Family Law

When a relationship breaks down, one of the most complex and high-stakes aspects of a property settlement can be valuing a business. With around 70% of Australia’s more than 2.66 million businesses being family-owned, these assets often play a pivotal role in the division of property.

This guide will break down the key methods of business valuation, explain why it’s so important, and provide practical insights for navigating this complex process in family law matters.

The Importance of Proper Business Valuations

Accurate business valuations are essential in family law cases because businesses often make up the largest portion of the assets to be divided. The Family Court’s job is to ensure a fair distribution of assets, taking into account both direct and indirect contributions from each party.

In the case Turnbull v Turnbull (1991) FLC 92-258, the Court established guidelines for valuing both direct management contributions and indirect inputs. It ruled that shares in private family companies should be valued based on their worth to the actual owner, rather than what a potential buyer might pay.

These principles were expanded in Scott & Scott (2006) FamCA 1379, where the Court highlighted that valuations should include benefits unique to the owner, such as personal goodwill. Goodwill refers to the intangible value a business holds, such as its reputation, customer relationships, or the owner’s personal connections that contribute to its ongoing success. Personal goodwill, in particular, is tied to the business owner’s skills and reputation, which aren’t captured by traditional market value.

These cases highlight the importance of carefully considering both the tangible and intangible aspects of a business when determining its value in family law proceedings, ensuring a just and equitable division of assets.

Common Methods of Business Valuation

Future Maintainable Earnings (FME) Method

The FME method, often called the income method, assesses the future earning potential of a business. Valuers examine:

• Regular Earnings: The business’s normal income is analysed by removing unusual one-off payments (such as insurance payouts) to determine consistent yearly earnings.
• Capitalisation Rate: A risk factor, or ‘cap rate,’ is applied based on income stability. For example, a doctor’s practice with a 20-year history may have a lower cap rate of 2-3, while a new retail shop might have a higher rate of 4-5 due to higher risk.
• Business Strengths: Special features of the business, such as a prime location, valuable contracts, or unique equipment, are evaluated.
• Future Challenges: Potential factors that could impact future profits, such as new laws or technological advancements, are considered.

Asset-Based Valuation Method

This method calculates the value by summing all assets owned by the business and subtracting liabilities:

• Physical Items: Property, equipment, and stock are valued at current prices, rather than their original purchase cost.
• Intellectual Property: Intangible assets, such as trademarks, recipes, or exclusive selling rights, are included.
• Working Capital: Stock values, outstanding customer payments, and cash reserves are assessed.
• Liabilities: All debts, including loans, staff entitlements, and anticipated tax bills, are subtracted.

Market Comparison Method

Also known as the Market-Based Approach, this method compares the business to similar ones recently sold:

• Industry Standards: Sales of comparable businesses are reviewed, with adjustments made for differences in size and quality.
• Revenue Multipliers: Differences in profitability among businesses with similar sales are considered.
• Location Impact: The effect of location on value is factored in, such as the difference between a shop on a busy main street and one in a quiet suburb.
• Market Timing: The impact of market changes since other businesses were sold is taken into account.

Professional Requirements

Expert Qualifications

Professional valuers must demonstrate:

• Relevant professional certifications such as Chartered Accountant or Certified Practicing Valuer qualifications that establish technical competency.
• Specific industry expertise demonstrated through prior experience valuing similar businesses in the sector.
• Independence from both parties, including no prior business or personal relationships that could suggest bias.
• Current knowledge of relevant Family Court decisions affecting business valuations.

Documentation Standards

Essential business records include:

• Three years of detailed financial statements showing operational trends and seasonal patterns.
• Tax returns and Business Activity Statements demonstrating compliance and reported income.
• Employee records including contracts, entitlements, and key person dependencies.
• Asset registers with purchase dates, depreciation schedules, and maintenance records.

Special Considerations

Family Business Factors

Important considerations include:

• Unpaid family work contributions such as after-hours bookkeeping or weekend assistance during peak periods.
• Personal guarantees provided by family members for business loans or leases that affect risk assessment.
• Business relationships that may be impacted by family separation, such as key customers with personal loyalties.
• Succession planning implications, particularly where children are involved in the business.

Conclusion

Business valuations in family law matters require careful consideration of multiple factors and methodologies. The process demands expertise in accounting, finance, and legal requirements while considering the unique aspects of family businesses and the “value to owner” principle established by Australian courts.

Our Family Lawyers Can Help

At Felicio Law Firm, our experienced Family Lawyers Central Coast understand the complexities of business valuations and can guide you through the process. We work closely with qualified valuers and financial experts to ensure your business interests are properly assessed and represented in your property settlement. Whether you need assistance with initial valuations, negotiations, or court proceedings, we provide comprehensive support to protect your interests and achieve fair outcomes. Reach out today to explore how we can safeguard your business interests and provide expert guidance through your family law journey.

In a landmark move, New South Wales has recently become the last state in Australia to provide individuals with the option of Voluntary Assisted Dying (VAD). This significant development reflects years of work by campaigners and a wider community debate about end-of-life choices and the right to die with dignity.

This article provides more detail on the introduction of VAD in NSW, which is available as of November 28, 2023, in particular the criteria which govern this particularly sensitive and complex area of health management.

More detail on the new Voluntary Assisted Dying law in NSW

In order to take advantage of the VAD law in NSW, the essential criteria are as follows:

• A person must be diagnosed with at least one disease, illness or medical condition that:
  • is advanced, progressive and – on the balance of probabilities – will cause death within six months, or 12 months for neurodegenerative conditions, and;
  • is causing suffering that cannot be relieved in a manner the person finds tolerable.
• An eligible individual must also have:
  • decision-making capacity in relation to VAD, meaning they comprehend and remember everything related to a VAD decision and its consequences, and are able to clearly and coherently communicate their decision;
  • be acting voluntarily and not because of pressure or duress from another person;
  • be aged 18 or over;
  • be an Australian citizen or permanent resident who has lived in NSW for at least 12 months;
  • have an enduring request for VAD.

In addition, the VAD Act emphasises the importance of an individual acting with informed consent, meaning they are fully informed about their medical condition, prognosis, and the potential implications of choosing this method of death. This step includes exploring alternative options such as palliative care.

Once eligibility is established, how does a person access VAD?

The Act mandates a comprehensive medical assessment by two medical practitioners, including at least one with expertise in the relevant condition. This process involves the eligible person making a first request to a medical practitioner, of their own volition and not as part of an advanced health directive or through an enduring power of attorney. This first request must be decided within two days, after which the practitioner will refer the individual to a second assessor.

If the second assessment confirms eligibility for VAD, a second request to access the law must be made in front of two independent witnesses. A third request is then made to the co-ordinating practitioner (generally the doctor who received the first request) – with a period of at least five days between the first and last request – where a doctor will check the individual is still eligible as a candidate for VAD. This final request demonstrates the person’s wish to proceed represents a sustained and informed desire. A person may change their mind about VAD at any stage of this process.

An individual who wishes to access VAD must retain capacity to make an informed decision throughout the steps described above. Loss of capacity between initially making the decision and a final request means a person cannot go forward with VAD. Likewise, a person who it is suspected to be suffering from dementia, depression or some other impairment of their reasoning process, will be referred for specialist help before being able to undertake the VAD steps.

Proceeding to the VAD process

Once a person decides to proceed with VAD and passes all eligibility tests, they may self-administer the drug or have a practitioner do so with the guidance of the co-ordinating medical practitioner.

Only medical practitioners trained and registered to provide this service can administer the medication, and there are specific guidelines to ensure a peaceful and dignified process. A doctor acting as a coordinating or consulting practitioner must have at least one years’ experience if they are a specialist, or 10 years’ experience as a general practitioner (GP). An administering practitioner must be a specialist, a GP with at least five years’ experience, an overseas-trained specialist with the appropriate registration, or a nurse practitioner.

There is mandatory training for health professionals involved in a VAD decision which covers their legal obligations, the strict eligibility criteria for the patient and how a practitioner assesses whether an individual meets those criteria, including identifying any signs of pressure, duress or coercion by others towards the requesting individual.

Need more information? Discuss your case with our understanding team

The introduction of Voluntary Assisted Dying in NSW represents a significant step in the evolution of end-of-life care, acknowledging the complex and deeply personal nature of the choices individuals face when confronted with unbearable suffering. The criteria established by the Voluntary Assisted Dying Act 2021 attempts to strike a delicate balance between compassion for those in pain and the need for strict safeguards to prevent abuse. If any of the information offered in this article raises questions or concerns for you, contact our professional team at Felicio Law Firm and we can provide more detail on the steps involved for you and your family.

In some situations a person is not physically or mentally well enough to take part in family law proceedings in Australia’s Federal Circuit and Family Court of Australia (FCFCOA), lacking the capacity to manage their case or instruct legal representatives. The elderly, the disabled and the chronically ill are examples of people who may require a litigation guardian.

In such cases, as a measure of last resort, a ‘litigation guardian’ may be appointed in their place. The guardian is empowered to do anything for the benefit of the litigant that they would be ordinarily allowed to do in the proceedings. In matters heard by the FCFCOA, the need for a litigation guardian may arise in family law matters such as divorce, child custody, or property settlements.

This article looks more closely at how a litigation guardian is appointed in FCFCOA proceedings.

When is a litigation guardian needed?

Firstly, it’s important to note that the Court begins with the presumption that a person does not require a litigation guardian unless there is evidence to prove otherwise. Where a person does not understand the nature or consequences of the court proceedings, or cannot conduct their case or give instruction to legal representatives for how the case should be conducted due to some incapacity, then a litigation guardian may be necessary. It should also be noted any person under the age of 18 requires a litigation guardian.

Who can be a litigation guardian – and the appointment process

Those who are eligible to be a litigation guardian are:

• an adult;
• persons who have no interest in the proceeding adverse to the interest of the person needing the litigation guardian, and;
• persons who can fairly and competently conduct the proceeding for the person needing the litigation guardian.

A person who is a guardian of another person under state legislation – known as ‘a manager of the affairs of a party’ – is entitled to be the litigation guardian provided the party does not understand the proceedings, or is not capable of conducting the proceedings.

If a suitable person is not available to serve a party as a litigation guardian, the Court may request that the Federal Attorney-General appoint a person to be a manager of the affairs of the party to then act in the role.

A litigation guardian is appointed through an application to the Court by an incapacitated litigant, or through the Court’s own initiative. The application can be made either before proceedings begin or during the course of the matter, and must be supported by an affidavit setting out the facts as to why the party needs a litigation guardian. The person seeking appointment as the litigation guardian must also provide an affidavit consenting to the appointment. The court considers the circumstances of the litigant and may appoint a family member, friend, or professional guardian.

Once appointed, the litigation guardian must provide notice of their appointment to other parties and any independent children’s lawyer. The Court may also make orders about the payment of the costs and expenses of the litigation guardian.

Responsibilities of a litigation guardian

The litigation guardian must at all times act in the best interests of the incapacitated party as their paramount duty. This duty extends to both the legal strategy pursued during the proceedings and decisions related to settlement negotiations. Courts closely scrutinize the actions of litigation guardians to ensure that they align with the wellbeing of the person they represent.

For elderly or unwell litigants, the guardian must be acutely aware of the party’s potential cognitive impairments, health-related issues, and emotional vulnerabilities. The guardian must work closely with the litigant, legal representatives, and healthcare professionals to ensure a comprehensive understanding of the individual’s needs and preferences.

Clear and effective communication is paramount when acting as a litigation guardian for elderly or unwell litigants, maintaining open communication with the litigant, legal representatives, and other relevant stakeholders. In family law matters, the role of a litigation guardian becomes particularly complex. Decisions related to child custody, spousal support, and property settlements require careful consideration of the individual circumstances of the incapacitated party. The guardian may need to collaborate with family members, healthcare professionals, and financial advisors to make informed decisions.

Litigation guardians must also diligently adhere to court procedures and deadlines – from diligent filing of necessary documents, attending court hearings, and participating in mediation or settlement conferences. Failure to meet these requirements can have serious implications for the case and the wellbeing of the incapacitated party.

Termination of a litigation guardian

The court has the authority to review and, if necessary, terminate the appointment of a litigation guardian. This may occur if there are concerns about the guardian’s ability to act in the best interests of the incapacitated party or if the circumstances that led to the appointment have changed.

Seek expert legal advice

Acting as a litigation guardian in the FCFCOA for litigants unable to conduct their case is a challenging yet essential role. Particularly for elderly or ill litigants, the guardian must not only understand the legal complexities of the case but also navigate the litigant’s unique needs and vulnerabilities.

The guidance and advice of experienced family lawyers can be absolutely crucial in the appointment of a competent litigation guardian who protects and manages the litigant’s best interests. At Felicio Law Firm our expert team can provide you with the right advice if you need a litigation guardian to represent you at the FCFCOA to ensure your case proceeds as smoothly as possible.

Australia’s Family Law Act 1975 (‘the Act’) provides the framework for deciding parental and financial arrangements when couples separate or divorce. One of the important presumptions within the Act since 2006 has been that of equal shared parental responsibility (ESPR) of children from the relationship. This presumption – which can be rebutted by evidence from either party – represented a shift away from notions of ‘sole custody’ to encourage parents to make joint decisions in the best interests of their children.

But the passing of the Family Law Amendment Act on October 19, 2023 brings a number of significant changes to the Act, with one of the most notable the removal of the presumption of ESPR. The overriding concern in making a parenting order no longer involves ESPR but instead focuses on what is in the child’s best interest, considering six factors (plus two additional ones for Aboriginal and Torres Strait Islander children) including a child’s safety, the child’s own views, the benefit of having relationships with both parents, and the child’s developmental, psychological, emotional, and cultural needs.

This article looks in more depth at this landmark change and what it means for those seeking parenting orders through the Federal Circuit and Family Court of Australia. It’s vital to seek professional legal advice in family law matters, particularly in light of the recent amendments.

More on ESPR and why it has been removed

Under the 2006 framework, there was a strong presumption that it was in the best interests of the child for parents to share equal responsibility for major decisions, such as education, health, religious and cultural upbringing.

Section 61DA of the Act provides for ESPR in parenting matters. The presumption does not apply if there are reasonable grounds to believe that a parent has engaged in child abuse or family and domestic violence, and can be rebutted if the court determines it is not in the best interests of a child to apply the presumption. Until the recent amendments, if the Court made an order under this section for ESPR, it was also obligated to consider – under section 65DAA of the Act – whether an order should be made for children to spend ‘equal time’ between separated parents, if it is reasonably practicable and in the best interests of a child to do so.

The result in practice has been confusion for parents, many of whom believed that an order for ESPR also meant they were entitled to equal time with children. This was not the case and often resulted in unnecessary litigation and unrealistic expectations in applying to the Court for parenting orders.

A further motivation for the amendments is acknowledgment of the diverse nature of modern families, ensuring Australia’s family law is more inclusive and accommodating of a range of family structures and dynamics. The additional flexibility the amendments provide allow for a more nuanced and individualised response to each family’s circumstances.

What do the changes mean in practice?

Under the new amendment, the Court may make a parenting order with the flexibility to give one parent the responsibility for making long-term decisions about the child’s upbringing, or it may provide for joint decision-making. An order may also stipulate that one parent has sole responsibility for certain issues related to raising the child, but that major long-term issues require joint decision-making between the parents. The allocation of responsibility for major long-term decisions is to be based on what is in the child’s best interests, as set out in section 60CC of the Act.

When the Court makes an order for joint decision-making about any issue related to the child, the parents are required under section 61DAA to:

• consult each other person with joint responsibility in relation to each such decision; and
• make a genuine effort to come to a joint decision (if it is safe to do so, i.e. family or domestic violence is not present).

Under section 61DAB of the amendments, once an order has been made about parental responsibility for major long-term decisions about a child, the parent the child lives with is not required to consult the other parent about minor, day-to-day issues related to the child’s upbringing.

Similarly, the changes make it clear that third parties involved with the child, such as schools, sports clubs and medical practitioners, for example, do not need to first establish a joint decision has been made about the child if they have communicated with the parent who has decision-making responsibility.

The amendments also formalise the principle first espoused in the case of Rice v Asplund (1979) FLC 90. That is, where a parenting order has been made and one party wishes to vary or set it aside, that party must show that there has been a ‘significant change in circumstances’ relating to the child, and that it would be in the best interests of the child for the final parenting order to be changed.

Speak with our family law experts

The best interests of the child has always been the paramount factor in Court decisions on parenting orders but the concept has additional primacy now that ESPR is no longer in effect. While it’s not expected the amendments will significantly change the nature of parenting orders made by the Court, the changes may lead to some parents seeking an order to be re-opened and varied based on a change in circumstances. Others may undertake new legal action if they are denied joint decision-making responsibility or believe they will see their child less under the new laws.

This is a sometimes difficult and emotionally draining area of the law. If the issues discussed are pertinent to your situation and you need more information or guidance, contact our understanding family law team today for the right advice.

Apprehended Domestic Violence Orders (ADVOs) are a key legal tool in NSW to protect individuals from domestic violence or the threat of such violence.

Increasingly domestic violence is understood to encompass a wide range of behaviours within a family relationship, from physical, emotional and financial abuse, to harassment, stalking and coercive control. An ADVO aims to provide immediate protection to victims by imposing restrictions on the alleged perpetrator’s behaviour.

This article provides an overview of ADVOs, including the legal grounds for obtaining one, what happens before the matter is dealt with in court, how to seek an ADVO and how to defend against one.

Understanding the legal grounds for obtaining an ADVO

To obtain an ADVO in NSW, an applicant must establish certain legal grounds, including:

• Fear of violence or harm: The applicant for an ADVO must have a reasonable fear of violence, threats, harassment, or intimidation from the alleged perpetrator. This fear must be based on actual or perceived actions, and it can extend to not only the victim but also any other person whom the victim believes is at risk.
• Domestic or family relationship: There must be a domestic or familial relationship between the applicant and the alleged perpetrator. This can include current or former spouses or de facto partners, family members, or people living together in a domestic setting.
• Acts of domestic violence: The applicant must provide evidence of specific acts of domestic violence, such as physical assaults, verbal abuse, stalking, or any other behaviour that causes fear or harm. These acts must be recent or ongoing.
• Protection and safety: The court will consider whether the ADVO is necessary to protect the safety and wellbeing of the applicant and any other person at risk.

Some of the actions a person is prevented from taking under an ADVO includes assaulting or threatening the protected person; stalking and intimidating; destroying or damaging property; going within a certain distance of the other person; attending the protected person’s house, or contacting them.

An ADVO lasts for 12 months from the date the order it was made unless the court specifies a different time period.

What happens before the matter is dealt with in court

The process begins with the victim (or someone on their behalf) filing an ADVO application with the local police station or the court registry. NSW Police will most commonly apply for an ADVO on the basis of a report of domestic violence, even where the alleged victim thinks that the order is unwarranted or unnecessary.

In cases of immediate danger, the court may grant interim orders to provide protection right away to the applicant. These orders can be issued without the alleged perpetrator being present or informed. The police are responsible for serving the ADVO application and any interim orders to the alleged perpetrator. This serves as notice of the legal proceedings.

A person the subject of an ADVO should consult a legal professional with experience in domestic violence matters as soon as possible after becoming aware of the order to discuss the steps they should take to possibly have the order dropped.

The matter will typically be listed for a first court appearance where both parties are required to attend. During this appearance, the court may make further orders, including extending interim orders or setting a hearing date. Both parties will have an opportunity to gather evidence to support their case. This may include witness statements, photographs, text messages, or medical reports.

In some cases, the court may suggest mediation or dispute resolution services to attempt to resolve the matter without a full hearing.

The person who is the subject of the ADVO can defend the application at the first hearing by attempting to prove, on the balance of probabilities, one of the following to the court:

• that the complainant or protected person does not fear the defendant;
• the complainant does not have reasonable grounds to fear a personal violence offence from the defendant;
• it is inappropriate for the ADVO to be made.

A person the subject of an ADVO may also consent to it without admissions, meaning they do not agree with the grounds on which the order was granted. A legal representative with experience in this area may then be able to negotiate with police and/or the other party to amend the conditions of the order. Legal advice is highly advisable before agreeing to an ADVO in this manner as it has the potential to affect current family law proceedings, particularly in relation to parental rights.

A person subject to an ADVO may also file a cross-application against the protected person, claiming that they fear the other person and have reasonable grounds to do so. In the case of this type of application, the court will generally hear both applications at the same time.

An ADVO may be appealed within 28 days of a final order being made by the court. It’s possible the ADVO may be ‘stayed’ – or has no effect, in other words – once the appeal is filed and until it is decided.

What factors influence acceptance of the application?

The chances of being granted an ADVO by the court in NSW depends on several factors, including:

• The strength and reliability of the evidence – witness statements, photos, text messages, and medical reports can all play a significant role in supporting the application.
• Credibility of both parties – in considering an ADVO application, the court will assess the consistency of the statements and any evidence presented by both parties.
• Testimony of witnesses – first-hand accounts of the alleged domestic violence may strengthen the applicant’s case.
• Conduct and past incidents – the court may consider any past examples of domestic violence and the alleged perpetrator’s conduct in determining whether an ADVO is warranted.

Other important things to consider

Both parties have the right to legal representation – the presence of a solicitor with experience in ADVO proceedings can be essential to the application being granted.

In some cases, mediation may lead to a resolution that does not require a full ADVO hearing but this depends on the willingness of both parties to engage in the process. In cases where there has been long-term or repeated instances of serious domestic violence, mediation is unlikely to be a suitable suggestion.

The court’s primary concern is the safety and wellbeing of the victim and any other person or persons at risk. If the court determines that an ADVO is necessary to provide protection, it will issue the order, outlining the conditions and restrictions imposed on the alleged perpetrator.

Our expert team can help

Family law matters, including how to approach domestic violence matters, are one of our specialities at Felicio Law Firm. We can advise on ADVO whether you need urgent protection from the violence of a partner or family members, or you are the subject of an ADVO you believe is unwarranted or unnecessary. Call our professional team today for more details on anything raised in this post.

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.

‘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.

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. 

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.

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.

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.

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.

The onset of the COVID-19 pandemic has severely disrupted all our lives. Workplaces have shut en masse, as have entertainment venues, most shops and – other than for the children of emergency workers – schools as well.

We are all experiencing great uncertainty and anxiety as to how long these necessary arrangements will remain in place in order to stop the spread of the disease. One area obviously impacted by the pandemic is parenting arrangements as well as other family law matters. In this article we’ll provide a brief overview of the main issues involved and urge anyone with questions or concerns to get in touch with Felicio Law Firm for further assessment during this difficult time.

What is the impact on parenting arrangements?

The need for social distancing, the ending of interstate and international travel, the closure of many venues, the stopping of group sporting activities and the need for many individuals to self-isolate – all of these developments have had a sudden and serious impact on the arrangements parents have made when they have separated but share parenting of their children.

Maintaining a relationship with both parents is obviously crucial for children but in these dangerous times, this may now not be possible. Children who regularly travel interstate to spend time with one parent will obviously need to rely on FaceTime or Skype in order to maintain a relationship with the remotely located parent for the time being. For those parents who live geographically close to each other, regular handover spots such as shops and schools are likely now closed. Parents will need to think more laterally about handing over the children to the other parent at the usual time. Is there an alternative neutral location where you can practise social distancing and still hand over the children? If not, for the moment (unless there are family domestic violence or abuse issues involved), children should be delivered door-to-door between the separate houses of the parents.

As ever, it’s important to remember that under the Family Law Act 1975 the best interests of the child are paramount. This means that the impacts of the COVID-19 pandemic can’t be used by one parent as a “reasonable excuse” – the necessary legal hurdle – to limit or stop a child’s time with the other parent. Expert legal opinion should be sought if you plan to change the living or visiting arrangements of your children in relation to the other parent.

Making the decision to breach a parenting order because you believe the other parent does not maintain appropriate standards of hygiene, or does not practise social distancing when in custody of the children, may not qualify as a reasonable excuse for your breach. Seek legal advice if in doubt.

It’s also important to note that the virus causing the disease more severely impacts the elderly and so, if you need to continue working and your child’s school is closed, if at all possible it’s advisable to avoid having grandparents care for the children.

If temporary changes to the parenting arrangements are forced on you by COVID-19 restrictions, it’s sensible to record these in writing via text message, email or correspondence through lawyers so as to avoid a later ‘he said-she said’ contest.

Do child support payments continue?

Many people are losing their jobs or having their hours reduced as a result of the pandemic and will be unable to meet existing child support arrangements.

Speak to an experienced legal representative or the Federal government’s Child Support Agency if you think you will need your child support payment reassessed because your income has drastically changed. The advice is similar if there is a spousal maintenance order in place.

The status of court proceedings

If you have a family matter currently proceeding through the courts, expect delays while government measures to stop the spread of the disease are in place.

To date the Family Court of Australia and the Federal Circuit Court of Australia have announced it will continue to take new applications and hear matters that are already before it, but it has changed the priority given to certain cases and implemented social distancing measures within the court. Family reports will continue but all non-urgent parenting trials have been adjourned to a later date.

Communicate and adapt

The challenge posed by the pandemic is one of the most trying we’ve faced. For parents, keeping regular and honest communication between both parties on everything from observing the safety measures to monitoring the physical, emotional and psychological wellbeing of the children (and yourselves) is vital to getting through to the other side. Adopting a flexible and adaptive approach to parenting arrangements will also help in unprecedented times.

Felicio Law Firm had made a priority of getting across the parenting and family law issues presented by the COVID-19 pandemic. We have broad experience advising NSW and Queensland clients on these matters and offer a compassionate and considerate ear in these testing, difficult times. If you’re unsure about where you stand on sudden changes to parenting arrangements, call us Erina & Central Coast family lawyers now on (02) 4365 4249 or admin@feliciolawfirm.com.au

It’s part of being a family that parents, children, siblings and other relatives willingly accommodate each other’s needs as life changes. Parents allow adult children to move back home after the loss of a job; brothers and sisters open their homes to one another when someone needs a place to stay after a job relocation. Children concerned about their ageing parents make room in their homes in a ‘granny flat’ arrangement.

The only trouble is that many of these accommodations are reached through informal agreements, leaving plenty of room for disputes, misunderstandings and wrecked relationships.

This is why it’s so important to consult a lawyer, whenever possible, before making these accommodations. We can help you draft agreements that everyone understands and agrees upon. Or, at the very least, we can give you the information you need to make an informed decision about the issue at hand.

With that being stated, here are a few things that older parents should consider before moving into a granny flat.

The legal classification of a granny flat

To have even a basic grasp of this topic, it is important to understand the legal classification of a granny flat.

For the purposes of a granny flat agreement, a granny flat is broadly defined as “a designated room or area that allows for a parent’s exclusive occupancy” created in accordance with a relevant agreement. This means it may be anything from a separate dwelling on an adult child’s property to a flat incorporated within an existing home. It could even be a loft room, duplex, or a room in an existing apartment.

What is a granny flat agreement?

A granny flat agreement is made when an adult child allows one or both of his or her parents to move into the adult child’s home.

The adult child generally makes this provision in return for some type of payment. Depending on the circumstances, this may include the transfer of the parent’s residence. In other cases, however, the parent/parents will provide funds for the construction of a granny flat at the adult child’s home. Because an older parent’s care requirements often prompt the consideration of a granny flat, provisions for such care may also be included in the agreement.

Although terms are predicated on individual circumstances and vary accordingly, a granny flat agreement must create a ‘granny flat interest’. In other words, there is a legal obligation for the transfer of assets or money to the person (adult child) who owns the property where his or her parent will live, in return for a life tenancy or interest in such property.

Specific considerations with regards to care provisions

As we have just noted, many granny flat agreements include provisions for an ageing parent’s care. However, such provisions are not mandatory.

Legally, a granny flat agreement can include simple provisions for the older parent’s accommodation without provisions for care. But if you are considering this option, you should be aware that it can cause long-term complications. This can happen if the parent/parents are still fairly spry when they first move in, but their health declines suddenly. Such an unanticipated turn of events can then create significant financial and emotional stress for everyone in the household.

Accordingly, everyone in the household should be informed about the provisions being considered and potential repercussions. In the interest of fairness and transparency, the adult child’s brothers and sisters should also be advised, even if they are living elsewhere. By consulting his/her other siblings, the adult child involved in the granny flat agreement can dispel any misconceptions about favoritism.

Within this context, lawyers often suggest that their clients allow all relevant family members to read and consent to the agreement. By doing so, they say, the adult child who is directly involved in the agreement can lessen the chances of future misunderstandings.

What about Centrelink?

Another issue that must be taken into account is how a granny flat agreement affects any Centrelink benefits, particularly where the elderly parent is on a pension. This is because the agency has a specific set of (complicated) rules pertaining to these arrangements.

Compliance with these rules ensures that there are no adverse effects on someone’s pension. But because lack of compliance or even a simple mistake can have serious consequences, it is important to get the proper legal and financial advice before entering into a granny flat agreement.

It is also important to consult Centrelink about relevant rules, especially if you have questions or need clarification. For example, there are some circumstances in which the gifting of assets or money may violate the gifting or deprivation provisions of the Social Security Act 1991 (Cth). But there are also some circumstances in which this is not the case.

A case where there’s no violation

There is no violation of the deprivation rules if payment for the granny flat interest is:

• A transfer of title of the parent’s home;
• covers the cost of the construction and fit-out of the granny flat;
• a property purchased in someone else’s name.

Exceptions to the rules

Exceptions are made when Centrelink values the granny flat interest differently. This happens when the agency makes a determination based on ‘the reasonableness test’. In this method, the value is assessed at a different amount to what is actually paid for the life interest. It is typically used in the following circumstances:

• When the home and additional assets are transferred;
• when payment is made for construction and fit-out of premises and there is a transfer of additional assets;
• someone is using the granny flat rules to enhance their social security benefits.

Tax implications

Tax implications must also be taken into account when considering a granny flat agreement. Why? Because some of these agreements may be subject to capital gains tax in accordance with an Australian Taxation Office ruling no 2006/14.  This is most likely to happen when you, as a parent, pay your son or daughter a specific amount in exchange for the right to live in the latter’s home or to construct a separate granny  flat there.

This may seem counter intuitive since our principal place of residence is usually exempt from any taxation implications, especially capital gains tax. Because this issue tends to generate so much confusion, we must reiterate how crucial it is for all parties involved in a granny flat agreement to seek advice from qualified professionals prior to finalising the agreement.

In summary

For adult children, providing a safe place for their elderly parents to live is a way of returning the love and care their parents have always provided. While it may seem simpler to make these accommodations without a formal agreement, doing so can often open the door for future family disputes. On the other hand, a granny flat agreement allows for specific provisions that everyone can agree upon.

As we have detailed, however, these agreements are not without complexities. If you are considering a granny flat agreement, we can help. Contact our Erina & Central Coast family lawyers at Felicio Law Firm on (02) 4365 4249 to learn how, today.

Today, it is more common than not for couples to live together prior to getting married.

In fact, in Australia alone, about 80% of couples conduct this, potentially being able to ‘try before they buy’.

However, financial consequences regularly arise from this, as couples who have lived together longer than two years become susceptible to the possibility of their assets being claimable, as if they were already married. A recent article by the Daily Telegraph on 19 June 2017 ‘Reason at Romance’s Heart’, pronounces this very idea as it involves the co­mingling of you and your partner’s money which can easily result in a loss of assets. Due to this, preparation is key, as all individuals need to consider their options on the possibility their relationships may fall apart.

To protect your assets, lawyers suggest that it’s best to develop a thorough and effective asset protection strategy long before the possible need for it. This will enable you to have a safety net to fall back on if anything goes wrong within your relationship for the future. This can be implemented by a few tips and tricks outlined by the following.

Protecting your assets:

In any relationship, the ultimate way in protecting your assets that you bring to the table should always begin with a record keeping and valuation at the time your relationship begins. This forms as a base level to be financially secure and provide protection of your and your partner’s individual assets. Co-habitation agreements are a common way to outline a relationship, property rights and liabilities between a couple. They act as a basic pre-nuptial promise for couples to create in an effort to protect each party’s distinct assets.

Housekeeping expenses:

Budgeting financial housekeeping can also maintain independence within a relationship. Household budgets are vital when living with your partner, particularly if separate bank accounts are to be upheld. This will reflect each partner’s responsibility and can act as a common test for compatibility, as you will not be bound by each other’s expenses. Finding out that your partner is a compulsive gambler if you are a savvy shopper could lead you to decide to end the relationship and having kept your finances separate, you have a better chance to keep your assets.

Property pathways:

Owning a property and the decisions relating to this are extremely important in any relationship. The two distinct types for couples involve ‘tenancy in common’ or ‘joint tenancy’ and the difference could potentially impact you and your relationship. These two choices provide entirely different outcomes if a relationship, unfortunately, breaks down and therefore, can impact on your assets and financial protection. ‘Tenancy in common’ allocates each partner the direct ownership of a designated portion of the property, where each individual will be accountable for their own mortgage and own share of the property. On the other hand, ‘Joint Tenancy’ involves the agreement that a couple is jointly and severally responsible for the entirety of the property and mortgage. When renting, by adding your name to the lease you gain equal possession of the space and opportunity allowing for a better financial position if it comes down to the event of a break-up. If your name is not on the lease and the unfortunate event of a breakup unfolds, the person with their name on the lease has an upgraded position to continue possession of the rental property.

Personal Budgets and their impacts:

Before you or any couple agrees to rent a house or apartment together, you should consider creating an individual budget for all monthly bills, utilities and individual expenses to be conducted whilst living together. Alongside this, by purchasing items separately you utilise your ownership and possession of certain items within the relationship, therefore, recognising who owns what particular piece of furniture etc. In doing this, both parties can understand and respect their own contributions and ownership of items, in the preparation for any unfortunate event.

Talk about it!

Lack of communication regarding any finances in a relationship may result in money problems and lead to breakdowns. It is encouraged that all couples allocate time to talk about money with their partners and understand each other’s goals, plans and monitoring of finances. This will consequently ensure both individuals are on the same page and allow issues to be raised for any discussion. Warning! Do not fall into the trap where one partner controls all finances and decisions in a relationship. This is the biggest NO NO in being able to protect your assets and individual security. Money matters should be a joint decision in any relationship, providing stability and security to your asset management.

Our Felicio law firm team are here to help you with Financial Agreements (before, during and after marriage) contact our Erina & Central Coast family lawyers today.

In more than two dozen countries including Australia, the legalisation of same-sex marriage represents a significant legal milestone.

Because the legislation has only been in effect in Australia since December 2017, a key question that remains largely unanswered is how the legal recognition of same-sex marriages in Australia will affect property proceedings.

This is important because the changes to Australian laws that permit same-sex marriage here also allow for the recognition of same-sex marriages that took place overseas. In other words, a gay or lesbian couple that wed in a country that had legalised same-sex marriage prior to 2017 and is now living in Australia will also be treated as a married couple under our laws. And depending on each couple’s situation, that can be complicated.

Let’s say, for example, that a couple married in a foreign country which legalised same-sex marriage 10 years ago. After living there for a couple of years, the couple returned to Australia but were never officially divorced, because their marriage was not legally recognised here at the time. If they were to now be married under Australian law, this would actually be a second marriage in the eyes of the law.

Under applicable laws, namely 88D(2) of the Marriage Act, the second marriage is voided once someone enters into a second valid marriage. This means that a couple in the circumstances detailed above may be forced to abide by the de-facto provisions of the Family Law Act instead of the marriage provisions.

Changes to the Family Law Act that took effect in 2008 authorised the Family Court to change property interests for same-sex couples who are in ‘de facto relationships’, effectively putting them on equal footing with heterosexual couples in the same legal classification.

Even so, initiating property proceedings is a little bit harder for these couples. This is because they have to meet a higher burden of proof to verify that they are, or were, in this type of relationship. For example, they must prove that they lived together (prior to separation) and had some degree of mutual financial dependence. On the other hand, the existence of a valid marriage is the only evidence a court needs to find that a married couple shared joint property interests.

Another factor to consider is that married couples have one year (12 months) in which to initiate property proceedings in court after the issuance of a divorce order. Conversely, de-facto couples must initiate property proceedings in court within 24 months (two years) after they have legally separated.

Because they have generally separated without the Court’s help and without applying for an official divorce in the country in which they were married, stipulations pertaining to these deadlines may also affect same-sex couples. The good news, however, is that the Court already has a framework for addressing this dilemma. This is because it comes across similar issues when separated heterosexual couples have procrastinated before filing for divorce, and then make court applications for property settlements several years after their legal separation.

To date, the Court hasn’t had to decide how the recognition of past same-sex marriage will affect the implementation of these deadlines. However, it does have the authority to decide whether a case should be dealt with by a judge on an individual basis, based on its evaluation of whether Court intervention is fair and just.

If you are a gay or lesbian couple that wed in another country and you are now living in Australia, it is important that you fully understand how legal recognition of same-sex marriage affects you.

Felicio Law Firm can help you with this complex and still emerging area of the law, contact our Erina, Central Coast family lawyers today.