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FAMILY LAW

FAMILY LAW. TOPIC Property Disputes. Preliminary Matters. Property regimes unity of property separation of property community of property (strict and deferred). Preliminary Matters. Part VIII Family Law Act s 71: party to a marriage s 71A: no Part VIII for BFA’s

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FAMILY LAW

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  1. FAMILY LAW TOPIC Property Disputes Family Law Topic 8

  2. Preliminary Matters • Property regimes • unity of property • separation of property • community of property (strict and deferred) Family Law Topic 8

  3. Preliminary Matters • Part VIII Family Law Act • s 71: party to a marriage • s 71A: no Part VIII for BFA’s • s72: spousal maintenance right • s75: spousal maintenance considerations • s78: declarations of interests in property • s79: alteration of interests in property • s 79A: setting aside property orders • s 80 general court powers • s 81 finality principle Family Law Topic 8

  4. Part VIII Family Law Act • s 106A: execution of instruments • s 106B: power to set aside transactions to defeat claims • s 85A: ante-nuptial/post-nuptial settlements • *s 86: registration of maintenance agreements • s 86A: MA’s made after commencement of Part VIIIA no longer enforceable • *s 87/87A: court-approved maintenance agreements • *ss 86 and 87 applies only up to commencement of Family Law Amendment Act 2000 (27.12.00) * applies only up to start of Family Law Amendment Act 2000 (27.12.00) Family Law Topic 8

  5. Part VIII Family Law Act • s 88: enforcement of maintenance agreements • s 89: overseas maintenance agreements • s 90: stamp duty exemption • Also note: • Pt VIIIA (financial agreements) • Pt VIIIB (superannuation) • Pt VIIIAA (third parties) • Pt VIIIAB De-Facto Financial Matters Family Law Topic 8

  6. (1) Declarations • s 78(1) • In proceedings between parties to a marriage • Existing title or rights in property • May declare title or rights in respect of property • s 78(2) • Consequential orders • Includes sale Family Law Topic 8

  7. (2) Alteration of Property Interests • s 79 (key provision) • note amendments in 1976, 1983, 1987, 2000, 2001, 2005 etc! (a) Powers • s 79(1)(a)-(d) (specific power) • s 80 (menu of powers) • s 106A (execution of instruments) • s 79(1) has two limbs: • general power (a)+(b) • two particular orders (c)+(d) • s 79(1A) enforcement against estates • s 79(1B) adjournment of proceedings? • s 79(1C) continuation of proceedings (from 1B) Family Law Topic 8

  8. (2) Alteration of Property Interests (b) Just and Equitable Requirements 79(2) • Separate & distinct requirement of s 79? • A preliminary step? • The final step? • Permeates the entire decision making process? • The order as an outcome? Family Law Topic 8

  9. Just & Equitable Requirement Post-Stanford Is a separate & distinct requirement of s 79 3 fundamental propositions: • Begin by identifying existing legal & equitable interests; • No palm-tree justice, but in accordance with legal principles, including the Act • No right to have property divided or fixed by reference to s 79(4) ie. Do NOT conflate s 79(2) and s 79(4) Family Law Topic 8

  10. (2) Alteration of Property Interests (c) Matrimonial Property • s 4: definition • all property owned by both parties • net value of assets • partnership interests? • superannuation entitlements? Family Law Topic 8

  11. (2) Alteration of Property Interests (d)Pre-Stanford preferred 4 step approach • Step1 - Identify and value the property • Step 2-Identify & evaluate the respective contributions - s 79(4) (a) to (c) • Step 3- Identify & evaluate the future needs factors - s 70(4) (d) to (g) • Step 4 – Justice and equitable orders Family Law Topic 8

  12. Alteration of Property Interests • Post-Stanford Approach • Apply s 79(2) in accordance with the 3 Propositions in Stanford • If just & equitable to make an order, then follow the preferred 4 step approach • See Bevan Family Law Topic 8

  13. (2) Alteration of Property Interests (e) Cross-vested claims • Tort/criminal injury compensation • Side-stepped no-fault principle for the battered spouse • The effect of High Court decision in Re Wakim (1999) on the operation of state to federal transfers of jurisdiction • Note pre-Wakim effect of the Federal Courts (State Jurisdiction) Act 1999 (NSW) Family Law Topic 8

  14. (3) Statutory Considerations • s 79(4) • in considering what order (if any) • the court shall take into account • seven considerations Family Law Topic 8

  15. (3) Statutory Considerations The ‘Top Seven’– s 79(4)(a)–(c) considerations The 3 contributions factors to be considered • direct or indirect financial contributions by/on behalf of a party/child to acquisition, conservation or improvement - s79(4)(a) • direct or indirect non-financial contributions by/on behalf of a party/child to acquisition, conservation or improvement - s79(4)(b) • Contribution by a party to the welfare of the family ( being parties/children) including in capacity homemaker and/or parent - s79(4)(c) Family Law Topic 8

  16. The ‘Top Seven’– s79(4)(d)–(g) considerations The 4 future needs factors to be considered (3) Statutory Considerations effect of a proposed order on a party’s earning capacity - s79(4)(d) the relevant s75(2) matters (i.e. spousal maintenance matters) – s79(4)(e) any other order made under the FLA (affecting a party or child of the marriage) – s 79(4)(f) child support payments that have been paid/is to be paid/is likely to be paid in future for child of the marriage – s79(4)(g) Family Law Topic 8

  17. (3) Statutory Considerations Past (retrospective) contributions:s 79(4)(a)-(c) – these are the step 2 considerations in the 4 step approach Future (prospective) needs [aka s 75(2) factors /maintenance factors]:s 79(4)(d)-(g) – these are the step 3 considerations in 4 step approach Family Law Topic 8

  18. (4) Past Contribution Factors (a) Financial Contributions • s 79(4)(a) • direct financial contribution(s) • indirect financial contribution(s) (b)Gifts, compensation and windfalls • gifts - donor’s intention? • clear evidence of joint gift • gifts to children • compensation/windfalls • joint contribution? Family Law Topic 8

  19. (4) Past Contribution Factors (ba) Superannuation • Pt VIIIB (ss 90MA-90MZH) and Regs • Splitting orders • Flagging orders • Agreements • ‘two pools’? (Coghlan 2005 FLC 93-220) (c) Non-financial contributions • s 79(4)(b) (d) Global or asset-by-asset approach • two judicial schools of thought • Norbis (1986) Family Law Topic 8

  20. (4) Past Contribution Factors (e) Homemaker and Parent Contributions • s 79(4)(c) • equality is equity? • Mallet (1984) • Ferraro (1992) & McLay (1996) • is family violence relevant? If a more significant homemaker/parent contribution? (see Kennon) Family Law Topic 8

  21. (5) Future Needs Factors (a)Earning capacity • s79(4)(d) • family farm/business? (b) Section 75(2) factors • s79(4)(e) • maintenance factors • 5-15%? • 10-20%? • high wealth cases? Family Law Topic 8

  22. (5) Future Needs Factors (c)Superannuation pre-2002 reforms was a financial resource for s79(4)(e) purposes but now is “property” but a different species of “property” : see Coghlan (d)Other orders s 79(4)(f) (e)Child support s 79(4)(g) Family Law Topic 8

  23. General Approach by the Court So … a final summary for s79 Usually follow the preferred 4 step approach as modified by Stanford i.e. Preliminary - Consider whether just & equitable to make a s79 order having regard to the 3 propositions in Stanford, if yes, THEN Step 1 - Identify (and value) the property Step 2- Identify & Evaluate contributions Step 3 - Identify & Evaluate future needs Step 4 - Make orders that are just & equitable Family Law Topic 8

  24. (6)Setting Aside Orders Altering Property Interests • s 79A • Five situations • miscarriage of justice • impracticable • default • new child circumstances • proceeds of crime order (also see ss 79B-79E) • s 79A(1A) consent • s79A(2) third party • s 79A(1B)(1C) death issues Family Law Topic 8

  25. (6)Setting Aside Orders Altering Property Interests (a)Miscarriage of Justice • s 79A(1)(a) • two factors • listed category • miscarriage of justice Family Law Topic 8

  26. (6)Setting Aside Orders Altering Property Interests (a)Miscarriage of Justice • s 79A(1)(a) • listed categories: • fraud • duress • suppression of evidence (including failure to disclose relevant information) • giving of false evidence • ‘any other circumstance’ • note FL Rules Family Law Topic 8

  27. (6)Setting Aside Orders Altering Property Interests Family Law Topic 8

  28. (6)Setting Aside Orders Altering Property Interests (b)Impracticability • s 79A(1)(b) • practically impossible (c)Default • s 79A(1)(c) (d)Change in circumstances for child • s 79A(1)(d) • Also note s 79A(1AA) which defines ‘caring responsibility’ Family Law Topic 8

  29. (7) Third Parties and Competing Claims (a)Intervention in proceedings • s 92 • AG intervention: s 91 (b)Corporate and other entities • Ascot Investments (1981) • exceptions • ‘sham’ (evasion) • ‘puppet’ (effective control) • Now see (d) below: Pt VIIIAA (c)Competing claims Family Law Topic 8

  30. (7) Third Parties and Competing Claims (d) Pt VIIIAA (ss 90AA-90AK) 90AE(1) - in s 79 proceedingscourt may: • order against creditor for substitution of debtor • order against creditor that the parties be liable for a different proportion of the debt owed • order directed to a director of a company or to a company to register a transfer of shares from one party to the marriage to the other party. 90AE(2) - in s 79 proceedingscourt may make an order that: • directs a third party to do a thing in relation to the property of a party to the marriage; or • alters the rights, liabilities or propertyinterests of a third party in relation to the marriage. Family Law Topic 8

  31. (7) Third Parties and Competing Claims (d) Pt VIIIAA (ss 90AA-90AK) 90AE(3) - court may only make an order under 90AE(1)/(2) if: • order is reasonably necessary etc to effect a division of property between the parties • if order concerns a debt of a party to the marriage - it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full • the third party has been accorded procedural fairness • court is satisfied that, in all the circumstances, it is just and equitable to make the order • court is satisfied that the order takes into account the matters mentioned in subsection (4). Family Law Topic 8

  32. (7) Third Parties and Competing Claims 90AE(4) - the matters are as follows: • taxation effect (if any) of the order on the parties to the marriage • the taxation effect (if any) of the order on the third party • social security effect (if any) of the order on the parties to the marriage • third party's administrative costs in relation to the order • if order concerns a debt of a party to the marriage - the capacity of a party to the marriage to repay the debt after the order is made • the economic, legal or other capacity of the third party to comply with the order • if, as a result of the third party being accorded procedural fairness in relation to the making of the order, the third party raises any other matters - those matters • any other matter that the court considers relevant. Family Law Topic 8

  33. (8) Transactions t0 Defeat Claims • Section s 106B (Part XIII) • power: s 106B(1)(2) • third parties: s 106B(3) • party in collusion: s 106B(4) *formerly s 85 Family Law Topic 8

  34. (9) Ante-Nuptial and Post-Nuptial Settlements • Section 85A • settlement(s) made in relation to the marriage • note since FLAA 2000 definition of ‘financial agreement’ in s 4 does not include a settlement to which s 85A applies Family Law Topic 8

  35. (10) Financial Agreements (a) Public policy arguments (b) ‘Maintenance Agreements’ (1976-2000) • s 4(1) definitions(s) • ss 86, 87 and 87A (maintenance and property agreements) Family Law Topic 8

  36. (10) Financial Agreements (c) ‘Binding Financial Agreements’ (2001-) - Part VIIIA (i) what is a financial agreement - ss 4, 90A-90D (ii) when can spouses enter into one - before marriage: s 90B - during marriage: s 90C - after divorce: s 90D *may cover property and resources *may cover spousal maintenance NOTE: new s 90DA: need for a separation declaration! Family Law Topic 8

  37. (10) Financial Agreements (iii) maintenance requirements • s 90E (children)/s 90F (spouses) • future support? s 90F(1A) (1) No provision of a financial agreement excludes or limits the power of a court to make an order in relation to the maintenance of a party to a marriage if subsection (1A) applies. (1A) This subsection applies if the court is satisfied that, when the agreement came into effect, the circumstances of the party were such that, taking into account the terms and effect of the agreement, the party was unable to support himself or herself without an income tested pension, allowance or benefit. (2) To avoid doubt, a provision in an agreement made as mentioned in subsection 90C(1) or 90D(1) that provides for property or financial resources owned by a party to the agreement to continue in the ownership of that party is taken, for the purposes of that section, to be a provision with respect to how the property or financial resources are to be dealt with. Family Law Topic 8

  38. (10) Financial Agreements (iv) when agreements binding: s 90G • signed by both parties • statement as to independent advice by lawyer • signed annexure by lawyer • original (pty 1) & copy (pty 2) (v) enforcement? s 90G(2) (vi) effect of death a party: s 90H (vii) ‘termination agreement’: s 90J (ie terminating the financial agreement) Family Law Topic 8

  39. (10) Financial Agreements (viii) setting aside agreement: s 90K • obtained by fraud • void, voidable, unenforceable • impracticable • exception of child-related hardship (ix) validity, enforceability, effect: s 90KA (x) stamp duty exemption: s 90L Also Note: • ss 90M-90Q • Capital gains tax Family Law Topic 8

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