain provisions that the parties retain their personal superannuation entitlements, or that a portion is to be split to the other party. In the event that the superannuation entitlements of one party are to be divided, this is to be carried out by way of a ‘splitting order’.
Splitting order
A splitting order can be achieved by an order which allocates either an amount or a specified percentage from that party’s superannuation interest to the other party, which subsequently directs the trustee of the superfund to transfer their newly created entitlements into a separate superannuation scheme.
In some cases, it is unpractical to determine the splitting of superannuation entitlements at the same time when other property issues are being dealt with. Such a determination may need to be postponed until a later stage in the proceedings because of certain difficulties with respect to the valuation of superannuation interests.
Contact us
It is vitally important to understand how superannuation will be dealt with in your family law proceedings. If you would like more information on how we can assist you with your property settlement or if you have any family law general enquiries, do not hesitate to contact one of our family law solicitors on 9963 9800 or at via the contact form here.
Jun 12, 2022 | Family Law
The Legal Implications of Partner Separation
When a relationship breaks down, there are significant legal implications to consider. The legal consequences of a partner separation differ from divorce to de facto relationships, and are impacted by your living circumstances.
What is the definition of ‘separation’?
‘Separation’ in family law is defined as the bringing to an end of a marriage or de facto relationship. There is no requirement to register a relationship separation under Australian law. However, separation is a fact which must be proven if it is disputed by one party in legal proceedings.
In the case of a divorce, the date of separation is recorded on the application for divorce and is sworn or affirmed to be true and correct by the applicant. If you cannot prove you separated from your spouse at least 12 months before you file your application for divorce, the court will not grant the divorce.
Therefore, it is a good idea to confirm the separation in writing, even if this is via text message or email that can be saved. Often divorce cases and cases for property settlement in de facto relationships can turn upon whether or not a party can prove that separation occurred on a particular date.
What about de facto relationships?
In the case of a de facto relationship, whether or not a property settlement is available can depend on whether the relationship lasted for two years or longer. If the de facto relationship was less than two years long the court may have no jurisdiction under the Family Law Act to provide a property settlement. There may be alternate remedies available or another basis other than the two year requirement to show that a de facto relationship existed.
In addition, there is also a two year limitation period in which to commence the application, from the time of separation. In such cases, again, the date of separation in evidence can be significant.
What about if you still live together?
Separation can take place even if the parties still live in the same property. In these cases, the court will need to examine a number of factors to determine when and if a separation has taken place. Those factors can include whether the parties:
- Slept in separate rooms or together after the alleged date of separation;
- Performed domestic duties such as cooking and washing for each other after the alleged date of separation;
- Separated their financial affairs to any extent after the date of separation;
- Lodged or signed any documents informing government agencies of the separation, such as applications for Centrelink or ATO documents as a single person, as opposed to a person in a relationship;
- Continued to be intimate after the date of alleged separation; and
- Made it publicly known (such as by telling friends and family), that they had separated.
Ten things to consider if a marriage or de facto relationship has just ended:
- Contact your bank or financial institution in writing (in person or email- with your signature appearing) to separate or freeze joint funds.
- If your ex-partner has your power of attorney, ensure it is revoked, and have a new one drafted.
- Consider whether your nominated death beneficiary for your superannuation entitlements is appropriate.
- Photocopy all of your and your ex’s financial documents and put them in a secure location (this should not be at your home or in your motor vehicle).
- Look at your will and consider if it is still what is appropriate.
- If you have children, contact the Child Support Agency and find out how much is to be paid or is payable for child support and what impact that will have on any pension.
- Do title searches on your If your home is not in your name or is in joint names consider placing caveats over the properties. If your property is held as a joint tenant, consider severing the joint tenancy.
- If there has been family violence in the relationship you may need to seek an Apprehended Violence Order (AVO).
- Start a diary which keeps track of time your partner has with the children and any adverse behaviour they display.
- Seek advice from an experienced lawyer.
Contact Us
There are many legal considerations that arise following a relationship breakdown. If you need more information, or if someone you know needs help, please contact Etheringtons Solicitors to speak to one of our experienced solicitors on (02) 9963 9800 or contact us via our form here.
Jun 10, 2022 | Family Law
Following the breakdown of a marriage or de facto relationship, separated parties must consider how to divide joint property. It is crucial to understand each party’s ability to claim entitlements in a property settlement and the assets they are likely to retain.
Family law is a complicated and emotional area of law which is often poorly understood. This is reflected in a great quantity of inaccurate statements often regarded as fact by those in the community. This blog will debunk several of the property settlement myths and provide you with an understanding of the factors a court will consider to resolve a property settlement dispute.
The myth of a 50/50 split
Contrary to popular belief, there is no presumption that assets should be divided 50/50, 60/40 or in any other subjective proportion. The Family Court always has full discretion to divide property in a proportion that is just and equitable for both parties.
People often receive ‘advice’ from well-meaning friends or family as a result of their own experiences. However, no two cases are decided the same and there is no presumption of any kind in relation to a financial settlement when it comes to percentage entitlements. Comparing another person’s property settlement outcome to your own can be misleading and unhelpful when it creates a false expectation or entitlement.
Each property settlement situation is different and should be carefully assessed by a family lawyer qualified to provide you with proper advice.
Factors to be taken into account by the court
The Family Law Act outlines what factors must be taken into account when the courts consider how property is to be divided. There is no universal equation applied to calculate the weight given to each factor. Property settlement is based on all of the information provided and the discretion of the court in deciding the matter.
To decide how to distribute the assets the court will normally take into account factors including:
- The current value of the assets and liabilities to establish a ‘net asset pool’. This includes superannuation entitlements, as well as assets held personally, in partnership or trusts, or by companies.
- The direct financial contributions made by each person to the acquisition of assets or the preservation, improvement or maintenance of those assets. This will include assets owned at the commencement of the relationship.
- The indirect financial contributions made by each person in the relationship, for example, the giving up of a career to allow the other person to further their own career.
- The non-financial contributions by each person, like caring for children, being the homemaker and maintaining or improving the assets by personal exertion such as individual efforts in renovations that increase the value of an asset.
- Identifying the future needs of the parties, for example, age, health, financial resources, superannuation, care of children and income earning capacity.
After considering all of the above factors and others, the Court will consider whether any proposed property settlement is ‘just and equitable’ in the circumstances of the particular case.
The outcome cannot be predicted since no particular factor is given priority over another. For example, someone who is the sole income earner will not necessarily be entitled to a greater financial settlement than the other person who was a stay-at-home parent to the children of the relationship.
Summary
It is important to remember that there is no presumption of equality (like a 50/50 split) as a starting point in respect of contributions and that each matter will be decided upon the particular circumstances of that case. The Family Court has broad powers to make orders for a just and equitable division of assets.
It is important for anyone considering separating from their spouse, or who has already separated, to obtain independent legal advice from an experienced family law practitioner about their likely property settlement entitlements.
If you would like advice, guidance or assistance about property settlement entitlements following the breakdown of a marriage or relationship, contact Etheringtons Family Lawyers in North Sydney on (02) 9963 9800 or via the form here.
