1. Family Law Topic 8 1 FAMILY LAW TOPIC Property Disputes

2. Family Law Topic 8 2 Preliminary Matters Property regimes Property regimes unity of property unity of property separation of property separation of property community of property community of property (strict and deferred)

3. Family Law Topic 8 3 Preliminary Matters Part VIII Family Law Act Part VIII Family Law Act s 71: party to a marriage s 71: party to a marriage s 71A: no Part VIII for BFA’s s 71A: no Part VIII for BFA’s s 72: spousal maintenance right s 72: spousal maintenance right s 75: spousal maintenance considerations s 75: spousal maintenance considerations s 78: declarations of interests in property s 78: declarations of interests in property s 79: alteration of interests in property s 79: alteration of interests in property s 79A: setting aside property orders s 79A: setting aside property orders s 80 general court powers s 80 general court powers s 81 finality principle s 81 finality principle

4. Family Law Topic 8 4 s 106A: execution of instruments s 106A: execution of instruments s 106B: power to set aside transactions to defeat claims s 106B: power to set aside transactions to defeat claims s 85A: ante-nuptial/post-nuptial settlements s 85A: ante-nuptial/post-nuptial settlements *s 86: registration of maintenance agreements *s 86: registration of maintenance agreements s 86A: MA’s made after commencement of Part VIIIA no longer enforceable s 86A: MA’s made after commencement of Part VIIIA no longer enforceable *s 87/87A: court-approved maintenance agreements *s 87/87A: court-approved maintenance agreements *ss 86 and 87 applies only up to commencement of Family Law Amendment Act 2000 (27.12.00) *ss 86 and 87 applies only up to commencement of Family Law Amendment Act 2000 (27.12.00) *applies only up to start of Family Law Amendment Act 2000 (27.12.00) Part VIII Family Law Act

5. Family Law Topic 8 5 s 88: enforcement of maintenance agreements s 88: enforcement of maintenance agreements s 89: overseas maintenance agreements s 89: overseas maintenance agreements s 90: stamp duty exemption s 90: stamp duty exemption Also note: Also note: Pt VIIIA (financial agreements) Pt VIIIA (financial agreements) Pt VIIIB (superannuation) Pt VIIIB (superannuation) Pt VIIIAA (third parties) Pt VIIIAA (third parties) Pt VIIIAB De-Facto Financial Matters Pt VIIIAB De-Facto Financial Matters Part VIII Family Law Act

6. Family Law Topic 8 6 (1) Declarations s 78(1) s 78(1) In proceedings between parties to a marriage In proceedings between parties to a marriage Existing title or rights in property Existing title or rights in property May declare title or rights in respect of property May declare title or rights in respect of property s 78(2) s 78(2) Consequential orders Consequential orders Includes sale Includes sale

7. Family Law Topic 8 7 (2) Alteration of Property Interests s 79 (key provision) s 79 (key provision) note amendments in 1976, 1983, 1987, 2000, 2001, 2005 etc! note amendments in 1976, 1983, 1987, 2000, 2001, 2005 etc! (a)Powers s 79(1)(a)-(d) (specific power) s 79(1)(a)-(d) (specific power) s 80 (menu of powers) s 80 (menu of powers) s 106A (execution of instruments) s 106A (execution of instruments) s 79(1) has two limbs: s 79(1) has two limbs:  general power (a)+(b)  two particular orders (c)+(d) s 79(1A) enforcement against estates s 79(1A) enforcement against estates s 79(1B) adjournment of proceedings? s 79(1B) adjournment of proceedings? s 79(1C) continuation of proceedings (from 1B) s 79(1C) continuation of proceedings (from 1B)

8. Family Law Topic 8 8 (2) Alteration of Property Interests (b)Just and Equitable Requirement s 79(2) Separate & distinct requirement of s 79? Separate & distinct requirement of s 79? A preliminary step? A preliminary step? The final step? The final step? Permeates the entire decision making process? Permeates the entire decision making process? The order as an outcome? The order as an outcome?

9. Just & Equitable Requirement Post-Stanford Is a separate & distinct requirement of s 79 3 fundamental propositions:  Begin by identifying existing legal & equitable interests;  No palm-tree justice, but in accordance with legal principles, including the Act with legal principles, including the Act  No right to have property divided or fixed by reference to s 79(4) ie. Do NOT by reference to s 79(4) ie. Do NOT conflate s 79(2) and s 79(4) conflate s 79(2) and s 79(4) Family Law Topic 8 9

10. 10 (c)Matrimonial Property s 4: definition s 4: definition all property owned by both parties all property owned by both parties net value of assets net value of assets partnership interests? partnership interests? superannuation entitlements? superannuation entitlements? (2) Alteration of Property Interests

11. Family Law Topic 8 11 (d)Pre-Stanford preferred 4 step approach Step1 - Identify and value the property Step1 - Identify and value the property Step 2-Identify & evaluate the respective contributions - s 79(4) (a) to (c) Step 2-Identify & evaluate the respective contributions - s 79(4) (a) to (c) Step 3- Identify & evaluate the future needs factors - s 70(4) (d) to (g) Step 3- Identify & evaluate the future needs factors - s 70(4) (d) to (g) Step 4 – Justice and equitable orders Step 4 – Justice and equitable orders (2) Alteration of Property Interests

12. Alteration of Property Interests (d) Post-Stanford Approach Apply s 79(2) in accordance with the 3 Apply s 79(2) in accordance with the 3 Propositions in Stanford If just & equitable to make an order, then If just & equitable to make an order, then follow the preferred 4 step approach See Bevan See Bevan Family Law Topic 8 12

13. Family Law Topic 8 13 (2) Alteration of Property Interests (e)Cross-vested claims Tort/criminal injury compensation Tort/criminal injury compensation Side-stepped no-fault principle for the battered spouse Side-stepped no-fault principle for the battered spouse The effect of High Court decision in Re Wakim (1999) on the operation of state to federal transfers of jurisdiction The effect of High Court decision in Re Wakim (1999) on the operation of state to federal transfers of jurisdiction Note pre-Wakim effect of the Federal Courts (State Jurisdiction) Act 1999 (NSW) Note pre-Wakim effect of the Federal Courts (State Jurisdiction) Act 1999 (NSW)

14. Family Law Topic 8 14 (3) Statutory Considerations s 79(4) s 79(4) in considering what order (if any) in considering what order (if any) the court shall take into account the court shall take into account seven considerations seven considerations

15. Family Law Topic 8 15 (3) Statutory Considerations The ‘Top Seven’– s 79(4)(a)–(c) considerations The 3 contributions factors to be considered direct or indirect financial contributions by/on behalf of a party/child to acquisition, conservation or improvement - s79(4)(a) direct or indirect financial contributions by/on behalf of a party/child to acquisition, conservation or improvement - s79(4)(a) direct or indirect non-financial contributions by/on behalf of a party/child to acquisition, conservation or improvement - s79(4)(b) direct or indirect non-financial contributions by/on behalf of a party/child to acquisition, conservation or improvement - s79(4)(b) Contribution by a party to the welfare of the family ( being parties/children) including in capacity homemaker and/or parent - s79(4)(c) Contribution by a party to the welfare of the family ( being parties/children) including in capacity homemaker and/or parent - s79(4)(c)

16. (3) Statutory Considerations effect of a proposed order on a party’s earning capacity - s79(4)(d) effect of a proposed order on a party’s earning capacity - s79(4)(d) the relevant s75(2) matters (i.e. spousal maintenance matters) – s79(4)(e) the relevant s75(2) matters (i.e. spousal maintenance matters) – s79(4)(e) any other order made under the FLA (affecting a party or child of the marriage) – s 79(4)(f) any other order made under the FLA (affecting a party or child of the marriage) – s 79(4)(f) child support payments that have been paid/is to be paid/is likely to be paid in future for child of the marriage – s79(4)(g) child support payments that have been paid/is to be paid/is likely to be paid in future for child of the marriage – s79(4)(g) Family Law Topic 8 16 The ‘Top Seven’– s79(4)(d)–(g) considerations The 4 future needs factors to be considered

17. Family Law Topic 8 17 (3) Statutory Considerations Past (retrospective) contributions: s 79(4)(a)-(c) – these are the step 2 considerations in the 4 step approach Future (prospective) needs [aka s 75(2) factors /maintenance factors]: s 79(4)(d)-(g) – these are the step 3 considerations in 4 step approach

18. Family Law Topic 8 18 (4) Past Contribution Factors (a)Financial Contributions s 79(4)(a) s 79(4)(a) direct financial contribution(s) direct financial contribution(s) indirect financial contribution(s) indirect financial contribution(s) (b)Gifts, compensation and windfalls gifts - donor’s intention? gifts - donor’s intention?  clear evidence of joint gift  gifts to children compensation/windfalls compensation/windfalls  joint contribution?

19. Family Law Topic 8 19 (4) Past Contribution Factors (ba) Superannuation Pt VIIIB (ss 90MA-90MZH) and RegsPt VIIIB (ss 90MA-90MZH) and Regs Splitting ordersSplitting orders Flagging ordersFlagging orders AgreementsAgreements ‘two pools’? (Coghlan 2005 FLC 93-220)‘two pools’? (Coghlan 2005 FLC 93-220) (c)Non-financial contributions s 79(4)(b) s 79(4)(b) (d)Global or asset-by-asset approach two judicial schools of thought two judicial schools of thought Norbis (1986) Norbis (1986)

20. Family Law Topic 8 20 (4) Past Contribution Factors (e)Homemaker and Parent Contributions s 79(4)(c) s 79(4)(c) equality is equity? equality is equity? Mallet (1984) Mallet (1984) Ferraro (1992) & McLay (1996) Ferraro (1992) & McLay (1996) is family violence relevant? is family violence relevant? If a more significant homemaker/parent contribution? (see Kennon)

21. Family Law Topic 8 21 (5) Future Needs Factors (a) Earning capacity s79(4)(d) s79(4)(d) family farm/business? family farm/business? (b) Section 75(2) factors s79(4)(e) s79(4)(e) maintenance factors maintenance factors 5-15%? 5-15%? 10-20%? 10-20%? high wealth cases? high wealth cases?

22. Family Law Topic 8 22 (5) Future Needs Factors (c) Superannuation pre-2002 reforms was a financial resource pre-2002 reforms was a financial resource for s79(4)(e) purposes but now is “property” for s79(4)(e) purposes but now is “property” but a different species of “property” : see but a different species of “property” : see Coghlan Coghlan (d) Other orders s 79(4)(f) (e) Child support s 79(4)(g)

23. Family Law Topic 8 23 General Approach by the Court So … a final summary for s 79 Usually follow the preferred 4 step approach as modified by Stanford i.e. Usually follow the preferred 4 step approach as modified by Stanford i.e. Preliminary - Consider whether just & equitable to make a s79 order having regard to the 3 propositions in Stanford, if yes, THEN Preliminary - Consider whether just & equitable to make a s79 order having regard to the 3 propositions in Stanford, if yes, THEN Step 1 - Identify (and value) the property Step 2- Identify & Evaluate contributions Step 3 - Identify & Evaluate future needs Step 4 - Make orders that are just & equitable

24. Family Law Topic 8 24 (6)Setting Aside Orders Altering Property Interests s 79As 79A Five situationsFive situations a. miscarriage of justice b. impracticable c. default d. new child circumstances e. proceeds of crime order (also see ss 79B-79E) s 79A(1A) consents 79A(1A) consent s 79A(2) third partys 79A(2) third party s 79A(1B)(1C) death issuess 79A(1B)(1C) death issues

25. Family Law Topic 8 25 (6)Setting Aside Orders Altering Property Interests (a) Miscarriage of Justice s 79A(1)(a) s 79A(1)(a) two factors two factors  listed category  miscarriage of justice

26. Family Law Topic 8 26 (6)Setting Aside Orders Altering Property Interests (a) Miscarriage of Justice s 79A(1)(a) s 79A(1)(a) listed categories: listed categories:  fraud  duress  suppression of evidence (including failure to disclose relevant information)  giving of false evidence  ‘any other circumstance’ note FL Rules note FL Rules

27. Family Law Topic 8 27 (6)Setting Aside Orders Altering Property Interests

28. Family Law Topic 8 28 (6)Setting Aside Orders Altering Property Interests (b) Impracticability s 79A(1)(b) s 79A(1)(b) practically impossible practically impossible (c) Default s 79A(1)(c) s 79A(1)(c) (d) Change in circumstances for child s 79A(1)(d) s 79A(1)(d) Also note s 79A(1AA) which defines ‘caring responsibility’ Also note s 79A(1AA) which defines ‘caring responsibility’

29. Family Law Topic 8 29 (7) Third Parties and Competing Claims (a) Intervention in proceedings s 92 s 92 AG intervention: s 91 AG intervention: s 91 (b) Corporate and other entities Ascot Investments (1981) Ascot Investments (1981) exceptions exceptions  ‘sham’ (evasion)  ‘puppet’ (effective control) Now see (d) below: Pt VIIIAA Now see (d) below: Pt VIIIAA (c) Competing claims

30. Family Law Topic 8 30 (7) Third Parties and Competing Claims (d) Pt VIIIAA (ss 90AA-90AK) 90AE(1) - in s 79 proceedings court may: proceedingscourtproceedingscourt order against creditor for substitution of debtor order against creditor for substitution of debtor order against creditor that the parties be liable for a different proportion of the debt owed order against creditor that the parties be liable for a different proportion of the debt owed order directed to a director of a company or to a company to register a transfer of shares from one party to the marriage to the other party. order directed to a director of a company or to a company to register a transfer of shares from one party to the marriage to the other party.directormarriagedirectormarriage 90AE(2) - in s 79 proceedings court may make an order that: proceedingscourtproceedingscourt directs a third party to do a thing in relation to the property of a party to the marriage; or directs a third party to do a thing in relation to the property of a party to the marriage; orthird partypropertymarriagethird partypropertymarriage alters the rights, liabilities or property interests of a third party in relation to the marriage. alters the rights, liabilities or property interests of a third party in relation to the marriage.propertyintereststhird partymarriagepropertyintereststhird partymarriage

31. Family Law Topic 8 31 (7) Third Parties and Competing Claims (d) Pt VIIIAA (ss 90AA-90AK) 90AE(3) - court may only make an order under 90AE(1)/(2) if: court order is reasonably necessary etc to effect a division of property between the parties order is reasonably necessary etc to effect a division of property between the parties property if order concerns a debt of a party to the marriage - it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full if order concerns a debt of a party to the marriage - it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in fullmarriagemademarriagemade the third party has been accorded procedural fairness the third party has been accorded procedural fairnessthird partythird party court is satisfied that, in all the circumstances, it is just and equitable to make the order court is satisfied that, in all the circumstances, it is just and equitable to make the order court court is satisfied that the order takes into account the matters mentioned in subsection (4). court is satisfied that the order takes into account the matters mentioned in subsection (4). court

32. Family Law Topic 8 32 (7) Third Parties and Competing Claims 90AE(4) - the matters are as follows: taxation effect (if any) of the order on the parties to the marriage taxation effect (if any) of the order on the parties to the marriage marriage the taxation effect (if any) of the order on the third party the taxation effect (if any) of the order on the third partythird partythird party social security effect (if any) of the order on the parties to the marriage social security effect (if any) of the order on the parties to the marriage marriage third party's administrative costs in relation to the order third party's administrative costs in relation to the order third party third party if order concerns a debt of a party to the marriage - the capacity of a party to the marriage to repay the debt after the order is made if order concerns a debt of a party to the marriage - the capacity of a party to the marriage to repay the debt after the order is mademarriage mademarriage made the economic, legal or other capacity of the third party to comply with the order the economic, legal or other capacity of the third party to comply with the orderthird partythird party if, as a result of the third party being accorded procedural fairness in relation to the making of the order, the third party raises any other matters - those matters if, as a result of the third party being accorded procedural fairness in relation to the making of the order, the third party raises any other matters - those mattersthird partythird partythird partythird party any other matter that the court considers relevant. any other matter that the court considers relevant.court

33. Family Law Topic 8 33 (8) Transactions t0 Defeat Claims Section s 106B (Part XIII)Section s 106B (Part XIII) power: s 106B(1)(2)power: s 106B(1)(2) third parties: s 106B(3)third parties: s 106B(3) party in collusion: s 106B(4)party in collusion: s 106B(4) *formerly s 85

34. Family Law Topic 8 34 (9) Ante-Nuptial and Post- Nuptial Settlements Section 85ASection 85A settlement(s) made in relation to the marriagesettlement(s) made in relation to the marriage note since FLAA 2000 definition of ‘financial agreement’ in s 4 does not include a settlement to which s 85A applies note since FLAA 2000 definition of ‘financial agreement’ in s 4 does not include a settlement to which s 85A applies

35. Family Law Topic 8 35 (10) Financial Agreements (a)Public policy arguments (b)‘Maintenance Agreements’ (1976- 2000) s 4(1) definitions(s) s 4(1) definitions(s) ss 86, 87 and 87A (maintenance and property agreements) ss 86, 87 and 87A (maintenance and property agreements)

36. Family Law Topic 8 36 (10) Financial Agreements (c) ‘Binding Financial Agreements’ (2001-) - Part VIIIA (i)what is a financial agreement - ss 4, 90A-90D (ii)when can spouses enter into one - before marriage: s 90B - during marriage: s 90C - after divorce: s 90D *may cover property and resources *may cover spousal maintenance NOTE: new s 90DA: need for a separation declaration!

37. Family Law Topic 8 37 (10) Financial Agreements (iii)maintenance requirements s 90E (children)/s 90F (spouses) s 90E (children)/s 90F (spouses)  future support? s 90F(1A) (1)No provision of a financial agreement excludes or limits the power of a court to make an order in relation to the maintenance of a party to a marriage if subsection (1A) applies. (1A)This subsection applies if the court is satisfied that, when the agreement came into effect, the circumstances of the party were such that, taking into account the terms and effect of the agreement, the party was unable to support himself or herself without an income tested pension, allowance or benefit. (2)To avoid doubt, a provision in an agreement made as mentioned in subsection 90C(1) or 90D(1) that provides for property or financial resources owned by a party to the agreement to continue in the ownership of that party is taken, for the purposes of that section, to be a provision with respect to how the property or financial resources are to be dealt with.

38. Family Law Topic 8 38 (10) Financial Agreements (iv)when agreements binding: s 90G  signed by both parties  statement as to independent advice by lawyer  signed annexure by lawyer  original (pty 1) & copy (pty 2) (v)enforcement? s 90G(2) (vi)effect of death a party: s 90H (vii)‘termination agreement’: s 90J (ie terminating the financial agreement)

39. Family Law Topic 8 39 (10) Financial Agreements (viii) setting aside agreement: s 90K  obtained by fraud  void, voidable, unenforceable  impracticable  exception of child-related hardship (ix)validity, enforceability, effect: s 90KA (x)stamp duty exemption: s 90L Also Note: ss 90M-90Q ss 90M-90Q Capital gains tax Capital gains tax