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Nov 11
Solidify Your De Facto Relationship With a De Facto Prenuptial Agreement

Solidify Your De Facto Relationship with a De Facto Prenuptial Agreement

By Family Law

They may have been made famous by celebrity relationship break-ups but that should not diminish the fact pre-nuptial agreements – or binding financial agreements as they are known in Australia – can be a wise choice for both parties to a relationship to protect themselves in the sad event the union ends.

Such agreements, which popular culture likes to refer to as ‘pre-nups’, are commonly associated with marriage and divorce but they are also becoming more important for de facto relationships. A binding financial agreement (BFA) between de facto partners can provide both parties peace of mind about their respective financial assets if the relationship comes to an end.

In recent years the status of de facto relationships – including same sex ones – under Australia’s family laws is almost identical to that of marriage. That is in recognition of society’s maturity in understanding de facto relationships are not only more common, but are just as loving and significant as the act of marriage. Part VIIIAB of the Family Law Act 1975 deals with financial agreements made by couples in a de facto relationship.

These agreements can be made before, during or even after a relationship breaks down. In this article, we’ll look at why a BFA can be important in clarifying the financial and other commitments of de facto couples if the relationship comes to an end.

What does a binding financial agreement cover?

A BFA primarily protects each party’s financial position after a relationship breakdown or separation. A financial agreement can cover:

  • The maintenance of one or both people in the relationship;
  • how assets and money from the relationship are divided;
  • other issues.

If written co-operatively between both parties to the relationship, these agreements can be flexible enough to deal with a range of issues that arise when a couple separates.

Particularly where there are children from the relationship, the existence of an agreement can prevent adversarial court proceedings which can create further antagonism or conflict between the parents and provide security for how the children will be provided for into the future. Similarly, a BFA can deal with issues such as who will look after a pet or pets acquired during the relationship in the event of a break-up.

The agreement can also address future property that one half of the couple may expect, such as an inheritance from a parent or other relative, ensuring it does not become part of a property settlement order.

A BFA can also cover the often difficult issue of spousal maintenance after the relationship ends, allowing the parties to ‘contract out’ the right to seek support from each other. This issue arises where one party to the relationship – the party who is not working and typically in the role of ‘homemaker’ – has a need of ongoing financial support and the other party (the ‘breadwinner’, usually) has the ability to pay support. The agreement can deal with this issue provided one party was not on an income-tested pension at the time it came into effect.

The ‘binding’ part of financial agreements in de facto relationships

For financial agreements in de facto relationships to be ‘binding’, that is, legally enforceable, a number of steps must be followed in making one.

  • The agreement must be signed by all parties;
  • each party to the agreement must have received independent legal advice about both the advantages and disadvantages to their rights of the BFA;
  • each party can provide a statement from a legal practitioner that such advice was given, either before or after the making of the agreement;
  • a copy of the statement from the lawyer is also provided to the other party; and
  • the agreement has not been terminated or set aside by a court.

Once signed, BFAs can only be cancelled or changed if there is evidence of fraud or dishonesty in its making; the agreement is impractical to put into effect; there is a significant change in the care and welfare of the children from the relationship, or; one party acted in an unconscionable way in the making of the BFA.

How specialist legal advice can help

As detailed above, a person in a de facto relationship who wishes to make a financial agreement with their partner to give them both certainty about what happens if they break up first needs independent legal advice.

Consulting with experienced family lawyers such as Felicio Law Firm can help you clarify the issues involved to ensure your rights and interests are reflected in any BFA entered into. Because these agreements become legally enforceable, it’s important to get the terms of the agreement right at the outset. Contact us at our central cost family lawyers today for an initial obligation-free consultation.

Nov 07
How to Protect Your Pets in a Relationship Breakdown

How to Protect Your Pets in a Relationship Breakdown

By Family Law

‘Let’s get a dog!’

It’s a commonly heard exclamation in a relationship between two people, a sign of commitment to each other. Sometimes, getting a ‘fur baby’ is almost considered a trial run for having children.

But what happens to the much-loved dog, cat or budgie if the relationship unexpectedly breaks down? Under Australia’s Family Law Act, a pet is considered an item of property that cannot be shared in the way children from the relationship are, spending time with each parent.

For that reason, pets will be considered much as other items of property such as cars are in any decision by a court about where the animal will live – unless the matter is dealt with a binding agreement between the couple.

Dealing with pets in a binding financial agreement

A binding financial agreement (BFA) between a couple protects each party’s financial position after a relationship breakdown or separation but can also deal with what happens to pets. These agreements can be made before, during or even after a relationship breaks down.

Rather than have a family law court decide where the pet will live, a BFA can provide mutually agreed details on a sharing arrangement after separation, as well how costs of grooming, training, vet bills and insurance, for example, will be met.

By discussing these issues to include in an agreement, both parties can answer difficult questions about whether the pet should live with one half of the couple, be cared for jointly or not at all (rehomed, for example).

In order for this type of agreement to be ‘binding’, that is, legally enforceable between the parties, a number of steps must be followed in making one:

  • The agreement must be signed by all parties;
  • each party to the agreement must have received independent legal advice about both the advantages and disadvantages on their rights of the BFA;
  • each party can provide a statement from a legal practitioner that such advice was given, either before or after the making of the agreement;
  • a copy of the statement from the lawyer is also provided to the other party; and
  • the agreement has not been terminated or set aside by a court.

What happens if you can’t agree?

There is no ‘one-size-fits-all’ rule when it comes to how courts will deal with pets in relationship break-ups. A number of factors need to be considered in determining where the pet should live, including who purchased the animal, whose name it is registered in and who pays insurance and other costs for it; and who primarily cares for it (feeding, grooming, etc).

If there are children from the union, their relationship with the pet may also be relevant as to where it should live in the event of the relationship ending. Ongoing financial commitments for the animal as well as the practicality of owning a pet in new living arrangements are other factors to consider.

Speak with expert family lawyers

The requirement to seek legal advice before entering a BFA means a person should consult with an experienced Central Cost Erina family lawyer so that they are clear about how to protect their rights and interests.

Issues that can be addressed in a BFA, including financial support of one half of the ex-couple by the other and how property – including pets – is dealt with in the agreement, can be clarified in a chat with one of the expert family lawyers at Felicio Law Firm.

Call us for an initial meeting today if you want to protect your pets in a relationship split.

Aug 10
child

How the Family Court Decides on How Much Time a Child Will Spend with Each Parent – the Case of Jasper & Lilley

By Family Law

One of the most challenging times during a family break-up is always the decision about where a child or children from the relationship will live and how much time they will spend with each parent under the new arrangements.

In deciding this difficult but crucial question, the court is guided by the ‘best interests of the child as set out in the Family Law Act 1975. One of the primary considerations for determining a child’s best interests is ‘the benefit to the child of having a meaningful relationship with both of the child’s parents.

How the court deals with the consideration has been explored in numerous Federal Circuit and Family Court of Australia (FCFCOA) cases, including one case in which Felicio Law Firm acted in: Jasper & Lilley in 2018.

A look at the facts, in this case, is illustrative of some of the difficult issues to resolve when trying to work out arrangements for the raising of a child from a broken relationship.

The details of the case

Felicio Law Firm acted for the father in this case, which involved a mother who suffered from mental illness and seeking additional time with her seven-year-old daughter to stay overnight with her in the face of objections from the father, who the child lived with.

The mother and father had separated while the child was still an infant and the girl at first lived with the mother. But after a year, the mother was admitted to a mental health facility and the father sought an order that the child lives with him, which she had done ever since.

The mother would spend some time with her daughter under the supervision of her parents. She was admitted to a hospital on a number of separate days during this period until, in early 2018, the mother applied for overnight time with her daughter. The orders sought included the mother having the child with her each Saturday from 9 am to 5 pm for a period of six weeks and thereafter, every second weekend from 5 pm on Friday until 5 pm on Sunday. The mother also sought extended periods of time during school holiday periods.

The father sought for this application to be dismissed. While there was no dispute that it was important for the child to maintain a strong relationship with her mother, the father was concerned about how the child could be kept safe in the event of the mother experiencing another mental health episode.

How the case was resolved

The decision in the Family Law Court agreed with the father that the time sought by the mother was too extensive, but disagreed with him that the child spending four hours supervised per fortnight with the mother was sufficient time.

‘I am confident that the supervision by the mother’s parents, or other adults acceptable to the father, is sufficient to ensure the child’s safety and welfare during the periods which she spends with her mother,’ the judge stated.

The order was that the child spends time with her mother each Saturday from 9 am to 5 pm for a period of six weeks and, commencing on the seventh week, each alternate weekend from 9 am on Saturday until 5 pm on Sunday.

The importance of specialist legal advice

Under section 65AA of the Family Law Act, the best interests of the child are paramount when the court makes a parenting order. Under the Act’s presumption of equal shared responsibility, the court must consider whether those interests are best met by the child spending equal time, or ‘substantial and significant time with each parent.

A parent’s mental health, as well as other factors such as family violence, become relevant factors in the court’s consideration of whether it is reasonably practicable for a child to spend periods of time with a parent, including overnight stays as in Jasper and Lilley.

If anything in this article raises issues of concern, contact Central Coast family lawyers today for a compassionate hearing of your issue. We have many years of experience in difficult and complex family law matters. 

Aug 08
mr lilley and ms jasper

Lilley & Jasper 2019 FamCA 170 [21 March 2019]

By Family Law

Lilley & Jasper was a 2019 case heard in the Family Court of Australia in which we successfully acted for a father in a custody and parenting matter. This article will provide a summary of the facts and outcomes of the case.

Facts

Child B was born in 2011 to Mr Lilley and Ms Jasper. Ms Jasper suffered from a postpartum psychiatric illness and was admitted to the hospital following B’s birth. In 2013, B was diagnosed with a medical condition.

Mr Lilley and Ms Jasper separated in 2013, when B was two years old, following which Mr Lilley commenced proceedings in the Federal Circuit Court of Australia. Over the next few years, Ms Jasper continued to suffer from mental illness and was admitted to the hospital multiple times. From May 2014 onwards, B lived with her father. Mr Lilley remarried, and he and his present wife had two children.

Between 2014-2018, contact between B and her mother was initially supervised at a contact centre. By February 2018, the mother’s time with B was supervised by the maternal grandmother or grandfather on alternate Saturdays and, after six weeks, alternate weekends.

In July 2018, Mr Lilley and Ms Jasper reached an agreement that B would live with the father and spend alternate weekends from Friday after school until Sunday evening with the mother.

Application for Adjournment

Ms Jasper applied for the case to be adjourned because she had dispensed with her legal representatives.

In rejecting this application, Justice Rees referenced the fact that it was in the child’s interest for the drawn out proceedings to be concluded, and for there to be certainty and stability in her life. Her Honour also noted that Ms Jasper had not suggested that she was unable to conduct the proceedings herself. Due to these factors, and the fact that three days of hearing time had been allocated to this matter and there was not sufficient time to bring on another matter to avoid those days being wasted, Justice Rees denied the application for adjournment.

The Hearing

Mr Lilley and Ms Jasper reached an agreement on the first day of the hearing that B would continue to live with her father and that she would spend alternate weekends from Friday after school until Sunday evening with her mother. They also agreed to phase out strict supervision by the maternal grandparents, and equally shared parental responsibilities.

On the second day of the hearing, both parents were cross-examined.

On the third day of the hearing, four issues were left to be considered:

  • Whether Mr Lilley should have sole parental responsibility regarding B’s medical treatment
  • Whether Ms Jasper’s weekend time with B should be extended to from 5 pm Sunday to 8 pm Sunday when B is 12 years old
  • Whether Sunday afternoon changeover should take place at a halfway point
  • Overseas and interstate travel

Parental Responsibility

Mr Lilley sought sole parental responsibility regarding B’s medical treatment.

Justice Rees ruled that both parents have B’s welfare at heart and that parental responsibility regarding B’s medical treatment should be shared. It was ordered that Ms Jasper be able to attend appointments with specialists and receive copies of all specialist reports that Mr Lilley may take B to.

Weekend Time

Ms Jasper proposed that when B turns 12, she stay with her until 8 pm on Sundays instead of the current 5 pm. This would enable Ms Jasper to have dinner with B on Sundays. Justice Rees rejected the father’s argument that B goes to bed at 7 pm and an 8 pm drop-off is too late, stating that by the time she is 12, her bedtime will no doubt be later. Further, as B would have had dinner by the time she got back to her father’s at 8 pm, Her Honour said that 8 pm would not be too late for her to rest before school the next day, and found in favour of Ms Jasper’s proposal.

Sunday Afternoon Changeover

The parents lived one hour and 15 minutes from each other. Ms Jasper proposed that the changeover should take place halfway between the two homes. Mr Lilley opposed this, as he worked rotating shifts and could not be available every Sunday to pick up B from the halfway point by 5 pm.

As the parties had experienced difficulties in the past when they attempted changeovers in accordance with the father’s roster, Justice Rees ruled that there was no alternative but for Ms Jasper to return B to Mr Lilley’s home

Overseas and Interstate Travel

Ms Jasper sought to restrain B’s father from travelling overseas with B until she is 10 years old, as she needed time to settle into the new parenting arrangements. Justice Rees rejected this claim, as the weekend arrangements had been in place since 2018 and thus no adjustment was necessary.

Ms Jasper also asked that, in the event that the father travels with B within Australia, he should provide her with an itinerary and contact details due to a fear he may travel with B to Queensland and not return. Justice Rees ruled that this claim had no basis in logic, and imposed no such requirement.

Family law matters can be stressful and upsetting. At Felicio Law Firm, we provide a compassionate and practical legal approach and will assist you with any challenges you may face with your family law matter. 

Contact the central coast family lawyers, if you require specialised legal advice and representation.

Mar 04
Erina & Central Coast Family Lawyers

Property Disputes Under the New Family Law Court (Now Federal Circuit and Family Law Court)

By Family Law

A significant change in Australia’s family law system occurred in September 2021 when the Federal Circuit Court and the Family Court of Australia were joined to become the Federal Circuit and Family Court of Australia (FCFCOA).

The new structure was introduced by the Federal government to try and reduce the bottlenecks in the family law process, resolving property and parenting disputes in a quicker, more efficient manner and encouraging dispute resolution before the need for a court trial at every opportunity.

To this end, a new case management pathway and harmonised procedural rules have been introduced as of September 2021, some of which we provide more detail on in this post about how the new court will handle property disputes between couples whose relationship has come to an end.

As in parenting matters, in an ideal world, a separating married or de facto couple save time, money and stress by coming to their own agreement on dividing property and debts from the relationship. When they can’t agree, the Court is called on to resolve the issue.

Within the new Court structure, the key change in property disputes is around disclosure of financial details between the parties prior to reaching the trial stage.

How the new case management pathway applies to property disputes

Applying to the Court for financial orders on the division of property and payment of spouse or de facto partner maintenance can occur 12 months after a divorce is finalised for married couples and within two years of the breakdown of a de facto relationship.

Under the new Court’s revised rules, the parties will be asked at their first court appearance whether they have undertaken a number of ‘genuine steps’, including undertaking dispute resolution and complying with ‘pre-action procedures’.

Further detail on these steps in applying for property orders includes:

  • The requirement that all ‘pre-action procedures’ are exhausted prior to a party filing proceedings. These procedures include the applicant for the orders providing a written notice of intention to the other party to start a proceeding. The respondent is then required to respond.
  • Once the parties are aware of the dispute, they must exchange relevant disclosure documents as soon as possible. This is a significant, time-saving change to the former procedure in the Federal Circuit Court, where the duty of disclosure did not start until after the parties had made a first appearance in Court.
  • The parties’ legal representatives will be expected to promptly and thoroughly comply with pre-action procedures. The Court can make an order for legal costs against one party where a lawyer fails to comply with these procedures.

In property/financial cases, disclosure before any court proceeding includes each party providing to the other:

  • a schedule of assets, income and liabilities;
  • a list of documents in each parties` possession or control that are relevant to the dispute, such as tax returns, bank statements, property or motor vehicle valuation appraisals, inheritance or gift details, and company and trust financial statements; and
  • a copy of any document required by the other party.

The other key requirement as part of case management is that the parties undertake at least one form of dispute resolution, such as mediation, before appearing in court.

This stage of the process may occur through private mediation, a conciliation conference or arbitration in property settlement cases.

The requirement for dispute resolution is not new in either property or parenting matters but will be more strictly enforced in the new Court structure, signified by the need for a party filing an application to start a proceeding, or a response to the application, to file a ‘Genuine Steps Certificate’.

The certificate outlines each party’s compliance with pre-action procedures and confirms their participation in dispute resolution.

Other changes in the new structure

People bringing a property dispute to the new FCFCOA will find that their initial interaction with the court will more often be with registrars and senior registrars.

The change is designed to help judges within the court more quickly and efficiently resolve matters that require priority.

On the announcement of the new court, it was suggested that after an application for orders the first court event will occur within 6-8 weeks, with mediation or dispute resolution to take place within six months of filing.

If the matter proceeds to trial, the aim is for it to proceed within 12 months of the initial application.

Is legal advice necessary?

When applying to the court for property orders – or for consent orders where the parties are asking the court to formalise a property agreement made between them – the parties do not necessarily need to be represented by a lawyer.

But family law is a complex area, particularly property matters where the Court considers an extensive range of factors before determining whether it should alter the division of property between the ex-couple. Valuations of property, the place of non-financial contributions to the relationship and the weight to be given to contributions as a homemaker or parent are all important aspects that benefit from the advice of a specialist family lawyer.

At Felicio Law Firm we have many years of experience in family law matters and can help you understand your rights and responsibilities, whether you wish to initiate an application for property orders, or are responding to one.

We will also help explain the new arrangements under the new Federal Circuit and Family Law Court and what they mean for an application for property settlement.

Contact us Central Coast family lawyers today.

Feb 17
Erina Family Lawyers - Parenting Disputes in New Family Law Court

Parenting Disputes Under the New Family Law Court (now Federal Circuit and Family Law Court)

By Family Law

As of September 2021 significant changes to Australia’s family law system have been in effect, designed to simplify and speed up the process of the Court deciding on parenting orders.

‘The overlapping family law jurisdiction between the previous Family Court and Federal Circuit Court of Australia (FCC) led to significant inefficiencies, confusion, delays, additional costs and unequal experiences for many families,’ the Federal Attorney-General’s department said of the change.

The ‘merger’ of the Federal Circuit Court and the Family Court of Australia into the Federal Circuit and Family Court of Australia (FCFCOA) brought with it some new rules and procedures in an attempt to streamline the process when parents cannot agree on arrangements for the care and upbringing of children.

A key change in the new structure is a new case management pathway, designed to prevent bottlenecks and unnecessary delays in having parenting matters (and also property and financial cases) resolved by the court.

We’ll provide more details on these changes in this post. If you need more information about applying to the court to decide on matters relating to children after separation, contact us at Central Coast Family Lawyers at Felicio Law Firm where family law is one of our specialties.

The new case management pathway

A significant change to the way parenting disputes are handled in the FCFCOA relates to the stages before legal proceedings begin, referred to as ‘pre-action procedures.

The court has indicated there will be a greater focus on legal representatives of the parties complying with these procedures.

Prior to proceedings, a person applying for parenting orders must provide to the other party written notice of intention to start a proceeding. The respondent must then respond to the notice.

When applying for parenting orders, there is also a new requirement for the parties to file a parenting questionnaire with the initiating application, or the response, which summarises the current and proposed future arrangements for the children.

The document is designed to help the court registrar or judge gain a greater understanding of what each party is seeking, and the needs of the children, when the parties first appear in court.

Identifying the risk and safety of children at the beginning of each case is the motivation for the change.

The court’s practice directions provide more detail on what a parent needs to provide in an initiating application for parenting orders:

  • a certificate given to the applicant by a family dispute resolution practitioner;
  • a ‘Genuine Steps Certificate’ that confirms the applicant’s compliance with the pre-action procedures;
  • a Notice of Child Abuse, Family Violence or Risk, if relevant;
  • the parenting questionnaire;
  • an undertaking as to disclosure;
  • a copy of any family violence order affecting the child or a member of the child’s family;
  • if the application seeks interlocutory (interim) orders, an affidavit stating the facts relied on in support of the interlocutory orders sought.

The applicant must also pay the filing fee unless an exemption applies.

The parties will be encouraged to try and resolve areas of disagreement through dispute resolution at multiple stages prior to proceedings, either through private mediation, a conciliation conference, arbitration, a legal aid conference or court-based family dispute resolution.

This was always the case in parenting cases but will be more strictly enforced in the new Court setup.

Where matters cannot be resolved by this means, the new structure seeks to list trials earlier than in the previous system.

Other changes in the new structure

People bringing a parenting dispute to the new FCFCOA will find that their initial interaction with the court will more often be with registrars, senior registrars, and family consultants.

The change is designed to help judges within the court more quickly and efficiently resolve matters that require priority.

In parenting cases, a registrar or judge may order a Child Impact Report at an early stage of court proceedings to provide information about the experiences and needs of children as they are relevant to the dispute.

On the announcement of the new court, it was suggested that after an application for parenting orders the first court event will occur within 6-8 weeks, with mediation or dispute resolution to take place within six months of filing.

If the matter proceeds to trial, the aim is for it to proceed within 12 months of the initial application.

Is legal advice necessary?

People applying to the court for parenting orders – or for consent orders where two parents are asking the court to formalise a parenting agreement made between them – do not necessarily need to be represented by a lawyer.

But family law is a complex area, particularly where parents hold significantly different views on how their children should be raised.

It’s important to seek legal advice from specialists in this area of the law before you make an application so as to fully understand your rights and responsibilities.

At Felicio Law Firm we have many years of experience in family law matters. Whether you need advice on making a parenting plan, seeking consent orders from the court, or applying for parenting orders when you can’t agree, we will help guide you through the process and explain the new arrangements under the new Federal Circuit and Family Law Court.

Contact us Central Coast family lawyers today.

Nov 23
Erina & Central Coast Family Lawyers

Costs in Family Law Matters Involving a Third Party

By Family Law

A couple seeking a property settlement once their relationship breaks down to divide up the assets accrued during their time together will often have the matter complicated by the existence of a third party interest.

The third-party could be a close family member or another relative, a business partner of one half of the couple, a creditor of one party, or someone else who has a property interest or financial relationship with one or both parties.

A common example is a parent who lends money to an adult child to help their son or daughter buy a house with their partner.

Changes made to Australia’s Family Law Act (‘the Act’) in 2004 give those courts charged with interpreting the Act wide-ranging powers in relation to third party interests in property settlements.

Specifically, under Part VIIIAA of the Act, the court may alter the rights, liabilities and property interests of third parties in relation to the couple’s property settlement proceedings, including for former de facto couples.

This means the court may issue orders which direct a third party to do something in relation to the property of a party to the marriage or, alter the rights, liabilities or property interests of a third party in relation to that marriage.

The court may order, for example, a creditor of one party to a marriage to substitute the other party, or both parties to the marriage for that party in relation to a debt. It could also order a company to register a transfer of shares from one party to the marriage to the other party.

The question arises as to who is responsible for the costs of legal action involving a third party, which we’ll address in this post.

How are third parties joined to property settlement proceedings?

A party to a property settlement proceeding after a relationship break-up can join a third party to the proceeding in their Initiating Application to the court.

A third party can also ask to be joined to the proceedings. This will usually happen if there is a significant asset legally owned by one half of the ex-couple in the proceedings that the third party considers to be theirs, or where the third party’s rights will be affected by the orders being sought by one of the parties to the property settlement.

A third party may apply to the court to strike out the application joining them to proceedings. By joining as a party, the third party is subject to disclosure obligations, legal costs and potentially becoming the reluctant subject of a court order.

The third-party can ask the court to exercise its discretion not to make orders affecting its rights.

It should be noted that a third party can still be asked to disclose financial information in the property proceedings under a subpoena, even if they do not join as a party to the legal action. If one spouse had a role with a third party entity, for example, documents relevant to that financial asset or property may be relevant under the usual disclosure obligations in the proceedings.

The issue of costs

Before joining a third party to property settlement proceedings, careful consideration should be given to the legal costs the third party is likely to incur.

A cost-benefit exercise needs to be conducted to work out whether the possible financial benefit to the person who joins the third party is significantly greater than the third party’s potential legal costs.

Under section 117 of the Act, costs in property settlement proceedings state that ‘each party to the proceedings under the Act shall bear his or her own costs’.

Other clauses in that section, however, allow the court to make other costs orders for one party to pay the other’s legal costs. The court takes into account the financial circumstances of each of the parties, the conduct of the parties, and whether the proceedings were necessary because one party failed to observe earlier court orders, among other reasons.

Importantly for this topic, section 117 of the Act does not make express distinction between the parties to the proceedings, such as a former husband and wife, and a third party. This means a third party can make an application to the court for its legal costs to be covered by a party or parties to the proceedings.

It should be remembered that costs order are not designed to be punitive but are simply made to compensate a party for the costs incurred in becoming part of the litigation.

Nevertheless, depending on the extent of the third party’s involvement in the property settlement proceedings, that party could obtain an oppressive order against the applicant to pay legal costs and expenses if the latter is unsuccessful after including the third party.

In this situation, if the court decides the third party did not need to be joined to the proceedings, the party who did so may have to pay the third party from their share of the asset pool.

Speak with experienced family lawyers

The decision to join third parties in property settlement proceedings between ex-spouses is one that needs careful consideration and the advice of expert Erina family lawyers.

Felicio Law Firm counts on many years’ experience advising parties to family law proceedings, whether they are a primary partner such as a husband or wife, or a third party.

We will help you decide on the wisdom of third party participation in property proceedings so you are aware of both the benefits and the risks.

If anything raised in this post applies to your situation, call us Erina & Central Coast Family Lawyers for an initial discussion of your case today.

Nov 17
Central Coast Business Lawyers

What to do if Your Business Receives a Bad or Defamatory Google Review

By Business Law

The power of Google, with more than four billion users of the search engine around the world, is now unquestionable.

A bad review of a business posted as a review on its Google listing can be highly damaging to the enterprise’s reputation.

There have now been a number of cases brought in Australia by those adversely impacted by a negative or defamatory Google review by a disgruntled client or vexatious reviewer.

The costs of legal action mean not every business has the funds to bring a defamation action. Additionally, the owner who brings such an action will need to demonstrate actual loss or harm as a result of the negative review.

This article takes a closer look at what options are available to a business the subject of a bad Google review. You should always seek the guidance of experienced central coast family lawyers with specialist knowledge in this area, such as Felicio Law Firm, before embarking on a defamation action over a negative Google review.

How does defamation work in relation to Google reviews?

A business that believes its reputation has been damaged by a negative Google will most commonly take legal action in defamation.

Defamation relies on the accusation that the review in question opened the business to hatred, contempt or ridicule.

It’s important to note not all companies can take action for defamation. Under NSW’s Defamation Act, an action for defamation is only possible by an ‘excluded corporation’. That is one that employs fewer than 10 persons and is not related to another corporation. The corporation must also not be a public body.

There are other causes of action a company can take, such as injurious falsehood, to combat the effects of a Google review, though they are generally more difficult to prove.

It’s open to a director or officer of a company to take personal action for defamation against a reviewer provided they are identified with sufficient certainty in the review that allegedly carried the defamatory imputation.

Significantly, a Google review can still be defamatory even if it does not specifically name a person or business. A reference in the review that is specific enough to allow identification – ‘the men’s hairdresser on Smith Street’, for example – can sustain the defamation action. Similarly, if there is a reference to a class of people such as ‘Everyone working at the fish and chips shop on Smith St’, may also support a claim for defamation.

Some recent case examples

In the recent case of Dean v Puleio [2021] VCC 848, Ms Puleio wrote four Google reviews on the business listing of Dr Dean, a periodontist who owns Kew Periodontics and Dental Implants. Ms Puleio had been a client at the clinic until Dr Dean terminated the relationship due to Ms Puleio’s manner and constant cancelled appointments.

Ms Puleio then posted reviews that levelled accusations at Dr Dean including being unprofessional, overcharging, failing to diagnose illness, and being someone who bullied patients. Another post stated that Kew Periodontics provided ‘unprofessional and undermining service’.

Two further reviews stated other accusations about Dr Dean’s ethics and falsely stated the doctor had apologised to Ms Puleio.

Evidence supporting Dr Dean’s defamation application included the number of times the review had been viewed online, including the ‘grapevine effect’ when posts are shared, as well as data on the downturn in the page views on Kew Periodontics’ website and a drop in new patient referrals after the negative posts.

The court accepted the reviews had damaged Dr Dean’s reputation amongst her peers and in the eyes of the broader community, plus had an effect on her wellbeing.

It awarded damages in the amount of $170,000. That figure included aggravated damages because Ms Puleio had published the statements solely to harm Dr Dean’s reputation. She also refused to apologise, take down the reviews, attend mediation or participate in the court process.

Around the same time in February 2020, Melbourne dentist Matthew Kabbabe took Google to the Federal Court in order to force the search engine giant to identify a person who anonymously posted a bad review about his practice on his Google business page. Google had refused to either take down or reveal the identity of the poster, ‘CBsm 23’.

The Federal Court justice made an order compelling Google to turn over any identifying information of the reviewer, including names, phone numbers, IP addresses, location metadata, and any other information about the person’s Google accounts so that Mr Kabbabe could pursue a defamation action against the reviewer.

Can Google itself be liable? The Dylan Voller case

International social media platforms such as Google and Facebook have for many years strenuously resisted the idea that they are ‘publishers’ of reviews hosted on their platforms.

The High Court of Australia’s recent decision in the case of Dylan Voller, a former detainee of the Northern Territory’s juvenile detention system, where it dismissed an appeal from Australian news outlets who claimed they were not responsible for third-party comments on their public Facebook pages, may also have implications for Google reviews.

Voller is seeking to pursue an action for defamation against the news organisations for allowing defamatory material about him to be published in comments on their Facebook pages.

The High Court rejected the appeal, finding instead that by creating a public Facebook page and posting content, the media outlets facilitated, encouraged and assisted the publication of comments from third-party Facebook users. These actions made them, therefore, the publishers of those comments.

Similar reasoning could be applied to Google’s facilitating of business reviews which are defamatory in nature.

In April 2020, Melbourne lawyer George Defteros won $40,000 in damages from Google by arguing it had defamed him as the publisher of Google searches on his name which linked him to Melbourne gangland figures.

Call Felicio Law Firm for further advice

If you believe your business has been harmed by the appearance of a negative review on Google or another social media platform, call Central Coast Family Lawyers today.

In this fast-changing and evolving area of the law, we are always up-to-date on the latest developments to be able to advise clients on the most sensible and practical course of action to combat a negative review.

Contact our Erina Family lawyers friendly team today at (02) 4365 4249.

Sep 22
Erina conveyancing - What You Know About Property Settlement

What You Need to Know About Property Settlements

By Family Law, Property Law

Breaking up is hard to do.

There is the sadness and regret that comes with a failed relationship, but there is also the work that needs to be done to disentangle two lives so both people can move forward.

Negotiating a property settlement of assets from the relationship, covering everything from property to cars, shares, joint accounts, superannuation and even pets, can be a stressful, trying process.

The first step in a property settlement is for the ex-couple, whether married or de facto, to identify and value all property from the relationship or marriage, including debts.

This process can encompass things each party owned before, during or even after the marriage or relationship.

It can be a gruelling and sometimes confrontational process to work out this asset ‘pool’, particularly after the breakdown of a long-term relationship where a couple’s lives were significantly enmeshed.

The advice and guidance of specialists in family law like Central Coast family lawyers at Felicio Law Firm is invaluable in helping clarify the process so that property settlement negotiations can run as smoothly as possible.

How assets from the marriage are assessed

Family law property settlements are governed by the Family Law Act 1975 (‘the Act’).

An ex-couple can come to their own agreement about the division of property from the relationship between them, through mediation or other means, that can be made into a court order which both must abide by. Any informal agreement is not otherwise legally binding.

A court – or consent – order – will only be made if the agreement is ‘just and equitable’ to both sides.

When two parties can’t agree on how property from the relationship should be divided, they apply to the court for property orders which will decide how the assets should be split.

All assets arising from the relationship constitute the total property pool, including assets held by both parties, as well as those held in either party’s name.

The property considered party of the pool is that held at the time the couple separates unless one of these assets was also used to create a new asset after separation.

Typical assets assessed during property settlement as a result of separation and divorce include the home the ex-couple lived in, any investment properties either or both owned, cars, furniture, jewellery, share portfolios or other investments, savings accounts, insurance accounts, inheritances, debts and superannuation.

Real estate: Both parties may decide to sell the house they shared during the relationship to pay off the mortgage or pay off other debts from the relationship. The proceeds of any sale become part of the pool to be divided in a property settlement.

This process will require the parties to obtain valuations of the property, either by a financial institution, a licenced valuer or a real estate agent, to work out a median value.

In other relationships, one party may ‘get’ the house (or the mortgage on it) and be ordered by the court to pay to the other party their share of the asset.

Superannuation: In situations where one party to the relationship paid contributions into a superannuation fund, that person may be allowed to retain that benefit but the amount the ex-spouse would have been entitled to in a split of the fund is reflected in the court awarding the partner an increased share of other assets (such as proceeds from the sale of the former couple’s home).

One party’s super fund may also be split so that its value is divided between the ex-partners at an agreed percentage, or a ‘flagging order’ where the non-member spouse can access a share of the fund once eligible.

Trusts: Assets held by one half of the couple within a family trust may be included in the property pool if the court so decides. Its discretion to include is exercised based on the level of control one party has over distributions from the trust. Evidence of whether either party received a loan, salary or expenses from the trust, as well as the trust’s other historical transactions, may be required to work out its significance to the overall property pool.

Inheritances: It’s a common occurrence that one half of the former relationship inherits money or other assets as a beneficiary from an estate. The timing of the inheritance is an important factor as to whether it will be considered property within the divisible pool. An inheritance received during the relationship, for example, and used for a purpose such as renovations of the marital home will likely be regarded as a contribution to the marriage.

An inheritance received during or after separation, however, may not be considered a part of the property pool. It may still be accounted for, however, in working out the future needs of each party because it is a financial resource available to the beneficiary of the inheritance.

Cars, pets, benefits, other assets: We’ve discussed some of the more significant assets in a property settlement above – what about less significant (in terms of value) property, such as vehicles, household items and pets that were co-owned by the ex-couple.

Cars, jewellery, household items and collectibles will all need to be ‘market’ valued for inclusion in the divisible pool of assets.

In general, courts prefer the estranged parties work out between them which one of them will take and care for pets from the relationship. Unless the pet carries a substantial monetary value (such as a pedigree dog), or are income-generating (such as cattle), it will generally not be considered part of a property pol. Where one party has expended significant funds on the care of the animal, however, a property settlement may be adjusted to reflect future costs and maintenance of the pet by that party.

As with a house, car or other assets, the Court may order the animal to be sold if appropriate.

Sources of income such as Centrelink payments may be considered as part of each party’s financial contributions to the relationship, affecting the assessment of that person’s share of the property pool.

The test used for dividing the property pool

Under the Act, the Court determines what is fair and equitable to both parties given all of the circumstances.

The value of the property pool, minus any liabilities, is figured out before the Court employs a four-stage test which considers:

  • The direct financial contributions each party made to the marriage, such as wages and government benefits;
  • any indirect financial contributions by each party, such as gifts and inheritances;
  • the non-financial contributions to the marriage, such as caring for children, homemaking, house renovating, and;
  • future requirements in light of each party’s age, health, financial resources, care of children and ability to earn (including the effect of a property settlement order on each party’s earning capacity).

In a property settlement, each party to the former relationship must fully disclose their financial circumstances to the other party. This may require them to furnish the other side with a bank and super statements, tax returns, income statements and more.

The duty to disclose continues from the moment property settlement negotiations are initiated until the matter is settled.

One party may also seek an injunction against the other where they believe their former partner is selling or disposing of assets that rightfully should be part of the property pool for settlement. The party seeking the injunction needs to show the court that the ‘dissipation’ of assets is imminent or possible.

The need for good legal advice

Once a divorce is finalised the parties have 12 months in which to seek an order from the court regarding property settlement, otherwise, they must seek the court’s permission to bring an out-of-time application.

The stages we’ve discussed above can take time and painstaking attention to detail. For people who are working, raising children and dealing with the emotional fall-out from a relationship break-up, this can be a very testing thing to do.

Entrusting your side of the property settlement to experienced, understanding family law specialists like Felicio Law Firm will reduce the stress and worry on you. We look after all the details.

Property settlement provides closure on an old relationship, allowing you to move on with your life, but it’s important to get it right so call us Erina & Central Coast family lawyers today for an initial consultation.

Sep 17
Estate Planning Lawyers Erina & Central Coast

What to do if Someone Close to You Dies?

By Estate Planning

Grief, when someone close to you dies, can take a long time to deal with, and leave most people feeling like they need a break from the normal demands of life for a while.

But when someone close to you dies, there can be a lot to do in order to properly farewell them and finalise their affairs.

From arranging the funeral to fulfilling any wishes in relation to your loved one’s will, the checklist of matters to be attended to can become quite lengthy.

The advice and guidance of legal professionals experienced in what needs to happen after a person dies can be essential in helping you at a time when you may still be grieving, and supporting others who are as well.

What are the main things you need to do after someone close to you dies?

There are a number of priorities to attend to when someone close to you dies.

The most important priority in the first hours and days after your loved one has passed is to contact their doctor, if they died at home, as well as close family and friends, the funeral director (if known), and the executor/s of the will.

Locating your loved one’s personal documents is an important thing to check off soon after the death because they may or may not have left extensive instructions on what they wanted to happen in the event of their death.

These plans might include a pre-paid funeral plan, for example, but it’s also important to locate documents such as birth and marriage certificates, property deeds, life insurance or superannuation policies, bank account details and a will if one was made.

If a funeral director has been nominated by the deceased or arranged by the family, it is their role to officially register the death with the authorities and apply for a death certificate. This will generally need to be completed within 14 days of the death.

If the person had a will, the executor of the will is generally responsible for making funeral arrangements. If the person did not have a will, the responsibility falls to the next of kin, relatives or close friends.

Accounts with banks and utilities such as electricity and water, social security payments such as pensions, memberships of clubs and other organisations, direct debit payments, social media accounts and more need to be cancelled or closed.

Outstanding financial matters, including debts and liabilities, may require loved ones to consult the deceased’s financial adviser if they had one.

Settling the will

Where the deceased made a will, the role of the executor of the will is particularly important.

Among many other responsibilities, an executor has time limits to observe in executing the will, so that beneficiaries have a clear picture of what they might receive from the estate of the deceased.

In the situation where persons or organisations hold assets that are part of your loved one’s estate but will not release them, such as banks or retirement villages, for example, the executor applies to the Supreme Court for probate.

A grant of probate is the legal document that authorises the executor to manage the deceased’s estate according to the provisions of the will. It is the Court’s recognition that the will is legally valid and that you are the person authorised to deal with the estate.

Where your loved one’s will was valid and you are applying to administer its terms but are not the executor, you will have to apply for a grant of letters of administration of the will.

In cases where a person failed to make a will, a loved one may need to apply for a grant of letters of administration on intestacy.

How Felicio Law Firm can help

The services of expert legal professionals with years of experience in wills and estates can make the process of sorting through the affairs of a recently deceased loved one a lot easier and stress-free.

Felicio Law Firm brings a compassionate and understanding approach to helping clients through a trying time when a loved one dies.

We can help you check off the necessary things to do at this difficult time and understand the most important priorities.

Call us Wills & Estate Planning Lawyers Central Coast today for an appointment.

Jun 30
Business Law Lawyers in Erina & Central Coast

What You Need to Know About Joint Venture Agreements

By Business Law

There are many reasons why two parties may decide to enter a joint venture (JV).

Each may bring complementary skills which they believe will work in combination. In other situations, the joining of finances from each side may help the parties realise involvement in a project that would otherwise be beyond them if they attempted it on their own.

It also allows the parties to share risk and liability if profits of the project do not eventuate. In Australia, a JV is also one way to allow foreign investment in a project.

In United Dominion Corporation Ltd v Brian, Justice (later Chief Justice) Mason described a JV as “an association of persons for the purposes of particular trading, commercial, mining or financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill.”

Parties may create a JV for a business project or to buy a property interest but in either example, it is wise to create a JV agreement that sets out the obligations, rights and responsibilities of each party.

This agreement will benefit from being drafted by legal professionals with wide experience in corporate law matters, such as Felicio Law Firm.

What should be included in a joint venture agreement?

These agreements will generally cover the obligations of each party entering into JV, including:

  • what each party will initially contribute to the JV;
  • what actions each party will be obliged to perform during the life of the JV;
  • terms on the reporting and governance of the JV;
  • dispute resolution processes between the JV parties, and;
  • what should happen at the end of the life of the JV.

What type of joint ventures are there?

It should be stated at the outset that unlike corporate structures, such as a limited liability company, the definition of joint venture remains largely undefined in Australian corporate law.

While joint ventures are subject to common law principles and different parts of various pieces of legislation, their essential nature is best described as a commercial arrangement between two or more independent parties, organised under one of several legal forms for the purpose of a business project.

There are three main forms of JV in Australia: unincorporated, incorporated and unit trust JVs.

Unincorporated JVs: Also referred to as a ‘contractual JV’, this form sees the parties enter into a contract that sets out the rights and obligations of each party.

The terms of the contract will typically address:

  • That the rights and obligations of each party are several rather than joint.
  • Operation of the JV may be undertaken by a manager that may be either of the parties, a third party, or a third party contracted manager.
  • The operator is appointed separately by each party.
  • The parties are not agents for each other, except where one of them is appointed the manager of the operator.
  • The JV is conducted so as to give the parties a right to share in the product of the undertaking as a proportion of their financial interest in the JV.
  • The management structure of the JV ensures that each party contributes its agreed percentage interest; and that decisions about the JV are made by an operating committee comprised of representatives of each party.
  • The undertaking is a JV and not a partnership.
  • Assets are held as tenants in common by the parties at common law rather than beneficially.
  • Any transfer of the interests of the parties is usually subject to a pre-emptive option held by the other parties.
  • The parties may decide to be in a fiduciary relationship with each other or deny such a duty by express terms in the contract.

Incorporated JVs: In this arrangement, each party agrees to incorporate a separate legal entity to undertake the joint project. Each party then holds a percentage of shares in the new company, which is why this form is sometimes called an equity JV.

In this form, the details of ownership of the business or asset will be set out in a shareholders’ agreement, though other rights and obligations may be separately negotiated in a JV agreement.

Formation of a new company under an incorporated JV means there is a different legal relationship between the parties governed by the provisions of the Corporations Act 2001 relating to shareholders.

Unit trust JVs: This hybrid form sees the parties to the JV create a unit trust with each holding units which reflect its equity in the business or property asset. The potential benefit of the trust structure is a reduced tax liability for the JV.

The trust should be formalised in a clear written agreement.

Case example: In Coyte and Anor v Norman and Anor; Centre Capital (Newcastle) Pty Ltd and Anor, a 2016 NSW Supreme Court case, claims of a breach of contractual obligations in an oral agreement relating to a unit trust JV did not succeed because the court did not find the agreement existed.

Speak with expert legal professionals

If you’re considering a joint venture to purchase a property asset, undertake a business venture, or participate in a one-off project, it’s important to establish at the outset which form is appropriate and what sort of agreement should govern its operation.

Felicio Law Firm has the expertise to advise on the best structure of JV to ensure expectations are managed on both sides and to create an agreement that covers the possibility of disagreement or dispute. Call us Erina lawyers today.

Jun 28
Erina Business Lawyers

Why Should You Engage a Lawyer When Negotiating a Commercial Lease?

By Property Law

While there is various government legislation applying to a commercial lease, they are essentially contractual in nature.

This means that common law contract principles are important when negotiating the terms of the lease and the clauses relating to renewal, termination, dispute and other possible issues.

While anyone can sign a lease, doing so without guidance from a legal professional who has experience in the finicky details of contract law and property leases is unwise.

Hard-headed negotiations are sometimes required between a landlord and a commercial tenant, which will benefit from a knowledgeable lawyer as the intermediary. Ultimately, the parties to the lease will in most cases wish to quarantine their relationship from squabbles over contract terms relating to the commercial lease.

What needs to be considered in a commercial lease?

Whether it’s a retail lease, a lease of factory or warehouse premises, or a lease on the land, there are several important questions the lease-holder needs to ask before signing a contract.

Key among these are:

  • The terms of the lease and the option for renewing it – what is its duration and how is the option to renew exercised (more on this below)?
  • How much is the rent, how often is it payable and what is the process/timeframe by which rent is reviewed?
  • Apart from rent, which expenses and costs related to the property are the responsibility of the landlord and which are the tenants’? The costs of waste collection, water usage, electricity and other overheads need to be clarified in the lease.
  • Is there a bond to be paid? Not all commercial leases include payment of a bond but if one is part of the lease, how is it returned after the lease and under what circumstances may it be withheld?
  • Which party is responsible for fixtures and fit-outs? If there is no agreement between the parties, in a retail lease it’s generally presumed to be the tenant’s responsibility.
  • How are repairs and maintenance of the property to be carried out? This is a common area of dispute in commercial leases and should be clearly defined in the lease.
  • Depending on the length of the lease, what the lease-holder is permitted to do in terms of refurbishment and renovation of the premises.

Additional issues such as permitted uses of the premises (types of business that can operate there), whether subletting of the lease is permissible, insurance and the obligations of each party at the end of the lease also need to be negotiated before the legally binding lease is signed.

Most commercial leases exceed three years (including options to renew), requiring registration with the NSW Land Titles Office. If the lease is funded through a mortgage, consent from the mortgagee must be obtained before registration.

All of these important issues are dealt with by an experienced lawyer when negotiating a commercial lease on behalf of a client. At Felicio Law Firm we take an exhaustive approach so that no potential issue is left unaddressed before signing a commercial lease. We will make sure you can achieve the best possible terms for your commercial lease by taking a line-by-line approach to the document.

Dispute resolution

It’s not uncommon for a dispute to arise between a commercial landlord and tenant during the term of the lease over any of the issues discussed above.

While the resolution of the dispute may be achieved by a straightforward chat between landlord and tenant, there are situations where the dispute may need to be escalated to a statutory body such as the Registrar of Retail Tenancy Disputes or the NSW Civil and Administrative Tribunal for adjudication.

Again, expert legal representation by a firm with years of knowledge in handling commercial leases is crucial, whether you’re landlord or tenant.

Lease renewal and termination

The advice of a commercial lawyer is particularly advisable in relation to the renewal or termination of a commercial lease.

Most commercial leases will include an option to renew, with the landlord obliged to grant the lease-holder a further lease subject to conditions of the existing lease being complied with.

Exercising the option to renew requires certain steps such as doing so within the notice period and correct service of the acceptance of the option which, if not properly followed, may result in loss of the right to do so. This is why good legal advice is essential.

Likewise, there are numerous ways to terminate a commercial lease, some of which may be detailed in the clauses of the contract. A lease-holder may ‘surrender’ a lease, though the landlord is under no legal obligation to accept this method. Usually, it will be done through a process of negotiation, which Felicio Law Firm can facilitate for you.

In other situations, termination may be achieved by an early termination clause, assignment of your rights and obligations under the lease to a new tenant or some other method.

In any of these scenarios, expert legal advice will help you avoid common pitfalls.

Consult us today

Felicio Law Firm can offer guidance and advice on all commercial lease matters discussed in this post. We are highly experienced in conducting negotiations between landlords and tenants, as well as managing disputes should they arise during the term of the lease.

Contact us Erina lawyers today for an initial consultation.

Jun 23
Will & Estate Planning Lawyer Erina & Central Coast

How is Disposal of an Asset Treated When You Want to Claim the Age Pension

By Estate Planning

Those who wish to receive the age pension in Australia must first submit to both an income and assets test.

These tests determine the amount the applicant will receive, with the test that provides for the lowest pension amount preferred.

The income test will consider any income a person receives from employment, pensions, annuities, investments and salary packaging. The assets test is the market value of things such as investment properties, caravans, cars and boats, and business assets.

The family home is not counted as an asset of a person applying for the pension who lives in the house. But a pension entitlement can be affected if that person decides to sell the house.

On selling the home, the proceeds of the sale are exempt for up to 12 months if they are used to buy, build or renovate another home.

But the proceeds are ‘deemed’ in the income test and assessed as income from financial assets, which could affect a pension entitlement.

There are also rules regarding the addition of granny flats to a property, and retirement village costs, in terms of the pension.

What happens if you dispose of an asset

Disposing of an asset when you are receiving an age pension is governed by what is known as ‘gifting and deprivation’ rules.

These rules apply to prevent a person from reducing their assets or income to either qualify for or increase their age pension entitlements.

Some people may also want to reduce their assessable assets to qualify for a part pension.

The term gifting is used to describe the disposal (or deprivation) of assets or income where the person doing so receives no financial consideration in return.

Gifting might include selling a residential property to a child for a discounted value, providing money to a child for a wedding, paying a grandchild’s education costs, or repaying a loan for a child in the position of a guarantor.

Limits are imposed on this practice because Centrelink views it as a person owning combined assets before they were gifted that were worth more than what they are now.

As a result, a person is allowed to gift assets or income of $10,000 in one financial year, or $30,000 over five financial years (but not more than $10,000 in a single financial year).

Any amount over these amounts is considered a ‘deprived’ asset and counted as an asset in the assets test, and subject to deeming in the income test, for a period of five years after the excess gift was made.

If the gifter receives financial consideration for the asset during the five-year period, or it’s returned, its value is no longer assessed as a deprived asset.

What are the implications of disposing of an asset?

It’s important for a person who disposes of assets to qualify or increase their pension entitlement to pay proper consideration to their current and future needs.

Will they need the asset to pay for means-tested aged care in a retirement home in the future, for example?

A person’s assets and income are means-tested in working out what they need to pay for aged care accommodation and care costs, including gifted assets. If assessed as deprived, gifts given within five years of a resident moving into residential aged care can result in the resident having to pay more for aged and care costs.

Residing with children, including granny flats

A common situation is for an elderly person to transfer the title of their house to a child and come to an agreement with them about continuing to reside there, either in the house or a purpose-built ‘granny’ flat on the property.

The title transfer and/or the costs of building the flat are not generally assessed as a gift unless it could have been anticipated at the time of the transfer that the elderly parent would need aged care within five years. In this case, the arrangement could be assessed as a gift and then considered to be a deprived asset. If this is the case, the parent’s pension entitlement could be affected.

Centrelink maintains rules in this regard, including that the parent paid a ‘reasonable amount’ for the value of the asset transferred. If it appears the parent transferred more than the value of the granny flat right, the asset’s value may be considered deprived and their pension entitlement could be reduced.

In addition:

  • the parent being provided with accommodation and/or care cannot own the property;
  • the home in which the accommodation is provided must be the parent’s principal home.

A problem can arise where the relationship of the adult child and their partner ends through divorce or separation, and the house needs to be sold. Can the person who originally gifted the property be left homeless?

Ideally, this situation is addressed in an enforceable written agreement before it comes to pass. Some options include:

  • selling the property with the parent’s residential arrangement as a condition of sale;
  • transfer the parent’s life tenancy or interest to another property, or;
  • compensate the parent financially for losing the granny flat interest.

The final option may have ramifications for the parent’s age pension entitlement.

Consult specialists in this area, Felicio Law Firm

The issues addressed in this post can be complex. At Felicio Law Firm we have lots of experience interpreting gifting and deprivation rules for clients to conform with Centrelink’s rules.

Whether you’re approaching pension age, or are concerned about the effect on your pension of disposing of an asset, call us Erina lawyers today for an initial consultation.

May 14
Erina & Central Coast Will & Estate Planning Lawyer

What Do You Need to Know About Retirement Village Agreements

By Estate Planning

Advances in medicine, technology and lifestyle choices meaning Australians are living longer.

As a result, the proportion of the population aged 65 or over has increased and is forecast to continue to increase. In 2017 3.8 million Australians, or 15 per cent of the population, were aged 65 or over.

One of the implications of this trend is the growth in aged care facilities such as nursing homes, residential retirement villages and over-55 ‘lifestyle communities’.

There are different types of agreement covering these facilities, as well as different legislative rules. We’ll provide an outline of each below but if you need more information or guidance when considering an agreement, contact Central Coast & Erina Lawyers at Felicio Law Firm. We have a proud track record advising our clients in this area.

Retirement village agreements

All retirement village contracts in NSW are regulated under the Retirement Villages Act (NSW) 1999 (‘the Act’).

Before a person can move into a retirement village, a written contract must exist with the village operator unless the prospective resident is moving in with an existing resident, or is signing a residential tenancy agreement under the residential tenancy laws.

A contract with a village can encompass a residence contract or a service contract, or a combination of both. Prospective residents must be given a copy of their proposed contract at least 14 days before signing it and a cooling-off period generally applies allowing a person time to back out of the contract.

The standard contract in the Retirement Village Regulation 2017 and applying to contracts agreed to after 1 October 2013 sets out the details of each party’s rights and obligations, including costs, services, facilities, alterations and additions, repairs and maintenance, and sharing of capital gains.

Additional terms can be added to the contract provided they do not contradict the standard terms, the legislation or any other law.

Certain documents must be attached to the contract including a copy of the disclosure statement provided to the resident; the residence condition report; details on the village’s services and facilities, and the village rules (if any).

A standard form is not required if the resident is signing a sale of land contract where the person buys a strata or community scheme unit, or an agreement to buy company title shares. A service contract, however, is still required.

Key types of retirement village contracts include:

Loan and licence arrangements: The resident pays an initial contribution in the form of an interest-free loan, or a non-refundable deposit that is deemed part of the loan.

This contract provides entitlement for the resident to reside at the village along with termination provisions. If the loan agreement is in combination with another type of contract such as a licence or a lease, it should make reference to the entitlement to reside in that document.

Under this agreement, recurrent charges will be payable on a fortnightly or monthly basis.

Leasehold arrangements: A resident enters into lease with the village operator/owner. The resident becomes a registered interest holder where they enter into a long-term lease that includes a provision that entitles the person to at least 50% of any capital gain.

Depending on its terms, the lease may provide for entitlement to the whole, or a share, of the capital gain to the lease-holder, as well as be liable for the whole (or a share) of the capital loss upon the sale of the interest.

Strata and community schemes: The resident becomes the registered proprietor of a lot within the strata or community scheme via a contract for sale.

In this situation the resident becomes a member of the owners’ corporation or association and so must pay strata/community levies.

The owners’ corporation is also responsible for maintenance of common property.

The resident will generally also sign a service contract with the retirement village operator, including detailing the Ingoing Contribution, the requirement to pay departure fees and whether a capital gain/loss on the lot is shared with the operator.

Rental arrangements: This arrangement looks like a normal tenancy arrangement, including payment of a bond, but with no Ingoing Contribution or departure fees.

Company title schemes: The prospective resident purchases shares in the company which is the registered proprietor of the retirement village. These shares provide the right to reside on one of the premises. A services contract is generally required providing for when departure fees are payable. A bond to the company may also be possible, refundable upon the sale of the shares.

Over-50s lifestyle communities

These types of communities are governed by similar provisions to retirement villages though more closely resemble tenancy agreements.

Covered by the Residential Parks Act 1988, there are applicable rules for the conduct of operators and residents, contractual cooling-off periods, maintenance of grounds and facilities, and terms about departures.

A key distinction with this type of establishment is that residents own the building and pay rent on the site hosting the building. This means they are stamp duty exempt and the resident may also be able to apply for rent assistance.

Nursing homes

Nursing home agreements apply to those who are reaching the stage where they need to live close to emergency and constant care.

There are a number of agreements related to nursing homes, and sometimes they are combined into one.

The resident agreement details the services and level of care to be provided as well as its cost. It also provides details on supporting the resident as needs change, as well as exit arrangements and how to move to another aged care home.

The accommodation agreement covers the type of room to be provided, any other conditions on the accommodation and the cost. This includes a means assessment to work out whether the resident may be eligible for government assistance with the costs of nursing home care. The agreement will also outline options for payment, from regular rent to lump sum payment.

Discuss your needs with us

In any of the agreements outlined above, independent legal advice should be sought before entering into one to ensure you are fully aware of your rights and responsibilities.

At Felicio Law Firm we regularly advice people on these important life decisions. Choosing the right residential option for your later years is not only a large financial commitment but a decision you want to make without stress or complication.

Estate Planning Lawyers Central Coast can help you achieve that outcome with considered, understanding legal guidance.

Apr 22
Central Coast & Erina Lawyers

The Vital Importance of Making a Will

By Estate Planning

The thought of making an important legal document such as a Will can be one of those ‘life tasks’ people like to put off, but there are many very compelling reasons for resisting that impulse.

In this article, we’ll provide some more detail on the most important reasons for making a Will. Perhaps the most important, when all is said and done, is that a Will is an expression of your final wishes. For your loved ones, it is usually relied on as a clear ‘guide’ for them to follow to ensure that your estate is distributed as you wished it to be.

Your Will generally provides guidance on what you wish to happen with: land, houses or commercial property that you own; money held in bank accounts and term deposits; shares; other investments; personal belongings; life insurance policies, and; employment entitlements (but not always superannuation).

If you fail to make a Will before your death, the state may become responsible for distributing your estate under the intestacy laws and any wishes you had for how this should be done during your lifetime are likely not to be honoured.

If you have questions about making a Will, contact us at  Felicio Law Firm today. We have experienced Wills and Estates lawyers who take a caring and compassionate approach to the queries and concerns of our clients.

The best reasons for making a Will

Perhaps the primary reason for making a Will during your lifetime is to ensure you do not die intestate (without a Will).

To do so means your worldly possessions will be distributed by an administrator under the state’s intestacy laws, and not take into account what you wished to happen with your estate.

When you make a Will, you appoint a trusted person as the executor of the document, entrusting them to distribute your assets to beneficiaries, resolve your debts and order your affairs according to the instructions you left in the Will.

One thing an administrator is likely to do is to distribute your assets equally between your children. But for a variety of reasons, many people do not wish this to be the case. One of their children may have personally cared for them in their later years and the Will-maker believes they deserve more from the estate. One child may have been professionally successful and less needy of an inheritance. One may be going through or has gone through, a divorce, where the ex-partner may have a claim on the inheritance as part of a property settlement.

Perhaps you would like to specifically look after your grandchildren in your Will. This may not occur if you die intestate because your estate will generally be distributed between a surviving spouse and your children, rather than the next generation.

Similarly, stepchildren are not generally recognised as beneficiaries under intestacy laws. They can become so under a valid Will.

Many people would like to leave something in their estate to a charity, or a lifelong friend. Again, without a Will, this is unlikely to happen under the laws of intestacy.

A further reason to make a Will even before you reach mature years is that the document allows you to name a guardian for minor children. No one knows what the future holds. In the event of your sudden death, or that of both you and your partner, it may be left to a court to decide which people are best placed to take responsibility for your infant children, and these may not be the people you preferred.

The importance of a Will in blended families

In modern society more and more people need their Will to address the fact they have had more than one family during their lifetime.

You may divorce and remarry. You may divorce and your ex-partner remarries or forms a new de facto relationship. There may be children from the original relationship but not the subsequent one, yet the surviving spouse may be able to bypass their children when they receive and pass on your assets to the new spouse (and their beneficiaries).

There are a number of ways a Will can deal with these situations but you should first consult an expert legal professional. There may be a ‘mutual Wills’ agreement whereby both spouses agree not to change their Will when one of them dies, allowing the children from the relationship to enforce the agreement in court should a surviving spouse decide to change his or her Will.

Another solution is to grant a right of residence to each other to live in their share of the family home for life, with each other’s share returning to the other once one of them dies.

Making a valid Will

In the digital age, there are many free and DIY will kits offered online. It’s very easy, however, for a legal document such as a Will to be adjudged invalid if it is not done correctly. An invalid Will means your wishes can, again, be overridden by intestacy laws.

In general, a Will must be in writing, whether handwritten, typed or printed, signed by the testator (the Will-maker) and witnessed by two other people who also sign the Will.

Ideally, a Will should be reviewed and, if necessary, updated every three to five years. This way it can best reflect any changes in your life circumstances, most particularly changing family arrangements. Once you start earning income, it’s never too early to consider making a Will.

If you have questions or concerns about making a Will, contact Central Coast & Erina Lawyers specialists Felicio Law firm today.

Apr 16
Pitfalls of Being a Guarantor

What are the Pitfalls of Being a Guarantor on a Home or Business Loan?

By Property Law

Probably the most common situation where someone guarantees a loan taken by another person is that of parents doing so for adult children who wish to buy a house.

In other situations, a person may be a guarantor for a business loan taken out by someone else.

In either situation being a guarantor for the loan – meaning you become legally responsible to the lender that you will pay back the loan if the person the money is lent to fails to make repayments – is an admirable thing to do, but also carries some pronounced risks.

Let’s take a more detailed look at some of the pros and cons of being a guarantor below. Before you agree to be a guarantor, however, or ask someone else to go guarantor on your loan, seeking professional advice from legal specialists with expertise in the rights and responsibilities of this role is essential.

What are the risks of going guarantor on a loan?

Before you agree to be a guarantor on a loan, you should ask yourself some searching questions. Becoming legally liable for someone else’s debt is a considerable burden, and could severely impact your own lifestyle and future.

Particularly in family situations, where a parent may take on the guarantor role to help an adult child take out their first home loan, emotion can sometimes cloud reason.

The key risks to be aware of are:

  • Being liable for the entire loan, plus interest and fees, if the borrower can’t make the repayments and defaults. If you are also unable to meet the terms of the loan, the lender may proceed to repossess the asset/s you nominated as security for the loan, including your house.
  • As a guarantor, your own ability to apply for a loan may be affected. You will be required to inform a lender of any other loans on which you are a guarantor.
  • Should you as guarantor, or the borrower, be unable to meet the terms of the loan, your credit report will be adversely affected and your ability to borrow in the future may be impaired.

A guarantor also needs to consider the possible effect of a family member defaulting on a loan for which they are guarantor. The relationship may be irretrievably broken if the trust implicit in the arrangement is breached.

Guarantor on business loans

Whereas a family member will generally be the guarantor on a home or personal loan, partners, investors or associates are also commonly guarantors when someone applies for a business loan.

With this type of loan, the lender will generally need to be convinced that the guarantor has a genuine relationship with the borrower, an interest in the business and sufficient assets to guarantee the loan.

A residential or a commercial property would usually be considered a sufficient asset to be offered as security for the loan.

Where the loan is for a new business, the guarantor will generally be guaranteeing 100 per cent of the loan because the new business has no assets to use as security. If the loan is to purchase commercial property, the guarantor will usually guarantee a 30 or 40 percent portion of the loan.

Important final questions

As we mentioned earlier, a potential guarantor needs to ask some important questions before signing on to guarantee a loan.

Does your financial situation allow you to take the risk of losing the asset you have offered as security? Are there are other ways you could help achieve the aim of the borrower, such as loaning the money to them directly? How strongly do you trust the borrower to make the necessary repayments?

It’s crucial that before agreeing to be a guarantor, you examine the loan contract, business plan or any other relevant documentation the borrower needs to provide to the lender. The best advice is to treat the loan you’re guaranteeing as if it were your own.

The process can be time-consuming and involved. Expert legal advice from experienced advisers such as Felicio Law Firm is essential. Whether it’s a home or business loan you’ve been asked to guarantee, we can provide understanding and relevant guidance on how to approach the question.

Mar 11
Resolving Building Contract Disputes - Erina Lawyers

How to Resolve Building Contract Disputes in NSW and QLD

By Litigation

Unfortunately disputes arising from domestic building contracts are a common story. Just ask anyone who has built or renovated a house.

While most disputes can be resolved amicably either before or during mediation on the areas of disagreement, this is not always the case. In both NSW and Queensland there are well-established dispute resolution processes managed initially through the NSW Department of Fair Trading and, in Queensland, the Queensland Building and Construction Commission (QBCC).

In both states the advice and guidance of Felicio Law Firm should be sought before you enter dispute resolution.

Of course, using a state-run dispute resolution services does not prevent either of the parties from seeking legal advice or taking independent legal action in a contractual dispute… but you should definitely seek expert legal advice if this is your preferred course of action.

Terminating a contract for breach requires a number of important procedural steps to be taken in order for it to take effect. There are potentially serious consequences for a party who wrongly terminates a building contract.

Common disputes in regard to domestic building contracts include disagreements about the contract price, the contract clauses relating to variations (of fixtures, or plans, for e.g.), extensions of time, implied warranties (defective work, non-completion, etc) and more.

Contract dispute resolution in NSW

In any dispute with a contractor, it is best to first raise the issue directly with them to see if the area of contention can be resolved to mutual satisfaction.

If that is not possible, NSW Fair Trading provides a dispute resolution service through its Home Building Service. This service aims to provide early intervention to avoid an escalation of the dispute. Statistics on the effectiveness of the service show that over 70 per cent of disputes over building contracts are resolved at the initial mediation or inspection stage.

This process can be commenced by the homeowner/consumer, or the contractor, by a formal request to Fair Trading. If the contractor initiates the request, the homeowner must agree to enter into dispute resolution but if the consumer lodges a complaint, the trader does not need to agree to resolving the dispute (though is strongly encouraged to do so).

Resolution of disputes relies on the work of experienced, trade-qualified building inspectors located throughout NSW who will provide an opinion on whether work performed under a contract is defective or incomplete.

This process may be conducted in the presence of the homeowner and contractor on site, or through inspection of material submitted by both parties combined with phone interviews. If the issue in contention can be resolved, the inspector will compile a complaint investigation report detailing what actions have been agreed upon and what each party has to do.

Where the inspector is satisfied the contractor bears responsibility for defective or incomplete work, a rectification order is issued directing the trader to rectify or complete the work by a due date. Should work not be fixed by the nominated date, the builder will be breach of the Home Building Act 1989.

If on the balance of probabilities the inspector is not satisfied that fault for the dispute solely resides with the contractor, a homeowner can choose to lodge an application with the NSW Civil and Administrative Tribunal (NCAT) to have the complaint heard and determined. Expert legal advice should be sought at this stage.

Statutory warranties under the Home Building Act apply for six years for major defects and two years for all other defects from the date of the completion of home building work. A claim must be lodged with the NCAT within these periods in order for it to deal with the issue.

Resolution of building disputes in Queensland

In Queensland the QBCC provides an Early Dispute Resolution (EDR) Service provided your building contract is not completed or has been terminated. A complaint before a contract has been completed may relate to defective or incomplete building work, or an issue about the contract itself. This service is only available for domestic building contracts worth $3,300 or more.

The aim of the EDR service is to facilitate a speedy resolution of the issue in dispute. Similar to the NSW process, the QBCC will rely on a building inspector to make a visual inspection of a property if work is alleged to be defective or incomplete under the terms of the contract, and make a decision as to what action is required. This may include issuing a Direction to Rectify to the contractor.

The QBCC can help parties reach agreements when contractual disputes arise (progress payments, delays, defective work, for e.g.) but it cannot make orders about a contract, nor force a party to pay or refund monies, or comply with any agreement the parties may reach.

Instead, for enforcement action or in the case of termination of the contract, parties need to take the dispute to the Queensland Civil and Administrative Tribunal (QCAT). In most cases, applications to QCAT need to demonstrate that the parties have tried to achieve a resolution through the QCCB EDR process.

QCAT exercises jurisdiction over most legal disputes involving domestic building contracts in Queensland, including commercial building disputes involving work of a value up to $50,000.

Before initiating legal action in QCAT, the parties to the contract are encouraged to seek advice from a legal representative with experience and expertise in Queensland building legislation, such as Felicio Law Firm.

The importance of good legal advice

Building contracts usually involve significant sums of money and for that reason, emotions can run high when there is disagreement between a homeowner and a building contractor.

But these emotions need to be kept in check. An owner’s inclination to terminate a contract and find new builders can have very detrimental consequences if the document is incorrectly terminated under the terms of the contract.

If you have questions or concerns about how to resolve a dispute about a building contract, contact the professionals with extensive experience in NSW and Queensland building contracts, Felicio Law Firm. Call us today on (02) 4365 4249.

Feb 26
Different Types of Building Contracts in NSW QLD

The Different Types of Building Contracts in NSW & QLD

By Property Law

For the majority of people, contracts are not a fun thing to deal with in life. For most of us, they’re just small print.

Therein, however, is the danger. Many people entering into a contract find themselves in a difficult situation when a problem arises, such as one party not fulfilling their end of the deal or where there is some other dispute. If the issue is not dealt with in the contract, or not expressed to be in your favour, then you may be in a weak position with no recourse.

This situation can be particularly common in domestic building contracts. In their enthusiasm to have their renovation started, or their new house built, people often skim the details of the contract with the builder and are left in a vulnerable position if a dispute or disagreement emerges.

This article will look at the essentials of domestic (rather than commercial) building contracts in NSW and Queensland, where Felicio Law Firm has a proud track record advising clients over many years on what they need to know before putting pen to paper on this type of contract.

Essential things to know about building contracts

Unlike the old days, relevant statutory organisations such as Fair Trading NSW now provide ‘model’ plain English contracts which make it easier for consumers to access guidance on what a building contract should and should not include.

In any building contract, some key things to take note of include:

  • That the contract is written in clear English; states the names and addresses of the parties to the contract; includes the builder’s current registration and/or licence number.
  • The contract sets out all the terms relating to the building, including detailed descriptions of the work to be carried out, plans, specifications and any other relevant documents.
  • That special requirements and finishes used in the building are set out and specified. Ideally, fixtures and fittings are also detailed in the contract, including their costs, as ‘prime cost’ items. If their nature and price are not yet known, they should be included as ‘provisional sum’ items.
  • States the total price for the works, including the amount of the deposit and any schedule of progress payments (including ensuring progress payments relate to work completed and not time on the job).
  • That the date on which the contract becomes effective is stated, as well as a clause about the cooling-off period. It should also include state a start and a finish date for the work, with allowances for delays.
  • A section defining words and key phrases used in the document.
  • Details on any implied warranties, including their duration.

NSW building contracts

In NSW contracts relating to residential building are governed by the Home Building Act 1989, whether you’re building a new home, or altering or renovating an existing one.

Any such project valued at more than $5000 requires a contract. Even for building projects valued under that amount, you should consider a contract or written agreement.

Building projects valued between $5000-$20,000 can be covered by a ‘small jobs’ contract. These contracts contain most of the points covered above, including the details of both parties; the contractor’s licence number; detailed descriptions of the work, including plans and specifications; and a contract price, if known.

This type of contract in NSW should also have clauses relating to:

  • ‘Quality of construction’, which states that the proposed work will comply with the Building Code of Australia, as required under the Environmental Planning and Assessment Act 1979.
  • Other relevant codes, standards and specifications that the project must comply with.
  • The conditions of any relevant development consent or complying development certificate.
  • Limitation of the contractor’s liability for failure to comply with work compliance clauses because: a design or specification prepared by or on behalf of the home owner (but not the contractor); or a design or specification required by the home owner if the contractor has advised the home owner in writing it goes against the ‘work compliance clause’.

A more detailed written contract is required for work costing more than $20,000. It should include all the details included in a small jobs contract, as listed above, as well as:

  • Relevant statutory warranties required by the Home Building Act 1989 (such as that the work be done with ‘due care and skill’).
  • The contract price, including warning provisions where the price is subject to change or is not known.
  • A prominent clause about the cooling-off period of five clear business days for both parties once the contract has been received, for contracts valued over $20,000.
  • A checklist of essential matters to tick off, such as the contractor having a current licence, details of when variations can be made to the contract, the costs of insurance or another indemnity scheme, termination clauses, etc.
  • A progress payment schedule, covering fixed payments, interval payments or a combination of both.
  • A termination clause.
  • A note that the contractor must give you an insurance certificate under the Home Building Compensation (HBC) Scheme.
  • A clause that any variation to the contract or its plans and specifications must be in writing and signed by both parties.
  • A clause that the work will comply with the Building Code of Australia, and all other relevant codes, standards and specifications that the work is required to comply with under any law.
  • A clause limiting the liability of the contractor for failure to comply in certain circumstances.

A builder or tradesperson must give the owner a copy of the contract within five business days after it has been signed.

Queensland building contracts

In Queensland domestic building contracts are covered by the Queensland Building and Construction Commission Act 1991 (‘the QBCC Act’), which sets out contract requirements for the erection or construction of a detached dwelling (i.e. a single, free-standing home or duplex) or the renovation, alteration, extension, improvement or repair of a home, as well as for other domestic building work such as a driveway, fence or swimming pool.

QBCC provides standard form contracts, as do Queensland industry associations, or the parties can create their own, though if this latter course is taken, legal advice from experienced contract lawyers such as Felicio Law Firm should be sought.

Introduction of Schedule 1 B in the QBCC Act introduced two levels for domestic building contracts in Queensland – Level 1 contracts for jobs priced between $3301 and $19,999, and Level 2 contracts for those costed over $20,000.

Requirements in a Level 1 contract are similar to those for NSW contracts listed above. The contract must be in writing, dated and signed by or on behalf of the contractor and the owner; contain the names of the contracting parties including the name and licence number of the building contractor; a description of the contracted work; the contract price; the date for practical completion or how the date is to be determined; a copy of any plans and specifications; notice to the owner about cooling-off period rights; and clear identification of the site where the building work is to take place.

A fully signed copy of the whole contract must be given to the owner within five business days after the contractor enters the contract. Variations or changes to the contract after it is signed must be detailed in writing in a compliant variation document and approved in writing by the owner before the variation work commences.

Implied warranties in this contract include that materials must be new and suitable for purpose; work is carried out in accordance with all relevant laws, legal requirements and the plans and specifications; work is carried out with reasonable care, skill and diligence; and that a home will be suitable for occupation when the contracted work is finished. Breach of these warranties can result in legal action which must be commenced within the warranty period (i.e. within six years for a breach resulting in a structural defect, or one year in any other case).

A Level 2 contract for work valued above $20,000 includes all the same points for Level 1 contracts plus:

  • Provision of the QBCC Consumer Building Guide to the owner before the owner signs the building contract.
  • The start date (as well as a date for practical completion), or how it is to be determined, must be stated.
  • Relevant statutory/implied warranties must be stated in the contract.
  • The contract price (if fixed) and a price change warning (detailing provisions which could cause the contract price to increase or decrease) must be prominently featured on the first page of the contract schedule.
  • Where the contract price is not fixed, the method for calculating the price including any allowances (e.g. for Prime Cost Items or Provisional Sums) must be stated in the contract schedule.
  • Within 10 business days of work commencing on site, the contractor must provide a Commencement Notice to the owner stating the date work commenced on site and the date for practical completion.

The need for legal advice

While there is plenty of official guidance on domestic building contracts these days, it is always wise to ask for guidance from a law firm with many years’ experience advising clients on obtaining a contract that clearly establishes all of the responsibilities of both parties and also protects their rights.

Call Erina Lawyers today for further guidance on your domestic building contract. (02) 4365 4249.

Jan 29
Erina & Central Coast Family lawyers

How do Costs Orders in Family Law Matters differ from those in other Courts?

By Family Law

Costs orders are issued by courts as a decision about which of the parties to a proceeding should meet the legal costs involved. Such orders are governed by a variety of statutes and a court’s procedural rules. They are usually made on the application of one or both parties, but can also be determined by the presiding judge or magistrate at other stages of the proceedings, prior to any application being made.

For most matters heard in the Supreme, District and Local courts of NSW, the awarding of costs is governed by the NSW Civil Procedure Act 2005 and the Uniform Civil Procedure Rules 2005. By contrast, in family law matters, costs orders follow the provisions of the Family Law Act 1975.

We’ll look at how family law costs orders differ from other types of costs orders in this article but if you are uncertain about whether you will be liable to pay the other’s party’s legal costs, or whether you can apply to have your costs met, you should contact experienced family law practitioners Felicio Law Firm today.

Costs orders in family law matters

Under section 117 of the Family Law Act the starting point for costs in family law matters is that each party to the proceeding will be responsible for their own legal costs.

As always in law, there are exceptions to this general rule. Subsections within section 117 set out the factors the court may take into account in order to make an order as to costs which apportions them on a different basis to that of each party being responsible for their own legal costs.

Matters the court regards in determining whether it should make an order for costs in a family law matter include:

  • The financial circumstances of each of the parties to the proceedings.
  • Whether any party to the proceedings is receiving legal aid and, if so, how much that entails.
  • The conduct of the parties in relation to the proceedings, including pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters.
  • Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court.
  • Whether any party to the proceedings has been wholly unsuccessful in the proceedings.
  • Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer.
  • Such other matters as the court considers relevant.

Only one of the matters above need be present for the court to decide to make a costs order. It’s important to note that the court’s discretion applies both to parenting and property cases in family law matters. Also important is the principle that costs orders are not meant to be punitive or act as a penalty against one party. Instead, they are conceived as compensation for one party for the costs they have incurred in going to court.

Case example: In the Federal Circuit Court – the other court in Australia that hears family law matters – the case of Secco & Reid (No. 2) [2019] FCCA 2594 saw the father ordered to pay the mother the sum of $32,498.75 after the judge considered the parties’ differing financial circumstances; the fact the father was wholly unsuccessful in the proceedings; and the fact that the father failed to properly consider or respond to an offer made by the mother.

Costs orders are usually awarded on a party/party basis, in which one party is ordered to pay a proportion of the other party’s legal costs. This will usually not cover all of the successful party’s legal costs but may cover 75 per cent, as a guide.

In some cases both in family law matters and in other courts, costs may be awarded on an ‘indemnity’ basis in which one party is ordered to pay the actual legal costs of the unsuccessful party. An indemnity costs order may be made where one party makes false claims against the other party, such as fraud; where one party’s conduct has wasted the time of the court or the other party; where the litigation has been commenced for vexatious or ulterior purposes; where offers of compromises have been refused, and other similar reasons.

Costs orders in other courts

In non-family law courts, the court has an unfettered discretion to make cost orders unless a specific legislative restriction applies. As in family law matters, costs orders are not designed to be punitive and must be proportionate.

In making a costs order, the court has regard to the facts of the case, whether any specific legislative provisions apply, and the conduct of the parties to the proceedings (as it also does in family law matters).

In courts such as the District or Local Court, in general ‘costs follow the event’, meaning the successful party is awarded costs against the unsuccessful party. The party against whom costs are awarded can, however, apply to the Supreme Court to have the costs order re-assessed.

As in the Family or Federal Circuit Court, costs can be awarded on a party-party or indemnity (also known as solicitor-client) costs basis. It should be noted that there are restrictions on the amount of legal costs that can be awarded depending on the court division hearing your matter. Expert legal advice should be sought before you commence your action.

Speak with Felicio

The awarding of costs in legal actions can be a complicated area of the law, reliant on court discretions, statutory limits, the nature of the matter and the conduct of the parties.

While a family law case starts on the basis that each party will be responsible for their own legal costs, it’s not always the case, just as it’s not always the case that a winning party in the District or Local will automatically be awarded costs against the losing party.

If you need to know more about costs orders, it’s best to discuss the subject with experienced legal practitioners such as Felicio Law Firm as part of a wider discussion on the merits of your case, whether you’re involved in a family or civil matter. Call us Erina & Central Coast family lawyers today on (02) 4365 4249.

Dec 21
Debt Agreements Compare with Bankruptcy

How do Debt Agreements Compare with Bankruptcy?

By Debt Recovery

There are a number of paths you can take when you’re facing bankruptcy and it’s important to consider each option carefully so that you can work your way out of this unfortunate situation where you can’t pay your debts.

The Bankruptcy Act 1966 (‘the Act’) sets out these options which we’ll look at below. One of the key things to consider is whether you are better off declaring bankruptcy, which may clear your slate of debts but has other serious consequences for your lifestyle, or you instead negotiate a legally enforceable debt agreement, which allows you to repay your debts on a schedule you can manage.

If you need more guidance on these options after reading this article contact Felicio Law Firm for a consultation. We will help clarify the best way forward with empathy and understanding.

The process and consequences of bankruptcy

When debts are mounting and a person has no way of meeting them, declaring bankruptcy under the Act often seems the best way forward.

Bankruptcy can be entered into voluntarily, or be forced on you by a creditor through a court order (what’s known as a sequestration order).

Once you are declared bankrupt, a trustee is appointed to manage your period of bankruptcy, which is usually three years and one day. The trustee can be appointed by the Australian Financial Security Authority (AFSA) or you can nominate your own registered trustee.

Once you are bankrupt and a trustee appointed, you have a series of ongoing obligations you agree to, including:

  • providing details of your debts, income and assets to your trustee;
  • facilitating the trustee notifying your creditors of your bankruptcy, which will stop them contacting you about repaying your debts;
  • facilitating the trustee selling certain of your assets to help pay debts;
  • making compulsory payments if your income exceeds a set amount.

Bankruptcy means you won’t have to pay unsecured debts, such as credit and store cards; unsecured personal loans and pay day loans; gas, electricity, phone and internet bills; overdrawn bank accounts; unpaid rent; and medical, legal & accounting fees.

But you will have to check with the creditor to see whether you are freed from certain other debts, such as Centrelink or ATO debts, victims of crime debts or toll fines.

Bankruptcy does not free you from certain other debts, such as court imposed penalties and fines; child support & maintenance; HECS and HELP debts; any debts you incur after your bankruptcy begins; and unliquidated debts.

It’s also important to note that being declared bankrupt can affect the way you live your life. During the period of bankruptcy your ability to work in certain trades and professions and be a director of a company will be restricted, while you’re also not able to travel overseas unless given permission by your bankruptcy trustee.

The record of your bankruptcy will also stay on your credit report for five years and your name will permanently remain on the National Personal Insolvency Index.

How are Part IX debt agreements different to bankruptcy?

A debt agreement is a legally binding contract between you and your creditors under which you make repayments of your debts on a payment schedule you can manage.

Such agreements are administered under the provisions of Part IX of the Act and hence are known as Part IX debt agreements.

There are conditions you must meet before being able to make such an agreement when you’re unable to pay debts that are due. Specifically you must:

  • not have been bankrupt, or had a debt agreement or personal insolvency agreement, within the last 10 years;
  • have unsecured debts and assets less than the set amount;
  • estimate your after-tax income for the next 12 months to be less than the set amount.

‘Set amount’ refers to indexed, threshold dollar amounts which are updated twice a year to reflect the Consumer Price Index or the base pension rate. As of September 2020, for instance, the unsecured debt amount was $118,063.

The process of creating a Part IX debt agreement involves:

  • negotiating to pay a percentage of your combined debt that you’re able to afford over a set period of time, and;
  • making repayments to a debt agreement administrator, instead of making individual payments to creditors.

Once you complete the payments under the debt agreement, creditors can’t recover the rest of the money you owe.

Is a Part IX debt agreement preferable to bankruptcy?

Like bankruptcy, there are a number of consequences as a result of entering a debt agreement and it will be up to your judgement – or that of your legal practitioner – as to which best suits your circumstances.

Firstly you should understand that by proposing a debt agreement  you are undertaking an ‘act of bankruptcy’, which  your creditors can potentially use to apply for a court order to declare you bankrupt.

Additionally, if you trade under a business name that isn’t your own, you must inform those with whom you conduct business that you are operating under a debt agreement.

Furthermore, while unsecured debt is dealt with in such an agreement, secured creditors may still seize and sell any of assets you’ve offered as security for credit, such as your house or car, if you are unable to meet your payments. Remember also that there are eligibility limits to the amount of debt you can have in order to propose an agreement.

Entering a debt agreement of this kind will also be marked on your credit file for up to five years or possibly longer, and your name will be listed on the National Personal Insolvency Index.

Your creditors are likely to be more positive about a proposed debt agreement, however, as they are a better chance to recover more money under the agreement than if you are declared bankrupt.

We’re here to help

As the details above show, there are options when you are unable to meet debt repayments either as an individual or a business.

Working out which option is best for you given your situation is often best identified by experts in insolvency matters such as Felicio Law Firm.

We bring a warm and understanding approach to our relationship with clients and can help you guide you through to a fresh start if you are facing the prospect of bankruptcy. Call us Erina Lawyers today for an initial consultation on (02) 4365 4249.