Viewing entries tagged
separation of property

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.

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.

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.

Who stays in the home?

When your Ex Won’t Move Out…..

There are times when both parties wish to remain in the family home post separation.  You may feel you have a greater right to remain in the home; maybe it was your home prior to the relationship or marriage.  You perhaps made greater financial contributions to the home or have primary care of the children, or you simply may have nowhere else to go nor the financial resources to leave.

Whatever the reason in the event of family law separation both parties are legally entitled to live in the family home.  It does not matter whose name is on the ownership of the house. 

If you leave the house, you do not lose your rights to a share of the house, or other property. You can also legally protect your interest in the family home if your name is not on the title by placing a caveat on the property which registers your interest in it.

You cannot be forced to leave the property at the mere demand of the other party in the absence of safety concerns.   If there are no safety concerns, no court orders have been breached, the removal of one party from the residence cannot even be enforced by the police.

Can you change the locks?

It is generally not advisable to change the locks as a tool to evict a party from the property, in addition to increasing the acrimony between the parties it can also reflect poorly in any subsequent court proceedings.

If the property is owned by one party, that party has the right to change the locks, if it is jointly owned then both parties are able to change the locks.  If the property is being leased then the landlord should be consulted about the lock change.   Even if the party who is remaining in the property is not the legal owner, it can nonetheless be justifiable for them to change the locks if the other party has moved out and has removed their possessions.  It is argued that the remaining party is entitled to the peaceful enjoyment of their residence, similar to that of a tenant.

How can I get my partner to leave?

To legally force your partner to leave the home and stay out, you will need to obtain an exclusive occupancy order from the court.  These orders are usually only made in circumstances involving threats, domestic violence and/or safety concerns for one of the parties or their children or whether the children are being exposed to parental conflict.  

We would need to explore the pitfalls of remaining in the home with your former spouse – weight it up against what you want to achieve by remaining in the property and is there a better option for you.  For example, if the costs of establishing a new household is a deterrent, we may need to consider whether an application for urgent or interim maintenance to fund relocation would be appropriate.

Can I take the children with me?

You can take the children with you if there are concerns about your safety and the children’s safety.  However, if you want to move away with the children and the move makes it difficult for the other parent to see them you need to try to get agreement first.

If you are afraid to try to get the other parent’s agreement and are worried about your safety, we can speak to you about your options.

If your former partner refuses to vacate the home or wish to discuss your options prior to separation and your matter generally, you should contact our office to make an appointment on 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.

Risks in delaying property settlements

Risks in delaying property settlements

Parents, children and or family members who have endured or witnessed a relationship breakdown can certainly attest to the challenges and intimidation separated parties face as a result. Not only are they emotionally challenging, they involve life-changing and confronting decisions, particularly adjusting to the severance of any financial ties and or resolving care arrangements for the children.

It is not uncommon to come across clients who have separated and left finalising their property settlement for many years. Empathetically and understandably so, property negotiation with a former partner is probably the last detail on the minds of separated parties, given the need to also address emotional issues resulting from separation – however it is imperative that you know the considerable risks associated when discussions surrounding a family law property settlement are left for a significant period.

It is important to be aware of the time limits under the Family Law Act 1975 in bringing proceedings for property settlement or spousal maintenance before the Court, which is designed to promote property settlements within a practical time frame.

  • For married couples, you have 12 months from the date of divorce;
  • For de facto couples, you have two years from the date of separation.

For married couples, we do not recommend applying for divorce until property settlement has been finalised or proceedings commenced seeking property orders. For de facto couples, we commonly run in to the issue of being out of time and we see parties expending legal costs to argue the exact date of separation – therefore reiterating the importance of finalising your property settlement at the first available opportunity following separation.

These time frames exist under the Act to provide certainty to both parties and is beneficial in cases where one party is deliberately skirting the negotiation process (usually the party required to pay maintenance or the party who has smaller future needs) and delaying a property settlement.

In the event you wish to pursue a property or maintenance claim outside the designated time frame, you can only do so with the Court’s permission, that is, leave must be sought from the Court to begin proceedings. The Court must be satisfied that hardship will be caused to you or a child if leave was not granted. In maintenance proceedings, you must demonstrate that at the time the ordinary time limit expired, you were unable to support yourself without an income tested pension, allowance of benefit.

Another significant risk associated in delaying a property settlement is that values of assets, liabilities and or superannuation, as well as the parties’ financial circumstances may change between the date of separation and when negotiations begin and or the matter is brought before the Court –the law looks at and considers the asset pool at the time of any trial, not at the date of separation. This means that any lottery wins or inheritances accumulated may be included as part of the asset pool for division. Similarly, delaying a property settlement whilst meanwhile disposing of any matrimonial assets prior to a settlement can be treated by the Court as that the person has already received part of their property settlement entitlement, thereby reducing their entitlement in the final settlement.

When property settlements are left for a significant period, this also increases the risk that one party may die before proceedings are initiated. Any property owned as joint tenants such as the matrimonial home will be transferred automatically to the surviving tenant (usually the ex-spouse), regardless of what the deceased’s Will states and regardless of whether the parties have separated.

It is for these complexities and risks involved in determining the parties’ entitlements after a long period of separation that we advise you to speak to one of our experienced family lawyers post-separation. Or, if you are in a position where the ordinary time limit has lapsed, we can tailor our advice to you accordingly taking into account your circumstances.

On the same note, if you have managed to reach an agreement with your former partner about a property settlement, we encourage you to document it in a legally binding and recognised manner, either through Consent Orders or a Binding Financial Agreement. The risks you face otherwise is that your partner later decides to change the agreement, which was never formalised in the first place. Putting the terms of settlement in a legally enforceable way would save considerable amount of time and costs in the future if the “informal” agreement was challenged.

Please do not hesitate to contact us on 03 9614 7111 or email us out of hours on melbourne@nevettford.com.au.