Viewing entries tagged
property dispute

I’m going through a property division - should I quit my job to get more?

We get this question, or a variant of this question very commonly. Part of the stages of a property division in Australia is considering each party’s future earning capacity. In response, people often have some ideas about how they might maximise the funds they receive.

Someone might ask whether they should quit their job, as getting 5% more of a million dollar pool of assets seems attractive. Or they might decide not to start looking for work very hard during the course of the proceedings. Sometimes opportunities come up and clients think about whether they should postpone taking up those opportunities. It can happen that there is deliberate contact to reduce your earnings just to try to get a bigger slice of the pie. Sometimes clients are, unfortunately, not completely honest with their lawyers or with the Court, and may be earning cash from jobs that they do not declare.

In all of these situations, the Court is obliged to look at your earning capacity, not necessarily what you are earning right here and now on paper. A skilful lawyer will be able to identify a pattern of earnings you’ve had, and if those earnings suspiciously drop around separation, you will have to have an excellent answer for why that happened for your Judge. You may be compelled equally to reveal to your ex-partner and the Court what attempts you have made to get a job, and your efforts in that regard (or otherwise) could become a significant issue.

Not only that, but by not working if you are otherwise able to, and not earning what you genuinely are able to for the work you do, you are depriving yourself for potentially years of litigation while you await a decision, all while gambling on whether a Judge will find your actions to have been believable. It’s not a bet I would risk my house on!

My view is that you should take the work you can get, can reasonably perform with your health and skills, for fair pay. You will have more money in your pocket from salary and appear as an honest, sensible person to any Court looking through your affairs.

This is of course a general observation and you should always seek advice specific to your circumstances. If you suspect your former partner isn’t playing by the rules, or you need advice about your reported earnings, call our lawyers on 03 9614 7111 to speak with someone now.

Forever young? Valuations and family law

The valuation of assets is a critical part of family law property settlements and divisions. Lawyers and clients are not usually property value experts, whether in the industry of real estate, businesses, cars or jewellery. You would be surprised how many people suddenly decide that they are experts in this field when they separate from their long-term partner! As a result, independent property valuations are commonly obtained when disputes arise about the precise value of items of property. But are those values, once obtained, set in stone

It is not unusual for valuations to be updated as a result of the passage of time – a property valuation that is two years old may not accurately reflect the current value. In what appears to be an uncertain real estate market at present, a valuation obtained even a few months ago may be able to be challenged based on new information and changes in market conditions. Business valuations also have a significant amount of complexity – sometimes it is best to obtain historic valuations of businesses ‘as at separation’ because of conduct by a party that has had the result of diminishing the value. It is extremely common for business owners to claim that their business has suddenly faced a downturn immediately after separation and the Court is increasingly sceptical about such claims, and so historic valuations may well be appropriate or useful to the Court. If you are on the other side of this equation though, an insistence on the current value may well be much more in your interests.

 

In short, you should engage a lawyer who is alive to these issues rather than blindly follows a set structure or path for every case. Tailored, specific advice is invaluable, and is something that we offer at Nevett Ford Melbourne. Call us on 9614 7111 to discuss your circumstances.

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.

Husband’s Business Suddenly Gains Value Post Settlement – What’s a Wife to do?

$93 million dollars! The Age today made headlines with this splashy article about ongoing legal battle that was brought before the Family Court of Australia. The parties have been given the pseudonyms of Mr and Ms Wills, and you can read their case here http://www.austlii.edu.au/au/cases/cth/FamCA/2017/183.html

In this case, the parties were married for 35 years before they split. On 27 April 2015, their property dispute was finalised where the wife received a division of assets worth $15 million. The Wife has then filed an application for this agreement to be disregarded, claiming that the Husband had failed to disclose relevant information relating to an interest in a business which later resulted in him receiving $93 million.

As it appears to have turned out, on 1 May 2015 the Husband was said to have “determined to take the initial steps to the making of an Initial Public Offering (IPO)” for the business. Their property dispute was finalised on 27 April 2015.

Having not seen the full details of the case, it is hard to say exactly who said what, knew what and when, and so we cannot comment definitely on what will happen. But there may be some value in looking at cases where the property ‘pool’ consisted mainly of lottery winnings (bought by the husband), as in the case of Elford v Elford [2016] Fam CAFC.

In Elford the Appeal Judge upheld the trial judge’s decision that the winnings were not a joint endeavour but rather recognised that the husband made the sole contribution to the winnings – therefore dismissing the wife’s appeal to a greater share in the property pool.

The question then is whether the wife receives any entitlement to the $93 million.

Only an experienced lawyer such as one from our family law team would be able to navigate you through complex scenarios such as the above – we are contactable on 03 9614 7111 or otherwise out of office hours on melbourne@nevettford.com.au.