Divorce in Australia

Arbitration in Family Law Matters in Australia

It is trite to say that the Family Court system is overburdened with matters, and that delays for litigants in reaching a final determination of their matter is continuing to grow. It is not unheard of that parties may have to wait up to 3 to 5 years for a Trial. There are serious financial and emotional consequences for all involved. A solution is Alternate Dispute Resolution – an umbrella term for processes that do not involve the Court or a Judicial Officer. This article provides some insight on “Arbitration” in the Family Law system.

Arbitration is a confidential dispute resolution process arranged privately in which the parties and their legal representatives appoint an ‘Arbitrator’ who decides the outcome of the dispute. The decision is called an “Award” and it is issued within 28 days and registered with the Family Court. It has the same ‘effect’ as a court Order.  

The manner in which the Arbitration is conducted is agreed between all of the parties but is mostly guided by the Arbitrator. In effect it is conducted like a formal Court Hearing – evidence is presented to the Arbitrator and the parties (and any witnesses) are cross-examined on their evidence. It is conducted in strict confidence – the Hearing is in private and is not open to the public and all involved are bound by obligations of confidentiality.

In Arbitration the parties and the legal representatives choose the Arbitrator (often an accomplished Barrister or former Family Court Judge, who they deem best suited to the case and best able to determine the matter in a reliable, independent, and timely fashion. This choice for the parties is not present in a Court process – there is no say about the Judge given.

The main drawcard for Arbitration is that with collaboration the readiness and completion of the dispute can take place in a matter of weeks, not years, which is far more cost effective for the parties and enables the parties to move forward with their lives. It also provides the parties with control over the process – they choose the Arbitrator, the date and the formalities. For these reasons, the process is becoming increasingly more popular as the Family Court system continues to struggle to cope with the number of litigants.  

It is important to note that Arbitration can only take place where all parties agree to it. You cannot compel a party to undertake the process. It is also only reserved for financial matters – it cannot decide parenting disputes. Mediation is usually the appropriate forum outside of the Court process for parenting matters.

In our experience Arbitration is often a worthwhile means to resolve some protracted disputes and assists with minimizing the costs and delays otherwise experienced by the parties if their matter continues through the Court process.

To discuss whether this form of dispute resolution is right for you, Dorter Family Lawyers and Mediators are expert family lawyers who specialise in all areas of family law and can assist. Please contact with us on (02) 9929 8840.

Rebekah Dorter
Principal

Andrew Johnson
Partner

Advancement of Monies

Have you assisted with the purchase of a home for your child(ren) who have now separated or divorced? Or have you separated, and your home has been purchased with the assistance of a family member?

You might wonder how the Family Law Courts treat an advancement of monies and whether this advancement of funds will be returned. 

How the Family Court treats these advancements depends on how the Court determines these funds were received. There are three common scenarios:

The funds were advanced as a “Loan”

If the money was advanced by way of a loan, the Court could consider this advancement as a liability when determining the net property pool available for distribution. The Court needs to be satisfied that the loan actually exists, and that the monies are required to be repaid. 

The Court can make an allowance for a particular liability if it is appropriate to do so and there is sufficient certainty that the loan is likely to be enforced. In other cases, the court may take the view that the liability ought to be disregarded in the interests of justice and equity of the parties. 

However, although the Court may disregard the loan as a liability in the balance sheet, the Court cannot disregard the liability entirely and the advance may be a factor affecting the party’s available financial resources. 

The funds were a “Gift”

If a party receives the moneys by way of a gift, then the gift is taken into account when assessing that party’s contribution to the asset pool. The significance of this contribution will depend on when the gift was received and how it was applied to the asset pool.

The funds created an “Equitable Interest”

If the monies were advanced by a third party for the purpose of that third party retaining an interest in the property, then the Court can consider that these monies are held on trust by the party (who legally owns the property) for the benefit of the third party who advanced the monies (commonly the parents). This third party (the parents) may hold an equitable interest in the property which the Court may need to exclude and usually pay back, when altering the parties’ interests in the property pool. 

The Court may find a trust exists. Specialist family law advice should be obtained as to the appropriate category of trust to ensure your claim is successful. The Court may find the trust is an Express Trust, an Implied Trust, or a Constructive Trust. 

1. Express Trust

The essential criteria for finding an express trust is that the parties intended to create the trust to deal with a specific subject matter for a specific purpose for the benefit of someone. This is usually documented in writing by way of a trust deed. 

2. Resulting or Implied Trust

Where there is no document, the Court can look to the circumstances surrounding the advancement and assess whether the third party intended the advancement of money  to be for a specific purpose, and not for the benefit of the party to the relationship.  

For example, if a spouse’s parents (third party) advanced money towards the purchase of a property for the spouse, then they  are required to rebut the presumption that this  advancement of monies was a gift and was not  for the purpose of the third party obtaining a beneficial interest in the property. 

3. Constructive Trust    

In the context of purchasing a property, a constructive trust arises if: 

1. the parties have a common intention between the parties that the third party who has advanced the moneys in the purchase of the parties’ property would have a beneficial interest in the property; or

2. notwithstanding the actual or presumed intention of the parties, it would be considered unconscionable for the spouse/party, as a legal owner of the property, to deny the person who has advanced the money. 

In the matter of Giles & Giles & Anor [2018] FCCA 194, Dorter Family Lawyers and Mediators were successful in establishing a resulting trust in favour of the husband’s father. The husband’s father advanced moneys to the husband equivalent to 50% of the purchase price of the former matrimonial home. The Court considered contemporaneous evidence in finding that the presumption of advancement was rebutted, and that the monies were never intended to be advanced as a gift. An order was made for the Husband’s father to be repaid 50% of the sale proceeds from the sale of the former matrimonial home.  

Have you or your spouse been advanced money from parents? 

To obtain specialist family law advice, contact our expert family lawyers at Dorter Family Lawyers and Mediators who specialise in all areas of family law, including trusts, and they will assist you. Please contact us on (02) 9929-8840. 

Rebekah Dorter
Principal
Julie Cheung
Associate

In the News: Fast-Tracked Family Law Matters

“Women’s Economic Security Package to assist women exposed to family violence and streamline the Court service to couples with property pools under $500,000.”

In November 2018, a report provided by the Women’s Legal Service Victoria, identified a procedural roadblock preventing parties from accessing justice and reaching a timely, cost effective resolution in the Federal Circuit Court of Australia.

The report from the Women’s Legal Service Victoria appealed for a “small claims” stream in the family law system. 

The response to the report from the Women’s Legal Service Victoria was the creation of a new “pilot program” for some family law matters, namely those with a net property pool of $500,000 or less (including superannuation). Pursuant to Practice Direction 2 of 2020, from 1 March 2020, these cases, known as “Priority Property Pools under $500,000 Cases” or “PPP500 Cases” will be effective.   

The purpose of this new stream of family law matters is twofold, namely: –

1. To assist women who have been the victim of family violence by providing a timely, cost effective route to resolution their family law dispute; and
2. Ensure families, with limited financial assets, do not exhaust these assets on legal expenses.

Purpose of Fast Tracked Family Law Matters

Chief Justice Will Alstergren, the head of the Family Court of Australia and Federal Circuit Court, described the pilot program as improving “access to justice”.

The report from the Women’s Legal Service Victoria observed that there is a significant reluctance from women who have experienced family violence to pursuing in Court, their share of family assets. This reluctance is usually coupled with exposure to financially controlling behaviour by their spouse during the relationship.

The pilot program aims to assist women who have been subjected to family violence or financially controlling behaviour during their relationship by assisting them navigate the family law system, provide them with access to efficient alternate dispute resolution processes and minimise the animosity in proceedings.

The program also identifies that parties to family law proceedings, where the asset pool is not significant, would incur a small fortune in legal fees. The program seeks to reel back the legal costs incurred and appropriately match legal fees with the difficulty and issues in the matter.

Who Does the Program Apply to?

To be classified as a PPP500 Case, proceedings must be commenced in the Federal Circuit Court of Australia, seeking an alteration of property interests for matrimonial or de facto assets.

It must also meet the following criteria: –

1. The value of the net assets of the parties (including superannuation) is less than $500,000; and
2. There are no companies or other commercial entity such as a family trust, company, or SMSF, that requires a further expert valuation; or
3. The Court makes a declaration that the matter is assigned as a PPP500 case.

A PPP500 matter is unable to be established if either party is seeking Orders in relation to parenting, child support / child maintenance or enforcement of Orders.

Steps in a PPP500 Case

An emphasis on “Registrar-Led” resolution was a major focus of the PPP500 Case program.

There are six (6) primary steps in the PPP500 Program, of which the first four (4) are Registrar-led and the last two (2) are Judge-led: –

1. Before the First Court date, preliminary orders will be made by the Registrar in chambers in relation to the balance sheet and any preliminary valuation issues;
2. The first Court date before a registrar, at which time, the balance sheet will be finalised and the matter will proceed to a conciliation conference, private mediation, Legal Aid conference or other alternate dispute resolution process;
3. The parties engage in an Alternative Dispute Resolution Process;
4. The parties attend the Second Court date for further directions, only if it was not settled during step 3 above;
5. The parties have a Procedural hearing before a Judge in preparation for a Final Hearing and the Court will give directions in relation to the filing of evidence; and
6. Final hearing (either Less Adversarial Trial, Trial on the papers or traditional Final Hearing).

The streamline program provides parties to family law proceedings with a prompt, cost effective and amicable regime to resolve disputes without the need for acrimony and prolonged proceedings.

If you have separated from your spouse or partner and the above applies to you, please contact Dorter Family Lawyers and Mediators to obtain assistance from one of our family lawyers.  We are based in North Sydney and are available to assist you with your property settlement.

By Luke Meehan
Dorter Family Lawyers & Mediators Solicitor