Usually, the main scope for dispute arises in steps two and three where parties dispute how they contributed to the assets or the weight that should be given to their current circumstances and future needs. Frequently, the significance of the first step of this process is overlooked.

There is rarely a difficulty in attributing a value to liquid assets such as bank accounts and share portfolios – the value given to such assets is the realisable cash value of the asset. Tangible assets such as houses, land, cars, and chattels are taken at their sale or second hand (not insured) value, and often need to be valued particularly where neither party knows the value of the assets or there is a dispute.

Obviously, the more assets there are to be divided, the greater value of assets that a party will receive in the eventual settlement. A number of techniques can be employed to maximise (or, in other circumstances, minimise) the value of the asset pool to achieve a more favourable result. The emergence of trusts, superannuation and structured asset holdings has been considered by courts in determining what property is available for division.

One contentious point relates to monies that were in existence at separation that have been spent by one of the parties, for that party’s benefit, since the time the parties separated. The generally established rule is that those assets should be notionally added back to the pool (dubbed an ‘add back’) and considered an asset that the party receiving the benefit had already received.

There are three main categories of add backs:
Legal Fees – the Family Law Act says each party should pay their own legal costs. If a party uses joint funds to pay their legal fees, then there is a strong case for those funds to be considered already received by the expending party in the property division. Adducing evidence about legal fees and the source of funds used to pay the legal fees can often result in the other party’s legal fees being ‘added back’ to the pool;
Waste – Where a party has intentionally acted to reduce the asset pool available for division, or acted recklessly or negligently and thereby caused a reduction in the asset pool, the wasted monies can be considered in determining the outcome; and
Spending Monies/Disposing of Asset – If one party spends monies existing at separation, or disposes of and receives money for an asset that existed at separation (thereby depleting the asset pool), the value of the asset or monies as at separation can be added back to that party.

Clients must be careful about their conduct with money post separation but pre settlement. Previous cases have penalised clients for gambling, offering the use of an asset to a third party for no charge or below market charge, or ill advised business ventures. Even the purchase of reasonable assets that are likely to decline in value (such as boats, vehicles, or in one case, $1.8million worth of wine) can result in a financial penalty to one party.

Taking a great amount of care to consider the asset pool at separation as contrasted to the asset pool at the date of settlement or hearing can result in a more favourable outcome for your client.

Gavin Howard is a senior solicitor and In House Counsel at Farrar Gesini & Dunn Family Lawyers. Contact Gavin on 6290 9818.

We have brought a team of people together at Consensus Family Lawyers who will use collaboration, mediation, facilitation or arbitration as the primary way to reach an outcome.

The establishment of Consensus is in response to our perception that there are at least two legitimate ways to resolve disputes which arise as a result of a couple separating and that conventional lawyers only address one of those ways.

The first is the traditional way which Farrar Gesini & Dunn will continue to practice. This involves identifying what problems need to be resolved, what are the relevant facts and identifying what the law would say is a fair solution to the problem. This is known as a “rights based” analysis. The practice then advises its clients on the most cost effective method of achieving that solution.

The second way which will be practised by Consensus Family Lawyers involves a commitment by its lawyers that they will exhaust non-court based processes to find solutions to their clients’ problems. Consensus will identify what is important to each party for example their contributions and what each party wants to achieve by way of their financial security, and their relationship with their children whilst finding a way to maintain effective communication and appropriate relationship with their former partner – in essence endeavouring to reach an outcome which reflects these ‘interests’ without resorting to Court. This is known as an ‘interest based’ analysis.

The Canberra family law landscape has now changed. Consensus will provide a solution for those who are separating and want to avoid Court at all costs.

www.cflaw.com.au

In 2006, the Federal Government changed the Family Law Act to introduce a change in the way children’s cases were determined.  The changes move away from traditional concepts of “custody” and “access” towards a more modern and co-operative system of “live with”, “spend time with”, “communicate with”, and importantly, “parental responsibility”.  The new law has been argued in the Full Court of the Family Court many times and a clearer understanding of what the various terms mean has now been established.

The underlying principle of the parenting provisions in the Act remains that the Court must do what is in the best interests of the child.  There are a number of factors the Court must take into account, most notably, the benefit to the child of having a meaningful relationship with both parents, and the need to protect the child from harm, abuse, neglect and violence.

Under Australian law, there are no presumptions about how much time a child should spend with each parent.  There are, however, a number of considerations that the Court must take into account.  While many cases still result in child living with each parent equally, such as a week-about arrangement, the majority of cases do not.  In circumstances where the parents cannot communicate, or when the parents are geographically apart, the Court can still provide for the parents to share parental responsibility, whereas the child clearly lives with one parent and spends time with the other.

Parents still commonly confuse the various terms, which, despite seeming simple, may have a legal meaning that extends beyond their ordinary connotation.  The way that a Court must now determine a parenting dispute is as follows:

1. The Court must begin with the presumption that it is in the best interests of the child for both parents to have equal shared parental responsibility.  This means general parenting duties, powers and responsibilities, including decisions about education, health, religion, etc.  In most cases parents agree that they will continue to have joint parental responsibility.  However the presumption is rebuttable in cases where there is evidence of violence, or a risk of harm, or where a court decides that for other reasons it would not be in a child’s best interests.
2. If the Court has decided that equal shared parental responsibility should continue, the Court must then consider the possibility of the child spending equal time with each parent, and whether or not this is reasonably practicable.
3. If the Court has determined that it is not reasonably practicable for the child to have equal time with each parent, the Court must consider the possibility of the child spending substantial and significant time with each parent, and whether that is reasonably practicable.  “Substantial and significant time” is a vague term, but includes weekdays and weekends and might be an arrangement between 3 and 5 nights per fortnight with the parent the child does not live with.  The intention is that both parents should have the child on school nights, weekends and holidays.

Under the new law, it is not uncommon for a parent to have equal shared parental responsibility but only have the child in their care every second weekend, or from Thursday until Monday each alternate week.  The two concepts – of “parental responsibility”, and of “living with/spending time with” – although related, are different and the approach taken to determining each of them differs on a case by case basis.

Matters can be further complicated when there are issues of violence or neglect, when one parent is seeking to relocate, when one or both parties have re-partnered and there are stepchildren involved, or when grandparents wish to become involved in proceedings also.

If you require assistance with a parenting dispute, please make an appointment to see a lawyer at Farrar Gesini & Dunn by phoning us on 6257 6477.