Mar 28, 2022 | Family Law
A fundamental component of a financial or business investment is risk. Adopting risk can reward the investor with higher returns, but at other times it may result in a significant loss or waste of assets. During a relationship, this risk is shared by both partners, but upon separation any subsequent investments are subject to assessment as part of the division of assets in property settlement proceedings.
The Family Court will divide property on a just and equitable basis, which may require an adjustment to be made where one party has prematurely wasted assets upon separation. An adjustment may be done by adding back the value of those assets to the combined property pool. It is important to understand the doctrine of waste and recent trends in the application of add backs by the court.
What happens if one partner has lost or wasted money?
The general rule has been set out in the case of Kowaliw v Kowaliw (1981).The rule states that financial losses incurred by the parties throughout the course of the marriage, whether jointly or otherwise, should be shared by both parties. Where one spouse has deliberately or recklessly disposed of assets before final property settlement but after separation, the value of those assets can be added back to the asset pool. This is known as granting an ‘add-back’. Courts have historically recognised various types of wasted assets including:
- funds that have been withdrawn from bank accounts and spent;
- money or other property, such as land, that has been given away to friends or family members;
- funds gambled or lost in poor investments; or
- assets sold for below market price.
Reluctance in granting add backs
Recently, courts have expressed reluctance to grant add-backs for the waste or loss of assets. This trend was demonstrated in the decision of the Federal Circuit Court in Owen & Owen [2015].
In Owen & Owen, soon after the parties separated in 2013, the wife received an inheritance sum of $305,000 from her first husband’s aunt. The wife then distributed $50,000 of the inheritance to her son and $255,000 to her daughter. The wife maintained that there was an existing agreement that the bulk of the inheritance would go to her children, therefore she did not waste the $305,000. The husband contended that the wife had chosen to give $305,000 to her children and that that sum should be added back to the matrimonial pool.
The Court found that it is no longer appropriate to treat dissipated funds as an add-back. As the $305,000 had been given to the wife’s children, it was no longer an asset owned by either of the parties and could not be included in the parties’ combined assets.
The rule was tested again in the 2017 decision of Charles v Charles, which was an appeal to the Full Family Court. In this case, the wife asserted that money lost by the husband in unprofitable share trading, and notional adjustments relating to mortgage payments made by the husband should be added back to the asset pool. The wife argued but for the husband’s conduct there would have been more money available for division between them.
The Full Court found that the husband’s share trading had not been designed to reduce or minimize the parties’ wealth and he had not acted recklessly, negligently or wantonly, therefore rejecting the wife’s claim that the amounts should be added back.
Conclusion
Recent cases indicate a potential modification of a long-settled precedent, which allowed the courts to adjust for one party’s unilateral expenditure or waste of assets. In practice, where assets have been lost, the court may award the other party a higher percentage of the remaining pool, but the value of the lost asset will not be added back. This represents risk for the many couples who, often for legitimate reasons, allow significant time to pass between separation and beginning their property settlement negotiations.
If you would like further information regarding property division, please do not hesitate to contact Etheringtons Family Lawyers in North Sydney on 02 9963 9800 or via our contact page.
Mar 27, 2022 | Family Law
When children are involved in a separation or divorce, a court may make parenting orders in relation to time each parent spends with their child. These orders are made when the parents have made a genuine effort to engage in family dispute resolution or pre-action measures (such as counselling or mediation), and have made reasonable efforts to communicate with the other party, but still cannot come to an agreement regarding the parenting arrangements.
Parental responsibility and parenting orders
Parental responsibility encompasses all of the duties, powers, responsibilities and authorities which parents have in relation to their children, by law. This includes decision making powers relating to important matters such as medical care or education (as discussed in our article here). The Family Law Act 1975 (Cth) s 61DA requires the application of a presumption of shared parental responsibility to be made in the best interests of the child. This presumption exists unless there are reasonable grounds for believing a parent has engaged in family violence, or abuse of the child or another child who was a member of the parent’s family. However, shared parental responsibility does not mean each parent is entitled to shared or equal time with the children.
Parenting orders set out the specific parenting arrangements for children, and may consider:
- How much time the children spend with each parent;
- Who the children reside with until the age of 18;
- How the children will communicate or how much time the children will spend, with parents or other people who they will not live with (for example, as discussed in relation to grandparents in another article); and
- Any other aspects of the care, welfare or development of the children.
When making parenting orders, the court’s paramount consideration is on ensuring that the orders made are in the best interests of the child. With this in mind, the court can decide to make orders for equal time spent with each parent, substantial or significant time with one parent, or any other arrangement that they see fit.
The Family Law Act 1975 (Cth) s 60CC(2) sets out the primary considerations involved in determining a child’s best interests for a parenting order:
- The benefit to the child of having a meaningful relationship with both parents; and
- The need to protect the child from physical or psychological harm, and from being subjected or exposed to abuse, neglect or family violence.
Perspectives of children and parenting orders
There are also numerous additional considerations (within s 60CC(3)) which the court may use in determining parenting orders, including any views expressed by the child and any factors that the court thinks are relevant. The significance of the child’s perspective will be affected by the degree of maturity and understanding of the circumstances that the child is assessed as having. This perspective can be shared by the child themselves, if deemed appropriate, or by an independent person, such as a social worker or psychologist, in the form of a Family Report.
A child’s perspective must be balanced against other factors, including their insight and maturity, attitude towards their parents or the perspectives of other stakeholders. This ensures that the pressure placed on the child in influencing this decision does not become overwhelming, which could be detrimental for their emotional development in the already stressful time of their parents’ separation.
That being said, courts are generally more reluctant to make parenting orders relating to children who are 15 years and older as they are seen to be able to make their own decisions relating to parenting arrangements. Even where parenting orders are made, they are rarely enforced in practice as by this age the child can generally effectively choose for themselves whether the parenting orders should apply to them. However, until the child turns 18, the court may still intervene where the child is an unsafe or inappropriate situation. Parenting orders are only effective until the child turns 18 years old, gets married themselves, or forms a de facto relationship.
How Etheringtons Solicitors can help
A solicitor at Etheringtons Solicitors can provide clarification of the relevant law on parenting orders and its relation to your individual circumstances. Furthermore, if Etheringtons Solicitors can assist with family law and separation matters more generally, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form here.
Mar 21, 2022 | Family Law
A divorce recognises, by law, the termination of a relationship and the end of legal responsibilities partners owe to one another. It often involves making arrangements in relation to property, children and spousal maintenance.
Divorcing a partner is a major life event and can be a stressful and emotional time for you and your family. It is therefore pertinent to choose the right divorce lawyer to represent you and guide you through this process.
1. Assess your needs
Every divorce lawyer has strengths in different areas. When choosing a divorce lawyer, you should always ask yourself – what is it that you require the lawyer to do for you? Obtaining a divorce order does not automatically determine issues relating to property, maintenance or children, therefore it is important to consider the impact your divorce may have on these aspects of your relationship.
Where there are many legal facets to your separation, you will benefit from a legal representative with experience in Family Law. It is also important to consider how you want the process resolved. There are collaborative alternatives to litigation, such as mediation, in which you have more autonomy to determine the outcome and the lawyer plays a different role. Such options are available and can be applied depending on the facts and circumstances of your matter. However, if an amicable agreement between the parties cannot be reached, you may need to consider engaging a lawyer to assist you in court proceedings.
2. Do your research
Understanding the advice you are provided with is essential and key. The core principles of advice can be a good start and the Family Court of Australia has an online resource that provides an essential guide, however there is no substitute for good legal advice.
Once you have a basic understanding of divorce law, you will be better equipped to start researching different lawyers. Factors to consider when assessing whether a lawyer is right for you include:
- Level of skill and experience (divorce is a specialised area of law so choosing someone with the right skills is essential);
- Recommendations from trusted people;
- The values of the firm the lawyer works within; and
- Any initial information regarding their approach and communication
Your research should assist you in compiling a list of lawyers you can contact. It is recommended you do not limit yourself to just researching one law firm in the event that they are not available or are not a good fit for helping you to achieve your desired outcomes.
3. Initial consultation
The next step is to arrange an initial consultation with the lawyers on your short list. This will enable you to gauge the attributes of each lawyer. At Etheringtons Solicitors, we offer a discounted rate for an initial consultation, during which you will receive preliminary advice and you will have the opportunity to better understand who your lawyer is and how they can assist you.
It is important that you feel comfortable with your lawyer as they will be assisting you through a vulnerable stage of your life and your decision may greatly impact other parties, such as grandparents and children. Therefore, personality and ease of communication is also a factor to consider.
How Etheringtons Solicitors can help
Etheringtons Solicitors can assist with your separation and divorce. If you need further advice or assistance with Family Law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact page.
Mar 19, 2022 | Family Law
Family Law disputes can often be incredibly time consuming and place significant financial and emotional burdens on all the parties who are involved. These burdens are exacerbated by the delays and under-resourcing that is prevalent in the broader Family Court system. As such, there has been a push towards resolving disputes and finalising matters through Alternative Dispute Resolution (ADR) methods including Family Arbitration. This article will explain what Family Arbitration is and how it may be advantageous to you if you are experiencing a marriage or family breakdown.
What is Family Arbitration?
Family Arbitration is a dispute resolution process by which parties’ present arguments and evidence to a Family Arbitrator who then makes a determination in order to resolve the dispute, in a similar manner to court proceedings, but with a few key distinctions. Arbitrators are generally legal practitioners with extensive family law experience and training, who are selected by the parties. This ensures they can facilitate proceedings in the fairest way possible.
Matters that can be referred for Family Arbitration include:
- Property matters;
- Spousal maintenance;
- Financial agreements; and
- Execution and compliance with court orders.
Advantages and Disadvantages of Arbitration
The primary advantages associated with Family Arbitration include how efficient and relatively inexpensive the process is. Decisions (or ‘awards’) are given within 28 days, which is significantly faster than the formal court system. Not only do parties save on costs associated with preparing a matter for court, but they are not tied up in lengthy litigation preventing them from working and moving forward with their lives. In addition, the Family Arbitration process is more flexible than traditional court proceedings, offering the parties greater autonomy over issues such as the time and date of the arbitration and procedures of how evidence is to be presented. Arbitration is also completely voluntary and confidential, which means the outcome and the issues discussed between the parties and the arbitrator cannot be discussed externally or published.
However, whilst there are numerous benefits associated with Family Arbitration, it is important to note that where family matters are more complex or potentially involve a power imbalance between the parties (such as instances of family violence), it may be more appropriate to engage in the formal court process. In some instances, it may also be more difficult to seek relief if you are unhappy with the Arbitrator’s decision, compared to doing so in court proceedings.
What if I am unhappy with the outcome of Arbitration?
Arbitrators are protected with the same immunities that the courts have. Therefore, the decisions made during Family Arbitration are final and binding on the parties once they have been registered.
However, if an error of law has been made, the decision can be reviewed by a court who can make determinations of issues of law and choose to either uphold or alter the decision made by the Arbitrator. Generally, only an error of law will justify the review of an arbitrator’s decision.
However, in exceptional circumstances of unreasonable or prejudiced decisions, the court can also intervene. In doing so, the court will consider factors including:
- Whether there is fraud or misrepresentations involved in the decision;
- Whether the decision is void, voidable or unenforceable;
- Whether circumstance have arisen that make the decision impractical;
- Whether there was any bias on behalf of the Arbitrator; or
- Whether there was a lack of procedural fairness in the arbitration process.
How Etheringtons Solicitors can help with your family law matter
At Etheringtons Solicitors, we have a highly experienced and strategic team who will work with you to achieve a desirable outcome in your family law matters. If you are concerned about your property, divorce or parenting disputes, or want to consider Family Arbitration, please do not hesitate to contact our office by calling 02 9963 9800 or via our contact page.
Mar 18, 2022 | Family Law
Under the Family Law Act 1975 (Cth), when a relationship ends, a party has an obligation to financially assist their former partner if that person is unable to adequately support themselves. This financial assistance is called spousal maintenance.
Generally, spousal maintenance will only be ordered where there is a significant disparity in the incomes of the parties and where a clear expiry dates for the payments is given. However, in the recent case of Bodilly v Hand [2019] FamCA 210, the court held that spousal maintenance could be owed to a party even 17 years after their separation in circumstances where the payer had a new family and was headed towards retirement. This case has re-emphasised the need for parties who are experiencing a relationship breakdown to understand spousal maintenance and be aware of any future responsibilities which they may incur.
What does the court consider when deciding on an order of spousal maintenance?
Spousal maintenance is not an automatic right. In deciding a spousal maintenance application, a court considers the needs of an applicant and the respondent’s capacity to pay. This involves considering the parties’:
- Age and health,
- Income, property, and financial resources,
- Ability to work,
- Ability to earn an income as a result of the marriage, and
- Standard of living.
An example of when a court will most likely make an order for spousal maintenance is in cases where one party is unable to work due to disability or illness. This liability to maintain a former partner can continue until their death or until they are able to support themselves financially. However, as noted above, usually when making orders for spousal maintenance the court will specify a date or event that will release the payer from their liability. Such events could include re-skilling, securing employment or commencing in a new relationship.
Applications for spousal maintenance for married couples must be made within 12 months of their divorce being finalised, whereas applications for de facto partner maintenance must be made within 2 years of the breakdown of the de facto relationship. While it is possible to apply outside the time limits, the court does not always grant these late applications so these limitation periods should be noted.
Case Study: Bodilly v Hand [2019]
The parties involved in this case had separated in 1998 and subsequently reached an agreement that the husband would pay to the wife spousal maintenance of $500 per week in 2000. In the 17 years that followed, the parties had little contact and the husband continued to pay spousal maintenance. By November 2009, the wife was housebound with a diagnosis of multiple sclerosis and began receiving benefits from the NDIS.
The wife made an application to the court seeking further spousal maintenance orders, such that the husband pay to the wife $3,000 per week. The husband sought a discharge of the previous spousal maintenance orders and a fresh consideration of the necessity of any order being made in favour of the wife.
In determining the application, the Court considered whether there exists a point in time where it is no longer appropriate for an order for spousal maintenance to continue, such as retirement or anticipation of retirement. The Court held that the wife still had a need for spousal maintenance as she was unable to support herself adequately from her own income. The husband was thereby ordered to continue paying spousal maintenance of $500 per week with no date upon which the order would cease.
The Court also considered whether the receipt of NDIS payments had an impact on spousal maintenance payments. Justice Cronin held that the wife was not entitled to argue that any shortfall in the budget from her NDIS payments should be met by the husband as part of her maintenance claim, as this would go beyond the intention of the scheme.
How Etheringtons Solicitors can help with your family law matter
A party’s obligation to pay spousal maintenance may be discharged in various ways including through periodic and regular payments or by way of a lump sum payment. It may also exist for different periods of time. The calculation of and assessment for the need of spousal maintenance requires a deep understanding of family law and the time limits which apply. If you need legal advice regarding separation and spousal maintenance, please contact Etheringtons Family Lawyers in North Sydney on (02) 9963 9800 or via the below contact form.
Mar 16, 2022 | Family Law
It is important to consider how an Apprehended Violence Order (AVO) may affect parenting orders. Parenting orders set out the specific parenting arrangements for children which can include how much time the children spend with each parent, who the children live with as well as any other aspects of their care, welfare or development. A court must make parenting orders with the child’s best interests as the paramount consideration. When there are instances of family violence and an Apprehended Violence Order is in place or has been applied for, this can impact arrangements under the parenting order. This article will discuss some of these ambiguities. Given the stressful and complex nature of these situations, it is crucial to contact family law experts such as Etheringtons Solicitors.
What is an Apprehended Violence Order (AVO)?
An Apprehended Violence Order (AVO) is issued when one person has made the other person fearful of or exposed to violence in any form, including physical or verbal abuse, harassment, intimidation or coercive and controlling behaviour. Specifically, an Apprehended Domestic Violence Order (ADVO) is a type of AVO that can be issued when two people are married, in a de facto relationship or are related family members, and the violence occurs in the context of this relationship. A child is exposed to family violence if they see or hear it, or experience it themselves. We have addressed applying for AVOs and how they are considered by the court in another article. Breaching the conditions of an AVO is a criminal offence with a maximum penalty of a $5500 fine and/or two years in prison.
AVOs and parenting orders may conflict
AVOs and parenting orders may conflict due to the interconnected nature of family law. For example, an AVO may prevent a parent from approaching the other, but a parenting order may require them to attend an arranged changeover so that the children may spend time with the other parent. The different conditions of the AVO will determine what parenting orders would potentially conflict. All parties must strictly comply with the terms of both the AVO and parenting orders to avoid the penalties of contravention. The Family Law Act 1975 (Cth) provides that where a parenting order is inconsistent with an existing AVO, the AVO may be deemed invalid. This is because parenting orders are made by courts with federal jurisdiction while AVOs are made by courts with state jurisdiction – federal jurisdiction overrides state.
Parenting orders are also not the same as parenting plans. Parenting plans are written agreements about parenting arrangements which are not made by the court and are therefore not legally enforceable. Where inconsistencies arise between a parenting plan and an AVO, the AVO will be given preference, however the existing parenting plan may be taken into consideration when the court makes the AVO.
AVOs implemented before parenting orders are made
Courts are unlikely to create parenting orders which would conflict with existing AVOs, as it is not in the best interests of the child to expose them to harm or family violence. The Family Law Act 1975 (Cth) prioritises protecting children from risks of physical or psychological harm when considering what is in their best interest. Therefore, the court must be informed of any AVOs or allegations of family violence when applying for parenting orders. This is regardless of whether the AVO was ordered with or without admissions, as courts do not need to make a finding of guilt in family law matters as they would in criminal law ones, but instead work to protect children from the “unacceptable risk” of harm.
For the example of an arranged changeover, it is likely the parenting order would set out a particular time and place at which one parent may collect their child from the other, aggrieved parent and doing so would not constitute a breach of the parenting order or AVO. However, approaching the aggrieved person at that place at another time would be a breach. If a parenting order is made which is inconsistent with an existing AVO, the court is required to explicitly state that it is inconsistent and provide a detailed explanation of the order and the rights and responsibilities of the parties involved.
AVOs implemented after parenting orders are made
If a domestic violence issue commences after parenting orders are made, a final AVO may be issued to vary, discharge or suspend the pre-existing parenting orders as appropriate, under the Family Law Act 1975 (Cth). This prioritises the best interests of the children while ensuring that all parties can comply with all the relevant enforceable orders. However, as determined in Rice v Asplund (1979) FLC 90-725, there must be a significant change of circumstances to justify an amendment to pre-existing final parenting orders. An AVO made after a parenting order may include additional terms which act as exceptions so that the person can comply with the existing parenting order.
How Etheringtons Solicitors can help
A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. Furthermore, Etheringtons Solicitors can assist with applying for parenting orders or an AVO as appropriate, or drafting a parenting plan.
If you need further advice or assistance with family law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.
