Saturday, 31 January 2009
The editorial in today's Australian speaks of a reason to mourn. In an opinion piece in today's Fairfax papers, Adele Horin says that the nation seeks answers for the little girl's death.
I hope that we do find out the reasons why this young girl died. By finding out the causes of her death, we can at least honour her memory, and (hopefully) prevent further tragedies like this.
- an informal deal (this may also involve a lot of paperwork and possibly what are otherwise seen as binding agreements, such as contracts)
- orders under the Family Law Act
- a binding financial agreement
To which people does the Family Law Act apply?
The Family Law Act applies to all people who are or were married, and the marriage is recognised in Australia. Some marriages are not recognised in Australia, for example:
- polygamous marriages (although these may be covered under the de facto changes to the Family Law Act which have passed Federal Parliament, and are to come into effect shortly);
- same sex marriages (again, the de facto provisions may apply when force later this year. For all relationships considered de facto relationships, existing State and Territory laws may apply.)
Is there any minimum period for people to be married before a property settlement can be sought?
Provided that the parties have separated and their marriage has broken down- the answer is "no".
In which States and Territories does the Family Law Act apply?
The Family Law Act applies in all States and Territories, including Norfolk Island. Incidentally, property settlement matters from Norfolk are usually heard in Brisbane or Sydney.
Are there any time limits?
Proceedings for property settlement (and spousal maintenance) must be brought within 1 year of divorce, or permission from the court is required before they can be commenced. The court is not obliged to give permission - it is a matter of discretion, and is not guaranteed.
Informal property settlement
Except for those with minimal property, this is not recommended. If an informal property settlement has occurred, then capital gains tax and stamp duty might have to be paid (which could otherwise have been avoided through properly formalising the deal). Because it is an informal property settlement, then unless the time limits apply, the person who feels that they have not received enough can apply to the court for property settlement, i.e., ask for more.
Sometimes this can have far reaching results. In one case, for example, well after the parties separated (they were broke), the husband won first prize in the lotto. The Family Court awarded a share of the prize to the wife.
It is always best to get advice from a good family lawyer.
Even if you have entered into a contract with your ex, if it is not an order or binding financial agreement under the Family Law Act it may provide no certainty at all as it does not prevent the other party (or you) from making a property settlement claim under the Family Law Act. Often financiers will insist on orders or a binding financial agreement being entered into before they lend money.
This is the most common method of resolving property settlement.
Most orders are not made by any type of court fight, but after an agreed outcome, with the deal being struck after negotiations of some kind- directly between the parties, through their lawyers, or with the assistance of someone like a mediator. These orders are made by the Family Court and State Magistrate or Local Courts, usually without the need (and bother and expense) of any court appearance. Because each of the parties is agreeing to the making of orders, these orders are commonly known as "consent orders".
Orders provide certainty, thereby do not prevent refinancing from taking place (which an informal property settlement could do), and provide tax breaks for both stamp duty and capital gains tax.
Consent orders are binding in the same way as orders made after court proceedings. Their form is exactly the same. The differences are obvious- it is usually:
- cheaper, and
to have consent orders at the beginning, rather than have to go to court.
The courts encourage people to settle rather than go to trial. A small percentage of matters goes to trial- usually about 3-5% of matters filed. Most of the rest are resolved by consent orders.
Binding financial agreements
These are agreements in a particular form signed by the parties, by which they contract out of the Family Law Act, and enable a property settlement to take place. Binding financial agreements have their place.
Some family lawyers use them a lot, and others refuse to use them.
Binding financial agreements give certainty to property settlement (and have some advantages to consent orders). However, there are two features about binding financial agreements that mean people are more inclined to have consent orders than binding financial agreements:
- to get a consent order drawn up is usually quicker and cheaper than having a binding financial agreement drawn up
- the Family Court has signalled that it requires strict compliance with rules associated with binding financial agreements, and that if there has not been strict compliance, the agreement is struck down, meaning - back to square one with the property settlement.
Getting an experienced family lawyer to draw up the documents will usually provide certainty to the deal, which should save money and grief.
Friday, 30 January 2009
- they last years;
- there is usually no let up in hostilities;
- they cost a fortune;
- fights are often about (what might seem to an outsider to be) a relatively minor point;
- they cause devastation all around, for no apparent purpose;
- everyone loses, in one way or another.
Almost 30 years ago, a Family Court judge stated that this type of litigation was unlike any other-
The problem about the jurisdiction under the Family Law Act at least in relation
to children is that obsessive litigants can in effect continue to relitigate the matter ad nauseam. They have a whole galaxy of subsequent applications which they can work their way through...
The problem, unfortunately, is not confined to Australia. In the US, one of the experiments that is being trialled to help solve this problem is the role of a parent co-ordinator.
The idea of a parenting co-ordinator is that the parenting co-ordinator can make the day to to day decisions about the seemingly minor disputes between the parties, so that it can be dealt with presumably via mediation or correspondence, rather than having to go to court.
Parenting co-ordinators are not free. They are not funded by the governments there, which means that in addition to their own lawyers, the parties have to fund the cost of one of these. Therefore parenting co-ordinators can really only apply in cases where the parties have money.
In one state, Pennsylvania, standards are now being considered for parenting co-ordinators. These include a requirement that they are either experienced family lawyers- of a minimum of 5 years' standing, or experienced social scientists, such as psychologists or social workers. Presumably the parties would agree on who was to be the parenting co-ordinator, and failing agreement to be decided by the court.
Why would you want a parenting co-ordinator?
Quite simply it might be cheaper, quicker and more effective to have one of these than have to keep going back to court. Going through this process probably also avoids the worst part of inflammatory affidavits and criticism in the court room, which in themselves often worsen disputes.
Could they happen here?
Probably not; or at least not in the way that they are happening in the States. The reason is rather technical, so bear with me...
Back in the 1920's the High Court held that the only people who could exercise judicial power of the Commonwealth were judges- either Federal or State. A later decision concerning the Family Court said that judges of that court could delegate their power to Registrars, but only if the judges were truly supervisory, and that there were rights of review from the Registrars to the judges.
Long story short- I think that parenting coordinators here would, in making binding decisions (which is their advantage as opposed to going to court), be exercising judicial power, which they could not do.
Thursday, 29 January 2009
And he doesn't think anyone will notice?
The feeling of deja vu related to what happened in Australia in 2001. At that time Jodee Rich and Brad Keeling were the joint managing directors of One Tel Limited. At about the time that One Tel went belly up, Jodee Rich transferred his interest in his harbourside mansion to his wife pursuant to a binding financial agreement, thereby removing it from the claw back provisions under the Bankruptcy Act.
ASIC was not amused, taking both the Rich's to the Family Court in a vain attempt to set aside the binding financial agreement.
One of the features of the marriage of the Rich's was that it had not broken down.
Following the case, amendments were passed to the Family Law Act, requiring amongst other things that the significant parts of binding financial agreements were not of any force or effect until the marriage had broken down and that one of the parties had signed a separation declaration to that effect- eg section 90DA.
Changes were also made to the section allowing agreements to be set aside- section 90K - to allow someone who might become a creditor of a party to apply to the court to set aside the agreement.
It has been suggested that following these changes, Jodee Rich and his wife did not proceed with the agreement.
And one final word about One Tel : whatever it's other faults, I found One Tel to be the most responsive of the telco's when served with subpoenas, and the most likely to return phone calls.
Wednesday, 28 January 2009
In 1999, Jennifer Dobos (petitioner) and Sandor Dobos (respondent) were married in Hungary. They had two children, one born in Hungary and the other born in Ohio. In 2001, the couple moved to Ohio until 2004, when they returned to Hungary. In 2007, the petitioner returned to Ohio with her children and filed a petition for a protection order. She alleged severe physical and emotional abuse by her husband in front of their children.
After Jennifer sought medical treatment for her bruised, swollen, and battered body parts, she tried to get protection from her husband via Hungarian officials. Yet, without tangible proof of broken bones or puncture wounds, she was turned away because it is not against Hungarian law to have abuse absent such injuries. The petitioner returned to the respondent to accumulate the necessary passports and plane tickets to be able to return to Ohio, where she filed for a civil protection order.
A magistrate, after listening to oral arguments on the jurisdictional issue dismissed the Jenniferrequest for a protection order due to a lack of jurisdiction. The magistrate held that Sandor did not have minimum contact with Ohio because the abuse occurred in Hungary, not Ohio. The court could not have jurisdiction over the matter simply because the petitioner fled to Ohio. Additionally, because Hungary was almost 10,000 km away, Jennifer’s claim that there was an immediate and present danger by her husband was held untrue.
Remianing unprotected, Jennifer appealed.
On appeal, the court held that an evidentiary hearing should have been performed to determine whether jurisdiction was present and whether minimum contact necessary to satisfy due process existed. As a result, the court concluded that the magistrate failed to examine how the husband’s phone calls or her fear of him possibly coming to Ohio could reasonably put the petitioner and her children in fear of imminent harm.
The appellate court felt that the threatening phone calls from Sandor were sufficient to establish minimum contact, and the location of Hungary wasn’t dispositive of the issue. Additionally, without an evidentiary hearing the court could not determine whether extending jurisdiction over the husband would comply with fair play and substantial justice.
Tuesday, 27 January 2009
In the recent Full Court of the Family Court case of Forbes and Bream, one of the issues was who was to pay for the transcript. The father, who was the appellant, said that he could not afford to pay (something which the Full Court ultimately rejected). The mother said that a transcript would be useful, but she was not going to pay for it.
Chief Justice Bryant, and Justices Boland and Stevenson discussed the issue of the cost of transcript:
From the inception of the operation of the Family Court in 1976, transcript
has not been routinely provided to parties. The cost is not provided for in the
budget of the Court, and the cost of doing so routinely, would impinge on other
necessary expenditure for the proper operation of the Court. Thus in hearings of
matters at first instance parties will be responsible for the cost of transcript
if they wish to obtain it. However, the Court has from time to time judiciously
provided transcript to parties where it is demonstrably in the interests of
justice to do so. A common example is the provision of transcript of the
evidence of an expert witness in a parenting case.
There is no legislative basis in the Family Law Act 1975 (Cth) or the Family Law Rules 2004 (“the Rules”) providing for such transcript to be made available by the Court. The Rules relating to appeals deal specifically with the obligation to provide a transcript. Rule 22.23 states that the “appellant or, if so ordered, the cross-appellant must arrange to obtain the relevant parts of the transcript of the hearing...”. In contrast, rule 22.24 enables the Court to order that the Appeal Registrar, rather than the appellant, prepare the appeal books, if “exceptional hardship” would otherwise be caused to the appellant. However, the note to rule 22.24 clarifies that even if the
appellant is excused from preparing the appeal books because of “exceptional
hardship”, the obligation remains upon the appellant to obtain the transcript of
proceedings pursuant to rule 22.23.
It logically follows from the Rules that ordinarily the appellant should bear the cost of provision of the transcript at least in the first instance. This has certainly been the case in practice in appeals heard in this Court. However, in this case the father states that he is impecunious and cannot afford to obtain a transcript so as to comply with the Rules. The question then is whether this Court has a residual discretion to
order provision of a transcript at the Court’s expense in such
The Family Law Act is silent on the question of the provision of
transcript and provides no obligation, nor in our view any impediment, to the
Court providing transcript in a particular case. Although Rules 22.23 and 22.24
place an obligation on the appellant (or cross-appellant) to provide transcript
for insertion in the appeal book, the Court may dispense with the application of
the Rules if warranted in a particular case. On one view this could mean simply
that the requirement to provide transcript is waived but we do not consider the
meaning to be necessarily so constrained.
If the interests of justice require it, and the appellant or cross-appellant or party seeking it cannot afford the cost of transcript, the Court may in the exercise of its discretion agree to provide the transcript of relevant parts to enable the appeal to
proceed. In Fortnum & Fortnum (No 2)  FamCAFC 73 Finn J described this as part of the “supervisory role of the Full Court”. We would add to her Honour’s explanation the “supervisory power of the Court” may necessarily, in a particular case, require the Court to have transcript to fulfil its statutory function under s
94(2) of the Family Law Act. Thus the Court hearing an appeal may order the
provision of transcript as an exercise of its incidental powers.
We do not need to define the circumstances in which the discretion may
be exercised. Suffice it to say that we doubt whether it would be
exercised in anything other than exceptional cases. Furthermore, we
consider that the vast majority of such cases will relate to parenting orders, where the necessity to arrive at a result in the best interests of the child may provide compelling reasons for transcript to be provided at the Court’s expense
if the parties are impecunious. [emphasis added]
Monday, 26 January 2009
And probably the only people who are selling at the moment are those who have little choice in it- such as those going through a divorce. The three most common reasons for sale start with the letter D:
The article highlighted for me some of the issues that face people when they split up. Usually one of two things happen when people split up- the home is either sold or one party transfers their interest in the property to their ex, who in turn refinances the mortgage debt.
Refinancing the mortgage debt
Most lawyers will ensure that orders or binding financial agreements have conditions in them about the person who is keeping the property having to refinance by a certain time. In the past this has usually been 30 days or one month. Occasionally, it would be 2 months.
It was seen that all the usual things can happen in that time- the person applies to the bank for finance, the bank then says- this is what we need from you, the bank then goes through its checklist, then gets its valuation and voila! within the month approval is granted.
There have been a myriad of reports in the media about banks limiting credit and delaying applications for credit. Other solicitors have said to me that banks are limiting credit and that there is a delay in getting valuations.
It is wise to talk to your mortgage broker or bank and ask : "I am about to sign orders here that tell me that I must pay out my ex within ... days. Is this timeframe realistic? What is a realistic timeframe?"
It would appear that 60 days or 2 months is more common now.
Low doc loans
While low doc loans are still out there, it won't be for long. I understand that they will be gone within 6 months. If your settlement is dependent on a low doc loan, you might think of acting now, rather than later, when it might be too late.
Sale of the home
In the past, a standard default clause was that if the home had to be sold, then 3 months should be allowed for that, and then the property would be auctioned.
There always had to be allowances for special circumstances where there was a limited market of potential buyers. Typically, rural properties or exclusive properties took longer, and allowance needed to be made for that.
In my experience of over 20 years as a Brisbane family lawyer, there are two types of couples who have split up and are selling their home. The first are those who are very much in tune with the market, and with each other, and can sell a property quickly. They are rare.
The second are those where there might be these features (sometimes all):
- they have a poor relationship, sometimes conducted through the lawyers or through the children.
- they can't agree on anything, let alone the sale price of the home.
- they distrust each other intensely. In the context of the property settlement, one or both might think that the other is out to rip him (or her) off.
- different agents have said different sale prices for the property.
- one or both have set an unrealistic figure for the sale.
- the party who is in default of raising the dough to pay out the ex, remains in the home and keeps it in less than spotless condition.
- one is clinging to a valuation that is out of synch with the current state of the market. Nevertheless he (or she) has already worked out how the money he (or she) will get from the sale at that price is going to be spent, and is not going to compromise.
Sooner or later one of two things is going to happen- one party buys the other out, or the property has to be sold. The question is whether there is enough time for each step.
One has to wonder whether the usual default provision of 3 months is anywhere near long enough, when the figures that agents talked about for committed sellers were around 2-4 weeks, but are now (at least in Brisbane) in the order of 7 weeks. All I can suggest is to talk to a realistic hard-headed agent- what is arealistic timeframe- and then allow some more. One has to wonder whether 6 months ought to be the usual default provision now.
Finally, everyone should be avoiding auctions at the moment. "Auctions" and "divorce" are normally words that do not mix well together but my view at least, for what it's worth, is that in the current market parties who are going through a marriage breakup should avoid auctions like the plague. They are really options of last resort. Someone has to pay upfront for the auction. Agent's commission still also has to be paid. There is no guarantee of sale. The bottom feeders are out, trying to get bargains at auctions.
If there is to be an auction, there needs to be a reserve and a formula as to how to get it.
Sunday, 25 January 2009
Edward has now been sentenced to 18 years jail, according to Fairfax.
Sarah's death is another reminder that if there has been violence in a marriage, that violence can often be worse ina period of 1-18 months after separating.
What surprised me was to see that ordinarily 4 to 5% of owners are in default at any time with their rates.
This got me to thinking about what might happen to those who are about to split up, and paying the rates might be a struggle.
Here's a little guide on what to do...
If you have split up and you and your spouse own a property, then there are usually a number of critical bills that have to be paid. There are two keys to control the situation post-separation: not surprisingly, they are information and money. Information, as Benjamin Franklin put it so aptly, is power. More to the point - a lack of information is a lack of power.
People usually remember to pay the mortgage but forget about some of the other essentials that have to be paid. Some basics that have to be paid:
But what if your spouse is in the home and you don't know whether the mortgage is being paid or not? Assuming that you owe the debt too, the first thing that you need to do is to ensure that you get copies of the mortgage statements sent direct to you from the bank. Better yet, if you are able to access statements online, you will be getting current information, whenever you want. If you have a mortgage that has a substantial line of credit or redraw facility, you ought to get copies of your terms of account from the bank and immediate legal advice so that the money in the account is able to be protected.
It's one things for your ex's lawyers to say something like "the withdrawal of this money will be taken into account on property settlement". It's another to know that once it's gone, it's gone.
Check the statements to see if you and your spouse are ahead in payments. Making any payments immediately on separating can be extremely painful, and if there are substantial pre-payments, then that might things easier for a few months.
If you intend on separating to make substantial pre-payments on the mortgage - get legal advice from a family lawyer before you do so. You may find yourself later criticised for making the payment, or set yourself up on child support or spousal maintenance obligations. You may find that the bank treated the money differently to how you thought it might treat the money, and payments still have to be made.
If the mortgage is only in the name of your spouse, then you will need to get copies of the mortgage statements from them, or failing that from the bank. If in doubt, get legal advice.
Fairly obviously, if you default in payment of the mortgage, it is an act of default. This can impact on you getting credit in future. If payments are not made, there are legal steps that can be undertaken to fix the situation. This could include an order requiring your husband or wife to make the payments, or an order for sale.
If you are in default of payments, talk to the bank. Banks do not like throwing people out of their own homes. It makes them feel bad and generates terrible publicity. Most banks would rather that you sorted out your mess, but treated them with courtesy- keeping them up to date with developments and ensuring that they know that they will be paid.
If you are in default with your mortgage, get immediate legal advice from a family lawyer.
Home and contents insurance
It's essential that the insurance is kept up to date. There's no room for manoeuvre here- it just has to be done. After you have separated, don't just assume that it has been done. Some people are tempted to save money and not keep their property insured. If the policy is partly in your name, check that it's been paid and ensure that you get copies of statements.
If the worst comes and you discover that the property is uninsured- if the property is partly in your name- get a cover note immediately. This is just a case of phoning your broker or an insurance company and organising it over the phone.
If you discover that the property is uninsured, but it is not in your name- get immediate legal help.
Non-payment of the insurance will also constitute an act of default on your mortgage.
Local government rates
The same rules apply. The rates bills have to be paid. Make sure you are getting copies of the rates bills either sent directly by the council or indirectly from your ex.
If the rates bills are unpaid, then council usually levy interest. If the council sues you, there is no defence.
Non-payment of the rates bill is also an act of default on the mortgage.
If you are not in a position to pay the council, then there are usually means to defer payment. In Brisbane there is the formality of a Tribunal. With most small councils, it usually means calling them up and telling the person on the rates desk the problem you have. They will have heard it all before-
- "We've split up."
- "We're going through a property settlement."
- "I don't know how long it's going to take- the lawyers are writing to each other/it's in court. How long's a piece of string?"
- "Of course we'll pay when the property settlement is done. I'm not sure if there's going to be a buy out or a sale. Both of us want the home."
Most, but not all, councils are prepared to be patient, provided:
- they are treated with courtesy, and are kept up to date with developments. If you keep them in the dark, they are less likely to be courteous towards you.
- there is a clear commitment that they will be paid on completion of the property settlement.
- interest is paid.
Some councils will want payment each billings cycle or they will take action. Some councils do not charge interest.
It doesn't apply to everyone, but if it applies to you it also has to be paid.
Non-payment is an act of default on your mortgage.
Again make sure that you get copies of any assessments, and ensure that it is paid. Offices of State Revenue may be prepared to wait until the property settlement occurs, provided:
- you keep them advised of developments
- there is a clear commitment to pay on property settlement
- interest is payable
Thursday, 15 January 2009
The legislation will implement the Trans-Tasman Court Proceedings and Regulatory Enforcement Treaty that was signed in July 2008.
The Treaty includes a number of innovative measures, such as expanding the range of court judgments that can be enforced across the Tasman, and simplifying the process for doing so.
The Treaty also allows certain fines imposed in one country to be enforced in the other, improving the effectiveness, integrity and efficiency of Trans-Tasman markets.
"Making it easier and more cost effective for Australian and New Zealand businesses and individuals to resolve disputes will further encourage trade between our two countries," Mr McClelland said.
"With the global financial crisis likely to increase the number and complexity of legal disputes, it is more important than ever that legal processes are simple and affordable," Mr Power said.
The Attorney-General and the Minister noted that the reforms would strengthen co-operation between the countries. This reflects the special nature of the trans-Tasman relationship, the strong similarities between the New Zealand and Australian legal systems, and the confidence each country has in the judicial and regulatory institutions of the other.
The reforms are based on recommendations made in December 2006 by the Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement. The Working Group undertook public and stakeholder consultation before finalising its recommendations.
Source: Ministerial Media Release
- defamatory; or
- breach legal rules.
If you want to contact me, email me: email@example.com
Most family lawyers want to help their clients get on with their lives and not be bogged down in a never ending, bitter court case. Whilst they can work the occasional miracle, family lawyers and judges are not miracle workers. They cannot undo in a number of days or weeks or months what it has taken a couple to do often over very many years.
What do people argue about?In terms of legal disputes, when couples split up, they argue about:
- ending the relationship
These can fall into three categories:
- property settlement
- spousal maintenance (although this does not apply in all relationships)
- child support
Property settlement disputes are usually settled without going to court. Most of the time, people reach agreement between themselves, with some assistance from their lawyers. Despite some people saying that family law matters are matters of relationships, not matters of law, an informal property settlement can lead to financial troubles. Often formal property settlements are needed to provide protection for stamp duty exemption, capital gains tax rollover relief, or for financial certainty.
Sometimes it is necessary to start court proceedings about property settlement or spousal maintenance to avoid a time limit.
Good family lawyers encourage their clients to settle and not to litigate- except as a last resort. With money disputes, this is very easy to calculate-what percentage of the property pool are the lawyer's costs going to be? What difference are the parties apart on property settlement? What is this in real money (as opposed to percentages)? How does this real money compare with the costs that have been incurred or are going to be incurred to go to court?
Parties need to ask themselves: "is the deal one that I can live with?" It doesn't have to be perfect - dealing with an ex, and trying to compromise means that deals rarely are perfect.
Spousal maintenance claims are taken to court much more rarely- in part because the ability to get spousal maintenance out of the former partner might be very low, and the cost of doing so (compared to the cost of what may be obtained) might proportionally be very high.
Child support claims are, in the scheme of things, occasionally brought before the courts- but the great emphasis is going through the Child Support Agency, either formally or informally.
Fighting about kids
Most parents manage to sort this out, without involving lawyers, or if lawyers are involved, lawyers are very much on the periphery. This is how it should be.
With the exception of those cases involving allegations of domestic violence or child abuse, or in urgent cases, the Family Law Act provides that the parties before they go to court must obtain a certificate from a registered dispute resolution practitioner. To get a certificate requires both parties to attend dispute resolution first, or at least be given the opportunity to attend. Dispute resolution used to be called counselling or mediation.
The practitioner in filling out the certificate has a number of options including stating whether or not each party has made a genuine attempt at settling. Obviously if the certificate states that a party has not made a genuine attempt at settling, then that certificate might be used later on against that party.
Unfortunately, the cases that are litigated, and involve the most protracted litigation, are those cases where, in the words of one former judge "a party has not listened to good legal advice, or worse, where both parties have not listened to good legal advice".
Litigation should be avoided wherever possible. Things happen in litigation that could not have been predicted by either of the parties that can cause long standing and possibly permanent damage to either of the parties (but usually both) or worse, to their children. While litigation should always be seen as the last resort, when all attempts to settle have failed, or the need to protect children is required, then unfortunately, sometimes litigation is needed.
It is sad, but many Australian relationships are characterised by the use of domestic violence. As part of safety planning, it is often necessary to go to court to obtain domestic violence orders.
Ending the relationship
This is simple- the relationship as a couple may have ended when the couple split up. For those recognised under Australian law as married, the married relationship only ends when they are divorced. A divorce application can only be made 12 months after final separation. For those living in de facto relationships- the relationship ends on that final separation. No court order is required to say that it is over. It is important though to get advice about property settlement and spousal maintenance time limits- as these kick in following the final separation or divorce.