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The Importance of Sole Company Directors having a Will

By | Articles, Wills and Estates

As adults, most of us are probably aware that dying intestate (without a valid will) can complicate matters for our families and loved ones. But did you know that dying without a will can also complicate things when it comes to your business matters? It’s true, especially if you are the sole director and shareholder of a company which operates your business.

Immediate concerns

Generally speaking the death of a sole director and shareholder who has not left a valid will has a significant impact on the company because:

  • it creates an immediate void in leadership;
  • there are immediate financial and logistical ramifications;
  • who takes over the directorship and how long will that that.
A closer look

Directors are in charge of managing a company’s business activities. Specifically they are tasked with:

  • acting in good faith and in the best interests of the company;
  • avoiding conflicts between the company’s interests and their own personal interests;
  • preventing the company from conducting business during insolvency;
  • taking certain steps to facilitate the process when the company is being wound up.

Legally, a proprietary company must have at least one director and he or she must live in Australia. Any company with publicly-sourced funded shareholders must have at least two directors, most of whom must live here. Any public company must have at least three directors (exclusive of alternate directors), and at least two of them must live here.

In most cases, if there are several directors and one passes away, there is minimal disruption. This is because the surviving director/s can simply step in to run the company on a daily basis. Or, in some cases, they will select one of their peers to do so on an interim basis, usually until the shareholders/members choose a permanent successor.

In companies where there are several shareholders, the death of one also tends to cause minimal disruption. This is because the directors can usually continue the daily management of the business until the shares are distributed to the beneficiaries of the will.

By leaving a will, a sole director can also ensure that there is a smooth transition in the company leadership and operations following his or her death. The reason is that section 201F of the Corporations Act 2001 permits the executor to appoint the successor. Put simply, the executor is authorised to address this matter quickly, thereby avoiding any prolonged disruption. Under these circumstances a replacement director can usually be appoint within 24-48 hours.

Whereas, if the sole director has not left a will, a relative must make an application to the Supreme Court to apply for a Grant of Letters of Administration and this usually take months thereby leaving the business in limbo. What is more, the Court decides who is granted Letters of Administration not the deceased director. Imagine the ramifications for the company if the bitter and estranged spouse was appointed, which is highly possible given their right of priority to apply, unless there is a divorce.

The effect on operations

During this time, operations may cease entirely. This usually happens when the lack of a duly authorised manager results in the inability to continue daily operations, including routine business and financial transactions. When this occurs for a protracted period, the results can be devastating. Among other things, employees who can no longer be paid will leave, and the company’s reputation will suffer.

Even if someone wants to buy the company, the lack of a recognised shareholder may hinder their ability to do so – or at least their ability to do so quickly. Without someone to authorise the transfer of shares, any sale would be put on hold pending the appointment of the deceased’s legal personal representative and the settlement of the estate.

Complications may also arise if the final decision to wind up the company is made so all beneficiaries can be paid out. Specifically, a lengthy delay may have an adverse effect on the company’s value compared to what it would have been if operations remained unhindered.

The significance of a valid will

Of course, a will isn’t valid unless it is:

  • signed by the person who made it;
  • appoints an executor (up to 4 persons)
  • witnessed in front of at least two other adults who are not beneficiaries;
  • made when the deceased was of sound mind, memory and understanding.
To learn more about making a valid will and the importance of having one if you are the sole director or shareholder of a company, contact the Estate Planning Partner, Richard Dawson, or our estate planning team on 07-5555 0000 or [email protected]

The Pitfalls of Buying a Property with the Objective of Redeveloping it

By | Articles, Property Law

When entering into any contract for the purchase of property, it is important to ensure that all bases are covered and both parties know what is expected from them. When purchasing a property for redevelopment, there are a few extra steps that buyers should take to ensure they are aware of how they can deal with land they are looking to develop. Developers should seek additional advice and information about the property, as well as ensuring allowances are made in their contracts, so they are not faced with any nasty surprises after settlement.

In any contractual negotiations, conducting due diligence to ascertain as much information on a property as possible is crucial. Here at OMB Solicitors, it is standard practice to include various searches in our conveyance of purchase matters. Where property is purchased for redevelopment however, we recommend to our clients that specific searches and additional expert advice is also sought. It is important that such information is gathered, so that any restrictions or issues with the property which may affect redevelopment are brought to light. Seeking review and recommendation from sources, including but not limited to, town planners, engineers and surveyors for example, allows purchasers to have the greatest understanding of the lengths and limitations a development project may encounter.

Another tool we suggest prospective developers consider is the Gold Coast City Council’s ‘City Plan‘. The City Plan outlines, maintains and protects the Gold Coast community’s intentions for future development. A crucial part of the City Plan which developers must consider is zoning. Zoning is the categorical assignment of areas around the Gold Coast into ‘zones’ which ultimately affect how land can be used and (re)developed. It is important that developers consider the zone property is located within so they are aware of the restrictions and requirements which may be enforced.

Not only should developers conduct such due diligence, they should also ensure that their contract provide allowances so this information can be sought prior to a developer being locked into a deal. Special Conditions can be included in contracts so that purchasers have time to conduct these investigations and terminate a contract without penalty in the event the due diligence does not stack up.

The inclusion of special conditions which stipulate the contract to be ‘subject to’ the satisfaction or undergoing of such searches or research should be a non-negotiable term of a contract if a developer is planning to redevelop a parcel of land. If these additions and changes are not made to contracts, purchasers may find themselves in breach where they have taken excess time to meet conditions, or unable to terminate a contract if the property can not be used as envisioned.

Redeveloping property can be a rewarding and exciting time for purchasers. It is important however, that due diligence is undertaken, and proper additions are made to contracts so that pitfalls can be avoided. Seeking expert advice is crucial to ensure that property can be developed as proposed. Ensuring that contracts reflect the intentions and expectations of both parties is also fundamental in achieving a successful outcome for all involved.

Contact Jessica Thomas today if you need any further advice on the preliminary actions that should be taken when redeveloping property, or if you would like to find out more about how contracts can be drafted to suit your redevelopment needs.

We’ve Come to an Agreement in Relation to Our Property Settlement. What Do We Do Now?

By | Articles, Family Law

Firstly, give yourself a pat on the back! It is great that you have reached agreement, as you will save the considerable legal costs involved in arguing over who gets what and ending up in court.

Once an agreement has been reached between you as to how you wish to divide your assets and liabilities in a family law settlement, you have the option of entering into a financial agreement or consent orders to formalise and finalise your agreement.

You will need to have either consent orders made or a financial agreement in place, to legally resolve the dispute once and for all (so that it can be used in resisting a court application in the future with respect to the same issues).

Consent orders or a financial agreement will also be required to obtain the stamp duty exemption for the transfer of any interest in property pursuant to your agreement.

Consent orders are often preferred over financial agreements, where a potential future breach of the terms of the agreement by one party is sensed as a serious likelihood by the other party. It is easier and less expensive to enforce compliance with consent orders than it is with financial agreements.

It is also often less expensive to both parties to formalise their agreement with consent orders, and consent orders are harder to set aside than a financial agreement.

I will explain both options to you further below:

Consent Orders

We will draft any agreement reached in the form of consent orders, and file those orders in the Family Court with an Application for consent orders. It will be necessary for both parties to sign. Your spouse will not need a lawyer (if he or she chooses not to) for this process.

If the consent orders contain a superannuation split, flag or otherwise impose an obligation on the trustee of a superannuation plan, we must first serve written notice of the terms of the order on the Trustee of the superannuation plan in which the interest is held.

After the application for consent orders is filed, a Registrar of the Family Court will consider the application. If the Registrar is satisfied that the orders should be made, the Registrar will sign the proposed orders and sealed copies will be sent to us. Your court appearance for this process is not required, as the Registrar will decide the application in chambers in the absence of the parties.

If the Registrar is not satisfied that it is just and equitable for the orders to be made on the information before the court, a notice will be sent to us with a brief explanation as to what further information or evidence is required.

It may be necessary for the application to be ultimately heard in court, however this generally only occurs in rare cases where the orders appear to be grossly unfair to one party.

In a best-case scenario, the Registrar will make the consent orders, and sealed copies will be returned to us within 1-3 months of filing.

Financial Agreement

It may be preferable or necessary to prepare a financial agreement in certain circumstances instead of consent orders. These circumstances include:

  1. where the parties cannot wait for consent orders to be made (a financial agreement is binding as soon as it is signed by both parties);
  2. if the property settlement is unfair to one party, or
  3. assets or businesses are to be continued be jointly owned by the parties.

If a financial agreement is preferred, then we will draw up the required agreement. Once the terms are approved by you, we will send it to your spouse (or their lawyer) to review and settle the terms by negotiation.

A financial agreement aims to oust (remove) the jurisdiction and power of the family law courts in relation to all financial matters to which the financial agreement applies. The financial agreement is not filed in the court.

The financial agreement can deal with all or some of your property, and spousal maintenance and superannuation.

To be binding the financial agreement:

  1. Must be in writing;
  2. Must specify which section of the Act it is made in accordance with;
  3. Must be signed by both of you;
  4. There must be a Statement of Independent Legal Advice for each of you from a qualified legal practitioner setting out the matters referred to in the Family Law Act (“the Act”), and confirming that the advice was given to you each before you signed the financial agreement;
  5. The Statements of Independent Legal Advice must be exchanged;
  6. One party will retain the original financial agreement and the other will be given a copy;
  7. There should have been full and frank disclosure of all financial matters between both of you (however this is not strictly necessary under the Act); and
  8. All of the technical requirements set out in the Act must be complied with.

A financial agreement is a complex and technical document and takes a lot of time to prepare. There are schedules with all assets and liabilities. A comprehensive letter of advice to you is also required.

Your spouse will need a solicitor to advise him or her on the financial agreement and sign a certificate of advice, otherwise it will not be binding.

If either of the parties breach a term of the financial agreement, the other party can apply to a family law court to enforce the financial agreement. If the financial agreement is held to be valid and enforceable, the court can enforce the terms of the financial agreement as though those terms were orders of the court.

The Advantages and Disadvantages of a Financial Agreement Compared with Court Orders

The advantages to you of making a financial agreement may be summarised as follows:

  • Entering into a financial agreement brings certainty to the outcome of the division of your property. This also applies to consent orders.
  • Entering into a financial agreement also brings certainty to the payment of spousal maintenance, and unlike consent orders made by the court, the spousal maintenance clauses in the financial agreement (if binding) can be used to resist an application being made to the court for spousal maintenance by either party in the future.
  • The terms of a financial agreement are generally not construed by the court to see if they are “fair” or “just and equitable”, unless they are grossly unfair to one party and that party was unduly influenced or coerced (forced) into signing the financial agreement by the other party directly or through some unconscionable (unreasonable or unacceptable) conduct, or duress.
  • Because the agreement is not filed in the court unless one party wants to enforce it or set it aside, the court does not have the opportunity to see if the financial agreement effects a “once and for all” division of assets. A financial agreement therefore gives you more flexibility than a court order, as the court requires a final division of the party’s assets and looks to sever all financial ties between the parties.
  • You will avoid the costs of protracted court litigation over a property settlement following separation, which in some instances can cost up to $120,000 (or more).

The disadvantages of making a financial agreement or consent orders include:

  • You are contracting out of your right to have a court determine a just and equitable division of your assets and assess your entitlement to property and/or spousal maintenance following separation;
  • The terms of the financial agreement might not be within the range of your likely entitlement, depending on the date of separation, your future needs at the time, the size of the asset pool at that time, and the contributions (both financial and non-financial) that you have made. At least with consent orders you have the security of a court registrar reviewing the terms and being satisfied that they are within your likely range of entitlements.
  • Financial agreements are able to be set aside by a court if they are not drafted and executed in compliance with the Act, and for a number of other reasons including non-disclosure of a substantial asset, fraud, undue influence, unconscionable conduct, duress, mistake and where it is no longer possible or it is impracticable to carry out the terms of the financial agreement.

For any further advice and assistance with your family law property settlement matter, or which is the best way to proceed when you have reached an agreement, please contact our family law team at OMB.

Are You Covered if Your Airbnb Guests Injures Themselves?

By | Articles, Insurance

This is the first question that you should ask yourself if you are considering renting your property on Airbnb.

Are you renting your whole house or unit on Airbnb or perhaps just renting out a room?  Have you got the right cover? What will happen if one of your guests injures themselves or worse still, dies due to a fault with your property?

If you think your home building and contents insurance will cover you in the event of an accident, you may be in for a rude shock.  Household insurance will generally only cover you for non-commercial activities.

If you rent your property on a one-off basis then your home insurer may allow this if you inform them prior or they may allow it and you will have to purchase a specific endorsement so that you are adequately covered.

If you are regularly renting your whole property out on Airbnb or regularly renting out a room of your property, then this will be deemed to be commercial activity or business activity and your home insurance will not cover you. If someone injures themselves in your property due to your negligence you could be up for hundreds of thousands of dollars or more in compensation. This would financially ruin most people, but it is completely avoidable with the right insurance cover in place.

Landlord insurance policies are available and may offer broader cover than short term policies, but beware, they may only cover you for long term rentals. Check with your insurer rather than take a ‘she’ll be right’ attitude and end up losing all your assets.

There are specific insurance policies available for short term rentals and Airbnb offer their own insurance. IAG also offer a policy but you should ensure that whatever policy you choose, it is right for your circumstances.

You should check what the policy covers you for and what exclusions are applicable. Some things that you should make sure are included are as follows:

  • Theft of items in your home;
  • Damage to your home;
  • Personal liability in the event of injury or death to your guests; and
  • Identity theft.

You should look carefully at the exclusions and limits on the amount payable in certain categories of coverage. If loss of rent if your guests cancel or cut short their stay are important to you, you should note that most short term stay policies don’t cover this. You may have to pay for an extension to your policy to cover this.

The bottom line is, do your research and insure yourself properly. Be open and honest with your insurer. Then, if the worst happens your insurer can deal with the claim and you can rest assured that you are protected.

The Importance of an Up To Date Enduring Power Of Attorney

By | Articles, Wills and Estates

What happens if you are outside the country and you need someone to urgently act on your behalf, or are incapacitated and unable to make decisions for yourself?

An Enduring Power of Attorney (EPOA) is the legal document which appoints someone (known as your Attorney) to make these decisions on your behalf. An EPOA can also appoint more than one person – either severally, jointly or unanimously. An Attorney can be appointed in two ways – to handle your financial matters, to handle your personal health matters or to handle both (recommended). The ‘enduring’ nature of an EPOA means that it continues in the event you lose capacity to make decisions for yourself.

You can nominate when your Attorney’s power for financial matters begins. For example, you may wish for it to begin immediately upon you signing the EPOA or at a nominated date (for example, if you were travelling overseas) or not until a specified occasion, such as when you were certified by a medical practitioner in being incapable of handling your own financial affairs.

Your Attorney’s power regarding your personal/health matters begins only when you are incapable of making those decisions for yourself.

An EPOA could prove invaluable if you are outside the country and require a document to be executed as a matter of urgency (contracts of sale, transfer documents etc.).

On the other hand, what happens if you have previously appointed someone as your Attorney and they are no longer able to act, or you have lost faith in them acting in your best interests (divorce, estrangement etc.)?

The consequences of not having an EPOA, or not having an up-to-date EPOA, can be far-reaching because this could involve you missing an important deadline, or decisions being made on your behalf by persons who you would not otherwise appoint.

Up-to-date EPOA’s are not just reassuring; it is the one document that provides YOU with the legal authority to appoint someone to act in your best interests and protect your financial interests and personal health matters.

If you are incapable of making your own decisions and do not have an EPOA, or your appointed attorney is not willing to act on your behalf, your family will likely be forced into costly and time-consuming delays.

An application to the Guardian and Administration Tribunal (GAAT) may be required for the appointment of your Attorney (known as your Administrator). If an agreement between the parties cannot be reached, the GAAT may appoint the Public Trustee to handle your financial affairs or the office of the Adult Guardian for your personal/health matters.

This predicament is easily overcome by preparing a simple EPOA and ensuring it remains up-to-date.

We strongly recommend that you prepare, or update, your EPOA as part of your Estate Planning review.  We welcome you to contact our experienced team on (07) 5555 0000 to discuss your EPOA and other estate planning matters.

Gold Coast Lawyers

Benefits of Mediation

By | Articles, Ligitation

Litigation can be inherently uncertain, time consuming and expensive. This is fundamentally why the majority of disputes that come across our desk are resolved out of court.

Parties are encouraged to participate in Alternative Dispute Resolution (“ADR“) in all jurisdictions in Australia. However, the type of ADR process used will differ depending on the nature and circumstances of the dispute. These processes can include Conciliation, Settlement Conferences, Arbitration or Mediation.

Whilst there are some matters that can only be resolved by determination at trial, if the parties can assess the value of what they are fighting for and weigh this up against the costs of going to trial, a resolution at Mediation will save on time, money, opportunity and emotion.

Mediate as a preferred Alternative Dispute Resolution Process?

Mediation is a common process used for settling disputes with the assistant of an impartial third party, ‘the Mediator’. It allows the parties to flesh out the real issues in dispute and to encourage the parties to compromise on certain matters in order to achieve an outcome.

Parties can mutually agree to participate in Mediation or, otherwise, in some instances, are ordered to participate by the Court.

Mediation can occur at any stage of the proceedings but the earlier the better, before the costs start to escalate and your wallet starts to hurt.

Benefits of Mediation

The five major benefits of participating in a Mediation are:

  1. Controlling the outcome

At mediation both parties will have an opportunity to have a say and agree on an outcome that they would be prepared to walk away with.

The parties can also agree to specific terms and releases which mutually benefit one another.

  1. No winner no loser

Mediation is likely the last opportunity for the parties to resolve the dispute prior to a final hearing. Once a final order is made there will only be one satisfied party, the successful one.

A resolution at Mediation will result in a mutually beneficial outcome without necessarily one party being more out of pocket more than the other (depending on the terms of settlement).

  1. Confidential

Mediations are conducted on a without prejudice basis which allows the parties to discuss matters openly and without pressure of offers being used against them at a final hearing.

Further, unlike the potential publicity of court proceedings, everything said at the mediation is entirely confidential to the parties (unless specifically agreed otherwise).

  1. Tying in other matters not subject of the proceedings

Mediation allows the parties to vent all issues, including issues which may not be particularly relevant or pleaded in one’s claim.

It also provides an opportunity for apologies, statements of regret, acknowledgements and confidentiality clauses to be included in the settlement which is more than what a hearing could provide.

  1. Saving money, time and stress of going to trial.

These benefits speak for themselves.

Gold Coast Lawyers at OMB Solicitors can assist you in resolving your dispute in a commercial and timely manner. We provide tailored advice to client’s based on the individual circumstances of the case.

If you wish to talk to a member of our litigation and dispute resolution team, please do not hesitate to contact us today for a free telephone consultation – Phone 07 5555 0000.

divorce Lawyers gold coast

How Do I Apply for a Divorce?

By | Articles, Family Law

Divorces can be an emotionally tough time for both partners, as well as affected third parties such as children, parents, in-laws and even friends. Unfortunately, divorces can also be a lengthy and tiring process.

Eligibility for divorce

Before a spouse can apply for a divorce, there are specific eligibility requirements that must be met. Either spouse must have been born in Australia or be an Australian citizen by grant or descent. They must otherwise be lawfully present in Australia and intend to continue live in Australia and have been in Australia for a period of at least 12 months.

The marriage between the spouses must be ‘broken down irretrievably’ and the applying spouse must consider that there is no reasonable likelihood of reconciliation and resumption. The spouses must also have been separated for at least 12 months and one day.

If the spouses have been married for less than two years, evidence of a counselling certificate, or evidence saying why this could not be provided, must also be filed.

If the spouses have, at any time, lived with one another during the 12-month period, extra evidence will need to be given to prove that there has been a change in the marriage.

Initiating an application

Once these requirements are met, an Application for Divorce form must be completed, either joint or sole. The application will be joint if both spouses involved in the divorce wish to mutually make the application. If the application is sole, one spouse is making the application and the other spouse is the respondent. The application must then be sworn or affirmed in the presence of a lawyer, a Justice of the Peace, or another who is authorised to witness your signature on the document.

It is advisable that the laws governing the State or Territory in which the application is being made are reviewed, to determine that the witness of the document is authorised to do so. If the applicant is overseas at the time he or she wishes to have the document witnessed, the document can be witnessed by Notary Public, an Australian Diplomatic Officer or Australian Consular Officer, or an employee of the Australian Trade Commission.

Filing and serving documents

Once the application has been completed, the past procedure was to the mail the application to the Family Law Registry along with two photocopies of the document and also a photocopy of your marriage certificate (though this does not need to be sworn, affirmed or certified). Once the Family Law Registry received the application, the court would then file it, and forward sealed copies of the application with a file number, along with a time and date of the scheduled hearing.

However, as our firm is registered with the Family Court portal, we are able to file the application online, and we will obtain a hearing date at the time of fling. We then print sealed copies of the divorce application to serve (with an information brochure from the court) on the other spouse.

The application must be served to the other spouse either by mail or by a third party within a time period of 28 days before the scheduled hearing date, if the spouse lives in Australia, or 42 days if the spouse lives overseas. If the other spouse’s residential address is unknown, an order to either dispense with service or enable substituted service can be applied for by the applicant spouse.

With a joint application, there is no need for service as both parties are applying together for the divorce.

Costs to file for divorce

The average cost of the filing fee for a divorce application in the Federal Circuit Court is usually $900. If financial hardship is an issue, the spouse applying can also apply for a reduction in the filing fee. In this case, the spouse must provide to the Court specific documents such as Centrelink income statements, health care cards, earlier government grants such as Legal Aid, payments for Austudy, or evidence that the applying spouse is a prison inmate or held in legal detention (if that is the case).  This evidence would need to be provided by both spouses in a joint application, or solely by the spouse initiating the application if a sole applicant.

Children and previous names

If there are children of the marriage, the applying spouse must provide to the court the current particulars of the children and care arrangements. Children of the marriage include step, fostered, adopted or biological children, and the details for all such children must be included. This information would include whether the child or children were born before or after the separation, and/or whether the non-biological children were a part of the family before the separation. The particulars and arrangements of the children would include anything from where they primarily live; their contact with each parent or reasons explaining why contact is limited or no contact with a parent; which school they attend; any current arrangements involved, as well as their health.

The financial positions of each parent also must be provided to the court, and if applicable, details of non-provision of financial support by a parent. Additionally, if a spouse in the divorce has a different name to both the married or maiden name, an affidavit will need to be filed with the court, explaining the difference.

Granting of a divorce

Following the granting of a divorce, the divorce will take one month and one day to finalise unless the court makes a special order to shorten this time frame.

As described, a divorce is a long and tiring process, and legal assistance is advisable throughout the process.

Independent legal advice will assist a spouse to understand their rights and responsibilities, how the law both works and applies to their individual cases.

Please contact the Gold Coast Lawyers at OMB Solicitors for assistance and advise for divorce and any other family law issues that are causing you concern. There are often strict time limits involved to do certain acts and file certain documents, and failure to obtain legal advice is not an excuse readily accepted by the Court for missing these time limits.

What Happens in a Property Settlement Conference?

By | Articles, Family Law

One of the first things to become clear when you are going through separation and divorce is that there is a lot of confusing legal jargon. There are technical terms about the property, financial and even parenting matters that inevitably surface as your relationship officially ends. For example, you may have heard of a ‘Conciliation Conference’ but can be forgiven for not knowing exactly what that means.

Also known as a ‘Property Settlement Conference’, this is simply a meeting where you and your former spouse or partner have a chance to reach consensus about the distribution of your property before going to court.

Unfortunately, you cannot schedule this meeting yourselves. Instead, the Court will schedule it for you, though this will only happen if you have not resolved your differences during or following a preliminary meeting with a Registrar of the Family Court in what is called a ‘Case Assessment Conference’.

Preparing for the Property Settlement Conference

If you cannot resolve your disagreement during the Case Assessment Conference, the registrar will let you know what you must do prior to the Property Settlement/Conciliation Conference.

After the Case Assessment Conference, you will usually have 28 days to exchange relevant information following the Registrar’s instructions. Along with new material relevant to your case, this may also include documents that were not shared prior to the Case Assessment Conference. Here is what you will need:

  • Paperwork about any financial matters referenced in your respective financial statements;
  • proof of joint and individual financial contributions made when cohabitation began;
  • documentation of any inheritances, gifts or compensation payments received during cohabitation;
  • documentation about the purchase or sale of property in the year before or since the separation, and any increase or reduction of liabilities since separation;
  • detailed documents about superannuation.

Depending on the specific nature of your dispute, you may also need to complete a financial questionnaire and balance sheet as directed.

Within this context, it is crucial that you share all the facts and documents about any aspect of your application. Failure to do so can have grave consequences, including delays, added costs or even an order mandating that you pay any costs incurred by your former partner or spouse. At its discretion, the Court may also issue a greater order for a property settlement favouring the other person.

Understanding the process

Even with the proper legal, financial, and emotional support, preparing for a Property Settlement Conference can be stressful. But knowing what to expect at the meeting can help lessen your anxiety.

One of the first questions you may have is how long the meeting will take. The answer is based on the unique circumstances of your case, but you should be prepared to spend one to two hours in conference.

The meeting format depends upon the Registrar’s preferences. He or she will usually begin by speaking with each of your lawyers to confirm the specific nature of the disagreement. Based on this information and material submitted prior to the meeting, the Registrar will frame the ensuing conversation with your lawyers in a manner designed to achieve consensus. However, you should not be surprised if the Registrar also asks to speak with each of you directly.

You should be aware that in most cases, both you and your ex-partner or spouse must both attend this conference. If either you are worried about this for any reason, you should let your lawyer know so he or she can relay your concerns to the Registrar, who will make arrangements to address this issue.

You should also be aware that anything said during a Property Settlement Conference or Conciliation Conference is usually confidential. This means that you cannot refer to these conversations in any ensuing Court hearings if the matter is not resolved.

The three parts of the Property Settlement Conference

A Property Settlement or Conciliation Conference is usually a three-step process. These steps are the introduction, the settlement discussions, and the conclusion. Below is a simple description of each stage:

  • Introduction: The Registrar will explain the general format for the meeting and lead a brief discussion about any points of contention. He or she will also give guidance for ensuing negotiations based on the specific circumstances of your case.
  • Settlement discussions: This is when the Registrar will facilitate the actual conversation about how to resolve your disagreement(s).
  • Conclusion: At the end of the meeting, the Registrar summarises everything that has happened and reviews any agreements. If all the issues have been successfully addressed, your lawyer will put the agreement(s) in writing so that the Court can issue consent orders accordingly.

What if we still do not agree?

In a perfect world, everything will settle at the Property Settlement or Conciliation Conference. If not, the only alternative is court intervention. In this case, you will have to attend a pre-hearing conference, which is usually held within six to 12 months, and a pre-trial conference.

You should be aware that you and your former partner or spouse (and your lawyers) can keep trying to reach a settlement until the final hearing. If you still have not been able to resolve the issues by that time, the Court will evaluate all relevant material and testimony. After it does so, it will issue an immediate ruling or announcement that it will issue its decision later.

If you and your partner and spouse are going through separation or divorce and cannot agree on property, financial or parenting matters, it is essential to get the proper legal advice. Contact our Gold Coast Lawyers today.

Gold Coast Lawyers

Am I in a De Facto Relationship or Not?

By | Articles, Family Law

Bob and Betty have both had terrible experiences in property settlement matters with their prior spouses. They are now in their 50’s and have been ‘going out’ for about 8 years. They have both sworn that they will never get involved in a de facto relationship or marriage again!

The facts

Bob and Betty do not live together. They have their own separate houses over an hour’s travel apart, and Betty still has 2 adult children from her earlier relationship still living with her.

They see each other 3 weekends a month. On 2 of those weekends Bob stays at Betty’s house for the weekend (2 nights) and on another weekend Betty similarly comes to stay with Bob. The reaming weekend they each stay at their respective homes and do not see each other. They ring each other once or twice during the week.

Bob and Betty do not have any joint accounts, nor do they share finances. They have their own assets and liabilities and do now own anything jointly. They have separate credit cards and neither of them is authorised to use the others card.

When they go out to dinner together, Bob, being the gentleman that he is, usually pays. They regularly go on overseas holidays together and pay their own way, though Bob again will pay for meals and drinks.

They have a sexual relationship but have no children together.

They are known as a couple to close friends and family, and when they are out together in public on weekends or on holidays they would be seen as a couple. However, on all other occasions during the week and on one weekend a month, they will be seen living their own separate lives, paying their own bills, buying their own groceries, doing their own washing, and cleaning, and maintaining their own homes, gardens, and lawns.

On the weekends that they are at either party’s property, they both make contributions to their food, groceries, and cleaning. Bob will ‘wipper snip’ while Betty is on the ride on mower, and so on. They both shared in the repainting the inside of Betty’s house.

Have Bob and Betty fallen into the trap. Are they in a de facto relationship, even though they do not live together?

What constitutes a de facto relationship?

Every person’s circumstances will be different to that of Bob and Betty, and each case will be decided by scrutinising all aspects of each relationship.

The Family Law Act 1975 (“the Act”) is a Commonwealth Act, so the same de facto laws apply throughout Australia. The Act deals with what factors a court must consider when deciding if a de facto relationship exists or not.

If (god forbid) Bob and Betty broke up, and Betty ‘turned nasty’ and wanted to file proceedings in the court for a property settlement alleging a de facto relationship, she would have to satisfy the Court that all the following circumstances exit:

  1. That she was in a genuine de facto relationship with Bob, which has broken down irretrievably; (can Betty prove this?)
  2. That the relationship meets one of the following four gateway criteria:
    1. That the period for the de facto relationship is at least 2 years (Betty could show this);
    2. That there is a child of the de facto relationship (not applicable in Betty’s case);
    3. That the relationship is or was registered under a prescribed law of a State or Territory (again not applicable in Betty’s case); or
    4. When assessing property or custodial claims in cases of a breakdown of a relationship, it is recognised that significant contributions were being made by one party and the failure to issue an order would result in a serious injustice (it would appear that neither Bob nor Betty made a significant financial or non-financial contribution that deserves an adjustment to solve any injustice).
  3. That Bob and Betty have a geographical connection to a participating jurisdiction (both Bob and Betty are Australian citizens and live in Queensland, so this is satisfied);
  4. That their relationship broke down after 1 March 2009 (Bob and Betty only recently separated, so this requirement is satisfied).

Having satisfied all the other gateway requirements, whether Betty is successful will depend upon her proving that they were in a genuine de facto relationship.

What makes a genuine defacto relationship?

In deciding whether Bob and Betty were in a genuine de facto relationship for the first gateway criteria, the court will have regard to the following matters.

Section 4AA of the Act defines a de facto relationship. The Act requires that Bob and Betty must have had a relationship as a couple living together on a genuine domestic basis for a defacto relationship to exist.

The Act then gives a list of factors to consider in deciding if Bob and Betty had a relationship as a couple living together on a genuine domestic basis.

Those factors are:

  • the duration of the relationship (8 years – this is good for Betty);
  • the nature and extent of common residence; (the parties lived separately and only spent holidays and 6 nights a month together – this is not good for Betty’s prospects);
  • whether a sexual relationship exists or existed (it did – again this good for Betty);
  • the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties; (Bob and Betty were financially independent of each other – this is not good for Betty);
  • the ownership, use and acquisition of their property (Bob and Betty did not buy any assets together, and they owned their own homes and vehicles. Again, this is not looking good for Betty);
  • the degree of mutual commitment to a shared life (this appeared to be in existence, however Bob says they were just taking one day at a time and if the relationship did not last, then so be it. Bob says Betty was of the same view, but non-surprisingly in her affidavit she claims that this commitment to a shared life existed. The Judge may need to decide based on credit, who is telling the truth in a “he said she said” argument, and objectively it is difficult to figure out from the facts, which are (like every case) so unique. Given that Betty has the onus of proving the facts I will give her a fail on being able to prove this joint commitment);
  • whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship (this relationship was not so registered, and this issue is really for same sex relationships before amendments were made to the Marriage Act to allow same sex couples to marry – this is not relevant to Bob and Betty who were very much male and female);
  • the care and support of children; (there are no children together, another blow for Betty) and;
  • the reputation and public aspects of the relationship (I will give this one to Betty because all their family and close friends knew them as a couple, and when in public together they acted as couple).

No one factor is more important than any other. However, the more factors from this list that Betty can prove will aid her in convincing the Court that there was a de facto relationship. Likewise, the more factors that Bob can disprove will help show that there was not a defacto relationship in existence.

Betty is looking good on 3 of the above factors (duration of relationship, a sexual relationship and public perceptions), however Bob is looking much better on 5 of the factors (no common residence, financially independent of each other, property ownership use and acquisition, no mutual commitment to a shared life, and no children together).

There is not a certain number of factors from the list that must exist (or not exist) for a defacto relationship to be proven (or disproved for the absence of a defacto relationship).

There is also no minimum number of nights that the parties must spend together in a common residence, nor is there a need for the parties to have actually lived together at all before a defacto relationship will be found to have existed.

The Family Law Act also recognises that a person who is married, may also possibly be in a defacto relationship with another person at the time. A person can also be in several de facto relationships at the same time if the test is satisfied for each of those relationships.

Does Betty succeed?

If I were acting for either Betty or Bob, I would be able to argue very strongly in either of their cases of the existence or non-existence of a defacto relationship. Who will win will depend on how the evidence falls at the hearing, matters of credit and what factors the Judge considers to be most important in deciding the matter one way of the other. Judges have very wide discretion in deciding these matters, one Judge might say there was a defacto relationship, while another Judge (or the Court of Appeal) may decide that there was not.

If I were a betting man, my money in this case would be on Bob, but I would not put too much money on the bet. This is close to a 50/50 chance. It could go either way.

If I were advising Betty or her prospects of success, I would be telling her that she has a compelling case, but I would be testing her to see if she accepts whether it is worth the risk. If Bob opposes the existence of a defacto relationship (which he will) Betty will have to pay significant legal costs that will be involved if the matter goes ahead all the way to a final hearing. She will need to weigh that up with the amount that she is looking for, and her prospects of success. The normal rule in family law cases is that each party pay their own legal fees.

If I were acting for Bob, again I would be telling him that he also has a compelling case. I would recommend that he strongly oppose Betty’s application on the basis that there was no defacto relationship and gather as much evidence as he can to support this conclusion.

Generally, matters like this will settle at mediation, with both parties accepting that going to Court will be expensive, taxing on their time and their emotions, and involves a serious risk that they each might fail.

Time limit to start proceedings for financial orders

If (despite her legal advice on costs and chances of success) Betty still wishes to try to obtain financial orders, and settlement of the matter at a mediation fails (neither Bob nor Betty will shift from their positions), then Betty must apply to the court within two (2) years of the breakdown of the defacto relationship. After that time, she would need the leave (permission) of the Court to apply, and the Court does not readily give that leave.

For all legal advice on property or parenting issues, please contact our Gold Coast Lawyers firm and make a free first appointment with Gary Mallett.

Gold Coast Lawyers

Duty of Disclosure in Family Law Matters

By | Articles, Family Law

Sometimes you simply must tell the truth, the whole truth and nothing but the truth. A lie by omission – something you do not mention when you should – is still a lie. Australian law dictates that people seeking resolution of certain issues related to separation or divorce must make certain information available to each other, and to the court. This is called the duty of disclosure.

When it applies

As stipulated in Family Law Rules 2004 (“the Rules”), the duty of disclosure applies to you when you are seeking resolution of financial matters in a separation or divorce. This means you must make certain information available to your former spouse or partner in property settlement, spousal maintenance, and similar cases.

You and your former spouse or partner must also exchange certain information when seeking resolution of parenting matters. This may include but is not limited to: living arrangements, visitation, and child support.

The timing and extent of disclosures

Legally, you must make “full and frank disclosure” of all information that has direct bearing on any point of contention in your case. In other words, you must give any pertinent material that you actually have, or that you have access to or authority over. And you must do so before the case goes to court.

It is best to be aware that both parties have this duty, and that it is ongoing. This means you must report any relevant changes – such as a job change or loss of employment – to the other person, and they must make similar information available to you. Your respective obligations to exchange pertinent information will not end until you reach an agreement, or the court issues a final order.

Finally, it is important to note that there are no legal stipulations about the way in which this material should be given, so it does not matter if you share electronic or paper records. The information you must give will also vary based on case type and your situation.

Your duty of disclosure in financial cases

In these cases, both of you must give comprehensive information about your respective financial circumstances. This usually means you must supply any or all the following:

  • Documents reflecting your regular earnings;
  • bank statements reflecting deposits and withdrawals from checking accounts, savings accounts and so on;
  • tax documents;
  • superannuation statements;
  • material documenting the valuation and appraisals of assets;
  • material about financial resources other than income, along with supporting documentation;
  • information about interests in any company and/or trust, along with supporting documentation;
  • information about any assets disposed of prior to and since separation.

Please bear in mind that this is not an exhaustive list, and you may need to give different and/or more material given that each case is unique.

Your duty of disclosure in parenting cases

In disputes over parenting matters, both of you must give information the court needs to make decisions about the care and living arrangements for a child. Specifically, you must supply any material relevant to the child’s welfare. As in financial cases, however, the type of information will depend on your unique circumstances.

The following is generally subject to disclosure in parenting cases:

  • The child’s (or children’s) school reports;
  • relevant assessments about the child/children and/or parents issued by doctors, psychiatrists, psychologists, social workers and so on;
  • information about the amount of time the parent spends at work;
  • information about the supervision of the child/children when they are not with you;
  • information about any issues that affect each parent’s ability to care for the child, such as substance abuse, mental illness, or chronic medical conditions;
  • official documents about any family violence, including intervention orders, police reports or relevant statutory body reports.

Penalties for noncompliance and dishonesty

Rule 13.01 of Family Law Rules allows the court to disregard any material that has not been fully and properly disclosed in finance cases. If you do not fulfill your duty of disclosure, the Court may also be reprimand you for contempt of court.

At its discretion, the court may also issue a costs order against you for failure to meet this obligation fully and truthfully. If it does, you will have to pay not only your own legal costs but also those incurred by your former spouse or partner. In the most drastic cases, you may be fined or incarcerated.

If either one of you finds out that the other failed to fulfill the duty of disclosure prior to the issuance of family law final orders, the aggrieved person can ask the court to change the order or set it aside. The court may also vacate or amend a final family law order if either of you have not fulfilled your duty of disclosure before it is issued.

As we have noted, each case is different. If you are going through separation and divorce, and you have questions about the type of information you have to disclose, contact our Gold Coast Lawyers today.

Gold Coast Lawyers

New Changes To The Family Law Court System

By | Articles, Family Law

Clarifying Binding Death Nominations in Superannuation

Re Narumon Pty Ltd [2018] QSC 185

A recent decision in the Queensland Supreme Court, Narumon, emphasizes the importance of a valid Binding Death Benefit Nomination (BDBN) within superannuation funds and clarified whether an attorney has the ability to renew BDBN’s.

Summary: In Narumon, the deceased (Mr. Giles) was the sole member of the John Giles Superannuation Fund. Mr. Giles appointed his wife (Mrs. Giles) and his sister (Mrs. Keenan) as his attorneys under an enduring power of attorney (EPOA) for financial and personal/health matters. His attorneys were to begin making financial decisions on his behalf when Mr. Giles had been determined incapable of making his own decisions. In November of 2013, that very situation occurred and Mr. Giles was declared completely incapable of making his own financial, health, and lifestyle decisions. From then on, his wife and sister were authorised to act as attorneys on his behalf.

Mr. Giles made several BDBNs before he lost capacity. The most recently created BDBN was on the 5th of June 2013, which directed his attorneys to distribute his superannuation death benefits, a portion of which were obviously left to his wife and sister, who just so happened to also be acting as his attorneys. Additionally, 5% of Mr. Giles’ death benefits were to be paid to a non-dependent and non-legal representative. The 2013 BDBN stated that three years after the date it was signed, it would cease to have effect and must be signed within three years of the member’s death.

Issue: 5% benefit to non-dependant and non-legal representative

In order to ensure that the 2013 BDBN and its extension were valid, Mrs. Giles and Mrs. Keenan decided to change the 5% nomination to a non-dependant and distribute it between the dependant’s already nominated. The court, however, confirmed that the original 2013 BDBN was valid, despite the 5% nomination to a non-dependant. The reallocation was found to be a conflict of interest and, since there was no explicit language in the BDBN allowing such a conflict, the new BDBN would not be valid.

Issue: May an attorney make a BDBN?

The court held that, yes, an attorney has the power to make a BDBN on a member’s behalf. His Honour looked closely at the language of the deed. The deed did not prohibit such an act. In fact, another section expressly stated that an attorney would enjoy all of the rights that a member would have. Since there was no restriction under the Superannuation Industry (Supervision) Act of 1993 preventing an attorney from making a nomination, there was nothing to prevent Mr. Giles’ attorneys from making a nomination on his behalf.

Issue: Validity of the 2013 Binding Death Benefit Notice

The issue in question was whether or not Mrs. Giles and Mrs. Keenan would be allowed to renew the 2013 BDBN or make a new one, despite also being recipients. The Court considered whether or not there was a conflict created by the dual interests of Mr. Giles’ attorneys. In the end, the judge ruled that there was no conflict created.

The judge reasoned that because they were merely confirming existing estate planning intentions, there was no conflict. However, it is unclear whether making one from scratch would also be allowed or if that would be considered a conflict. Therefore, it is clear that the individual circumstances for each case will need to be considered in determining whether or not a BDBN renewal is likely to be valid.

This is the first time it’s been considered as far as I’m aware of, that an attorney subject to the trustees of the super fund is able to renew a binding death benefit nomination for the person for whom they are the attorney,” said Scott Hay-Bartlem of Cooper Grace Ward Lawyers after the judgement.

Gold Coast Lawyers

Your Business Your Dream

By | Articles, Business Law

Buying or selling a business can be a stressful time. Your business is often your dream and the motivation and income source for your family.

But the process of buying or selling a business can be difficult and requires expert assistance.

Step One

Investigate the business that you are thinking of buying. Do your due diligence.

Step Two

Seek expert legal advice to draw up the contract. This is a critical stage as the contract will set out the essential terms of the purchase and sale. Is the contract subject to finance, verification by your accountant of the financial records or the assignment of the lease of the premises? Are there licences or approvals that are required to run the business, will there be a restraint on the seller or its entities conducting a similar business for a time in a certain area? Are there staff required to remain in the business and on what basis will they be offered employment? This is vital and your legal representative should be able to draft a contract that protects you and ensures that you will only be buying a business on the terms that suit you. Drafting of these conditions is an important task and the detail is often critical.

Step Three

Once the contract is negotiated and signed it is time to satisfy those conditions, get your finance, check the financials and obtain the landlords consent to assign the lease or grant a fresh one. Again the documentation here is vital and it is important that you and your lawyer communicate clearly.

Step Four

So the conditions have been approved and it is time for settlement. Your lawyer will have conducted the necessary searches and from these it will be clear what adjustments need to be made at settlement. Documents need to be checked and liaising with your bank regarding finance. Settlement will need to be coordinated with the seller and their financier, the landlord, and the buyer’s financier so that all parties are satisfied to proceed. It is essential for all parties that these matters follow the correct procedure as the buyer wants to ensure they take over the business with all items in place to continue its operation without any impediments or debts. The seller needs to be sure that upon the completion they receive their money for the sale and have been released from all liabilities, including personal guarantees of the business moving forward.

Step Five

Once settlement has been effected your lawyer should attend to any loose ends which require attending to including lodgement of forms, registration of transfers, releases or any other items to perfect the completion and transfer ownership to the buyer and away from the seller.

Whilst the exact process varies from transaction to transaction the skill and knowledge of your legal expert should be relied upon to ensure the transaction proceeds.

Gold Coast Lawyers At OMB Solicitors our expert team can ensure that your purchase or sale is handled in the most professional and competent manner with a common sense approach to the transaction having regard an understanding to your business needs

recovering costs family law lawyers gold coast

Can I Recover My Costs in Family Law Proceedings?

By | Family Law, Podcasts

In this podcast, OMB Solicitors, Family Lawyer, Gary Mallett answers the commonly asked question, as to whether costs can be recovered in family law matters.

What is the General Rule About Costs in Family Law Matters 

S.117 of the Family Law Act 1975 provides that each party to proceedings under this Act shall bear his or her own costs, subject to a few exceptions. In other words, the general rule in Family Law is that each party will have to pay for the costs of their own legal representation and should not expect to be able to recover any part of those costs from the other party.

Subsection 2 then goes on provide that if the court believes there are circumstances that justify doing so, the Court may make such order as to costs as the Court considers just.

What Matters do the Court Consider in deciding if it is “just” to depart from the general rule?

The Family Law Act provides that in considering what order if any should be made with respect to costs, departing from the general rule, the Court shall have regard to:

  • The Financial Circumstances of each of the parties to the proceedings;
  • Whether any party to the proceedings receives assistance by way of legal aid and if so, the terms of the grant of that assistance;
  • The conduct of the parties to the proceedings in relation to pleadings discovery and inspection and directions to answer questions, admissions of fact, production of documents and similar matters;
  • Whether the proceedings were necessitated by the failure of the party to the proceedings to comply with previous orders of the Court;
  • Whether any party to the proceeding has been wholly unsuccessful in the proceedings;
  • Where either party to the proceeding has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
  • Such other matters as the Court considers relevant.

So, if I make an Offer to Settle and I beat that Offer at the Hearing, will I receive a Costs Order?

The purpose of the Court enquiring as to whether any offers to settle have been made in considering cost orders, is to ensure that offers to settle are considered seriously by both parties, to minimize the cost of litigation and reduce the workload of the over loaded Family Law Courts.

The Court also tries to eliminate any injustice that may occur if a financially stronger party is placed in a position where they can drag out the proceedings, mounting up costs and wearing out the other party.

The Court will consider the actual terms of the offer and possible outcomes of a settlement resulting from acceptance of that offer.  A comparison will then be made to determine if acceptance of the offer would have resulted in a greater share of the assets to a party than what was ordered by the Court to that party at final hearing. If the comparison shows that the party would have been better off accepting the offer, then the court may make a costs order against the party who declined the offer.

As an example, in one case I was recently involved in, the Husband made an offer to the Wife before legal proceedings were even commenced that she have 65% of the property pool. The Wife rejected that offer. The matter went to trial and the Wife was awarded 62% of the property pool. The Husband had beaten his offer at the trial. Acceptance of the offer by the Wife would have given the Wife a greater share of the matrimonial pool then she was given at a final hearing, some two and a half years later.

The Wife would also have saved herself the significant legal costs, time, and the trauma of years of Court litigation, where all both parties’ dirty laundry is aired, and the property pool gets eaten away by legal costs, experts’ costs, barristers’ fees, mediator’s costs and other expenses.

The Husband applied to the Court for a costs order to recover his legal party and party costs on the applicable Court scale from the Wife, from the time the offer was made until the time of the final hearing.

As the Husband found out, the granting of a costs order to him because he had beaten his offer was not a guaranteed certainty. The Judge also looked at all the other matters required to be considered in deciding a costs order, to satisfy the Judge that it was just for her to use her discretion and part from the general rule.

The Judge noted the offer that was made and agreed that the husband had beaten it. However, the Judge went on to consider the parties conduct during the case. She noted that the Husband failed to comply on numerous occasions with his obligations to disclose documents, which resulted in lengthy delays and a waste of the Courts time and resources. The Judge further took serious note of the fact that the Husband had even breached The Judge’s own Court Orders for the Husband to disclose documents. Judges do not take lightly to their Court Orders not being complied with.

The Judge considered that the Husband’s conduct outweighed the effect of the Husband beating the initial offer that he had made.

The cost order was refused, and each party was ordered to pay their own costs.

If I am awarded a Costs Order, Can I recover all my Legal Costs?

If a standard costs order on what’s known as a party and party basis is made in your favour, you will not recover all your legal costs.  You will only recover the costs for certain items of legal work on a scale prescribed by either the Family Court Rules or the Federal Circuit Court Rules.

Depending on how much your Lawyer has charged you, and what hourly rate you have been paying, often parties end up recovering less than 50% of their total legal fees on a party and party costs assessment.

However, if the Court goes one step further and considers that the justice of the case warrants an order that that the costs to be paid to the winning party by the losing party should paid on an “indemnity basis”, then all reasonably incurred costs by the winning party will be paid by losing party.

In determining whether the justice of the case demands indemnity costs, the court will consider the following:

  1. if a party, properly advised, should have known that they had no chance of success in their proceedings, then indemnity costs might be appropriate.
  2. If a party has knowingly made false allegations of fraud or irrelevant allegations of fraud during the proceedings, then an indemnity costs order should be considered. So be very careful when making allegations that the other party has been fraudulent (e.g. defrauded the government, forged a signature etc.) If these allegations are irrelevant to the case or are found to be untrue or have no substance, then you may find yourself looking down the barrel of an indemnity costs order.
  3. And finally if a party has conducted themselves in such a way that they wasted the time of the court and the other parties, or made allegations which should never have been made, or prolonged a case by groundless contentions or imprudently refused to offer to compromise or, consistently failed to comply with the Orders of the Court, indemnity costs order might be appropriate.

So, If the general rule is that each party pay their own costs, why do Solicitor’s letters always threaten to seek costs on an indemnity basis?

Occasionally it may be appropriate for lawyers to threaten to apply the Court for cost orders against the other party on the indemnity basis if their client’s demands are not met or orders are not complied with, but only where the justice of the case suggests that such a costs order might be made.

However, on most occasions when lawyers threaten the other party with cost orders, those threats are in reality ’empty threats’ and are generally made as a strategy to unsettle and intimidate the other party.

If in the context of family law proceedings, if you receive a letter from another Lawyer making certain requests or demands and then threatening to seek a costs order against you, you should immediately obtain our Gold Coast Lawyers legal advice. Often, the costs threat will be a bluff, however, it might not be, and we can advise you when it should be taken seriously, and how to respond.

recovering debt business lawyers gold coast

How Your Business Can Recover Debt if You Have Received a Court Judgement

By | Business Law, Podcasts

If you’re a business and you’re owed money and have received a court judgement to recover the debt, what are the next steps? In this podcast, Cameron Marshall, Business Lawyer Gold Coast of OMB Solicitors sets out the ways your business can recover the debt.

Dan:  Cameron, where does a business start to recover this debt?

Cameron:  Yes well that’s a good question. The first place to start is if we’re dealing with the civil courts in Queensland, the uniform civil procedure rules as they’re usually the best place to start. Now I’ll just talk about an individual today, but these can also apply to some, in some cases, corporations. So the first thing you’d be looking at is to enforce the judgement, which you would have, in the courts in the uniform civil procedure. So that’s after the judgment’s been given, and you make an application to the court.

Cameron:  Usually the first step is what they call an enforcement hearing. Now that’s really a process just to ascertain what the debtor might has to do to pay your debt. So that’s a very important thing to start off with. So you can show up and you know which actual tool that you wish to use to be able to get your money back.

Dan:   So Cameron is the fact that the the court judgment’s been done and dusted, is that sort of half the battle won?

Cameron: Oh definitely, that’s in some cases the easy part. We have a famous saying, you can’t get blood out of stone, but people don’t like paying money and a lot of the time you’ve got to drag them to make them pay, and the way to do that is through the recovery process. So yes.

Dan:  Right okay so the person’s got the court judgement . Now practically what is the next step? So are they sending out a letter to the person who owes them the money or what happens?

Cameron: So we’ll just look at the Uniform Civil Procedure Rules procedures at this stage. So what the first thing you would do is what they call a Form 71, which is a statement of financial affairs or financial position, and you send that out to your debtor. Hopefully if they’re a good and honest debtor they’ll fill it out to the best of their ability and swear what assets they have. If they do that you can then take the next step of deciding how to enforce it if they don’t pay.

Cameron:  But if they don’t return that you then make an application to the court. It’s fairly straightforward, however you need to know what you’re doing, and I’d of course advise you see a solicitor to do it.

Cameron: Now what that effectively does is allow you to decide the best way and the best angle to get try and get your money back. If they don’t turn up, you can apply to the court and have an enforcement warrant issued. Now I’ve done that a few times unfortunately, where the enforcement warrant’s issued, and in those unfortunate cases the police actually go and drag the debtor back before the court, so they’re required to answer the questions that you require of them. So it is a tool that’s used often, and it is useful because it allows you to identify what money that there is.

Cameron:  Now once you’ve got that and you know what their financial position, you can go to the next step and try and enforce the debt. Now if they’ve got personal property or real property, which is land, you can get what they call an enforcement warrant in seizure and sale. And that will allow the bailiff to attend the property and obtain certain items, depending on what they are. There are some excluded items under the Bankruptcy Act. And he can sell them and you can get the money through that.

Cameron: Another good way is garnishing wages if the person is an income owner, PAYG earner, you can make application to the court to have their wages each week garnished and they can pay you. There’s also another useful one which I use quite often, is unfortunately I get the bank details and if they’ve got sufficient money in the bank that you can redirect the debt from the bank straight to you. But the one thing with those orders as well as the garnishing orders, you need to do attend to the enforcement hearings so you are not unfairly or harshly treating the debtor, so you’re not putting him or her into a point of destitution. So that’s one of the things that the court will need you to satisfy.

Dan:   Now Cameron, you’ve got the judgement , is there like a certain timeframe that you need to recover the debt?

Cameron:  Yes it does expire. It technically expires after six years but my advice is as soon as you’ve got that judgement  you need to act on it sooner than later. The longer you leave it the less chance you’re ever gonna get paid. If it goes beyond the six years you have to ask the court and show the court why you didn’t enforce it previously. So yeah.

Dan:  And what about legal costs to do so? So for example if somebody is owed a debt they’ve got the judgement  and now they’ve taken heed of what you’ve said about getting some legal advice and help with this. Is there any chance that they can recover some of the legal costs on top of that debt?

Cameron: Yes it’s fairly procedural. As opposed to the legal steps that are required to get a judgement of going to trial et cetera which are very technical, the steps of enforcing a judgement  are often more procedural. Now the court scales do allow you to add those costs into the recoverable amount that you’ll be seeking to be paid. And because they’re more procedural in nature then they generally are closer to the actual scale cost, the cost that you pay, and you can be paid them as well. They increase the debt that’s owed to you and is of course recoverable. You’re also allowed interest as well, that continues to be applicable under the various legislation.

Dan:  You’d have to have rocks in your head not to seek legal help and representation in this respect, given that you’re gonna recover the costs anyway.

Cameron:  Yes 100% because they can be very particular. A lot of the time they’ll require what they call personal service, a lot of these documents, and the courts are very stringent in the procedural application of it. So unfortunately if you make a little mistake in one of the forms or something like that which looks fairly insignificant, the magistrates or the registrars can sometimes or often refuse to allow you to take the next step, because the step … what you’re asking the court to do is basically sell someone’s assets and they take that very seriously. So you should get legal advice, yes.

Dan: Cameron, thanks for joining me.

Cameron:  No worries, thank you.

body corporate question at Gold Coast Lawyers

Common Body Corporate Questions Answered

By | Body Corporate, Podcasts

In this podcast, OMB Solicitors Partner, Juliette Nairn answers some commonly asked questions by bodies corporate.

Dan: The first question we have here is, in the event that an owner is requiring a copy of the body corporate roll, does the body corporate have to release all the information or just their name and address, or is there a privacy issue that might apply in this circumstance?

Juliette: Dan that is a great question. It is a question, which we often get, whether it’s from a lot owner, committee members or a body corporate manager. When I’m a lot owner and I write in and put my information on the body corporate roll or sometimes it’s called, The Strata Roll, all of that information is capable of being disclosed to anyone who pays the application fee to get that information. So if I’m a lot owner or a potential purchaser, the privacy rules don’t apply with respect to that information.

Juliette: So if I have my full name, my personal home address, a PO Box address, an email address or any other information like a mobile phone number, then all of that information must be disclosed as part of the body corporate roll. There’s actually quite a number of adjudicator’s decisions from the Commissioner’s Office which deal with exactly that point because people don’t want their mobile numbers being disclosed.

Juliette: It’s important at an early stage, if you’re a lot owner who doesn’t want that information to be disclosed, then you just put the minimal amount of information on so it’s included on the Strata Roll in that way.

Dan:  Tremendous. Okay. Next question, which at sort of first blush might seem fairly remedial but I’m assuming also a commonly asked question and that is, can a body corporate charge GST on any fees payable to them?

Juliette: You would think that, that is actually quite an easy or straightforward question but the answer can be quite complicated depending on the size of your body corporate as well. The starting point is, there are some fees that are actually contained in the regulation. So for example, like we were talking about the body corporate roll before, if I’m a lot owner and I would like a copy of the body corporate roll, my only obligation and all that the body corporate can charge me is the photocopying fee for that body corporate roll because I’ve asked for a copy of that document.

Juliette: If I’m in a small Strata scheme that only has six lots, then it may not fall within that component of having a GST and that GST service fee charged to it. The majority of the body corporate fees actually don’t have a GST component but if you are in a very large body corporate such as Q1, then you might find that there may be GST component payable and it also depends sometimes on whether the lots an investment property and how the lot is structured.

Juliette: So the question can actually become quite complicated … well the answer can actually become quite complicated when we talk about GST and normally we refer those types of questions to our accountants depending on the individual lot owner but the general answer is, most body corporate fees do not have a GST component.

Dan: Now the next question which I’m assuming is relatively common and that is, how should body’s corporate respond to tenants who contact them about breaches of bylaws and maintenance issues?

Juliette: Dan that’s a really interesting question as well because particularly from a committee member or a body corporate manager’s point of view, there was always a view held that unless you’re an actual lot owner within the body corporate, you’re not entitled to receive information about the body corporate. That view has been around for a long, long time but it’s actually an incorrect view.

Juliette: As a tenant, I’m considered an occupier within a Strata scheme within a body corporate, and as an occupier all the bylaws apply to me and all the rules and regulations apply to me as well. So if I would like information from a body corporate, then I have a right as a tenant being an occupier to call a committee member or go through the normal communication channels to obtain that information.

Dan:  Okay the next question is, the body corporate committee wants to call an emergency general meeting, now can it conduct what’s called the EGM by a postal vote?

Juliette:  In most circumstances we only have on,e general meeting of a body corporate and it’s called, Our Annual General Meeting, and that’s the meeting where the majority of the lot owners go to because they’re going to vote on the next financial year of the body corporate. What amount of money do we need to raise for a budget, are we going to paint the building, what levies are going to paid during the year, all those normal body corporate questions that occur during a financial year of a body corporate.

Juliette: However, sometimes an emergency arises and an emergency might be a hole in one of the body corporate roofs, a water penetration issue, a burst pipe, electricity, so a failure of a utility of the structure, those sorts of issues and we may not have enough money in the body corporate to be able to pay to fix that type of problem. Normally what would happen is, we would get quotes together on behalf of a body corporate or the body corporate committee would go out and seek those quotes from different contractors and then motions would need to be put forward and the committee would request the holding of an extraordinary general meeting.

Juliette:  An extraordinary general meeting is required to give 21 days notice. So it’s 21 days formal notice, plus usually add on another seven days for a postal rule. So normally 28 days is the total amount of notice a lot owner needs before we can hold an emergency or extraordinary general meeting. However, usually what we would do is we’d hold the physical meeting and everyone would turn up and you’d vote yes, no or abstain to the motions. In certain circumstances, if you are able to satisfy the rules and the regulations, that meeting can actually be held by what we call the postal way.

Juliette: So basically by email to make it more instantaneous so that the decision is happening faster in an emergency circumstance. You need to show that you can satisfy those requirements in the regulations. So there really does need to be a sense of urgency or an individual lot owner can actually make a complaint about that to a dispute resolution procedure, which is called our Commissioner’s Office. So yes, there is an ability in certain circumstances to hold that type of general meeting by way of what we call a postal vote.

Dan:  Okay. Next question is, now can an un-financial owner submit a motion for a general meeting or be a part of a request for an extraordinary general meeting or emergency general meeting?

Juliette:  See that’s actually a bit of tricky question that one and we’ve had quite a few adjudicator’s decisions handed down with respect to that. The normal rule that applies is if I’m a lot owner and I fail to pay my levies, so my contributions that are issued usually on, maybe two or three or four times a year, then I’m actually not entitled to propose a motion or go to a general meeting and vote at a general meeting and those types of things.

Juliette:  However, in certain circumstances that normal rule doesn’t apply and one of those circumstances is when the motion being proposed at the general meeting is actually a resolution without dissent. So what that means is there can’t be a, no vote. So if I have 20 lot owners, and as a result of those 20 lot owners let’s say 10 of them turn up to the meeting, and out of that 10, 9 vote yes but one votes no. That means that, that resolution would fail because we’ve had one no vote.

Juliette:  Even if I haven’t paid my levies, if there is a resolution that’s been put forward as resolution without dissent, then I’m entitled to vote at that particular motion because they’re the type of motions that are very poignant in this scheme. Like it might be the termination of the Strata scheme or those type of issues. So there are circumstances where, if I haven’t paid my levies, I am actually entitled to cast a vote or put forward a motion.

Dan:  Great. Now I’m assuming that there’s probably lots of body’s corporate out there that have gone lots of other questions that they’d like to ask, how do they best get those questions answered?

Juliette: A great way to do it, and what we’ve found here Gold Coast Lawyers at OMB Solicitors is we have obviously a specialised page on our website for body corporate and there’s an inquiry form. So if you make inquiry through our website at OMB Solicitors or either telephone us direct if you’d like to put just your question in writing, that’s no problem and just contact through the website and within 24 hours we’ll get back to you and have a chat with you or either talk to you through … we can email you back and provide you with the answers to any questions that you have and that’s for lot owners, body corporate managers or committee members.

Dan:  Tremendous. Thanks Juliette.

Juliette:  Thank you Dan.

Gold Coast Lawyers

Divorce & Separation in Australia: Who Gets What in Settlements?

By | Articles, Family Law

For Australians going through divorce and separation, there are plenty of advantages of living in the ‘Information Age’. Now it is easier than ever before to access the court forms and other material you may need. This makes it possible to do more on your own, so you may save money on legal costs. There are also plenty of disadvantages, however, the most significant of which is the amount of misinformation readily available in the digital world. If you’re getting divorced or separated, following the wrong legal advice – be it from the Internet or even friends, family and workmates – can be costly, especially when you’re trying to figure out who gets what in a settlement. Here’s what you should know.

The first and most important thing to understand is that every case is different. Essentially this means that regardless of what you may have heard, read online or seen on television and films, everything is not always ‘split down the middle’. It also means there is no real basis for the belief that women always benefit from the property settlement, or that you must go to Court in order to get one.  It is true that courts must approve related orders, but they actually intervene in only a small percentage of cases.

Having said that, there is a proven method that is used to ensure that couples going through separation and divorce arrive at fair settlements. It consists of four steps, which we will discuss in detail.

To begin with, you should prepare a comprehensive list of assets and liabilities that will be shared with the other person. By law, each of you must fully disclose all of your assets and liabilities. This means you should be sure to include everything, irrespective of whether the asset or liability is in one person’s name, both of your names, or held by one of you and a third party. Although it is technically considered a different type of property, don’t forget to include your individual or joint superannuation interests on a separate list at this point.

The second step is a little bit trickier because it involves the identification and valuation or assessment of each person’s contributions to the marriage. Contrary to popular belief, this evaluation is not strictly limited to each of your financial contributions. Non-financial contributions, such as home improvements or those you made as a stay-at-home mum are assessed as well. Furthermore, ‘indirect’ contributions to the household – or those made by your relatives – are also considered. Each contribution is then assigned a percentage on a scale specifically created for this purpose.

At the next stage, another set of factors is assessed. These include but are not limited to each person’s health, each person’s ability to make a living, how many kids you have, how old they are, who will have primary custody and the extent to which your ex-spouse will be involved in their lives. Another key factor that will be considered at this stage is whether or not any of your children require special care. If warranted at this point, the determination made in the previous step may be changed.

Finally, in the fourth step, the court takes one more objective look at the division of property to see if the outcome reached through this process is fair and reasonable to everyone involved. This final determination is based on all circumstances of the case. Although the court can make additional changes at this time, it will seldom do so.

The bottom line is that the decision to end a relationship is seldom easy. The prospect of separation and divorce can be intimidating and overwhelming, even when a wealth of information is so readily available. The best way to safeguard your interests and secure a fair outcome for everyone involved is to work with an experienced family lawyer. If you are considering separation and have questions or concerns about the process for reaching a settlement, contact us today.

Gold Coast Lawyers

Spousal Maintenance Frequently Asked Questions

By | Articles, Family Law

Even in a best-case scenario – one in which you and your partner have decided to end the marriage on amicable terms – questions may arise about your legal rights and obligations. For example, you may both have questions and concerns about spousal maintenance. Specifically, you may be wondering if either of you is eligible and if so, how to apply, the deadlines for doing so, whether there are different types of spousal maintenance and so forth. Here are some of the things you need to know.

To begin with, spousal maintenance (known as alimony in America), is simply a legal term for the financial support one former spouse provides for the other following separation or divorce.

Ideally, you and your former spouse are still on good terms and you can agree on all of the issues related to spousal maintenance (such as the amount and a schedule for payment). When this is the case, you can simply put the terms into a legally binding Financial Agreement or Consent Orders that must be filed with and approved by the court.

If, on the other hand, you can’t agree on anything, much less the terms for spousal maintenance, you can apply for Spousal Maintenance through the Federal Circuit Court or Family Court.

Application is irrespective of whether you were in a traditional marriage or a de facto relationship (including a same-sex de facto relationship) but there are different standards of proof you must meet for eligibility.

To be eligible for spousal maintenance if you were in a de facto relationship, you must demonstrate that:

  • you were in the relationship for at least two years, or
  • you and your former de facto partner have a child together, or
  • one of you made substantial monetary contributions to the other’s property, or
  • one of you officially registered the relationship (at Registry of Births, Deaths and Marriages, or an interstate/overseas equivalent).

On the other hand, to qualify for spousal maintenance if you were in a traditional marriage, you must prove that:

  • you cannot support yourself financially;
  • your former spouse has adequate means to do so.

More often than not, the court will award spousal maintenance if you can show that your former spouse earns significantly more than you do and/or that you lack the potential to earn sufficient income based on factors including but not limited to your education and past work experience. For instance, the court may approve your application if you are a ‘stay at home’ parent and cannot secure outside employment. Your application for spousal maintenance may also be approved if you have had a prolonged absence from the workforce and now lack the skills or are too old to secure employment, or if an illness precludes you from working.

Be aware, however, that spousal maintenance is not automatic just because you don’t make any money of your own, or you don’t make very much. In other words, if you are capable of working and simply choose not to do so, the court is likely to deny your application.

You should also be aware that there are different deadlines for applying for spousal maintenance. With certain exceptions, if you were in a traditional marriage, you must apply for spousal maintenance within a year (12 months) after the divorce order is granted. Conversely, if you were in a de facto relationship, you must make this application within two years (24 months) after the relationship officially ends.

Another thing to keep in mind is, for the most part, spousal maintenance is not a long-term benefit. Usually, it is only in effect until you (the applicant) gain or regain your financial footing by getting a job or receiving training necessary to find work.

Furthermore, if you were in a conventional marriage, your right to receive spousal maintenance from your ex- husband or wife usually ends when you marry someone else. However, your right to financial support received after the break up of your de facto relationship won’t necessarily end when you start a new one. This is because the court will consider the financial dynamics between yourself and your new de facto partner when determining whether you can support yourself.

The way in which spousal maintenance payments are made will also depend on your unique circumstances.  In some cases you may prefer one large (‘lump sum’) payment, and in others, you may prefer regular payments once a month, twice a month, weekly or even annually. If need be you can also apply for spousal maintenance on a limited basis. This may be your best option if you know you only need enough financial support to tide you over until your property settlement is finalised.

It should also be noted that spousal maintenance is not limited to monetary payments. Transferring ownership of a motor vehicle, investment property or other assets is also considered as legal payment of spousal maintenance.

Finally, we must also point out that, contrary to popular belief, child support and spousal maintenance are two separate benefits. While spousal maintenance provides financial support for you, child support payments should be used only to meet the children’s needs. This means courts can – and do – issue orders for the payment of both.

Divorce and separation are emotionally trying for anyone. Addressing complex legal matters on your own during times of stress can complicate things even more. For more information about the legal aspects of divorce, separation and related issues, including but not limited to spousal maintenance, contact the Family Law team at OMB Solicitors today.

Gold Coast Lawyers

Statutory Wills: Making A Will For Person Who Lacks Capacity

By | Articles, Wills and Estates

Let’s face it, as responsible adults there are certain things we simply have to do whether we like it or not. We have to work. We have to pay bills. We have to pay taxes. We have to plan and save for retirement. And at some point, we have to put our affairs in order. For most of us, that final obligation involves making a will – a legal document in which we specify how our assets should be distributed and, in some cases, who should look after our children after we die.

But what happens when someone makes a will and then suffers a catastrophic injury or a sudden illness, such as a stroke, that profoundly affects their ability to comprehend and communicate? Or what if the person who made the will is now suffering from Alzheimer’s disease or another form of dementia? In other words, what happens if someone lacks the capacity – the legal term for intellectual ability – to make or change his or her will?

In such cases, Queensland law may allow for the creation of a ‘Statutory Will’. Also known as a ‘court-authorised will’ or a ‘court-made will’, this type of document is actually a Supreme Court order that permits “making, alteration or revocation of a will on behalf of a person who lacks the capacity to make, alter or revoke their own will”.

Technically, anyone can ask the court to issue this type of order on behalf of the testator (the person for whom the will must be made, changed or revoked).  But there is a qualifier, which is that the court must agree that the person making the request has the right to do so.

In most instances, the person petitioning for a Statutory Will is related to the testator. However, courts have also established legal precedent for others, such as caregivers, powers of attorney, lawyers representing testators and – in some cases – close friends of testators, to make such requests.

Before you can actually apply for this type of will, you must ask permission to do so. Making this preliminary request allows the court to verify that you are acting in the testator’s best interests, and that you have legitimate reasons for seeking a Statutory Will. The initial part of this process is also designed to reduce or eliminate unnecessary and/or inappropriate applications.

For example, in a 2013 case heard by the Queensland Supreme Court, the issue at hand was whether the application for a Statutory Will had been made to safeguard any assets that may be passed on to the testator’s son, who was facing potential bankruptcy. After considering the arguments and evidence submitted, the Court determined the applicant’s reasons for pursuing changes through a Statutory Will were valid and allowed the application to go forward.

Once you have permission to file the ‘main application’, you may proceed.  In general, this application should demonstrate that:

  • the person is incapable of making a will and/or making necessary changes to a will; and
  • the proposed will (or changes or revocation) is a truthful representation of what the person would want, as if he or she was capable of making a will and/or required changes to a will; and
  • in light of all of the circumstances, it is logical for the court to authorise the will and make the orders.

Acceptable evidence that someone is no longer capable of making a will and/or making changes to an existing will may include written reports issued by their personal physician or specialist. The court will also accept medical opinions as to the potential for the person in question to gain or regain their essential abilities in the future. This is especially significant in cases where there does not seem to be an immediate need for a Statutory Will.

As a friend, family member or acquaintance, your testimony pertaining to the individual’s inability to make or change his or her will may also be considered. The court, however, will not regard it as highly as medical evidence.

Because the legal standard to determine intention in Queensland is whether or not the proposed will “is or may be one that would have been made by the proposed testator if he or she had testamentary capacity”, you should provide information that will help the court understand what the testator hoped to accomplish. This may include but is not limited to:

  • an estimate of the size and nature of the estate;
  • a draft of the proposed will;
  • copies of any previous wills made and/or signed by the person in question;
  • material that serves as proof of the testator’s wishes;
  • verification of how the estate would be handled if the person in question died without a will;
  • information about any relatives who are likely to make a family provision claim against the estate, and whether the proposed will would instigate or deter this type of claim; and
  • information pertaining to anyone, including relatives and non-relatives, who can realistically expect to be included in the will.

The court may deny the main application (proposed will) if, for example, it concludes based on its review of all of the evidence that the person in question never planned on making a will at all.

That situation occurred in a 2017 case heard by the Queensland Supreme Court. In that matter, which involved a sizeable estate, the Court determined that it couldn’t approve the proposed will because the person in question didn’t really care whether he had a will – even when he had the ability to make one. Key to this determination was evidence that the man never followed through on making a will even though he had been earlier advised to do so, and even after he had consulted a solicitor about it in 2013.

If you are concerned about an ageing family member and his or her ability to make or update his or her will, don’t leave anything to chance. Speak with one of our qualified lawyers for a comprehensive assessment of the situation today.

Gold Coast Lawyers

Post-Separation Assets – Who Gets What?

By | Articles, Family Law
Who gets what will depend on the facts

Australian statistics show that one third of relationships end in separation or divorce. The growing breakdown of relationships caused by divorce or separation has allowed for the distortion and generalisation of what is perceived to be ‘Who Owns What’ in a property settlement. The reason for the misinformation is due to there being no specific rules that indicate which party will retain what in the event of a breakdown in relationship.  Each case is fact specific and will be determinable on those facts, each case differing from the one before and after it.

Property Settlement – the Law

Property settlement after separation is governed by the Family Law Act 1975 (Cth) (‘the Act”) and is applicable to married couples’ and De Facto (same sex and heterosexual) relationships. A property settlement may be applied for any time after the breakdown in relationship occurs and need not wait until divorced.

Get started quickly

Because a property settlement order will deal with assets and liabilities that exist at the time the order is made, it is strongly recommended that negotiations for a property settlement begin as soon as is practicable after separation. If you delay, and in some cases, parties have delayed for ten or more years, then the Court will deal with what property exits then, and not when you separated. One of the parties may have accumulated substantial additional assets since separation, and the other party may have run up substantial debts. The property settlement then (in 10 years) would look completely different to a property settlement reached within a reasonable time of separation.

Time Limits

Where a couple gets divorced they must commence property settlement proceedings (i.e. Bring a Court Application) within twelve months of the divorce. Whereas for a married and De Facto couple the application must be bought forth within two years of the breakdown in relationship. Where proceedings are not bought within these limits, a loss of rights may occur due to being outside the time frame.  The law takes into consideration the below factors and does not considered the way in which the relationship deteriorated.

This the way a Court will tell you “Who Gets What”

Judges have a wide discretion to make orders for property settlement. In some circumstances, a court will not make any order at all dividing the property, if it appears to the judge that it is just and equitable that each party should keep the property they have without making any adjustment.

However, if the judge decides that an order is necessary to adjust property interests, then orders to divide the property on a just and equitable basis will be different in almost every case, as the circumstances of each particular case that comes before the court are all unique and different.

In applying the legislation over the years, the courts have defined a framework within which it must work to achieve what is a fair and equitable division. This framework involves an approach with four or five steps.

The Steps involved in working out “who Gets What”

The steps to working out a property settlement now may be summarized as:

  • What are the legal and equitable interests of the parties in their property;
  • Should these interests be altered;
  • What are the contributions of each party and what weight should be given to the contributions;
  • What is the future of each party and should there be any adjustment for that;
  • How is the proposed division to be implemented?

Step 1-  What are the legal and equitable interests of the parties in their property

The Court determines what the legal and equitable interests of the parties are in their property.

This will be all assets, liabilities and financial resources in joint names, and in each party’s separate names. Until an order is made, for family law purposes both parties have an interest in each asset in the property regardless of who owns it. The Court will take into account all of the property and financial resources in existence at the time that the order is made. Both parties have an obligation to make full and frank disclosure of all assets and liabilities that exist to each other and to the Court.

The Court then attributes values to each of the parties’ interests. Generally, the court will value the items as at the date that an order is made.

Step 2- Should the parties interests be altered

Once all the property is identified and valued, the Judge will take a step back and look at the length of the relationship, who brought what into the relationship, who owns what now, is there jointly owned property and/or bank accounts or did the parties keep their property separate, and was that their intention or agreement.

If the Judge is of the view that no adjustment in property interests is warranted, then no property settlement order will be made, and each party will keep what they currently own.

However, if relationship circumstances are such that an order is necessary to adjust property interests (and in most cases it will be), the Court proceeds to the next step.

Step 3 – What are the contributions of each party and what weight should be given to the contributions;

The Court determines the contributions that the parties have made to the acquisition, conservation and improvement of the property.  The contributions can be direct and indirect, financial and non-financial as well as relating to a homemaker/parent role and otherwise to the welfare of the family unit.  The Court will take into account the contributions made:

  • at the commencement of the relationship,
  • during the relationship, and
  • since separation.

Some of the general principles that apply to the assessment of contributions are:

  • There is no presumption that contributions are equal or that they were made in “partnership”;
  • An evaluation must be made of the actual respective contributions of each party;
  • Although in many cases the direct financial contributions of one party will equal the indirect contribution of the other as homemaker and parent, that is not necessarily so in every case;
  • Care must be taken to recognise and distinguish a windfall gain;
  • Whilst decisions in previous cases where special factors were found to exist may provide some guidance to Judges, they are not prescriptive, except to the extent that they purport to lay down general principles;
  • It is ultimately the exercise of the Judge’s own discretion on the particular facts of the case that will regulate the outcome; and
  • In the exercise of their discretion, the Trial Judge must be satisfied that the actual orders are just and equitable.

In a short relationship (up to seven years) the Court is more likely to adopt an asset by asset or “piecemeal” approach to the assessment. Relationships beyond that time will be regarded as a mid to long term relationship.

In mid to longer range relationships the Court is more likely to adopt a global assessment of contributions.  When taking into account the contributions of the parties the Court will have regard to any period of separation prior to commencement of the relationship.

The assessment of contributions will not be equal in circumstance where:

  • One party has made a greater initial contribution than the other; or
  • One party has received a significant inheritance (particularly late in the relationship);
  • One party has received a significant gift (particularly late in the relationship);

Step 4 – Future Needs

The Court then assesses the future needs of each party, having regard to the various factors set out in the Act. These factors involve looking at and assessing the difference between each of the party’s:

  • current income;
  • income earning capacity,
  • property and resources,
  • superannuation entitlements,
  • deficits in health,
  • ages,
  • closeness to retirement; and
  • the need for one party to care for children of the relationship.

Step 5 – How is the proposed division to be implemented

The Court will then give consideration on how the proposed division of property is to be implemented. For example, an order may be structured where the wife gets to the retain the former matrimonial home as the primary care provider for the children, and the husband keeps his superannuation and business assets.

Conclusion

In Property Settlement Court proceedings, the Judge will decide “who gets what”. That judge has very wide discretion and may make a completely different order to the Judge in the next courtroom. You may like the order that is made, or you may detest it.

Suggestions

Before or during your relationship, enter into a binding financial agreement under the Act so that you (and not a Judge) can determine “Who Gets What” should you separate.

If you do separate without a Financial Agreement in place, it is important that you consult a family law solicitor to ascertain what your entitlements are likely to be, and then attempt to reach agreement as to “who gets what”, either personally, through your solicitors or at a mediation. If an agreement can be reached, your agreement can be finalised by consent orders of the Family Court or a Financial Agreement.

Contact our Gold Coast Lawyers

If you require assistance or advice with respect to:

  1. Your likely entitlements upon separation;
  2. Negotiation of a property settlement
  3. Preparation of a Financial Agreement,
  4. Organising a mediation,
  5. Commencing court proceedings or the preparation of consent orders.
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