ByLawyers News and Updates

Family Court Act – WA

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The Family Court Act 1997 (WA) has been amended to reflect recent changes to Commonwealth family law legislation and facilitate the exercise of federal jurisdiction by the Family Court of Western Australia.

The combined WA and Federal amendments provide for the exercise by the Family Court of Western Australia of federal jurisdiction in family law property proceedings to:

  • determine the superannuation interests of separating de facto couples; and
  • hear bankruptcy proceedings concurrently with family law proceedings, where appropriate.

Superannuation splitting

The Commonwealth family law legislation has allowed the superannuation interests of married parties in proceedings before the previous Family Court of Australia, now the Federal Family and Circuit Court of Australia, to be treated as property for distribution since 2001. However, this was restricted to parties to the breakdown of a marriage.

The Family Court Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Act 2020 (Cth) inserts a new Part VlllC into the Family Law Act 1975 (Cth). This section provides for the distribution of superannuation entitlements between separating de facto couples in the Family Court of Western Australia. It allows superannuation matters under the Family Law Act 1975 (Cth) to be heard concurrently with other matters under the property provisions of the Family Court Act 1997 (WA).

Bankruptcy jurisdiction

The Family Court Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Act 2020 (Cth) also amends the Bankruptcy Act 1966 (Cth) to enable bankruptcy matters related to de facto couples to be heard by the Family Court of Western Australia in conjunction with family law proceedings. This is possible where:

(a) a party to a marriage or de facto relationship is bankrupt, and the trustee of the bankrupt’s estate is a party or an applicant in property settlement or spousal maintenance proceedings; or

(b) proceedings before the Federal Court or the Federal Circuit Court are transferred to the Family Court of Western Australia.

The Commonwealth Act also provides that appeals about concurrent family law and bankruptcy proceedings for Western Australian de facto couples will mirror existing appeal pathways for married and de facto couples in other jurisdictions.

The By Lawyers Family Law publications have been amended accordingly.

Superannuation and downsizing

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The By Lawyers Self Managed Superannuation Guide has been updated to provide greater detail about contributions to superannuation as a result of residential downsizing.

From 1 July 2018, superannuation fund members aged 65 and over who downsize by selling their principal place of residence are able to contribute up to $300,000 from the proceeds of sale into their superannuation fund as a non-concessional contribution. Both members of a couple can take advantage of the concession for the same family home, allowing up to $600,000 per couple to be paid into superannuation from the sale proceeds of the family home.

Downsizing contributions are exempt from inclusion in the $1.6 million total superannuation balance cap. Instead, the contribution is included when the total superannuation balance is recalculated at the start of the new financial year.

This measure is available to superannuation fund members who have held their principal place of residence for 10 years or more, for contracts that are exchanged after 1 July 2018. The contribution must be made to the fund within 90 days of settlement of the sale.

Importantly, despite the term ‘downsizing’, there is in fact no requirement to purchase another home.

For more information about superannuation contributions, see the By Lawyers Self Managed Superannuation Funds Guide.

Family Law Rules – Amendment

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ALERT – FROM 1 MARCH 2018 – APPLICATION FOR CONSENT ORDERS

Family Law Amendment (2018 Measures No. 1) Rules 2018

Parenting matters: Changes to consent orders and submitting notices. New forms for abuse/violence.

Financial matters: Superannuation interest – kit no longer required. Must file proof of value of the interest with application.

Companies – new precedents

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New precedents have been added to the publication Companies, Trusts, Partnerships and Superanuation

Put and call option agreement
Put and call option precedent for use by a private company allowing the vendor to grant the purchaser a call option over the shares and the purchaser to grant the vendor a put option over the same shares.

Company constitution
Adding to a comprehensive set of commercial incorporation tools for practitioners and their clients, the constitution is for company members who elect to use a constitution, instead of the replaceable rules to guide their internal governance.

The company constitution precedent includes the general rules governing the relationship between a company’s directors, secretary and shareholders and the activities of the company and can be easily customised to suit individual clients’ requirements.

Table of Replaceable Rules

For company members who elect to use the rules to guide their internal governance. The main advantage of the replaceable rules is that a company who uses them can ensure that they are always up to date with developments and changes in regulation.

De Facto – The Tension Between Family law, succession law and Superannuation

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By Guy Dawson, CEO

It is generally accepted that when two people get together there are circumstances that exist, or a period of time that has elapsed, before they can be considered life partners – before their financial lives are joined and divided in an equitable manner on separation or death.

In order to investigate whether there is in fact a de facto relationship in family, succession and superannuation law, the interpretation acts such as the Commonwealth Acts Interpretation Act 1901 section 2F sets out the matters to consider as follows:

(a) the persons are not legally married to each other; and

(b) the persons are not related by family; and

(c) having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis. Working out if persons have a relationship as a couple the circumstances considered may include any or all of the following:

(a) the duration of the relationship;

(b) the nature and extent of their common residence;

(c) whether a sexual relationship exists;

(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;

(e) the ownership, use and acquisition of their property;

(f) the degree of mutual commitment to a shared life;

(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;

(h) the care and support of children;

(i) the reputation and public aspects of the relationship.

Registering a relationship is tantamount to deciding to marry so it is not a common practice.

Family Law

For the Family Court to make orders, under the Family Law Act 1975, the time that must have elapsed for the finding of a de facto relationship is at least 2 years.

The other circumstances that may establish jurisdiction are:

  • That there is a child of the de facto relationship; or
  • That the party to the de facto relationship who applies for the order or declaration, made substantial contributions and a failure to make the order or declaration would result in serious injustice to the applicant; or
  • That the relationship is or was registered under a prescribed law of a State or Territory.

Financial arrangements before the expiration of that time are matters for consideration by the courts as partnerships or joint venture arrangements.

Succession Law

Succession Law across the States defines the term partner or spouse to include a person who was either married to or in a domestic partnership with the intestate. Domestic partnership is a relationship for a continuous period of at least 2 years prior to death, or that was registered under a prescribed law of a State or Territory, or one that resulted in the birth of a child,.

Superannuation

The relationship test of 2 years, does not apply to the determinations of Superannuation Trustees under the Superannuation Industry (Supervision) Act 1993 .

The failure to include such a time period in the SIS legislation results in some ludicrous decisions which sees large sums of money paid to a boyfriend or girlfriend in a relationship of only a few weeks, or a month or two shacked up, without children and no registered relationship. Family members such as parents and siblings are often overlooked and receive nothing at all.

The SIS Act needs to be brought into line with family and succession law to provide the minimum period of 2 years so common sense can prevail.

Contract for Sale of Shares – Extensive

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A new precedent has been provided. The Contract for the Sale of Shares – Extensive covers many of the issues that may arise in complex transactions. It may be found in our Companies, Trusts and Partnership Guide in the Companies section within Deeds and agreements.

Practice management – superannuation

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FROM 1 JULY 2017 Concessional Contributions Cap for superannuation reduced to $25,000 for all ages. Before-tax contributions include compulsory employer contributions and salary sacrifice arrangements. Contributions greater than $25,000 from before-tax income may mean payment of extra tax.

Companies, Trusts, Partnerships and Superannuation

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Companies, Trusts, Partnerships and Superannuation

DECEMBER
  • New Precedent – Hybrid Trust Deed – A hybrid trust is one that combines the efficiency of a fixed trust with the flexibility of a discretionary trust.
NOVEMBER
  • New precedent – Discretionary trust deed – No appointor
  • Costs Agreements – Reference to interstate costs laws added and updated interest clauses
  • ‘Further Information’ options added
  • Self Managed Superannuation Funds commentary – Updated information regarding non-lapsing binding nominations and stamp duty
OCTOBER
  • Costs Agreements
    • WA and SA – added client and firm fields company execution clause trust account details solicitor’s lien.
    • WA – added clause on scale fees.
    • NSW/VIC – included reference to time limit for bringing costs assessment included total estimate of legal costs section with provision for variables and included authority to receive money into trust.
    • Disputes section improved, fields for client and firm details added, trust account details added, solicitor’s lien added, execution clauses for individuals and corporations added and general formatting and grammatical improvements.
  • Commentary – Update income tax – corporate beneficiary Div 7A loan
SEPTEMBER 
  • Amended tax amount where necessary to $175,000
AUGUST
  • Costs agreements have been added for Tasmania and Northern Territory.
JULY
  • Companies, Trusts, and Partnerships Commentary – The land tax sections of the comparative business structures table have been updated to include the foreign purchaser surcharge in NSW and the increase in absentee owner surcharge in VIC.
  • Self Managed Superannuation Funds Commentary – The commentary was amended to expand the definition of a dependent for the purposes of determining superannuation death benefit recipients.
JUNE
  • Self Managed Superannuation Funds Commentary – updates regarding amendments to superannuation fund balance caps introduced by the 2016 – 17 Federal Budget and updates for lender requirements in limited recourse borrowing arrangements also applied bringing commentary into alignment with arm’s length principles discussed in ATO practical compliance guideline 2016/5.
MAY 
  • Commentary added on discussing foreign resident capital gains withholding payments.
APRIL
  • File Cover Sheets for all publications have been completely re-formatted for a better look.
MARCH
  • Superannuation commentary now discusses replacement assets.
  • New precedents added:
  1. Custodian Deed
  2. Resolution of the directors – Act as custodian – Bank limited recourse borrowing arrangement
  3. Resolution of director as trustee – Limited recourse borrowing arrangement
  4. Resolutions for sole director – Limited recourse borrowing arrangement
  5. Limited recourse borrowing deed
FEBRUARY
  • A general minutes precedent has been added to the companies trusts and partnerships guide.
  • Making life a little easier for practitioners – look out for Blank Deed, Agreement and Execution Clauses folder in the matter plan at the end of each Getting the Matter Underway.
JANUARY
  • Considered the forthcoming amendments to the Associations Incorporation Act 2009 and the regulations planned for later in this year.
  • Added a new Combined Shareholder and Unitholder agreement precedent into Companies, Trusts and Partnerships Guide.

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