The family law legal process has its own language and can be complex. Below we have compiled some of the most common terms used in family law matters, including:

  • Divorce and separation
  • Children’s issues
  • Child support and maintenance
  • Property settlement
  • Other family law issues

It is important to note that the following definitions are not intended to be relied upon as advice or the basis for action.

On 1 September 2021, the Family Court of Australia and the Federal Circuit Court of Australia merged to create the new and unified Federal Circuit and Family Court of Australia. There is now a single set of Court Rules applied to Family Law matters, being the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. Our Glossary was prepared prior to the Court merger, so some references need updating. We are now working through the Glossary term by term to bring it fully in line with the new system.

Accredited Specialist (solicitor)

The Law Society of NSW operates the Specialist Accreditation Scheme to help the general public identify solicitors who have demonstrated proficiency in a particular area of law. Solicitors who fulfil the requirements of the scheme are entitled to use, after their name, the words ‘Accredited Specialist’ in the nominated area of practice.

Only individual solicitors can be Accredited Specialists, not firms.

Accrued Jurisdiction

Accrued jurisdiction allows a court to deal with the whole of a matter even where some elements might otherwise have extended beyond its normal or direct jurisdiction or might normally fall within the jurisdiction of another court.

The circumstances where accrued jurisdiction might apply in a family law context were set out in Warby (2001) 28 Fam LR 443 where the full court of the Family Court said:

“Relevant to whether the Family Court of Australia [now the Federal Circuit and Family Court of Australia] will invoke the court’s accrued jurisdiction in the circumstances posited in question 1 are:

  1. what the parties have done;
  2. the relationships between or among them;
  3. the laws which attach rights or liabilities to their conduct and relationships;
  4. whether the claims are part of a single justiciable controversy and in determining that question whether the claims are “attached” and not “severable” or “disparate”;
  5. whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts; and
  6. whether the court has the power to grant appropriate remedies in respect of the “attached” claims.”

Admissibility

The general rule at common law is that all evidence which is sufficiently relevant to the issue before the court is admissible and all evidence that is irrelevant or insufficiently relevant is excluded (Hollington v F Hewthorn and Co Ltd [1943] KB 587).

Not all relevant evidence is admissible for family law purposes and the Commonwealth Evidence Act (in particular) allows the exclusion of some relevant evidence under specific provisions.

Bases for exclusion of otherwise relevant evidence take many forms but include:

  1. unreliability;
  2. the possibility the evidence is manufactured;
  3. procedural fairness;
  4. untested (or untestable) evidence;
  5. collateral issues; or
  6. the value of evidence is outweighed by unfairness, prejudice or delay.

Generally, evidence drawing conclusions or evidence of a specialised nature requiring particular expertise can only be provided by a suitably qualified expert.

The requirements for admissibility in the hearing of an interim application may be less stringent than those applying in relation to hearing of a final application.

Generally, the evidence of an individual can only include a description of something seen, heard or taken in through one of the senses – conclusions or suspicions cannot ordinarily be included.

Appeals

In family law, this term applies to an application for re-hearing or review of a decision made by a single judge. In the case of a Federal Circuit and Family Court of Australia (Division 1) judge, appeals are usually heard by the full-court (usually made up of three judges)”. Appeals from Federal Circuit and Family Court of Australia (Division 2) judges or Family Law Magistrates of Western Australia can usually be heard by a single Federal Circuit and Family Court of Australia (Division 1) judge.

Re-hearing of a Registrar’s decision (including a Judicial Registrar’s or Senior Registrar’s decision) is generally referred to as a review.

In certain cases, leave to appeal may be required. This means that permission of the full court or relevant appeal tribunal is necessary before an appeal application can be made.

Time limits apply in relation to appeals and reviews. Leave for extension of time can be available in some circumstances.

Arbitration

See Mediation.

See also FDRPs.

Bankruptcy and Family Law

Once a party to a marriage or de facto relationship becomes bankrupt, their assets (excluding some categories like household items, super, some tools or some vehicles) vest in the trustee.

The Federal Circuit and Family Court of Australia can deal with matters involving a bankrupt party in relation to property settlement, maintenance, setting aside property orders and enforcement. The trustee can apply to become a party to proceedings.

Certain notice provisions apply.

The court can determine the competing rights of creditors and the non-bankrupt party. Neither has defined priority.

Big Money Matters

In earlier cases (including FerraroWhitelyMcLayStayLynch and Fitzpatrick, H and H and M and M), the full-court provided recognition of large or special financial contributions in cases where one party’s contribution had resulted in the accumulation of unusually valuable assets. (There was also one case where similar treatment was applied to impressive parenting contributions made under extraordinarily difficult circumstances.) More recent cases (including KaneHoffmanFields and Smith and Grier and Malphas) have indicated “there is no principle… that renders the direct contribution of income or capital more important – or ‘special’ – when compared against indirect contributions and, in particular, contributions to the home or the welfare of the family”.

Case-Assessment Conference (CAC)

Case assessment conference (CAC) is one of the first steps in the Family Court’s process after a final application relating to property issues has been filed. (This step is different in the Federal Circuit Court.)

CACs are run by registrars (in Sydney, they occur on level 8 of the court building).  Ideally, CAC directions should be carefully and thoughtfully prepared; they should anticipate any significant problems likely to occur at conciliation conference (see Conciliation Conference) in the particular circumstances of the matter and they should contain provisions that mean those problems will not arise at the conciliation conference or will be resolved beforehand.

See also Conciliation Conference.

The purpose of a CAC is to provide directions for the preparation of a conciliation conference (the next step). The importance of these directions is often underestimated by participants. They can (and often do) make the difference between a successful conciliation conference and a failed one – the difference between resolving a matter at a relatively early stage and going on thorough the court system (with the costs and stress likely to be associated with that).

Change-of-Assessment

See Child support.

Child Abduction

This topic can involve issues relating to the Hague Convention on the Civil Aspects of International Child Abduction, the airport watch-list, location orders, recovery orders and children’s views. This list is designed to be a very brief and general summary. There are many important cases that deal with child abduction. You might wish to call Steve on (Sydney) 9222 8000 to ask about those aspects or topics that relate to your particular circumstances.

See How are Parenting Issues Resolved?

Child Maintenance

Child maintenance pre-dates child support. It is not generally available where child support is. It may continue to apply in circumstances where maintenance is warranted in relation to an adult child (unable to complete education or suffering disability) or where child support is not available.
The above is necessarily a very brief and general summary of processes that can be more complex. There are a number of important cases that deal with child maintenance. While we like to talk about those cases, it is difficult to know where to start or what particular aspects or topics to cover in notes like these. It is probably better to call us on (Sydney) 9222 8000 to ask about those aspects or topics that relate to your particular circumstances.

Child Responsive Programme (CRP)

The child responsive programme is run by the Family Court (the process is a little different in the Federal Circuit Court) and involves a series of meetings between a court-appointed family consultant, the parents (and/or carers) and the child or children. The meetings focus on children’s needs. The purpose of the programme is to provide assistance to the parents and to the court to assist in resolving parenting issues and to achieve the best outcomes for children.

Where appropriate, a report will be prepared by the family consultant which will usually be provided to the parties (or their representatives) and to the court (and to any independent children’s lawyer). Often the family consultant will also be available at hearing to provide assistance to the court.

Except in very unusual circumstances, children do not give evidence (directly) to a court. Evidence about children’s views, needs or wishes can be provided via the affidavits of parents or others (via an exception to the hearsay rule that applies concerning things said by children), via an expert psychiatrist or psychologist (appointed by the court or via the court) or through the child responsive programme.

Child Support

Child support is governed by the provisions of the Child Support (Assessment) Act and the Child Support (Collections) Act. The CS(A)A provides a statutory formula based on studies of costs of living for children, based on the respective incomes of the parents and based on children’s ages and time they spend with each parent or carer.

Parents or carers can agree about levels of child support informally or via a child support agreement or binding child support agreement. Alternatively, a parent or carer may apply for assessment of child support to the Child Support Agency (CSA). The assessment will follow the statutory formula.

Indications about child support levels under the statutory formula can be obtained by keying relevant information into the calculator at https://processing.csa.gov.au/estimator/About.aspx.

Once an assessment is made, an application for change-of-assessment can also be made to the CSA. Such an application must be based on special circumstances and one or more of ten grounds. Briefly, those grounds are:

  1. high costs of communicating or spending time with a child/children;
  2. costs associated with special needs;
  3. costs of education or training;
  4. child’s/children’s income or resources;
  5. property or assets transferred;
  6. high child-care costs (for children under twelve);
  7. necessary expenses reduce capacity to support;
  8. unfairness arising from earning capacity, assets or resources;
  9. legal duty to maintain another (or others);
  10. responsibility for resident (other) child.

In certain circumstances, applications for departure from a child support assessment made be made to a tribunal or court.

The above is necessarily a very brief and general summary of processes that can be complex. There are many important cases that deal with child support. You might wish to call Steve on (Sydney) 9222 8000 to ask about those aspects or topics that relate to your particular circumstances.

Collaborative Law

Collaborative law is a system developed (originally) by Stu Webb in Minnesota in the late 1980s.  The system is designed to save costs and delay by aligning the interests of parties and lawyers and by minimising scope for unrealistic expectations and reducing court involvement.

In its basic form, collaborative law is a contract involving both parties and both lawyers that requires both lawyers to withdraw from the matter if either party involves the court (except for the filing of a consent order or equivalent).
While it is now a little out-of-date, Stu Webb’s original book, The Collaborative Way to Divorce, remains a very useful reference.

Companies

In the context of family law, interests in companies or businesses can give rise to many issues including in relation to value, valuation methodologies, goodwill, enterprise and personal goodwill, minority interests, shareholder loan accounts, accounts and records, accounting and recording methodologies, notes, depreciation, forecasting, budgets, management accounts, group structure, asset character, history, shareholder agreements, governing documents, remuneration, expenses, relationships, roles, responsibilities, premise of value, market, acquisitions, historical value, strategic benefits, adjustments, risk, key clients and employees, economic cycles, core and non-core assets, premises, debtor and creditor issues, tax issues, finance issues, leave entitlements, asset-backing, work-in-progress, off-balance sheet items, covenants and/or contract issues.

There are many cases dealing with company and business interests and related value issues. Rather than listing those here, you might prefer to phone 9222 8000 and to ask about your particular circumstances or the circumstances of relevant business interests.

Except in unusual cases, all assets and all liabilities of both parties are taken into account when altering interests in property between parties under family law following separation.

Compliance

In the context of family law, compliance means carrying out the requirements of an order of the court or the court’s rules.

Orders can be made by registrars (including Judicial Registrars or Senior Registrars) at the first court event or subsequent listings or by Registrars or judges in chambers (offices within the court building) or in open court.

The Federal Circuit and Family Court’s rules can be accessed via the link  austlii.edu.au/au/legis/cth/num_reg/fcafcoalr2021202101197559/).

Conciliation Conference

In suitable cases, a conciliation conference may follow the first court event. In other cases, a referral to an external mediator might be made (usually via the Law Society in NSW). Where it has not been possible to resolve a family law matter via cooperation or without assistance from the court, conciliation conference can be the best opportunity for parties to resolve their matter relatively efficiently and relatively cost-effectively.

In order to improve the chances of a conciliation conference being successful, it helps to understand those factors that most frequently result in failure of such conferences.

The most common cause of failure of conciliation conference is lack of preparation. In relation to property issues, lack of preparation most commonly takes the form of unresolved value issues or unresolved disclosure issues. If parties are not properly prepared for conciliation conference, they may be unable to calculate the value (or may be unable to agree about the value) of net assets available for distribution between them under family law. This means that any given overall percentage (most property settlement discussion in family law is based on overall percentages) means something different to each party. This can make negotiating at conciliation conference difficult and can mean the difference between a successful conference and a failed one.

Resolving value or disclosure issues before conciliation conference is not usually as difficult or as complicated as it might sound but it does involve thinking about issues likely to cause problems at the conciliation conference before the conference and thinking about what orders might best resolve those problems in time. Similar considerations apply in relation to preparing for mediation.

Another common cause of conciliation conference failure relates to relevance. A conciliation conference listing is generally for three hours or less. If one or both parties use that time to talk about less relevant issues (including venting or criticising), the opportunity to resolve issues can be lost. This problem can be addressed by thinking about relevant issues before the conference and by preparing properly.

Registrars only make decisions about directions for future progress at conciliation conferences. They do not make decisions about property or parenting issues.  Resolution of issues can only occur at a conciliation conference if both parties agree.

Conflict of Interest

In a family law context, conflicts of interest can arise in circumstances where (for example) a solicitor has acted for both parties in some capacity previously and might have access to information about the other party which might not otherwise exist or might be improper (or might give an impression of impropriety). It can also exist where the interests of solicitor and client differ.

Contempt

Contempt in the context of family law involves disobedience of judgments, orders, rules or other processes of the court.

Contempt is dealt with specifically in part XIIIB of the Family law Act. Penalties for contempt can include fines or prison (or both). There is no upper limit specified for such penalties. (I note that imprisonment rarely occurs in the Family Court or the Federal Circuit Court.)

Cooperation

It’s common for people to take an uncompromising, adversarial or one-sided approach in family law. Often the thinking behind this is something like… if I take a position that gives me a good result and leave the other party with a choice of giving-in or spending lots of money on legal costs all the way through the court system and if I make life difficult for them in the meantime, they might give-in and I might get a good deal.

This kind of approach can be very profitable for lawyers. It can, however turn out to be very expensive and stressful for everyone else, including children and including the party who thought it was a good idea in the first place. It can also mean that a family law matter takes a long time. Other approaches might be more efficient and more cost-effective.

In family law, there are really only two ways to resolve a matter reliably. One way, consent order, is relatively quick, easy and cost-effective but it requires some cooperation. The other way, a judge’s order, can be difficult, expensive and stressful but it requires no cooperation. You can see that the main difference between the quick, easy, cost-effective way and the difficult, expensive, stressful way is cooperation. This is not always well-understood or well-advised.

If one party takes a one-sided approach, the other party, or their solicitor, might suggest involving someone who can provide an objective view – a mediator or a registrar at the court.  If that doesn’t work, a court application might mean that a conference with a registrar becomes a requirement. The registrars are generally very good at bringing one-sided viewpoints back to reality. Judges will tend to do the same kind of thing in preliminary steps. There are mechanisms at each step of the process that help bring one-sided thinking back into line with the thinking of the court and the legislation – to refocus on the things that are important under family law.

The operation of sections 117 and 117C of the Family Law Act (concerning costs orders where reasonable offers have been made and not accepted) is also an important part of these mechanisms.

The approach of family law is directed by the Family Law Act as interpreted by the case law. In relation to property, family law considers certain contributions and certain future needs to be important. It doesn’t generally (at least not in relation to property) regard personalities or past aggravations as determinative. In many cases this can mean that family law is relatively predictable. It can also mean that the view of family law and the view of a party about fairness can be different (especially if that party is more focused on personalities or aggravations). Understanding this can be important in avoiding wasted time and wasted costs.

Pursuing a view that seems fair to one party but includes consideration of things that are not so important under the legislation can be expensive. Any result that cannot be obtained by agreement with the other party and cannot be obtained from the court, cannot be obtained at all.  Understanding the potential for differing views about fairness and understanding the mechanics within the system that tend to focus on the things that are important to family law can save time and costs. This is something you don’t want to find out the hard way.

None of the above means that you should not get a good deal. The point is to avoid wasted time or wasted costs and to think about the difference between a good deal and a deal that is not possible in practice.

Maintaining a level of cooperation that is enough to allow a family law matter to be resolved the easy way is not always straightforward. The way a matter begins is usually important – matters that begin cooperatively and efficiently tend to end that way and matters that begin uncooperatively and inefficiently tend to take longer and cost more.

Sometimes, little things can make a big difference. Thinking about or listening to the concerns and interests of the other party not only makes it easier to develop proposals that are more likely to lead to settlement, it can also break tension, stop a downward spiral or just make negotiating easier and less frustrating – sometimes with little or no cost.  (I know this sounds like heresy in family law but sorting the matter out is the aim and to do that efficiently and cost-effectively – by agreement – you need both parties to agree and, while that might not mean both parties are happy, making both parties less-unhappy increases the chances of agreement.)

Costs

In the context of family law, ‘costs’ refers to legal fees.

Legal fees are dealt with generally in sections 117 and 117C of the Family Law Act.

Court – Involving the Court

Disclosure obligations and advice requirements are central to family law. The law assumes that parties need reliable information about each other’s financial circumstances and that each needs independent advice about how family law operates in order that a deal can be fully reliable.

It is difficult to make informed decisions without being able to make a reasonable calculation of the value of combined net assets or without enough information to facilitate proper advice. Obtaining the information required for both these things generally requires a level of cooperation between parties. Sometimes, this cooperation is difficult to obtain without directions or orders from the court.

A decision to involve the court will ordinarily involve a detailed examination of the potential benefits and potential costs. Involving the court will provide benefits by obliging both parties to provide information necessary for calculations and advice.  It will also oblige both parties to prepare for and to attend at settlement conferences.

The first few steps in the court’s process are generally efficient and cost-effective.  There is a reasonably good probability that most matters will be resolved in those steps. That probability can also be substantially improved with proper preparation.  However, there is no guarantee that a matter will be resolved within those first steps and the steps in the court’s process that follow can be expensive and stressful.

A full discussion of this point is beyond the scope of these notes. Please call Steve on (Sydney) 9222 8000 to discuss.

Court Officers

In the context of family law, this term generally refers to registrars (including Judicial Registrars and Senior Registrars) or judges, though, the person who calls the name of the next matter at the courtroom door is also called a court officer.

De Facto Relationships

Since 1 March 2009, property issues concerning de facto relationships have been dealt with under the Family Law Act in almost the same way as for marriage relationships. (Parenting issues concerning de facto relationships have been dealt with under the Family Law Act since its inception.)

Section 4AA(1) of the Family Law Act defines de facto relationship. The definition provides that partners (or former partners), who may be of the same or opposite sex (section 4AA(5)(a)), had a relationship as a couple living together on a genuine domestic basis but provides that a relationship is not a de facto relationship if the parties were legally married to one another or are related by family. A de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship (section 4AA(5(b)).

Section 4AA(2) lists circumstances relevant to determining whether a de facto relationship exists as:

(a) the duration of the relationship;

(b) the nature and extent of their common residence;

(c)  whether a sexual relationship exists;

(d)  the degree of financial dependence or interdependence, and any arrangements for financial support, between them;

(e)  the ownership, use and acquisition of their property;

(f)  the degree of mutual commitment to a shared life;

(g)  whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;

(h)  the care and support of children;

(i)  the reputation and public aspects of the relationship.

The limitation period for de facto relationship property and maintenance matters is two years from the breakdown of the relationship (section 44(5)).

Death

Section 79(8) and 79(1A) of the Family Law Act make provision for existing family law property proceedings to be continued by, or for orders to be enforced against, the estate of a deceased party after the death of that party (in circumstances specified in those provisions).

Proceedings under section 79 (alteration of property interests) cannot be instituted (as distinct from continued) after the death of a party to the marriage. After the death of a party, proceedings cannot be characterised as “proceedings between the parties to a marriage” as required under paragraph (ca) of the definition of “matrimonial cause” in section 4 of the Family Law Act.

Delay

As a very general proposition, the longer a family law matter takes, the more it costs. Delay can also contribute to frustration, stress and suspicion and these things, in turn, can add further delay.

The way a family law matter starts can make a big difference. Knowing how family law works and what things are not worth arguing about can help a lot. Applying the right steps in the right order can also help reduce repetition and delay. Understanding the importance of cooperation can also help. This doesn’t mean you can’t get a good deal.

Disclosure

Chapter 6 of the Family Law Rules deals with financial disclosure.  Rule 6.06 provides a comprehensive list of required disclosure material and information. In order for any resolution of a family law property matter to be reliable, full and frank disclosure of both parties’ financial circumstances is compulsory. Generally, it makes sense for this disclosure to occur early in a matter in order that both parties may receive detailed advice and may make informed decisions as soon as possible. Providing thorough disclosure early can also promote the kind of cooperation that might help resolve a family law matter more efficiently and cost-effectively.

While leaving financial disclosure to the end of a matter is permissible, it can result in one or other party backing away from what seemed like a deal as they realise finances are not exactly as expected or that the deal is not as good as it seemed (and they would have decided differently if information had been available earlier).

Section 79A of the Family Law Act provides for a property order (including a consent order) to be set aside where “there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance” (my emphasis).

Full and frank disclosure of each party’s financial circumstances is central to alteration of property interests under family law. Disclosure obligations apply to each party and cannot be dispensed with by consent or otherwise.

Many cases deal with disclosure obligations and the potentially unpleasant consequences of improper compliance with those obligations. A full discussion of those cases is beyond the scope of these brief notes. You can call Steve on (Sydney) 9222 8000 to ask about your particular circumstances.

Divorce

Divorce ends a marriage. However, it does not resolve property or parenting issues – these are dealt with separately.

An application for divorce can be made by one or both parties to a marriage. Listings usually occur about eight weeks after an application is filed (but this can vary). At hearing of a divorce application, the court must be satisfied that:

  1. there has been a valid marriage;
  2. there is jurisdiction (which can be based on Australian citizenship or upon domicile – being lawfully in Australia with an intention to continue);
  3. there has been irretrievable breakdown of the marriage (represented by twelve months continuous separation);
  4. (if the application is not joint) there has been proper service of the application on the other party; and
  5. proper arrangements are in place concerning any children of the marriage (though, the court has discretion to proceed without being satisfied on this point in some cases).

While a period of separation under one roof can be relied upon in a divorce application, this usually involves the provision of a supporting affidavit sworn by a third party.

If the court is sufficiently satisfied about the above points, a decree nisi is pronounced. This decree becomes absolute after one calendar month and one day.  After that time, the divorce cannot be reviewed or appealed, the parties may legally re-marry and the divorce may affect either party’s will (by striking out the name of the other party – this may lead to a partial intestacy or to other problems and should be kept in mind).

Docket System

The Federal Circuit and Family Court generally operates under a docket system. This means that, for most processes that involve the court, the case manager, the same registrar and the same judge will be involved. Interim or urgent applications may be dealt with by officers other than the docket-registrar or docket-judge.

Enforcement of Orders

Part XIII of the Family Law Act provides generally in relation to enforcement of orders and provides broad powers. Where non-compliance or disobedience of judgments, orders, rules or other processes of the court constitutes contempt, those powers can include fines or prison (or both) without specified upper limit. (We note that imprisonment rarely occurs in the Federal Circuit and Family Court.)

Evidence

Evidence is any matter of fact, the effect, tendency or design of which is to produce in the mind a persuasion affirmative or negative of the existence of some matter of fact (Cheney v Spooner (1929) 41 CLR 532). The term will have different meanings in different courts or tribunals.

Financial Agreements

The option of a financial agreement under the Family Law Act has been available to married (or soon to be married) couples since 2000 and has been available to de facto couples since 2009.

A properly prepared and executed financial agreement can help safeguard against confusion, conflict, litigation and costs.  However, especially in the circumstances which have arisen in Australia, financial agreements carry a very high level of responsibility and an important requirement for diligence and they can sometimes involve risks.

Often, financial agreements provide for division of assets on the breakup of a relationship on the basis of direct financial contributions.  Family law takes account of direct financial contributions but also takes account of indirect and non-financial contributions.  For this reason, the operation of a financial agreement can produce quite a different result to general family law.  This effect tends to increase with time, especially if one party becomes more involved with non-financial contributions (like parenting and housework) while the other party is more involved with direct financial contributions (earning or inheriting for example).

As time passes, it generally becomes less likely that both parties will remain happy with the terms of a financial agreement if the relationship ends.  After a time, it becomes almost inevitable that one party will feel disadvantaged or unfairly treated by the terms of a financial agreement compared to what would otherwise be available under general family law.  Accordingly, it may become almost inevitable with time that a financial agreement will be subject to careful examination to see if it might be set aside in favour of the ordinary family law jurisdiction.

For a financial agreement to be effective it must comply with formalities set out in section 90G of the Family Law Act (for married couples) or section 90UJ (for de facto couples). These formalities have varied over time.  A number of legislative changes have occurred.  Drafting and interpretation issues have arisen concerning some legislative amendments.  Some amendments have had retrospective operation.  Judicial decisions have taken differing approaches over time.

Because financial agreements are often subject to careful examination, they are generally associated with high levels of litigation concerning validity.  In Australia, the varying amendments, judgments and related issues (above) have also added to litigation levels.

Legislative amendments have also introduced a judicial discretion that can mean that the validity of some financial agreements can be uncertain until a judge exercises that discretion. Because this involves a court hearing, it can mean that some of the original purpose for which financial agreements were introduced – to limit scope for litigation and costs – is weakened in some cases.

Practical issues such as timing and urgency (especially as a wedding date approaches), emotional resistance, pressure, power imbalances, disclosure issues, record-keeping issues, checking, fairness and issues relating to changing or unexpected circumstances (especially concerning children, earning capacities, windfalls and losses) can all impact on the effectiveness or appropriateness of financial agreements and can affect issues of reliability.

In some (de facto) cases, there can also be geographical requirements.

The legislation also imports principles from other areas of law and equity that may not always be so familiar to family law practitioners.

Section 90K (for married couples) and section 90UM (for de facto couples) provide grounds on which financial agreements can be set aside.  These include fraud, material non-disclosure, detriment to creditors or third parties, contracts principles, impracticality, changed circumstance, hardship for a child or carer and unconscionable circumstances.

A financial agreement concerning a de facto couple ceases to operate on the marriage of that couple (section 90UJ(3)).

Generally, it cannot be guaranteed, in the current state of the law, that a financial agreement will be upheld and it will very likely come under close scrutiny or challenge.

Given the above, great care must be taken with the preparation and drafting of financial agreements and with related advice and this can mean that financial agreements involve costs substantially above what might commonly be expected.

Where a consent order can be used in place of a financial agreement, that might provide a more reliable arrangement.  That would also mean that a copy of the order would remain on record at the court.

Financial Statements

The financial statement is the form specified in rule 13.05 of the Family Law Rules.  It is designed to assist parties to comply with their disclosure obligations.

Flagging Orders

Section 90MD of the Family Law Act says “’flagging order’ means an order mentioned in  subsection 90MU(1)”.  Section 90MU(1) provides for the court to make an order “directing the trustee not to make any splittable payment in respect of the [superannuation] interest without the leave of the court”.  A flagging order might be made in circumstances where superannuation forms a large proportion of the net assets of a separating couple and the court (or the parties by consent) determines that property proceedings (or some part of them) should be adjourned until the relevant superannuation entitlement becomes accessible.  The order acts to prevent any dealing with the entitlement in the meantime (without the court receiving notice).

Future Needs

In a family law context, the continuing or future needs of each party are relevant to property settlement under section 79(4)(e) of the Family Law Act and to issues of maintenance under section 75(2). These sections incorporate considerations of:

  • the parties ages and health;
  • the income, property, financial resources and earning capacity of each of the parties;
  • care of children;
  • commitments necessary for the support of each party, children or other persons;
  • social security entitlements (disregarded for consideration about maintenance);
  • living standards;
  • education or training issues;
  • potential effects on creditors;
  • duration of the marriage;
  • parenting roles;
  • financial circumstance relating to cohabitation (with a third party);
  • child support;
  • the terms of any relevant financial agreement; and/or
  • any other circumstance the court thinks justice requires be taken into account
  • FDRPs

FDRP stands for family dispute resolution practitioner.  Section 60I of the Family Law Act provides that, except in specified circumstances (relating to risk of harm, urgency, contravention or where there is consent about an order), the court must not hear an application for a part VII (children) order in relation to a child unless the applicant first files in the court a certificate relating a meeting with an FDRP.  FDRP meetings will generally involve both parties to a family law parenting dispute and are designed to ensure that all persons who have a dispute about parenting matters make a genuine effort to resolve that dispute by family dispute resolution before an application for a part VII order is made to the court.  An FDRP may issue a certificate in circumstances where all relevant parties attended and made a genuine effort to resolve relevant issue(s) and may even issue a certificate where such effort was not made by all parties or even where one party refused or failed to attend.  FDRP meetings are often similar to mediation.

How are Parenting Matters Resolved?

In most family law matters, the kind of result that can be expected in the courtroom will tend to influence results that can be achieved via negotiation.  This tends to be true in relation to parenting and child-related matters as well as in relation to property. This is because the courtroom option generally remains available to both parties.  Where that option is more attractive to one party than what is offered by the other party, the party that finds the likely courtroom result attractive might reject offers and to continue through the court process.  This will generally prompt offers closer to courtroom expectations.

Section 60CA of the Family Law Act says that in “deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration”.

Section 60CC provides guidance about considerations relevant to determining what is in a child’s best interests. Subsection 60CC(2) sets out the primary considerations as:

“(a) the benefit to the child of having a meaningful relationship with both of the child’s parents; and

“(b) the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.

Sub-section 60CC(2A) says:

“(2A) In applying the considerations set out in subsection (2), the court is to give greater weight to the consideration set out in paragraph (2)(b).

Subsection (3) sets out additional considerations as:

“(a) any views expressed by the child and any factors (such as the child ‘s maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child’s views;

(b)  the nature of the relationship of the child with:

(i)         each of the child’s parents; and

(ii)         other persons (including any grandparent or other relative of the child);

(c)  the extent to which each of the child’s parents has taken, or failed to take, the opportunity:

(i)         to participate in making decisions about major long-term issues in relation to the child; and

(ii)         to spend time with the child; and

(iii)        to communicate with the child;

(ca) the extent to which each of the child’s parents has fulfilled, or failed to fulfil, the parent’s obligations to maintain the child;

(d)  the likely effect of any changes in the child’s circumstances, including the likely effect on the child of any separation from:

(i)         either of his or her parents; or

(ii)         any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living;

(e)  the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child’s right to maintain personal relations and direct contact with both parents on a regular basis;

(f)   the capacity of:

(i)         each of the child’s parents; and

(ii)         any other person (including any grandparent or other relative of the child);

to provide for the needs of the child, including emotional and intellectual needs;

(g)  the maturity, sex, lifestyle and background (including lifestyle, culture and traditions) of the child and of either of the child’s parents, and any other characteristics of the child that the court thinks are relevant;

(h)  if the child is an Aboriginal child or a Torres Strait Islander child:

(i)         the child’s right to enjoy his or her Aboriginal or Torres Strait Islander culture (including the right to enjoy that culture with other people who share that culture); and

(ii)         the likely impact any proposed parenting order under this Part will have on that right;

(i)   the attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child’s parents;

(j)   any family violence involving the child or a member of the child’s family;

(k)  if a family violence order applies, or has applied, to the child or a member of the child’s family–any relevant inferences that can be drawn from the order, taking into account the following:

(i)         the nature of the order;

(ii)         the circumstances in which the order was made;

(iii)        any evidence admitted in proceedings for the order;

(iv)        any findings made by the court in, or in proceedings for, the order;

(v)        any other relevant matter;

(l)   whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child;

(m) any other fact or circumstance that the court thinks is relevant.”

In relation to consent parenting orders, subsection 60CC(5) says:

“(5) If the court is considering whether to make an order with the consent of all the parties to the proceedings, the court may, but is not required to, have regard to all or any of the matters set out in subsection (2) or (3)”.

The above is necessarily a brief and general summary of what can be a complex process.  There are many important cases that deal with children and parenting.  It is difficult to know where to start or what particular aspects or topics to cover in notes like these.  You might wish to call Steve on (Sydney) 9222 8000 to ask about those issues that relate to your particular circumstances.

How are Property Matters Resolved?

In most family law matters, the kind of result that can be expected in the courtroom will tend to influence results that can be achieved via negotiation.  This tends to be true in relation to parenting and child-related matters as well as in relation to property.  This is because the courtroom option generally remains available to both parties.  Where that option is more attractive to one party than what is offered by the other party, the party that finds the likely courtroom result attractive might reject offers and to continue through the court process.  This will generally prompt offers closer to courtroom expectations.

When making an order concerning the property (net assets) of the parties or either of them under section 79 of the Family Law Act, the court will (in brief summary) consider those things listed in sub-section 79(4):

  • each party’s direct and indirect financial contributions;
  • each party’s non-financial contributions (including parenting and domestic contributions);
  • the effect of any proposed order or declaration;
  • the parties ages and health;
  • the income, property, financial resources and earning capacity of each of the parties;
  • care of children;
  • commitments necessary for the support of each party, children or other persons;
  • social security entitlements;
  • living standards;
  • education or training issues;
  • potential effects on creditors;
  • duration of the marriage;
  • parenting roles;
  • financial circumstance relating to cohabitation (with a third party);
  • child support;
  • the terms of any relevant financial agreement;
  • any other circumstance the court thinks justice requires be taken into account;

and sub-section 79(2):

  • whether it is just and equitable to make the order;

(not necessarily in that order – the requirement under sub-section 79(2) being one that permeates the entire process).

The above is necessarily a brief and general summary of what can be a complex process.  There are many important cases that deal with children and parenting.  It is difficult to know where to start or what particular aspects or topics to cover in notes like these.  You might wish to call Steve on (Sydney) 9222 8000 to ask about those issues that relate to your particular circumstances.

How do I Sort my Family Law Issue More Quickly?

It’s common for people to take an uncompromising, adversarial or one-sided approach in family law. Often the thinking behind this is something like… if I take a position that gives me a good result and leave the other party with a choice of giving-in or spending lots of money on legal costs all the way through the court system and if I make life difficult for them in the meantime, they might give-in and I might get a good deal.

This kind of approach can be very profitable for lawyers. It can, however turn out to be very expensive and stressful for everyone else, including children and including the party who thought it was a good idea in the first place.  It can also mean that a family law matter takes a long time.  Other approaches might be more efficient and more cost-effective.

In family law, there are really only two ways to resolve a matter reliably. One way, consent order, is relatively quick, easy and cost-effective but it requires some cooperation.  The other way, a judge’s order, can be difficult, expensive and stressful but it requires no cooperation.  You can see that the main difference between the quick, easy, cost-effective way and the difficult, expensive, stressful way is cooperation.  This is not always well-understood or well-advised.

If one party takes a one-sided approach, the other party, or their solicitor, might suggest involving someone who can provide an objective view – a mediator or a registrar at the court (see Conciliation Conference).  If that doesn’t work, a court application might mean that a conference with a registrar becomes a requirement.  The registrars are generally very good at bringing one-sided viewpoints back to reality.  Judges will tend to do the same kind of thing in preliminary steps.  There are mechanisms at each step of the process that help bring one-sided thinking back into line with the thinking of the court and the legislation – to refocus on the things that are important under family law.

The operation of sections 117 and 117C of the Family Law Act (concerning costs orders where reasonable offers have been made and not accepted – see Offers of Settlement) is also an important part of these mechanisms.

The approach of family law is directed by the Family Law Act as interpreted by the case law.  In relation to property, family law considers certain contributions and certain future needs to be important.  It doesn’t generally (at least not in relation to property) regard personalities or past aggravations as determinative (see also Violence).  In many cases this can mean that family law is relatively predictable.  It can also mean that the view of family law and the view of a party about fairness can be different (especially if that party is more focused on personalities or aggravations).  Understanding this can be important in avoiding wasted time and wasted costs.

Pursuing a view that seems fair to one party but includes consideration of things that are not so important under the legislation can be expensive. Any result that cannot be obtained by agreement with the other party and cannot be obtained from the court, cannot be obtained at all.  Understanding the potential for differing views about fairness and understanding the mechanics within the system that tend to focus on the things that are important to family law can save time and costs.  This is something you don’t want to find out the hard way.

None of the above means that you should not get a good deal. The point is to avoid wasted time or wasted costs and to think about the difference between a good deal and a deal that is not possible in practice.

Maintaining a level of cooperation that is enough to allow a family law matter to be resolved the easy way (see Consent Order) is not always straightforward.  The way a matter begins is usually important – matters that begin cooperatively and efficiently tend to end that way and matters that begin uncooperatively and inefficiently tend to take longer and cost more.

Sometimes, little things can make a big difference. Thinking about or listening to the concerns and interests of the other party not only makes it easier to develop proposals that are more likely to lead to settlement, it can also break tension, stop a downward spiral or just make negotiating easier and less frustrating – sometimes with little or no cost.  (I know this sounds like heresy in family law but sorting the matter out is the aim and to do that efficiently and cost-effectively – by agreement – you need both parties to agree and, while that might not mean both parties are happy, making both parties less-unhappy increases the chances of agreement.)

Independent Children’s Lawyer

An independent children’s lawyer (ICL) may be appointed by the court of its own initiative or on the application of any person (including the child).

The role of the ICL is set out in section 68LA of the Family Law Act which provides (among other things) that an ICL:

  • must form an independent view of the best interests of the child;
  • must act in those interests;
  • is not the child’s legal representative;
  • is not obliged to act on the child’s instructions;
  • must act impartially;
  • must ensure that any views expressed by the child in relation to the matters to which the proceedings relate are fully put before the court;
  • must endeavour to minimise the trauma to the child associated with proceedings; and
  • must facilitate an agreed resolution.

Injunction

An injunction is an order directed to a party to court proceedings forbidding some act, requiring some some act or restraining the continuance of some act where the act (or non-act) or its continuance would be unjust, inequitable or injurious and where the result of the action or non-action could not adequately be addressed by law.

Specific provision for injunctions is made in the Family Law Act at sections 69B (in relation to child-related matters) and 114 (in relation to other matters).

Section 68B(1) provides for the making of injunctions for the personal protection of a child or the protection of a parent or carer of a child or injunctions restraining entry to relevant places.

Section 114 provides for the making of injunctions relating to the protection of parties, relating to entry or occupation of premises or places and relating to property (assets or liabilities).

Interim Issues

Certain steps are necessary in the proper and final resolution of a family law matter. Others are additional and often referred to as interim issues.

Interim issues can involve argument, lawyer involvement and/or court involvement.  These things can add to costs and delay and can reduce cooperation levels.  Interim issues can sometimes be avoided via an understanding of family law concepts.

Post-separation expenditure is a common interim issue – parties worry about who is paying expenses and who gets credit for those payments.

In the great majority of family law matters, all assets and all liabilities of both parties are added together before distribution under family law and those assets and liabilities are valued at about the time the matter is settled (or determined by the court).  This means that there is really no such thing as “his” or “her” assets in a family law matter prior to settlement – only a pool of net assets available for distribution between the parties.  This means that most (or many) arguments about payment of expenses become unnecessary.

This can be explained via a simplified example.  Parties A and B each have $100.  The parties have agreed (or the court has decided) a fifty / fifty distribution of net assets.  A needs to pay an expense of $20 and B won’t help.  This leaves A with $80.

At settlement (or determination), the total pool is $180. The fifty / fifty distribution results in both parties taking $90.  So it didn’t matter who paid the $20.  Any delays, costs or loss of cooperation the parties suffered arguing about expenses would have been wasted.

Limitation Periods

Section 44(3) of the Family Law Act provides a limitation period of twelve months after a divorce has taken effect after which (oversimplifying) proceedings relating to family law property (assets and liabilities) or maintenance require leave of the court.

Section 44(5) provides a similar limitation that applies two years after the end of a de facto relationship.

Mediation

Mediation operates by involving an independent person (mediator) between two contending parties in order to help them settle a disagreement.  Mediation usually aims to promote a better understanding of each party’s views and interests and aims to promote compromise and agreement.

Conciliation is similar to mediation but (generally) involves a mediator who has some expertise in the field to which the dispute relates.

In mediation and in conciliation, any resolution of the dispute depends upon agreement between the parties.  The mediator or conciliator does not make decisions determining the dispute.

Arbitration differs from mediation or conciliation in that an arbitrator has some authority to make decisions determining the dispute.

Nullity

The Marriage Act provides that a relevant marriage (one celebrated after 20 June 1977) is void in five circumstances, “and not otherwise”.  Those circumstances are:

  1. the prior existing marriage of a spouse;
  2. prohibited relationships (marriage with an ancestor or descendent or between siblings – including adopted siblings);
  3. non-compliance with formalities (where the celebrant is not authorised and both parties are aware or the ceremony does not comply with prescribed form – the form adopted by a particular religion or the minimal non-religious form);
  4. lack of real consent of a spouse; or
  5. lack of marriageable age.

On 9 December 2017, the words “the union of a man and a woman” within the definition of marriage in the Marriage Act were replaced with “the union of 2 people”.

Offer of Settlement

Section 117 of the Family Law Act provides generally that “each party to proceedings under this Act shall bear his or her own costs” unless “the court is of the opinion that there are circumstances that justify” otherwise.  Subsection 117(2A) sets out considerations relevant to questions about such circumstances.  These include considerations relating to parties’ financial circumstances, parties’ conduct, prior compliance, success (in terms of what each party asked the court to do) and whether written settlement offer(s) have been made.

Section 117C also provides in relation to settlement offers and orders for payment of costs.

In a family law context, written settlement offers are often generally referred to as section 117C offers.

A written offer (especially a reasonable one made early in a matter) can promote settlement because it raises the possibility that the party receiving the offer may be ordered to pay the other party’s costs (or part of them) if the offer is not accepted and if the matter proceeds to a court decision. The wording of offers can be very important.

Order

In the context of family law, an order generally refers to an order of a court exercising jurisdiction under the Family Law Act. Orders are binding on parties to proceedings. A breach of an order can result in sanctions including fines or imprisonment.

Parenting – How are Parenting Issues Resolved?

In most family law matters, the kind of result that can be expected in the courtroom will tend to influence results that can be achieved via negotiation. This tends to be true in relation to parenting and child-related matters as well as in relation to property. This is because the courtroom option generally remains available to both parties. Where that option is more attractive to one party than what is offered by the other party, the party that finds the likely courtroom result attractive might reject offers and to continue through the court process. This will generally prompt offers closer to courtroom expectations.

Section 60CA of the Family Law Act says that in “deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration”.

Section 60CC provides guidance about considerations relevant to determining what is in a child’s best interests. Subsection 60CC(2) sets out the primary considerations as:

“(a) the benefit to the child of having a meaningful relationship with both of the child’s parents; and

“(b) the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.

Sub-section 60CC(2A) says:

“(2A) In applying the considerations set out in subsection (2), the court is to give greater weight to the consideration set out in paragraph (2)(b).

Subsection (3) sets out additional considerations as:

“(a) any views expressed by the child and any factors (such as the child ‘s maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child’s views;

(b)  the nature of the relationship of the child with:

(i)         each of the child’s parents; and

(ii)         other persons (including any grandparent or other relative of the child);

(c)  the extent to which each of the child’s parents has taken, or failed to take, the opportunity:

(i)         to participate in making decisions about major long-term issues in relation to the child; and

(ii)         to spend time with the child; and

(iii)        to communicate with the child;

(ca) the extent to which each of the child’s parents has fulfilled, or failed to fulfil, the parent’s obligations to maintain the child;

(d)  the likely effect of any changes in the child’s circumstances, including the likely effect on the child of any separation from:

(i)         either of his or her parents; or

(ii)         any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living;

(e)  the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child’s right to maintain personal relations and direct contact with both parents on a regular basis;

(f)   the capacity of:

(i)         each of the child’s parents; and

(ii)         any other person (including any grandparent or other relative of the child);

to provide for the needs of the child, including emotional and intellectual needs;

(g)  the maturity, sex, lifestyle and background (including lifestyle, culture and traditions) of the child and of either of the child’s parents, and any other characteristics of the child that the court thinks are relevant;

(h)  if the child is an Aboriginal child or a Torres Strait Islander child:

(i)         the child’s right to enjoy his or her Aboriginal or Torres Strait Islander culture (including the right to enjoy that culture with other people who share that culture); and

(ii)         the likely impact any proposed parenting order under this Part will have on that right;

(i)   the attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child’s parents;

(j)   any family violence involving the child or a member of the child’s family;

(k)  if a family violence order applies, or has applied, to the child or a member of the child’s family–any relevant inferences that can be drawn from the order, taking into account the following:

(i)         the nature of the order;

(ii)         the circumstances in which the order was made;

(iii)        any evidence admitted in proceedings for the order;

(iv)        any findings made by the court in, or in proceedings for, the order;

(v)        any other relevant matter;

(l)   whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child;

(m) any other fact or circumstance that the court thinks is relevant.”

In relation to consent parenting orders, subsection 60CC(5) says:

“(5) If the court is considering whether to make an order with the consent of all the parties to the proceedings, the court may, but is not required to, have regard to all or any of the matters set out in subsection (2) or (3)”.

The above is necessarily a brief and general summary of what can be a complex process. There are many important cases that deal with children and parenting.  It is difficult to know where to start or what particular aspects or topics to cover in notes like these. You might wish to call Steve on (Sydney) 9222 8000 to ask about those issues that relate to your particular circumstances.

Post Separation Expenses

The treatment of post-separation expenses and, particularly, expenses that one or other party considers have been incurred unreasonably since separation, has occupied a lot of court time in recent years.

In Chorn and Hopkins [2004] FamCA 633, the full-court said (quoting an earlier decision of Marker) “It is well settled that save in exceptional circumstances a trial Judge should deal with the property as at the date of the hearing and make adjustments taking into account the various matters set out under s.79” and “There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses”.

In Omacini [2005], 33 Fam LR 134, the full-court identified three categories that justify notional add-backs (where money that existed previously may be included as part of one party’s share of property at settlement even though it no longer exists on the basis that that party has benefited from it or is responsible for it) as:

(a) legal fees;

(b) premature distribution of matrimonial assets; or

(c) where one party has embarked on a course of conduct designed to reduce value or has acted “recklessly, negligently or wantonly” so that value is reduced.

In Bevan [2013] FamCAFC 116, the majority of the full-court (by way of obiter dicta – more of a comment than something necessary in reaching a decision):

“We observe that ‘notional property’, which is sometimes ‘added back’ to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute ‘property of the parties to the marriage or either of them’, and thus is not amenable to alteration under s 79.  It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part.  As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.”

As a result of the above, the treatment of unreasonable post-separation expenditure is in a state of flux.  It might be reasonable, however, to say that adjustments where post-separation expenditure has been reckless, negligent or wanton are still reasonably probable and that such adjustments are now more likely to occur via adjustment under section 75(2)(o) (any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account) than as a direct mathematical add-back.

Pre-Action Procedures

Rule 1.05 of the Family Law Rules provides that, before “starting a case, each prospective party to the case must comply with the pre-action procedures”. Specific exemptions are made including in relation to parenting cases involving risk of harm, other cases involving violence or fraud, urgency, undue prejudice, a related application within the past twelve months, divorce, a child support appeal and some bankruptcy matters.

The pre-action procedures require a party considering filing an application to provide to the other party(ies):

(a) a copy of the pre-action procedures brochure (schedule one to the Family Law Rules);

(b) an invitation to participate in a dispute resolution process (other than the court);

(c) written notice of an intention to commence proceedings with details of the issue(s) in dispute, the order sought if proceedings commence, a genuine offer to resolve issues and a nominated time (at least two weeks) for the other party to reply.

Property – How are Property Issues Resolved?

In most family law matters, the kind of result that can be expected in the courtroom will tend to influence results that can be achieved via negotiation.  This tends to be true in relation to parenting and child-related matters as well as in relation to property.  This is because the courtroom option generally remains available to both parties.  Where that option is more attractive to one party than what is offered by the other party, the party that finds the likely courtroom result attractive might reject offers and to continue through the court process.  This will generally prompt offers closer to courtroom expectations.

When making an order concerning the property (net assets) of the parties or either of them under section 79 of the Family Law Act, the court will (in brief summary) consider those things listed in sub-section 79(4):

  • each party’s direct and indirect financial contributions;
  • each party’s non-financial contributions (including parenting and domestic contributions);
  • the effect of any proposed order or declaration;
  • the parties ages and health;
  • the income, property, financial resources and earning capacity of each of the parties;
  • care of children;
  • commitments necessary for the support of each party, children or other persons;
  • social security entitlements;
  • living standards;
  • education or training issues;
  • potential effects on creditors;
  • duration of the marriage;
  • parenting roles;
  • financial circumstance relating to cohabitation (with a third party);
  • child support;
  • the terms of any relevant financial agreement;
  • any other circumstance the court thinks justice requires be taken into account;

and sub-section 79(2):

  • whether it is just and equitable to make the order;

(not necessarily in that order – the requirement under sub-section 79(2) being one that permeates the entire process).

The above is necessarily a brief and general summary of what can be a complex process.  There are many important cases that deal with children and parenting.  It is difficult to know where to start or what particular aspects or topics to cover in notes like these.  You might wish to call Steve on (Sydney) 9222 8000 to ask about those issues that relate to your particular circumstances.

Registras

Both the Family Court and the Federal Circuit Court delegate some decision-making processes to registrars.  Rules 18.05 and 18.06 of the Family Law Rules deal with powers delegated to registrars.  Part 20 of the Federal Circuit Court Rules deals with registrars’ powers.

Same-Sex Relationships

Section 4AA(5)(a) provides:

(5) For the purposes of this Act:

(a)  a de facto relationship can exist between 2 persons of different sexes and between 2 persons of the same sex; and

(b)  a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.

On 9 December 2017, the words “the union of a man and a woman” within the definition of marriage in the Marriage Act were replaced with “the union of 2 people”.

Separation

Section 49 of the Family Law Act provides:

(1) The parties to a marriage may be held to have separated notwithstanding that the cohabitation was brought to an end by the action or conduct of one only of the parties.

(2) The parties to a marriage may be held to have separated and to have lived separately and apart notwithstanding that they have continued to reside in the same residence or that either party has rendered some household services to the other.

In Pavey (1976) 1 Fam LR 11,358, the full-court quoting (with amendments in square brackets) the decision of Murphy J in Todd (No 2) (1976) 1 Fam LR 11,186, said:

“‘separation’ means more than physical separation — it involves the [breakdown] of the marital relationship (the consortium vitae).  Separation can only occur in the sense used by the Act where one or both of the spouses form the intention to sever or not to resume the marital relationship and act on that intention, or alternatively act as if the marital relationship has been severed.  What comprises the marital relationship for each couple will vary.  Marriage involves many elements, some or all of which may be present in a particular marriage — elements such as dwelling under the same roof, sexual intercourse, mutual society and protection, recognition of the existence of the marriage by both spouses in public and private relationships [and the nurture and support of the children of the marriage].”

Setting Aside

When Financial Agreements can be Set Aside (sections 90K and 90UM)

When Property Settlements can be Set Aside (section 79A)

Single Experts

Issues concerning the value of assets or liabilities are common in family law and can make resolving a matter more difficult (see Valuation).  The Family Law Rules (Part 15.5) make provision for a system of single-experts to address such issues.  A single-expert can be appointed by agreement between parties (rule 15.44) or by the court (rule 15.45).  Once an item has been valued by a single-expert, it can be difficult for a party to dispute that value.  In the Family Court, leave of the court (permission) must be obtained (rule 15.49) to dispute a single-expert value via a further expert (called a shadow-expert).  Because single-experts are generally appointed on behalf of both parties and paid for by both parties and because a shadow-expert is generally appointed by one party, single-expert values are usually considered to be more independent.  In this way, the system of single-experts largely removes most value issues from family law.

The Federal Circuit Court does not have a system of single-experts (but a similar approach can be applied in many cases).

Spousal Maintenance

Spousal maintenance relates to the ongoing expenses of one of the parties to the marriage. It differs from child support which is concerned with ongoing expenses relating to children.

There is a wide body of case law relating to spousal maintenance.  Trying to provide a summary of that case law in a small space like this is not really feasible.  However, a preliminary look at some of the relevant sections of the Family Law Act can make a useful starting point.

Sections 71, 72, 74, 75, 77, 77A and 80-85 of the Family Law Act provide in relation to spousal maintenance.

Section 72(1) provides:

“(1)  A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

(a)  by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

(b)  by reason of age or physical or mental incapacity for appropriate gainful employment; or

(c)  for any other adequate reason;

having regard to any relevant matter referred to in section 75(2).”

Section 75(2) provides:

(2)  The matters to be so taken into account are:

“(a)  the age and state of health of each of the parties; and

(b)  the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

(c)  whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and

(d)  commitments of each of the parties that are necessary to enable the party to support:

(i)  himself or herself; and

(ii)  a child or another person that the party has a duty to maintain; and

(e)  the responsibilities of either party to support any other person; and

(f)  subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

(i)  any law of the Commonwealth, of a State or Territory or of another country; or

(ii)  any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

and the rate of any such pension, allowance or benefit being paid to either party; and

(g)  where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and

(h)  the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

(ha)  the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and

(j)  the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

(k)  the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and

(l)  the need to protect a party who wishes to continue that party’s role as a parent; and

(m)  if either party is cohabiting with another person–the financial circumstances relating to the cohabitation; and

(n)  the terms of any order made or proposed to be made under section 79 in relation to:

(i)  the property of the parties; or

(ii)  vested bankruptcy property in relation to a bankrupt party; and

(naa)  the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:

(i)  a party to the marriage; or

(ii)  a person who is a party to a de facto relationship with a party to the marriage; or

(iii)  the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

(iv)  vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

(na)  any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

(o)  any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

(p)   the terms of any financial agreement that is binding on the parties to the marriage; and

(q)  the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.”

Section 75(3) says:

“(3)  In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.”

Stamp Duty Exception

Section 90 of the Family Law Act provides for specified instruments to be exempt from state or territory stamp duty.  This list includes “a deed or other instrument executed by a person for the purpose of, or in accordance with, an order made under this Part” (Part VIII – property, spousal maintenance and maintenance agreements).

In New South Wales, section 68 of the Duties Act provides in relation to stamp duty exemptions relating to specified documents executed in accordance with an order of a court made under the Family Law Act and specified documents executed in accordance with a financial agreement made under the Family Law Act.

It is important to note that family law and stamp duty law and related requirements can be complex and that this entry cannot be relied upon as advice or as the basis for action.

Stay of Proceedings

Stay of proceedings generally refers to an order halting or postponing operation of an earlier order or further process.  This sometimes occurs in circumstances where an appeal or review has been filed with the court (see Appeals) and where carrying out the order which forms the subject of the appeal or review would defeat the purpose of the appeal or would otherwise cause difficulty or duplication of costs or effort.

Steps in the Settlement Process

For a family law result to be reliable (or as reliable as is possible), some steps are necessary.  Generally, it makes sense to carry out those steps in the right order.  Briefly, those are as follows.

  1. Advice – generally, for a result to be reliable under family law, it is necessary for both parties to obtain advice from separate solicitors.  This means that both parties can gain a reasonable understanding of how family law works in practice, what they can reasonably expect and a reasonable understanding of common mistakes to be avoided and these things can make reaching a resolution much easier.  Obtaining advice early can mean knowing what you’re doing from the beginning and avoiding mistakes that can be difficult to fix later.
  2. Disclosure – full and frank disclosure is central to family law and is required under the Family Law Act, the court rules and the case law (see Disclosure).  Providing and receiving disclosure early means that both parties are able to make informed decisions early.  While it is common for people to make decisions first and to provide and receive disclosure second, this can result in second thoughts or disappointment (when expectations and actual calculations don’t exactly match).
  3. Calculating – turning earlier general advice into dollars and cents.
  4. Further advice – once calculations are available, it is sensible to consider many issues – including stamp duty, accrued CGT liabilities, other tax issues, practical issues, finance issues, indemnities, joint accounts, credit issues, parenting, child support, maintenance, updating, checking, personal items, super issues, SMSF issues, trustee obligations, double-checking,… – to make sure that any proposal formulated does not result in future problems.
  5. Proposals
  6. Settlement.

Superannuation

Section 79(1)(a) of the Family Law Act provides for the court to make orders “with respect to the property of the parties to the marriage or either of them – altering the interests of the parties to the marriage in the property”.

Section 90MC says a “superannuation interest is to be treated as property…”.

It follows that, in most family law matters, each of the parties’ superannuation entitlements can form the subject of an order altering the interests of the parties to the marriage or be taken into account when making such orders.

In December 2002, specific amendments providing for the splitting of superannuation entitlements under family law became effective.

In the case of an accumulation entitlement (the most common form of superannuation in Australia), a value can usually be ascribed to the entitlement by obtaining an up-to-date statement from the trustees of the fund.

In the case of a defined-benefit superannuation entitlement, figures on statements can differ substantially from the value calculated under the court’s regulations.  The pension or lump-sum value of a defined-benefit superannuation entitlement is usually calculated as a function of final salary and a specified multiple.  If you have such an entitlement, you will probably be used to hearing about the multiple at your workplace or will have seen references to it on statements.

Valuation methodologies for defined-benefit superannuation interests (including pensions) are set out in the schedules to the Family Law (Superannuation) Regulations.  While Regulation 29 says “If the whole of the superannuation interest is a defined benefit interest, the gross value at the relevant date of the interest is to be determined in accordance with this regulation”, the court is not necessarily bound to adopt such a value (see, for instance, EdwardsWelch and Abney and Surridge).

A number of issues can arise in relation to self-managed superannuation funds (SMSFs). Issues may relate to compliance (questions about whether funds comply with relevant superannuation requirements); issues may arise as a result of the potential for conflict between an individual’s interests as a member of a fund, as a party to a family law matter and/or as a trustee of a fund (or as director of a trustee company); or issues can also arise where some assets of a fund may be subject to accrued capital gains tax liabilities or potential stamp duty liabilities.  There may be other issues.  Parties may need to be careful when dealing with SMSFs under family law and may need to obtain specialist advice.  You might wish to call Steve on (Sydney) 9222 8000 to discuss particular issues.

Taxation

In the context of family law, taxation considerations can give rise to many issues including in relation to prior transactions, recording and reporting accuracy, penalties and interest, setting aside past transactions, prospective or retrospective effects, company, business or trust, structure reorganisations, rollover provisions and relief, allowing for presently accrued liabilities (including CGT), concessions and exemptions, stamp duty, deemed dividends and Division 7A issues, trust issues, trust resettlement issues, income entitlement issues, accumulations, distributions, known and unknown transactions, disclosure and investigation issues, transactions that may give rise to uncertain tax outcomes, rulings, determinations and private rulings, consideration issues, valuation issues, CGT events, capital losses issues, timing issues, depreciating assets, trading stock issues, capital allowances, individual, company and trust interactions, inter-entity arrangements, franking and double-counting issues.

Each family law matter should be examined carefully so as to identify any potential taxation issues and the right expert advice obtained.

There are many cases dealing with taxation and related issues in a family law context.  It isn’t really feasible to summarise those here.  You might wish to call Steve on (Sydney) 9222 8000 to discuss particular issues.

Third Parties

In a family law context, third-party issues can involve questions of trust law, questions concerting asset transfers, questions concerning loans and gifts (and the difference between the two), questions relating to jurisdiction, questions relating to which assets are available under family law, questions concerning contributions made on behalf of a party, questions concerning inheritances and other issues.  These issues can be complicated and it isn’t really feasible to summarise them here.  You might wish to call Steve on (Sydney) 9222 8000 to discuss particular issues.

Trusts

Questions commonly arise concerning whether trust assets can be included in consideration relating to family law property settlements.

Section 79(1)(a) of the Family Law Act provides for the court to make orders “with respect to the property of the parties to the marriage or either of them – altering the interests of the parties to the marriage in the property”.

As a general proposition, where a party is one of a number of potential beneficiaries under a discretionary trust, where there is no pattern or history of distributions from the trust to that party, and where the party has no control over the operation of the trust or the discretion, the assets of the trust are not likely to seen as property that can be taken into account when making an order altering the property interests of the parties to a marriage under family law.

Where a party to a marriage can effectively treat assets of a trust as their own or has some element of control over those assets, the trust property can be treated as property of that party under family law.

A trustee cannot generally be directed to act in a manner that is not consistent with the trustee’s duties under to the trust deed or in a manner contrary to the due administration of the trust.

Section 80(1)(e) of the Family Law Act says the “court, in exercising its powers under this Part, may do any or all of the following…appoint or remove trustees”. This would generally only occur where the assets of the trust can be treated as property for family law purposes (see above) and the court cannot generally vary the terms of an existing trust.

Steve has a particular interest in trusts and their interaction with family law.  There are many cases relating to this interaction – too many to summarise here.  You may wish to call Steve on (Sydney) 9222 8000 to discuss particular issues and particular cases.

Valuation

Valuation issues can be important in family law matters.  One of the most common causes of difficulty in Family Court conciliation conferences is valuation issues.  If the parties hold significantly different views about the value of a significant asset or assets, this can make reaching settlement more difficult.

Valuation issues can be resolved by compromise, via the use of a single-expert or by a judge with the assistance of a report or evidence from a single-expert or a shadow-expert.

Vexatious Proceedings

Vexatious proceedings are specifically dealt with in part XIB of the Family Law Act.

Section 102Q defines vexatious proceedings as including:

  1. proceedings that are an abuse of the process of a court or tribunal; and
  2. proceedings instituted in a court or tribunal to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and
  3. proceedings instituted or pursued in a court or tribunal without reasonable ground; and
  4. proceedings conducted in a court or tribunal in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose.

Section 102QB(2) provides that the court can make any or all of the following orders in relation to vexatious proceedings:

  1. an order staying or dismissing all or part of any proceedings in the court already instituted by the person;
  2. an order prohibiting the person from instituting proceedings, or proceedings of a particular type, under this Act in a court having jurisdiction under this Act;
  3. any other order the court considers appropriate in relation to the person.

Violence

Section 43(1)(ca) of the Family Law Act directs that the “Family Court shall, in the exercise of its jurisdiction under this Act, and any other court exercising jurisdiction under this Act shall, in the exercise of that jurisdiction, have regard to…(ca)  the need to ensure protection from family violence”.

Section 60CC(1) says: “Subject to subsection (5), in determining what is in the child’s best interests, the court must consider the matters set out in subsections (2) and (3)”.

Section 60CC(2) says the “primary considerations are:

(a)  the benefit to the child of having a meaningful relationship with both of the child’s parents; and

(b)  the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence”.

Section 60CC(2A) says “In applying the considerations set out in subsection (2), the court is to give greater weight to the consideration set out in paragraph (2)(b)”.

In relation to violence in the context of family law property matters, the majority of the full-court in Kennon (1997) 22 Fam LR 1 said “Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of ‘negative contributions’ which is sometimes referred to in this discussion.”

The majority also said these principles “should only apply to exceptional cases”.

Brian Knox SC prepared a paper concerning violence in family law in 2017 which provides a good summary.  You can call Steve on (Sydney) 9222 8000 if you would like a copy.

When Can an Order be Set Aside?

Section 79A of the Family Law Act provides for a property order (including a consent order) to be set aside where “there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance”.

The section also makes provision for circumstances where:

  1. carrying out an order has become impractical;
  2. a person is in default and it is just and equitable to vary the order;
  3. exceptional circumstances exist relating to a child; and
  4. in the case of a proceeds of crime order.

Orders relating to children can be varied at any time but, most often, this would occur only where there has been a significant change in circumstances since the last order.

Written Communication

Someone involved in a family law matter may not be able to expect themselves to be completely objective at all times.  It may be important to remember this when communicating in writing.

Written communication made in haste or without some care or written communication that lacks objectivity can find its way into evidence and can reflect badly in the courtroom or in settlement conferences or the like.

It follows that it can be advisable to be careful about what you put into writing when involved in a family law matter or when such a matter may be pending.

Wills and Family Law

It is probably sensible to review your will every few years or whenever there is a significant change in your life.  The time surrounding separation may generally be such a time.  Changing circumstances may mean it is advisable to re-examine choices of executors and beneficiaries or other matters.

Divorce has the effect of deleting any reference in the will of one spouse (or, by then, ex-spouse) of the other ex-spouse.  This can result in problems concerning appointments of executors or can result in a full or partial intestacy (where a will does not provide in relation to all assets).

Similarly, marriage can have the effect of revoking a will that is not expressed to be made in contemplation of such marriage (though, in New South Wales, the Succession Act sets out a number of exceptions to this).