Legal Considerations For De Facto Relationships… What Would Beyonce Say?

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For many years, the stats have shown that for many couples, a formal marriage ceremony has followed a de facto relationship. Other couples who have made a conscious decision not to marry, despite passing the two or three years that couples often cohabit before marrying, will assure their family and friends that this is their choice and so it is. Perhaps the value of the marriage certificate to those couples is more in its lack of existence, in that they don’t need a marriage certificate to live out their bliss.  

De facto relationships are recognised in family law as having the same consequences as a marriage, once the couple has lived together for two years (generally).  Some de facto relationships can be recognised in family law earlier than that, if there is a child or some other reason, such as a major financial contribution by one to the other.  

While not getting married means a couple misses out on the party, they will get all the legal consequences of a formal marriage.  

But if the relationship breaks down and 

  1. They don’t agree about what their relationship was;
  2. They don’t agree about how long it lasted, 

And they have a financial dispute, they will have the dispute about whether they qualify as a de facto couple in the Family Court and are allowed to have their dispute heard there, rather than the general law courts.  

That is truly money wasted on legal fees.  

Because after they have argued about that, then they will have a dispute every married couple has, about what they each contributed in monetary terms and probably also their contributions in making the home together, the non-financial contribution.  

Having a home together does not even have to be part of a de facto relationship, although it usually does.  

The range of what can be found to be a “genuine domestic relationship” is deeply varied, complex, and personal to the couple, so de facto relationship law is very broad to reflect how people live, capturing secret relationships as well as polyamorous ones.  

The recommendation that we make as family lawyers, is that whatever your relationship is, you should both be able to agree on what it is.  That might not even protect you from a dispute, because friends with benefits can look a lot like a de facto relationship and might in some cases be one.  

But if you must have a financial dispute, the family court is a better environment for that, than maybe finding yourself in one or more of the several general law courts, depending on the value of your dispute.  

Notoriously many people are leaving home as adults later in life than their parents did, when they are likely to move into shared housing of some kind.  Many couples who start living together, thinking it is an expression of their committed romantic relationships, may find after the love has worn off, they are still together because it’s hard to find somewhere else to live.  

So, while formally married couples will still dispute the outcome of the breakdown of their relationship, the bit of paper they have may simplify matters.  But for de facto couples, a great deal of their accumulated wealth can be used up in a legal case about when they began living together; or whether it was just a passing intimate relationship, even if one or more in the couple might have had other interests, as well, along the way.   

If this seems a little cynical and bleak, the optimism of couples beginning a romantic relationship is evergreen, so at that time, if it is your wish to formally marry, then when the romance is strong and true, is the best time to put a ring on it.  

And if the other party is adverse, because of the ruinous cost of weddings as promoted in the wonderful world of online reality (and you can’t bear to have a little party), then just understand that you are still married in a de facto relationship, and not having the party might cost the value of a wedding or more.  

If you are uncertain as to what to do you should seek legal services as quickly as possible. Bowen Buchbinder Vilensky has experience in dealing with interests in land and will be happy to provide further advice to you. Contact Bowen Buchbinder Vilensky.

Bankruptcy And Superannuation Remedies – The Family Law Position

Bankruptcy-and-Superannuation-Remedies

Family lawyers are often asked the question “can my ex-partner avoid paying my entitlement by going bankrupt“. 

In most cases, the answer will involve a discussion about the assets in the asset pool, and how a particular settlement should be worded. 

In cases where a party actually does go bankrupt to defeat a Family Court settlement, the same topics can arise.  

In Rahman v Rahman [2020] FamCAFC 279 and Wilkinson v Kemp [2020] FCCA 69, the husband in each case went bankrupt, voluntarily, after a final property settlement order had been made.

In these cases, the initial result for the wives was harsh.  In both matters, the husband had or was accruing superannuation entitlements and the Trial Court had not made a splitting order.

As superannuation is a protected or “exempt” asset under bankruptcy law, the husbands were able to keep and build their superannuation despite going bankrupt.

This left the husbands in a far stronger financial position, relative to the wives, than the Trial Court had ever intended. 

To rectify that, the wives in each case asked the Family Court to give them a portion of their husband’s superannuation (under a splitting order) in substitution for the unpaid money. 

In both cases, the Court said that this option was possible.  However, as the wife’s cases hadn’t been drawn up and argued correctly, neither succeeded at first instance. 

What these cases demonstrate is that the Court will entertain a claim to substitute unpaid money with superannuation, when there are no other assets left to satisfy the judgment.  

The decisions also, to a lesser extent, indicate how property agreements and orders can be structured to better protect against future bankruptcy.

Background

Prior to 2005, a financial order made by the Family Court against a party could not be enforced if that party later went bankrupt.  

Historically, a Family Court judgment was considered a “provable debt” in bankruptcy law.  

For the non-bankrupt spouse, that meant that there was no ability to use the Family Court to enforce a property settlement judgment. The non-bankrupt spouse had to lodge a debtor’s petition in the bankruptcy Court instead. 

The trustee-in-bankruptcy then determined the claims and priorities of all of the bankrupt’s creditors under the general bankruptcy law.  The non-bankrupt spouse did not hold any special status above the other creditors.  The trustee was not bound to give effect to the Family Court judgment. 

When the bankruptcy period ended, the bankrupt spouse’s debt to the non-bankrupt spouse was extinguished and could no longer be pursued.

In 2005, with the implementation of the Bankruptcy and Family Law Legislation Act 2005 (Cth), the law changed to allow certain Family Court judgments to sit outside of, and survive, the bankruptcy. 

This included orders for transfers of property from one spouse to another, child support orders and spousal maintenance orders.  This meant that these orders could be pursued by the non-bankrupt spouse through non-bankruptcy processes (i.e. enforcement applications to the Family Court). 

Other common Family Court awards such as payments of money and costs orders were not included in the reforms and remained “provable debts”.   

Another key aspect of the 2005 reforms was to grant the Family Court the power to sit as a bankruptcy court.  

The amendments allowed that in cases where a spouse went bankrupt before a Family Court settlement was ordered, or if bankruptcy occurred while the Family Court proceedings were running, the trustee-in-bankruptcy could be brought into the Family Court proceeding.  

The entitlements of all the creditors, as well as the bankrupt and non-bankrupt spouse, could then be resolved at the same time, in one proceeding.

But what happens if the bankruptcy occurs after the Family Court case has finished?

Rahman: initial decisions

Rahman dealt with a situation where the husband had unilaterally withdrawn $580,000 from the home mortgage and transferred it overseas after the parties separated.  

In February 2012, the trial judge ordered that the husband transfer the wife the sum of $377,000 from the $580,000.  The trial judge also placed a travel ban on the husband. He was restrained from leaving Australia until the wife had received that money. 

The husband refused to transfer the money to the wife. He brought an appeal against the decision (which he lost). He then entered into voluntary bankruptcy a few weeks after the appeal ended.

The husband’s period of bankruptcy ended in 2016.  In 2017, the husband then applied to the Court to lift travel ban. He argued that his debt to the wife under the Orders had been extinguished by the bankruptcy which meant that the travel ban had no legal basis anymore.

The husband’s application to remove the travel ban was not decided by the Court until March 2020.  The Court rejected the husband’s arguments and confirmed the travel ban.  The Court found that the payment order was a “transfer order” protected by section 59A of the Bankruptcy Act 1966.   In other words, the order had survived the bankruptcy and the wife could pursue the $377,000.  

In April 2020, the wife brought a fresh application, to the Family Court, to pursue the $377,000.  The wife asked to be paid superannuation in substitution for the unpaid money.  She also sought an interim Court order to “freeze” the husband’s bank accounts.  

The lower courts heard the wife’s interim application in May 2020 and granted the freezing order.

The husband appealed both of the March 2020 and May 2020 decisions.  The appeal was determined in November 2020 and is discussed below.

Rahman: decision of the appeal court

The Full Court of the Family Court of Australia agreed with the lower Court’s decision in March 2020. The travel ban and the $377,000 payment obligation were confirmed, for the same reasons given by the primary judge. 

The Appeal Court did not agree, however, with the primary judge’s decision in May 2020.  The Court dismissed her case on a legal technicality.

Essentially, the Appeal Court found that the wife had made her application in the wrong way, in the wrong form, and that she’d asked the Court to use a power it didn’t have.

More specifically, the problem lay in the fact that the wife has asked the Court to order the superannuation payment as a second Final Order in circumstances where there’d already been a trial and Final Orders made in 2012.  

The Court found that the wife’s application was incompetent and dismissed it, along with the interim freezing order on the husband’s bank account which was connected to it.

His Honour Justice Austin, who wrote the main judgment, said:- 

  • As Final Orders had been made in 2012, the Court’s power to decide the parties’ interests in the property had been exhausted;
  • The Court could not now change the 2012 Orders, other than through an appeal or a section 79A Application;
  • If the wife decided to bring another application to enforce the 2012 Orders, it should be an enforcement application in both style and substance.

In doing so, the Court left the door open for the wife to reapply in the correct way. At this point, there have been no further reported Family Court cases involving these parties.

Wilkinson: initial difficulties

In Wilkinson, the asset pool was smaller than in Rahman. There were no existing cash reserves from which a transfer order could be made.

In this case, the Trial Judge made a Final Order in 2015 that the husband keep certain assets and pay the wife the sum of $45,352 within three months.  This Order effectively created a debt in the husband’s name.  

Importantly, the Final Orders did not include any “fallback” provision. That is, there were no orders that required the husband to sell, transfer or provide assets to the wife if he didn’t pay her. 

The $45,352 payment, therefore, was not a transfer order (as had been the case in Rahman). The payment was not covered or protected by section 59A of the Bankruptcy Act 1966.  The obligation was a “money order” and thus a “provable debt” which had to be dealt with under general bankruptcy law.

The Court confirmed this in 2015 when the wife made a Family Court enforcement application to recover the money due under the judgment. By that time, the husband had gone bankrupt and hadn’t paid.  

Importantly, the husband’s period of bankruptcy was still running when the case was brought. The wife did not seek to change the Final Orders. She had simply asked the Family Court to compel the husband to pay the money previously ordered. She wasn’t seeking any superannuation orders at that time. She had not obtained the bankruptcy trustee’s permission to bring the case to the Family Court. The wife had not lodged a debtor’s petition with the bankruptcy trustee.

For these reasons, the Court found the wife’s application was incompetent and dismissed it. 

In April 2016, the wife again applied to the Family Court, this time for superannuation splitting orders in substitution for the unpaid money. Unfortunately, the wife’s case contained technical mistakes, similar to those made in Rahman.

In June 2016, the wife’s case came before a Judge who told her why it was defective. The wife then withdrew her case, before it went any further in the Court process.

Wilkinson: subsequent success

In 2019, the wife brought a fresh case to the Family Court and was successful.  

The wife asked the Court to discharge the original orders and make new final orders in their place (i.e. a section 79A Application) which included a superannuation splitting order. 

In the alternative, she argued that the Court could make a superannuation order, without having to change the old Orders, using its enforcement powers.

Importantly, in both the “section 79A” claim and the “enforcement” claim, the wife was not asking for a greater share of the asset pool than she’d been awarded in 2015.  Rather, she sought an outcome that had the same overall effect on a “percentage basis” that the 2015 orders had intended.   

The husband was no longer bankrupt when the 2019 case began.   However, he went into voluntary bankruptcy again shortly thereafter. 

At the hearing, the wife tendered a letter from the bankruptcy trustee. The trustee confirmed its consent to the wife’s case being heard in the Family Court.  It confirmed it had no power over the husband’s superannuation because it was a protected asset. It confirmed that the case didn’t affect their rights as trustees.  The Court agreed with the trustees. 

As to the wife’s “enforcement” application, the Court agreed with the wife’s reasoning.  The Court found that it had the power to alter the 2015 Final Orders by means of a “machinery provision” amendment and that in this case, it was appropriate to do so.   In deciding this, the Court referred to the case of Molier v Van Wyk [1980] FamCA 851 which deals with enforcement powers and when they should be used.

As to the “section 79A Application”, the Court found it had legal merit, albeit on only one of the grounds she’d argued.  The court accepted that the husband’s act of defaulting on the payment obligations meant that the 2015 Final Orders could be set aside and amended  The Court considered it was just and equitable to do that, in all the circumstances.  

The Court made the superannuation order the wife sought, primarily as an enforcement order, and as a section 79A Order in the alternative. The Court appeared to prefer the enforcement remedy over the section 79A remedy, although both were available.   

During the proceedings, the husband tried to invoke a legal doctrine called “Anshun estoppel”. He argued that the wife shouldn’t be allowed to pursue a superannuation order because she hadn’t asked for his superannuation in the original 2015 case and because she’d already in 2016 to get it and been unsuccessful. 

In this case, the Court said that the husband’s poor conduct and ongoing attempts to defeat the Court orders effectively disqualified him from using Anshun estoppel.

Conclusion

These cases show that the legal distinction between money orders and transfer orders can be important in an enforcement context.

Failure to seek superannuation splitting orders in the original proceedings does not necessarily prevent them from being sought later, in the enforcement or Section79A application.  

As always, care should be taken when negotiating final orders at first instance, to ensure enforceability in the event of non-payment.  

It is best practice to obtain the consent of the trustee in bankruptcy when seeking enforcements of Family Law judgments, of any kind.

Western Australian couples

Presently, the Family Court of Western Australia does not have the power to alter the superannuation interests of de facto couples or to hear bankruptcy proceedings.

This means the de facto couples in Western Australia do not have the superannuation remedies indicated in the Rahman and Wilkinson cases.  

This anomaly is scheduled to change in the near future, with legislation having recently passed the Western Australia upper house of parliament and awaiting proclamation: see Family Law Amendment (Western Australia De Facto Splitting and Bankruptcy) Act (Cth) 2020 and Family Law Amendment Bill (WA) 2022

 

References:

  1. 1 Ejje and Ejje (2003) FLP 93-129; Melnik v Melnik (2005) 144 CR 141.
  2.  See in particular sections 59A and 116(q) Bankruptcy Act 1966.  Initially, these measures were available only to married couples. On 1 March 2009, they became available to de facto couples: see Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008. The reforms did not extend to Western Australian de facto couples.
  3.  Pursuant to section 79A of the Family Law Act 1975, the Court has the discretion to vary or set aside a Final Order, and if it considers appropriate, make another Final Order in substitution for the order so set aside.
  4.  Ie made under Part XIII of the Family Law Act and Part 20 of the Family Law Rules 2004.
  5.  Superannuation is a non-divisible asset protected under section 116(b) of the Bankruptcy Act 1966
  6.  The case was held to found to come within section 79(1)(b) only.  The husband had defaulted on his payment obligations including during periods when he was not bankrupt. None of the other criteria contained in section 79A were found to have been satisfied, including section 79A(1(c) which considers orders that have become “impracticable”.
  7.  See Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 and the cases which refine it including: Tomlinson v Ramsey Food Processing Pty Limited [2015] HCA 28(2015-16) 256 CLR 507.

The Family Court – financial settlements, cryptocurrency and the photo finish

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In a family law settlement, the couple must exchange all relevant information about their assets and liabilities and financial resources, which is called the “disclosure obligation”.   

A financial resource is something that a party has a financial interest in but doesn’t control or have the power (usually) to deal with, such as a beneficiary of a family trust. 

Cryptocurrency, on the other hand, is something that a person who has a holding of it owns. Knowing whether to cash it in when a financial settlement must occur or to share it with the other party will be difficult to decide. 

That is because cryptocurrency is highly speculative, that is, it might be worth a great deal one day, then much less the next and then up and down again. 

Bowen Buchbinder Vilensky’s experienced team of family lawyers in Perth would not advise you whether you should sell the currency or share it with the other party at settlement.  That is because lawyers are not financial advisors.  

For our clients, a practical outcome will be sought.  In some cases, sharing the asset might be the best result, reflecting the old words of the marriage vows, that a couple is to share “for better or for worse”. 

The disclosure obligation in family law is serious.  If one party to the relationship fails to give full disclosure, the outcome in a trial might be that the judicial officer increases the share the other party is to get, to consider what is missing by guessing what it might have been. For cryptocurrency, the shares in the currency might be worth $20,000 one week, and $5,000 the next.  The judicial officer might decide to take the higher amount as the amount that should be considered.  

An aspect of family law settlement that underlines the uncertainty of outcomes is that while the Court deals with the assets liabilities and financial resources as they are, the court also must speculate about what the future holds for each party, part of the discretionary aspect of family law that makes it difficult to predict and advise about. 

So, while the capital assets the parties have, is split up based on what they are worth at the time of settlement, like the photo finish at a horse race, the court also considers the future earning capacity of the parties and their responsibilities as separate individuals for themselves and others. 

Understanding family law is complex; our family lawyers have great experience and work hard to stay up to date with the ongoing changes in law and practice that happen.  We build a personal relationship with our clients and seek outcomes that best meet their particular needs and expectations.

Increased Visibility Of Superannuation Interests For Married Couples

Superannuation-Interests-for-Married-Couples

Much has been made of the recent developments for de facto couples in Western Australia, who are now a step closer to being able to split their superannuation entitlements following the breakdown of their relationship.

There has also been a recent development for married couples, providing for increased visibility of superannuation interests.

As of 1 April 2022, a party to a marriage may apply to the Court to request superannuation information from the Australian Tax Office (ATO) about their former spouse.

Such an application must be made in the context of existing Family Court proceedings.

In response to the application, the ATO provides the requested information to the Family Court, who pass that information to the requesting party, their spouse, and their legal representatives if applicable.

This process allows a spouse to efficiently identify superannuation interests held by the other party. 
This is a welcome development for those who have concerns about superannuation assets being concealed.

Once the applying party knows the identity of each fund their spouse holds an interest in, they can obtain further information about the value of those interests by applying directly to the fund for that information.

Unfortunately, at the time of writing, like superannuation splitting, this process remains unavailable for de facto couples in Western Australia.

For more information, see the below information on the ATO and Family Court of Western Australia website (current as at 1 June 2022):

The Family Court – The “Helping Court”- Is The Court Becoming Tougher?

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Most people would appreciate that if you have a right to take someone to court it is a good idea to do that without delay.  For personal injuries, there is a time limit of 3 years and for breach of contract, 6 years to go to court. 

The time limits in family law are much shorter, one year from a divorce order taking effect for a married couple (a divorce can’t be granted unless the couple has been apart for one year) and two years from separation for a de facto couple.

The short family law time limits are for practical reasons.  The longer a couple is separated the harder it can be to untangle their finances; even if they kept things separate there might still have to be an accounting.  What they each had at separation, and what happened in relation to income and assets before and after separation will likely need to be considered.        

Recently a party in Wellard & Hawthorn [2021] FedDFAMC1A (the names are changed to protect the privacy of the parties) complained of significant difficulty in bringing their application in time and asked the Court to extend the time, arguing that they would suffer hardship. While the Court could have granted the application, the court refused the extension of time, allowing the other party to avoid a financial accounting.

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The Family Court - The "Helping Court"- Is The Court Becoming Tougher? 2

The Family Court of Western Australia was set up when ‘no fault’ divorce was introduced in 1975 to be the “helping court”.  Even if it is no-one’s fault a relationship has failed, it can be difficult for parties to move on and deal with their situation. 

Since 1975, the Family Court system has been greatly expanded to include de facto relationships, relationships that are treated just like a marriage even if the parties are not married and didn’t have a party to celebrate their union.

Arrangements for children have become more complex too, where the principles guiding how parties should make arrangements for their children changed in 2006. Now both parents are expected to be involved in their children’s lives, as long as that is in their best interests.   In 2012, the Family Law legislation was amended to reflect a greater understanding of the endemic presence of family violence.    

Does the recent decision send a message that the Court will not tolerate parties seeking more time to come to the court unless they can make out a strong case?  Is the court becoming stricter than it might have been in the past, where the pressures on the court’s limited resources are unrelentless? Possibly yes.    

A stricter approach could have a heavy impact on de facto couples, where their circumstances tend to be less formalised than married couples.  In Western Australia despite the best efforts of family lawyers in seeking reform of the law so it falls in line with every other state and territory, superannuation splitting is still not available. Legislation to provide for super splitting has been drafted but not yet passed by the Western Australian parliament.     

Get in Touch With Our Family Lawyers

If you would like advice in this area please contact Rhonda Griffiths at rgriffiths@bbvlegal.com.au.

Our Family Lawyers in Perth can provide you with information, advice and legal representation on a range of family law issues on a fixed fee price basis.

Navigating The Family Court After Family Violence

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The Family Court and Family Violence

Separation is an extremely difficult time. Those difficulties, and in some cases dangers, can be exacerbated for those who experienced family violence in their relationship. We discuss navigating the Family Court in WA after family violence.

Parties at the end of a relationship involving family violence may find themselves involved in proceedings in the Family Court of Western Australia, if they cannot agree about the post-separation arrangements that are in the best interests of their children.

For many, the Court process is daunting. Fear and intimidation from a former partner add to the stress and anxiety that most people experience while Family Court proceedings are on foot.

In the Family Court of Western Australia in 2020, Family Consultants conducting assessment conferences identified family and domestic violence as a risk issue in 82% of cases.[1]

The purpose of this article is to outline some of the resources and special arrangements available for those who have experienced family violence and are involved in Family Court proceedings. It is not an exhaustive list of resources or arrangements available.

Definition of Family Violence

Under the Family Law Act 1975 (the legislation that applies to married couples in Western Australia), family violence means violent, threatening, or other behaviour by a person that coerces or controls a member of the person’s family or causes the family member to be fearful. Examples of behaviour that may constitute family violence include, but are not limited to:

  • An assault
  • A sexual assault or other sexually abusive behaviour; or
  • Stalking; or
  • Repeated derogatory taunts; or
  • Intentionally damaging or destroying property; or
  • Intentionally causing death or injury to an animal; or
  • Unreasonably denying the family member the financial autonomy that he or she would otherwise have had; or
  • Unreasonably withholding financial support needed to meet the reasonable living expenses of the family member, or his or her child, at a time when the family member is entirely or predominantly dependent on the person for financial support; or
  • Preventing the family member from making or keeping connections with his or her family, friends or culture; or
  • Unlawfully depriving the family member, or any member of the family member’s family, of his or her liberty.

Exemptions from Family Dispute Resolution

The Family Court encourages parties to reach agreement about what is in the best interests of their children, before applying to the Court for orders. To that end, to apply for Family Court orders, generally, parties must attempt Family Dispute Resolution first.

That requirement does not apply where there has been family violence, and parties may proceed with making an application for parenting orders by completing the relevant exemption form.

Special Arrangements for Court Attendance

Usually, during Court proceedings before a judicial officer, both parties are required to be in the same Court room and will usually wait in the same area for their matter to be called. For those who have concerns about their safety, the Court can make special arrangements for their attendance, including:

  • Attending from an offsite location by telephone.
  • Attending from an offsite location by video-link.
  • Attending from an onsite location (in a separate room to the other parties) by video-link.
  • Separate waiting areas inside the Court.
  • Separate entry and exit points from the Court building, or
  • A security escort to and from the entry to the Court building to the Court room.

It is important to provide the Family Court with advance notice of any special requirements, so they have time to process your request.

Cross-Examination Scheme

Most people settle their family court matter without needing a trial.

If a trial is required to determine parenting or financial matters, or both, then provided certain circumstances are met,[2] the Court will not permit one party to cross-examine the other. Instead, any self-represented party would be allocated a legal practitioner to conduct the cross-examination, funded by the Commonwealth Government.

In WA, the funding scheme can presently be accessed by litigants who were married to each other and is run by Legal Aid WA.  On 9 December 2021, the funding scheme will extend to WA litigants who were not married to each other.[3]

Behaviour Change Programs

Where appropriate and in the best interests of the children, the Court has the power to order parties who have perpetrated family violence to enrol in and attend behaviour change programs and parenting courses.

Services Outside of The Court System

Outside of the Family Court system, there are a range of services available for parents and families who have experienced family violence. They include:

You may also be eligible to apply for a Family Violence Restraining Order.

Get in Touch With Our Family Lawyers

Our Family Lawyers in Perth can provide you with information, advice and legal representation on a range of family law issues on a Fixed Fee Price basis.


[1] Family Court of Western Australia Annual Review 2020, at p 13

https://www.familycourt.wa.gov.au/_files/Publications_Reports/FCWA_Annual_Review_2020.pdf

[2] see section 102NA of the Family Law Act 1975 for married couples

[3] See sections 219AJ – 219AL of the Family Court Act 1997. The Family Court Amendment Act (WA) 2021 No 16 of 2021 received Royal Assent on 9 September 2021.  Under Division 3 of that Act, the Commonwealth cross-examination scheme will apply to de facto couples from 9 December 2021 onwards.

 

Family Law: Lawyers and the Bank of Mum and Dad

Why is it important to know about Lawyers & the Bank of Mum and Dad? The Australian Financial Review reported (8-9 May 2021) that parents are now among the nations’ top 10 lenders for home loans.  Remarkably, data shows more than 60% of first home buyers are getting assistance from their parents to get into their first home.

How should the families concerned, mum and dad and their adult child and possibly their child’s partner, document such financial assistance?

Binding Financial Agreement (BFA)

What about a Binding Financial Agreement (BFA) for the happy couple, each requiring their own separate lawyer for advice? Another newspaper (The Australian) the same weekend carried comment from family lawyers recommending BFAs where there are Mum and Dad loans.   

A BFA might provide that in the event of a separation of the couple, the loan from Mum and Dad be repaid, or not, and by whom, but is a BFA is the right solution?    

Remarkably, no one knows how successful BFAs are for most couples.  There is no record of the numbers of BFAs done in Australia. The University of Sydney (UTS) has in April 2021 Family Law Section Newsletter invited lawyers to take part in a project involving academics from several universities to gather data and report about BFAs.   

In the 20 plus years since BFAs were first permitted there has been significant litigation between the couples to the BFA and sometimes including their lawyers, that ironically BFAs are intended to prevent.    

A more immediate solution could be a formal contract between the Bank of Mum and Dad and their adult child and possibly their child’s partner, as to the terms of the loan.  Some of the loans will be ‘gifts’ and/or required to be gifted as part of the deposit requirements for the primary housing loan, so what happens then? On any basis, financial planning and legal advice should be considered by all parties.  

Our Family Law team at Bowen Buchbinder Vilensky has the skills to assist our clients to negotiate this complex system and navigate through Lawyers & the Bank of Mum and Dad. 

To book an initial consultation with one of our experienced family lawyers, please get in touch. Alternatively, to get started online now, visit the BBV Legal Online System where you can enter your relationship details and receive information that is free, instant, personalised and helpful.

AMICA – Can A.I Replace Family Lawyers?

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Amica is a new initiative supported by the Australian Government. It is designed to assist couples to resolve their parenting and/or financial issues following separation. It is a great initiative for couples who can “get along” as they come apart.  For others, it is less helpful.

According to the website, Amica:

  • provides separating couples with a user-friendly platform to work out and record parenting arrangements that work for their family.
  • uses artificial intelligence to make suggestions about dividing money and property (considering legal principles) based on the information that is entered by the parties.

The website claims that Amica “should suit most separating couples”.  These are some of the situations listed where Amica is not going to be suitable:

  • There is a Family Violence Restraining Order in place between the parties.
  • A limitation period will expire in the next 3 months.
  • There is a genuine dispute about the validity of the relationship.
  • One of the parties to a relationship or marriage is on a visa or seeking a visa which is dependent on their relationship with their partner.
  • There are any existing court orders in place about parenting arrangements for any children of the relationship.
  • There are ongoing cases or allegations in any court involving family law, child support, family violence or child welfare that involve either parent, or a child of the relationship.
  • One of the parties wishes to relocate with a child of the relationship.
  • Either party wishes to divide superannuation.
  • There are any genuine disputes over what is included in the property pool.
  • Any property of the relationship has been disposed of (such as sold or transferred) without consent of both parties.
  • There are caveats or charges lodged over any property in the property pool.
  • Assets in the property pool are held in a company or trust.
  • One party is a director of a company that forms part of the property pool.
  • Where either party owns or partly owns property or other assets overseas.
  • The property pool includes property which is also owned by a third party.
  • Either party currently has bankruptcy proceedings against them, or if either party was bankrupt during the relationship, or if either party is an undischarged bankrupt.

While Amica appears to be a great initiative, it is not the end of family lawyers by AI.  Amica does not give legal advice. In our experience, it is very rare to encounter a matter which does not involve at least one of the complicating factors listed above, making Amica unsuitable for most separating couples.

Importantly, even if a separating couple can reach agreement using Amica, it is not legally binding. All information exchanged between parties is done so on a “without prejudice” basis, meaning the information disclosed via Amica cannot be used in Court proceedings.  

Here at Bowen Buchbinder Vilensky, we encourage our clients to reach an amicable resolution to their family law issue, whether it be divorce, parenting arrangements or property division.

To book an initial consultation with one of our experienced family lawyers, please get in touch. Alternatively, to get started online now, visit the BBV Legal Online System where you can enter your relationship details and receive information that is free, instant, personalised and helpful.

Family Law: A Complex And Private Legal System

executors perth three people sitting at a table looking over documents

In Australia all separating couples, are subject to a family law system that is both “bifurcated” and private. 

We can read about Angelina Jolie and Brad Pitt’s divorce and separation process in the media, and learn that in California Angelina and Brad are subject to a “bifurcated” legal system. But you will not usually learn details about local celebrities’ divorce settlements.

The fact of a separation or divorce and general details can be published but that is because it is not about family court litigation or “proceedings”.  

Section 121 of the Australian Family Law Act makes it an offence to publish details of separating couples’ court cases.    

Sometimes when media outlets have sought permission, the Court grants leave for the publication of details concerning a case, or the Court itself directs publication when pseudonyms rather than the real names of the parties are used.  On other occasions, real names are necessary, for example, if there is a missing child.

The embargo on publication means not only can details about a family law case NOT be published in the media but also NOT on social media. 

A bifurcated divorce in California means “they are legally divorced, but are yet to decide on child custody and financial arrangements”.

In Australia, the Family Law Act provides that a person can apply to the court (or negotiate a settlement without going to court) as soon as they separate, but can only apply for a divorce after 12 months has run.

That is how a bifurcated system operates, where the processes are separated into separate branches or parts.  In Australia there are three parts to the system, including a separate child support system.

Services Australia Child Support decides financial obligations for children after separation, separately from Family Court property settlement and spousal maintenance.  Spousal maintenance (rarely used in the 21st Century) is usually resolved at the same time as property settlement. Spousal maintenance can be obtained and very rarely, after property settlement.

Divorce (the right to remarry without committing bigamy) often follows later, after the hard work of financial settlement and arrangements for the children has been done. 

This complicated system is private, to protect the individuals and families involved. 

People can take steps and make decisions or seek legal process to assist them, using those parts of the system that they need at that time.  But there are pitfalls that require experience and expertise in family law to negotiate.

The confidentiality of the system means that general public knowledge of family law in Australia is limited, scattered and often ill informed.

Our team at Bowen Buchbinder Vilensky has the skills to assist our clients to negotiate this complex system as best suits them.   

Avoid Being a “Botched” Victim When It Comes to Family Law Advice

spousal maintenance

I do not know whether you have had the fortune, or misfortune as the case may be, to watch an episode of the reality TV show “Botched”. 

“Botched” follows the daily professional lives of 2 plastic surgeons in Beverly Hills who specialise in fixing up botched jobs done by less experienced and incompetent plastic surgeons.  In other words, all of their patients are former patients of other plastic surgeons and many are disfigured from procedures that have gone horribly wrong.  Hence the title of the reality show.

“Botched” reminds me of the family law practice of Bowen Buchbinder Vilensky (“BBV”).  Many of our clients have been the clients of sometimes, two or even three, other law firms before they eventually end up at BBV.  By the time these new clients come to our experienced and competent family law team, they are very often demoralised, low on funds and have completely lost faith in the legal system insofar as it relates to family law matters.

The lesson for potential clients seeking advice in family law is to avoid being a “Botched” victim.  That is, get good quality advice early in the process from experienced and competent family law lawyers who understand the process and will point you in the right direction from the outset.  This is a specialty of BBV.  The financial benefits of being in good hands early cannot be overestimated.

Put simply, start with the right family law lawyer to avoid having to change lawyers midstream to unwind bad legal or strategic advice provided by inexperienced lawyers.  Avoid wasting time and resources on bad legal advice.

As managing director, I could not be prouder of the family law team working at BBV.  I observe them at work every day.  They are ethical, experienced, passionate, empathetic and highly competent.  Further, they will work on a fixed fee basis so that clients know in advance what fees will be incurred. 

May I share with you a very recent testimonial provided by a satisfied client of the firm on whose behalf we concluded a rather complex family law matter:

            “You and your firm have been my saviour when it comes to sailing the treacherous waters of divorce, consent orders and paperwork. I cannot thank you enough for your advice, thoroughness and organisation. You were understanding, compassionate and have amazing patience.

Words cannot explain my feelings and I am forever thankful.”

If the producers of “Botched” were looking to do a similar series based on the legal profession, they could use the family law team at BBV as the practitioners fixing up the botched jobs caused by less experienced lawyers.

PLEASE CONTACT

If you would like advice in this area please contact David Vilensky at dvilensky@bbvlegal.com.au 

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