Directors Duties: What Spouses Should Know

Directors Duties: What Spouses Should KnowIt is not uncommon for wives or husbands, or de facto partners to be appointed as a director of a corporation for taxation or other purposes. It is important that people being appointed as directors understand their rights and obligations. Directors Duties: What Spouses Should Know.

The Corporations Act 2001 (Cth) gives directors rights and places obligations with respect to companies.

Pursuant to the Corporations Act, company directors have a number of duties that they must comply with. Failure to comply with duties or to act diligently may result in having to pay compensation to the company.

 

The following are examples of rights and obligations that can be relevant in family law:

Insolvency and Liability

One of the foremost duties of directors is not to let their company trade insolvent. Upon the realisation that their company is trading insolvent, a director should take steps to ensure they do not continue to trade or otherwise appoint an administrator.

It is no defence for a director of a company that is trading insolvent to say that they were not involved and were a silent party, per Rema Industries and Services Pty Ltd v Coad & Ors (1992) 10 ACLC 530.

Of particular note is section 588G of the Corporations Act. 588G puts financial responsibility for losses on directors when a company is trading insolvent.

If a director realises that the company is trading insolvent, they should decide whether or not to stay on as a director and either resign or take steps to halt trade. Ignorance of the company finances is no excuse.

In the case of Ferraro and Ferraro (1992) 16 FamLR 1; (1992) 111 FLR 124, the Full Court of the Family Court, while not making a finding on the point, stated in obiter:

As it has been held that directors cannot absolve themselves from liability for insolvent trading by an assertion that they were merely a nominal director and took no part in the company’s affairs, this development in the law is particularly relevant to a wife who is only nominally a director of a company which conducts a family business. As the judgment of the Full Court in Morley notes “… the days of the sleeping, or passive, director are well and truly over.”

Access to Documents

Directors Duties: What spouses should know as a result directors also have rights of access to company documents in order to comply with their duties. This is a right that the director may action. It is up to the person denying access to show why a director should not have access to documents.

This may be helpful to a spouse director where a party is not allowing access to documents or is stalling or not compliant with their duties of disclosure under the Corporations Act.

For more information on directors duties and what spouses should know, please contact Daniel Sampson from Culshaw Miller Lawyers in Perth or Adelaide today for more information.

Perth: (08) 9488 1300 or email
Adelaide: (08) 8464 0033 or email

Blog post by Daniel Sampson

Family Court Consent Orders – How Do They Work?

Blog post by Tom Cuthbertson

consentIt is always vastly more efficient to resolve your relationship breakdown, children’s and property issues without the time and expense of litigation. It is however important to ensure that the protection and stability provided by any negotiated agreement is legally binding.

Circumstances, and personal feelings, change over time so while one party to a relationship may initially promise to allow access to any children or to financially look after the other, it is unfortunately the case that written, verbal or ‘handshake’ arrangements can be easily terminated by one party and are unenforceable in the absence of an appropriate legal instrument such as a Binding Financial Agreement or Consent Order.

Should I Get Legal Advice?

Formalising the agreement that you have reached through a Binding Financial Agreement or Consent Order creates legal obligations in respect of the promises each party makes. The former is a private contractual arrangement whereas the latter has the same effect as a legally binding order made by the Federal Circuit Court or Family Court. There are a number of key differences, advantages and disadvantages, to using a Binding Financial Agreement or Consent Order so it is important that you seek legal advice as to which legal instrument is appropriate to formalise agreement in your circumstances.

Consent Orders

Consent Orders enjoy some significant taxation benefits, allowing you to sort out children’s and property issues as well as any spousal maintenance in one document; these can be designed to ensure that both parties can have piece of mind in a short, cost-effective timeframe. A Consent Order is filed in the Court by agreement between the parties, and if the proposed settlement is viewed as just and equitable or ‘fair’ by the Court, then the Court will make orders in terms of the filed Consent Order – there is no need to attend a Court hearing.

Binding Financial Agreements

Binding Financial Agreements can be utilised either in conjunction with or instead of Consent Orders and are sometimes more appropriate where financial or property issues are particularly complex. Effectively, they oust the jurisdiction of the Family Court where the agreed arrangements are more creative and might not be accepted by the Court in the form of a Consent Order.

In many cases, Binding Financial Agreements are entered into by parties before commencing a relationship or during a relationship indicating how they would divide property in the event of relationship breakdown. While some may find this difficult or awkward, it is well worth it for the security they afford each party. Click here for more information on Binding Financial Agreements.

To discuss how a Binding Financial Agreement or Consent Order can be financially advantageous to you or to discuss creative, cost-effective solutions to your children’s or property issues, contact Tom Cuthbertson at Culshaw Miller Divorce & Family Lawyers. Tom can also be reached on (08) 8312 4527 or 0400 219 889.

Help! My Ex Isn’t Complying With Parenting Orders – What Can I Do?

Blog post by Sarah Nicholls

sunset

All parties affected by a parenting order made by a court are expected to comply with the orders.

If your former partner is not complying with parenting orders, you may consider one of the following options:

  1. Attend family dispute resolution;
  2. Apply to the court; or
  3. Seek legal advice.

Family Dispute Resolution

Engaging in Family Dispute Resolution may assist you and your former partner resolve issues out of court. If an agreement is reached during this process, you may enter into a parenting plan or apply to the court to formalise your agreement by way of consent orders. If the registrar is satisfied that the orders sought by the parties are proper, it will make the parenting orders without the need to attend court.

Court

If you cannot reach an agreement with your former partner, you may consider applying to a court to vary the existing parenting orders or commencing contravention proceedings.

Varying the existing orders

Before you can apply to the court to vary the existing orders, you must attend Family Dispute Resolution if you have not done so in the past 12 months and obtain a certificate from a registered provider. There are some exceptions to this requirement, for example, if there is family violence, child abuse or some urgency.

It is important to understand that the court will only vary final parenting orders if it is shown that there has been a significant change of circumstances that make the change necessary.

Contravention proceedings

A contravention application is an application where a party can ask the court to remedy a breach of a court order.

The court will first determine whether or not there has been a breach of the orders. If the court finds that there has been a breach of the court orders and there is no reasonable excuse, it may impose a remedy. Depending on the nature and seriousness of the breach, the court may:

  • vary the orders to reduce the chance of further breaches;
  • give one party ‘make up’ time with their child or children;
  • order a party to attend a parenting program;
  • impose a community service order;
  • order legal costs;
  • impose a fine; or
  • in the most serious of cases, order a sentence of imprisonment.

If your former partner is not following the court orders, it is important that you seek legal advice as to the best avenue to take. Please contact Sarah Nicholls of Culshaw Miller Lawyers to make an appointment.

Gen Sails Around The Competition!

CM NEWS

photoGenevieve Wickham of Culshaw Miller Lawyers in Perth recently participated in the SYC Sandringham Yacht Club, in the ISAF Sailing World Cup held in Melbourne on 7-14 December 2014. This is the first of seven regattas around the world, the next being in Miami. There were 800 competitors from 33 countries in the Melbourne regatta.

Genevieve came second in her class sailing solo in the Hansa Liberty section. She was only beaten by a fellow Australian and competing in her race were competitors from England, Australia and France. Gen was the only woman in this class.

Gen, as we affectionately call her, has been sailing now for many years and is a very experienced yachty. She travels worldwide to compete in these events on an annual basis and always comes home bearing medals.

Gen’s next yachting adventure is in London next year where she will compete in the same race and hopefully bring home the GOLD. We wish you all the best Gen!

My Partner Won’t Let Me See The Children – What Can I Do?

Blog post by Daniel Sampson

stopfromseeingIn almost every case of the breakdown of a family relationship, the first thought of a party is what will happen to my relationship with the children. It is usual that parties can make arrangements for the care and welfare of the children by themselves or with the assistance of family or third parties. There are however, times where the animosity between parties can be such that they cannot agree with respect to care arrangements for the children, or there are differing views as to what is the best for the children.

Even rarer, are situations when a party will unilaterally withhold the children with good reason. There can be valid reasons for withholding children from another parent, such as the threat of an act of physical or emotional abuse or violence. However, where no such risk is evident a party has the right to see the child when it is in the best interest of the child. The current approach of courts is that baring any serious threat to the child’s health and welfare, parents have the right to time with their children.

Mediation

Unless the matter requires the urgent intervention of the Court, parties are required to participate in Mediation conducted by a Family Dispute Resolution Practitioner. The mediator helps parties to come to an agreement with respect to the children and discuss any areas of conflict.

If the parties can reach agreement they can draft a parenting agreement or seek that their agreement be made into Court Orders, binding them both to the agreement. This would be filed and approved by the Court if it is appropriate in the Court’s view.

If there are threats to a child’s safety or welfare you should make enquiries with the Department of Child Protection or otherwise make an urgent application to the Family Court.

Applying in the Family Court

If mediation fails, the parties will be issued with a Certificate confirming they have attempted mediation. This will allow either party to file an Application.

The Application can be for a spend time arrangement on an urgent basis by seeking an interim Order. This will mean that, if there is sufficient evidence in support, the Court may track the matter to an urgent hearing for interim time with the parent who is not currently having time.

You may be required to attend a Case Assessment Conference with a Family Court psychologist, so that they can make recommendations to the Court as to the proposed care arrangement.

For more information, please contact Daniel Sampson from Culshaw Miller Lawyers.

Family Law, Facebook and Social Media

Blog post by Daniel Sampson

facebook

Social Media has become part of our daily lives and is often taken for granted. Facebook in particular can be a source of evidence and tool for conducting legal proceedings. It can also get parties to proceedings into trouble if they do not know the law and its implications.

Service of Documents

In the matter of Byrne & Howard [2010] FMCAfam 509, an Order was made for the substituted service of documents to the Respondent’s Facebook page. This was in circumstances where all other avenues of service had been exhausted and where the Court had evidence to believe that there was a reasonable chance that service would be effected by Facebook. The Federal Magistrates Rules at the time allowed for electronic service of a document. This could be seen as the natural evolution and acknowledgement of Facebook as a frequently used communication medium akin to email.

Evidence

Documents may be annexed to support a fact that is stated in your affidavit. Affidavits can therefore provide the Court with evidence of the credibility of a party to the proceedings.

A party’s Facebook (and other social media) account may be a goldmine for the other party seeking to discredit them.

In the matter of Everett & Everett [2014] FamCAFC 152, the mother was given Orders for Adult Child Maintenance for the father to pay for their daughter who had Cystic Fibrosis and was offered a place at University. The father annexed copies of the daughter’s Facebook and Instagram pages to support his contention that the daughter did not require maintenance. The Court did not accept the evidence on this occasion but granted the appeal on other evidence.

Publication of Court Proceedings and Identifying Parties

Pursuant to Section 121 of the Family Law Act 1975, the electronic publication or dissemination of Family Court proceedings and identifying parties to the proceedings or witnesses is prohibited. The Court when publishing reportable judgments available to the public will anonymise the parties prior to their publication.

In the matter of Lackey & Mae [2013] FMCAfam 284, the paternal family made multiple false reports to the child protection authorities with respect to the mother’s care of the child. In addition to the false reports, the paternal family and the father also made a number of denigrating online ‘posts’ with respect to the Court, the Independent Children’s Lawyer and the mother.

The Court had a copy of the postings. Federal Magistrate Neville viewed the posts as a ‘form of cyber-bullying, cowardly, derogatory, cruel and nasty’. The Court ordered that the posts be removed and the matter was referred to the Marshal of the Court for further investigation of the breach of section 121, the penalties for which are fines and possible imprisonment.

For more information, view our earlier blog on this topic or contact Daniel Sampson from Culshaw Miller Lawyers.

Recognition of Overseas Same-Sex Marriage

Blog post by Daniel Sampson

international_recognition

The New South Wales government recently gave their support to the Relationships Register Amendment (Recognition of Same-Sex and Gender-Diverse Relationships) Bill 2014.

Once the bill becomes law, the NSW government will recognise overseas same-sex marriages in NSW. The implications are purely that of recognition. NSW has already referred its de facto law-making powers to the Commonwealth; the Family Law Act 1975 grants property rights to de facto couples regardless of sexual orientation.

The Act will eventually mean that same-sex couples married overseas can register themselves as ‘married’ on the register of Marriages in New South Wales.

One curiosity is this: if a same-sex couple in NSW wants to formally divorce, then they would need to do so in the jurisdiction in which they were married, and not in NSW. This would of course carry implications for wills and estate planning, and if they wanted to remarry. This however is largely academic, as such scenarios would not apply in Australia until the definition of marriage is changed to recognise same-sex couples. For now, they would need to marry and stay in a jurisdiction which allows same-sex marriage or recognises same-sex married partners in estate disputes.

Two other states have already recognised overseas same-sex marriages in Australia: Queensland and Tasmania.

In Western Australia, there is no recognition of overseas same-sex marriage. Western Australia has not referred its de facto law making power to the Commonwealth. De facto relationships regardless of sex are dealt with under the Family Court Act 1997 in WA which has similar provisions as the federal Family Law Act.

One glaring omission in WA is the treatment of superannuation entitlements for both same-sex and de facto couples. Under the WA legislation, no superannuation splitting orders can be made to deal with a party’s superannuation entitlements. This can have serious implications for those people in long-term de facto relationships with significant superannuation entitlements of one party.

A bill for same-sex marriage has been proposed in the Western Australian Parliament. It is available to read here.

For more information, please contact Daniel Sampson from Culshaw Miller Lawyers.

CM News – Introducing Warren and Sarah!

CM NEWS

warren-and-sarah2Culshaw Miller Lawyers is pleased to introduce Warren Elder and Sarah Nicholls to the team.

Warren brings considerable experience as an Accredited Family Law Specialist in his role as Special Counsel in the Family Law Section.

Sarah also joins the Family Law team. Hailing from South Australia, Sarah brings her background as a Legal Associate in the District Court of South Australia as well as a passion for Family Law.

Both Warren and Sarah join the team in the Perth office, and we look forward to watching them grow in their new roles. Welcome Warren and Sarah!

Gender Re-assignment of Children: The Role of The Family Court

Blog post by Daniel Sampson

gender

Justice Diana Bryant, the Chief Justice of the Family Court of Australia, has expressed her view that applications with respect to transgender children should go before the High Court for further determination as to whether the Court should continue to determine this issue. The view is based on a growing body of medical and psychological research with respect to the varied effects of gender re-assignment and whether the Court is the appropriate forum for such matters.

In Australia, where the re-assignment of the gender of a child is concerned, an application must be made with respect to the medical procedure required for re-assignment. This is because the legal capacity of a child is not that of an adult. The Courts are guided by the Gillick competency test or Gillick principle, which is ultimately a test of whether a child is able to consent to treatment without parental permission or knowledge. This will depend on the child’s relative maturity and ability to understand what the procedure will do.

Under the current law, the Court will be guided by the expert evidence of medical practitioners and psychologists as well as evidence of the Applicant to determine whether the gender re-assignment is in the child’s ‘best interests’.

There is reportedly growing research with respect to the increase of cases with respect to the gender re-assignment of children. The comments of the Chief Justice can therefore be seen as an acknowledgement as to whether the Court should continue to be involved in what is a serious medical and mental health issue.

Cases

Gillick v. West Norfolk and Wisbech A.H.A [1986] AC 112

A Decision of the House of Lords in England that established the ‘Gillick test’ that parental power to consent to medical treatment diminishes as the child’s capacity and maturity grows.

Secretary, Department Of Health And Community Services v JWB and SMB (1992)175 CLR 218

This was a High Court case, accepting as good authority Gillick [1986] and establishing further principle for the Court exercising its jurisdiction in cases where serious medical cases required the intervention of Court, not only the parents. This was a matter regarding the sterilisation of an intellectually disabled child. The Court ruled that the parents required an order of the Court and that the Court had proper jurisdiction to authorise such a procedure. An irreversible medical procedure on a child will require the intervention of the Court.

In the matter of the welfare of A (a child) (1993) 16 FamLR 715

This was an Application by A’s mother for male gender re-assignment for her 14 year old daughter. The Court granted authorisation for the procedure and identified gender re-assignment as the type of procedure that ‘stand(s) in the category of procedures which require the authorisation of a court’ (In re Marion (1990) 14 FamLR at p 448).

Re Marion(No 2) (1994) 17 FamLR 336

This was a sterilisation case discussing the relevant factors for the Family Court to consider in determining whether a procedure was in the child’s best interests such as:

  • The condition requiring treatment or procedures;
  • Nature of the treatment or procedure;
  • Reason for the proposed treatment;
  • Alternative procedures and treatment;
  • Waiting of the proposal against the alternatives;
  • Physical, psychological and social implications of the treatment;
  • Risks in not authorising treatment; and
  • Views of parents, guardians, carers and the child.

Re: Alex: Hormonal Treatment for Gender Identity Dysphoria [2004] FamCA 297

Alex was legally a girl and in the care of the state. Alex was requesting treatment for gender reassignment. The Court considered the principles in Marion and applied them to Alex’s case. They held it was in Alex’s best interest to authorise the treatment. There was also an acknowledgement by Chief Justice Nicholson of a child’s right to live with a transgender identity under international human rights law.

Re: Jamie [2013] FamCAFC 110

Jamie, an 11 year old, was diagnosed with childhood gender identity disorder. Jamie was undertaking stage one of a two stage hormonal replacement process. While stage two was irreversible, stage one was not. At first instance Justice Dessau ruled that the procedure required the intervention of the Court, however the Full Court determined that the decision fell within the parental responsibility of the parents. Jamie was in agreement with the treatment, but the protection afforded to irreversible procedures was not required to be exercised by the Court.

Jamie’s case was the subject of the ABC’s Four Corners program that aired on 17 November 2014 – for more information click here.

Children’s Best Interests and Parenting Orders

Blog post by Kate O’Leary

bestinterestschild

When making a parenting order, the Family Law Act requires the Court to consider the best interests of the child as the paramount, and primary, consideration. Parents must also apply this principle when making parenting plans.

The primary considerations, as established by the Family Law Act, are:

  1. the benefit to the child of a meaningful relationship with both parents; and
  2. the need to protect the child from physical or psychological harm.

The Court will always apply more weight to the second consideration.

The Court can then consider the following additional considerations:

  • any views expressed by the child and factors which may affect those views (for example, the child’s maturity and level of understanding);
  • the nature of the relationship that child has with each parent, and other people (including grandparents and relatives);
  • The extent to which each parent has contributed to, or failed to; participate in long-term decisions regarding the child; spend time with the child; and communicate with the child;
  • The extent to which each parent has or has not fulfilled their obligations to maintain the child;
  • The likely effect on the child of any changes in his or her circumstances, including the likely effect of separation from either of his or her parents, or any other person (whether that person is a sibling, grandparent or other relative);
  • The expense and practicality of a child spending time and communicating with a parent;
  • Each parent’s ability to provide for the child’s financial, intellectual and emotional needs;
  • The maturity, sex, lifestyle and background of the child and of either of the parents (and any other characteristics the court thinks relevant);
  • The right of an Aboriginal or TSI child to enjoy his or her culture and the likely impact any proposed order would have on that right;
  • Any family violence involving the child or a member of the child’s family;
  • Whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings; and
  • Any other factor the Court considers relevant.

Children’s Best Interests – points to note:

A parenting plan is a written agreement, between the parents, that sets out the parenting arrangements for the child. As it is a mutually agreeable arrangement there is no need to attend court. A parenting plan can be changed, as agreed by both parties, and unless a court orders otherwise it is not a legally enforceable agreement.

A parenting order is a legally enforceable agreement approved by the court. A parenting order will cover parenting agreements and will often stipulate financial matters such as maintenance. Also called consent orders, parenting orders can be applied for without attending court.

Culshaw Miller Divorce & Family Lawyers can advise you on all aspects of parenting orders and how the court applies the Family Law Act in determining what is in children’s best interests. Contact Kate O’Leary for more information.