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Family Law

Costs Orders in Family Law Matters

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 today on (02) 4365 4249.

Parenting Arrangements COVID-19

Parenting Arrangements in Light of COVID-19

By | Family Law

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 now on (02) 4365 4249 or admin@feliciolawfirm.com.au

Granny Flat

What to Consider Before Moving into the Granny Flat

By | Family Law

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 Central Coast family lawyers at Felicio Law Firm on (02) 4365 4249 to learn how, today.

Family Law Relationships Assets

Relationship Stability Vs Assets Security

By | Family Law

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

 

Same Sex

What Does Same-Sex Marriage Mean For Property Proceedings?

By | Family Law

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 Central Coast family lawyers today.