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    Divorce in Australia

    How is a Business Divided in a Divorce? 1024 631 Dorter

    How is a Business Divided in a Divorce?

    When a couple divorces or separates, a property settlement, also known as the division of assets, is almost always necessary.

    In some cases, this process will involve assets like a home, cars, money, and superannuation and in other cases, it may involve complex and highly valuable assets, such as a business.

    In this article, we’re going to discuss how a property settlement involving a business should be handled, including the various steps that should be taken.

    Property Settlements and Businesses

    The breakdown of a marriage or de facto relationship can have a significant impact on a business. Whether both parties to the relationship own the business or it is owned by one party only, the future of the business could be impacted as the business is considered part of the marital property pool.

    It’s important to be aware that the breakdown of a relationship where a business is involved could impact not only the couple, but also any other owners of the business, as well as anyone else with an interest in the business.

    What happens to the business when a couple breaks up?

    As we touched on above, it doesn’t matter whether the business is owned by one party or both parties to the relationship – in most situations, it is considered to be an asset that could be divided in the property settlement.

    The way assets, property and liabilities are divided in a property settlement involves a 4-step process. These steps are:

    1. Identify all assets and liabilities – during this step the value of the business will need to be identified.
    2. Step 2: Identify the contributions of all parties – contributions can be financial and non-financial, as well as direct and indirect. Even if one party never worked in the business, their contributions to the relationship could make them entitled to a percentage of the business.
    3. Step 3: Work out the future needs of each party – factors such as parenting, health and age can impact the future needs of each party.
    4. Step 4: Review the agreement – the property settlement agreement must be just and equitable.

    Identifying the assets in step one is particularly important and it also involves valuing them too. In the case of valuing a business, this can be complex as many factors determine the value of a business. This can also be an area of contention for separating couples, so it is highly recommended that a professional business valuation expert is engaged to avoid disputes arising.

    The aim of these steps is to work out the percentage of the overall property pool that each party is entitled to.

    Who actually gets the business in a property settlement?

    The way assets are split can be complex and will differ from situation to situation. When it comes to a business, there are many different outcomes that could occur.

    One potential option is that the one former spouse buys out the other spouse’s interest in the business. Another option is that the business is split, with each party receiving part of the business. Selling the business to third party and splitting the proceeds in the property settlement is another option. If there is agreement, there are certain circumstances where former spouses could continue to own and operate the business as is.

    The right option is dependent on the unique factors of your situation and the type of business operated. In some cases, the former spouses may have an amicable relationship where their split hasn’t interrupted the business operations, while in other cases, there has been a significant loss of trust and it’s not possible to come to an agreement.

    It’s best to seek legal advice before making a decision regarding a business in a property settlement as there can be long-term consequences of these decisions that could be overlooked.

    What if the former spouses cannot reach an agreement for their property settlement?

    The family law system in Australia has been designed to allow people to reach agreements together or to use other resources to avoid having to go through Court proceedings. However, while the system allows for this, it’s not always possible to come to agreements, and in matters that involve complex property and assets, like a business, Court intervention may be necessary.

    In this scenario, the parties apply to the Federal Circuit and Family Court of Australia for a property division. The Court will use the same 4-step process we outlined earlier to determine an appropriate split of assets and liabilities, including the business. It’s important to note that the Court may require that an independent valuation of the business takes place where the parties cannot agree on the value.

    As a property settlement is meant to be a way to finalise the financial relationship or sever the financial ties of the former spouses, the Court will be likely to make a decision where one person may receive the business while the other receives other assets that equate to their share of the assets and property, or if this is not possible, the Court may order that the business is to be sold. The aim will be to not only finalise the financial relationship but also to ensure that the property settlement is just and equitable.

    Can you protect a business?

    Protecting a business from being impacted by a relationship breakdown is possible, however, it is highly recommended that a lawyer is engaged.

    Whether you’re considering marriage or in a relationship and own a business, or you’re considering starting a business while in a relationship or marriage, there are various options available to you. A binding financial agreement that outlines how assets are managed in the event of a relationship breakdown is one of these options.

    As many unique factors are at play with relationships and businesses, we highly recommend seeking legal advice if you wish to protect your business or any other asset.

    Talk to our property settlement family lawyers

    If you’ve separated and are having difficulties in determining a property settlement agreement or you’re wanting to protect your assets, talk to our property settlement family lawyers today.

    Our experienced legal team is here to offer advice, guidance and representation for all types of family law matters, including complex property settlements.

    Call us today on 02 9100 0437 or book a no obligation consultation here.

    I want a Divorce. Do I need a Family Lawyer? 1024 683 Dorter

    I want a Divorce. Do I need a Family Lawyer?

    Separation and Divorce are different. Separation occurs when a couple decide, and communicate, that they no longer wish to be a couple. Divorce can occur 12 months after separation but is not compulsory. 

    When people separate, they often wonder whether they should see a lawyer. The answer is ‘yes’. People can reach agreement without legal assistance, but it is important to consult with a specialised family lawyer to make an informed decision who can provide you with clarity and confidence about your options and entitlements. 

    Specialised Family Lawyers can assist with: 

    1. Family Breakdowns

      Separation and family breakdowns can be difficult, especially when children are involved. Many people are unaware of their entitlements under the Family Law Act 1975 (Cth) “the Act” and the processes available to assist them.

      Complications can arise if domestic violence is an issue or if a party is disadvantaged, for whatever reason. Specialised family lawyers can provide the right care and knowledge to assist you. Family lawyers can provide specialised and independent advice, separating the emotional aspects of the separation from the legal issues.

    2. Properly documenting an agreement on separation

      If you have reached an agreement with your partner or spouse after separation it is vital to properly document that agreement, so it is legally binding. When agreements are not documented correctly there is a risk the agreement will not be binding or is ‘overturned’, which can enable the other party to have a ‘second bite of the cherry’. A specialised family lawyer can assist you with documenting a legally binding agreement.

    3. De Facto partners

      When couples separate, the Family Law Act provides guidance as to how separated couples should divide their assets and liabilities and make arrangements for their children. The Act applies when married couples separate and also when de facto partners separate.

    If you have separated, or are considering separation, it is wise to obtain advice from specialised family lawyers.  

    If you are considering engaging a family lawyer for your assistance, Dorter Family Lawyers and Mediators are expert Family Lawyers who specialise in all areas of family law and mediation and can assist you. We can be contacted on (02) 9929 8840.

    Antonia Cacopardo

    Rebekah Dorter

    What is Arbitration in Family Law? 1024 683 Dorter

    What is Arbitration in Family Law?

    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

    Andrew Johnson

    Gifts Or Loans From Parents – Do They Have An Interest In The Property? 1024 660 Dorter

    Gifts Or Loans From Parents – Do They Have An Interest In The Property?

    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. 

    1. 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. 

    1. 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
    1. 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
    Julie Cheung

    Financial Abuse 1024 683 Dorter

    Financial Abuse

    When it comes to domestic and family violence verbal and physical abuse usually come to mind. However, a further widespread form of domestic and family abuse is ‘financial or economic abuse’.

    What is Financial Abuse?

    Financial abuse occurs when one party uses money to control, coerce or to restrict the other person in a domestic relationship. This type of abuse frequently occurs hand-in-hand with other forms of abuse, such as physical or emotional abuse.

    Am I Being Financially Abused?

    It can be difficult to recognise financial abuse. Perpetrators may often ‘excuse’ their behaviour as a consequence of the victim’s financial illiteracy or being due to “traditional roles” in the family.  A pattern of behaviour is usually exhibited and unfortunately, the abuse may escalate over time.

    Financially abusive behaviour can include but is not limited to:

    • taking control of someone else’s finances (e.g. being in charge of all the household income and paying the other person an allowance);
    • controlling how all of the household income is spent;
    • forcing a family member to claim social security benefits like Centrelink;
    • insisting that a family member apply for a second credit card;
    • preventing a family member from working;
    • preventing a family member from studying;
    • refusing to give access to bank accounts;
    • denying a family member access to money so they cannot afford basic expenses such as food or medicine.

    The Effects of Financial Abuse

    The effect of financial abuse can be far-reaching and usually includes suffering from emotional trauma and homelessness.

    Financial abuse affects the victim’s financial independence preventing them from accessing education, healthcare and in some cases basic personal items which can leave them with no alternative but to remain in the abusive relationship.

    In many cases, financial abuse continues post-separation. This includes perpetrators engaging in prolonged litigation, hiding assets or defaulting on financial responsibility such as a mortgage leaving the victim with poor credit score, thus exacerbating their financial stress and vulnerability.

    What Support is Available for Financial Abuse?

    Any form of abuse is unacceptable. We all have a right to live life without fear of abuse or violence. Support services are available on both state and federal levels and can assist you if you are experiencing domestic or family violence, including financial abuse.

    Some support services which are available include:

    • Financial Abuse Legal Service (Redfern Legal Centre)
    • NSW Domestic Violence Helpline;
    • Women’s Legal Services NSW;
    • Domestic Violence NSW;
    • Legal Aid;
    • 1800Respect;
    • National Aboriginal and Torres Strait Islander Legal Services.

    Do You Need Legal Help?

    Dorter Family Lawyers and Mediators offer specialist family law advice in Milsons Point on Sydney’s Lower North Shore, and are available to assist you with any questions you may have about financial abuse. 

    Please get in touch with us on (02) 9929 8840 or hello@dorterfamilylawyers.com

    Rebekah Dorter

    Tim Russell

    This post is an overview only and should not be considered as legal advice.  If there are any matters that you would like us to advise you on, then please contact us.

    Declaration of Nullity and Divorce 800 533 Dorter

    Declaration of Nullity and Divorce

    “Is a Declaration of Nullity the Same as a Divorce?”

    After married couples have been separated for a period of twelve (12) months they may wish to apply to the Family Court or the Federal Circuit Court for Divorce. Some clients, however, ask if they can obtain a Nullity rather than a Divorce order.

    What is a Nullity?

    A Declaration of Nullity is a finding by the Family Court of Australia that, although a marriage ceremony may have taken place, the marriage between the parties is void and not legal. As a result, the outcome is that the parties to the void marriage do not become divorced, but rather it is as though they were never married in the first place. This is also known as a marriage annulment.

    How to Declare Nullity

    The Court is able to make such a declaration in accordance with the Family Law Act however, there are very specific grounds upon which a Declaration of Nullity may be sought. A Declaration of Nullity may be made on the following grounds:

    1. At the time of the parties’ marriage, one of the parties remained married to someone else (a previous relationship where no divorce occurred);
    2. The parties are in a prohibited relationship;
    3. The parties did not comply with the laws of the marriage in the country they were married;
    4. Either party was not of a legal age to marry and did not hold the relevant approvals; or
    5. Either of the parties did not give their real consent to the marriage because:-
      • consent was obtained by duress or fraud;
      • one party was mistaken as to the identity of who they were marrying or the nature of the ceremony; or
      • one party was mentally incapable of understanding the nature and the effect of the marriage ceremony.

    When do you want to seek a Declaration of ‘Nullity’ and not a ‘Divorce’?

    The purpose of a Declaration of Nullity is to find a marriage “void”, meaning “of no effect”. The primary reason a Declaration of Nullity is sought is when one of the parties is already married. This is often the case when:

    1. A party is unaware that their previous marriage was formally registered; or
    2. A party is unaware that no Divorce Order has been granted in relation to their earlier marriage.

    A recent Family Court Decision dealt with this issue whereby an Application for Nullity was sought. In this case, the Wife had not obtained a Divorce Order from her previous Husband. The Wife had been separated from her former Husband for approximately 12 years prior to the second marriage, however, she was not aware that a Divorce Order had not been granted from her first marriage.

    In this matter, there were three (3) steps that needed to be completed: –

    1. Apply to the Family Court for a Declaration of Nullity;
    2. Obtain a divorce from her first Husband; and
    3. Legally re-marry.

    When is a Marriage Recognised?

    The ­­­­­­­­­­­­­­­­­­­­Marriage Act 1961, defines marriage as “The union of 2 people to the exclusion of all others, voluntarily entered into for life.”

    The criteria to be legally married in Australia, requires that you must: –

    1. Not be married to another person;
    2. Not be marrying a parent, grandparent, child, grandchild, brother, or sister;
    3. Be at least 18 years old, unless a court has approved a marriage where one party is aged between 16 and 18 years old;
    4. Understand what marriage means and freely consent to becoming husband and wife;
    5. Use specific words during the ceremony; and
    6. Give written notice of the intention to marry to their authorised celebrant, within the required time frame.

    If you would like any assistance with the above, Dorter Family Lawyers and Mediators are expert family lawyers who specialise in all areas of family law and can assist. Please contact us on (02) 99298840.

    Luke Meehan

    Rebekah Dorter

    This post is an overview only and should not be considered as legal advice.  If there are any matters that you would like us to advise you on, then please contact us.

    Fast-Tracking Family Law Matters 1024 605 Dorter

    Fast-Tracking Family Law Matters

    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

    Property Settlement Time Limits 1024 685 Dorter

    Property Settlement Time Limits

    Separation can be a very stressful and emotional time, and parties may avoid or prolong finalising a property settlement with their ex-partner (which may or may not include a provision of spouse maintenance) for a variety of reasons.

    Whilst there are no time limitations for parties making an application to the Court for parenting orders for children, the Family Law Act 1975 (Cth) sets down strict time limits in relation to claims for a property settlement following either the making of a divorce order or the breakdown of a de-facto relationship.

    Time Limits for Property Settlements

    Section 44 of the Family Law Act 1975 (Cth) (Act) sets out the relevant time periods for parties to apply to the Family Court or Federal Circuit Court of Australia for a property settlement.

    • For married couples, a claim must be commenced within 12 months of a divorce order being made.
    • For de-facto couples, a claim must be commenced within 2 years of the date of final separation.

    Leave to make an application out of time

    Notwithstanding these time limitations, it is possible to make an application to the Court for leave (formal permission) to be granted an extension of time under the Act, and be permitted to have their property settlement heard and determined by the Court notwithstanding that these time periods have expired.

    When considering applications for an extension of time, the Court usually undertakes a two (2) step enquiry.

    The first step involves the Court considering whether hardship (substantial detriment) would be caused to the applicant party if leave were not granted.

    If the applicant party establishes hardship, the second step involves the Court using its discretion to determine whether or not the claim/s should be heard by the Court.

    Factors the Court may consider include:

    • the length of the delay in bringing the claim;
    • whether there is an adequate explanation for the delay in bringing the claim; and
    • the prejudice that may be suffered to the other party if leave is granted.

    Expert help for property settlements is available

    Applications for leave to commence proceedings out of time are highly technical areas of family law and ultimately depend upon the individual facts and circumstances of each case.

    If you find that you are out of time to commence a property settlement claim, it is vital that you obtain legal advice regarding the prospects of success in applying to the Court for leave.

    Alternatively, if you have been served with Court documents by your ex-partner (or his/her legal representatives) and you are aware that their claim/s are out of time, it is also vital that you obtain legal advice regarding the merits of your ex-partners claims.

    Dorter Family Lawyers and Mediators are experts in family law and can assist you in all areas of family law. If you would like to book an appointment to see one of our experienced family lawyers for a confidential discussion, please call our office on (02) 9929 8840 or email us at hello@inst1045122-8984.ozhosting.com