Jun 6, 2022 | Family Law, Litigation and Court
A binding financial agreement – also commonly referred to as a ‘pre-nuptial agreement’ – is an agreement sets out the division of property and child custody agreements in the event of the breakdown of a relationship. These documents are legally binding and can be enforced by the courts, which allow for certainty, trust, and peace of mind in a relationship.
However, the High Court has made it clear in a recent case that it will not enforce any binding financial agreements as a consequence of unconscionable conduct, particularly when there is a significant power imbalance between the parties. Unconscionable conduct is defined to mean conduct which is so harsh that it goes against good conscience. A common instance is when an innocent party is subject to a special disadvantage which seriously affects the ability of the innocent party to make a judgment as to their own best interests.
What are Binding Financial Agreements?
Binding financial agreements are legally binding agreements that address what happens to a couple’s finances and property in the event that there is a break down in a marriage or de-facto relationship.
The Family Law Act 1975 is the relevant legislation which applies to binding financial agreements. Importantly, a binding financial agreement can protect assets including cash, property, superannuation and inheritances.
However, in order for a binding financial agreement to be binding on the parties’, it is prudent that each party obtain independent legal advice, and the binding financial agreement must contain a statement from a legal practitioner.
Recent Case: Thorne v Kennedy
A recent High Court case has demonstrated that if a binding financial agreement is entered into in circumstances of unconscionable conduct, the agreement will not be upheld.
Thorne v Kennedy involved a binding financial agreement between a wealthy Australian property developer and his ex-wife.
The couple met online in 2006 on a website for potential brides. At the time, Ms Thorne was 36 years old, living in the Middle East with no substantial assets. Mr Kennedy was 67 years old and had assets in the vicinity of $18 million – $24 million.
Ms Thorne moved to Australia. Then, ten days before their wedding Mr Kennedy took Ms Thorne to a solicitor to obtain advice about the terms of a binding financial agreement which was purported to be entered into between them. The lawyer advised Ms Thorne that the agreement was highly prejudiced against her, and advised her not to sign it. Mr Kennedy told Ms Thorne that if she did not sign the agreement then the wedding would not go ahead. Despite the lawyer’s ‘advice, Ms Thorne signed the agreement and the wedding continued.
The couple separated in 2011 and Ms Thorne was provided with what the High Court described as a ‘piteously small’ lump sum payment based on the terms of the binding financial agreement. After lengthy legal proceedings, the High Court ruled that Mr Kennedy had taken advantage of his ex-wife’s vulnerability to obtain an agreement which was ‘entirely inappropriate and wholly inadequate.’ The agreement was entered into as a result of undue influence, illegitimate pressure and unconscionable conduct – Ms Thorne was in a foreign country, with no support system, and was entirely reliant on Mr Kennedy for financial and emotional support. Mr Kennedy had also promised to help relocate Ms Thorne’s family to Australia following the marriage. As a result, the binding financial agreement was not enforceable and was subsequently set-aside.
Impact on Binding Financial Agreements in Australia
This ruling has been considered a landmark case in the interpretation of binding financial agreements in Australia. As a consequence of the agreement being set aside, the Federal Circuit Court allowed Ms Thorne to bring a property settlement claim against Mr Kennedy.
This case serves to reinforce that binding financial agreements are not cheap documents and therefore appropriate advice and caution must be taken when entering into these agreements.
Contact us
If you would like more information on how we can assist you with your binding financial agreement or any other family law matters, do not hesitate to contact us on 9963 9800 or contact us via the form here.
Jun 4, 2022 | Family Law
An ‘AVO’ refers to an ‘Apprehended Violence Order’, issued by a court against a person who has made another person feel fearful of assault, harassment, violence or intimidation.
There are two types of Apprehended Violence Orders:
- Apprehended Domestic Violence Order (ADVO), which is issued where the two parties are married, family, or in a de facto relationship.
- Apprehended Personal Violence Order (APVO), which is issued where the two parties are not Examples include colleagues, friends or neighbours.
How to apply for an AVO
An AVO can be pursued by the police or, in the absence of the police, through a private application in the local court. If the police will not make the application on your behalf, you can still make an application, but you should get legal advice first. For instance, sometimes the police will not take action where no assault has taken place, but the court may still grant you an AVO.
The police and the courts take AVOs very seriously, and applications will be refused if they do not seem legitimate, or appear exaggerated or fraudulent. If you are considering applying for an AVO, it is useful to write down as much information as you can including dates, times and places of incidents, and how you felt at the time, so you can provide this to your solicitor to obtain the relevant advice.
In Court
This may come as a surprise, but the defendant (the person who the AVO is issued against) can consent to the AVO being made without admitting to any of the behaviour they have been accused of. However, if you are a defendant, it is highly recommended that you consult a lawyer before consenting to an AVO, because it can have serious ramifications and may affect your access to any children. It can also result in you losing a firearms license and in certain types of employment, it can affect your position.
If the defendant does not consent to an AVO, the court will hear the matter to first determine whether a provisional order should be made. Usually a provisional order is made and then the Court will refer the matter to a hearing.
At the hearing, both parties will present their facts to the judge, and the judge will determine whether or not to issue the AVO and if so – how long the AVO will be imposed for and what the conditions of the AVO will be.
Defending an AVO
There are many ways to defend against an AVO. If you are a defendant, it is very important to obtain legal advice before defending yourself in court. If you have not had time to obtain legal advice, you may ask the court for additional time.
As mentioned above, you can consent to an AVO being made against you without admitting to any of the reasons the AVO was issued (e.g. violence, harassment, etc). If the evidence against you is strong, you may wish to consent to it instead of having a contested hearing. In some circumstances, you can apply for the AVO to be revoked or changed.
Our experienced lawyers can assist you in defending an AVO that has been brought against you. We will consider the reasons for the AVO, hear your side of the story, look at all of the facts and advise you accordingly.
Breaching an AVO
It is important to remember that breaching an AVO is a criminal offence. The maximum penalty is a fine of $5500 and/or two years in prison. We strongly recommend obtaining legal advice before acting outside of the terms of any AVO issued against you.
Contact Us
The team at Etheringtons Solicitors are skilled at handling all matters relating to AVOs and are able to assist with complex cases. If need assistance with any area of litigation, do not hesitate to contact us on 9963 9800 or via the contact form here.
Jun 2, 2022 | Family Law
Spousal maintenance is a responsibility you or your former partner might have to financially support the other person after separation or divorce. Spousal maintenance is not automatic and, in most cases, is only payable where one partner cannot reasonably support themselves and the other person has the capacity to pay maintenance. It may be a series of regular payments or it can be paid in one lump sum.
Parties should attempt to reach an agreement out of court, or negotiate a formal property settlement, before commencing legal proceedings. If an agreement cannot be reached, an application can be made for a maintenance order.
Court Order for Spousal Maintenance
Parties to a marriage have the right to make an application for Spousal Maintenance (section 72 of the Family Law Act), and similar provisions enable parties to a de facto relationship to apply (section 90SE). When assessing an application for spousal maintenance, the court will take into account numerous factors outlined in section 75(2) which include:
- Income, property, debts and financial resources;
- Age;
- Health;
- Ability to earn an income;
- A suitable standard of living;
- Children living with you or your former partner.
Common situations that result in spousal maintenance include when a spouse:
- Had to give up work to care for young children and it is either unreasonable for them to obtain work or they do not have necessary skills enabling them to re-enter the workforce;
- Is unable to work due to health issues or because they are suffering with a mental or physical disability;
- Is responsible for taking care of children under 18 years or adult children who are disabled.
When to apply for a Spousal Maintenance order?
There is a strict time limit if you are applying for spousal maintenance for the first time, but once an order has previously been made, time limits do not apply. If applying for the first time, an application must be made to the court within:
- One year of a divorce being finalised for married couples (when a Certificate of Divorce is actually issued by the Court);
- Two years of separation for de facto couples.
An application to the court outside the time limit will be granted in limited circumstances.
Contact us
We know that the divorce process can be strenuous for both parties. If you would like more information regarding a property settlement matter or any other family law matter, do not hesitate to contact Etheringtons Family Lawyers in North Sydney on (02) 9963 9800.
Jun 1, 2022 | Family Law
If you have been involved in family law matters, then you may be familiar with the section 75(2) factors. This section of the Family Law Act relates to adjusting a property settlement based on the contributions of the parties. It also considers factors which can “soften” the effect of looking at a property settlement. In this article, we break down what section 75(2) factors are and explain what they mean for you.
What is Section 75(2)?
This section of the Family Law sets out numerous factors that the Court may take into account in deciding how to distribute property in property settlements.
What are the Factors?
Section 75(2) of the Family Law Act 1975 (Cth) sets out numerous factors that may be taken into account by the Court in property settlements when determining whether there are any special circumstances that require adjustment to the property settlement amount.
The factors are:
- The age and state of health of each of the parties Income, property, finances and ability to earn an income.
- Whether either party has the care or control of a child of the marriage who is under 18.
- Commitments relating to support of themselves, a dependent or other person.
- Eligibility for a pension, allowance or benefit.
- Whether the parties have separated or divorced.
- The extent to which payment of maintenance could enable further education and therefore increase one of the parties earning capacity.
- The effect of any proposed order on the ability of a creditor of a party to recover a creditor’s debt.
- The extent to which one party has contributed to the income, earning capacity, property and financial resources of the other party.
- How the length of the marriage affected the earning capacity of the party seeking maintenance.
- The need to protect a party who wishes to continue their role as a parent.
- Financial circumstances of any current cohabitation by either party.
- Orders made under Section 79 of the Family Law Act, if any. This section regulates how assets are to be divided.
- Any child support that one of the parties is liable for.
- Any fact or circumstance which the court feels needs to be taken into account for reasons of justice.
- The terms of any financial agreement binding on the parties to the marriage.
What Do They Mean for You?
If you are going through a separation, it is important to understand what these factors mean for you. These factors are important for the court’s consideration and assessment of what each party’s ‘future needs’ are likely to be.
This requires the court to anticipate what each party’s life is likely to look like in the future and award a percentage uplift to the party with the greater ‘need’. As seen above, there are many factors that the court will take into consideration when deciding who gets what portion of the assets. It is therefore important to understand that property settlements can become quite complex.
Contact Us
If you would like to discuss your family law matter with one of our family lawyers, please contact us on 9963 9800 or at via our contact form.
May 30, 2022 | Family Law
Single parent families now represent 14% of all Australian families, with a majority of their children being under the age of 18. Being a single parent can be difficult financially, therefore, it is important to ensure that your financial affairs and estate plan are in place to protect your children should something ever happen to you. An Estate Plan is legally binding and documents how you wish for your assets to be distributed in the event of your death.
This article will discuss the most important factors to consider when forming your estate plan as a single parent, namely making sure you have an updated Will, have made plans regarding your insurance and superannuation and have appointed a guardian.
Your Will
Your Will appoints an Executor to manage your assets and liaise with your children’s guardian. The Executor will hold your children’s share of the estate on trust until they become adults. Alternatively, a solicitor can assist you in setting up a private trust in which your children’s share of assets is held by someone other than the Executor.
As a single parent, it is essential that your Will is up to date and reflects your current family composition and financial status. If you are currently in the process of separating from a partner or are entering into a new relationship, these changes can have a profound effect on your estate plan. Any, and all, alterations to existing Wills must comply with section 6 of the Succession Act 2006 (NSW). If you do not have a Will, your assets will be divided according to the laws of intestacy, and may not be divided according to your wishes had you been alive. This is why it is crucial to have an accurate and updated Will which clearly sets out your wishes.
Life insurance and Superannuation
It is important to note that your life insurance and superannuation death benefits are not controlled by your Will. Beneficiaries should be nominated for these assets so that your children may be financially supported after your death. While minor children cannot receive these assets themselves, there are methods for protecting these assets until your children are older.
Appointing a Guardian
In the event of your passing, it is important that a guardian is appointed. In multiple parent families, the surviving parent is made solely responsible due to the presumption of shared parental responsibility prior to the death. However, in single parent families, the appointed guardian will be responsible for your minor children (those under the age of 18) in your absence, and will have decision-making powers over their care, welfare and development. Appointing this guardian will help support your children through the difficult transition in the event something happens to you. It will also avoid any uncertainty over who is responsible for them, and may assist in reducing family conflicts in the future.
This is a significant decision, as the appointed guardian will be responsible for their medical treatment, education, residence and other day to day considerations. It is important that you choose someone who you believe will make these decisions in your children’s best interests. The person you are considering appointing should be made aware of the significant responsibilities of this role. This includes communicating the specific arrangements you wish to be made in your stead. You may choose to include a Memorandum of Wishes with your Will to provide any such specific guidance for your guardian.
Similarly, you may wish to prepare an Enduring Power of Attorney which specifies who will make personal and financial decisions on your behalf if you become incapacitated by illness or an accident.
How Etheringtons Solicitors can help
Preparing an estate plan can alleviate the concerns involved with navigating through the uncertainties of life. Creating a Will, organising your assets and appointing a guardian will ensure your children’s interests are protected. If you are looking to create a new Will, or would like to amend your existing Will, please call us on (02) 9963 9800 or contact us via our contact form.
May 29, 2022 | Family Law
De facto relationships are legally defined as a relationship between two people, who are not legally married or related by family and live together on a genuine domestic basis.
Does a de facto relationship require cohabitation?
There have never been any cases where the court has ruled that a de facto relationship exists where the couple has never lived together. However, the Family Court has indicated that the concept of living together is not necessarily based on the proportion of time a couple spends living in the same property.
Factors considered when defining de facto relationships
In practice, the court decides if a de facto relationship exists based on a number of factors, including:
- The duration of a relationship
- Whether a sexual relationship existed
- The nature of the couple’s common residence
- The degree of financial dependence or interdependence between the couple
- The degree of mutual commitment to a shared life
- The ownership, use and acquisition of property
- The care and support of children
- The reputation and public aspects of the relationship
Limitation period
If you were in a de facto relationship and have separated from your partner, you have a two year time limit from the date your relationship ceased to make a property claim against them.
There are situations when this may be extended and you should seek professional legal advice to determine whether this may apply in your circumstances.
Further Information
If you would like more information on how we can advise you following a relationship breakdown, whether it is a marriage or de facto relationship, do not hesitate to contact us on 9963 9800 or via this contact form.
