The Family Law Act 1975 deals with adjusting the assets and liabilities of separated married and de-facto couples. A property settlement is not a “right”, but rather the court must consider if it is fair and reasonable in all the circumstances for a property settlement to take place at all.
If a property settlement is necessary, the court must consider what actually constitutes the assets and liabilities of the parties. Often the issue of liabilities becomes a vexed issue. For instance, is money provided by parents a gift or a loan which must be repaid? If it is deemed to be a gift was it made to one or both parties? If the money is a loan, is the loan secured or unsecured? Ultimately was the payment of money an asset or a debt which should be included in the asset pool?
The 2010 case of Sulo & Colpetti concerned an 18 year marriage and a net asset pool of almost $1million. The parties had 3 children.
There were a number of debts which were disputed. In particular the husband asserted that two sums of money advanced to him from his father during the marriage were actually debts owed to his father. The loans exceeded $380,000 in total. The sum of $150,000 was used to purchase property in joint names. The remaining money was applied by the husband to discharge mortgage debt on properties he owned.
The wife argued that the moneys from the father were gifts and should be factored into the asset pool.
The court agreed and determined that the moneys were not loans. The husband’s arguments failed for the following reasons:
The husband’s father never actively sought for the loans to be repaid by the husband;
The second loan agreement did not seek any interest to be repaid on the moneys and no moneys had been repaid by the husband;
The statute of limitations applied at the time of the property settlement and the father was out of time in demanding his son to repay the moneys even if he wanted to;
The son has signed an acknowledgement of debt after the statute of limitation period had expired.
It is imperative that loans are documented in such a way that they show the existence of an enforceable debt. This case highlights that you should seek the advice of a solicitor in regard to preparing documents such as a mortgage or a loan agreement whenever there is an advancement of significant moneys to family members particularly if you wish to try and protect that money from a marriage or de-facto relationship breakdown in the future.
Although a loan to a husband or wife, usually from a parent, may create a legally enforceable debt, if the obligation is not enforced and not likely to have been met, it may not be deemed a loan for family law purposes.
At Everingham Solomons we have the expertise and experience to assist you with all property matters because Helping You is Our Business.
Section 44 of the Constitution has never been as interesting as it is now, especially in the seat of New England. There are five cases including our local member, who are to be referred to the High Court. The facts in each case are different but all involve s.44(i) of the Constitution.
Section 44(i) states that any person is disqualified if they are “a subject or citizen or entitled to the rights or privileges of a subject or citizen of a foreign power”.
The section has been looked at by the High Court most comprehensively in Sykes v Cleary [2] [1992] HCA60 (Sykes case).
The facts in the Sykes case involve a Mr Delacretaz and Mr Kardamitsis both whom were born overseas. Both had utilised their foreign citizenship before becoming Australian citizens and the question was had they renounced their citizenship. It was held that they had not and both were ineligible to stand.
Justice Brennan said;
“to take an extreme example, if a foreign power were mischievously to confer its nationality on members of the Parliament, so as to disqualify them, it would be absurd to recognise the foreign law confirming foreign nationality”.
Justice Dean said;
“an Australian born citizen is not disqualified by reason of the second limb of s44(i) unless he or she has established, asserted, accepted or acquiesced in the relevant relationship with the foreign power”.
Each of the cases that will come before the High Court involve different facts, some of which are similar to those in the Sykes case but most of them are different. The questions that will need to be determined include does a foreign citizenship automatically disqualify a candidate, what amounts to reasonable steps to ensure you are a foreign citizen and is consent a consideration?
At Everingham Solomons we have the expertise and experience to assist you because Helping You is Our Business.
The deceased married Carol in 1988. They separated in 2008 and were divorced in 2011. On the day of their divorce, the deceased and Carol entered a Contract concerning their financial affairs. The Contract was expressed to be in consideration of each of the deceased and Carol settling disputes arising out of their matrimonial affairs. Under the Contract, the deceased agreed to provide that on his death one half of his interest in a hotel business (now valued at some $4.5 million) would be gifted to their 2 daughters, Diane and Suzanne.
In 2014, 11 days before he died, the deceased made a Will which provided in effect, that his interest in the hotel business would be divided equally between his four daughters, but only at the “Termination Date”. The “Termination Date” was defined as being only if and when the deceased’s de facto partner Amanda received $1 million from that business, or she dies. This was contrary to the Contract the deceased made with Carol whereby the deceased agreed to gift half of his interest in the hotel business to Diane and Suzanne on his death and not some later event.
Carol, Diane and Suzanne brought proceedings against the deceased’s estate claiming breach of Contract and other relief. The executors of the deceased’s Will, did admit the existence of the Contract between the deceased and Carol.
Diane and Suzanne were not parties to the Contract between the deceased and Carol, however the Contract was made for their benefit. The Court was satisfied that, “by making the Will, the deceased acted in breach of his promise” under the Contract to gift to each of Diane and Suzanne an interest in the hotel business, “effective immediately on his death, and not on the ‘Termination Date’, likely to be many years later”.
Under law, Equity will enforce a Contract to leave property by Will, “not by restraining or nullifying an inconsistent Will, but by fastening a trust on the deceased’s estate to give effect to the Contract”.
The Court found that the deceased, and the executors well knew that the provisions of the deceased’s Will would contradict and amount to a repudiation of the Contract. Accordingly the Court imposed a constructive trust on the deceased’s estate enabling Carol to enforce the deceased’s promise for the benefit of their 2 daughters and an order was made for an account to be taken of profits of the hotel business since the deceased’s death and one half of those profits paid to Diane and Suzanne.
A legally binding contract to make a Will containing particular provisions can be legally enforceable. If you are in any doubt regarding anything you have said about your Will or how you plan to leave your estate, you should seek professional legal advice. At Everingham Solomons we have the expertise and experience to assist you with all of your estate planning needs becauseHelping You is Our Business.
Click here for more information on Lesley McDonnell
In its simplest terms Crowdfunding involves using a social media platform to request relatively small amounts of money for a particular purpose. Most of us would have had some contact with crowdfunding usually in the context of a funding request for a charitable or benevolent purpose.
Overseas, crowdfunding is used for wider purposes including raising business finance. Essentially the request for finance is made by way of a “kick-start” request with the promise that those who contribute will be given the 1st opportunity to invest if the proposal comes to fruition.
Laws in Australia are beginning to catch up. In March this year legislation was approved to allow unlisted public companies with less than particular revenue and asset thresholds to raise capital via what is referred to as “crowd-sourced equity funding” (CSF).
There are quite a few conditions and restrictions that will apply to any company seeking to raise capital through CSF but the main ones are –
All CSF offers will need to be made through a financial services licensee whose licence authorises the licensee to provide a crowdfunding service;
There are caps both on how much can be raised (normally $5 million within a 12 month period) and how much can be invested (normally $10,000 for a retail investor);
Funds can’t be raised for the purpose of investing in other companies or investment schemes; and
The CSF regime does not apply to private companies.
For most of us, the last point is the most important. Overwhelmingly, new businesses start out as private companies. There is already some scope under corporations’ law for private companies to raise start-up or business expansion finance but the present provisions are complex, restrictive and can be expensive to implement.
It could be strongly argued that the CSF regime is most needed in the private company space. The government has stated that work is already underway to extend the CSF provisions to private companies. Whilst that may take some time, we will be watching those developments with keen interest.
At Everingham Solomons we have the expertise to assist businesses with questions about fundraising and business finance generally because Helping You is Our Business.
As a child of the deceased, a daughter or son of the deceased is deemed to be a person eligible to bring a claim under the Succession Act which allows for eligible people to make an application to vary the Will. In NSW a claim must be made within 12 months of the date of death.
There is an emerging predisposition on the part of Judges of the Supreme Court that adult children bringing a claim for further additional benefits from the Estate, which their claims may be dismissed entirely or otherwise the provision made for them will be made in a paltry amount.
This is particularly true when a Court looks at the conduct of the adult children towards the deceased when assessing what weight to give to the deceased’s intention to deliberately leave adult children out of their will.
The starting point of the Act is that the freedom of the person making the Will is the foundation principle and that consideration and proper respect must therefore be afforded to a capable testator’s judgement. A Court cannot simply “ride roughshod over the testator’s intention.”
There is no rule or principle that the deceased has an obligation to make provision for an adult child. Neither is a testator required to look after a child for the rest of the child’s life into retirement.
In circumstances where there is evidence that the child has been callous, hostile or indifferent towards the deceased the Court will not look favourably on the clear intentions of the deceased in favour of adult children.
In cases of small Estates, where there is a surviving widow, it is sometimes deemed appropriate that no provision be left for the adult children at all.
An adult child cannot presume to have an automatic right to a share of the estate of a parent. Nor does an adult child have an automatic right to parity as between his and her siblings, as was found in the recent case of Revell v Revell.
At Everingham Solomons, we have the expertise to assist you with respect to such claims, because Helping You is Our Business.
A discretionary trust is an extremely popular choice for all types of investments as it provides great flexibility to make income and capital distributions to various family members and their related entities.
The ability to split the trust income in the most tax advantageous way each year is clearly an attractive trait of a discretionary trust.
This feature is further enhanced by the fact that amounts derived by the trust effectively retain their character when distributed to the beneficiaries.
Consequently, this allows for non-assessable amounts for example pre-capital gains tax, amounts arising from the capital gains tax 50% general discount, the small business concessions et cetera, to be distributed tax effectively to the beneficiaries, which cannot be achieved via a company or unit trust structure.
Another desirable feature of a discretionary trust is its potential asset protection qualities. A discretionary trust with a corporate trustee has traditionally been regarded as an effective structure for asset protection purposes on the basis that the corporate trustee only acts in its capacity as trustee of the trust and trust creditors generally only have recourse against the corporate trustee’s assets and the assets of the trust.
Creditors generally have no claim against the trust beneficiaries’ assets.
Accordingly it is prudent to ensure the corporate trustee does not have any assets of significant value.
As no one beneficiary has direct ownership of the trust assets, this allows for flexibility in making distributions to various beneficiaries each year in order to achieve the best tax outcome.
This structure, which has no clear ownership entitlements, is also one of its main drawbacks where unrelated parties for example business partners, want to be in business together.
In those circumstances the use of a partnership of discretionary trusts or a unit trust, could be more appropriate.
At Everingham Solomons, we have the expertise to advise you becauseHelping You is Our Business.
In 2015 the deceased died suddenly at the age of 55 without leaving a Will. The deceased was survived by three siblings. The applicant claimed that at the time of his death, she had been in a continuous 12-year de facto relationship with him. Pursuant to the rules of intestacy, the deceased’s surviving siblings would be entitled to the whole of his estate, unless the applicant could establish that she was the deceased’s de facto spouse.
The Court needed to determine whether the applicant was a “spouse” of the deceased as defined under legislation. The applicant claimed she was in a de facto relationship with the deceased that “has been in existence for a continuous period for at least two years” at his death. The Court found that the applicant did not qualify in the last five years of the deceased’s life as his de facto partner because she had not been in a de facto relationship with him from 2010. The applicant had quite strong financial dependence upon the deceased during the de facto relationship until 2010 with the Court describing their existence as one of a shared household up until that time, but after that the nature of the deceased’s visitation to her was as a neighbour and former de facto partner and nothing more.
The applicant sought to argue that she was an eligible person entitled to make a claim on the deceased’s estate because she was at a particular time “wholly or partly dependent upon the deceased person” and was at the time of her dependence, or at other times “a member of a household of which the deceased person was a member.” The Court was satisfied that the applicant qualified as an eligible person to make a claim for family provision on the estate on the basis of a six year long relationship. The Court then had to determine whether, having regard to all the circumstances of the case “there are factors which warrant the making of the application”.
The Court found the deceased chose to allow the applicant a place in his life. “He clearly consented to her organising social functions with him and having some degree of a life together”. “She was more than just an ex-partner to him and…for this reason there are factors warranting” the making of provision of $75,000 in the applicant’s favour from the estate. The sum was fixed “partly to take into account the fact that [the applicant] did benefit financially in a substantial way throughout her relationship with the deceased and he was quite generous towards her”.
This case involved significant uncertainty, stress and cost for the parties involved when the deceased passed away and serves to highlight the importance of not leaving legal matters to chance. At Everingham Solomons we have the expertise and experience to assist you in making a Will because Helping You is Our Business.
Click here for more information on Lesley McDonnell
When parties with children separate they should try to enter into practical and childfocused arrangements between themselves in regard to the care and welfare of their children. Arrangements should be structured and practical but also allow some flexibility. Children have a right to a meaningful relationship with both parents and any parenting arrangements should reflect this principle.
For some parents, where there is a disagreement in respect of future parenting arrangements, the Family Law Act requires them to attend family dispute resolution, which is also known as “mediation” before embarking on making an application in court for parenting orders. In Tamworth, mediation takes place at “Centacare”.
If parties are able to reach consensus at mediation they will enter into a “parenting plan” which they both sign and date. A parenting plan can include details on where children live, how they will communicate with the non-resident parent and arrangements for birthdays and holidays. There may also be a review date built into the parenting plan which allows the parties to revisit the parenting arrangements at a later date to assess what is working well or whether something needs to be changed.
There are some situations where mediation is unsuitable. For example, where children relocate without the other parent’s knowledge or where they are being withheld by a parent for an extended period of time without a valid reason, or if there are significant safety 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 under these circumstances.
If a parenting plan is working well it can be made into “consent orders”, which are prepared by a family lawyer and filed in the court. Once parenting orders are made by the court they are legally enforceable and should be followed carefully. There are penalties for contravening parenting orders which may include a significant fine or a period of imprisonment for example.
There are very limited circumstances where parenting orders can be changed once made by the court. In this situation the party bringing an application to amend or set aside such orders would need to demonstrate a significant change in circumstances in bringing their application as courts do not wish to expose children to endless litigation.
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. Parents should always enter into negotiations with the other parent with this principle firmly in mind.
At Everingham Solomons we have the expertise and experience to assist you with all parenting matters because Helping You is Our Business.
A Grant of Probate is a document issued by the Supreme Court that acknowledges the validity of the deceased’s Will and authorises the Executor/s to administer the Estate.
Whether or not Probate is required depends on the nature and value of the deceased’s assets.
If the deceased held land in their sole name or as a Tenants In Common with another, Probate will be required.
Financial institutions, superannuation funds and share registries may also require Probate for larger investments before they will allow those assets to be dealt with. Generally they will require Probate if the amount held with them is greater than $30,000.
What is involved in obtaining a Grant of Probate?
ascertain assets and liabilities;
file an online Notice of Intention to make an application for Probate;
14 days after the date of publication of the notice of intention send Summons, Grant, Affidavit of Executors, original Death Certificate, Inventory of Property, and original Will to the Supreme Court for filing.
It takes the Supreme Court approximately 6 weeks to issue a Grant of Probate. Once the Grant has been obtained the Executor/s finalise the estate assets and liabilities and distribute to the beneficiaries.
If a person dies without a Will, or with a Will but with no living Executor, the same process applies however grant is called Letters of Administration.
The solicitors at Everingham Solomons have the knowledge and experience to assist you in obtaining grants and estate administration and distribution because Helping You is Our Business.
The recent case that has been reported regarding Matthew Leveson whose body has been found in the National Park south of Sydney, raises many interesting legal questions but not as many answers.
The facts in short are that in 2007 Matthew Leveson was killed and Michael Atkins was charged with his murder. Atkins was tried and in 2009 he was found not guilty of that murder.
There was subsequently a Coronial Inquest and Atkins refused to give evidence, as he is able to do, presumably on the basis that the evidence he gave may incriminate himself. The Coroner, to force Atkins to give evidence, subsequently gave him a certificate under section 61 of the Coroner’s Act, which means that evidence he gives cannot be used against him in any criminal proceedings.
In October 2016, Atkins gave evidence, however a lot of what he said, by his own admission, was untrue. This could have opened him up to being charged with perjury as the section 61 certificate only protected him from any murder charges.
Atkins then said to the Police, if you indemnify me from any charges for perjury I will take you to the body of Leveson.
There was subsequently a lot of a discussions between the Coroner, the NSW Attorney General, the Police and the family of the deceased. It was agreed that Atkins would show the Police where the body was, but only on the basis that he would not be charged with perjury.
Atkins subsequently showed the Police where the body was and it was exhumed a couple of weeks ago.
The question is, can Atkins be put back on trial for his involvement in the killing of Leveson? There would need to be fresh and compelling evidence that is admissible, that shows that Atkins was responsible for his death.
Knowledge of the place of the body would not be sufficient as he may have discovered it whilst bushwalking or by some other cause. Atkins DNA on Leveson would also not be enough, as they knew each other well and you would expect to find Atkins DNA on the body.
A farfetched example of what might be fresh and compelling evidence is, if a gun was found with the body and it was established that the cause of death was a shot from that gun. Further there would need to be fingerprints on the gun of Atkins. That may be fresh and compelling evidence.
What happens next, from a legal perspective, may not be fresh, but it will be compelling.
At Everingham Solomons we have the expertise and experience to assist you because Helping You is Our Business.
The Family Law Act 1975 deals with adjusting the assets and liabilities of separated married and de-facto couples. A property settlement is not a “right”, but rather the court must consider if it is fair and reasonable in all the circumstances for a property settlement to take place at all.
