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:
Firstly they identify and assess the assets and liabilities of the matrimonial pool;
There is a consideration of contributions made by the parties, being both financial and non-financial, direct and indirect;
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;
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.
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.
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.
The Family Law Act, which is the overriding legislation which deals with parenting matters across Australia, does not prohibit parents from relocating following the breakdown of their marriage or de-facto relationship.
Parents may wish to relocate for many reasons, including for new employment opportunities, seeking family support, commencing a new relationship, or to create a physical distance between them and their estranged partner.
At the end of the day, any relocation should not be merely about distance. It should be about what are the consequences on the children who are moving away from the former family home and the non-resident parent?
The Family Law Court deals with parenting disputes where parties are unfortunately unable to agree in respect of the formal parenting arrangements concerning their children. The Court may be required to make an order permitting a parent to relocate away from the other parent or indeed can order a parent to return to where the estranged parent is living.
The Court must ensure that whatever decision it makes in light of all the facts and circumstances of the case, that the child’s best interests are paramount.
Clearly, relocating to a different town or suburb, interstate or overseas, will impact a child’s ability to spend time with and communicate with the non-resident parent. The practical difficulties, inconvenience and expense associated with facilitating time with the non-resident parent may therefore, outweigh the perceived benefits of moving. Likewise, the commitment of the resident parent to facilitate such time may be an issue.
It is also worth noting that so long as there is no history of abuse, violence or neglect by a parent, the Court must consider the benefit of the child having a meaningful relationship with both parents. Ultimately, relocating children away from one parent, may have a minimal, or alternatively, a significant effect on the ability to maintain a meaningful relationship with both parents.
At Everingham Solomons we have the expertise and experience to assist you with relocation issues and any family law matter because Helping You is Our Business.
Where parentage of a child is an issue, an applicant may apply to the Family Court for a “parentage testing order”. Family Court will then be able to make a declaration as to the parentage of a child born where there is some doubt in regard to whom their parent is.
The court can order the child, the mother and any other person the court believes may assist in determining the parentage of a child, to undergo a parentage testing procedure, which invariably will be “DNA testing” due to its reliability and accuracy.
Parentage testing must comply with particular procedures set by the Family Law Regulations, therefore any results of testing performed outside of the ambit of family law requirements, may not be admissible to the court and consequently the results will have no legal validity when determining parentage.
If a party or parent of the child refuses to comply with an order for testing, the court may draw inferences from their behavior as per section 69Y of the Family Law Act 1975. Therefore whilst a contravention of a parentage testing order will not penalise the person not wishing to participate, it can certainly affect the court’s decision making down the track as to the making of a parentage declaration.
For example, in the 2009 case of Tryon and Clutterbuck (no. 2), the applicant, Mr. Clutterbuck, challenged the paternity of two children born to a married couple, Mr. and Mrs. Tryon. The husband and wife had 5 children in total and the husband was named as the father on all of the children’s birth certificates. Mr. Clutterbuck challenged the legal presumption that children born to a woman of a marriage are children of the woman’s husband, found in section 69P of the Family Law Act. Accordingly, Mr. Tryon contended that he was the father of the two youngest children of Mrs. Tryon, due to a long standing sexual relationship with the wife and because he was told by her on both occasions when the woman became pregnant, that he was the father of the two youngest children.
The husband and wife failed to participate in DNA testing ordered by the court. They also failed to put forward sufficient evidence to rebut the claim by Mr. Clutterbuck. Secondly, due to the conduct of the husband and wife to avoid and refuse DNA testing (based on religious grounds), the court made an adverse inference toward them and declared that Mr. Tryon was the father of the two children.
It is also worth noting that should a party to a parentage testing order be found to be the father, they may also be liable for reasonable expenses associated with the mother’s pregnancy and birth of the child. The costs may be liable from up to 2 months before and for 3 months after the birth of the child.
This case highlights the various elements involved in parentage testing. If you have any questions or require advice in regard to parentage testing at Everingham Solomons we have the expertise and experience to assist you becauseHelping You is Our Business.
Many people probably do not know that when parties separate who have been in a de facto relationship, they only have 2 years from the date of separation to lodge an application with the Court to claim for their entitlements.
If you do not file any documents with the Court prior to the expiration of the 2 year time frame, you have to seek the Court’s permission to proceed which can be a costly and time consuming process.
The Court had to consider this in a most recent Family Court appeal decision of McCoy and Chancellor [2014] FamCAFC 62.
The background to this case was the parties were in a relationship for 23 years and separated in December 2010. There were assets to the value of approximately $2 million and the parties attempted mediation in November 2012.
The parties reached an agreement at mediation however Ms McCoy did not sign the finalised Consent Orders which needed to be filed with the Court. Subsequently, Ms Chancellor filed an application with the Court to seek a division of the assets in March 2013, which was approximately 3 months after the 2 year time limit had expired.
At first instance, the Federal Circuit Court Judge gave Ms Chancellor permission to file her documents. Ms McCoy appealed this decision arguing that the Court must not allow a party to file out of time unless it is just and equitable to do so.
The Appeal Judges agreed with the Federal Circuit Court Judge as one of the factors the Court needed to determine when making decisions about giving a person permission to file documents out of time is whether the party would be caused undue hardship if leave was not given to file out of time.
The Appeal Judges stated that in this case “all matters … relevant to the just and equitable requirements were present such that to deny the application for an extension of time would inevitably cause hardship to the applicant.”
Whilst successful in this instance, you must be aware that there are occasions when the Court may not make a determination that any hardship to a party exists and therefore, not grant permission to alter the property interests.
If you have any concerns about the time frames in which you have to finalise a property settlement between you and your former de facto partner, you should contact Everingham Solomons because Helping You is Our Business.
Often, when parties decide to separate, one spouse decides to relocate in order to restart their life or to move to be with a new partner. When children move with the relocating spouse, be it interstate, overseas, or even to a new town or city down the road, recent case law suggests that judges are highly critical of parents who move their children without the other parent’s knowledge or consent.
The Family Law Act (1975) and accompanying regulations and rules, which govern family law practice in Australian society, does not explicitly state how the courts must deal with relocation issues. Consequently, there is no rule against the relocation of children, yet the court applies the same principles as it would in determining parenting cases. In other words, the court regards the best interests of the child as the paramount consideration when deciding where children should live, along with the presumption (unless rebutted) that parents are to have equal shared parental responsibility for the child concerned.
Recently the case of Sora & Mikan and Anor [2013] highlighted the Court’s position on the relocation of children without the consent of the non-relocating parent.
The case concerned an unmarried couple who had a child in Japan. The mother was Japanese national and the father a New Zealand national. Whilst in Japan, the parties separated after the birth of their child but later reconciled and planned to move as a family to Australia to start anew after the tsunami. Initially, the parties visited Australia with the child, yet after a short period, the father returned to Japan for work whilst waiting on his job transfer to Australia. The mother and child followed a short time thereafter.
The father upon his return to Japan commenced a new relationship with another lady. Consequently, he told the mother he was planning to raise their child with his new girlfriend in either New Zealand or Australia. By this stage the mother, father and child were all located in Japan.
Without consent or notice given to the mother, the father obtained travel documents and moved with the child and his new girlfriend to Australia where he sought for the child to live permanently.
In covertly relocating the child, the Court took a contemptuous view of the father. The judge said the father’s conduct was both “premeditated and deceptive”, and that the father had placed a low priority on the “maintenance of a continuing relationship” between the child and the mother.
Significantly, the judge said:
“The father’s view of his relationship with his son appears to be born of a misconception that somehow parents have proprietary rights in children.”
As a result, the court determined it was in the best interests of the child that the mother be granted full parental responsibility and she was allowed to return to Japan with the child on a permanent basis. Overwhelmingly, the father had demonstrated a lack of insight into his parenting responsibilities and of the child’s needs.
You should seek our advice if you are thinking about relocating or if your estranged partner is thinking about relocating with your children because at Everingham Solomons we have the expertise and experience to assist you becauseHelping You is Our Business.
When parties to a relationship have separated, both parties can continue to make financial and other contributions towards the assets and members of the family. This could involve running a business or being a stay at home parent to care for a child.
This issue was recently raised in the Full Court of the Family Court of Australia appeal of Marsh and Marsh [2014] FamCAFC 24. The parties were married in 1979 and separated in 2000. The parties were divorced in 2008 and in June 2010, the wife commenced proceedings before the Court for the purposes of dividing the parties’ assets.
There was a period of 10 years between the time the parties separated and the application before the Court. As you could imagine, contributions were made by each of the parties and these had to be considered.
In the first instance, the Court stated that due to the large earning capacity of the husband and his financial contributions since separation, he was entitled to a greater share of the assets than the wife.
The wife appealed this decision on the basis that her contributions of homemaker and parent after separation were not taken into consideration. Since 2000, the wife had continued her role as mother (the youngest child being 10 at separation) and continued to maintain the home.
The Full Court agreed with the wife that despite the husband’s overwhelming financial contribution, the Court at first instance failed to give any weight to the wife’s contributions as a mother and homemaker. By the wife continuing that role, the husband was able to make the larger financial contributions.
When adjusting property adjustments at the end of the relationship, the Court must take into account the contributions by both parties at the commencement of the relationship, during the relationship and after the relationship.
If you have any issues in relation to contributions that have been made throughout a relationship, including after separation, you should contact Everingham Solomons because Helping You is Our Business.
In Eufrosin & Eurfrosin [2013] FamCA 311, recently decided in the Family Court of Australia, the court was required to consider the division of a $6 million dollar lottery win by a wife, six months after the parties had separated.
The facts were the parties married in 1987 and separated in 2008. The husband was aged 62 and the wife aged 55 at the time of the hearing. The parties had adopted “traditional roles” of the husband being the principal breadwinner and the wife being the primary home maker and carer of the children throughout the marriage. Their joint pool of assets had a net value of over $2.4 million at the time of separation.
The wife purchased a “gambling” ticket in early 2009 along with her sister and won $6 million, whereby $1 million was given to her sister and $5 million retained by the wife (paid to the wife soon after the win). The husband argued that he had contributed to the gambling win because the funds used to purchase the winning ticket had came from the parties pool of assets and as such the winnings should be included in the joint asset pool and divided accordingly.
The court concluded that the funds used to purchase the winning ticket, could have come from a number of sources of the wife, or from a combination of the sources. For example, the funds may have come from the wife’s sister, the wife’s tax return, or from money owed to the wife from her husband’s company.
The Judge found that it was “impossible to identify the precise source of the funds used by the wife to purchase the winning ticket”. Furthermore, “the husband could not simply assert that the purchase money came from ‘joint funds’ ”.
For that reason the wife was entitled to keep all of her gambling winnings which were placed in a separate pool of assets to the joint pool. That pool was not adjusted by the court owing to their being no contribution made by the husband toward the winnings. The parties each received 50% of the joint asset pool, however the court still made an adjustment of $500,000 in favour of the husband on account of the husband’s age, limited earning capacity and based on his future needs.
Ultimately, in property proceedings before the Family Court, the central principle which underpins any judgment is that the orders made concerning the property of the parties are just and equitable. If you require advice in regard to potential property proceedings, at Everingham Solomons we have the expertise and experience to assist you because Helping You is Our Business.
A recent article which appeared in the Sydney Morning Herald concerned a property case in the Family Court called Kane & Kane [2013] FamCAFC 205 . The judgment overturned an earlier finding in which a trial judge had assessed a husband’s financial contribution to a long marriage more favourably, due to the husband’s skill in “selecting and pursuing an investment”. The investment significantly increased the value of the couple’s family superannuation fund.
Kane & Kane concerned a 30 year marriage. The husband was aged 61 years and the wife 48 at the time of the trial. The parties were able to reach agreement in regard to dividing some of their joint matrimonial assets qually, but they could not agree on the division of their joint superannuation which totaled the sum of $3.4 million.
Whilst still married, the husband had extensively researched and considered a number of investment possibilities for the couple’s superannuation fund. His wife did not agree to him purchasing the shares in “Company 1” however he went ahead and did so. The purchase price paid by the husband was $539,500. The value of the shares on “Company 1” at the date of the trial had significantly increased to $1.85 million.
Significantly, the funds used to purchase the shares came from the couple’s joint funds. Yet, the allocation of funds deposited into the superannuation fund itself was unequal and significantly favoured the husband.
At trial, the husband argued that due to his “special skills” in selecting and purchasing the shares in “Company 1”, that he was entitled to a greater share of the superannuation funds. He sought a split of approximately 66% in his favour.
As previously outlined this matter went on appeal. The court stated that the husband was not qualified nor an expert in share investments. The judge said that the husband’s skills “did not prevent losses in other investments which he allocated not only to his superannuation fund but also to that of his wife”. The judge also commented more generally when he said that “special skills will not always produce significant financial results”.
The appeal court found that the husband’s contribution to the superannuation fund was not to be disproportionately weighted in his favour when splitting the funds between the couple. The court ultimately found that it was not a just and equitable outcome to favour the husband and that the principle of “special skills” in relation to assessing financial contributions, was not a settled doctrine advocated by the legislation.
If you require advice in regard to any aspect of property proceedings or superannuation splitting, at Everingham Solomons we have the expertise and experience to assist you because Helping You is Our Business.
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.
