ByLawyers News and Updates

Consent orders in property settlement

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By Keleigh Robinson

As family practitioners we are regularly advising clients that property settlement reached between separated husbands and wives or de facto spouses as the case may be must be documented in the appropriate legal manner. This is usually done via an Application for Consent Orders or, depending on the particular circumstances, via Financial Agreement pursuant to ss 90UC, 90UD, 90C or 90D of the Family Law Act.

It is safe to assume and is certainly the writer’s experience that the majority of property settlements formalised with the assistance of solicitors are effected via an Application for Consent Orders and Minute of Consent Orders filed in the Family Court.

There are the fundamental requirements associated with such an application with which we are all familiar, including:

  • filing the original and two copies of the documents with the court;
  • ensuring the consent orders and application are signed by both parties including completion of the statements of truth, including ticking the relevant boxes, which if not attended to can be the subject of an embarrassing requisition;
  • provision of the relevant sections of the legislation as set out in the statement of truth to the client;
  • according procedural fairness to the superannuation fund and providing a copy of the letter to and from the superannuation fund to the court, as well as the superannuation information form if it is a defined benefit interest; and
  • provision of the correct filing fee, unless the parties are eligible for the exemption or fee reduction.

The regularity with which we prepare and file such documents can result in practitioners taking a somewhat laissez faire attitude to the completion of the application form and the drafting of orders. However, it is vital that practitioners remember that the filing of consent orders is not a ‘rubber stamping’ exercise and the orders will not simply be made by the court because the parties have signed the documents and agreed that the orders ought to be made.

Serious consideration needs to be given to the question of justice and equity of the adjustment of property provided for in the proposed orders. This is important in every case but perhaps even more important in those matters where the other party is self–represented. Sometimes in those cases the party who is receiving the greatest benefit from the settlement is eager to have documents drafted, signed and filed as quickly as possible and the other party does not wish to engage a lawyer for cost related or other reasons.

The recent case of Hale & Harrison [2014] FamCA 165 where consent orders were ostensibly consented to by the parties but were not made by the court is one such example. The facts of the case were:

  • Ms Hale and Mr Harrison cohabited from 1998 to April 2009 and were in a de facto relationship. A separate issue was the date of separation and the jurisdiction of the court, however that is not relevant for the purposes of this article.
  • There were four children of the relationship, aged 10, 10, 13 and 15. The children were living with Ms Hale and spending time with Mr Harrison pursuant to a parenting plan.
  • Ms Hale was 36 years of age and Mr Harrison was in his fifties. Both were in receipt of government pensions and neither of them were engaged in paid employment.
  • Ms Hale received a small sum of child support per month.
  • There was a small asset pool:
    • Property in New South Wales which was expected to sell for $80,000. However its municipal value was $60,000 and it appeared that Justice Cronin took the view the property would sell for between $60,000 and $70,000.
    • Ms Hale’s mother loaned the parties $10,000 towards the purchase of the property, which remained outstanding.
    • There was also a mortgage of $17,000.00 secured against the real property.
  • Mr Harrison received an inheritance at some stage after 2009 which he asserted was in the vicinity of $150,000. However Ms Hale had not seen any evidence of this inheritance. Mr Hale said he had $12,000 remaining from that inheritance.
  • Ms Hale and Mr Harrison filed an Application for Consent Orders on 8 October 2013 which provided:
    • The real property would be sold.
    • After repayment of the mortgage of $17,000, the proceeds of sale would be divided equally between the parties.
    • From the wife’s share of the proceeds of sale, she would repay her mother the $10,000.
    • Mr Harrison would also retain the $12,000 which remained from his alleged inheritance.
  • Based on His Honour’s comments in relation to the possible sale price of the property and depending on the sale price of the property, Ms Hale would be left with somewhere between $11,500 and $24,000, and Mr Harrison with between $33,500– and $46,000.
  • His Honour found that the loan repayment to Ms Hale’s mother in circumstances where Mr Hale had more property and more money was not just and equitable. It is apparent from the judgment that Mr Harrison’s solicitor argued before His Honour that the settlement was just and equitable because the parties had reached agreement. However when asked by His Honour, Ms Hale, who was unrepresented said she did not think the outcome was fair.

His Honour concluded that the parties having reached agreement was not a basis upon which the court should ‘waive away what is in reality its subjective judgement about what is fair’ and ultimately dismissed the Application for Consent Orders.

Justice Cronin’s decision in Hale & Harrison serves as a reminder of the essential and indeed overriding need for practitioners to consider what is just and equitable. Preparing consent orders must be a considered process and practitioners must focus on the justice and equity of the orders before filing them with the court to ensure there are not difficulties with the making of the orders which serve only to increase client costs and can be a professional embarrassment for practitioners.

An overview of the Victorian Relationships Act 2008

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By Roz Curnow, Nolch and Associates

The purpose of the Victorian Relationships Act is to establish a Victorian relationships register for domestic relationships, provide for relationship agreements, provide for adjustment of property interests between domestic partners (repealing part IX Property Law Act 1958), and to provide for rights of domestic partners to maintenance.

The latest default implementation date is 1 December 2008; or in respect to items 25 (re Freedom of Information Act 1982) or 69 (re Consumer Credit (Victoria) Act 1995) of Schedule 1, 1 July 2009. Regulations pertaining to fees, forms, penalties, and anything necessary for the purposes of the Act, may be made by the Governor in Council. See s 71; and ss 72-75 for transitional provisions and interim fees.

There are a number of main ‘arms’ to the Act, and note that there are different definitions of ‘domestic partner’ and ‘domestic relationship’ contained in the Act, depending upon the chapter – for example, s 35 contra s 39.

Registration of domestic relationships

A ‘registrable relationship’ is a relationship (other than a registered relationship) between two adults ‘who are not married to each other but are a couple where one or each of them provides personal or financial commitment and support of a domestic nature for the material benefit of the other, irrespective of their genders and whether or not they are living under the same roof, but does not include a relationship in which a person provides domestic support and personal care … for fee or reward; or on behalf of another person or organisation …’ See s 5.

There are various preconditions to registering a registrable relationship, such as not being in another inconsistent relationship/marriage, being domiciled or ordinarily resident in Victoria, and providing the prescribed documentation/information: see sections 6-8. If the application is not withdrawn, then within the prescribed periods the Registrar of Births, Deaths and Marriages must either register or refuse to register the relationship on the relationships register: see ss 9-10.

Note: there appears to be no required length of time for the parties to have been in a relationship before being able to register, compared with the two-year requirement in relation to property and maintenance orders pertaining to an ‘unregistered’ relationship.

Searches of the register appear to be similar to other searches at births, deaths & marriages – the privacy of the persons concerned is protected, and a proper reason needs to be given for the search: see ss 20-24.

A registered relationship will be revoked by the death of either party, or the marriage of either party (to each other or someone else); and it can also be revoked upon application by either party – see ss 11-13 – which application can be withdrawn: see s 14. The Registrar must revoke the registration after the expiry of 90 days after the revocation application has been lodged, unless it is withdrawn or a court or tribunal directs otherwise; and a court can order revocation on application by an interested person or on its own motion: see ss 15-16.

A person whose interests are affected by a decision of the Registrar can apply to the Victorian Civil and Administrative Tribunal (VCAT) for a review. See s 28; also see s 33 re extension to Evidence Act 2008 re the Registrar taking statutory declarations required for the above purposes.

Relationship agreements

First, there are a number of definitions to be taken into account – see s 35 (chapter 3, part 3.2), contra s 39 (chapter 3, part 3.3):

  • A ‘domestic partner’ is a person with whom the (first) person is or has been in a domestic relationship, or with whom they are contemplating entering into a domestic relationship.
  • A ‘domestic relationship’ is:
  1. A registered relationship, or
  2. A relationship between two persons not married to each other but living together as a couple on a genuine domestic basis, regardless of gender, or
  3. The relationship between two adults ‘who are not married to each other but are a couple where one or each of them provides personal or financial commitment and support of a domestic nature for the material benefit of the other, irrespective of their genders and whether or not they are living under the same roof, but does not include a relationship in which a person provides domestic support and personal care … for fee or reward; or on behalf of another person or organisation …’

And a number of listed factors are to be taken into account in determining the current or past existence of a domestic relationship:

  • ‘Financial matters’ relate to one or more of the following: the maintenance, income or property, or financial resources of one or both of the domestic partners. See further definitions in s 35 of ‘financial resources’ (very broad, including prospective claims or entitlements, pensions, and ‘valuable benefit’) and ‘property’ (again very broad, including real and personal, estates, interests, causes of action, et cetera).
  • A ‘relationship agreement’ is an agreement, whether or not there are other parties to it, made before, on or after commencement of the Act in contemplation of entering or during a domestic relationship, or in contemplation of terminating or after termination of a domestic relationship, which provides for financial matters, whether or not other matters are included.

These agreements are subject to and enforceable pursuant to contract law, and may be varied or set aside, wholly or in part, by a court in certain circumstances – for example, in instances of fraud or duress. See ss 36 and 37.

If a relationship agreement requires one of the domestic partners to pay periodic maintenance, then on the death of the first partner the requirement to pay maintenance is unenforceable against that person’s estate unless the agreement provides otherwise; and on the death of the second partner is unenforceable by their estate, with a saving for arrears then due at the death of either partner. However, unless provided otherwise in the agreement, terms relating to property and lump sum payments are enforceable by the surviving partner against the estate of the deceased partner.

Property and maintenance

Again, some definitions – see s 39, noting some other definitions revert back to s 35:

  • A ‘child’ is one born as a consequence of sexual relations between the partners, or a child of one of them of whom the other is presumed to be the father (per part II of the Status of Children Act 1974), or a child adopted by the partners.
  • A ‘domestic partner’ is ‘a person with whom the person is or has been in a domestic relationship’.
  • A ‘domestic relationship’ is:
  1. a registered relationship; or
  2. a relationship between two persons who are not married to each other but who are living together as a couple on a genuine domestic basis (irrespective of gender) …

A court has the power to make a declaration in respect to property, as broadly defined – see s 35(1) – including orders for possession, orders for adjustment of interests and/or granting of maintenance. Sections 45 and 46 concern the numerous factors to be taken into account, and also adjournments if there is a likelihood of a significant alteration in circumstances (including future entitlement to property under s 48) or contra Family Court proceedings; and ss 51 and 52 concern orders for maintenance). There are certain additional requirements in respect to unregistered relationships such as domicile, and that the parties have lived together in the relationship for at least two years or there is a child of the domestic partners or accepted by the domestic partners as a family member or serious injustice would result in not making an order: see ss 40 – 42, and s 42 in respect to unregistered relationships.

There are time limits for making applications – essentially two years from the date on which the relationship ended – but with the court having power to grant leave for an extension: see s 43. The court is to make orders where possible to determine the financial relationship and avoid further proceedings: see s 44.

Property interests – If a party to property interest proceedings dies before an application for an order is determined, the application may be continued by or against the legal personal representative, and a court may make an order against the deceased’s party’s estate; and if a party dies after an order is made against them, the order may be enforced against their estate. See ss 49-50.

Maintenance – In respect to maintenance, the Act sets out an extensive number of factors to be taken into account, and provides that if either party dies before the application is determined then the application abates. See s 51. A court also has the power to make an order for interim maintenance. See s 52. If the domestic relationship ceases, then an application for maintenance cannot be made by a domestic partner who at the time of the application is in a domestic relationship with someone else or who has married or remarried. See s 53. A maintenance order ceases on the death of either party, on the marriage or remarriage or on the registration of a registrable relationship of the party having the benefit of the order, with various provisions for adjustment and interest, recovery of arrears and variation orders for periodic maintenance. See ss 54-57.

There are also some general provisions in respect to property adjustment and maintenance orders:

  • Courts with jurisdiction are the Supreme Court, County Court, and Magistrates’ Court, depending upon jurisdictional limits; with provisions for the transfer of proceedings, and a stay or dismissal of proceedings where proceedings have been instituted in more than one court in relation to the same person. See ss 65-69.
  • A court has numerous powers including ordering the sale or transfer of property, execution of documentation (and if the party fails to execute it, an officer of the court or other person can be directed to do so in lieu – see s 60), payments of periodic or lump sums, appointment or removal of trustees, granting injunctions, and making consent orders: see s 58. In exercising its powers, a court must not make an order or do anything inconsistent with the terms of a relationship agreement between the parties if the agreement is in writing and signed by the party against whom it is to be enforced, and each party was given a legal practitioner’s certificate (covering the stated matters – refer also to Legal Practitioners’ Liability Committee publications, particularly check issue no. 40, September 2008) at the time of signing the agreement and which accompanies that agreement. See s 59.

However if a court is not satisfied that all of these requirements have been met, the court can make an order as if there were no relationship agreement, although the court may have regard to its terms; and the court is not required to give effect to the terms of a relationship agreement if it is of the opinion that the parties have revoked or agreed to revocation of the agreement, or the agreement has otherwise ceased to have effect, or it is wholly or partly varied or set aside by the court under other provisions of the Act – that is, under s 37.

  • Ex parte applications may be made in cases of urgency. See s 61.
  • A court can vary or set aside a section 45 (adjustment of property interests) or s 51 (maintenance) order if the court is satisfied that there has been a miscarriage of justice because of fraud, duress or false evidence; that circumstances have arisen making the order or part of it impracticable; that parties have failed to carry out obligations under the order, and so on: see s 62.
  • Transactions to defeat claims can be set aside, and costs orders made, with regard being had to the interests of any bona fide purchaser or other interested person. See ss 63 and 64. A court may order that a person who may be affected by an order be given notice of the proceeding, or on application be made a party to it; and if a party against whom an order is sought is married, the applicant must give notice of the proceeding to that party’s spouse. See s 64.
  • A court can make orders requiring bonds, payment of penalties, handing up of documents, and so on, where the court is satisfied that a person knowingly and without reasonable cause contravened an order or injunction (other than an order for payment of money). See s 70.

Acts affected by this Act

In addition to the repeal of part IX of the Property Law Act 1958, there are presently sixty-nine affected Acts – subject to any further additions/amendments. These affected Acts cannot all be listed here. However, some Acts that may be frequently encountered by readers are:

Accident Compensation Act 1985

Administration and Probate Act 1958 – including amendment to section 51A of that Act Conveyancers Act 2006

Conveyancers Act 2006

Consumer Credit (Victoria) Act 1995

Crimes Act 1958

Duties Act 2000

Equal Opportunity Act 2010

Estate Agents Act 1980

Fair Trading Act 1999

First Home Owner Grant Act 2000

Freedom of Information Act 1982

Guardianship and Administration Act 1986

Land Acquisition and Compensation Act 1986

Land Act 1958

Land Tax Act 2005

Landlord and Tenant Act 1958

Legal Profession Act 2004

Partnership Act 1958

Payroll Tax Act 2007

Residential Tenancies Act 1997

Retirement Villages Act 1986

Sale of Land Act 1962

Superannuation (Portability) Act 1989

Trustee Companies Act 1984

Wills Act 1997

Wrongs Act 1958

A final note: as pointed out by Adrian Stone and Kathryn Downs in ‘Going separate ways’ (Law Institute Journal, September 2008, page 34), the operation of this Act may yet be affected by an Act resulting from the Federal Family Law Amendment (De Facto Financial Matters and Other Measures) Bill 2008.

Note: This article was first published in The Legal Executive November-December Volume 2008 Issue No. 6 (save for minor corrections), and is reproduced with the permission of the author and The Institute of Legal Executives (Victoria). Readers should note that further Federal legislation has since been implemented, affecting the operation of certain parts of the Act; and are also referred to a subsequent article, More about the Relationships Act 2008.

Tips

Whilst written for Victoria practitioners this article has interest and relevance for practitioners in all states.

More about the Victorian Relationships Act 2008

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By Roz Curnow, Nolch and Associates

Further to the article in the November/ December 2008 (The Legal Executive) Journal, please note the Relationships Amendment (Caring Relationships) Bill 2008 which will amend the Relationships Act 2008 (the ‘principal Act’), the latest default implementation date being 1 December 2009 if not proclaimed earlier. Readers should of course maintain a watching brief, as further amendments may be made.

This article focuses on the ‘caring relationship’ aspects of the bill.

The explanatory memorandum to the Bill states, in part, that the purpose of the amending Bill is to amend the Relationships Act in order to “… allow for the registration of caring relationships on the relationships register and for the recognition, where appropriate, of registered caring relationships … Like registered domestic relationships, registration of a caring relationship will provide conclusive proof of the relationship where caring relationships are recognised under Victorian law. Also like domestic relationships, the bill allows partners in registered caring relationships that have broken down to apply to a court for the adjustment of interests in the property of the relationship and for maintenance …” The bill itself states that its purpose is “… to provide for the registration of caring relationships in Victoria … the adjustment of property interests between caring partners who are in, or have been in, a registered caring relationship (see clause 19 which amends the definitions in Part 3.3 Property and maintenance of the principal Act)… the rights to maintenance of caring partners who are in, or have been in, a registered caring relationship… ”

The bill also makes consequential amendments to various acts in order to specify which acts, whilst they apply to partners in domestic relationships, do not apply to partners in caring relationships.

Some definitions should be particularly noted – the bill amends section 5 of the principal Act to insert the definition of a ‘registrable caring relationship’ which means “a relationship (other than a registered relationship) between two adult persons who are not a couple or married to each other and who may or may not otherwise be related … where one or each of the persons … provides personal or financial commitment and support of a domestic nature for the material benefit of the other, whether or not they are living under the same roof, but does not include a relationship in which a person provides domestic support and personal care to the other person for fee or reward or on behalf of another person or an organisation …”, and to insert the definition of ‘legal practitioner’s certificate’ – being a certificate given per s 7(ba)(and see also s 59).

Persons in a registrable caring relationship can apply for registration of the relationship. They must live in Victoria and cannot be married or in a relationship already registered in Victoria, or in another relationship which could be registered in Victoria. The existing registration requirements in section 7 of the principal Act will be amended by clause 10 of the bill (inserting sub-section 7(ba)) embedding a pre-registration requirement in relation to a registrable caring relationship that each party must first obtain independent legal advice in respect to the consequences of registration (i.e. which will of necessity be extensive). The Explanatory Memorandum notes that the remaining registration application requirements in section 7 apply to applicants “in registrable domestic relationships and registrable caring relationships in the same way”. It appears therefore that independent legal advice needs to be provided for registration of a caring relationship, but not for registration of a domestic relationship; however, in respect to registration of agreements, both types need independent legal advice (see proposed amendments to section 59 regarding the court’s powers, including where registration requirements have not been met).

Clause 16 inserts a new s 35A into the principal Act, defining relationship agreements. It separately defines an agreement made between domestic partners, and an agreement made between caring partners on or after the commencement of the amending act. The caring relationship agreement, providing for financial matters, whether or not it provides for other matters, can be made in contemplation of entering into a registered caring relationship, during it, in contemplation of it ending, or after it has ended.

The bill also amends s 42 of the principal Act “to clarify that the section applies to domestic relationships that have not been registered…” That section details residential and other prerequisites which apply to unregistered domestic partners vis-à-vis making an order for the adjustment of property interests or maintenance. “The section is not relevant to caring partners whose relationship must be or must have been registered.”

The bill amends s 41(1) of the principal Act to include caring partners, as defined in s 39(1), so that a caring partner can apply to a court for an order for either or both of an adjustment of property interests or maintenance; s 43 regarding applications by registered caring partners within two years of the ending of the relationship (or as extended by the court); s 51, empowering a court to make a maintenance order in favour of a caring partner unable to support him/herself because his/her earning capacity has been adversely affected by the registered caring relationship or other reason arising from the relationship, listing the matters to be considered (with the application for maintenance abating if either caring partner dies before determination); s 53, preventing an application for maintenance in respect to an earlier domestic relationship or registered caring relationship where the person has married or entered a new domestic relationship or registered a new caring relationship; s 54 regarding the circumstances in which a maintenance order ceases to have effect (including in relation to the death of a party); s 74A regarding transitional arrangements for relationships registered after 1 December 2008 but before commencement of the amending Act; and numerous other sections to include caring partners and make other amendments to the principal Act.

Also of particular note is the section in the explanatory memorandum (and see clause 37 and schedule 1 in the bill) which refers to “schedule 1 – consequential amendments to other Acts”, which requires very careful scrutiny regarding reference to the definition in the listed Acts of a ‘registered relationship’; and the definition of ‘domestic partner’ in the Acts not amended by the bill.

Readers must check the specific wording of the amendments to the thirty acts which will be amended by the Schedule to the bill, assuming further acts are not added.

Of immediate concern to many readers will be:

Administration and Probate Act 1958

The explanatory memorandum states that “It is intended that the provisions (of the Administration and Probate Act) that apply to domestic partners apply equally to partners in registered caring relationships. The Act does not make provision for unregistered caring relationships.

The Relationships Act 2008 inserted into s 3(1) (of the Administration and Probate Act) a definition of a registered domestic partner of a person who dies. … the bill further amends s 3(1) … to insert a definition of a registered caring partner of a person who dies … (which) means a person who, at the time of the person’s death, was in a registered caring relationship with the person.

The Relationships Act 2008 also amended s 51A to make provision for a partner in a registered domestic relationship. … the bill further amend(s) s 51A to apply its provisions to registered caring partners…”

The explanatory memorandum continues “…if an intestate leaves a spouse or registered partner (either domestic or caring) and an unregistered domestic partner, then the estate will be divided between the one formalised relationship and the other relationship … a person cannot register a registrable caring relationship if he/she is already married or in a registered relationship”, i.e. an intestate cannot leave both a spouse and registered partner.

Wrongs Act 1958

In sub-ss 19(3)(a) and 19(4)(a) and (b) after the word ‘registered’ insert “domestic”.

Additionally, the Fair Trading and Other Acts Amendment Bill 2008 will repeal Item 69 in schedule 1 of the principal Act.

Insofar as property and maintenance matters are concerned, we noted in our previous Relationships Act article that the operation of that act could be affected by an act resulting from the Federal Family Law Amendment (De Facto Financial Matters and other Amendments) Bill 2008. This is now the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008; and in their article Two by Two: Victoria’s Relationships Register (Law Institute Journal Jan/Feb 2009 commencing at page 50), which includes commentary on the interrelationship between the Victorian and Commonwealth Acts, authors Adiva Sifris and Ronli Sifris comment “It is envisaged that, as Parliament has passed the Federal Act, the provisions in the Victorian legislation relating to property and spousal maintenance will become largely redundant.”

We will watch with interest the development of this area of law, and where enforcement action might ultimately be effected – noting County Court of Victoria Interim Practice Note PNCI 8-2008 re Relationships Act 2008 and Relationships Amendment (Caring Relationships) Bill 2008 – www.countycourt.vic.gov.au; and Family Court Rules 2009 – https://www.fcfcoa.gov.au/.

Further reading: Impact on Wills and TFM claims of the Relationships Act 2008 by Kathy Wilson, Aitken Walker & Strachan, presented at the LIV Legal Support Staff Conference 2009; and subsequent papers.

Roz Curnow

Nolch & Associates

Note: This article was first published in The Legal Executive March-April Volume 2009 Issue No. 2 (save for minor corrections), and is reproduced with the permission of the author and The Institute of Legal Executives (Victoria). Readers should note affecting Federal legislation. This is a brief, and non-exhaustive, overview contributed by Nolch & Associates Solicitors for educational purposes only, with thanks to those who provided input on the numerous initial drafts. This article does not constitute legal advice. Readers must of course read the full Principal Act, and maintain a watching brief on the amending Bill, for themselves. Sources: www.justice.vic.gov.au and www.austlii.edu.au. Emphasis has been added in some sections.

Tip Box

Whilst written for Victoria practitioners this article has interest and relevance for practitioners in all states.

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