Financial/Property Matters

The Duty of Disclosure 1024 575 Dorter

The Duty of Disclosure

Do I have to Disclose?

The answer is… Yes!

We are often asked by our clients what they must disclose in their family law matter after they have separated from their partner and what their former partner is obligated to disclose.

Both parties to a marriage or de-facto relationship are required to provide full and frank disclosure of information relevant to their financial circumstances. This means parties must provide each other with all information relevant to an issue in their case, including information recorded in a paper document or stored by some other means such as a computer storage device and also includes documents that the other party may not know about.

This duty of disclosure is a positive duty imposed by the Family Law Rules and the Federal Circuit Court Rules and is quite different to the obligations parties may have in a commercial dispute.

What does disclosure involve?

As part of your disclosure obligations, common documents required are those that evidence the following: –

  1. All income or earnings (whether paid directly to the party or not);
  2. Any interests in any ‘property’ or entity fully or partially owned or controlled by the party;
  3. All financial resources, including interests in a trust;
  4. Any disposal by the party that may affect, defeat or deplete a party’s claim; and
  5. All liabilities of the party or of any relevant entity.

‘Property’ for the purpose of a family law settlement is not just real property but is a much broader concept and means all assets, including superannuation.

When does your duty to disclose begin?

Your duty to disclose begins once you separate (with the pre-action procedures) which means before a case starts, and this duty continues until the case is finished. The duty of disclosure is an ongoing obligation and extends to all documents in your possession, power or control.

Your duty to disclose continues until your matter is finalised which means that you must continue to provide such information as your circumstances change or more documents are created or come into your possession, power or control.

What happens if a party to a case does not disclose?

There are a number of consequences which may follow if a party to a case fails to disclose, including but not limited to cost orders, and if a matter has been finalised the settlement may be re-opened if the non-disclosure resulted in a detriment to the other party.

It is important to provide disclosure in a timely matter, and to be honest and forthcoming with your disclosure documents. Non-disclosure contributes to significant delays in resolving a family law matter and significantly increases costs.

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

Rebekah Dorter
Principal

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.

COVID-19 & Financial Support – How Do I Get It? 1024 683 Dorter

COVID-19 & Financial Support – How Do I Get It?

COVID-19 & FINANCIAL SUPPORT – HOW DO I GET IT?

Financial support from your former spouse or partner in family law matters, referred to as ‘maintenance’, is nothing new. However, the COVID-19 pandemic is creating a challenging environment for households – financial uncertainty, job losses and illness. We are often approached for urgent advice from many clients asking about their legal right to financial assistance in these circumstances.

MAINTENANCE

If you require financial support and your former partner can assist you financially, but is not willing to do so, our Family Law system can help.

Recently, where a former spouse refused to provide financial support we assisted by successfully obtaining an Order from the Family Court for our client to be paid an amount each week from her former husband, with that payment to continue indefinitely until a Final Hearing. The benefit of that Order to our client (and her child) in the present financial climate is significant.

DO YOU HAVE A ‘NEED’?

In determining what Order, if any, should be made, the Court is required to consider firstly the “need” of the party seeking the financial assistance. Some relevant factors include:-

  1. What income the party receives? Importantly, the Court is unable to take into account an income tested pension, allowance or benefit;
  2. What expenses are incurred, such as weekly costs for food, a motor vehicle, telephone, entertainment costs, children’s costs, gym, health and beauty, holidays and the like;
  3. Whether the party was financially supported by the other party during the relationship;
  4. Whether the party has the care of children, or another person;
  5. The age and health of the party;
  6. Whether the party is able to work greater hours, or re-enter the workforce if they have had time away from paid employment during the relationship;
  7. A standard of living that in all the circumstances is reasonable.

If the Court is satisfied that from these factors that the party has a “need” for financial assistance, it is then required to consider whether the other party has the “capacity to pay”.

CAPACITY TO PAY

The Court will make an assessment of a party’s “capacity to pay” based on the financial obligations of that party. When considering a party’s financial obligations, or their capacity to pay, the Court may take into account a number of factors, including:

  1. Their property, income from all sources and their financial resources available;
  2. The use to which that person is applying their income;
  3. The factors listed above, including their age, health and whether they have the care of children or another person.

When considering a party’s expenses the Court can make an assessment as to the reasonableness of those expenses. For example, the Family Court found in favour of our client, awarding her a certain amount in maintenance week, as the Court found that our client‘s  former spouse was applying income towards new or unnecessary expenses to keep funds out of reach of our client, by paying for renovations and depositing additional funds into the mortgage.

FAIRNESS

Ultimately, the Family Court is required to make orders which are ‘fair’, or ‘just and equitable’ in the circumstances.

Each family, and each separation, is unique.  It is important that you obtain expert Family Law advice when you separate or divorce in order to obtain your best outcome and settlement, and an outcome which is fair.

MEDIATION, OR COURT?

Our team of Family Law experts will assist you, providing you with strategic, expert and timely advice.

The majority of family law disputes fortunately settle without Court intervention. If an agreement cannot be reached between couples the alternatives available include:

  1. Mediation;
  2. Arbitration; and
  3. Collaboration between Lawyers.

If you require assistance, we are available using a number of platforms – telephone, Skype, Zoom, Teams, Facetime.

Otherwise, please contact Dorter Family Lawyers and Mediators on (02) 9929 8840 or mail@inst1045122-8984.ozhosting.com for a confidential discussion.

Dorter Family Lawyers and Mediators offers expert family law advice in McMahons Point on Sydney’s Lower North Shore.

Andrew Johnson

Senior Associate

Rebekah Dorter 

Principal

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.

Binding Financial Agreements and How to Set them Aside 1024 684 Dorter

Binding Financial Agreements and How to Set them Aside

Have you entered into a Binding Financial Agreement (BFA) that is outdated or is unfair?

In certain circumstances, the laws in Australia may enable a party to receive a just and equitable property settlement, if permitted by the Court.

Recent Decision

In October 2019, in the decision of Westacott & Dunwoody (No. 2) [2019] FAMCA 719, Dorter Family Lawyers and Mediators successfully set aside a BFA on the grounds that it would have been unjust and inequitable to not uphold the Termination Agreement the parties had entered into on separation. Dorter Family Lawyers represented the Husband who is now able to seek a property division that will be just and equitable under the Family Law.

The Husband sought to set aside a BFA entered into by both the Husband and the Wife in 2005. In 2018, the parties entered into a Termination Agreement which enabled the parties to enter into Consent Orders for a final property settlement with terms different to their original BFA.

The Wife later sought for the Termination Agreement to be set aside, and to uphold the BFA on the grounds that the Husband did not obtain the required independent legal advice when entering into the Termination Agreement.

The Court found that since the making of the BFA, the Wife had made various payments to the Husband which were consistent with the Termination Agreement and inconsistent with the BFA. Accordingly, the Court found that it would be unjust and inequitable for the Termination Agreement to not be upheld and therefore, declared the Termination Agreement binding, which effectively terminated the BFA.

What is a BFA?

A BFA, or commonly known as a ‘Prenup,’ is an agreement entered into by two parties to a relationship which sets out how, in the event of a relationship breakdown, the parties’ financial affairs and property will be dealt with. You can enter into a BFA prior to being married or engaged, during a de facto relationship or marriage, or after a divorce.

Provided that all the legal requirements are satisfied when entering into the BFA, you and your partner will be bound by the terms of the agreement. As a result, you do not need to approach the Court for a final determination of your property settlement in the event your relationship breaks down.

Is your BFA Binding?

Before you consider setting aside your BFA, the Court will consider whether your BFA is binding.

Under the Family Law Act 1975 (Cth) (“the Act”), a financial agreement is only binding if you and your partner each satisfy the following:

  1. The agreement is signed by each party;
  2. Before signing the agreement, independent legal advice is obtained by each party in relation to the effect of the agreement and the advantages and disadvantages of the agreement;
  3. Each party obtains a statement signed by their legal practitioner stating that this advice was provided; and
  4. Neither party has terminated the agreement and the agreement has not been set aside by the Court.

If one or more of the above has not been satisfied, you may not be bound by your BFA. You may then be entitled to seek a property settlement that would be considered just and equitable under the Family Law.

Terminating the BFA

If both you and your partner no longer wish to be bound by your BFA, you may terminate the agreement by entering into a further BFA terminating the first agreement, or by entering into a ‘Termination Agreement’. These are the only two options available to terminate the agreement in accordance with the Act and you should obtain legal advice about how to do this.

Before signing a Termination Agreement, each party must obtain independent legal advice to understand their rights and to understand the advantages and disadvantages of making the Termination Agreement.

Setting aside the BFA

If the parties have not terminated their BFA and a party wishes to set aside the BFA, the Court must be satisfied of one of the following grounds:

  1. The agreement was obtained by fraud;
  2. The purpose of the agreement was to defraud or defeat a creditor or the other party;
  3. The agreement was made with reckless disregard to creditors or the other party;
  4. The purpose of the agreement was to defeat an interest of the other party;
  5. The agreement is void, voidable or unenforceable;
  6. Circumstances have arisen to make the agreement impracticable to be carried out;
  7. Since the making of the agreement, there has been material changes which involve the care, welfare and development of a child and the party who is responsible for the child will suffer hardship if the BFA is not set aside; or
  8. A party engaged in unconscionable conduct when making the agreement.

Application of Rules of Contract

A BFA, being a contract, is subject to the laws of contract and legal advice should be obtained to ensure your BFA also complies with the laws of contracts.

Simplifying the laws of contract, the BFA may be voidable or unenforceable if:

  1. One party repudiates the contract by showing that they no longer wish to be bound by the contract and the other party chooses to rescind the contract; or
  2. One party intentionally waives their right to enforce the contract or abandons the contract by acting in a way that is totally inconsistent with the contract.

FAQs

1.Do I have to go to Court to set the BFA aside?

Unfortunately, to set a BFA aside, you will need an order of the Court if the other party does not agree to mediate and reach agreement. If both parties agree to not be bound by a BFA, a Termination Agreement should be completed in accordance with the Family Law Act.

2. What if the BFA does not deal with all of the property in the event of separation or divorce?

Part or all of the BFA may become uncertain and therefore unenforceable. This will depend on the terms of the clause considered in the context of the BFA entirely.

3. Can the BFA include a parenting agreement?

These clauses will not be binding and cannot be enforced. The best way to deal with parenting is through Consent Parenting Orders.

4. Can the BFA include a parenting agreement? 

The Court will still have jurisdiction to deal with spouse maintenance in accordance with the Family Law.

Each party’s circumstances are unique and legal advice should be obtained from a family lawyer who specialises in such agreements if you seek to rely upon or set aside a BFA.

If you require assistance, please contact Dorter Family Lawyers and Mediators on (02) 9929 8840 or via email on hello@inst1045122-8984.ozhosting.com.