LEGAL CONSEQUENCES OF SEPARATION Property ‘Property’ includes: - Homes - Bank accounts - Companies - Investments (e.g. shares) - Superannuation Since 2002, separating couples have been able to claim super that each spouse had accumulated (earned; added-up) during the marriage (Family Law Legislation Amendment (Superannuation) Act 2001 (Cth))

LEGAL CONSEQUENCES OF SEPARATION Property Deciding what to do with the PROPERTY: Step 1: Try to reach an informal agreement about splitting up the property (‘property allocation’). It can then be sold/split and that’s the end of it.

LEGAL CONSEQUENCES OF SEPARATION Property Step 2: If the separating couple DO reach an informal agreement about the allocation of property, BUT they want to make it legally binding, they can apply to the Family Court for ‘consent orders’ (the instructions ARE ordered by the court, BUT the divorcing couple agrees to it). If the way the couple has allocated the property is fair and equitable, the court will then make a legally binding order.

LEGAL CONSEQUENCES OF SEPARATION Property Step 3: If the separating couple can’t reach an agreement, the court can order the disputing couple to attend a conference (mediation) to try to get the parties to agree.

LEGAL CONSEQUENCES OF SEPARATION Property Step 4: If the mediation process is unsuccessful, the Family Court can make ‘financial orders’ about the allocation of property.

LEGAL CONSEQUENCES OF SEPARATION Property ‘Contributions’ by each party If the Family Court decides what will happen about the property allocation, the decision of the judge will be based on the contributions (both financial and non-financial), as well as the future needs of both parties. The non-financial contributions of the primary (main) care-giver of the children (generally the woman) is usually considered no less valuable to the financial contributions of the income earner. If one party is seen by the judge to have contributed “more” (e.g. their contribution was more difficult or required more skill), they can get an ‘adjustment’. e.g If the husband worked and the wife stayed home but she had mental health issues (so he had to do most of the housework anyway), then the judge might give him an ‘adjustment’ of 10% of the assets (i.e. 60/40).

LEGAL CONSEQUENCES OF SEPARATION Property ‘Contributions’ by each party This is usually unfair for women, though, because the judges generally have no idea how hard it is to be a woman. e.g. In the Marando case, the wife ended up with only a 5% adjustment despite Mr Marando being a drunken, abusive prick who was horrible to his family, took no role in raising his children and made his wife do the housework for 50 years because he thought it was “women’s work”. So I can’t really imagine how bad things need to be for a housewife to get any significant adjustment. It’s bad for working Mums as well. Judges tend to not understand how difficult it is to work full-time and then, as a woman, be expected to do the housework and raise the children as well. e.g. The author of an article (Some husbands are more equal than wives, Law Institute Journal 2014) “could not find a single judgment where it was successfully argued on behalf of a working mother that she ought be entitled to an adjustment on the basis of at least an equal financial contribution and a superior homemaker contribution”.

LEGAL CONSEQUENCES OF SEPARATION Property What if someone doesn’t comply with the Court’s decision? This is an issue of non-compliance (which is a Theme) and enforceability (which is one possible criteria for judging effectiveness). Super spend lands husband in jail, The Age (2012): A guy who refused to follow a Family Court order to hand over a hundred grand to his ex-wife was jailed for 9 months. He instead spent the money on gambling and prostitutes. Totally worth it…

LEGAL CONSEQUENCES OF SEPARATION Property ‘Binding’ Financial Agreements: The Family Law Amendment Act 2000 (Cth) allowed the Family Court to recognise Binding Financial Agreements (AKA ‘Pre-Nuptial’ Agreements) as being binding. They can cover these areas:   Financial arrangements Property arrangements Agreements on separation But NOT arrangements to do with children. Since 2008, separating de facto couples can also make these agreements and they are dealt with by the Family Court or Federal Circuit Court (just like a divorce)

LEGAL CONSEQUENCES OF SEPARATION Property ‘Binding’ Financial Agreements: Agreements between married couples can be made at any stage of a marriage under the FLA: - Before the marriage (pre-nuptial agreements) – s. 90B - During the marriage – s. 90C - After the dissolution of the marriage – s. 90D

LEGAL CONSEQUENCES OF SEPARATION Property ‘Binding’ Financial Agreements: A BFA can be made void (invalid) if: One of partners didn’t get legal advice before signing 2. One partner made the other sign the agreement through duress 3. One party can prove that he or she didn’t fully understand the agreement Also, if the situation of the couple has changed dramatically during the relationship (e.g. the man lost his job and couldn’t find another one in ten years, but his wife went from housewife to millionaire), the pre-nuptial agreement may also be ignored by a judge.

LEGAL CONSEQUENCES OF SEPARATION Property ‘Binding’ Financial Agreements: There has been some controversy about lawyers getting sued for drawing up financial agreements that don’t “stick” when they get to court (e.g. Wallace and Stelzer (2011)) Apparently, “wealthy Australians who marry later in life are having to take the plunge without a prenuptial agreement” So, wealthy lawyers don’t want to make contracts to protect the money of wealthy people when they marry strippers when they’re old… Lawyers back off pre-nups over qualms about being sued The Australian (2013)

LEGAL CONSEQUENCES OF SEPARATION Property ‘Binding’ Financial Agreements: An analysis in the Law Institute Journal argued that lawyers should go on drafting (writing) these agreements without worrying because in 85% of cases where BFAs were made void by a judge, it was pretty obvious from the situation that this should have happened (the rest were because of mistakes by the lawyers in writing them). So their use is still growing overall but a lot of lawyers won’t touch them. The Ties that Bind, Law Institute Journal (2014)

Questions What do you think of the reforms that allow people to claim superannuation from their spouse? (slide 1) How does ‘property allocation’ and ‘consent orders’ show the shift towards cooperation in Family Law? (one of the themes and challenges – see slide 2 and 3) Are there any other measures in property allocation that encourage cooperation? (see slide 4) What is a ‘financial order’? (see slide 5) What is property allocation based on if it has to be determined by the court? (see slide 6) It is often said that Family Law and Law in general is a very male dominated sphere. How does this play out in terms of financial adjustment? (see slide 7) What are some examples of non-compliance of ‘financial orders’? (slide 8) Another word for Binding Financial Agreements is a ‘pre-nup’ and is an agreement a couple comes to before marriage or before a separation/divorce. What are the problem association with Binding Financial Agreements? (see slide 9- 13 especially slide 12) Why do you think BFA’s do not apply to children? (slide 9)