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The Consequences of Escaping Debt in Family Property Proceedings

If you or your former spouse owe a significant sum of money to a person or company known as a creditor, you may be wondering how this will be dealt with in your family property proceedings. Some have attempted to transfer property from one spouse to another in a bid to protect their property from a creditor’s claim. Our family law lawyers can provide some guidance on what you should do if you owe money to a creditor and the consequences for non-disclosure.

During your family property proceedings, there is an obligation on both parties to disclose any significant creditors or any significant claim against them by a third party to the Court. This includes Applications for Orders made by consent. In circumstances where a Family Court Order would prevent a creditor to recover their debt, your family law lawyers may need to give the creditor notice of the Family Court proceedings who are then provided the opportunity to intervene in the proceedings and seek their own orders to protect their interests in having their debt paid.
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When Can You Commission Your Own Expert Report – Family Law Lawyers Know How

In circumstances where there is an issue that is contested in family law proceedings, parties may look to obtaining a single expert report from an expert who is instructed by both parties’ family law lawyers to provide evidence on the issue. Common examples of an expert report include a valuation report to determine the value of the family home or one party’s business.

In the recent Family Court case of Rigby & Kingston (No. 2) [2020] FamCA 467, one of the issues in contention was whether the Husband was underpaid for his work when he was employed as a contractor. The Wife’s family law lawyers had directly invited the Husband on three separate occasions to engage a jointly appointed expert. The Husband did not agree to the Wife’s propositions. In that event, the Wife’s family law lawyers had commissioned their own report with instructions solely from the Wife to provide evidence on whether the Husband was being underpaid.
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Family Court Finds A Way to Get out of Binding Child Support Agreement during Covid-19

In the recent case of Martyn & Martyn [2020] FamCA 526 the Family Court considered a matter where the parents had entered into a binding child support agreement in 2012 which the father’s child support lawyers sought to set aside due to Covid-19.

The 2012 Agreement involved the father paying the mother a sum of $1,350 per month with a 2% increase each year.

The father currently owns and operates a business which supplies products to international businesses. Due to cross-border restrictions and social distancing measures, the father’s company was significantly impacted and he claimed that the business activity dropped by 90%. The father’s child support lawyers argued that as a result, his financial circumstances had been significantly worsened due to the limitations on international commerce during the Covid-19 pandemic.

According to Family Law, a Child Support Agreement may be set aside if exceptional circumstances have arisen that would cause hardship to the payer.

Ultimately, in this case, the Family Court was satisfied that the outbreak of the COVID-19 pandemic was an exceptional circumstance and that the father would suffer hardship. The Binding Child Support Agreement of 2012 was set aside and the father was not required to pay the child support amount in the Agreement.
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When will the Court appoint a lawyer (an ICL) to represent the interests of your children?

In complex parenting matters the before the Court the divorce lawyer may ask the Court to appoint an ICL. The Court itself may decide to appoint an ICL- that is a lawyer for your child or children.

A family Law case decided by the Court in 1994 is often relied upon by both the Court and the divorce lawyer to assist in determining when an ICL should be appointed.

This 1994 case known as Re K was a decision of the Full Court of the Family Court.

Re K suggested that where one or more of the following factors apply to the case, the Court should consider the appointment of an ICL:

  1. Where there are allegations of child abuse, whether physical, sexual or psychological.
  2. Cases where there is an apparently intractable conflict between the parents.
  3. Where the child is apparently alienated from one or both parents.
  4. Where there are real issues of cultural or religious difference affecting the child.
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What are the other options to address delays in the Family and Federal Circuit Court?

The Family Law Act provides that a property dispute of the parties can be referred to Arbitration for determination on a final basis.

A divorce lawyer will advise that arbitration is the process whereby the parties agree that a Family Court or Federal Circuit Judge will not hear the financial dispute but that it will be determined by an appointed and qualified Arbitrator.

A divorce lawyer can give suggestions as to an arbitrator who would be specially qualified and accredited. Arbitrators are usually lawyers or Barristers who have had significant experience in the Family Law field.

The divorce lawyer will advise that there are limitations upon Arbitration which are as follows

  • Each party must consent to the referral of the case to the Arbitrator rather than the case being determined by a Judge
  • Each party must be prepared to meet the costs of the Arbitrator, usually in equal shares
  • Issues of parenting cannot be referred to Arbitration
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Introduction by the Court of the Discrete Property List

A further option introduced by the Federal Circuit Court to alleviate Court delays is the discrete property list.  A divorce lawyer can advise you about this option.

Cases in the discrete property list are managed by a Registrar rather than the case having multiple preliminary listings before the Judge. A divorce lawyer appears before the Registrar to seek Orders to ensure that the issues in dispute can be quickly defined and disputes about the provision of disclosure documents and valuations can be quickly solved.

To ensure that property cases do not fall into a hole and become “stalled” if any dispute arises in defining the property pool or in either party obtaining financial records that may be required; the case can be quickly relisted by a divorce lawyer before the Registrar in order to resolve the dispute or order the provision of the document if applicable.

Sometimes it is necessary for the divorce lawyer to seek the Registrar’s leave to issue a subpoena.
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Court introduces new initiatives to help alleviate the significant delays in the Court

A divorce lawyer will advise you that the Court delays in hearing and finalising your property application under the Family Law Act have in some registries became even longer. It is for this reason that the divorce lawyer tries to encourage their client to consider mediation either privately or through the Court.

The Court itself is also considering options to help reduce the back log of cases.  A divorce lawyer will provide information about the PPP Program currently being tried out in some registries including at the Parramatta Federal Circuit Court.

The aim of the program is to:-

  • Identify cases that fall within the guidelines of the program
  • List those cases separately in lists where the progress can be clearly tracked
  • Lessen the amount of required documentation to be filed at Court
  • Provide those parties with the opportunity to participate in a Conciliation Conference before a Registrar (where each party and their divorce lawyer attend).
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Changing Existing Parenting Orders

Once final parenting orders are made in family law proceedings, they can only be changed with the assistance of your child custody lawyer in specific circumstances, including:

  1. where the parties agree to a change, or
  2. where a party can show that there has been a significant change of circumstances that makes a change necessary.

The Court will generally not “reopen” parenting proceedings that have been finalised to change parenting orders, unless there is a good reason for doing so and it is in the child or children’s best interest.   Continuing litigation about parenting matters is generally not considered to be in the best interest of the children, or the parties.

A recent decision of the Full Court of the Family Court of Australia determined that there was a change in circumstances that warranted a change to existing final parenting orders.

In Shan & Prasad (2020) FLC 93-980, final orders provided for the father to spend no time with his children.  The father applied to vary the orders.  The trial Judge found that there was no sufficient change in circumstances (in accordance with the rule Rice v Asplund (1979) FLC 90-725).
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