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LAWS 2021 Family Law SP2 2019 Exam Notes CONTENTS

PART VIII FLA 1975 Property Settlement/Adjustment..................................................3 STAGE 1: Identifying and Valuing the Property......................................................................4 STAGE 2: Contributions.............................................................................................................7 STAGE 3: Future Needs............................................................................................................10 STAGE 4: Just and Equitable....................................................................................................13

Parentage and Welfare.................................................................................................15 Marriage, Nullity and Divorce......................................................................................18 Part VII of the FLA (Children)........................................................................................24 Relationship Recognition..............................................................................................35 Introduction to Family Law...........................................................................................38 Additional Issues in Property.......................................................................................43 Part A: Property Adjustment 90 Minutes (30 planning / 60 writing) Part B: Short Answer (Complete 2/4) – 30 Mins Each Question 1 is on Parentage and Welfare ◦ Parentage  Presumptions of parentage  Parentage evidence  Artificial conception  Surrogacy ◦ Family Court’s welfare jurisdiction Question 2 is on Marriage, Nullity and Divorce ◦ Marriage  Definition of marriage  Recognition of overseas marriages ◦ Nullity  Lack of capacity to marry  Absence of real consent  Duress, fraud, mistake, mental incapacity ◦ Divorce  Separation  Duration of separation

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 Separation under the one roof  Reasonable likelihood of cohabitation resuming Divorce orders Arrangements for children Rescission

Question 3 is on Part VII of the FLA (Decision Making for Children)  Scope and key features  Objects and principles  Best interests of the child  Parental responsibility  Parenting orders  Determination of disputes involving children  Presumption of equal shared parental responsibility  Equal time and substantial and significant time  Determining what is in a child’s best interests (s60CC factors)  Special issues concerning children  The Independent Children’s Lawyer  Relocation  International child abduction  Orders that can be made Question 4 is on Relationship Recognition  De facto relationships and the FLA  Other systems for formalisation of non-marriage relationships  Policy issues re legal recognition and equal treatment of de facto relationships    

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Involves contentious or theoretical legal or policy issues Read the question carefully- ensure you know what is being asked Plan your answer before beginning Structure of answer ◦ Introduce topic generally, including explaining the relevant law ◦ Present argument in logical way ◦ Conclude

PART VIII FLA 1975 Property Settlement/Adjustment Time Limits and Leave to Apply Out of Time  Must apply for property settlement within 12 months of obtaining a divorce: s44(3)  Parties who are out of time must apply for leave of the court o Court will grant leave only if satisfied that hardship would be caused to a party or a child if leave is not granted: s44(4) Effect of Death of a Party  Proceedings can be continued by or against the estate if one party dies: s 79(8)  Orders made can be enforced by or against the estate of a party: s 79(1A) Finality Principle  The court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties and avoid further proceedings: s 81 o Not a firm requirement, just an endeavour  May be circumstances where ongoing financial relationship is unavoidable to achieve just and equitable result Court’s power in relation to property - Discretion  Declaration of interests (ownership) or rights in property: s 78  Alteration of property interests: s 79 1. Court may alter property interests of parties with an order as it sees fit 2. Must be just and equitable 4. Court will take into account contributions (financial, non-financial, homemaker/parent), effect of order on earning capacity, s75(2) matters (‘needs’ factors), child support liability The Four-Stage Approach (Hickey) 1. Court identifies and values the property, liabilities and financial resources of the parties at the date of the hearing; 2. Court assesses parties’ respective contributions within the meaning of s79(4)(a)(b) and (c) and determines entitlements as a percentage of the net value of the property 3. Court assesses matters in s79(4)(d)(e)(f) and (g) including matters in s75(2) (the ‘needs’ factors) and determines the adjustment to be made to the percentage split in stage 2; and 4. The court considers the effect of those findings and determines what order is just and equitable in all the circumstances Just and Equitable: Stanford (2012)  There is no legal right to property settlement 1. Court must identify parties’ existing legal and equitable interests. Is it just and equitable to make an adjustment? 2. Must not assume that parties’ rights and interests in the property are different from what already exists. 3. Don’t assume one party has a right to adjustment  Court must have a good reason for interfering with parties’ existing legal and equitable interests and their assumptions and agreements about property interests during their marriage  Where parties have separated, generally property adjustment will be just and equitable, because: 1. No longer common use of property 2. Assumptions have ended 3

 Where parties have not separated, or have separated involuntarily, property adjustment may not be necessary  Inquiry of what is ‘just and equitable’ must be answered in circumstances of each case STAGE 1: Identifying and Valuing the Property  Court may make orders re property of the parties to the marriage or either of them: s79(1)  Definition of property ◦ Property to which one or both parties are entitled, whether in possession or reversion: s4(1) ◦ Definition is ‘indicative and descriptive of every possible interest which the party can have’: Duff ◦ Extends to assets owned jointly or individually, or jointly with another person ◦ Extends to assets acquired before the relationship and after separation What property is included? Assets Acquired Post-Separation  Are included in the pool  Time of acquisition will be considered in stage 2 (contributions)  However, court will only determine that the asset was wholly contributed by one party where the other has made no direct or indirect contribution to it (including parenting contribution): Jacobsen Debts  Liabilities are included in the asset pool (as property of negative value)  House is the current value of the house; mortgage is debt minus the value of the house  Most common – mortgages, loans  Will not be included if ‘vague or uncertain, unlikely to be enforced or incurred unreasonably’: Biltoft  E.g. a loan from a parent  Court has acknowledged that the right of third-party creditors must be considered  E.g. if the parent would suffer by not getting the money back of their loan/they expected repayment Assets  All assets of the parties jointly or severally will be included  No distinction between matrimonial and business assets: Napthali – even if only one party is owner of the business  Even assets that cannot be transferred/reassigned will be included but adjustment will ensure asset is retained by the party who owns it: Best Trusts and Companies  Trust or company created for the purpose of distributing wealth within a family and minimizing taxation will be included  Court will examine structure of entity to determine whether party has effective control to the extent it can be their ‘property’  Even if the trust is for their children/kids are beneficiaries, the parents still have control therefore it is an alter-ego and it is their property  But the parties can agree to leave it afterwards, it is just taken into account  Do they make the decisions over the trust? etc.  Entities that are ‘alter-egos’ of a party will be included as property  If entity is not ‘property’ of parties but financial advantage is derived, court will consider it a ‘financial resource’ in stage 3 (needs) 4

 If only a beneficiary to a trust  Shares in a company are property  Dividends are financial resource not asset Notional Property – ‘add backs’  Property that existed at time of separation but has been spent recklessly, negligently or wantonly may be treated as a ‘premature distribution of the asset pool and notionally added back as an asset of the party who has had the sole benefit’: Townshend  To justify an add back, Court must assess reasonableness of the expenditure: Omacini  Legal funds/legal costs will normally be added back: Chom and Hopkins  Even where not added back, wasted expenditure can be taken into account in Stage 2 (contributions) as a negative contribution to the asset pool (and notionally add it back into the asset pool)  E.g. gambling addiction resulting in $50k debt after separation Other assets  Choses in action ◦ Included in property pool  Bare right to sue is not property: Zorbas  Financial resource ◦ Where an asset is not ‘property’ but has value to the parties it is considered a ‘financial resource’ ◦ Not included in property pool ◦ Taken into account in Stage 3 (needs) (s75(2)(b)) ◦ Examples- assets held by companies and trusts which are not ‘alter-egos’ ◦ Until 2002 superannuation was treated as a ‘financial resource’ and not property Transactions to defeat claims s106B  In proceedings under this Act, the court may set aside or restrain the making of any instrument or disposition by… a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order  Court can reverse transaction with a third party and put the asset back in the pool  No requirement of intention to defeat a claim  Court must have regard to and make orders to protect interests of bona fide third parties  BASICALLY THE COURT UNDOING DODGY TRANSACTIONS Valuing assets  Date of valuation ◦ Valued at date of hearing, not separation: Warne ◦ Court has discretion to use a different date: Omacini ◦ Note ALRC recommendation (2019) that date for valuation be changed to date of separation  Process for determining value ◦ Agreement of parties on market valuations (rr12.02 and 12.05 Family Law Rules 2004) ◦ Appointment of single expert if can’t agree (rr15.44 and 15.45) ◦ Court’s permission to adduce evidence from expert witness (rr15.49 and 15.51) ◦ Court cannot take average of two opinions - must determine value having regard to evidence and principle ◦ Court can request further evidence of valuation (Phillips) but must give reasons for rejecting opinions of parties’ experts 5

Global vs Asset by Asset Approach  Court has discretion to treat all assets as one big pool (global approach) or to look at each individual asset separately (asset by asset approach)  No overriding principle as to which is more appropriate: Norbis  Global approach more common, particularly in the context of long marriages  Asset by asset may be appropriate where: ◦ Short marriage ◦ Finances kept separate: McMahon ◦ Long time since separation: Zalewski Duty to make full and frank disclosure  Ch 13 Family Law Rules 2004  Court may make adverse findings against party who does not fully disclose (Weir)  If suspects hiding or undervaluing of assets, court can do lots of things  E.g artificially inflating assets  Failure to disclose may be grounds for later setting aside orders by reason of miscarriage of justice by the suppression of evidence (s79A) SUPERANNUATION  FLA Part VIIIB especially ss90MS, 90MT, 90MU  Allows court to treat superannuation as property and make orders to deal with the interest (s90MS)  Assets of superannuation fund held by Trustee in terms of trust deed  Member entitlement vests upon meeting qualifying criteria (retirement, incapacity)  Particular concern in family law cases (potential loss of future security)  Gendered aspects of loss of superannuation upon separation  Particularly important for women – live longer  Problem for women is that superannuation scheme is geared towards working pattern of men  Court may make orders to split or flag the interests  Superannuation ‘treated’ as property for purposes definition of ‘matrimonial cause’ s4  Note that superannuation is not property but can be ‘treated as’ property  Coghlan (2005) ‘another species of asset’ How Superannuation is to be Treated in Property Settlement: Coghlan ‘Another species of asset’  Preferred approach is to devise two pools of property 1. Actual property of the parties 2. Superannuation interests  Apply four stage-test independently to each pool  Consider length of membership v relationship, actual contributions made at relevant times, other factors peculiar to the interest  Must value superannuation – super pool must be actually valued by someone Why Deal with Superannuation Separately? (Coghlan)  Contributions, direct and indirect, to super can be given proper recognition  ‘Real nature’ of super interest can be taken into account ◦ Fund’s face value may not represent future value ◦ Value at date of receipt is unknown ◦ Super earned before relationship vs during relationship  May be occasions where court can consider all assets in one pool: ◦ Agreement 6

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Super has already vested Value of super is small re other assets Other features

Orders to Adjust Super  Splitting orders s90MT – actually splits the super and transfers the money between parties ◦ Order for up to 100% of member’s entitlement to be paid to non-member spouse ◦ Orders necessary to enforce splitting order ◦ Binding on third party trustee ◦ Non-members access will depend on rules of fund  Flagging orders s90MU ◦ Injunction preventing trustee from paying out ◦ Requires trustee to notify court when interest becomes payable ◦ Appropriate if interest soon to vest ◦ Non-member spouse can apply for flag-lifting order, court then makes splitting order  Note ALRC recommendation that FLA’s approach to superannuation be simplified STAGE 2: Contributions Court assesses parties’ respective contributions within the meaning of s79(4)(a)(b) and (c) and determines entitlements as a percentage of the net value of the property.  Court must take into account parties’ respective contributions, financial and non-financial, to the property and to the welfare of the family (nothing to say the weight that should be given to each one)  Note the significance of asset by asset or global approach  Legislation does not indicate importance of each type of contribution ◦ Pre-marital contributions can be considered ( Olliver) – (when they were already in relationship) ◦ Post-separation contributions will be considered  Lalor - payment of rent  Gould - payment of mortgages and loans  Ferraro - care of children; husband’s use of wife’s share in property  Farmer v Bramley - lottery win  Court’s discretion wide but not unfettered ◦ Must give reasons: Gould ◦ Successful appeals can be based on  Failure to give reasons  Failure to take account of relevant contributions  Mathematical errors in calculating contributions Financial contributions s79(4)(a) The court shall consider: - The financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them Includes salary, initial contributions, windfall - lottery win or inheritance that has come in (not just prospective), shares etc.

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Court does not embark on precisely mathematical exercise  Financial contributions may be the predominant consideration in short marriages – up to 5 years-ish: Jackson  Will be eroded by time and other party’s contributions in long marriages: Bremner o e.g. cooking, looking after kids etc  Substantial initial contributions must be properly weighed with all other relevant contributions: Pierce o Also erodes over very long marriage – 30 years marriage won’t really look at this  Court should have regard to the use to which initiating contribution is put- ‘springboard argument’ o E.g. having a $600k house before marriage which is then used as the family home then money that would be used for housing can be used for other things, or use as investment property to borrow money to be able to buy another home which they wouldn’t have been able to do without this – wealth has been increased overall in which this would not have occurred otherwise  Erosion over time vs springboard argument must be considered  Contributions to superannuation are relevant here (note usually separate pool of property) Non-financial contributions s79(4)(b)  The contribution (other than financial contribution) made directly or indirectly… to the acquisition, conservation or improvement of the property…  Includes unpaid labour – manual work that improves the value of the property  Does not include homemaker/parent contribution  Case illustrations ◦ Zappacosta- wife established orchard ◦ Whiteley – Contribution to success in business  Husband was the painter, but she argued that she was the critic of his paintings and also his muse which inspired the paintings (could also argue that she talked to customers, cleaned paintbrushes etc.) ◦ Zubcic – Homemaker contribution which indirectly contributed to property  Man got injured and got a damages pay out to get a nurse, but wife nursed his husband after injury instead of paying a carer so they saved money – she indirectly contributed to their wealth Contributions to the welfare of the family s79(4)(c)  The contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker and parent Court’s treatment of homemaker/parent contribution  Prior to 1984 ◦ Where marriage reasonably long and assets built up by joint efforts, starting point is equal division of assets ◦ Subject to adjustment for ‘needs’ factors (stage 3) ◦ ‘housewife’ role equivalent to ‘breadwinner’ role (Wardman and Hudson)  Mallett (1984) ◦ No presumption of equality ◦ Court must evaluate contributions ◦ Now difficult to advise clients to contributions – if there is no starting point of equality then it is hard to weigh up respective contributions  Current Approach ◦ Emphasis on equality and partnership concepts ◦ Ferraro 8

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No presumption of starting point of equality, but court need not make detailed analysis of parties’ roles if within ‘normal range’ (e.g. don’t need to say how good the husband was at making money, how good the mum was at being a housewife)

Brown  Detailed evaluation and comparison difficult because no ‘level playing field’ – financial vs nonfinancial ◦ McLay  Past cases are not prescriptive  Court must exercise discretion in terms of legislation and with assistance from past cases  Exact evaluation of parties’ contributions is unnecessary if within ‘normal range’  Does these herald a return to the pre-Mallett starting point of equality?  Contributions can be satisfied from post-separation acquisitions but will be relevant for exercise of discretion ◦ Farmer v Bramley – lottery win not excluded from division, very little other money to divide other than that winning money – cannot argue that the wife didn’t contribute to winning the lottery win, still loo...