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Reaching a Property Settlement Agreement through Family Law Arbitration

There are numerous methods aside from traditional Court determinations which parties can utilise when seeking to reach a property settlement agreement. Section 10L of the Family Law Act 1975 defines arbitration as “a process (other than the judicial process) in which parties to a dispute present arguments and evidence to an arbitrator, who makes a determination to resolve the dispute.”

How do Arbitrations operate?

Arbitrations are available for property and financial matters and are voluntary. A matter may also be referred by a court order. They can take place before, during or after proceedings have commenced.

Arbitrations may either determine entire financial or property disputes, or alternatively they can focus on specific aspects of the dispute.

The parties have flexibility in preparing a written arbitration agreement before the arbitration commences to determine the constraints and process of the arbitration.

Are Arbitral determinations final?

Once arbitration has finalised, the arbitrator will make an arbitral award. An arbitral award is final and upon registration, it has the same impact and enforceability as an order of the Court.

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Collectables and your property settlement agreement

Whether you collect postage stamps, designer handbags, books, art or cars, don’t underestimate the value of your little hobby when it comes to a property settlement agreement.

In the recent case of Isaacson [2019], Judge Wilson considered a property settlement agreement dispute between a former husband and wife, as to the value of the husband’s book collection. The husband alleged the book collection to be worth $183,905.00 and the Wife believed it to be worth $384,421.00.

Both parties sought to rely on their own “expert” evidence as to the apparent value of the book collection.  This is where the case highlighted the importance of seeking legal advice when intending to use expert evidence to ascertain the value of collectables in a property settlement agreement.

The Husband’s “expert” provided the Court with a 97 page affidavit pertaining to his opinion as to the value of the book collection. The affidavit of the Husbands “expert” failed to address the elements of his training, study or experience which are required to be satisfied in order to deem a witness to be qualified as an expert. The Court consequently found the Husbands alleged expert evidence to be deemed inadmissible.

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Property Settlement Agreement – Can the Court Split Employment Bonuses?

What is Property?

When negotiating a property settlement agreement, one of the first steps to be considered is what property you and your former spouse have or own. This step is important as only property can be subject to a property settlement agreement. The Family Law Act defines property as “any property in the possession of either party, either vested or in remainder.”  Property of the relationship generally includes:

  • All assets that are owned, g. the family home, motor vehicles, personal items
  • All assets under your control, e.g. a business, superannuation, shares and funds at bank
  • All liabilities, e.g. mortgages, credit cards, hire purchase agreements

Are Employment Bonuses Property?

In the case of Ilannello & Ilannello (No 3) [2018] FCCA 3752 (19 December 2018) the Court considered the question of whether the wife’s future employment bonus payments could be the subject of a property order.

Facts of the Case

In this case, the husband had suffered a workplace accident and had been unemployed since 2013. The husband was living on a permanent disability payment from his super fund. While he owned about $78,000 in shares, he claimed that his legal fees were equally as much. On the other hand, his wife had a base salary of $190,000 per year plus employment bonuses. In the previous year, the wife received $54,000 in bonuses.

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Judicial Mediation: A New Option To Resolve Your Dispute

As of 1 January 2019, parties to a family law dispute and their marriage lawyer, in appropriate cases, may now have the option of Judicial Mediation in the Federal Circuit Court of Australia. Judicial Mediation is not intended to replace or substitute private mediation. Rather, the court expects that parties to a family law dispute exhaust all mediation alternatives, such as private mediation with a private mediator, prior to Judicial Mediation.

The Judicial Mediator

The Judicial Mediator may not be the Judge that would ordinarily determine the family law dispute. This Judge is referred to as the Docket Judge. Where both Judges consent, the Docket Judge may refer the proceeding for Judicial Mediation to another Judge.

How to Initiate Judicial Mediation

Judicial Mediation can be initiated in two ways. Firstly, you or your marriage lawyer can make an oral application in court. Alternatively, you or your marriage lawyer may apply for judicial mediation in writing to the Docket Judge. The written application must include a brief summary in bullet point format addressing why the matter is suitable for Judicial Mediation.

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Quick Questions Answered: Property Settlement Agreement

  1. What is a Property Settlement Agreement?

A Property Settlement Agreement contains the agreed terms to divide property between you and your former partner following separation. This includes assets, liabilities and superannuation.

  1. When Can I Get A Property Settlement Agreement?

You can finalise a property settlement agreement as soon as you and your former partner have decided to separate i.e. end your relationship.

  1. What if we are still living under the same roof?

You can be living under the same roof but still be considered ‘legally separated’. You do not need to be living in separate households; however, your relationship does need to have ended.

  1. What are the deadlines for obtaining a Property Settlement Agreement?

The Family Law Act 1975 (Cth) provides some “deadline dates” depending on whether you were married or in a de facto relationship. There are some exceptions however, the general rule is:

For married couples: You have 12 months from the date your divorce* comes into effect to make an application for a Property Settlement.

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Family Violence and Your Property Settlement Agreement

At the end of a relationship, couples are often faced with the issue of dividing their property. Due to the emotional nature of relationship breakdown, this task often proves tricky for even the best of couples. Where the couple is unable to come to an agreement, the Family Law Act 1975 (Cth) empowers the Court to make a property settlement agreement that it considers appropriate. In coming to a property settlement agreement, the Court considers financial and non-financial contributions to the relationship and the future needs of the parties. The conduct of the parties is generally not a relevant consideration.

Kennon and Kennon– A Case where the Court has taken into account poor behaviour by a party to the relationship in determining a property settlement agreement.   In the case of Kennon, the   Full Court of the Family Court suggested that domestic violence may be a factor that a Court can take into account when deciding what each spouse is entitled to in a  property split up.

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I Didn’t Know – How You Can Get Out of A Property Settlement Agreement

The Family Law Act 1975 (Cth) s 79A(1)(a)  allows the court to vary or set aside a property settlement agreement where there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance. This includes where one party has failed to disclose his or her true financial circumstances. However, not every failure to provide full and frank disclosure during a property settlement agreement will amount to a miscarriage of justice. What is needed is to show that the failure to disclose has led the court to make an order that is substantially different from the order it would have made if full disclosure was made: Barker & Barker [2007] FamCA 13 [123].

 

Pendleton & Pendleton

In the case of Pendleton & Pendleton [2016] FCCA 285, the husband failed to disclose, among other things,

* A reimbursement of expenses amounting to $44,586.84,

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Property Settlement Agreement

The law encourages parties to negotiate and reach an amicable agreement as to the division of property following separation. If you have come to a Property Settlement Agreement with your former partner then you may wish to formalise this by entering into a binding property settlement agreement.

Sometimes parties come to an agreement without having properly considered the nature and effect of their agreement.

When negotiating a Property Settlement Agreement some things to keep in mind include the following:

  1. Property Settlement Agreements differ depending on your particular set of circumstances.
  2. A fair Property Settlement Agreement may depend on the length of your relationship or marriage and this is just one of the factors to be considered.
  3. There may need to be an adjustment for financial contributions made prior to the relationship by either party.
  4. There may need to be an adjustment for one of the parties’ future needs such as their age, health, ability to work and their earning capacity.
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