When spouses separate it is important that assets, liabilities and all financial matters are dealt with in order for parties to move forward.

Property settlements occur between married couples and de-facto partners and are governed by the Family Law Act.

When the assets, liabilities and financial resources of parties are determined, the Court examines the contributions made by the parties to the acquisition, conservation and improvement of the assets. It also takes into consideration factors such as the health and age of the parties and their earning capacity.

When assessing contributions there is no presumption of an equal 50:50 entitlement between the parties, as each case will be decided differently based on its own facts and circumstances.

Problems can arise however when parties separate but they remain financially enmeshed or where financial matters between separated parties are not finalised until sometime after separation.

The case of Z & Z concerned a 19 year marriage and two adult children.  The parties separated in 1994 but property proceedings were not commenced by the wife until 2002.  The property pool in 2002 was valued at over $3 million, which had increased significantly since 1994 as a result of the husband’s business, his investment in a company and superannuation interests separate to that of the wife.

At first instance the court split the matrimonial pool of assets 70:30 in the husband’s favour.

The husband appealed, and sought to reduce by 5% an adjustment made to the wife during the first trial. The husband asserted that the wife had made no contribution to his earnings and to the development of his business post separation.

The court determined that in relation to the post separation contributions:

“The husband’s skills in his initial interest in the company acquired during the marriage provided the foundation from which the husband was able to acquire his post separation assets and make substantial contributions to his superannuation fund”.

The court dismissed the husband’s appeal and the matrimonial assets were divided in accordance with the original judgement.

Factors such as the length of the relationship, one party’s care of young children, the disparity in income and the nature of the parties’ financial relationship post separation, will be taken into consideration by the court when making an adjustment for financial contributions post separation.

At Everingham Solomons we have the expertise and experience to assist you with property settlements because Helping You is Our Business.

Click here to learn more about Sophie Newham.

Often married or de-facto couples separate but do not effect a property settlement until many years later. This can make dividing assets more complicated.

The Family Court of Australia effectively adopts a 5 step approach in regard to dividing assets by way of property settlements. The court will only consider making orders in relation to a property settlement if it is fair and reasonable to do so.

The court must firstly identify and value the assets and liabilities of the parties.

It then must consider the financial and non-financial contributions made by the parties, such as who paid the mortgage and outgoings, who cared for the children and who made unpaid contributions to a business partnership or improvements to property for example.

The next step is to consider what are called “section 75(2) factors”, such as the health and age of the parties and their earning capacities.

Lastly, the court must be satisfied that it is fair and reasonable, or a “just and equitable” settlement for both parties.

The issue of assessing contributions can be made more complicated when those contributions are made in the latter stages of the relationship or even after the relationship has broken down.

The recent full court of appeal case of Trask & Westlake 2015 concerned a husband’s significant post separation earnings some 4 years after the parties had separated.  The total asset pool of the parties was worth $9 million but the husband accrued assets worth about $2 million post separation.

Throughout the marriage the husband worked and furthered his career as a result of the wife raising the parties’ four children. During the marriage, the parties had agreed to “embrace” these roles, which had led the husband to become extremely successful in his career as recognised by his tangible financial assets.  The wife in turn was unable to develop her career or earn significant income.

The husband acquired further assets post separation, due to his employment. The husband argued that the Court should have given greater weight to his post separation contributions and making an adjustment in his favour.

The Court did not agree, making an order dividing the assets in 60:40 in favour of the wife.

The Court determined that both parties made equal post separation contributions, with the husband making direct financial contributions, and the wife contributing to the home and welfare of the family in a non-financial way. Furthermore, an assessment of contributions could not be based on applying calculations.

The wife’s contributions, whilst not “tangible”, were held to be no less significant than the husband’s financial contributions. The wife’s contribution as a (single) parent and homemaker, were not only considered to continue despite the ending of the marriage, but had allowed the husband to gain experience and knowledge and take advantage of opportunities throughout his career, leading to the acquisition of the husband’s assets during, and also, after the marriage.

At Everingham Solomons we have the expertise and experience to assist you with parenting orders and any other family law matter because Helping You is Our Business.

Click here to learn more about Sophie Newham.

When parents separate there may be some disagreement in respect of the parenting arrangements of their children.

If parents are unable to enter into an agreement they are first required to attend compulsory dispute resolution, also referred to as mediation. If mediation is unsuccessful or one parent refuses to attend, the parents are issued with a “Section 60I Family Dispute Resolution Certificate” from an authorised Family Dispute Resolution Practitioner. This in turn allows either parent to make an application in the Federal Circuit Court or Family Court for parenting orders.

In deciding whether to make particular parenting orders in relation to a child, a court must regard the best interests of the child as the paramount consideration. Parenting orders which are made by the court and are usually considered final and will reflect the dispute between parties parents coming to an end.

From time to time, after the court has made a final order in regards to parenting arrangements, a parent or a child’s life can significantly change. For example, a child may become seriously ill and require medical treatment requiring, the parent, with whom the child resides, having to move. In circumstances such as these, a parenting order will require to be changed. Parents may do this by way of agreement, negotiation or make an application to the court. Courts, generally, are very reluctant to change final parenting orders and subject the children and the parties to further litigation. Prior to a court making any change to any parenting order, it must be proved that there has been a significant change in circumstances.

In the case Carriel & Lendrum (2015) FLC 96-640, a mother made an application to change parenting orders. The original orders were made in 2010. The orders outlined that the child would live with her father and spend supervised time with her mother. The mother argued her situation had significantly changed. Previously, she was addicted to illegal substances and alcohol. She, now considered herself, as a recovering alcoholic and drug addict, and it would be in the child’s best interest that she have unsupervised time with her child. The father, argued, that there should be no change in the orders made in 2010, as the mother could not provide evidence that would guarantee that she would not relapse into further alcohol abuse or drug addiction. The mother’s application was dismissed. The court found there was no merit in the mother’s application.

At Everingham Solomons we have the expertise and experience to assist you with parenting orders and any other family law matter because Helping You is Our Business.

Click here to learn more about Sophie Newham.

When parties with children separate they may be able to make an agreement between themselves in regard to the care and welfare and parenting arrangements of their children. For other parents, where there is disagreement in respect of parenting arrangements, the law requires them to attend family dispute resolution, which is also known as mediation. This is a compulsory requirement before parents can embark on seeking parenting orders to be made by the Family Court or Federal Circuit Court of Australia.

If the parents are able to reach consensus at mediation they may enter into a “parenting plan” which they both sign. A parenting plan can include: details such as where children are to live; both arrangements for special days and holidays; and how parents will consult with each other in regard to long term decisions affecting their children.

A parenting plan can later be made into consent orders where both parties agree to file an application for consent orders in the court. A lawyer can prepare parenting orders on your behalf.

There are some situations where mediation is unsuitable. For example, where there are safety concerns, where there is a high degree of conflict between the parties, or if there are significant concerns about children being exposed to family violence, abuse or neglect when they are in the care of the other parent. Legal advice should be sought as to whether an application to the court should be made as a matter of urgency in these circumstances.

Further, there will always be cases where parenting orders are required.

Parenting orders are legally enforceable.

A parent who intentionally fails to comply with a parenting order, or who makes no reasonable attempt to comply with such an order, can be found to have contravened the court orders. Penalties for contravening parenting orders may include a significant fine or even a period of imprisonment.

All parenting arrangements, whether imbued in a parenting plan or in court orders, must always regard the best interests of the child as the paramount consideration. All parents should do their utmost to enter into negotiations with each other with this principle firmly in mind.

At Everingham Solomons we have the expertise and experience to assist you with parenting matters and any other family law matter because Helping You is Our Business.

Click here to learn more about Sophie Newham.

People who are married or who are living in a de-facto relationship can have their property interests altered under the Family Law Act 1975.

For de-facto parties to bring an application for a property settlement, they must prove that they were in a de-facto relationship for a minimum of 2 years.

Section 4AA(2) of the Family Law Act 1975 defines a de-facto relationship.  The circumstances which must be taken into account when determining whether a de-facto relationship exists may include consideration of all or some of the following:

(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.

The recently decided Federal Circuit Court case of Kristoff & Emerson concerned a relationship which commenced in 2003 and ended in 2011.  The applicant had met the other party, being the respondent in this case, in her occupation as a sex worker.  The sexual relationship moved on from being a commercial arrangement when the respondent no longer paid for her services.  The respondent argued the parties merely had a “friendship”.

There were no children of the relationship. The applicant had minimal assets but the respondent had almost $2 million worth of assets.  She sought a payment from the respondent representing 25% of the value of his assets by way of a property settlement.

The parties never shared a fiscal relationship or financial interdependence.  The parties never held a joint bank account or acquired property together, and the respondent paid for the majority of expenses.  The parties however spent considerable time together and a commitment to a shared life.

The applicant also claimed that her career as a sex worker was adversely affected as she lost income because she gave up sex work for a new occupation during her relationship with the respondent.

The court was not convinced that the applicant had ceased her employment as a sex worker due to her relationship with the respondent. Ultimately, it found that it was not just or equitable to proceed with an alteration of property interests between the parties at all, because a de-facto relationship had not existed between them.

At Everingham Solomons we have the expertise and experience to assist you with de-facto relationship matters and any other family law matter because Helping You is Our Business.

Click here to learn more about Sophie Newham.

If you and your spouse or your de-facto partner decide to separate it is imperative that you seek out legal advice in regard to a formal property settlement to not only protect your assets but also to protect yourself from your estranged partner’s liabilities.  The Commonwealth Family Law Act 1975 governs the legal aspects of property settlements.

The High Court case of Stanford highlights the principle that a party has no automatic right to division of assets.  The overarching consideration therefore is whether it is “just and equitable” to make property orders in the first place.

If it is indeed just and equitable to proceed with a property settlement, parties’ current assets and liabilities are identified and valued and form part of the matrimonial pool.  Whether parties have access to any financial resources such as income from family trusts or companies for example, this is also taken into consideration.

Assets will include real property such as residential and rural land, shares in companies and business assets, as well as cars, cash in bank accounts, and superannuation funds.  Liabilities might include home mortgages, personal loans, hire/finance arrangements and credit card debts.  The assets and liabilities can be held in one party’s name or in joint names, and are all added into the matrimonial pool.

In respect of assets acquired prior to marriage or cohabitation, or in relation to an inheritance or asset gifted to a party late in a marriage or post separation, the court may still take these into consideration when assessing the matrimonial pool of assets.

The courts also understand that parties need to continue paying bills and operating businesses until property settlements are finalised.  Nonetheless the court will be critical of parties who attempt to dispose of assets and or recklessly use funds or waste funds for instance to diminish the matrimonial pool of assets.

Ultimately, the court must ensure that the final orders are also “just and equitable”, or in other words, fair and reasonable in light of all the unique circumstances of the matter.

As you can see, a property settlement is essential in order to deal with, and in order to finalise, the legal interests of the parties.

At Everingham Solomons we have the expertise and experience to assist you with property settlements and any other family law matter because Helping You is Our Business.

Click here to learn more about Sophie Newham.

When couples separate, often one of the parties wishes to move to a new location for a new job, to be closer to their family, or to make a fresh start.  Questions arise however when these parties are parents and wish to move away from the other parent.

As a general rule, parents should be open and discuss their relocation plans with the other parent as well as seeking their consent before they move.  The 2014 Family Court gave judgment in the case of Adamson which highlighted the legal complexities involved when a parent relocates with children away from the other parent.

The facts of Adamson were as follows:  It involved a married couple living in Sydney with a child who was only 12 months of age when the parties separated.  There was a domestic violence incident at separation which resulted in the husband receiving a 12 month AVO against him and a conviction for common assault.

As a result of the separation both parties moved from Sydney.  The wife at first instance moved 200 kilometers north of Sydney to live with her parents for extra support. The husband later moved in the same direction and resided on the Central Coast.  From the date of separation to the date of the hearing the father saw his child approximately once per month for a number of hours on each occasion.  The father considered that he maintain a relationship with his child.

An application was filed in the Family Court by the father, for the mother to return the child to live no further than 20 kilometers from him.  The father sought an order for the Court to restrict where the mother lived and worked and which would force her to relocate once again, this time to the Central Coast, as the father desired for the father to be able to spend more time with the child.

The Court declined to make an order for the mother to relocate.  The court found that the father could continue to maintain a meaningful relationship and spend reasonable time with the child, despite the distance that the parties lived apart.  The Court decided that it was not in the child’s best interest to make such a restrictive order on the mother and she was not required to move.

In extreme circumstances, the Family Court has the power to make an adult relocate.  The Court must be satisfied it is reasonably practicable, and ultimately in the best interests of the child.

Parents should seek out legal advice as each case differs depending on the facts and circumstances.  At Everingham Solomons we have the expertise and experience to assist you with parenting matters and any other family law matter because Helping You is Our Business.

Click here to learn more about Sophie Newham.

The Family Court and Federal Circuit Court have the jurisdiction in Australia to make orders in relation to division of matrimonial assets between separating spouses and de-facto partners.

When the Courts are asked to make a determination in regards to dividing matrimonial assets, the courts use a number of steps:

1. Firstly they identify and assess the assets and liabilities of the matrimonial pool;
2. There is a consideration of contributions made by the parties, being both financial and non-financial, direct and indirect;
3. The next step relates to “section 75(2) factors” which include a non-exhaustive list of further considerations such as the parties’ ages and health status, whether a party cares for children, and the future needs and earning capacities of the parties;
4. Finally, the Courts are required to make an order which is appropriate and fair, also known as being “just and equitable”.

The case of Morrison & Morrison [2014] concerned parties who separated after 23 years of marriage and who had a 14 year old child.  The husband was the primary breadwinner however the wife had care of the child throughout the marriage.  The child spent no time with the husband post separation.

The asset pool was $920,000 and the husband had the greater earning capacity working as a public servant, the wife worked in a part time capacity.  Accordingly there was a large disparity in their earning capacities.

During the hearing of the matter the husband was suspended from his employment and subject to criminal proceedings in which he was facing a custodial sentence.  In this respect the wife had no prospect of receiving any child support in the future from the husband.

The Court found that in considering the wife’s future needs, these were directly affected by the husband’s potential goal sentence and inability to pay child support in the foreseeable future as well as his nil involvement in parenting the child of the marriage.

Ultimately the Court made adjustments in the wife’s favour and she was entitled to 62.5 percent of the asset pool due to her care of the child and limited earning capacity.  Although the outcome of the husband’s criminal proceedings could impact on the future earnings of the wife, the court was required to make orders to finalise a property settlement because it was just and equitable to do so.

At Everingham Solomons we have the expertise and experience to assist you with a property settlement and any other family law matter because Helping You is Our Business.

Click here to learn more about Sophie Newham.

More people drift into de-facto relationships and many do not have an understanding of where they stand legally and financially, when the relationship ends.

It is worth noting that de-facto relationships can occur between heterosexual and same sex couples.  They also exist even if one of the parties to the de-facto relationship is married to someone else or is in another de-facto relationship.

The Family Law Act states that for a de-facto relationship to exist, the parties must not be married or related to each other, and must be a couple living together on a genuine domestic basis, having regard to all the “circumstances” of the relationship.  The circumstances may include for instance, the nature and extent of a common residence, the duration of the relationship, whether a sexual relationship exists, and/or whether there is a financial interdependence between the parties.

Furthermore, a de-facto relationship is deemed to exist if the total period of the de-facto relationship is at least 2 years, or where there is a child of both parties to the relationship.  Additionally, if you do not meet the first two tests, but you are a party to a relationship where you made substantial contributions, you may also be entitled to be considered a party to a de-facto relationship.

The reason why it is important to determine whether you are in a de-facto relationship, is because a party will be able to make an application for a property settlement in the Family Court or Federal Circuit Court for financial orders upon the breakdown of the relationship.

A property settlement will legally finalise all financial matters between de-facto parties, including the ownership of property, repayment of loans and superannuation entitlements.   Parties may also wish to seek a property settlement where one party has performed unpaid work in a joint business venture, or made significant improvements to the other party’s property, or where they have performed unpaid care of their de-facto partner.

Nonetheless, the court will only make financial orders in respect of a property settlement if it is just and equitable to do so.

It is also worth noting that you have a two year period from the date of separation in which to apply to the court for a property settlement in respect of the breakdown of a de-facto relationship.

At Everingham Solomons we have the expertise and experience to assist you with de-facto relationships and property settlements and any other family law matter because Helping You is Our Business.

Click here to learn more about Sophie Newham.

The Family Law Act in Australia provides where parties to a marriage are granted a “divorce order”, an application to divide their assets must be made within 12 months of the “divorce order”, unless, the parties otherwise consent to an order or leave of the Court is granted.

However, what is the situation where parties are divorced overseas, 12 months has lapsed since their divorce and they are still to divide their jointly owned Australian property?

This was the dilemma that faced the trial judge in a recent case of Anderson & McIntosh (2013). The short facts of this case were, the parties married in 1988 in Queensland. They moved to Argentina in 2006. The parties during the course of their marriage had purchased property both in Australia and in Argentina. Their marriage irretrievably broke down. In 2010 the parties divorced in Argentina. The parties reached an agreement as to how their property in Argentina was to be divided but no agreement nor orders were made in relation to the property owned in Australia. In 2012, the wife made an application to the Family Court in Australia to divide the property the parties owned in Australia. This was outside the period of 12 months and she did not obtain leave of the Court to make this application. The husband sought that the wife’s application be dismissed as the time limitation had lapsed and prior leave of the Court was required prior to the wife making an application for the division of property.

The trial judge determined that leave of the Court was not required in these circumstances as the judge held the time limitation does not apply to an overseas divorce and that no part of the Australian legislation indicated the term inferred in the “divorce order” should apply to a divorce granted overseas.

The husband appealed to the Full Court of the Family Court.

The Full Court of the Family Court sitting at Brisbane held that there was no error at law by the trial judge and that the wife’s original application be granted.

At Everingham Solomons we have the expertise and experience to assist you with all legal matters associated with Family Law because Helping You is Our Business.