Can an ex-spouse claim against an inheritance received by the other spouse after separation? Naturally, you may think that an inheritance received after separation should be excluded from the rest of the parties’ pooled assets. However, the Court has to consider all of the parties’ assets which were acquired before the commencement of the relationship, during the relationship and after separation as well as the parties’ contributions (both financial and non-financial). Having considered all of the assets and the contributions, the Court has the discretion to do one of the following: Treat certain assets received after separation differently in the above determination; or Include assets acquired after separation in the asset pool for division between the parties. These issues were recently considered by the High Court and the Full Court of the Family Court of Australia. Singerson & Joans  The Husband inherited about $3,000,000.00 shortly after separation. The wife made significantly more financial and non-financial contributions as a homemaker, child-carer, and bread winner. The Family Court noted that not only the 4 years of contributions between separation and trial but also across the entire 15-year relationship should be considered. It also acknowledged the initial contributions made by the husband and his post-separation inheritance. The Court determined that the wife is entitled to 47.5% of all the property including the inheritance. The High Court declined to provide guidelines for Family Law Courts in respect of post-separation “windfalls” and supported that family court judges’ discretion be exercised in every individual set of circumstance. Holland & Holland  This case involved a 17-year marriage with two teenage children. The parties separated in 2007 and were divorced in 2012. 3.5 years after separation, the husband received an inheritance from his deceased brother worth approximately $715,000.00. The inheritance was excluded from the asset pool available for division and was regarded as a “financial resource”. On appeal, the Full Court of the Family Court of Australia held that as a matter of principal, an asset should not be excluded from being considered altogether in the overall property settlement. However, the Court stated that it may, in some cases, be appropriate to treat certain assets separately depending on the parties’ differing interests to such assets or the degree of contributions made by the parties to such assets. Calvin v McTier  This case involved an 8-year marriage with one child. 4 years after separation, the Husband received an inheritance of $430,000 from his late father. The inheritance was equated about 32% of the total asset pool which was about $1,340,000. The Husband argued that the inheritance should be excluded from the asset pool available for division as it has no connection to the parties’ marriage. However, the Court held that the inheritance be included and that the Husband made substantial financial contribution after separation because of the inheritance which was assessed to be 75% and the Wife’s as being 25%. The Court then made an adjustment of 10% in favour of the Wife taking into account the disparity of the parties’ income earning capacities. The final division was made in 65% to the Husband and 35% to the Wife. The above cases demonstrate that all of the parties’ assets must be identified before the Court can make orders for property settlement and that the Court retains discretion as to how each asset is to be treated in each case. If assets are received after separation, the Court has the discretion to place them separately from the rest of the asset pool depending on the facts of each individual case.
29 Nov 2018
When buying a home after marriage, there are many cases where the purchase is made with the support of parents. If the marriage breaks down in such a situation, how does the court treat the funds received from the parent in the distribution of property? If there is any evidence such as a loan agreement that states that a fund is required to be repaid under certain conditions, a security deed or a record of a discussion between the parties that identifies the loan, the fund received from the parent is considered as a loan. If the money received is a gift from the parent, there is no obligation to repay it, and therefore, it is very likely that the money given to a couple in the long-term marriage will be regarded as a part of the common property. Considering whether the parent's funding was a loan or a gift, when calculating the total value of the parties' shared assets and determining their respective share, the court takes into account various factors stipulated in the Family Law Act. In many cases, it is not clear whether the parent's funding was a loan or a gift, and it often gives rise to a major problem during a divorce proceeding. For example, if a couple purchased a house for $800,000 with $400,000 in funding paid by their parents and has already paid out the loan, whether $400,000 was a loan or a gift is an important point in determining the total amount of common property. This becomes a more important issue if the amount of funding received by their parents accounts for a larger proportion in the total value. Accordingly, when considering funding a child, it is necessary to hire a lawyer in advance and to make the intent of the funding clear. Otherwise, the parents may be called upon their child’s divorce proceeding as a witness or required to submit an affidavit, which causes severe stress over a long period of time. Further, such proceedings will give rise to significant legal costs. In order not to spend too much money on legal fees during a divorce proceeding, it is recommended that parties start appropriate negotiations at an early stage for the settlement, so that things do not progress to the court due to property distribution issues.
15 Oct 2018
There have been many reports of defects in new apartments in the Sydney region. To address these issues, under the Strata Schemes Management Act 2015 Part 11 it provides new obligations that property developers must follow. Under the new law, property developers are required to pay NSW Fair Trading a deposit, equal to 2% of the value of the contract exchanged with the Construction Company. Until the deposit is paid, the developer will not be able to obtain the Occupation Certificate for the apartment which is required during settlement with the purchaser. Additionally, between 15-18 months after completing the construction of the building, there is a mandatory obligation to inspect the building by an independent building inspector who has not affiliation with the developer. Should a defect be found, the Construction Company that build the building must repair any damages and the cost of such repair is covered by the bond. The new scheme will only apply in the following circumstances: Apartments with 4 floors or more; Residential or mixed residential/commercial buildings; and Construction contracts signed on or after 1 January 2018. (Apartments with less than 4 floors are covered by the Home Building Composition Fund.) The obligations imposed on property developers under this new scheme aims at detecting and repairing any defects early on, and to avoid situations whereby buyers and owners are forced to repair long-term defects which may be costly.
03 Oct 2018
Under family law, an initial step for parties in a divorce or separation who are seeking a distribution of matrimonial property, must clarify the assets owned by the parties and obtain a valuation of each asset. In the event that the parties cannot come to a mutual agreement on the division of property, a party may apply to the court for a decision. In such case, the court will base its decision on the value of the asset at the time of the trial rather than the value at the time of separation. This is because a considerable number of years may have passed from the date on which the separation began to the date of the trial, and a decision made based on the value of the asset at the time of separation may not be a valid (or fair) decision. There are many cases where one party continues to live in a house that is a shared property even after separation, and either one continues to pay the loan. The value of real estate is usually on an upward trend, and the amount of net assets will increase according to the repayment of the loan. The court will issue a judgment taking into consideration what each party contributed to improve the value, such as maintenance of the marriage property, renovation, etc. after the separation. In this regard, in order to obtain a judgment that properly reflects each party’s contribution in the final judgment of property distribution, a party who continues to pay the loan after separation and strives to improve the value of the property should clearly record the details of his/her contribution which can be submitted as evidence at trial. Also, if one party contributes to the improvement of the value of matrimonial property after separation, he/she should also obtain an historical valuation so that the court can take into consideration the degree and importance of such contribution.
20 Sep 2018
Divorce is one of the most onerous and traumatic procedures in our lives. As a result, it is often to see cases where a party to a divorce proceeding jumps on social media and talk about its disappointment or anger, which ultimately gives rise to a regret about its posting. There are a significant increase in the number of cases where posts on social media such as Instagram, Facebook and Twitter are used as evidence especially for determining eligibility or entitlements as a parent in divorce or parenting proceedings. With this in mind, circumstances where parties to the proceeding in relation to family law need to take into account are set out below: prevent derogatory comments or messages (including email or SMS) - it may give the court a negative impression that a party lacks responsibilities as a parent; be cautious about posting or posting by third party any photo which may deteriorate its own reputation (e.g. a photo showing ) – it may trigger a suspicion as to eligibility as a parent; bear in mind that the other party or third party may use your post on social media as evidence; do not post any comment on social media when you are in emotional circumstances; consider any impact on your children when they read your post; do not publish your private information; do not publish any account of any proceedings on social media – it is an offence under section 121 of the Family Law Act 1975 (Cth); The example below illustrate how a post on social media can be used in the court proceedings. Husband A sent a message to his 10 year old son, stating “I want to separate you from incompetent wife B.” after taking children from wife B without her consent. Few years later, as a proceeding was commenced, husband A posted a comment ‘What a **** joke!’ and published contents relevant to the proceeding on his Facebook page. Such posts were used as evidence to support his incapability of taking care of children due to the fact that those may have been exposed to their children. Mr C posted several defamatory statements about the court on its Facebook such as “Worst family law court system that imprisons a person due to meeting with his daughter!”. As a result, such posts were presented before the court as evidence proving lack of responsibility as a parent. A Facebook post that were posted by D who took a picture of a prisoner during a supervised visit was used to prove that she is a thoughtless mother in her proceeding.
08 Aug 2018
1. Minimum Term (Section 16) Minimum 5-year term is removed from the Act. 2. Registration of Retail Lease (Section 16) Leases for a term of more than 3 years must be lodged for registration within 3 months after the signed Lease is returned to the Landlord 3. Bank Guarantee (Section 16BA) Bank Guarantee must returned to the Tenant within 2 months after Tenant completes obligations under the Lease. 4. Mortgage Consent Fees (Section 3) The Act will be amended to specifically prohibit a Landlord from charging a Tenant expenses incurred in connection with obtaining the consent of a mortgage. 5. Demolition (Section 35) Clarifies that the protection to Tenants afforded by the Act applies to proposed demolition of the building or any part of the building. The Lease cannot be terminated by the Landlord unless the proposed demolition cannot be carried out practicably without vacant possession of the shop (Section 35(1)(a1)). Previously this position was reflected in the definition of demolition. 6. Lessor’s Disclosure Statement (Section 11) Right to compensation for lessee: If a Landlord fails to serve a complete and accurate Lessor’s Disclose Statement 7 days before the Lease is entered into, the Tenant now has the right to terminate the Lease within the first 6 months and claim compensation including the cost of its fit-out (Section 11(2A)). Disclosure of outgoings: The Tenant is now not liable to pay any outgoings unless the liability was disclosed in the Lessor’s Disclosure Statement (Section 12A). 7. Consent to Assignment (Section 41) Clarifies that the Landlord must provide an updated Lessor’s Disclosure Statement within 14 days of request (Section 41(c)). If the Landlord fails to do so, whereas previously this requirement could be ignored, now the Tenant must provide a Lessor’s Disclosure Statement completed by the Tenant to the best of the Tenant’s knowledge (but with information as to current outgoings) (Section 41(e)). A Landlord will not be able to withhold consent to assignment if a Lease was awarded by public tender and the proposed assignee fails to meet any criteria of the tender (Section 39). 8. Online Transactions Revenue from online transactions are not to be included in turnover for the purposes of determination of rent, except for transactions where goods or services are delivered or provided from or at the retail shop or where the transaction takes place while the customer is in the retail shop (section 20). The Bill will prevent the Tenant from having to provide the Landlord with information about online transactions, except for transactions where goods or services are delivered or provided from the retail premises or where the transaction takes place while the customer is in the shop (section 47). Note “online transaction” is not defined in the Bill. 9. NCAT Jurisdiction (Section 73) NCAT now has jurisdiction in relation to claims of up to $750,000.00. 10. Excluded Uses (Schedule 1A) The Bill clarifies that Retail Leases Act does not cover the following: ATMs Car parking (not being car parking provided as part of the business of a car park) Children’s ride machine Communication towers Digital display screens Display of signage (not including the use of premises from which signage is sold) Internet booth (not being an internet cafe or similar use) Private post boxes Public tables and seating Public telephone Renewable energy generation Renewable energy storage batteries Self-storage units Storage of goods for use or sale in a retail shop (not including storage on premises from which goods are sold) Storage lockers Vending machine 11. Exclusion of Market Stalls (Section 6B) Clarification that the Act does not apply to market stalls unless the market is a permanent retail market. 12. Copy of Lease Term The Tenant must be provided with an executed copy of the Lease within 3 months after the Lease is returned to the Landlord or their lawyer/agent following execution. 13. Agreement for Lease (Section 3B) The Act clarifies that the Act applies to an agreement to lease in the same way as to a Lease. 14. Act Applies to Both Proposed Tenants and Landlords (Section 3(2)) Where the Act refers to the rights and obligations of a Landlord or Tenant, it also applies to a provision regarding a proposed retail shop lease, including the proposed Tenants and proposed Landlords. 15. Retail Bond An “online retail bond service” may now be available. 16. Police Checks If the Landlord wishes to require police or security checks and clearances for persons employed or other persons working in the shop, they must include a provision for it in the Lease.
01 Jul 2017