Divorce explained.
The word ‘divorce’ is often used to describe the process of separation. However, the term only applies to married couples who are legally ending their marriage. A divorce is a separate legal process to the process of negotiating post-separation parenting arrangements and property divisions. De facto couples do not need to get divorced.
A husband and wife must be officially separated for at least 12 months before they are eligible to file an Application for Divorce. In order to obtain a divorce, one or both of the parties, must believe that the marriage has irretrievably ended. The Court does not consider the reasons for the breakdown of the marriage.
Once a Divorce Order has been made, the Certificate of Divorce is issued, a month and one day later. This is available from the Commonwealth Courts website via: www.comcourts.gov.au. Following the making of a Divorce Order, parties have 12 months in which to file an Application with the Federal Circuit and Family Court, for a property division. However, from the time of separation, parties are also free to negotiate a property settlement either by themselves or through a lawyer-assisted mediation. At The Law Office of Conrad Curry, we have a strong track record in assisting our clients to negotiate just and equitable property settlements that meet their legal and financial needs. We are also experienced and skilled at taking matters to trial, if a property settlement is not able to be negotiated.
What is de facto relationships?
When determining whether a couple has been in a de facto relationship, the Court considers a range of different factors including the personal circumstances of the couple. Over time, a list of factors, that might prove the existence of de facto relationship, has been developed by the Courts. These include, but are not limited to:
· The public status and reputation of the relationship, (ie did other people, including friends and family believe that they were a de facto couple)?
· Whether or not the couple lived together in the same residence?
· Whether they had joint finances or shared bank accounts?
· Whether they had children together?
· Whether they had a sexual relationship?
· Whether they performed domestic tasks for each other or for the benefit of each other’s family members living in the same household?
· Whether they entered into legal contracts as a de facto couple (eg a mortgage)?
· Whether the length of time that the parties cohabited was more than two years?
If the parties agree or the Court determines that they were living in a de facto relationship, they then have two years from the date of separation, to negotiate a property settlement or to file an Application for a de facto property division pursuant to Part VIIIA and Part VIIIB of the Family Law Act. At The Law Office of Conrad Curry, we have significant experience in assisting clients to negotiate cost-effective and timely de facto property settlements. We also have proven success in prosecuting de facto property claims, through the Courts when agreement can’t otherwise be reached to secure a fair share of joint assets on behalf of our clients.
What do I need to know about child support?
From the date of separation, you may apply to the Child Support Agency (through Services Australia) for an assessment of child support liabilities. If you and your former partner are not able to agree on financial support that should be provided for the children of the relationship, then you can request that the Child Support Agency starts a collection process to obtain child support from your former partner.
The Child Support Agency is a large government agency and there are often significant delays between lodging an application for assessment, starting the collection processes and money being received. You should also be aware, that if you are on a Centrelink payment, Centrelink will use your child support assessment as part of the formula applied to calculate the benefits that you are entitled to receive.
If you have been a victim of family violence, you can apply for a Child Support Exemption, which has the effect of excluding your assessed Child Support entitlements from your assessment of Centrelink entitlements. In some cases, a parent will withhold access to children in order to secure more child support. At Conrad Curry Lawyers, we have a strong track record in working with clients to ensure that child support assessments reflect the real financial circumstances of each party and to protect children from being used as pawns in child support claims.
The Child Support Agency also has a child support estimator that you can use to estimate your child support entitlements or liabilities. You can access the child support estimator via: https://www.servicesaustralia.gov.au/online-estimators#a4
What is a parenting order?
Parenting Orders are made by the Court following an Application being filed with the Court by one or both of the parties. Parenting Orders can be made by Consent when parties agree about parenting arrangements for their children. Otherwise, the Court considers competing Orders proposed by each of the parties. Whether Orders are made by Consent or following a trial, the Court is required to consider any proposed Orders, using the ‘best interests’ guidelines set out in section 60CC of the Family Law Act 1975.
It is important to understand, that the Family Law Act does not require the Court to consider the rights of parents, only the rights of the child. Our family law team at The Law Office of Conrad Curry, can help you to understand how the best interest guidelines is applied to the circumstances of your case and the evidence that you will need in support of your proposed Orders.
What happens if the Orders are not followed?
If your Orders are not followed by the other party, you have the option to apply to the Court for a remedy by filing an Application – Contravention. Usually, the Court will require you to attempt to settle the matter by negotiation and then to attempt mediation. If the matter cannot be settled, then it will be referred to the Contraventions List and allocated to a Registrar for Directions. At each stage of the process the Court will try to ensure that the parties make all efforts to resolve the matter by negotiation. If the matter cannot be settled it will be listed for hearing.
A proven contravention of a Court Order is a criminal offence. This means that the Respondent has the right to silence, and that the Applicant has to prove the offence and to prove that the Defendant did not have a reasonable excuse and that the Defendant made no attempt to resolve the issue. In this sense, it is important that parties make genuine, reasonable and fair offers of settlement at every stage.
The penalties that can be imposed for a proven contravention without reasonable excuse include:
(a) Make-up time to compensate the other parent for time missed due to breach of Parenting Orders;
(b) Penalty interest to compensate the other party for a failure to pay a specified sum by the Court-ordered date;
(c) An additional share of the joint property assets;
(d) A fine (usually reserved for repeat offenders);
(e) A bond (usually reserved for repeat offenders);
(f) An Order for the guilty party to pay the other party’s costs of the Contravention Application and costs associated with the breach;
(g) A Community Service Order;
(h) A referral to a parenting program;
(i) A referral to family therapy;
(j) A term of imprisonment;
(k) A change in the final orders (as long as such change is in the best interests of the child).
Due to the seriousness of the penalties that may be imposed by the Court, it is imperative that you acknowledge, comprehend, and abide by any Orders made by the Court.
However, if you have a reasonable excuse for non-compliance with the Orders, the Court can make a finding that the breach has been proven but that a penalty should not be imposed due to the person having a reasonable excuse for non-compliance with the Order. In a property matter, a reasonable excuse might include an unanticipated event that made it impossible for one of the parties to comply with the Order. For example, an inability to make a payment specified in a Court Order due to the failure of a third-party mortgagee to complete settlement on time. In a parenting matter, a reasonable excuse might include the parent or the child having Covid19, a parent being unable to attend a changeover due to flooding of access roads or some other unforeseen event.
At The Law Office of Conrad Curry, our family law team has a strong track record in prosecuting breaches of Court Orders and in defending our clients against Applications for Contravention Orders. We would be happy to provide timely and trusted advice to you about any anticipated breaches or whether a particular circumstance would give rise to a reasonable excuse. This reflects our commitment to reducing uncertainty and alleviating the stress which often goes hand in hand with family law issues.
Spend time with arrangements. What are these?
Following separation, most Australian children end up in a ‘substantial and significant time’ arrangement under which they live with one parent and spend time with the other parent on weekends, school holidays, special occasions and for events that are of significance to the parent and/or the child.
An Equal Shared Care or “50:50” shared parenting arrangement is quite rare. For a 50:50 arrangement to work, the parents must have an effective and collaborative child-focused parenting relationship that is characterised by trust, respect and a willingness to support the other parent in their parenting of the children when required.
Since 2007, the Australian Institute of Family Studies has commissioned and reviewed a significant body of research about the impacts on children of being in 50:50 shared care parenting arrangements when the parental relationship is high conflict. This research has shown that an equal shared care arrangement can result in poorer social, physical and other developmental outcomes for children if their parents have a high conflict relationship. By definition, a matter is ‘high conflict’ if the parties have to apply to the Court to obtain Parenting Orders because they cannot reach agreement about the best arrangements for their children.
How does a Court determine a property settlement?
Property divisions following separation do not follow a mathematical formula. Whether parties come to their own agreement or apply to the Court for Consent Orders or for a judicial determination, a four-step property division process is usually followed.
At Step One – the joint net asset pool is calculated by adding up all the assets of the relationship and deducting all the liabilities. At this stage, there may be some contested assets and liabilities. These are adjusted at a later stage in the process.
At Step Two – the contributions of the parties are assessed and adjustments are made to reflect these.
· Direct financial contributions are assets including real property, cash, shares, cars etc contributed by each party during the relationship;
· Indirect financial contributions are loans, payments, assets etc that have provided for the benefit of one or both parties during the relationship. For instance, being able to live rent-free with family members. whilst renovations are undertaken on the marital home or being provided with an interest free loan to purchase a home.
· Contributions to the care welfare and development of the family are contributions made by one or both parties to the care of children, care of each other and care of other family members. For example, if one party has a period of maternity leave, then that party’s contributions in giving birth and caring for an infant will be equated to the contributions of the other party as an income earner during the same period.
· Non-Financial contributions reflect the ‘sweat equity’ contributed by one or both parties to the improvement, maintenance or repair of assets. For example, if one party undertook renovations on an unpaid basis that improved the value of a property.
At the end of Step Two adjustments are made to the joint net asset pool to reflect the relative value of the contributions made by each party.
At Step Three – adjustments are made due to the health of each party, their current and future parenting responsibilities, the current and future income of each party, the current and future superannuation savings of both parties and the impact of the relationship on these.
At Step Four – any proposed Orders are reviewed to ensure that they are ‘fair and equitable’ having regard to the circumstances of the relationship and the current and future needs of the parties.
What is the difference between Spousal Maintenance, Child Support and Child Maintenance?
Spousal maintenance is the duty of a party that provided financial support to the other person during the relationship, to continue such financial support for a limited time post-separation. It is usually limited to a period of two years after separation, but there is no hard and fast rule.
Spousal maintenance can take the form of a regular payment or a lump-sum adjustment of joint assets that can be made on an interim or final basis. Spousal maintenance is not the same as child support or child maintenance. Child support refers to an amount paid by one parent to the other parent to cover the basic costs of living for a child. Most child support liabilities are calculated by the Child Support Agency following an assessment process. Child maintenance includes payments made to cover any costs for children over and above basic child support assessments. For example, orthodontic treatment costs, private school fees, gymnastics classes, enrolment in soccer or swimming lessons.
When considering an Application for Spousal Maintenance, the Court considers:
– The need for financial support owing to a spouse
– The ability of a spouse to financially support the other within an appropriate timeframe
– Future need as set out in section 75 of the Family Law Act
– The full nature and impact of potential support including what is reasonable given the circumstances of the parties.
The Court does not have regard to a need to maintain the pre-separation lifestyle of either spouse post separation. In fact, the Court often recites the “rich together/poor apart” mantra when asked to consider pre-separation lifestyle costs.
An application for Spousal Maintenance must be made in a timely manner. Unless there has been a significant change in circumstances, you cannot bring an Application for Spousal Maintenance, several years down the track. This is because the fact that you have managed to survive without spousal maintenance being paid for an extended period, tends to prove that it is not required.
Property settlements – must they be official?
If there is one piece of advice to remember, it is: do not let too much time lapse before you start your property settlement.
There are three main ways that you can do a property division.
A Binding Financial Agreement (‘BFA’) – is a specialised Deed that is drafted to reflect an agreed property division. Due to the technical requirements for a BFA to be recognised and enforced, it is very important that you obtain specialist legal advice to draft a BFA. There are many reasons why a BFA might be set aside by a Court at a later date and BFA’s are seen as ‘high risk’ by many legal practitioners due to the frequency at which they are overturned by the Courts.
An Application for Consent Orders Property – is a joint application made to the Court by both parties. It involves each party completing one-side of an Application form and signing agreed Orders. It is usually quick, cheap and cost-effective. The proposed Orders are then submitted to the Court together with the prescribed fee, for review by a Judicial Registrar. He or she checks the Orders to ensure that they are fair and equitable given the circumstances of the relationship and the current and future needs of each party. If the Orders are acceptable to the Registrar, they will be sealed (stamped) and published on the Commonwealth Courts Portal.
Once Consent Orders have been endorsed by the Court, they are difficult to overturn or to have set aside, unless there is a significant change in circumstances soon after the making of the Orders or unless there has been an abuse of process due to the failure of one of the parties to disclose a significant financial asset which would have affected the property division.
Accordingly, Consent Orders are a cost-effective and relatively quick way to achieve a property division. Once the Orders have been published by the Court they can be used to obtain exemptions from the payment of stamp duty that is usually required for the transfer of property interests and they can be used to effect the rollover of superannuation interests from one party to the other party without tax penalties being imposed.
An Initiating Application for Property Orders can be filed with the Court by one of the parties after all settlement attempts have failed. The Application includes a form setting out the proposed property orders, a Financial Statement detailing the party’s current financial circumstances and an Affidavit that provides evidence about the financial arrangements during the relationship and the contributions of each party including financial contributions and contributions as the carer of children and to the family.
At the first ‘mention’ of the matter before the Court, procedural Orders will be made about the case management of the matter and financial disclosure. Once this has been completed by both parties, the matter will be referred to a settlement process. This might be in the form of a Conciliation Conference Financial which is a form of dispute resolution with a Court Registrar, or the parties may be referred to Arbitration which is a quasi-judicial process or they may be referred to a private lawyer-assisted mediation.
As property divisions involve a lot of technical issues and a balancing of rights and responsibilities, we recommend that you get some legal advice before entering into any agreements or disposing of any assets after relationship breakdown. Failure to prepare is preparing to fail.
Should I be thinking of Estate Planning and Super documents upon separating?
The answer is yes and as always, the best advice is to get it sorted and out of the way as soon as possible. Not least because everything is easier when matters are fresh in your mind.
Following separation, you should think about updating your will, power of attorney and enduring guardian documents. If you get divorced as part of your separation process, any previous Will becomes invalid in respect of your former spouse upon the Divorce Order taking effect.
Sometimes after going through an arduous property settlement process, people forget to update their Estate planning documents. Unfortunately, this means that all the effort and expense they invested to obtain their property division is potentially wasted.
Ask yourself, do my estate planning documents reflect my wishes as at the present? If you do not have a will, then now is the time to have one carefully devised by our estates team at Ther Law Office of Conrad Curry. Separation is a time of altered circumstances, and you should ensure that your Will and other Estate documents reflect your changed circumstances. You should also consider updating your nominated beneficiaries for any superannuation entitlements in your name. Our skilled and experienced Wills and Family Law Teams are always happy to help you with your family law and estate planning needs, so reach out to us with a simple phone call today.
The team at The Law Office of Conrad Curry is here for you when you need it to know where you stand in relation to right and duties within Family Law.