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5 Things To Know About Superannuation Splitting For De Facto Couples

1. WHAT DOES IT MEAN?

Soon de facto couples, like married couples will be able to split their superannuation after separation.

2. DOES THIS MEAN DE FACTO COUPLES MUST SPLIT THEIR SUPER 50/50?

No. it simply means that if one party may use part or all of their super to pay the other party out as part of a financial settlement. If there are other assets like a house or cash, a super split may not be necessary. The new legislation simply allows parties more flexibility in structuring a settlement.

3. DOES THE NEW LAW APPLY TO EXISTING SETTLEMENTS?

The Commonwealth Attorney- General’s media release of 24 October 2018 states that the legislation will be introduced in 2019 and super splitting to occur in 2020. Whilst we cannot rule out super-splitting occurring on existing cases, based on previous legislative changes we doubt existing cases would be included in the new regime.

4. DOES THIS MEAN I CAN GET ACCESS TO SUPER NOW AS PART OF MY SETTLEMENT?

Not unless you are already eligible. All this means is that a portion of one person’s super is transferred to the other person. The same rules re age apply.

5. IS THE NEW LEGISLATION A BIG DEAL?

For some people yes. Where the only major asset was super then undoubtedly some de facto partners suffered. However, in deciding whether settlements are “just and equitable” the Family court of WA always considers the percentage split including super. However, moving forward de facto couples will have the same flexibility that married couples have and that’s a good thing.

7 Important Things To Know About The Proposed 2018 Surrogacy Changes In WA

On 24 August 2018 the Government of Western Australia introduced the Human Reproductive Technology and Surrogacy Legislation Amendment Bill 2018 (“the Bill”).
The Explanatory Memorandum provides that the Bill will “enable male-same sex couples and single men access to surrogacy”. A few things are worth noting:

  1. The Bill is still a proposal and is not law until approved by Parliament and the State Governor.
  2. If approved in its current form gay couples and single men will have access to altruistic surrogacy in WA.
  3. The legal parents of any children born because of an approved surrogacy will be the gay couple or the single man.
  4. Gay men and single men will be required to have an approved surrogacy agreement and the regulation that entails.
  5. The proposal only related to future surrogacy arrangements.
  6. The current Surrogacy Review will address the issue of legal parentage of existing children born to gay dads.
  7. Reproductive technology will be made available to gay couples and single men.

Binding Financial Agreements and the High Court Decision in Kennedy

The significance of Thorne v Kennedy

  1. Thorne and Kennedy, in our opinion does not mark the end of BFAs as some commentators have argued.
  2. Neither does the case introduce a “justice and equity” or fairness test to BFAs.
  3. However, the case does:
    1. Sound yet another warning there are major risks of a BFA being set aside if it is executed too close to a wedding or significant event;
    2. Establish that the facts surrounding the execution of a BFA can lead to a conclusion that a party was powerless in the process; and
    3. Whilst the Court recognised that BFAs by their very nature will be more favourable to one party an unfair provision for a party in a BFA may in itself establish undue influence and unconscionable conduct which if established would lead to a BFA being set aside.

The Facts of the case are as follows:

The recent High Court case of Thorne v Kennedy
The High Court case of Thorne v Kennedy [2017] HCA 49 was delivered on 8 November 2017.

The Facts

  • The parties met over the internet in 2006. At the time, Ms Thorne, who was an Eastern European woman, was living in the Middle East. She was 36 years old. She had no substantial assets. Mr Kennedy was a 67-year-old Greek Australian property developer. He had assets worth between $18 million and $24 million. He was divorced with three adult children.
  • Ms Thorne’s profile on the website on which they met described her as a single woman with no children, of the Greek Orthodox religion, who spoke a little English and Greek. She shared the same religion with Mr Kennedy and generally conversed with him in Greek. Mr Kennedy travelled overseas to meet Ms Thorne very shortly after meeting her online. He told her that if he liked her then he would marry her but that “you will have to sign paper. My money is for my children”[1].
  • The wedding between Ms Thorne and Mr Kennedy was set for 30 September 2007. Around 19 September 2007, Mr Kennedy told Ms Thorne that they were going to see solicitors about the signing of an agreement. Ms Thorne asked Mr Kennedy whether he required her to sign the agreement. He replied that if she did not sign it then the wedding would not go ahead.
  • On 20 September 2007, Mr Kennedy took Ms Thorne and her sister to see an independent solicitor, Ms Harrison, who was an accredited family law specialist. Mr Kennedy waited in the car outside. It was during this appointment that Ms Thorne first became aware of the contents of the agreement. By this time, Ms Thorne’s parents and sister had been flown to Australia from Eastern Europe and accommodated for the wedding by Mr Kennedy. Guests had been invited to the wedding. Ms Thorne’s dress had been made. The wedding reception had been booked.
  • Ms Thorne signed the pre-nuptial agreement 4 days before the wedding and a very similar post nuptial agreement shortly after the wedding.

 

The BFA

Ms Thorne’s solicitor Ms Harrison advised her not to sign the BFA and that the BFA was “the Worst BFA I have ever seen.” The BFA provided as follows:

(1) The agreement provided for Ms Thorne to receive maintenance during the marriage of the greater of (i) $4,000 per month. Ms Harrison observed that the $4,000 per month contained no provision for increase and was a very poor provision from someone in Mr Kennedy’s circumstances.

(2) Ms Thorne would be permitted to live rent free in a penthouse located in the proposed development and her family would be permitted to live rent free in a unit located in that development.

(3) If Ms Thorne and Mr Kennedy separated within the first three years of marriage, with or without children, then Ms Thorne would get nothing. The rights described above would also cease.

(4) If Ms Thorne and Mr Kennedy separated after three years, without children, Mr Kennedy would only have an obligation to pay a single lump sum of $50,000 to Ms Thorne. Ms Harrison described this amount as “piteously small”.

(5) If Mr Kennedy died while they were living together and while they had not separated then the agreement provided that Ms Thorne would be entitled to (i) a penthouse in the proposed development or, if that were not possible, a unit she chose in the same city not exceeding a market value of $1.5 million; (ii) 40% of the net income of the management rights of the proposed development or $5,000 per month, indexed annually, whichever was the greater; and (iii) the Mercedes Benz car that was presently in her possession or a replacement vehicle of the same or higher value.

· Ms Harrison’s advice concluded as follows:

“I believe that you are under significant stress in the lead up to your wedding and that you have been put in a position where you must sign this Agreement regardless of its fairness so that your wedding can go ahead. I also understand from what you have told me that you are longing to have a child and you see your relationship with [Mr Kennedy] as the opportunity to fulfil what may well be a long- held desire. I hold significant concerns that you are only signing this Agreement so that your wedding will not be called off. I urge you to reconsider your position as this Agreement is drawn to protect [Mr Kennedy’s] interests solely and in no way considers your interests.”

· After four years the parties separated, and Mr Kennedy died during the subsequent legal proceedings. A single Judge (“the Primary Judge”) set aside the BFA. The case was appealed, and the Full Court of the Family Court re-instated the BFA. The High Court held that the decision of the Primary Judge was correct, and it set aside the BFA.

BFA set aside

At paragraph 47 the High Court approved of the Primary Judge’s reasoning as follows:
· The primary judge set out six matters which, in combination, led her to the conclusion that Ms Thorne had “no choice”[2] or was powerless[3]: (i) her lack of financial equality with Mr Kennedy; (ii) her lack of permanent status in Australia at the time; (iii) her reliance on Mr Kennedy for all things; (iv) her emotional connectedness to their relationship and the prospect of motherhood; (v) her emotional preparation for marriage; and (vi) the “publicness”[4] of her upcoming marriage. These six matters were the basis for the vivid description by the primary judge of Ms Thorne’s circumstances[5]:

“She was in Australia only in furtherance of their relationship. She had left behind her life and minimal possessions … She brought no assets of substance to the relationship. If the relationship ended, she would have nothing. No job, no visa, no home, no place, no community. The consequences of the relationship being at an end would have significant and serious consequences to Ms Thorne. She would not be entitled to remain in Australia and she had nothing to return to anywhere else in the world.

Every bargaining chip and every power was in Mr Kennedy’s hands. Either the document, as it was, was signed, or the relationship was at an end. The husband made that clear.”

· The high Court set aside the BFA on grounds of undue influence and unconscionable conduct. We note the following paragraphs of the decision

The primary judge was correct to consider the unfair and unreasonable terms of the pre-nuptial agreement and the post-nuptial agreement as matters relevant to her consideration of whether the agreements were vitiated. Of course, the nature of agreements of this type means that their terms will usually be more favourable, and sometimes much more favourable, for one party. However, despite the usual financial imbalance in agreements of that nature, it can be an indicium of undue influence if a pre-nuptial or post-nuptial agreement is signed despite being known to be grossly unreasonable even for agreements of this nature. In other words, what the Full Court rightly recognised as the significant gap between Ms Thorne’s understanding of Ms Harrison’s strong advice not to sign the “entirely inappropriate” agreement and Ms Thorne’s actions in signing the agreement was capable of being a circumstance relevant to whether an inference should be drawn of undue influence. [paragraph 56]

…Ms Thorne was labouring under a disadvantage… the disadvantage is not a mere difference in the bargaining power but requires an inability for a person to make a judgment as to his or her own best interests. The findings by the primary judge that Ms Thorne was subject to undue influence – powerless, with what she saw as no choice but to enter the agreements – point inevitably to the conclusion that she was subject to a special disadvantage in her entry into the agreements. [paragraph 64]

I’m Thinking About Separating – What Happens If We Separate?

These are difficult questions to think about. In fact, most of us would rather think of anything but separation. Thinking about separating doesn’t necessarily mean you will separate. Strange as it may seem, at Kavanagh Lawyers we are big fans of marriage and de facto relationships. However, if separation is on your mind it’s better that you get sound legal advice. Usually one hour’s advice will give you all the information you need to make informed decisions, in your own time. One of the true joys of being a Family Lawyer is seeing the relief on a client’s face as she/he realises that their worst fears will not happen. Most clients say they wish they had come to see us years earlier.

General information only

Here are some of the questions we are regularly asked. We hope you that you find our answers helpful. We caution that this is general information only and should not be treated as legal advice. Experience tells us that each case depends on individual circumstances and you should see a lawyer before you make any significant decisions.

Will I ever see my kids again?  

Yes, you will. It is only in the rarest of cases that a parent never has contact with his/her children after separation. This is a question we are asked more often by fathers. Whilst you are unlikely to see your kids as often as you did before separation, most parents come to reasonable arrangements with children. Does this happen immediately? No. However, in most cases with time, good legal advice, (mediation if necessary and litigation as a last resort) most parents arrive at a reasonable arrangement.

I’m afraid I won’t have enough money to support myself and the kids?

This is a very real fear and a question we are most often asked by female clients. It’s also the main reason many women stay in controlling and abusive relationships. There is no simple answer to these very real fears. A few things are worth noting:

  • If there are assets to divide (e.g. money, land, houses, cars and possibly superannuation) then each party will receive a fair share.
  • Child support must be paid until a child is 18 and the Child Support Agency plays a vital role in deciding the amount to be paid and ensuring payment.
  • Spousal maintenance may be awarded for the support of a partner where one party proves they need financial support and the other party has the capacity to pay.
  • All parties must disclose their true financial position and there are major financial penalties for failing to do so.
  • Orders can be made obliging one party to pay the other party’s legal fees.

This can be a complex area of law. The main message is that your partner cannot lawfully financially control you to your detriment.

Can separation get ugly?

Yes. Not always though. People sometimes behave badly. Separation is very often a very emotional process and we are rarely at our best when relationships, emotions, children and money are involved. In our experience separation is a little like the stages of grief: denial, anger, negotiation and acceptance. It’s a question of time. When both parties are ready and are well advised an agreement is reached. It’s not always the agreement you want- but the objective is to reach an agreement you can live with.

“It’s all very amicable”

If we had a dollar for every time we heard that. People regularly say “it’s all very amicable” but in fact it rarely is. This is not to say that every case is litigated and becomes an emotional nightmare. Statistically only a small percentage of cases go to trial. The good news is that the vast majority of cases are resolved with time, patience and good legal advice.

Can’t we just sort it out ourselves without lawyers?

Absolutely. Many people represent themselves at the Family Court or file their own separation papers at the Court. It’s entirely a matter for you.

Should I try mediation?

Absolutely. It is far better to have ownership of a mediated settlement than have little or no control over a court determination. There are many options available to suit your budget and your timeline. We suggest you obtain legal advice before mediation so you can mediate knowing what your legal rights and responsibilties are.

Do I need Court orders?

In most cases yes.

  • Whilst Parenting Plans are very desirable they are not legally enforceable. So, you could spend 6 months negotiating a parenting plan only to find that the other party breaches the agreement and you are powerless to force the agreement.
  • Without court orders in a property settlement there is no financial finalisation of your relationship. This can make it difficult to plan your financial future if your ex-partner may have a legal right to a share of the relationship assets.
  • Most court orders are made by consent. Therefore, whilst you may sign some papers the reality is you may never see the inside of the Family Court.

What can a lawyer do that I can’t?

The obvious answer is to give legal advice. It’s a question of what, if any advice you may need. The more complex the issue the more advice you may need. The following are examples of where legal advice may be useful:

  • What contact your kids have a right to spend with you
  • Whether your children can live interstate or overseas
  • How the Family Court can help protect children at risk
  • Whether shared care is likely to be ordered
  • What share of your relationship assets you are likely entitled to
  • Superannuation splits
  • Stamp duty in separation cases
  • Spousal maintenance
  • Limitation issues- time deadlines to protect your legal rights
  • Child support
  • Binding Financial Agreements

Does seeing a lawyer mean I am going to Court?

Absolutely not. Good lawyers treat litigation as a last resort.

Very often the fallout from a relationship breakdown means there is a lack of trust and good lawyers can bridge the lack of trust. In very general terms our legal strategy involves the following steps:

  • basic advice about your legal rights and responsibilities
  • encouraging you and the other party to reach a fair agreement where you or your lawyer drafts and files the necessary paperwork to be filed at the court
  • mediation
  • legal letters to identify issues and make settlement offers
  • negotiation
  • as a last resort- litigation
Kavanagh Lawyers are highly experienced in dealing with the particular challenges that separation can create. If we can be of assistance, please contact us.

Same Sex Marriage – What Does It Mean For Me And My Family?

The Marriage Amendment (Definition and Religious Freedoms) Act 2017 came into force on 9 December 2017. In practical terms how does the Act affect me?

Marriage

  • The most obvious benefit is that same sex couples can now apply to and get married effective 9 December 2017.
  • A 30 days-notice period is required and in some circumstances (e.g. life-threatening issues) the notice period may be waived.
  • You can also get married in an Australian Embassy.
  • If you were previously validly married overseas prior to 9 December 2017 your marriage will now be recognised under Australian Law.
  • Same Sex Marriages previously solemnised in Australia at foreign Embassies and Consulates (e.g. The United Kingdom Consulate in Perth) will also be recognised.

Children

  • No significant changes have occurred in relation to the Children of same sex marriages in terms of recognising same sex couples as parents or allocating parental responsibility.

Property, Superannuation and divorce.

  • Same sex married couples (married overseas or in Australia), having been separated for 12 months and living in Australia can divorce in Australia.
  • Same sex married couples married in Australia will have access to the Family Court to divide their property on separation.
  • Same sex married couples in Western Australia can split their superannuation in the event of separation- an option not open to de facto couples in Western Australia.

Equality before the Law

  • The recent legislative changes have greatly improved the rights of same sex couples in terms of marriage. However, the rights and recognition of same sex parents and their children are not the same as those of heterosexual married couples and the children of heterosexual marriages and de facto relationships. These issues are further complicated by state surrogacy laws and traditional assumptions in law re marriage and relationships. This is an area of the law that requires discussion, debate, and ultimately policy and legislative reform.
Kavanagh Lawyers is fortunate to have so many same sex clients. Our lawyers are highly experienced in dealing with the particular challenges that same-sex couples face regarding family law. If we can be of assistance, please contact us.

 

Parental responsibility ordered for non-parents in surrogacy case

In the case of Adair & Anor and Bachan [2017] FCWA 78 the Family Court of WA made orders granting parental responsibility for twin children to the biological father and another person. The Children were born overseas under a surrogacy agreement.
The biological father, the First Applicant was not the legal father of the children because of express provisions of the Artificial Conception Act 1985 (WA). The Second Respondent was not a parent of the children. The First Applicant was terminally ill.
Her honour noted the Court generally takes a cautious approach in such cases (particulalry the risk of exploitation of vulnerable women in poorer countries) and noted Thackray CJ’s statement in what is popularly known as the Baby Gammy case about the need for law reform in cases of overseas commercial surrogacy.

In making orders that the children live with both applicants and both applicants have Equal Shared Parental Responsibility for the children Justice Duncanson  emphasised that under the bests interest principle the focus is  not on parenthood but on parenting  and noted the following:

  • [The Applicants] have standing to bring these proceedings for a parenting order in relation to the children as they are persons concerned with their care, welfare or development.
  • I have considered the terms of the Surrogacy Agreement and notwithstanding concerning issues which can arise from such agreements, in the circumstances of this case I am satisfied that the orders sought are in the best interests of the children. [72].
  • This is not a decision taken in haste because of the first applicant’s condition and the unusual circumstances of this case… I have approached this matter on the basis that the best interests of the children is the paramount consideration. [52,54].

Mr M Kavanagh of this firm acted as Counsel in this matter.

Maximum $330* (inc. GST) for all initial consultations held in January and February 2017.

The New Year is often a time where people wish to see a Family Lawyer to “see where I’m at if I separate.” We are pleased to offer a fixed rate of $300 + GST (total $330) as follows:

  • All consultations must occur between 9 January 2017 and 28 February 2017.
  • The flat rate of $330 is based on a consultation of one hour- which is usually sufficient for an initial consultation.
  • If your appointment with our legal team takes less than an hour your rate will be reduced pro rata. For example, if your appointment lasts 30 minutes you will be charged a total of $165 (5 units x $30 per unit + GST = 5 x 30 + 10%).
  • If your appointment exceeds 1 hour you will be charged additionally pro rata. For example, if your appointment lasts 1 hour and 15 minutes you will be charged a total of $429 (13 units x $30 per unit + GST = 13 x 30 + 10%).
  • The flat rate applies to initial consultations only. If you instruct us beyond the initial consultation our normal higher rates apply. Why not talk to us about fixed rate fees if your matter needs to go further?