Property Disputes - elringtons lawyers

What is a caveat and how may it be used to protect real estate in family law?

Posted on15, July 201814, November 2018AuthorGabby Bridger

By Gabby Bridger

When parties separate, sometimes one or the other must take steps to protect the assets before a family law property settlement is formalised. One tool that is available to protect the matrimonial assets is the lodgement of a caveat on the tile to real property.

What is a caveat?
A caveat is a notice at large that is recorded on the title of real property to protect the interest which the caveator may have on the real property. Any third party who may seek to deal with the real property is placed on notice about the caveator’s claim by the existence of the caveat.

When may a caveat be used in family law?
Sometimes in a relationship, both parties have an interest in a property but only one party’s name is on the title. This may be for a range of reasons, such as one party bought the property prior to the relationship or for tax purposes. Even if the property is just in one party’s name, the other party may still have a caveatable interest. For example, if both parties have contributed to paying the mortgage on a house or one party made other financial or non-financial contributions throughout the relationship. However, not everyone will have a caveatable interest, so legal advice should be sought to determine whether you have an interest.

If you share a property with your spouse or partner, but the property is solely in your spouse’s name, he/she may have the ability to deal with that property without your consent. This may become a problem in family law matters, if the property should form part of the overall property pool, yet the person on title sells it, uses the equity, transfers a share to someone else or uses the property as security to raise a loan. A caveat may prevent your spouse dealing with the property before the Court may deal with the family law dispute. .

How may a caveat help protect you?
In a family law property dispute, lodging a caveat on a property protects your interest in it. This will stop the other party, who is on title, dealing with the property in a way that could detriment you. A caveat also acts as a warning for anyone else who does a search of the property; they would see that someone else has an interest in the property. In order to sell or deal with the property, the caveat would need to be removed.

Proceed with caution! Are there any risks in lodging a caveat?
Whether a party has a caveatable interest in a property in a family law matter is a complex question on law that must be considered on its own facts.

There are risks associated with lodging a caveat if you do not have a caveatable interest in the property. If you lodge a caveat without having an interest in the property and financial loss is then suffered by the person on title, you may be liable to pay compensation. Therefore, it is important to seek legal advice to determine your interest in a property and whether it is appropriate to lodge a caveat.

We can help you work out whether you have an interest in the property that allows you to safely lodge a caveat.

To speak to one of our family lawyers about how to protect your property, or to find out what you are entitled to or to make an appointment at either our Canberra or Queanbeyan office, contact us on:

info@elringtons.com.au| p: 02 6206 1300

For more information:

Elringtons Family Law
Family Law: Property Disputes and Settlements

Who Gets the Dog? Pets in Family Law Matters

Posted on29, October 20176, November 2017AuthorCarlos Turini

We love our pets and often they truly are part of the family. So when it comes to the end of a relationship or separation of a family, it can be very important to take a pet into consideration.

In most cases separating parties are able to resolve this issue amicably, as it may be understood from the start which person owns, or is the main caregiver for a particular pet. For others however, a disagreement may arise as to whom certain pets will live with, and even whether the other party can visit to spend time with the pets.

Unfortunately, sometimes the motivation for one party keeping a pet as part of the family law process may be for the wrong reasons. People can feel very close and form long term attachments to animals and one party might try to keep the pet to upset the other party or use it as a weapon. Threats to euthanise the pet to eliminate the issue entirely is particularly upsetting.

Aside from being unfair to the animal, situations such as these are unlikely to end well for either party. Another issue that is sometimes faced, is in cases involving family violence. Often, if the victim of family violence leaves, they may not be able to take their pet in to temporary accommodation or a refuge.^[1] This also poses the problem of leaving the pet in an unsafe and hostile environment.

Family law is generally broken into two sections, property and parenting. Determining the ownership of a pet after separation falls under property. The Family Law Act (1975) does not make specific provision for pets, rather they fall under the category of “chattels” – or simply, property. Most items in the property pool are allocated a value, but how can you place a value on a family pet? If the pet is used for racing or breeding purposes and provides an income of some kind, it may be allocated a financial value. However, as a general rule, a value is not placed on a pet when considering property division in family law.

While pets are considered property, the Court does acknowledge the comforting nature of pets, with Judge Harman in the case of Downey v Beale stating that “one would hope, in this neoliberal world that we have not yet come to the point where even love and affection are commoditised”.

Determining factors considered by the Court when deciding who gets the Pet

Accommodation – Can the pet live at the accommodation, for example rental accommodation?

Who was the main caregiver? – Who registered the dog, who fed it and took it for walks, who took it to the vet for vaccinations etc.?

Was the pet given to one of the parties as a gift?

The court will use the above information when considering which party should keep the pet.

In many cases involving children, the court will decide to give the pet to one parent. However, orders are sometimes made for the pet to accompany the child or children in moving between parents’ houses. In other situations, such as in the case of Poulos v Poulos, the Court made orders allowing the mother to keep the pet dog, even after the child was ordered to live with the father. The court considered factors such as the mother’s stress and her long term bond with the dog. Additionally, the calculation of spousal maintenance took into consideration pet friendly accommodation for the mother.

If you have a dispute that includes a pet, orders can take into consideration future costs and maintenance of the pet. This can include the cost of vaccinations, food and veterinary costs.

Pre-Nuptial Agreements

One preventive measure which can be taken to safeguard against any future dispute, is to enter into a prior agreement. A “prenuptial agreement”, also known as a binding financial agreement, can include pets in the property pool. If this is done, it is important to specify the exact details of the pet, or specify how you and your partner plan to purchase a pet and who will keep it should the relationship end. This option could avoid potentially lengthy legal proceedings after separation.

Family law disputes can take their toll on all members of the family, especially when involving a beloved family pet. As acknowledged by Judge Harman, “dogs are not our whole lives, but they make our lives whole.” At elringtons we understand that pets are more than just property and they provide immense happiness and comfort, especially when it is needed most.

Please do not hesitate to contact our Family Law Team if we can help you with a family law matter involving a pet.

For more information or to make an appointment with a Family Law Solicitor contact

Carlos Turini:

p: (02) 6206 1300 | e: cturini@elringtons.com.au

[1] Useful links if you need to rehome your pet urgently:

http://fosterdogs.org/tess/do-you-need-to-rehome-your-dog/

http://rspca-act.org.au/

https://www.petrescue.com.au/

http://www.tccs.act.gov.au/city-living/pets/dogs/lost-dogs/impounded_dogs

http://www.qcc.nsw.gov.au/Services/Animals/Animals-for-sale/Animals-for-sale

Who is at Fault for Financial Losses in a Marriage?

Posted on21, April 201427, July 2018AuthorCarlos Turini

As a general principle, financial losses incurred by the parties in the course of their marriage or de-facto relationship should be shared between them regardless of whether these were the fault of only one person in the relationship. Exceptions however are made where one of the parties has deliberately embarked upon a course of action to reduce the value of an asset, or has acted recklessly or negligently with a matrimonial asset with the overall effect of minimising its value. The typical example is gambling.

In circumstances of waste or premature distribution of property, the Court has the discretion to notionally ‘add back’ the value of the property into the pool of assets.

Traditionally, the three main categories where the Court will consider adding an asset back to the pool of assets, include:

Financial Losses

In Kowaliw (1981) FLC 91-092, following separation the husband allowed a prospective purchaser to occupy the former matrimonial home rent free for 12 months and during this time the husband did not live in the property and made no repayments toward the mortgage or rates. The prospective purchaser subsequently changed his mind and did not purchase the property. The husband sold the property and invested the proceeds. The wife argued that this was twelve months of lost income. The court said that the Husband’s actions in allowing no payment of rent as economically reckless and therefore was found solely responsible for that part of the liabilities comprising the rates and mortgage repayments.

Premature Distribution of Assets

Where there has been a premature distribution of “matrimonial assets” in favour of one party. In Townsend v Townsend [1994] FamCA 144, following separation the husband sold his taxi for $148,000.00 and retained all of the net proceeds of sale. The court found that the Husband prematurely disposed of a matrimonial asset to which the wife had a legitimate interest in. The Court ‘added back’ the sale proceeds into the pool of assets available for distribution.

Joint Money is used to pay for Legal Fees before separation

Where a party uses matrimonial money to pay for their legal fees (DJM v JLM [1998] FamCA 97) but if legal fees were paid from monies earned post separation, then they would generally not be added back (Chorn and Hopkins [2004] FamCA 633)

A more recent High Court decision, Stanford v Stanford [2012] HCA 52, raises some questions about how the Court should consider these types of deliberate use or wastage of assets by one party. Ultimately, it still remains a matter of discretion for the Court in each case.

For more information or to make an appointment with a Family Law Solicitor in either our Canberra or Queanbeyan office contact:

Carlos Turini e: cturini@elringtons.com.au | p: 02 6206 1300

Family Law: Property Disputes and Settlements

Posted on12, April 201120, January 2019AuthorCarlos Turini

The Full Court of the Family Court some years ago[1] identified the steps that the Court must follow to decide property matters between former spouses pursuant to section 79 and 75(2) of the Family Law Act. The Full Court’s approach has become a guide to parties’ entitlements. This approach became known as “the four-steps approach” and it has been applied to family law matters for some years since. The Court applies the four-steps approach in circumstances where parties are (or were) married or in a de facto relationship.

A more recent, very significant, decision of the High Court of Australia [2] raised questions about whether the four-steps approach continues to be the appropriate approach in all cases. In spite of the this decision, the four-steps approach remains an important guide to assess what should be an appropriate family law property adjustment in a particular case even if it “merely illuminates the path to the ultimate result”.[3]

The four-steps approach should be used to analyse the likely outcome of a property matter whether or not parties wish to negotiate a settlement or to take the matter to Court.

Step One Identifying and valuing the assets and the liabilities of the parties.

This first step, may appear at first instance obvious and uncontroversial. However, to identify what are the matrimonial assets, ascertain the liabilities and the value of the pool available for division between parties is, on occasions, an arduous process and it is not uncommon for matters to go to trial when the parties have not yet agreed on matters surrounding the matrimonial pool divisible between them.

On occasions, one party is not in a position to identify all the assets and liabilities and the correct information is not forthcoming from the other party. The Family Law Act and the Family Law Rules impose an obligation on each party to be candid about financial information and, on occasions, the Family Court has “punished” a party who failed to provide all relevant information by “drawing the worst possible conclusion against that party”. The Court has proceeded to make its own assumptions about the extent and value of the party’s secret assets.

On occasions, parties do not agree that they should be jointly liable to some liabilities, or a party would refuse to accept that a liability exists, typically, a loan repayable to parents.

When considering the four-steps approach, normally, the Court separates the parties’ assets and accumulated superannuation entitlements into two separate pools:

The superannuation pool of assets; and
The non-superannuation pool of assets.

The Court has power to adjust and divide between the parties their assets and their superannuation entitlements.

Step Two Assessing the contributions that each party made to the marriage

The next step is to make an assessment of the contributions that each party made to the marriage in different ways including financial and non-financial contributions, the contributions of a party as a wage earner, as a parent and home maker, the contributions made by others “on behalf of a party”, for example, when a party receives an inheritance, when a party’s parents or other relatives provide labour to build a home or to build extensions and so on. A party may have introduced an asset at the commencement of the marriage and there may be a dispute about the extent to which that initial contribution should be credited to that party.

Step Three A comparison of the financial circumstances of each party

Once the assessment of contributions has been completed, it is necessary to make a comparison of the financial circumstances of the parties to ascertain whether there should be an adjustment in favour of one as against the other taking into account such things as disparity in income, whether one party has the care of a child of the marriage, each of the parties’ health, ability to work and financial resources.

Step Four The just and equitable requirement

Examples

Below are a couple of examples about how the four-steps approach is applied by courts in different cases:

Example One – A couple cohabited for fifteen years. They married ten years after they commenced cohabitation.

At the commencement of cohabitation they were both young and poor! Neither party has any significant assets and neither had accumulated any significant superannuation entitlements. When they had children, the wife ceased working as a teacher. The husband continued to work as a public servant. The wife returned to work part time for three days per week as a teacher when the children commenced school. The parties separated and agreed to an arrangement whereby the children live with the mother and spend every second weekend and every Wednesday overnight with the father. Five years before separation, the husband received a substantial inheritance which he applied to pay off mortgage on the former matrimonial home.

The Court would normally recognise that both parties made substantial contributions to the marriage in different ways both financial and non-financial during the period of cohabitation. The fact that they married years after they commenced cohabitation would be irrelevant in the Court’s approach to the four-steps approach. The Court must then consider whether there are any special circumstances which it must take into account and it may conclude (subject to the size of the inheritance) that the husband’s inheritance and the manner he applied it to pay off a substantial matrimonial debt is a significant factor with regard to Stage Two of the four-steps approach and, therefore, that the husband made a sixty per cent contribution.

The Court must then consider Stage Three and compare the parties’ circumstances to decide whether there should be a further adjustment taking into account that the wife no longer has the same prospects in her career as a teacher, she earns a much lesser income and has three children as dependents (even though the husband may be paying child support). Under Stage Three, the Court may make a ten to fifteen per cent adjustment in favour of the wife which would make the overall adjustment a fifty-fifty division of the assets or a fifty-five forty-five division in her favour. [4]

Example Two – The parties commenced to cohabit in a de facto relationship three years ago in the woman's house which she owns in her name.

She has a mortgage which she continues to service during cohabitation. Her partner contributes an agreed sum per week to all outgoing expenses including an agreed some for “rent”. After three years of cohabitation, the parties separate. They have no children.

Although the parties did not marry, the four-stage approach would need to be applied in the same manner than if the parties had married.

The Court approaches short marriages and short de facto relationships differently. Normally, a marriage or relationship of less than five years is considered “short” and the Court would try to place the parties in the same or similar circumstances each were before the marriage or relationship commenced to the extent that this is possible. It may all become more complicated in some circumstances for example:

If the parties had a child and one of them will care for the child predominantly;
If both parties made significant contributions even though it was a short marriage or relationship.

The four steps mentioned above provide a general overview of the court’s approach to property settlement and a useful guidance to a solicitor to assess what is his/her client’s entitlement in a particular case. For a more detailed advice on your specific circumstances we invite you to contact our team.

For more information call Carlos Turini or to make an appointment either our Canberra or Queanbeyan office:

p: (02) 62061300 | e: Carlos.Turini@elringtons.com.au

[1] Hickey v Hickey [2003] FamCA 395.

[2] Stanford v Stanford [2012] HCA 52 (15 November 2012). In that case, the Court emphasised the importance of section 75(2) of the Family Law Act which reads: The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. The Family Court has wide discretion to adjust the proprietary rights of parties under the Family Law Act using the four-steps approach. There are some cases, however, when the Court should not disturb the parties’ proprietary rights and should not make any adjustments at all. A good example may be a short marriage or a short relationship.

[3] Bevan and Bevan [2013] FAM CAFC116

[4] The Court has a wide discretion about how to divide the parties’ superannuation entitlements. Normally, although not in all cases, the adjustment described in the example relates to the non-superannuation pool of assets. In that example, the Court is likely to divide the combined superannuation entitlements of the parties equally between them.