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family law

Family Law and the Bank of Mum and Dad

It’s common for modern entrants into the property market to have had some assistance getting there. You might have heard of the term ‘the Bank of Mum and Dad’ to refer to when parents or family members have assisted someone in helping with a deposit on a property. But how does this new type of Bank stack up when it comes to a separation with your partner?

Family law has long adopted a presumption about money coming from family members, called the presumption of advancement. In brief, that presumption says that where there is an intra-family transfer (a payment from your mother to you for example), then that is presumed to be a gift. If there is evidence to the contrary, then the presumption can be rebutted.

What does it take to rebut the presumption of advancement? There are competing schools of thought and arguments about this. One line of reasoning says that if you intended something to be a loan, then you would have all the regular features of a loan – a contract entered into before the money was transferred, terms of repayment, interest payable, the ability for whoever loaned the money to ‘call in’ the debt, and even registering an interest by way of a charge or sometimes a mortgage.

However another line of reasoning, advanced particularly in the Supreme Court of NSW, has said that family members are simply unlikely to adopt such formalities in their intra-family relations, but that this shouldn’t stop a Court taking a view that money transferred was a loan, not a gift. That is, that the level of formality about a loan in a family is going to be lower than if the Commonwealth Bank, for example, loans you some money.

These questions turn on evidence, and your conduct with the money, particularly before you separated. If you separate, and suddenly start treating money as being a loan and paying interest, it certainly looks suspicious if that’s not what was happening before. Patterns of conduct are important, as are formal documents being prepared at the time of the loan, particularly with documents showing that a partner or former partner knew exactly what was going on.

It’s easy to say all this in hindsight, but our lawyers are experts at asking you the right questions to help find the evidence that you might need to argue a loan – and if you cannot, giving you the right advice early to help you avoid going down the wrong path.

Call us now on 03 9614 7111 or email melbourne@nevettford.com.au to find out more.

Were you in a de facto relationship?

A de facto relationship is defined in Section 4AA of the Family Law Act 1975. The law requires that you and your former partner, who may be of the same or opposite sex, had a relationship as a couple living together on a genuine domestic basis. However, your relationship is not a de facto relationship if you were legally married to one another or if you are related by family.

But what counts as de facto? Does going to all the same events together, does attending family gatherings, does having a hild?

In Crick & Bennett [2018] FamCAFC 68 (13 April 2018) the Full Court (Ainslie-Wallace, Aldridge & Watts JJ) dismissed the De Facto Husband (DF Husband)’s appeal against Tonkin J’s declaration that a de facto relationship existed while he lived in the De Facto Wife (DF Wife)’s home from 2001 to 2014. He argued that despite having a child in 2003 they had lived apart under one roof since 2004, never acquiring any joint property or operating any joint account.

The DF Wife gave evidence that the parties went out to events where they ‘presented as a couple’ but the DF Husband denied this. The DF Husband accepted that the parties attended many family, social and school events with their child but denied that when they were at these events the parties ‘presented as a couple’. The Full Court indicated that the DF Husband “did not set out any facts or circumstances that could illuminate his assertion and it is impossible to attribute any probative weight to that evidence.”

In this case, the Full Court placed highest importance to the determination of whether the parties had ‘a relationship as a couple living together on a genuine domestic basis’ [s4AA(1)(c)) of the Act]. The concept of whether the parties are a ‘couple’ is part of the test. The primary Judge in this case found that between the alleged period the parties attended many social and family events including family Christmases, birthdays, events held at the parties home and at their relatives’ home as well as the child’s school functions. The Full Court continued to state “This was significant evidence of the public aspects of the . . . relationship and supported a finding that there was a de facto relationship. If the appellant wished to contend that the parties’ conduct at those events led to a different conclusion then it was incumbent on him to adduce evidence to support that proposition”.

Other than establishing that you were ‘living together on a genuine domestic basis’ you’re your former partner, you must satisfy the Court of all of the following:

  1. you meet one of the following four gateway criteria

    1. That the period for the de facto relationship is at least 2 years

    2. That there is a child in the de facto relationship

    3. That the relationship is or was registered under a prescribed law of a State or Territory

    4. When assessing property or custodial claims in cases of a breakdown of a relationship, it is recognised that significant contributions were being made by one party and the failure to issue an order would result in a serious injustice

  2. you have a geographical connection to a participating jurisdiction

  3. your relationship broke down after 1 March 2009 (or after 1 July 2010 if you have a geographical connection to South Australia only); although you may be able to apply to the courts if your relationship broke down prior to the date applicable to your state.

In the event of a breakdown of a de facto relationship, you must apply for de facto financial orders within two years of the breakdown of your relationship. After this time you need the Court's permission to apply.

If you are uncertain as to whether your relationship constitutes a de facto relationship, or if you are in one that has unfortunately broken down and you would like to discuss further what your entitlements are, please do not hesitate to contact one of our approachable and experienced family lawyers. The number to dial is 03 9614 7111, or email us out of hours on melbourne@nevettford.com.au.

Family law Courts to be restructured, given new name

The Federal government announced today its intention to combine the existing two-Court federal family court system in Australia into one, larger Federal Circuit and Family Court of Australia (“FCFCA”) commencing 1 January 2019.

What does this mean for you though? Currently, there are two Courts, one that is the ‘higher’ Court – the Family Court deals with complex property matters, serious allegations of child abuse or  particularly serious parenting arguments, International parenting matters and protracted disputes; and the Federal Circuit Court deals with the bulk of family law matters.

At present, your lawyer has to decide which Court you ‘belong’ in when starting your case. It is often not easy to know this at the first stage, and choosing the wrong Court may mean that you are sent between Courts while this is clarified or when new issues arise. Additionally, starting Court proceedings for property disputes in the Family Court is currently ‘easier’ than in the Federal Circuit Court, as you are not required to file an affidavit in support of your application at first. Drafting a good, comprehensive and accurate affidavit in support of your case can be time-consuming (and costly) and so it is a quick option for lawyers in a rush to simply go to the Family Court even if the property case is not otherwise complex enough to justify being in that Court.

The combined Court will mean a single point of entry for all matters, which will then be directed in the right place. This might be considered a bit like ‘triage’ that a hospital might conduct, prioritising and assessing cases as they come in and linking them with services, hopefully sooner than they would be otherwise.

The additional factor to consider in the government’s announcement is that appeals from the FCFCA will no longer be dealt with by an appeals section of the Family Court, but will be dealt with in a new division of the Federal Court of Australia. What does this mean? Family law judges in the Family Court who currently spend time hearing appeals will be available to hear cases from the start, potentially meaning more front-line resources in terms of time and Judges.

Of course, at present this is just an announcement. Once the government releases its proposal in more details, we will be able to assess how effective this might be at clearing some of the delays currently affecting the family law system.

File an application immediately if your child is relocated away from you

Often, parents are so shocked or devastated when their former partner takes some sort of unilateral action with their child(ren) that they do not do anything for some months. Recently, an application to list a mother’s application urgently was declined even though her 12-year-old child was unilaterally moved more than 600km away from her by the father in January 2017. This was the matter of Quong & Bush [2017]FCCA1765.

The mother was not granted permission by the Court to have an urgent because the child was not at risk of harm in the current arrangement. These types of decisions are made in the first instance by a Registrar of the Court.

The mother decided to seek a review of this decision by a Judge. Judge Terry concluded that the child was not at risk of harm in the current arrangement and the Court has to prioritise cases involving those children who are at risk of harm. These might include babies who have been take from their primary carer, cases involving severe family violence, cases in which one and sometimes both parents are using ice, cases in which there are serious alcohol abuse issues and cases in which one and sometimes both parents have serious mental health issues.  Limited Court resources do not allow a case in which there are no risks of harm issues to be prioritised over other cases competing for judicial time. This emphasises why you should take action quickly, as it emphasises any perceived risk, and worst case, ensures you are listed for hearing sooner.

The Courts are however generally disapproving of a parent unilaterally relocating a child far away from the other parent concerned, unless the relocation can be justified by the existence of some form of emergency or threat to the child or the parent.  Each case is decided based on the individual facts of the case, and there is limited guidance from the Family Law Act as to how these cases should be determined. The discretionary nature of the child’s ‘best interests’ means that it is difficult for parties undertaking relocation to navigate the process on their own.

If you have separated and are thinking about relocating with your children, or you are aware that the other parent is, you should seek advice about the best way to go about it from our experienced Family Law Team by calling 03 9614 7111.

Don't assume your partner will get half of your asset's increase in value!

It is a prevailing shorthand for many family lawyers that a starting point in a property division for clients is to work out what each party had at the beginning of the relationship, apply a percentage to what they have now, and estimate that your contributions otherwise during the relationship are '50/50'. However, a new case has emphasised the risks in taking this shorthand approach in some situation.

In the matter of Anson & Meek [2017] FamCAFC 257 (http://www7.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FamCAFC/2017/257.html), the trial Judge found that the Husband had brought in a property worth about $1,000,000 at the beginning of the relationship. That property had increased in value to almost $2,000,000 at the time of the family law trial. The assessment of contributions during the relationship, although not linked explicitly to this calculation, meant that the Wife was treated as having contributed half of the increase in value.

The Full Court took issue with this outcome, and identified that in fact the increase in value of the property was not solely due to the financial and non-financial contributions of the parties during the relationship (including homemaking duties), but also to prevailing market factors. In fact, a very large proportion of the increase in value was connected to the increase in the land value of this rural property, rather than the increase in value of the home itself. It would stand to reason then that the Husband should have a greater percentage contribution attributed to him, as without his initial capital to buy the property, the parties would not have been in a position to profit so handsomely.

The case seems to indicate that the Court should not neglect the concept of 'springboarding' when looking at assets such as these. It is important that you have a lawyer who understands these concepts and is able to dig into the detail of your assets, rather than treating your assets generically. Our lawyers at Nevett Ford Lawyers Melbourne are fully across this issue and will be able to provide you with the advice you need to get the outcome that is appropriate. You can call us now for more information on 03 9614 7111.