Binding Financial Agreements; are ‘Pre-nups’ still useful following the decision in Thorne & Kennedy?

Thorne & Kennedy [2017] HCA 49 is a decision of the High Court of Australia whereby a Binding Financial Agreement, or ‘pre-nup’, was set aside.

So what good are pre-nups if they can be set aside?

To answer this question, it is important to understand the background to Thorne & Kennedy.

In this case, the parties met on the internet in 2006. Ms Thorne was 36 years old, with no substantial assets, and at the time lived in the Middle East. By contrast, Mr Kennedy was 67 years old and held assets with a value of approximately $18 million.

In February 2007 Ms Thorne moved to Australia, and on 30 September 2007 the parties were married.

On 19 September 2007, Mr Kennedy informed his fiancé that they were going to see a lawyer to sign an agreement. Mr Kennedy informed his fiancé that if she did not sign the agreement, the wedding would not go ahead. Against independent legal advice, Ms Thorne signed the ‘pre-nuptial’ agreement pursuant to section 90B of the Family Law Act 1975 on 26 September; some four days prior to the wedding.

Shortly after the marriage the parties entered into a ‘post-nuptial’ agreement pursuant to section 90C of the Family Law Act. Ms Thorne again signed against independent legal advice.

The Agreements gave the wife a lump sum of $50,000 (CPI indexed) in the event of the parties’ relationship breakdown if they had been married for a minimum of three years.

After four years of marriage, the parties separated and Ms Thorne applied to the Federal Circuit Court for the agreements to be set aside. Ms Thorne was successful at first instance, with the primary judge setting aside both agreements for unconscionable conduct and undue influence.

The decision of the primary judge was based on a number of factors, including:

  1. Ms Thorne had no permanent status in Australia at the time;
  2. Ms Thorne did not have financial equality with Mr Kennedy;
  3. Ms Thorne was entirely financially dependent on Mr Kennedy;
  4. Ms Thorne’s emotional preparation for the marriage;
  5. Ms Thorne’s emotional commitment to the relationship and the prospect of having a child; and
  6. The ‘publicness’ of the marriage.

Mr Kennedy died during the proceedings and on his behalf his estate appealed the primary judge’s decision. This application to uphold the agreements was allowed.

Ms Thorne appealed successfully to the High Court of Australia, with the High Court unanimously restoring the primary judge’s decision.

So are Binding financial agreements enforceable?

The short answer is yes, subject to many conditions being met.

The Family Law Act 1975 (as amended) allows married and de facto couples to enter into a Binding Financial Agreement (‘BFA’) before marriage or cohabitation, during marriage or cohabitation, and after a relationship breakdown. BFAs provide a way for people to protect their assets before getting married or entering into a de facto relationship and set out the division of the couple’s assets should they separate.

Each party to the BFA must enter into the BFA of their own free will and be fully informed as to the advantages and disadvantages of entering into the agreement. Each party must receive independent legal advice about the BFA.

For couples getting married, the decision of the High Court in Thorne & Kennedy strongly enforces the considerations parties must contemplate when entering into a BFA including that the parties should (a) ensure that any contemplation of a BFA should be done many months in advance of the wedding to ensure that there is ample time to prepare the document and negotiate the terms, and (b) that the parties must enter into a BFA only in circumstances where unconscionable conduct of a party does not exist.

Testamentary Guardians – Looking After Your Children In Your Will

Wills predominantly deal with the financial side of your affairs, but did you know your Will can also make provision for the care of your child or children upon your death?

In Western Australia, a parent or legal guardian of a child may by Will appoint a testamentary guardian for a child or children under the age of 18 years.

Children under 18 are often referred to in Wills as ‘minor’ or ‘infant’ children. The guardian is a ‘testamentary’ guardian because the guardian is appointed by Will which is a testamentary document.

The appointment of a testamentary guardian only takes effect on the death of the last surviving parent or legal guardian of the child. The testamentary guardian’s appointment ends when the child attains the age of 18 years.

Once appointed, the testamentary guardian is responsible for making long term decisions regarding the welfare and development of your child and also has the daily care of the child.

In considering who to appoint as a testamentary guardian, it is important to think about practical matters including:

• the relationship of the proposed guardian to the child
• the testamentary guardian’s own circumstances (including their living arrangements, family structure and financial position), and
• the relationship between the proposed guardian and the executor appointed under your Will.

The executor of your Will has discretion to release funds from your estate to the testamentary guardian for the maintenance, education and advancement in life of your minor children. As such, the executor of your Will and your proposed testamentary guardian need to maintain a good relationship and work together in the best interests of the children.

The appointment of a testamentary guardian is subject to the jurisdiction of the Family Court of Western Australia. If there is a dispute about the appointment of a testamentary guardian, or if no testamentary guardian is validly appointed by Will, a person with a “sufficient interest” may apply to the Family Court for parenting orders in relation to a minor child.

An application for guardianship may be contested if more than one member of your family wishes to become the guardian(s) of your minor children. The Court will take into account any wishes expressed in your Will as part of the decision about what is in the best interests of the child. A Family Court application may also incur legal costs which are payable by your estate.

In order to make your wishes clear about who will look after your child upon your death, it is important to include a guardianship clause in your Will.

At Culshaw Miller Lawyers, we work with our clients to determine the most suitable person or persons to be the testamentary guardian of your minor children. Our Wills are drafted to include:

• a direction to the executor that a testamentary guardian is not to incur a financial liability as a result of looking after your child
• any conditions or wishes that you would like the testamentary guardian to consider when making decisions about your children; and
• any needs which may be particular to each of your children.

To make enquiries regarding appointing a testamentary guardian for your child or to speak to a member of our estate planning team in relation to your Will, please contact our office on (08) 9488 1300.

Same Sex Marriage – How Does This Affect My Will?

With the recent amendments to the Marriage Act 1961 (Cth) which see same sex marriage legalised in Australia, it is an opportune time for same sex couples to review and update their Wills or make a Will if they do not already have one in place.

In Western Australia, sections 14 and 14A of the Wills Act 1970 (WA) provide that:

1. marriage revokes your Will; and
2. a divorce order or annulment granted after 9 February 2008 revokes your Will

unless your Will is specifically drafted in contemplation of that marriage or divorce.

As the law in Australia has not until very recently recognised same sex marriage, it is unlikely same sex couples will have had their Wills drafted in contemplation of marriage and the recent legislative change may therefore see couples’ Wills being inadvertently revoked.

It is very important that same sex couples who are planning to marry in the future (and other couples planning to marry) update their Wills to include an express clause which states that their Will is made in contemplation of marriage. If drafted correctly, this will prevent the Will being revoked (rendered invalid) upon the marriage.

The recent legislative amendments also mean that same sex couples who have been married overseas are now recognised as married in Australia. If you have had your union solemnised overseas, it is important to revisit your estate planning as your existing Will may be revoked by virtue of the recognition of your marriage according to Australian law.

If you die without a Will or without a valid Will, your estate will pass according to the relevant laws of intestacy (in Western Australia, section 14 of the Administration Act 1903 (WA) applies). This effectively removes a Will-maker’s freedom to decide who is to benefit from their estate upon their death and often makes the administration of the estate more complex and inevitably more expensive.

For more information or assistance in making or updating your Will, please contact the Estate Planning team at Culshaw Miller Lawyers. Please note that our offices close from 12pm on 22 December 2017 and reopen at 8.00am on 3 January 2018.

Family Law FAQs: Can I Travel Overseas With The Children?

Want to travel with the children overseas?  If you have or are seeking parenting orders however, you might want to double-check a few things before making any sure-fire plans, otherwise you could find yourself in hot water and potentially facing a criminal charge.

Section 65Y of the Family Law Act 1975 makes it an offence to take or send a child from Australia if that child is subject to a parenting order dealing with:

  • where a child lives;
  • when a child spends time with a person;
  • when a child communicates with a person; or
  • when a person has parental responsibility for a child.

Similarly, section 65Z of the Act makes it an offence to take or send a child from Australia if there are proceedings before the Court for the making of a parenting order of the sort referred to above.

There are exceptions however, as the Act allows a child to be taken from Australia overseas in the circumstances outlined above, so long as it is done with:

  1. the express written consent of each party; or
  2. a Court Order providing for the overseas travel has been made.

It is crucial then that, if you have a parenting order or are a party to Court proceedings for a parenting order, any international travel involving a child subject to that order or those proceedings must not take place unless you have satisfied one of the above conditions.

If either of these requirements is not satisfied then you could be charged with committing an offence.  The penalty can be imprisonment for up to 3 years.

It is important that any final parenting orders therefore contemplate whether or not any provisions need to be made for international travel of a child or children.  These provisions can include (but are not limited to) addressing issues such as whether all parties must consent to such travel, how much notice the travelling party needs to provide the other and how children’s passports are to be handled.

It is possible to have a final parenting order that a child lives only with one party who has sole parental responsibility for that child, but unless that parenting order contains an order permitting that party to also arrange the international travel of the child without reference to the other party then section 65Y operates to still require both parties to consent to international travel of the child.  This highlights the importance of having properly drafted orders, and receiving Family Law advice with respect to same.

CM News – Introducing Rob and Deborah

CM NEWS

Culshaw Miller Lawyers is pleased to announce that Robert Parkinson will be commencing on Monday 9 January 2017 as our Family Law Consultant with his law clerk Deborah Luke.  Rob and Deborah will be joining the team in our Perth office.

The directors and staff of Culshaw Miller join in welcoming Rob and Deborah to the team!

2016/2017 Christmas School Holiday Contact Deadlines

Blog post by Hayley Ellison

deadlineWith the Christmas holidays fast approaching, it is important to make arrangements to spend time with your children in advance. If you are unable to reach an agreement regarding the upcoming Christmas school holidays then you may need to seek Family Court Orders.

Family Dispute Resolution

Prior to commencing Family Court Proceedings, the Family Law Act 1975 requires that parties attend Family Dispute Resolution (‘FDR’). There are exceptions to this requirement however; it is most likely that your matter will not fall under one of these exceptions. It is important to remember that you can experience delays in the FDR process therefore it is best to commence the process as early as possible. In the event that you are unable to reach an agreement through FDR, you are issued with a section 60I certificate or FDR certificate which allows you to commence proceedings.

Commencing Family Court Proceedings

In Australia, there are three Family Law Courts:

  1. Family Court of Western Australia;
  2. Family Court of Australia; and
  3. Federal Circuit Court of Australia.

You can make applications regarding the care arrangements for your children during the upcoming 2016/2017 Christmas school holidays in these courts dependent on which jurisdiction is applicable. For more information regarding the appropriate jurisdiction and making an application to the Family Law Courts, please contact our offices to make an appointment with one of our family lawyers. Each court has separate requirements regarding the filing of applications for the 2016/2017 Christmas school holidays.

Family Court of Western Australia

In Western Australia, the Case Management Guidelines provide that “the cut off to file applications in the Family Court in time for Christmas is 4.00 pm on the second Friday of November each year.” In 2016, the cut-off date to file applications for the 2016/2017 Christmas school holidays is Friday 11 November 2016.

The Family Court advises in the Case Management Guidelines that “parties should be aware that applications filed prior to this date are not necessarily guaranteed to be listed or determined prior to the commencement of the relevant school holiday period. Such applications should be filed as early as practicable to ensure an appropriate listing date.”

Family Court of Australia and Federal Circuit Court

In the Family Court of Australia, the Rule 5.01A of the Family Law Rules 2004 provides that the cut off to file applications is “before 4:00pm on the second Friday in November of the application year”, therefore, the same deadline of 11 November 2016 applies. Following this deadline, the applications will be assessed in terms of urgency. In the event that the application is not assessed as being urgent it is unlikely that your matter will be listed until 2017. In the Federal Circuit Court, there is no specific filing deadline.

However, the Court’s Case Management Guidelines also state, “Parties should be aware that applications filed prior to this date are not necessarily guaranteed to be listed or determined prior to the commencement of the relevant school holiday period. Such applications should be filed as early as practicable to ensure an appropriate listing date.”

Overseas Travel

It is vital to note that pursuant to section 65Y of the Family Law Act 1975 and section 107 of the Family Court Act 1997 parties to proceedings must not take or send the child or children who is the subject of proceedings outside of Australia unless:

  • It is done with the written consent of the other party/parties to the proceedings; or
  • It is done in accordance with a Family Court Order.

If you wish to take your child or children on an overseas holiday you must obtain the written consent of the other party. In the event that you cannot obtain written consent, an application should be filed to obtain endorsement of the Family Court through Orders.

Please contact our offices to make an appointment if you require assistance to make arrangements for your child or children this holiday before the Christmas rush begins.

Family Law: There’s An App For That!

Blog post by Daniel Sampson

app1We sit upon the precipice of a new age whereby we are developing technology that can teach a computer to ace Super Mario World (fun) or to command an autonomous army (scary).

An Australian venture is attempting to do something even scarier still; to apply data and technology to predict likely outcomes in Family Law cases. Is this a good idea or a bad idea?

The concept appears to be that the App will analyse both hard data and matters specific to a case, and predict likely outcome based on patterns and trends or legal precedents together with what the founder of the App describes as ‘gut feelings’, or statistical unknowns.

So are family lawyers about to go the way of the dodo? Will robo-lawyer kill off the industry? Not likely. The App may be accepted by the profession as a ‘second opinion’ resource or even a tool for lawyers to reconsider their advice along the way to ensure that the lawyer’s analysis of the case is sound or there may be further considerations.

Even despite the wisdom of an App, it would be interesting to see how the App factors in Judicial Discretion, that esoteric term that basically describes the ability of a Judge to exercise their own wisdom with regard to evidence that they are hearing and make decisions while still applying the law.

Studies have been conducted that conclude that judicial discretion can lead to arbitrary, uncertain and unclear judgments without further rules being applied. Then in that case, could the App help to further crystallise those observations, identifiable trends or common findings into legal rules and perhaps legislation? It is an interesting question.

In any case, I for one will welcome our new robo-judicial overlords if I have not already been replaced by a legally admitted Rasberry Pi.

CM News – Three New Associates

CM NEWS

Culshaw Miller Lawyers is pleased to announce that Hayley Ellison of our Perth office has been promoted to Associate in the area of Family Law. Similarly, Kate O’Leary of our Adelaide office has been made an Associate in Family Law.

Congratulations also to Tom Cuthbertson of our Adelaide office, whose practice covers Criminal Law and Family Law, who has been promoted to Associate of Culshaw Miller Criminal Lawyers.

The directors and staff of Culshaw Miller join in congratulating Hayley, Kate and Tom for their hard work and well-earned appointments.

Avoiding The 60 Minutes Debacle – Applying For An Urgent Recovery Order

Blog post by Mary Basta and Sarah Nicholls

recoveryorder1The 60 Minutes crew recently hit the news headlines after being accused of involvement in an operation to recover children from a street in Beirut in an attempt to have them reunited with their mother.  It was a widely publicised debacle.

Generally, the longer a child remains with the other party, the more difficult it is to successfully obtain a recovery order.

If you are faced with a situation where your child has been wrongfully taken, it is essential that you take appropriate action immediately and seek urgent legal advice.

What is a recovery order?

A recovery order is an order made by a court requiring the return of a child to a:

  1. parent of the child;
  2. person who has a parenting order that states the child lives with, spends time with or communicates with that person; or
  3. person who has parental responsibility for the child.

Who can apply for a recovery order?

A recover order may be applied for by:

  1. a person with whom the child is to live, spend time with or communicate with under a parenting order;
  2. a person who has parental responsibility for the child;
  3. a grandparent of the child; or
  4. any other person concerned with the care, welfare or development of the child.

How do I apply for a recovery order?

The application process for a recovery order will depend on whether or not you have proceedings currently before the court. In any event, an application to the court is required together with a supporting Affidavit which sets out the background to the matter, details of how the child was taken or not returned to you, steps you have taken to recover the child and why it is in the child’s best interest that they return to you.

What does the court consider when making a recovery order?

A court must regard the best interests of the child as the paramount consideration in deciding whether to make a recovery order. The court is required to give greater weight to the consideration of the need to protect the child from harm.

If the court decides to make a recovery order, the order will authorise or direct another person or persons to find, recover and deliver the child. A copy of the orders must be provided to that person. In most cases, this is the Australian Federal Police.

International child abduction

If your child has been taken overseas without your consent, the Hague Convention may apply.

The Hague Convention is an agreement in force between Australia and a number of other countries. It provides a framework for seeking the return of abducted children to their home country.

It is essential to seek urgent legal advice in the event that you suspect your child is at risk of being removed from the country.

Contact Culshaw Miller Lawyers for more information.

Legal Aid Matters – A National Campaign

legalaidmatters

Today saw the launch of the national Legal Aid Matters campaign.

The message:

Australian Governments must:

  1. Increase the Commonwealth’s share of legal aid commission funding to 50 per cent with the States and Territories. This would amount to an additional $126 million in the 2016 Commonwealth Budget.
  2. Immediately provide a further $120 million to cover civil legal assistance, with the States and Territories contributing $80 million, comprising a total of $200 million, as recommended by the Productivity Commission.
  3. Immediately reverse further Commonwealth funding cuts to legal assistance services announced in 2014, due to take effect from July 2017. These include:
    • $12.1 million in cuts to community legal centres;
    • $4 million in cuts to Aboriginal and Torres Strait Islander Legal Services; and
    • all cuts directed at policy and advocacy work conducted by legal assistance bodies, as recommended by the Productivity Commission.

For more information please visit: http://legalaidmatters.org.au/.

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