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‘My Ex has Control of all our Financial Assets!’ – Your Right to Partial Property Settlements during Financial Separations

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A financial separation is often a difficult and stressful process for both parties involved, particularly so where your ex-partner maintains control over joint assets or has a much higher earning capacity. Unfortunately, it is sometimes the case that one party to a financial separation maintains financial control over the other due to their higher earning capacity or control over joint assets. For example, this may be the result of one party withdrawing from the workforce during the relationship to take on the role of the primary carer of the parties’ children.

As the process of finalising financial settlements can often take months or even years to be resolved, it may be the case that the party with a lower earning capacity will face financial burdens and may require additional funds to support their daily living expenses, legal fees and/or educational costs. In these circumstances the burdened party may seek what is known as a ‘partial property settlement’; this is essentially an ‘advance’ of funds which can be paid before the final settlement is complete.

Partial property settlements can be ordered in these circumstances to counteract the inequity in the parties’ access to assets and/or financial resources during negotiations or proceedings. These settlements are recognised and accounted for in subsequent negotiations and proceedings as a distribution made in the otherwise burdened party’s favour.

 

What do I need in order to be successful in a partial property settlement?

The Family Court of Western Australia under sections 79 and 80 of the Family Law Act 1975 (Cth) has the discretion to make an interim property order when it is appropriate and in the interests of justice. The primary consideration for the Court when adjudicating these matters regards the current financial circumstances of the parties as opposed to the purpose for which the funds are sought.

An application for partial property settlement requires the applicant to satisfy the Court of the following elements:

  • A source for finance of the payment can be identified;
  • There is a party with the majority control of assets or relative financial strength;
  • The payment must not be more than the party will ultimately receive from the settlement;
  • There is a reasonable explanation on what the funds are for; and
  • It is ‘just and equitable’ and in the interest of justice to make the partial property settlement order.

It is noted that the Court does not make interim cost orders such as partial property settlements without a strong consideration to the circumstances of each party. Essentially, the Court will make this determination on the basis of the evidence that is before it with respect to the value of the asset pool, the initial contributions of the parties and the contributions of the parties throughout the marriage, but most importantly, if it considers it is just and equitable to do so.

An applicant must convince the Court on the evidence at hand that you will, without doubt, receive more in the financial settlement than you are asking for on this interim basis. This is to ensure the payment cannot cause injustice later on where the relationship assets have already been spent.

Where the Court makes this order, it is described as an ‘add-back’. That is, the funds which are distributed to a party via a partial settlement will be acknowledged and added back to the value of the asset pool available for distribution, but is recognised to have been distributed in one party’s favour already.

 

Is partial property settlement my only option?

Other orders can be sought to remedy the discrepancies in parties’ resources during family law proceedings. These include seeking a periodical or lump sum for spousal maintenance under ss72 and 74 of the Family Law Act or seeking a “dollar for dollar” order under s117(2) to cover the expense of legal fees.

 

How can I apply for a partial property settlement?

If you have not commenced proceedings but seek to have a partial property settlement, you can apply for this via interim Orders sought in your initiating documents before the Court. If proceedings have already commenced, a partial property settlement must be applied for via a Form 2, ‘Application in a Case’. These can be filed on the eCourts website after paying the relevant fee.

If the contents of this article appear relevant to your circumstances, or if you require any assistance with your family law matter, please contact our office on (08) 9408 5212.

 

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

Can my ex access my psychological records?

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In family law parenting matters, it is well-established that the paramount consideration to the Court is the best interests of the child. This takes priority over everything, even your right to confidentiality.

In considering what is in the best interests of the child, the Court will consider many factors, including:

  • the benefit the child may have from a meaningful relationship with both parents;
  • any views that the child expresses;
  • the nature of the relationship between the child and each of the child’s parents; and
  • the capacity of each of the parents to provide for the needs of the child, including emotional and intellectual needs.

If one parent attends counselling, it is likely that their counsellor’s notes would shed some light on these factors. In particular, the psychological records would be relevant to the question of whether the parent has the capacity to:

  • take care of the child’s best interests;
  • take care of the child physically;
  • provide emotional support to the child;
  • maintain or build a meaningful relationship with the child; and
  • Take care of the child long-term.

Psychological records may also evidence a risk of future family violence, psychological abuse or neglect. Therefore, psychological assessments can be highly relevant when determining orders that are in the child’s best interests.

 

How can my records be obtained?

Psychological records can be obtained pursuant to a subpoena. A subpoena is an order by the Court to an institution, such as your counsellor, to provide documents they have on record pertaining to you. Failing to comply with a subpoena is a breach of a Court order, which is punishable by a fine or imprisonment.

 

What about confidentiality?

Health practitioners have a duty of confidentiality, pursuant to which they cannot disclose medication information about the patient without the patient’s consent. However, this duty is subject to the medical practitioner’s obligations under a subpoena. If a counsellor receives a subpoena requesting them to provide documents to the Court about a patient, they must do this; practitioner-patient confidentiality is subject to the Court’s orders.

 

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

When Are Family Property Orders Really Final? Challenging an Order

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Most clients want complete certainty and a ‘final deal so I can move on with my life’ when it comes to resolving the matter, especially when it comes to finalising financial separation matters.

Under Section 81 of the Family Law Act 1975 (Cth) (‘the Act’), the Court has a duty to make orders that as far as practicable, will “finally determine the financial relationships”. This is commonly known as the “clean break” principle, and it is an attempt by the Court to ensure that the parties are no longer financially reliant on each other and to attempt to stop any further litigation between them with regard to financial matters.

There’s always a risk though that the ‘final’ agreement isn’t the right agreement. What if, for example, there’s a change of circumstances and you cannot comply with the orders? Or you find out your ex had hidden assets? Or trying to comply with the orders is going to cause you significant financial hardship? In these situations, having orders as “final” may be problematic. With this in mind, Section 79A of the Act gives the Court the power, in their discretion, to potentially ‘set aside’ or vary financial orders.

Note that Section 79A only applies to financial orders, NOT parenting orders.

 

What is Section 79A?

Section 79A provides the circumstances by which a Court may set aside or vary existing financial orders. The scope of this section is quite limited, a matter of changing your mind will not be enough to have an order set aside. There must be evidence of:

  • Miscarriage of justice by reason of fraud, duress, suppression of evidence, the giving of false evidence or any other circumstance;
  • Where circumstances have arisen since the order was made whereby it is impracticable for the order to be carried out;
  • Where a person has defaulted in carrying out an obligation imposed upon him or her by the order;
  • Where, in exception circumstances, the applicant will suffer hardship if the court does not vary or set aside the order; or
  • Proceeds of crime order has been made covering property of the parties.

Section 79A applications can be made by any party affected by an order of the Court, and is usually done as a result of a disagreement, if both parties are affected and wish to change the orders they may also make an application to vary or set aside orders by agreement, also known as consent.

 

Will a Section 79A be Easy?

Section 79A matters are legal complex (both as an applicant or a respondent – we represent both). If you are considering making one of these applications, you should strongly consider seeking legal advice. At Carter Dickens Lawyers we have experience and knowledge with regard to Section 79A applications.

Contact our Office on (08) 9408 5212 to arrange an initial appointment to discuss the merits of your case with one of our lawyers.

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

Co-Parenting after Separation? Welcome to the Apps of the 21st Century!

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Relationships break down for many reasons and unfortunately, it is not always on good terms. However, being able to amicably co-parent with your ex-partner is very important for children and family dynamic. Having potentially lost the stability of having a close family unit, it is important that children see their parents communicating and working towards advancing the children’s best interests.

Traditionally, co-parenting has been difficult and communication breakdowns are common. However, with the development of smartphones and new apps there are now several options to assist those endeavouring to co-parent in the 21st century.

 

What are co-parenting apps?

A co-parenting app is an application that you are able to download onto your phone or tablet which aims to provide easy communication regarding the well-being and needs of your children. They have in-built features such as calendars and schedules, as well as access to important medical information about the child/children. They may also have features that track shared expenses and payments, or reminders and alarms to help both parents keep up with the designated schedule.

 

What are the benefits of co-parenting apps?

Co-parenting apps seek to bring a sense of organisation and peace to what can be a very overwhelming and difficult process. Co-parenting involves a large number of considerations including schedules, appointments, expenses, exchange places/times, health concerns of the children, special occasions such as birthdays and holidays, and so much more.

Both parents being able to access all of this information in one place will bring more organisation and clarity to the co-parenting situation. Being able to coordinate both the big things, such as birthdays and sleeping arrangements, as well as the smaller things, such as school events and excursions, in one application may help to soften some of the difficulties of co-parenting.

Co-parenting apps may also be successful in minimising conflict that may arise if the parents were to privately text one another or speak through a third-party. By encouraging parents to resolve smaller issues regarding the children between themselves and through an app, there may be less disagreement and less interactions with the court. This is also likely to have a flow-on effect and positively impact the psychological well-being of the child.

 

Examples of co-parenting apps

SharedCare

This app contains features such as a shared calendar, care arrangements (including requests to swap days), an expenses recorder (including reimbursement requests), and a group news feed where other carers including grandparents, nannies and aunts and uncles can keep updated on important milestones and news.

 

Parentship

Parentship utilises features including custom calendaring, digital documents, reminders, and a smart profile that contains everything about the child in one place.

 

Cozi

Cozi is a free app with a hassle-free family calendar and other features such as being able to create to-do lists and even share recipes where children may have allergies or dietary requirements.

 

Our Family Wizard
A popular app used globally with a great deal of options and functions, designed from the ground up for difficult situations in which the Family Court is involved. This app can also give children a controlled level of access to information, as well as third parties and legal practitioners, where relevant.

 

We note that this is just a small sample of the various applications on offer.

 

Are there any concerns?

Some co-parenting apps may require a small payment or a subscription fee. Also, co-parenting apps will only be successful if the parents are able to set aside their personal conflicts in order to put the children’s interests at their very highest concern.  Co-parenting apps may not be appropriate in all cases.

Unfortunately, these apps will not resolve all disputes that may arise in parenting matters; however, they allow for effective communication and synchronised scheduling which aims to benefit the children in the long term. Our lawyers can advise whether a co-parenting app is the right fit for your matter.

If you have concerns regarding a Parenting Matter, please contact Carter Dickens Lawyers on (08) 9408 5212 and we will endeavour to provide you with comprehensive legal advice to assist in your matter.

 

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

 

Will my illness or disability lead to an adjustment in Financial Orders?

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Often during the course of property settlements, it is asserted by one of the parties that they ‘deserve’ a larger portion of the asset pool due to reliance on certain factors. The factors relied upon are found in the Family Law Act 1975 (Cth), in particular Section 75(2) for married couples, and Section 90SF(3) for de-facto couples. Application of these provisions is seen as the third step (out of four) that Australian Courts typically undertake in making Financial Orders.

The four steps undertaken by Courts are generally set out as follows:

  • Identify and value the assets, liabilities and resources of the parties;
  • Consider the contributions of the parties made throughout the relationship;
  • Consider the future needs of each party; and
  • Determine whether the proposed settlement is just and equitable.

Essentially, at the third step the Court evaluates the future needs of the parties taking into account their individual circumstances. The aforementioned provisions set out 19 factors that may be taken into account by the Court in evaluating the extent of each parties’ future needs. The relevant subsections relating to adjustments for disability and illness are the following:

  • The age and state of health of each of the parties (s 75(2)(a)); and
  • The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment (s75(2)(b)).

Unfortunately, many Australians face challenges in their everyday lives associated with ongoing disabilities or illnesses. At Carter Dickens Lawyers we seek to assist those who may be vulnerable in financial settlements, and ensure they are aware of their rights and the impact their disability may have upon the expected distribution percentage they would receive from a Court ordered financial settlement.

 

Am I likely to receive an adjustment in my favour due to my disability?

The assessment of ‘future needs’ remains a discretionary activity undertaken by the Court. Therefore, it is difficult to say with confidence that an ongoing disability or illness will guarantee a percentage adjustment in your favour by the Courts.

However, there are precedent cases which appear to suggest a 5-15% adjustment may be made where one party suffers from disabilities and this impacts their ability to achieve gainful employment in the future. In particular, the case of Dritsas v Wilson [2008] FMCAfam 44 saw a section 75(2) adjustment in the wife’s favour of 10 per cent where the potential of future employment was essentially non-existent due to the extent of the wife’s disabilities and her age.

Although there appears to be precedent for making these adjustments, and the legislation specifically makes reference to age, health and the ability to gain meaningful work – each case is determined on an individual basis. We therefore recommend you seek legal advice on this matter if you are either going through a financial separation or are planning on seeking financial orders.

 

What if both myself and my ex suffer from disabilities/illnesses?

Unlike the circumstances aforementioned, in some cases both of the parties to a financial separation suffer from illnesses or disabilities respectively. This situation creates greater difficulties for Courts in evaluating the ‘future needs’ of the parties as both may have their own valid claims.

Again, this situation would see the courts exercise their discretion, and all factors would be evaluated prior to any Order is made. However, Nathan & Nathan [2007] FamCA 589 was an example where the Family Court of Australia deemed it equitable to make no adjustment. In this case, Justice Kay at [23] stated no adjustment would be made out for the following reasons:

“A global view of this case shows two people with very limited earning capacity, two people with significant medical disabilities.  They are both aged 46.  Neither of them has a very secure economic future to look forward to.  The husband appears able to live on his wits.  The wife has secure employment at least with some modest superannuation available to her.  It does not seem to me to be a case in which any s 75(2) adjustment is appropriate.”

Essentially, where in the Courts discretion the parties equally suffer from limited earning capacities and significant medical disabilities/illnesses, it may be just and equitable to make no adjustment for future needs, instead opting for an equal split of the asset pool.

From the situations discussed, it is clear that the Court is empathetic to the plight faced by those with illnesses and disabilities; however, the extent to which this will impact Financial Orders depends on scope of the facts at hand. If you believe that the section 75(2) factors discussed in this article may apply to your circumstances, please contact Carter Dickens Lawyers on (08) 9408 5212 for a free 15-minute consultation with one of our lawyers.

Carter Dickens Lawyers specialise in Family Law and Financial Disputes. We pride ourselves on our ability to provide legal assistance and advice, including on niche areas of law, such as the impact of disabilities on expected percentage distributions from Financial Orders. We will ensure that you are fully informed of any rights and risks associated with your divorce or financial matter.

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

Reversing a transfer of property or assets during Family Court proceedings

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During a separation it is common for the Family Court to make property settlement orders to ensure that the distribution of assets between the parties is ‘just and equitable’. However, there are instances where property has been transferred or disposed of by one party to the separation proceedings.

In some instances, section 106B of the Family Law Act 1975 operates as an anti-avoidance provision. It functions to stop parties from entering transactions which hinder or circumvent Family Court orders during property settlements. Essentially it allows that the court can reverse transactions including the transfer of land in certain situations. Section 106B allows a court to do this when:

  1. a transfer of land occurs during family court proceedings; or
  2. during a time when the proceedings were reasonably anticipated; and
  3. the disposition is likely going to defeat existing or anticipated court orders.

The operation of section 106B does not require that the party selling the asset specifically intended to defeat the existing or anticipated orders of the court. It is merely enough to show that the sale or transfer of the asset would have the effect of doing so. For example, the reduction of the available pool of assets in a property settlement may be enough to satisfy a likelihood that a court may not be able to make adequate orders. It should be noted that section 106B does not only apply to sales of property or assets but also to gifts and the issuing of rights which attach to interests in a company or a trust.

For example, if around the time of separation an ex decides to sell their assets or gifts them to a family member the court has the power to reverse that transaction. These situations are complicated by instances where a third-party bona fide purchaser is involved. That is someone who purchases an asset from a party for value without having knowledge of any other parties’ interests. Whilst the court will generally have regard to the interests of a bona fide purchaser and can make orders to protect them, this does not provide them with an absolute safeguard.

The Family Court still has the discretion to make orders reversing a transaction which negatively impacts a just and equitable outcome. The Court is particularly minded to reverse transactions which are clear ‘shams’ attempting to defeat the operation of the Family Law Act. When dealing with a bona fide purchaser, the Family Court may consider whether at the time of the disposition the purchaser:

  • was aware of the other party’s interest;
  • should and would have been made aware if they made all the proper enquiries; and
  • whether the disposition would be likely to defeat the claim of the party in whose favour the order was existing or anticipated.

In exercising its discretion to set aside instruments and dispositions, the Family Court may also take into account the length of time between the disposition and the proceedings, and between the discovery of the disposition and the proceedings to set aside the disposition.

Parties to a dispute should use caution when dealing with property interests in the wake of Family Court separation proceedings. Third-parties who suspect impending family law matters should also take care when purchasing property and ensure all proper enquiries are made.

As well as section 106B of the Family Law Act 1975, there are several other ways that this may be dealt with.

Do you need Legal advice concerning a family law property settlement? Our Lawyers can provide you with comprehensive legal advice. Please contact our Office for an appointment.

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

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