Which marriage counts when you want a divorce?

A void marriage is of no effect in law.  It is not a marriage at all, whether or not the decree declaring it void has been pronounced.[1]

It is not uncommon for a couple to have two marriage-like ceremonies, especially where one spouse has family interstate or overseas.

So, which one counts when you want a divorce?

Section 113 of the Marriage Act 1961 (Cth) (the Marriage Act) creates a general prohibition on persons who are already legally married to each other, marrying each other again.  There are some exceptions, for example where there is doubt about the validity of the first marriage. 

While section 113 creates a prohibition against marrying someone you are already married to, it does not expressly say anything about the validity (or otherwise) of a marriage conducted in contravention of the section, or what the consequences are for those who breach the section. 

Section 23B(1) of the Marriage Act provides a list of circumstances in which a marriage will be void, paraphrased below:

  • either of the parties is, at the time of the marriage, lawfully married to some other person;
  • the parties are within a prohibited relationship (familial relationships);
  • by reason of section 48 (formal requirements for marriages solemnised in Australia) the marriage is not a valid marriage;
  • the consent of either of the parties is not a real consent because:
  • it was obtained by duress or fraud;
  • that party is mistaken as to the identity of the other party or as to the nature of the ceremony performed; or
  • that party did not understand the nature and effect of the marriage ceremony; or
  • either of the parties is not of marriageable age;

and not otherwise.

The grounds listed in section 23B of the Marriage Act purport to be exhaustive, and they do not include a marriage to someone who is already your spouse.  

Fortunately, this does not mean that parties who have engaged in 2 marriage ceremonies need to be granted 2 divorce orders. As a general rule, if the first marriage is valid, then the second marriage is not.

In Kapadia and Kapadia,[2] Kay J relied on the power under section 113(1) of the Family Law Act 1975 (Cth) (Family Law Act) to declare a second marriage (to the same person) invalid.[3]  In the more recent decision of Nelson & Nelson,[4] Hannam J found that on the basis of “common sense and logic”, any such marriage between spouses must be void, notwithstanding the apparently exclusive nature of the words at the conclusion of section 23B(1) of the Marriage Act.[5]

Interestingly, there does appear to be a distinction (largely without a difference) between a void marriage and an invalid marriage.  A decree of nullity may be granted by the Family Court of Australia in the case of a void marriage only.[6]  The Family Court also has a separate power to make a declaration that a marriage is invalid.[7]

The cases cited above involved second marriage ceremonies conducted in Australia.  The validity of a second marriage may depend on whether one (or both) of the marriage ceremonies were conducted overseas.

Part VA of the Marriage Act operates to recognise, in Australia, marriages solemnised overseas (which are recognised as valid marriages under the local law).  There are some exceptions, such as when either party to the marriage was married to some other person at the time of marriage, or when either party was not of marriageable age in Australia.  Already being married to the person you are marrying, is not included as one of those exceptions.

In the case of Lieu & Antcliff,[8] the bride and groom were already lawfully married to each other (having been married in a registry office in Melbourne some years prior) when they renewed their vows and engaged in a marriage ceremony in Fiji (Fijian marriage).   

The couple separated shortly after the Fijian marriage.  They were granted a divorce order in respect of their first marriage in Melbourne without difficulty.  However, they were initially not granted a divorce order in respect of the Fijian marriage because of concerns as to its validity.

The Wife subsequently applied to the Family Court of Australia seeking orders for, in the alternative:

  • a decree of nullity in respect of the Fijian marriage;
  • a declaration of invalidity in respect of the Fijian marriage; or
  • if the Fijian marriage was valid, a divorce order in respect of the Fijian marriage.

The Wife filed evidence from a Fijian lawyer who deposed that it was not an offence under Fijian law to marry a spouse. The lawyer further deposed that the Fijian marriage was valid under Fijian law, notwithstanding that the parties were already married to each other.

It followed then, under Part VA of the Marriage Act, that the Fijian marriage was recognised in Australia, notwithstanding that it was a marriage between two people who were already spouses.

If you have been through two marriage ceremonies with your spouse, and want a divorce, then you should carefully consider the circumstances of each ceremony, and seek legal advice before applying for a divorce.

The contents of this article are for reference and discussion purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.  

[1] Zua v Huang [2015] FamCA 873 at [15].

[2] (1991) FLC 92-245.

[3] See also Anouihl & Temke [2017] FamCA 325.

[4] [2016] FamCA 516.

[5] See also Zau & Huang [2015] FamCA 873.

[6] Family Law Act 1975 (Cth), s 51.

[7] Family Law Act 1975 (Cth), s 113(1).

[8] [2016] FamCA 942.

PLEASE CONTACT

If you would like advice in this area please contact Kori O’Meehan at [email protected] 

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What are the Duties of a Company Director?

Directors are responsible for the management and control of a Company.  They are the controlling minds of the Company.

Under common law principles the fiduciary duties of a director can be summarised as follows:

  • To act in good faith and for a proper purpose;
  • To exercise care, skill and diligence;
  • To exercise the powers for the purpose for which they were conferred; and
  • Avoid conflicts of interest.

In addition to the fiduciary duties owed by directors at common law as outlined above, the Corporations Act imposes extra statutory duties which to a large extent restate and reinforce the common law duties imposed on directors.  What is not widely known is the existence in our law of the so-called “business judgment rule” which is contained in section 180(2) of the Corporations Act.  The business judgment rule states, as a general rule, that if a director acts with care and diligence which is reasonably expected of a person with their knowledge and experience and if they act in good faith and for the benefit of the Company, then they will be exercising their duties and obligations to the Company correctly.

More to the point, a director of a Company will have met the requirements under the business judgment rule if they:

  • Make the particular business judgment in good faith and for a proper purpose;
  • Do not have a material personal interest in the subject matter of that judgment;
  • Inform themselves about the subject matter of the judgment to extent they reasonably believe to be appropriate; and
  • Rationally believe that the judgment is in the best interest of the Company.

While the purpose of the business judgment rule is to provide directors with an indemnity from personal liability for breaches of their statutory and general law duties of care and diligence, this defence will only apply if the decision making process is not flawed.  However, if a director departs from the principles of the business judgement rule, he or she will not have the protection afforded by the legislation and could be exposed to personal liability via litigation where it is alleged there has been a failure in the decision making process and the Company has suffered loss or damage as a result.

The potential ramifications that result from a director not meeting their obligations to their Company can be dire.  If the Company enters into a business transaction which sours or fails and the director did not conduct a proper and careful due diligence, that director may be held liable for damages sustained by the Company due to the imprudence of that director.

Caution should therefore always be exercised by a director of a Company before exercising their business judgment or embarking on a transaction which may affect the Company.

PLEASE CONTACT

If you would like advice in this area please contact David Vilensky at [email protected] or Alana Stallard  at [email protected] of our corporate advisory team.

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Do You Have Capacity For A Will?

Preparing a Will requires careful thought on the part of the person or persons for whom the Will is being prepared but it also demands great care and skill by the lawyer who is preparing the Will.

With people generally now living much longer and being prone to deteriorating mental health careful consideration must be given to whether or not the person for whom the Will is being prepared has the required level of mental capacity to make a legally valid Will (referred to as testamentary capacity). This is not only an increasingly important issue for lawyers, but it is also an equally important issue for accountants, financial planners, family doctors and other advisors.   

One must appreciate that the assessment of a person’s testamentary capacity is a legal test rather than a medical test. The opinion of a treating or reviewing medical practitioner is certainly relevant, but it is not determinative of itself.  An assessment of a person’s testamentary capacity may include obtaining an appropriate doctor’s opinion, but it very likely will also require evidence from other sources including people who know or have known the person concerned and who can inform the Court (if necessary) about  the day to day activities and responses of the person concerned.

Not infrequently, testamentary capacity can be a borderline issue. This may leave the person for whom a Will is being prepared or has been prepared vulnerable to those who may seek to exert influence over the Will maker and what they put into their Will.  Where the Court is called upon to determine a person’s testamentary capacity it will try and look at the full picture (sometimes with the benefit of hindsight) which often involves hearing from a wide range of witnesses.

For family members, as well as financial, medical or other advisors, this means making sure that at the time that the Will is executed there are comprehensive written records of the Will maker’s testamentary capacity – the Will maker should be engaged in conversation and if possible detailed written notes kept of responses to questions and the reactions to events that are happening around them at the time. It may also be valuable to take video of the person concerned at or about the time that they execute their Will to support the conclusion that they then have the necessary testamentary capacity.

These simple precautions can assist to prevent a Will later being declared invalid by the Court because the Court is not positively satisfied that the person making the Will had the required level of testamentary capacity.

The consequence of a Will being declared invalid by the Court can be significant and expensive. This may be especially so where there is a sizable Estate at hand and/or where there are potential vulnerable beneficiaries who may miss out on receiving a benefit from the Estate of the deceased.  The intended testamentary wishes of the person making the Will may be lost and their Estate distribute in a manner which is far less satisfactory and possibly even contrary to their expressed testamentary wishes.

Therefore, anyone who provides professional advice to others must carefully consider the mental capacity of the person being advised to properly understand the advice provided, appreciate the consequences of following that advice and be capable of providing coherent and reliable instructions to the advisor. In the case of a person who is making a Will, it is the required level of testamentary capacity of that person that is crucial. It is, of course, equally  important to ensure that the Will together with all other estate planning documents are regularly reviewed and updated so as to ensure that the person’s Estate will be distributed in accordance with their current testamentary wishes.

PLEASE CONTACT

For more information or to discuss any particular concerns contact Les Buchbinder at [email protected].

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Superannuation – Is Your Will Enough?

Superannuation has become a major asset for an increasing number of Australians since the introduction of compulsory payments by employers since 1992 by the Australian Government.

Contrary to popular belief, superannuation is not an estate asset and it does not automatically form part of your estate upon your death. Rather, payment of superannuation upon death is a matter determined by the trustee of the superannuation fund in accordance with the governing rules of the respective fund and relevant law.

Should your fund allow them (there are a few commercial funds that don’t), a binding death benefit nomination (BDBN) is a way in which you can, during your lifetime, override the trustee’s discretion.

A BDBN is effectively a written notice given by a member to the trustee of their fund which directs the trustee to pay the member’s death benefit, often comprising both superannuation and associated death benefits such as life insurance, in accordance with their wishes outlined in the BDBN.

The trustee of the fund is required to follow the instructions outlined in the BDBN, provided that it has been correctly prepared and executed.  A valid BDBN remains in effect for three years from the date it is signed, last amended and confirmed. In some instances, a non-lapsing binding death benefit may also be available and appropriate.

For members that have not made a BDBN with their fund, the trustee of the fund has the authority and discretion to decide whether to pay any benefit payable on your death to one or more of your dependants, or to your estate.

Dependants in this context include a spouse, children of any age, any person financially dependent on the member, any person in an interdependency relationship with the member, and the member’s legal personal representative.

There are a number of advantages to making a BDBN. These include the peace of mind and certainty as to who will receive your death benefit once you die and the ease and speed at which a death benefit can be paid.

Unlike those assets that form part of your estate, a Grant of Probate or Grant of Letters of Administration is not required to be obtained in order for a beneficiary to access your superannuation death benefit. Similarly, a BDBN can protect your superannuation and associated death benefits from any claims made against your estate.

For further advice or guidance on superannuation and the implications for an estate, executor or beneficiary, please contact Alana Stallard on [email protected]  or (08) 9325 9644.

PLEASE CONTACT

Contact Alana Stallard at [email protected] if you wish to discuss this matter or your estate planning objectives further.

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Lacking mental capacity to make a Will – you may get Court!

Arguably one of the most controversial and challenging of the formal legal requirements of a valid Will is whether or not the person making the Will has sufficient testamentary capacity at such time that they make their Will.  A Will is not valid unless the person making it has testamentary capacity. That is, they must:

(a) understand the nature of the act and its effects;

(b) understand the extent of the property of which he or she is disposing; and

(c) be able to comprehend and appreciate the claims on his or her Estate to which he or she ought to give effect.

However, what happens if a person has no Will and no longer has the required testamentary capacity?

One option of course is that no steps are taken. In this case, when that person dies his or her Estate will be distributed in accordance with a prescribed formula set out in the Administration Act (“an Intestacy”). But, what if dividing this person’s Estate or an Intestacy does not adequately provide for certain family members or non-family persons or organisations?  Further, what if the person already has a Will in place but their personal and/or financial circumstances have significantly changed since the time when the earlier Will was made and it is now no longer relevant or appropriate?

This issue arises more and more frequently as our population ages, people’s financial circumstances become more complex, and the family unit continues to disappear.

In this situation, consideration can be given to whether an application should be made to the Court for what is called a Statutory Will.  This is a Will which is made by the Court for the person concerned.   This option first became available in Western Australia in 2008.

Upon such an application being made by any person, the Court, pursuant to section 40(1) of the Wills Act 1970 (WA) has the power to make, alter, or revoke a Will of a person who lacks testamentary capacity provided that the person concerned:

(a) lacks testamentary capacity;

(b) is alive; and

(c) is over 18 years of age.

The power for the Court to make a Statutory Will enables the Court to ensure that there is a valid Will in place which:

  1.  Gives effect to the previously stated or more obvious wishes of a person lacking testamentary capacity;
  2.  Avoids a full or partial intestacy;
  3.  Avoids a future dispute as to the adequacy of provision or interpretation of an existing testamentary document;
  4.  May allow for appropriate structuring to be put in place, such as testamentary trusts, which can have significant benefits for beneficiaries of the Estate; and
  5.  Deals with changes in circumstances that may have occurred since a last Will was made by the Will maker.

However, in the last 10 years there is only one reported case in Western Australia which has addressed this matter.  In that instance the Court declined to make the Will as sought. The lack of applications to the Court for a Statutory Will may reflect a lack of familiarity with such applications, or that the cost and complexity of these Applications can be prohibitive in many instances. Nevertheless, Statutory Wills can be a useful estate planning tool that should, at the very least, be considered in the appropriate circumstances.

Please contact Alana Stallard at [email protected] if you wish to discuss this matter or your estate planning objectives further.

PLEASE CONTACT

Contact Alana Stallard at [email protected] if you wish to discuss this matter or your estate planning objectives further.

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State Taxes on Property Transactions – for Loved Up Couples and Those That Are Not So Loved Up

State tax on real estate transfers used to be called stamp duty- as the documents would be stamped.

Since 2008 state land transfer tax is called Duty under the Duties Act (WA).

What happens where an interest in property is transferred during a marriage or de-facto relationship by one of the parties to the marriage to the other party?

However, duty concessions can support happy families.  When, sadly, the relationship has ended and the couple is splitting up, duty relief may also be available.

PART 1: When the couple are settled and happy in their relationship

Duty that would otherwise be charged on land transactions where a couple has established a home together, is exempted by Section 97 of the Duties Act 2008 (WA).

For couples who are living together in a home that belongs to one of them, there is a saving if, after two years during which they live together in the home, the owner of the home wants to transfer half their interest to the other person, in that normal transfer duty is waived.

This law applies to all couples in de facto relationships.

The definition of a de facto relationship is Section 9 of the Duties Act that states that a de facto partner of 2 years means “a person who is living in a de facto relationship with the person and has lived on that basis with the person for at least 2 years”.

In the formal language of the Act:

Duty is not chargeable on a transfer or an agreement for the transfer of property that would otherwise ordinarily be subject to stamp duty where the person who is transferring the property is married to the one they are transferring the property to or are de facto partners of two years and the dutiable property (Section 97 (b) ) is a lot on which a residence is erected which, when the liability for duty on the transaction arises, was used solely or dominantly as the ordinary place of residence of the persons referred to in paragraph (a) (the married couple or de facto couple).

The waiver of duty otherwise normally payable, is only available if the person transferring the property is the sole owner of the property and where the result of the transaction will be that the dutiable property is owned by the parties as joint tenants or tenants in common in equal shares.

Instead of the usual duty the nominal amount only is paid, presently $20.  There will still be lodgement fees payable at Landgate and other expenses such are production fees if there is a mortgage.

So if the home is owned by George and Mary, (ie George’s ex partner) the stamp duty exemption doesn’t apply if Mary’s interest is going to Shane, George’s new partner, because George doesn’t own it outright, only half.

But if George is the sole owner of the property (perhaps after Mary has transferred it to him after their relationship breakdown, see below) then he can transfer half the property to Shane without there being the usual rate of stamp duty payable.

Section 133 sets out what evidence can be produced to establish that a couple is married or living in a de facto relationship.  It provides that a statutory declaration can relied upon to prove the relationship.

PART 2: When all is not good in paradise: a marriage like relationship ends

When a couple separates and they want to transfer property they own together between them, provided they obtain court orders or enter into a formal agreement arising from their relationship breakdown, under the relevant family law legislation, Section 129 of the Duties Act provides an exemption from duty that would otherwise be payable.

If George and Mary owned their home jointly, either of them can buy the other out and not have to pay stamp duty on the transaction.

To be entitled to the exemption the agreement reached about transferring the property needs to be part of the couples’ matrimonial settlement.  In a settlement all the assets and liabilities a couple has needs to be taken into account and considered.

Section 113 provides that duty is not chargeable on a dutiable transaction to the extent that it is affected by a matrimonial instrument mentioned in Section 129 (b) or (c) or a de facto relationship instrument mentioned in Section 130 (a).

Section 129 provides that a reference to a matrimonial instrument is to any of the following instruments to the extent that it does with matrimonial property:

(a)  A maintenance agreement registered under the Family Law Act……

(b)  A financial agreement made under the Family Law Act..

(c)  A splitting agreement;

(d) An order of the Court under the Family Law.

Section 130 relates to de facto relationship instruments and refers to the Family Court Act Section 205T or an order of the Court made under that Act or the law of the Commonwealth or another State that substantially corresponds with Family Court Act Part 5A.

Section 131 provides that transactions effected by or in accordance with matrimonial instrument or de facto relationship instruments are subject to nominal duty if the parties are separated or divorced from one another and the property is to be transferred to (Section 131 No. 1 (d) )

(i)         either or both of parties to the marriage;  or

(ii)        a child or children of either of the parties to the marriage; or

(iii)       a trustee of such a child or children; or

(v)        the trustee of a superannuation fund.

The similar provision applies for de factos except that a superannuation fund is not referred to, there being no provision in Western Australia for superannuation splitting in favour of de factos.

What Does This Mean For Me?

A couple still in their relationship can take advantage of exemptions to transfer their home from one owner’s name into their joint names.  They can obtain that relief with the assistance of a settlement agent or lawyer to prepare the land transfer and assist with preparation of the statutory declaration required to be produced to the State Revenue Office.

A couple separating and wanting to take advantage of the stamp duty concessions will require legal assistance to obtain the court orders or formal agreement required to be produced to the State Revenue office to obtain an exemption on a transfer of property between them.

The individuals in a separating couple should be separately advised about their entitlements.  Advice obtained that enables access to duty relief may be cost effective in that the costs of preparation of the court documents and or agreement can be partly at least defrayed by the duty savings obtained on the property transfer.

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Some Super Changes

Here we go again….!

Several significant changes to the superannuation rules became effective from 1 July 2017.Do you really need to know about them?  Yes, you do!

Not only will the changes impact on your plans for your superannuation and retirement, but they will very likely also impact on your estate planning objectives and arrangements.

Ok, So What Has Changed?

In summary, the new rules after 30 June 2017 in relation to pensions include the following:

1. A person cannot start a pension with an account balance supporting a pension of over $1.6m (or continue such a pension after 30 June 2017).

2. This limit is called a person’s “transfer balance cap”.

3. When a person starts a pension after 30 June 2017, they will have a “transfer balance account”. This will track key events in relation to the person’s pension, to see if the person exceeds their transfer balance cap (either on starting the pension or at a date on starting an additional pension).

4. If someone exceeds their transfer balance cap, they will need to take action to rectify the problem (that is, by commuting part of their pension).

5. If the person does not take action, the Commissioner of Taxation can force the fund to rectify the problem (by issuing a “commutation authority”).

6. The rectification action that can be taken will involve commuting some or all of the pension to a lump sum.

7. Except in relation to pensions resulting from the death of a member, such a commutation can generally be retained in the superannuation system.

What Does This Mean For Me?

What this means in practical terms is that where the death benefit exceeds the recipient’s transfer balance cap (currently set at $1.6 m), then any excess must be cashed out as a lump sum. This will impact in particular on those wishing to keep benefits in superannuation by reverting or paying a pension to their dependants upon their death.

How Will This Affect My Estate Planning Decisions?

There are a number of ways in which these changes may impact on estate planning decisions. For example:

1. It will be necessary to review and possibly update death benefit nominations and Wills;

2. It may be necessary to review and update Self Managed Superannuation Fund Deeds to bring them up to date with the new legislation and to allow estate planning objectives to be achieved. For example, often older Deeds do not allow for non lapsing Binding Death Benefit Nominations;

3. Where members of a superannuation fund have balances exceeding the transfer balance cap, they may need to consider setting up a  Self Managed Superannuation Fund for their pension interest and retaining their remaining accumulation interest in their existing fund. However, care will need to be taken as this could trigger tax issues and accordingly appropriate tax advice should be sought to determine the tax implications of each strategy. A good estate planning strategy can sometimes be a disaster from a tax planning perspective; and

4. Where a death benefit is required to be paid as a lump sum this may force the sale of non-liquid assets where there are insufficient liquid assets to satisfy the lump sum. In such a situation a strategy needs to be developed to prevent this occurring.

These are examples of some of the impacts the new superannuation rules will have on estate planning strategies, but in individual circumstances there are likely to be other impacts as well.

Conclusion

Estate planning is not a set-and-forget process. Rather it is an ongoing evolving process, which must necessarily respond to changes in individual personal, financial and other circumstances, as well as to changes in the law.

The changes to the superannuation rules will have far reaching effects for those who hold, or who anticipate holding, significant funds in superannuation. Therefore, for those who are, or might soon be, affected by these changes it becomes critically important to respond and carefully review your estate planning arrangements and strategies. This review may necessarily extend to reviewing business structures and business succession arrangements.

Those who choose to ignore the new superannuation rules and/or who choose not to regularly review their estate planning and business succession arrangements do so at their own peril. They also do so at the peril of their families and loved ones with potentially significant detrimental financial consequences.

PLEASE CONTACT

For more information or to discuss any particular concerns contact Les Buchbinder at [email protected].

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The Sham Of It All!

Surely I can save money by terminating the employment of a worker and then re-engage them as an independent contractor?

Not so fast….

Recently the Federal Court of Australia imposed a significant financial penalty against a company after that company was found to have breached the sham contracting provisions of the Fair Work Act 2009 (Cth) (“the Act”).

Section 357 of the Act protects genuine employees from “sham” arrangements in which they are portrayed as being independent contractors whereas in reality they are genuine employees.

Genuine employees are entitled to a range of rights and benefits (including sick leave, holiday pay and superannuation) whereas independent contractors do not enjoy these same benefits.

A sham self-employment contract arises in circumstances where a person is engaged to undertake certain work and/or provide certain services ostensibly as an independent contractor when the true situation is that they are not actually an independent contractor at all but an employee.

Cases where employers have misrepresented employees as being independent contractors have become more prevalent primarily because there is a financial benefit in doing so.   It is often less expensive to engage an independent contractor than to engage the services of an employee and, further, very often there are not the same risks associated with terminating an independent contract as there are in terminating the services of an employee.

On 2 December 2015 the High Court of Australia handed down its decision in the matter of Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) HCA 45, which was a case in which in 2009 Quest South Perth Holdings Pty Ltd, through the services of an independent  staffing agency, terminated the employment of two housekeepers and then immediately re-hired them but allegedly as independent contractors to perform the same duties.  The Fair Work Ombudsman commence legal proceedings against Quest South Perth Holdings Pty Ltd alleging that this arrangement was in breach of the sham contracting laws set out in Section 357 of the Act.

Initially the proceeding commenced by the Fair Work Ombudsman in the Federal Court of Australia was unsuccessful. However, in a subsequent Appeal to the High Court of Australia, the Court held that Quest South Perth Holdings Pty Ltd had breached the sham contracting provisions of the Act by misrepresenting an employment relationship with the the two housekeepers as that of independent contracting. The High Court of Australia said that the two housekeepers continued to perform precisely the same work for Quest South Perth Holdings Pty Ltd in precisely the same manner as they had always done. The Court said that in law, the two housekeepers had never become independent contractors.

The Federal Court of Australia when it initially rejected the argument of the Fair Work Ombudsman found that the sham contracting provisions of the Act had not been breached because the arrangements had been made through the services of a third party (an independent labour hire firm) and not directly between Quest South Perth Holdings Pty Ltd and the two housekeepers. However this finding was rejected by the High Court of Australia and the fact that the arrangement was conducted through the services of the labour hire firm did not mean that the sham contracting provisions of the Act had been circumvented and not breached. Indeed the High Court of Australia went on to say that the misrepresentation by Quest South Perth Holdings Pty Ltd was exactly the type of activity which was intended to be caught by Section 357 of the Act.

The High Court of Australia referred the matter back to the Federal Court of Australia for it to impose appropriate penalties.  The Federal Court of Australia has recently dealt with the issue of penalty and imposed  a fine of  $59,000 against the company for breaching the sham contracting provisions of the Act.

This case highlights the difficulties faced by those who engage the services of workers and those workers themselves in determining whether a particular relationship is one of employer and employee or, alternatively, one of principal and contractor. This distinction can have significant financial and other consequences for all involved.  The Courts have developed a series of key indicators to assist in determining whether a particular relationship is one of employer and employee or, alternatively, one of principal and contractor.   None of these indicators is alone determined in a true and ultimately it is for the Court to decide based on all of the evidence before it.

Perhaps the more significant feature of this decision is that it highlights that the sham contracting provisions of the Actcannot be avoided by utilising a labour hire firm through which to engage the worker.

In order to minimise the risk of being caught in a sham contracting situation, employers should:

  1. ensure that the relationship with their workers is what they have assumed them to be.   If in doubt, they should seek competent legal advice;
  2. ensure that they do not misrepresent the nature of relationship to workers otherwise they will face prosecution and potentially significant penalties, for breaching the Act;
  3.  if engaging workers through a third party such as a labour hire firm, continually examine the relationship and implement risk management strategies.   If an employment relationship is later found to exist instead of one of contractor, the employer can be liable for significant back payment of entitlements in addition to any penalties that may be imposed for breaching the Act.

PLEASE CONTACT

Contact Les Buchbinder at [email protected] if you wish to discuss this matter or your estate planning objectives further.

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The Cost of Separation – Certainty of Mind and Certainty of Legal Fees

Along with the disruption and uncertainty surrounding a marriage breakdown separating couples have to also consider whether or not they need to engage a lawyer.

Although there are many services available for couples, in particular through the Family Relationship Centre system, in most cases it becomes very obvious that both parties need to have some legal advice.

The Process of Separation
There is always one party who knows they are going to be leaving the relationship before the other. That often causes great distress when a party realises that the other one has ceased contributing to their relationship and is out the door, or wants you to leave.

The law does not give any pathway for separation. Parties enter a relationship voluntarily and entirely without any government intervention. It is entirely their personal decision.

It is always advisable for legal advice to be obtained before the physical separation, particularly if there are children involved.

While separation is a personal decision, it may have immediate legal consequences. So the first service that lawyers can offer a person when they separate is to give them initial advice.

Mediation
Mediation can be held before Court proceedings commence. If a mediation is successful, in that the parties come to an agreement about the matters in dispute, a couple can avoid Court altogether. The couples must however prepare and lodge a Form 11 Application for Consent Orders with the Court.

Mediation can also take place during Court proceedings as part of the Court’s programming of cases to ensure that, before a case is programmed towards a trial, the parties have had the opportunity of considering an agreement.

Issuing Court Proceedings
If the mediation processes have failed or there is something urgent that needs to be attended to, Court documents will be required to set out properly what your case is about with the kind of information that the Court requires (that will not necessarily be what you would like to talk to the Court about).

Court documents have been prepared to make it possible for people to fill in the forms themselves without legal support. However, most people find the forms daunting and unfamiliar.

There is no substitute for having a competent family lawyer assist with the preparation of your Court documents. That process will also identify the orders you want the Court to make and will enable you to be advised and tutored about what to expect in your Court case and how you can assist in your case.

Once The Court Documents Have Been Lodged, What Happens Next?
Once Court documents have been filed in the Court, parties face considerable delays before their case finally comes to trial. Many cases, especially those involving children, require assistance from the Court in the early stages of the proceedings in settling urgent interim issues.

Once parties have obtained some interim orders and assistance from the Court often a case does not have to progress past that point and in many instances mediation at this stage will be successful.

Where financial matters are involved parties have to take steps to establish valuation of assets and to consider what the issues in their case are that may require accounting and legal assistance.

Readiness Hearing and Trial
A readiness hearing is a date the Court allocates by which time parties need to have prepared their trial documents, issued all necessary subpoenas, and generally be ready for a trial. A great deal of work needs to be done at this time and a Fixed Fee can be offered for this stage of the proceedings and for the trial.

The majority of cases filed in the Family Court end by agreement before a trial actually commences.

Costs of Getting Legal Advice
Many lawyers provide Family Law services on a time cost basis, meaning that when you engage them, they will work for you from the beginning of your matter until the end, sending usually monthly accounts, charging you for every 6 minutes of time spent on your matter. This includes every email, telephone call, letter and meetings. Lawyers are obliged to advise clients you at regular points in the service period what is the estimate of the legal costs of the service will be. However, this is not a quote and does not bind the lawyer if the services turn out to cost more than the estimate given by the Lawyer.

At Bowen Buchbinder Vilensky we provide Fixed Price services. This involves an assessment of what work is required at various stages of your matter and providing a fixed fee for that service. The fixed fee is agreed to in advance before any work commences which provides certainty and peace of mind.

 

PLEASE CONTACT

Contact Rhonda Griffiths at [email protected] if you wish to discuss this matter or your estate planning objectives further.

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Owning Properties in Different Countries – Heirs and Places

In today’s globalised world, an increasing number of people own real estate in more than one country at any one time.

As a result, there has been an increase in the number of people who have both an Australian Will and a Will in a foreign country to dispose of real estate owned by them. The intention (subject to the manner in which the Wills are drafted) is usually for the foreign Will to dispose of real estate in that foreign country and for the Australian Will to dispose of all other assets of that person.

However, if you first make an Australian Will that only deals with your assets in Australia, and later make a second foreign Will that states that it revokes all previous Wills and deals solely with your real estate in that other country, what is the status of your Australian Will? Has your Australian Will been revoked by the later foreign Will?

This interesting predicament has been considered by the Australian Courts, which have set out principles to reduce the uncertainty that this creates and have determined that the question of whether a later Will revokes an earlier Will ultimately depends on the intention of the Will-maker: did he or she intend to revoke the earlier Will?

In Australia, in so far as real estate is concerned, such issues are generally referred to the law of the place where that real estate is situated (the legal principle of ‘lex situs’).

It has also been recognised since the 19th century that a general revocation clause in a Will (e.g., ‘I hereby revoke all Wills heretofore made by me and declare this to be my last Will’) is not sufficient of itself to revoke a prior Will if the Court is satisfied that the Will-maker did not intend by the later Will to revoke the earlier Will.

In determining the intention of the Will-maker, the Courts will look at a variety of factors, including:

  • whether the Australian Will deals only with your Australian estate;
  • whether the foreign Will deals only with your real estate in the foreign country;
  • whether the later Will is sufficient by its terms to cause a revocation of the earlier Will (which is a question of interpretation of the foreign Will by the Courts);
  • whether the foreign Will was ever intended to affect the Australian Will (which is to be determined as a matter of evidence according to Australian probate law);
  • whether the foreign Will was made in the language of that country and not in English; and
  • the terms of both Wills and the circumstances of their execution and signing.

The practical significance of this is that, if you own assets in Australia and also own foreign real estate, it is imperative that you obtain competent estate planning advice so as to avoid the risk that, at a later time, either your Australian or your foreign Will is deemed to have been revoked, when your intention and estate planning objectives may be clearly otherwise.

PLEASE CONTACT

Contact us at bbv@bbvlegal.com.au if you wish to discuss this matter or your estate planning objectives further.

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