IT’S BEEN A BIG YEAR FOR PROPERTY!

2019 brought with it a range of NEW perspectives on property matters in the Federal Circuit Court. Simply reading the Family Law Act doesn’t give a crystal clear picture of how the court perceives a property issue that it has to rule on. Cases are unique and have variables and circumstances where Judges use the legislation as a base but then make what are called ‘common law’ decisions. In other words, these are decisions based on a judge’s reading of the Family Law Act (or any other relevant legislation) PLUS that Judge taking into consideration the unique circumstances of the matter before the court.

Sometimes judges in landmark cases or appeal proceedings make decisions which change the way a law can be interpreted or viewed. These are called decisions of precedence and once such a decision is made with that level of authority, it becomes the basis for how future decisions in a particular area of family law are made until the next decision of precedence overtakes it. The common law is constantly evolving while the legislation changes at a slower pace until it it changed by the parliament.

Let’s turn it over to our trusty court stickybeak Elroy the Eagle to update you all on some interesting decisions relating to property and spousal maintenance in the Federal Circuit and Family Courts from June till December in 2019.

Eaglets! 
Firstly let me wish you all a feather-full 2020 and may you start the year soaring high with a tremendous squawk.
Ok… enough of the bird humour 😉
2019 had some interesting and unusual moments for the court as they were presented with the usual challenging matters to adjudicate over. Frazzled Judges are thinking of bringing back wigs to compensate for all the lost hair pulled out in dealing with matters regarding property and money.
After all, money does make the world go round.

June 2019


WHERE FAMILY VIOLENCE AFFECTS A PARTIES SCOPE TO CONTRIBUTE

Court did not err in relying on family violence findings in earlier parenting decision in support of a Kennon contribution weighting, where the husband did not object at trial and where there was an abundance of other evidence of violent conduct of the husband
Remember Eaglets, to successfully raise a Kennon argument, the Court must be satisfied that: there was a course of violent conduct by one party towards the other which occurred during the marriage or relationship; and. this conduct had a significantly adverse or negative impact on the party’s contributions to the marriage.

EXPERT EVIDENCE ON PRIZED BOOK COLLECTION INADMISSIBLE

Property – Valuation – Affidavit of bookseller adduced by husband to value his book collection held inadmissible as expert evidence – Affidavit of wife’s alleged expert who was unavailable for cross-examination was inadmissible too – Order made for sale of books.

DENTAL BILLS AND SPOUSAL MAINTENANCE

Spousal maintenance – Urgent lump sum maintenance granted for wife’s urgent periodontal and dental work for which she was being pursued for payment – Section 75(3) (as to disregarding pension) not relevant – Periodic maintenance application adjourned for interim hearing.

July 2019

PROPERTY AND A LONG MARRIAGE – REZONE INCREASES VALUE

Husband’s initial contribution of land soared in value due to rezoning – Judge erred in assessing contributions – Increase in value was “unrelated to the efforts of the parties” – Williams [2007] FamCA 313 “somewhat overstated” importance of an increase in value of an initial contribution, at the expense of all contributions by the parties throughout their relationship.

SHORT AND SWEET RELATIONSHIP …AND PROPERTY

Property – Short childless cohabitation – Initial contribution of entire small pool – Judge’s crediting of interim maintenance payments to appellant against her property settlement (resulting in no settlement being payable) was in error – Contributions reassessed at 90:10 – No adjustment under s 90SF(3).

August 2019

TRANSFERRING PROPERTY TO RELATIVES

Property – Wife fails to prove that a property the husband transferred to his sister and brother-in-law shortly before the parties’ marriage was held on trust for the husband – Court accepts evidence of husband and transferees that the transfer was for good consideration.

PROPERTY – SOLE USE OF THE BEACH HOUSE

Property – Sole use and occupation – Application by husband for sole occupancy of a “currently vacant” beach house occasionally used by his estranged children dismissed – Applicant financially able to rent alternative accommodation but did not want to do so.
No sand between that fellow’s toes I’m afraid!

PROPERTY AND CRAZY INVESTMENT LOSSES BY SPOUSE IN LONG MARRIAGE

Property – 45 year marriage – Elderly parties – Wife’s $1 million mid-marriage inheritance – Pool of $1.74 million included $360,000 notionally added back for wife’s reckless investment losses (not considered under s 75(2)(o) as the waste was identifiable) – Proceeds of life insurance policies paid to husband’s estate added back too – Contributions assessed at 65:35 in wife’s favour.

September 2019

CHALLENGED VALUATION

Property – Valuation by single expert appointed by parties was disputed by wife – Wife was refused leave to rely on shadow expert’s report (her instructions to whom were tainted) – Wife failed to use shadow expert to guide her questioning of the single expert, instead seeking to call him as an adversarial expert.

HUSBAND WITH NO WILL

Property – Husband died intestate (no will) – Wife appointed both as legal personal representative by Supreme Court of NSW and legal personal representative of husband’s estate by the FCC pursuant to s 79(8)(a) of the Act and FLR 6.15.

WHEN YOU DON’T CONTRIBUTE MUCH

Property – Small pool – Wife was of low intellect and contributed very little – Contributions assessed as 75:25 in favour of husband – Finding that wife would never be able to work – Adjustment of 25 per cent in her favour under s 75(2).

October 2019

QUICK SALES AREN’T FAIR

Property – Court erred in dismissing husband’s application for injunction against wife, where parties’ daughter had told him of imminent sale – Injunctions made pending determination of husband’s s 79A application.

PRE-MARITAL PROPERTY

Property – Husband granted sole occupancy of his pre-marital property – Conflict between elderly parties – Wife had ready access to alternative accommodation – Husband’s financial support of her was to continue – Wife also ordered to remove her caveat.

VALUING OVERSEAS PROPERTY

Property – Real estate agent husband’s evidence as to the value of a jointly owned property in China was inadmissible pursuant to s 76 of the Evidence Act (the opinion rule) – Such evidence did not constitute an admission (adverse to his interest in the case) within the meaning of s 81 of that Act to which weight could have been given.

LATE SPOUSAL MAINTENANCE APPLICATION? – NO WORRIES!

In Blevins [2019] FCCA 1923 (11 July 2019) Judge Baker heard an Initiating Application filed in March 2019 for spousal maintenance of $400 per week, filed 23 years after the parties separated and 21 years after their divorce. The parties were 69 and 71. A final order for maintenance had been made in 1999, requiring the husband to pay $750 per month until 8 July 2009 … In 2009 a further final order was made for lump sum maintenance of $275,000.

November 2019

BIG INITIAL CONTRIBUTION AND PROPERTY SPLITS (9 YEAR MARRIAGE)

Property – No error in 80:20 contribution assessment to reflect husband’s initial contribution of $4.97 million (and wife’s $500,000) of a $12.5 million pool –
A nine year cohabitation here eaglets.

SHORT DE FACTO RELATIONSHIP NEEDS INJUSTICE

Property – De facto threshold – Applicant partner for less than 2 years found to have made “substantial contributions” by assisting with renovations but fails to establish “serious injustice” if the order sought were not made.

December 2019

PROPERTY RISES AND SPLITS

Property – Rise in value of property resumed by government treated as windfall for both parties – Trial judge erred by equating periods of separation to the ending of the de facto relationship for the purpose of assessing contributions –Contributions continued during the many separations.

INHERITANCE AND SPOUSAL MAINTENANCE

Spousal maintenance – Applicant wife had inherited $1.6m in 2009, partly spent on property purchases – $520,00 retained in cash, term deposits and shares – While an applicant need not exhaust all capital so as to satisfy s 90SE(1) thresholds, the property of this applicant was such that she was able to support herself – Application for interim maintenance dismissed.

DIVORCE IN DUBAI NOT CONTESTED

Property – Wife’s application for property and spousal maintenance orders permanently stayed on appeal where she had failed to contest divorce proceedings in Dubai (in which she could have applied for property settlement and alimony) – Res judicata can arise notwithstanding differences between laws.

SPOUSAL MAINTENANCE RELEASE…DENIED!

Financial agreements – Clause purporting to release husband from future spousal maintenance held to be void as it did not specify the amount provided for maintenance as required by s 90E of the Family Law Act.

INHERITED PROPERTIES

Property – Court erred by failing to hear and determine wife’s application for declaration as to her one-half equitable interest in family home which husband inherited from his father after trial but before judgment – Further error where inadequate weight given to wife’s contributions.

And there it is folks.

So keep in mind Eaglets that every case before the court is different and the law can only guide the judge particularly if your matter has some complexity or untried element to it.

See you soon with more updates from the court battlegrounds and don’t forget that crack team at the Legal Eagle are always happy to assist self-representers with court preparation and low cost document drafting from applications to affidavits.

In the US and Australia, the divorce rate has been steadily declining since the 1980s.
That’s quite a surprise to me in this ever increasing self absorbed world we’re living in.

However, the latest research reported in The New York Times suggests about one-third of current marriages will end in divorce — not the 50 per cent statistic that gets thrown around time and time again. Unfortunately, that means there’s still a decent chance you and your partner will split up, even after pledging lifelong devotion to each other. That idea leaves room for a lot of questions:

What makes a divorce more likely? What will happen to our kids if we do split up? What will happen to my health? To help address some of these queries, let’s take a look at the relevant research on the predictors and consequences of marriage failure.

Before we start have you ever wondered about whether the stress and expense of putting on a lavish wedding has on the long term outcome of a marriage? According to the researchers: “As compared with spending between $6000 and $15,000 on the wedding, spending less than $1500 is associated with half the hazard of divorce in the sample of men, and spending $25,000 or more is associated with 1.6 times the hazard of divorce in the sample of women.” 
Remember that full blown wedding of Salim Mehajer?
All the bells and whistles didn’t stop that marriage ending acrimoniously.

Now before we begin keep in mind that all these studies mentioned below offer general takeaways about modern relationships — no one can predict with 100 per cent accuracy what will happen to yours.

1. You are less likely to divorce if you marry in your late 20s

Research led by Nicholas Wolfinger, a professor at the University of Utah, found that contrary to a long-held belief, waiting longer to wed doesn’t necessarily predict a stronger marriage.

Instead, the best time to marry seems to be between the early 20s and early 30s. If you wait until you’re older than 32, your chances of divorce start to creep up (though they’re still not as high as if you get married in your teens).

As Wolfinger writes on the Institute for Family Studies blog, “For almost everyone, the late twenties seems to be the best time to tie the knot.”

2. You are most likely to divorce in after a major holiday period

2016 research presented at the American Sociological Association found that post major holidays  bring spikes in divorce applications.

In the paper, they suggest that holidays represent something like “optimism cycles” — we see them as a chance to start anew in our relationships, only to find that the same problems exist once they’re over. The researchers also suspect that oftentimes our holiday experiences can be stressful and disappointing, laying bare the real issues in our marriage. As soon as they’re over, we’re ready to call it quits.

3. Husbands who work less may be more likely to divorce

Well who would of thought that less work would result is marriage unhappiness.

However, a recent Harvard study couples suggests that it’s not a couple’s finances that affect their chances of divorce, but rather the division of labour.

When the researcher looked at heterosexual marriages that began after 1975, she learnt that couples in which the husband didn’t have a full-time job had a 3.3 per cent chance of divorcing the following year, compared with 2.5 per cent among couples in which the husband did have a full-time job.

Wives’ employment status, however, didn’t much affect the couple’s chances of divorce.

The researcher concludes that the male breadwinner stereotype is still very much alive, and important for marital stability.

4. The myth that women who have had more sexual partners are more likely to divorce

Wolfinger conducted another analysis that found, among heterosexual couples who married in the 2000s, women who had between three and nine sexual partners were in fact less likely to divorce than women who’d had two partners (their husband and one other person).

Women who had at least 10 partners were most likely to divorce.

Meanwhile, among heterosexual couples who married in the 1980s and 1990s, women who had two or three sexual partners were more likely to get divorced than were virgins or women who had at least 10 sexual partners.

In a statement, Wolfinger distilled the lessons from this research: “If you’re going to have comparisons to your [future] husband, it’s best to have more than one.”

5. Couples closer in age are less likely to divorce

One study found that the odds of divorce among heterosexual couples increase with the age gap between the spouses.

As Megan Garber reported at The Atlantic: “A one-year discrepancy in a couple’s ages, the study found, makes them 3 per cent more likely to divorce (when compared to their same-aged counterparts); a 5-year difference, however, makes them 18 per cent more likely to split up. And a 10-year difference makes them 39 per cent more likely.”

6. Lavish weddings may predict less successful marriages

Well as previously mentioned, it ain’t the size of your cake that makes a marriage work.
In fact, spending a lot on your wedding doesn’t necessarily bode well for the marriage itself.

According to the researchers: “As compared with spending between $6500 and $15,000 on the wedding, spending less than $1500 is associated with half the hazard of divorce in the sample of men, and spending $25,000
or more is associated with 1.6 times the hazard of divorce in the sample of women.”

At the same time, the study found that having a lot of guests at your wedding predicts lower odds of divorce. My Thai friends will certainly be relieved to know that, where less than 100 guests is seen as odd. Couples with 200 or more invitees are 92 per cent less likely to divorce than couples who don’t invite anyone, The Atlantic reported.
So a simple wedding with lots of friends seems to be the perfect combo!
A pity dear Salim couldn’t work that out.

7. Divorce may contribute to heart problems in women

Recent research suggests that women who get divorced are more likely to suffer a heart attack than women who stay married.

As Time‘s Alice Park reported: “Women who divorced at least once were 24 per cent more likely to experience a heart attack compared to women who remained married, and those divorcing two or more times saw their risk jump to 77 per cent.”

For men, however, the chances of suffering a heart attack only went up if they divorced two or more times.

8. Divorce itself might not have a negative impact on kids

Instead, as Rebecca Harrington reported at Tech Insider, it seems to be conflict between parents that takes a toll on their children.

In fact, in one recent study, children whose parents fought a lot and then divorced were less likely to get divorced as adults than children whose parents fought a lot and didn’t get divorced. The researchers say that’s possibly because the divorce put a kind of end to the ongoing family conflict.

9. Couples who display contempt are more likely to divorce
Well I guess this is certainly stating the obvious but there are studies to prove it.

Relationship expert John Gottman’s research, which suggests that contempt — a mix of anger and disgust that involves seeing your partner as beneath you — is a key predictor of divorce.

It’s not simply getting into a fight; it’s how you respond to your partner afterwards: Do you try to see things from their perspective or just assume they’re an idiot?

If it’s the latter, try replacing the behaviour with a more positive, patient reaction. It could save your marriage.

Don’t forget to check out all our free legal resources on family law HERE.

[With thanks to Business Insider for some content contribution]

A wealthy couple celebrates their new marriage circa 1914

What exactly is a Pre-Nup?

Australian couples can plan for their future rights (and responsibilities) with a binding financial agreement. Once something is binding it is difficult, although not impossible, to change or overturn it.

Check out HERE what Aussie law says about these agreements and when they are binding.

A financial agreement is basically a contract which you and your partner make. If you are in a de facto relationship, you can make it at the beginning of your relationship or at any time during the relationship.

Marrying couples use to call these agreements “pre-nups” because they were made before the start of a marriage. These days both soon to be married, married and de facto couples can make theses agreements at any time in their relationship that suits them.
These agreements take into consideration a range of issues outlined in the Family Law Act like:

• How in the event of a relationship breakdown, all or any of the property or financial resources of either or both of the parties is to be dealt with.
• The maintenance of either party during the relationship and/or after dissolution of the marriage or the end of a de facto relationship.
• Any incidental, ancillary or other matters to those above.

Cohabitation agreements or de facto agreements, that confirm a person’s non-financial and financial rights when the de facto relationship comes to an end, are also recognised.

How do you create a Pre-Nup or binding financial agreement?

♦ You cannot get the same lawyer to act for both of you with financial agreements.
♦ You will each need your own lawyers to give legal advice about the effect of any potential agreement on your future rights (particularly in any future property settlement if your marriage or relationship breaks down) and about any disadvantages in making such an agreement.
♦ The agreement won’t be valid if you don’t get this advice.

♦ Either before or after signing the agreement, each party is to be provided with a signed statement by the legal practitioner stating that the advice was provided to that party.

♦ A copy of that statement is then given to your partner or their lawyer.

♦ Both of your lawyers will need to take detailed instructions about your financial circumstances, future intentions (eg regarding children), contributions already made to the property, estate planning requirements (eg protection of children from other relationships) and the financial agreement you both wish to enter. In disclosing all of your assets and liabilities, valuations are normally obtained and accountants are often used to make sure things add up

♦ Your lawyers must provide each of you with a detailed letter of advice, so you understand what such an agreement means and that it is binding.
♦ The agreement is then drawn and negotiated between the two of you to iron out any concerns.
 When settled, the agreement is signed by the parties.

Good agreements mean preparation, preparation, preparation

Both Before you can make your agreement, your lawyer will need detailed information about:

♥ Your assets, liabilities, businesses, trusts, superannuation/pension entitlements etc (and you need to be honest and not hide or leave out details) by providing statements and valuations. Where this isn’t possible it’s important to give a fair estimate of the value of any other things.

♥ Details of your employer, salary and entitlements. It is important to provide tax returns to prove this.

♥ Your personal details (including your previous marital status, details of any children).

♥ You and your future spouse or partner’s intentions about the division of your property if you separate. It’s also sensible for any agreement to provide an additional settlement for any financially disadvantaged party. (eg. the partner who may have no income)

It is simple common sense if you want a strong financial agreement to avoid being mean spirited. Make reasonable provision for your partner if you have greater wealth by sitting down and negotiating this with them. Each of you should also assess what’s offered with your lawyer so you can have a non-emotional mind overseeing any negotiations.

But doesn’t it take the romance out of the relationship?

While this may seem unromantic, making a financial agreement promotes trust, certainty and transparency about financial matters between both of you. It can actually be part of a plan for a successful marriage or de facto relationship. The agreement provides a reference point for both of you and reduces the chance of disputes arising about financial matters during the relationship.

Many couples consider that this sort of agreement gives them real peace of mind by clearing the air over what can sometimes be a sensitive topic to discuss.

Cost

Financial agreements often require much research, detail, checking and confirming and reconfirming with each party, so they are not easy things to construct. Make sure you both find lawyers with skills in this area and ensure you leave enough time to get the agreement drawn up and agreed to. One lawyer in this field has advised that they can start at $5000, and if they’re really complex agreements, it could be more than twice that. The more complex the agreement the more you should ask your solicitor to get a Barrister with experience in this area to double check the agreement.

Also, if you’re getting married, it’s best to start the process at least 6 weeks before the wedding.
For de facto couples, you should get your financial agreement done as early as possible.

Financial agreements can be changed as your relationship changes

Think of your financial agreement as an evolving document. It may begin as a ‘pre-nup’ but it can be changed and updated if the dynamics change. Good examples are if you have children, or if either or both of you become wealthier. Changes in circumstances such as hard times or sickness may require the agreement to be revised.

Talk to your lawyers about having a revision clause in your agreement so that from time to time you can review and change it to more suit your circumstances. It’s important that the agreement remains fair and reasonable. Again, for more complex agreements any changes should be also looked over by a Barrister with experience in this area.

Can a Pre-Nup or financial agreement be overturned?

You cannot be provided with a cast-iron guarantee that your agreement, once entered, will not be subsequently set aside by the Family Court.

The only way a court can make orders for property settlement and spousal maintenance despite an agreement is if the court sets aside the agreement. The law has a number of grounds to set aside an agreement.

Click HERE to see what the law says on this

In summary, the main grounds are:

♦ An agreement was obtained by fraud. For example, one spouse fails to disclose a matter material to the agreement such as ownership of assets / businesses.

♦ One or both of you entered into the agreement for the purpose of defrauding or defeating a creditor of either of you. This means that you can’t use a binding agreement to divert assets away from creditors, or a trustee in bankruptcy.

♦ The agreement is void, voidable or unenforceable. For example, the requirements for a binding agreement were not fulfilled and these are complicated which is why you both should consult with a lawyer to get everything right in the eyes of the law.

♦ Since the agreement was made, a material change in circumstances that relate to the care, welfare and development of a child of the marriage has occurred.  As a result of the change, the person who has caring responsibility for that child, will suffer hardship if the agreement is not set aside.

♦ The agreement was signed because of pressure, harassment or some other form of unfair conduct (eg ‘gunshot signings’ of an agreement on your wedding day).

Money is ever present at weddings, Italian wedding circa 1952

Future changes to the law about financial agreements

Financial agreements are out-of-court, private agreements between the two of you outlining how property and other financial matters will be dealt with in the event of the breakdown of a marriage or de facto relationship. It’s always disappointing when Courts get involved due to uncertainty.  The downside of this is delays and added cost for both parties.

May 2019

Updated May, 2019