Sunday, 9 October 2016

Court orders wife to refund over $200k in spousal maintenance


A  case last year in the Family Court of Australia, which had the effect of requiring the wife to repay the husband over $215,000 in spousal maintenance previously paid has demonstrated that it is possible for substantial interim spousal maintenance orders to be discharged- and to be backdated to when the order was first made.

How spousal maintenance orders are made

In order to establish that a court ought to make a spousal maintenance order, an applicant needs to show first that they cannot meet their own reasonable needs, and then that their spouse or former spouse has the capacity to do so.

The wife’s capacity

The case turned on whether the wife had the capacity to meet her own needs. At the time of the first hearing in December 2013, the wife made full disclosure of her financial circumstances, including what she knew of her interest in her late father’s estate. Despite her father dying four years before, there had not been a grant of probate.  She was not an executor, and held a minority interest in various companies, known as the V Group. The V Group was controlled by her brothers. It seems that she did not know what her entitlement was.

The wife was a health care professional who had the care of the parties’ children.
Her income was $300 per week from sessional work. Her late father’s estate provided for her to have two new luxury vehicles at any one time: a convertible and an SUV.

The husband’s capacity

The husband had the capacity to pay. The husband owned property on his account worth $75 million and debts of $54 million. The uncontested evidence was that he had income of $4 million a year. The wife was a health care professional who had the care of the parties’ children.

The spousal maintenance order

The interim spousal maintenance order was made at the rate of $130,000 a year the equivalent to a pre-tax income of $200,000, to continue until the property settlement application had been heard at trial. This payment was on top of the husband paying for the wife’s rates, mortgage and rates, taxes, utilities (gas, electricity) and school fees. In total, the husband was required to pay at the rate of $336,000 a year for these obligations.

The first hearing

The interim order was made in December 2013. Ten days later, the husband sought to appeal the decision.

The second hearing

As the appeal had not yet been heard, seven months later, in June 2014 the husband sought to have the initial spousal maintenance order discharged. He was unsuccessful. The husband also appealed that decision.

The husband argued at the second hearing that there was now information available to show that the wife had received, or would receive, shares from the estate of her late father in the approximate sum of $7.2 million and she was able to support herself.

The wife submitted “that she had fully disclosed her interest in the family companies based upon the information she had been given” and there was no clear or reliable evidence to support the husband’s assertion that the value of the shares from the estate of her late father were valued at $7.2 million. The trial judge noted that there was still “considerable dispute about what interest, if any, the wife [had] in her late father’s estate”.

The appeal hearing

The appellate court noted that the wife’s father died in 2009 and that probate had not yet been sought. The court did not accept the husband’s claim that the wife had failed to disclose these “assets” and, indeed, it was beyond doubt that the wife revealed these assets and interests in the first hearing before the trial judge. In the wife’s statement of financial circumstances filed in 2013, she deposed to having shares in various companies, which she named, and an interest in the estate of her late father, but she did not know the value of either. Further, in her affidavit filed the same day, the wife set out all that she knew about her shares and her interest in her late father’s estate.

New evidence

The wife’s father in his will expressed the wish that V Group provide the wife with $150,000 per annum, net of income tax (or $20,000 more a year than the husband was obliged by the spousal maintenance order to pay the wife). There was no evidence that the wife requested this payment from her brothers, or that any request that she had made for her father’s wish to be carried out had been rejected. Importantly, there was no suggestion that there would be an objection by at least one of her brothers to such a voluntary payment.

The wife had also obtained a personal overdraft of $1 million, apparently to meet her legal expenses and her living expenses.


Discharge of the spousal maintenance order
A spousal maintenance order may be discharged “if there is any just cause for so doing”. The court considered that there was now evidence before the court that demonstrated that the wife was able to support herself adequately. The inference from the evidence was that, if requested, the wife would receive that benefit. The wife had a good relationship with her brothers, it was a wish expressed in the will of their late father and the brothers provided the wife with late models of luxury motor vehicles, possibly through the V Group (although that was unclear on the evidence).
The $1 million overdraft was “a two edged sword though, in that any amount that she draws down from that overdraft immediately becomes a liability that she must repay.”

The court ordered the discharge of the spousal maintenance order. The court noted a statutory provision permitted a court to express an order discharging a spousal maintenance order “to be retrospective to such date as the court considers appropriate”. The court acknowledged that that will require the wife to reimburse the husband for the payments made by him, but she could pursue the payment of $150,000 per year, and she had the ability to draw down her overdraft of $1 million.

The decision is reported as Hall and Hall [2015] FamCAFC 154. http://www.austlii.edu.au/au/cases/cth/FamCAFC/2015/154.html

Sunday, 14 August 2016

Launch of Dangerous Liaisons

On Thursday night, I had the privilege of speaking at the launch of Marina Bakker's new book Dangerous Liaisons. The launch was at Mary Ryan's bookshop in Brisbane. The book is a great how to guide about how to avoid falling into relationships with sociopaths and psychopaths, who are often very difficult to pick. And once in a relationship with one, it can be very hard to get out.

Before I spoke, Marina was interviewed by fellow family lawyer, and founder of Our Children Australia Lorrie Brook (l).

When I spoke, I praised the book, including its key message: prevention is better than cure. I spoke about how I had fought domestic violence for over 30 years, and I gave a story of hope. Many years ago I acted for a client who had to be rescued from her farmhouse by police. If they had not acted, it is likely that she would have been killed by her husband.

Some months after she had escaped, in the midst of a bitter Family Court fight, I happened to call my client to see how she was doing. I had expected her to tell me that life was awful. After she split up, she fell on financial hard times- living in outer suburbs, with few qualifications, no car, little public transport, shunned by her church for leaving her husband and in an ugly, ugly court case.

Instead my client told me that life was grand. "I'm free!" She was not looking at death every day. My client had managed to get a job, was able to go to sleep at night, had joined a new church, had new friends. Her mystery kidney disease, attributed by doctors to stress, had gone away. And she had a new interest. My client, who was about 60, had taken up of all things waterskiing! I would never have guessed, and would have never have known, except I asked.

The point is that life goes on after a relationship ends. Life happens only once. Every day is precious. No longer held back by the fear of violence, my client was able to thrive and captured the beauty of life every day. Her story reflected one of the key messages of Dangerous Liaisons- we have to be careful who we form relationships with - as these emotional vampires can suck our life force out of us.









The three basic rules of advocacy- taught to me by a man on Monday

Last week I was thankful for a man who did not know when to shut up. This may sound ironic coming from a lawyer, especially a lawyer who blogs, presents and writes articles as I do, but one of the essential features of being a good advocate is knowing when to shut up.

After all when you are in court usually you are seeking to persuade one person- the judge. Advocates have to tread a fine line between forceful advocacy for their clients, and not going too far.

Those who act for themselves usually have not been advocates, and simply are not objective, and often focus on the wrong things. Sometimes they are even worse, bordering on the abusive of the judge. As the old adage goes- a person who acts for themselves has a fool for a client.

Be that as it may, often when people do not have any money, they act for themselves. If they are going to do so, then they should listen as to what not to do.

The three lessons that can be learnt from the man who did not know when to shut up are:

Number three lesson

Turn up at court. 

His first sin was not to turn up at court. This was not the first time it had happened. The previous occasion after he had not turned up, the man had been ordered by the judge to set out in an affidavit why he had not appeared. His excuse was akin to the dog ate his homework: he forgot, oh and his lawyer did not send the letter through confirming the date. And he was the applicant, asking the court to be able to spend time with his children.

Number two lesson

When the judge speaks- stop talking.

His second sin was to keep talking when the judge was talking. Several times her Honour had to politely intervene, and point out to him that she had telephoned him to get an explanation about why he was not at court, and tried to give him an explanation that I was seeking orders in default of his participation. And his reaction to that courtesy? To keep talking over the top of the judge- to then be told repeatedly by her Honour to the effect that it was her turn to speak.

Number one lesson

Don't abuse the judge

So after x occasions of the judge telling the man not to talk over the top of her, he raved, and raved and raved on, finishing with words I had never heard in a courtroom directed at a judge before: "You can go and @#*& yourself". (At which point almost everyone in the courtroom gasped.)

Her Honour's reaction was not to order a warrant issue for his arrest for contempt, but merely these statements: "Terminate the call. [Pause] Now, Mr Page, what orders are you seeking?"

Shortly after that, with assistance from the independent children's lawyer, my client obtained the orders she was seeking from the court in the absence of the father. And in the process saved a lot of money and heartache by avoiding a three day trial.

Thank you! His actions had ended the third of three cases involving that man and my client. Hooray, what a relief!

Monday, 18 July 2016

The real faces of domestic violence

I saw today a very powerful article by ABC showing the faces of Australian women killed in 2015 as a result of domestic violence. The faces of these women put faces on the statistics. These women were real, and now are gone, never to return. When we think about the impact of domestic violence on our society and on our children, never forget these women and women like them.

The article, and the haunting portraits are here.

Sunday, 17 July 2016

Pauline Hanson's family law policy

I have set out below Pauline Hanson's family law policies. It seems a policy written by men who are bitter about their divorce experience- for men bitter about their divorce experience. One of the policies is to abolish the Family Law Courts and replace it with a Tribunal, to be appointed with people who are non-lawyers and non-judges, and presumably not pesky social workers either.

 During the Howard era, a Parliamentary committee recommended the abolition of the Family Court of Australia. Instead, the Howard government boosted funding for mediation enormously- to such a degree the amount spent by the taxpayer on mediation was greater than that of the courts, and set up what is now the Federal Circuit Court of Australia.

One of the views about why the court was favoured over a tribunal was that it was considered that a court was much more likely to protect women and children who are subject to or exposed to violence and abuse. After all, in a tribunal, there may not be any right to representation- which will fall particularly hard on women who have been the subject of domestic violence.

Presumably when One Nation talks of the Family Law Court, it is talking of the Family Court of Australia, the Federal Circuit Court of Australia and possibly funding at least for the Family Court of Western Australia.

I must be missing something. The policy calls for abolition of the Family Law Court- but then says that protracted cases or incidents involving violence or abuse are to be dealt with in the respective courts. Which courts? The tribunal? Or State courts? Or the Federal Court of Australia? Given that an estimated 80% of matters before the Family Court of Australia and the Federal Circuit Court of Australia involve allegations of violence and abuse, what happens with these cases?

Another policy is that if you owned the property before hand, you get to keep it but otherwise it's a 50/50 split. Great for men- bad for women. It hardly seems a fair way of resolving matters.

Just as the policy of three strikes and you're out- if you deny the other parent three access visits- look out you're before the tribunal to look at moving the kids over to your ex. Without ever condoning breaches of court orders- good bye best interests of children. Punitive policies trump the rights of the child, apparently.

And here are the policies:


FAMILY LAW COURTS: CHILD SUPPORT SCHEME

Pauline Hanson’s One Nation believes that safe, secure and happy societies require as a guiding principle, strong functional family units. One Nation considers governments should recognise this basic principle and adopt responses that are aimed at long term family stability. One Nation believes that until a fair and just system is found for both parties, we will see the continual rise of domestic violence and suicide and murders associated with custody battles.
The following principles will be adopted by One Nation to rectify unjust applications from the Family Law Court and Child Support Agency.
  • One Nation supports mediation.
  • The Family Law Court will be abolished and replaced with a Family Tribunal.
  • The Family Tribunal will consist of people from mainstream Australia. Respected members from local community groups encompassing health, social and community interests groups will be invited to participate.
  • The functions and operation of the Child Support Agency will be reviewed and extensive community consultation will occur to develop appropriate guidelines for operations.
  • The punitive maintenance regime will be overhauled as a matter of urgency – key factors in this review include:
    1. A formula that recognises the new cost of maintaining two households.
    2. A pre–determined formula for non-custodial parents that in which additional incomes for overtime or a second job do not cause maintenance payments to increase.
    3. Recognition that a child’s standard of living following divorce cannot be maintained at it’s pre-divorce level.
    4. A formula based on after tax income not before tax income.
    5. New families and their needs to be recognised in maintenance schedules.
    6. A formula that recognises the number of children, their ages and individual requirements.
    7. Property owned prior to the relationship will remain the possession of the individual. Settlements will be based on a 50 / 50 split between partners.
    8. Recipients of Sole Supporting Parents (SSP) benefits will require counselling and verification of a family breakdown. When the youngest child reaches school age the SSP will be required to obtain work based on job availability, opportunities and qualifications.
  • Protracted settlements or incidents involving violence or abuse will be dealt with in the respective courts. Both parties will be entitled to legal aid and the unsuccessful party will pay the costs. Perjury charges will be enforced in court.
  • Joint custody is the option of choice for ONE Nation. It gives recognition to the vital role both parents have in relationships with their children. Joint custody can provide some stability in an environment that is otherwise turbulent for children.
  • Ideally the same case managers will work with families from entry to exit. Denied access will be referred to the case manager for immediate investigation. Three denied access visits will result in the non-custodial parent and custodial parent facing the tribunal to discuss shifting custodial arrangements.
  • Family centres will be developed and these centres will manage the family tribunals and associated support services including counselling, life style management, parenting plans, preparation with self representation and advocacy support. The family tribunals will be able to conduct a country circuit.
  • National Forums will be organised throughout Australia to identify family needs and identify community solutions that will assist in strengthening and maintaining the family unit. Responses to the forum will be pro-active and urgently address legislative inadequacies.

Fifteen tips on how to stay sane during property settlement

For over thirty years, twenty as an accredited family law specialist, I have assisted countless clients in property settlements. Here are my fifteen tips on how to stay sane during property settlement

Tip 1: remember your children


It may sound dumb- because after all you are thinking about a property settlement, and things are fixed with your kids, right? But it is essential at all times to focus on your kids first while also thinking about or actioning a property settlement. To do otherwise, means you could be failing in your primary duty- as your children's parent. Fighting between parents can and does impact on children even when not about them.

Some years ago I gave advice to a client that he would not have to repay a loan to his former parents in law because the loan was drafted in such a way that it was outside the limitations period: they could not sue him for repayment of the loan. I warned him that by taking this technical legal point, that it might poison the well, particularly with his children. Sensing that he would save tens of thousands of dollars, my client instructed me to take the limitation point.

Some months later my client came back to me and said that his children were not speaking to him. They were adults. I asked why. The answer- because he had taken the limitation point, they were disgusted that he would not be repaying his former parents-in-law, the children's grandparents. When he asked what he could do, I reminded him of my earlier advice. I said that he could drop the point, or could nominate a lower figure, so that at least the pain of his former parents-in-law would be eased. He refused to do so- and then wondered why his children weren't speaking to him.

Tip 2: drop the anger


I can't emphasise this enough. Once it's over, it's over. Let the anger go. When it comes to property settlement, all anger does is fuel the fires- and lead to at times a HUGE increase in cost and delay. Anger leads to hate. Hate leads to bitterness. Bitterness leads to destruction.

I remember many years ago when I had two complex property settlements side by side. Each involved a husband who came into the marriage with multiple properties and businesses. Each were tough cases. In each case the husband represented himself, and I represented the wife. In one case, after particularly hardnosed negotiations, we settled it. After getting barrister's advice, real estate valuations plus an accountant's valuations, my client was out of pocket $10,000. In the other case, with very similar facts, my client spent $300,000! The difference-  the husband in the first case was realistic, but the husband in the second case decided to put every possible roadblock in place (including a series of lawyers from time to time) to try and pressure my client to come back. He threatened her. He threatened to kill me. I ended up on the protection order. The domestic violence case ran for 7 days, still a Queensland record (the usual domestic violence trial runs half a day to a day). We had 30 + appearances in the Family Court BEFORE a 9 day trial- then a stay application and an appeal. I had to move home. We ultimately had appearances in four courts (Family Court , two separate Magistrates Courts, and the Federal Court). And the difference- the attitude of the husbands- one of whom was a hardnosed businessman who engaged in realistic negotiations- and the other a hardnosed businessman who used his anger that his wife had dared leave him to result in a scorched earth policy. If he had been sensible, and not angry, he could saved each of the parties an enormous sum of money and years before the courts.

For the same reason, your lawyer's role should be to represent your interests and not your anger. Doing the former will speed up your matter, and decrease your costs. The latter will increase your costs, slow the matter down, and put you at risk of having a costs order made against you.

Tip 3: get the best legal advice you can afford


Getting the best advice that you can afford means that a lawyer hopefully with lots of experience will be able to head you in the right direction, not tilting at windmills, and will be able to give you pointers as to what to look out for.

Funnily enough, it's usually helpful when your ex does the same, and gets legal advice from a lawyer who knows what they're doing. Your ex should then realise his or her dreams of world domination, or at least trying to punish you for leaving, are probably not worth the effort. Usually the more expensive lawyer your ex gets, the higher the chances of settlement.

Ask around as to who is good. An accredited family law specialist is a good starting point. Contact the Law Society in your State for a referral.

Tip 4: listen to your lawyer!


It may make for uncomfortable listening, but it is important to heed the advice of your lawyer. It could save you big bucks and lots of heartache. More importantly, if you do decide to tilt at windmills, it'll almost certainly impact on your kids. Your lawyer's role is primarily to give you objective legal advice- not be your best friend, nor your counsellor.

Tip 5: have a support network


Separating is one of the hardest things to do - EVER- and it is essential that you have a support network. If you don't have one- get one. Join a club or a church- meet new people. Friends and family can help you get through the crisis quicker, and help you remain focussed.

Tip 6: get a counsellor


I can't emphasise this enough. If you are about to enter into the most far reaching financial decision of your life, do so with a clear head.

Tip 7: get financial advice


Your lawyer is not allowed to give you financial advice. That is what financial planners do. I have found it is very helpful for clients to be part of a team working collaboratively for the client- so the client also gets financial advice, and can therefore make informed decisions about she or he might do depending on how the split occurs.

Tip 8: think positively


It is easy to catastrophise - and think that your whole world is going to come crashing down on you. Most of the time that doesn't happen. You wake up the following day! Take each day at a time. Be kind to yourself. While it may seem hard to think positively in such a period of gloom, being positive (and let's be clear, I mean being realistic) can make all the difference.

Tip 9: get fit


Having a fitness regime will help you through the difficulties. Endorphins and oxygen kick in when you exercise. The brain is emptied of its rubbish and allowed to function clearly again. You feel stronger and more positive about the world. Chances are, there will be less risk of wallowing in depression if you are fit.

Tip 10: come prepared!


One of the essential steps in sorting out a property settlement is working out the balance sheet. What do the two of you own? Who owns what? How much is it worth? Is there a defined benefit superannuation fund? Are there companies or trusts?

And to make things even more complex, lawyers will want to know - what was everything worth when the two of you got together- and if you have been separated for a while- what is everything worth now, compared to when you split up.

If there is going to be a dispute about who contributed what and when, get as much documentation as you can to show in an objective sense who paid what and when, or how much something was worth back then.

For tips about how to write up a balance sheet- see my post: the 8 steps on to write up a balance sheet.

If you are going to a mediation, or having negotiations with the other side,  prepare for each step. A client who is switched on can help guide their lawyer in their instructions- and can save huge amounts of time on the lawyer's part.

Tip 11: negotiate, negotiate, negotiate!


Whether talking to your ex direct, or through lawyers, or outside the court room, or in mediation- chances are you will be negotiating on the way through- and again, and again, and again. Sometimes clients put all their eggs in one basket- for example, they focus on the mediation to the exclusion of everything else- for the trial or for mediation. Better to think that what you are engaged in with your ex is a continuum of negotiations and process until it is over. Be realistic, but assertive!

The range of property settlement is that - a range- and what one judge might do is different to what another might do- even in similar circumstances. Many years ago, I took part in an exercise when lawyers were asked to assess the range on property settlements. Of the 60 lawyers in the room, spanning in experience from old practitioners to green newbies, there was heated disagreement about many of the exercises- and a range of 15%. For example in one case a lawyer was adamant that one party would get no more than 55%, and another lawyer was adamant that the same party would get 70%!

If your lawyer tells you that the percentage will be precisely x%, for example 45%, and not a range- beware, beware, beware. It is rarely thus.

Tip 12: focus on costs


If you are lucky, and you are smart, you could have a property settlement done and dusted for under $4,000. If you are unlucky, it could cost you a lot more.

A colleague of mine said many years ago that many of his clients when told of the range of likely property settlements and the range of costs would invariably hear the high end of the range for property settlements and the low end of the range for costs!

Work out in percentage terms in your matter what the likely costs outcome might be. If your lawyer says that you and your ex are 10% apart- and you have a net pool of $400,000- well, that's $40,000. And if your lawyer says that it is going to cost you $20,000, there's 5%, or half the difference.

Tip 13: prepare for death

It is important to have peace of mind to make sure that if something goes wrong, your children have been properly provided for.

Death and taxes, as Ben Franklin said, are inevitable. You may be unlucky and die before your property settlement is over. Instead of leaving a mess for others (and potentially cutting your kids out of the will), make sure you have an up to date will, and consider other basics: severing any joint tenancy and nominating beneficiaries for your superannuation and life insurance. Talk to your financial planner about these as well as getting legal advice. Accidents and illnesses happen.

When I was young and green, I had a client who was seeking 60% of the property. Aside from a few odds and sods, it was ALL owned by her husband. He was a general good for nothing who had made a lot of money. One Friday afternoon, the day before court (as court was on the Monday morning) the four of us- my client, her ex, his lawyer and me- found ourselves around a table trying to cut a deal. It didn't work- and didn't go down well with me or my client when I asked the husband: "Who owns the 50 foot boat?" He responded: "A man in Sydney." I might have been green, but I could smell a liar way back then. We didn't settle. I made arrangements to meet my client at court on Monday morning.

Instead, on Monday morning my client called me and said she was not coming to court. Being young and green, I yelled at her: "You have to come to court now!" She then told me that her ex had died on Saturday on THAT boat, which incidentally he owned, and that he hadn't changed his will, so she was executor and sole beneficiary. At that point my client was effectively suing herself in the Family Court. While she was sad that he had died, she was also very happy that instead of getting, at most, 60% of the property, she was now getting 100%, because he hadn't changed his will!

Tip 14: avoid court


Only mad people and lawyers like court. It is best to avoid at all costs. The outcome is uncertain, and how long it takes is unknown- but as reports have come in over the last year- getting worse. You might be told that you have two years to trial, and possibly another year after that for judgment.

Having said all that- court is the only place where someone can order your ex to do something. Negotiations and mediation cannot. It is the option of last resort, but sometimes painful though it is, you may have little choice but to go there.

Tip 15: formalise the deal


If you don't formalise the deal, you may end up with a liability to pay  stamp duty, withholding tax,  capital gain tax or a potential future claim from your ex. Formalise! Formalise! Formalise! This will normally be by way of consent orders (orders made by a court in which the parties have consented to being made) or a binding financial agreement, and sometimes by both. Each will depend on your case's unique characteristics.

The 8 steps to write up a balance sheet

One of the things that I learnt from 30+ years of helping clients with property settlements (20 of which as an accredited family law specialist) is that working out the property pool is one of the most vital. Knowing what your cake is and its size is essential before it is cut up.

I have lost count the number of times when other lawyers haven't focussed on what is the pool - and as a result a dispute at times has occurred which was entirely avoidable, while that lawyer comes up to speed.

Because of the need to know what the pool is, I always ask my clients before the first appointment to prepare a balance sheet and bring it in. Here are my tips about how to write it up.

Step 1: list all the property

List out all the property owned by each of you. Put beside each item who owns what- and then how much that property is worth.

I like to put under each item the debt for that item. For example, the husband and wife might own a house together. I will list out the address, who owns it, and the estimated value. I will then put as the next item who the mortgage is to, for example, Commonwealth Bank, and how much is owned- and them come to a net figure for that asset.

Step 2: total all the property

This then gives you the total gross property.

Step 3: list all the liabilities

Now list out the liabilities in the same way . Don't double count! If you have put the mortgage and the car loan, for example, in the list of assets, don't put them in here as well.

Step 4: total the liabilities

Step 5: subtract the liabilities from the gross assets

This will give you the net assets. Put this figure down.

Step 6: list the superannuation


In the same way, list the superannuation you believe each of you own.

Step 7: total the superannuation

Step 8: VOILA! Total the net property and superannuation

This will now give you the total net property pool of you and your ex.