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Wednesday, 13 July 2016

Wife takes a win after Husband’s failure to disclose his financial dealings

Judge Loughman in the Federal Circuit Court at Sydney was recently called upon to consider a matter where there had been very significant financial mis-dealings by a husband, in the case of  Rosario & Rosario [2016] FamCA 170 (22 March 2016) (http://www.austlii.edu.au/au/cases/cth/FamCA/2016/170.html).


Over the course of two years of litigation, the Husband appeared to disregard Court orders providing for him to deposit funds, not deal with funds, or arrange for the sale of shares and for funds to be paid to the Wife.

Instead, funds were apparently applied to pay a debt to another company that was poorly described by the Husband.

In the meantime, mortgages were defaulted upon and the Wife was left to attempt to keep the banks at bay on her very modest income.

The Husband throughout this time failed to make adequate disclosure, explain to the court precisely what debts he claimed to be paying or provide appropriate evidence to the Court.

What makes the case somewhat unusual is that as a way of recognising the significant injustice to the Wife of this situation, Judge Loughman determined that a percentage adjustment of what was left in the asset ‘pool’ should be made in favour of the Wife in light of the non disclosure.

Making reference to the matter of Weir & Weir (1993) FLC 92-338, Judge Loughman, held that ‘The authorities have it that in the case of significant non disclosure, the Court should not feel unduly constrained in making provision, within the identified assets for the other party.’

Even though the parties had agreed to ‘add back’ some of the funds that the Husband had taken without the Wife’s consent, the Court found that the ‘extraordinary circumstances of the untenable debt are not resolved by $495,000 being added back to the balance sheet. The husband’s refusal to fully disclose the circumstances of the alleged debt prevents any scrutiny of transactions with matrimonial funds by the wife or by the Court.’

Making reference to section 79(4)(e) and to section 75(2)(o) of the Family Law Act 1975 which provides that matters to be taken into account include ‘any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account’, the Judge made an adjustment of 5% to the Wife, even taking into account that the Husband received a small adjustment because he was eight years older than the Wife.

The case is significant because it provides some recourse or solution to parties who are struggling with a difficult or intransigent opponent who refuses to provide appropriate material.

Clearly every case is different and whether your situation meets the standard required in this case is a question that we can assist in answering – call Nevett Ford Lawyers Melbourne on 03 9614 7111 for a confidential discussion of your situation or email Melbourne@nevettford.com.au

Sunday, 3 July 2016

ChildSupportman v SpousalMaintenanceman: Dawn of Justice?

Child support and spousal maintenance in Australia are two very different things and are administered in two very different ways.
Surprisingly to some lawyers, many people do not understand the reason for the distinction between the two types of payments may arise or that they are even separate things .
 
Child support is usually based on a formula and assessment made by the Commonwealth Department of Human Services (formerly the Child Support Agency).
This formula is based on incomes, nights of care and the number of children subject to the assessment; the obligation to pay child support arises from an acknowledgement, whether through a DNA test or simply agreeing, that a party is a biological parent to a child.
The amount is assessed and can be collected by DHS through regular voluntary payments, by garnishing wages from your employer, or in some cases by taking stricter enforcement action against bank accounts.
The payments then get sent to the other parent who has been assessed as requiring the child support and will last until a child turns 18 years old or finishes their last year of high school.
The family law courts usually do not apply except in circumstances where people make applications, often very costly in comparison to the cost of any assessed amount, for an order to vary the child support amount for one reason or another.
 
People can also enter child support agreements of varying types that allow the parties to either pay more child support (and direct those payments towards schooling , health, extra-curricular activities and the like), less child support or to pay lump sums to avoid having ongoing obligations.
These types of agreements are sometimes made as part of a parenting dispute between parties or as part of a property settlement in order to provide some ongoing assistance when that assistance is to be directed towards children directly rather than through their parent.
 
Spousal maintenance is a term for a few types of payments that somebody can agree to pay, or a family law court can order for parties who are engaged in a property settlement.
These are payments that are calculated looking at a person’s income and expenses, seeing if their legitimate expenses are higher than their income, and then examining their former partner’s income and expenses.
If the former partner’s income exceeds their legitimate expenses they may have ‘capacity’ to pay and may be required to do so.
The purpose of these payments is usually to assist the person with the ‘need’ to get back on their feet or to be able to live in a lifestyle to which they have reasonably become accustomed as a result of the other person’s actions.
Usually these payments are made only during proceedings / while a dispute is ongoing and are often ‘capitalised’ as a lump sum in a final settlement.
 
Internationally there are differing attitudes towards spousal maintenance or ‘alimony’ and whether these payments should be ongoing  and this may effect where you might start Court proceedings.
 
There are important differences between child support and spousal maintenance that may not be clear to people entering the family law system, and that lawyers may not realise they need to explain to their clients. 
If you would like more information, call our expert team on 03 9614 7111 or Melbourne@nevettford.com.au to discuss your situation.