Amalgamation Bill passes the Senate

I mentioned in a post back in December last year, Proposed Amalgamation of the Federal Courts, that the Government had introduced a Bill to amalgamate the three Federal Courts into one administrative body.

The Courts Administration Legislation Amendment Bill 2015 has now been passed by the Senate and is currently before the House of Representatives.

The view of the Government is that the amalgamation will result in administration savings that can be used to to help fund the Courts in the future.

Appealing Orders made by consent

In the case of Charring & Bunt the Appeal Court of the Family Court set out a clear annunciation of the issues involved in attempting to appeal parenting orders that were made by the consent of both parties.

Justice Ryan stated "the fact that an order is made by consent does not make the order any different to an order made after a hearing." Her Honour went on to say that that there was one important qualification however: "the correctness of an order may not be appealed on its merits by a party who consented to the order. Rather, that party's right of appeal is limited to vitiating grounds, such as fraud, mistake, fresh evidence or the absence of jurisdiction."

In this case, Justice Ryan found that while the mother's complaint that the Independent Children's Lawyer (ICL) was biased had "the flavour of vitiating grounds" (with the allegation perhaps being mistake on behalf of the ICL) the ICL was entitled to form a view about the outcome and merely because that approach differed from the mother's that did not amount to error. Further, that the mother was not aware that the father had not attended upon a psychologist was also not grounds for overturning the consent orders as that information had been available in the available subpoena material and a decision was made by the parties to enter into the consent orders without consideration of that material.

The mother's application for appeal therefore failed. 

Ongoing funding crisis in the Family Courts

Late last year I wrote about the crisis in the Family Law Courts. It would appear that in the new year no improvements have occurred as recently the ABC reported on a matter from the Wollongong area having to be sent to Brisbane for the hearing.

The ABC interviewed a local solicitor who pointed out that this was distressing for the family involved as it will increase the costs involved in the hearing, both in terms of their personal travel costs but also the legal costs of their solicitors. The solicitor added that the reason the transfer was that other matters were already being given a date 2 years away and having the matter heard in Brisbane was the earliest date that could be given.

The report went on to note that the federal Attorney-General has still yet to appoint two judges to replace two retired judges.

http://www.abc.net.au/news/2016-01-15/judge-shortage-forces-nsw-family-interstate-for-court-hearing/7090164

A creditor, a bankrupt and a Binding Financial Agreement

The difficulties that arise in relation to enforcing a Binding Financial Agreement that provides for the division of assets and liabilities between a couple has increased following the recent decision of Grainger & Bloomfield.

In this case Ms Bloomfield obtained a judgement debt against Mrs Grainger for $2,100,000 in 2011. On 14 October 2012 a bankruptcy notice was served on Mrs Grainger. On 1 November 2012 Mr and Mrs Grainger entered into a Binding Financial Agreement that provided for Mrs Grainger to transfer her interest in a property to Mr Grainger. Mrs Grainger became a bankrupt on 7 January 2013.

Ms Bloomfield applied to the Court to set aside the Binding Financial Agreement. Ms Bloomfield was seeking that Mr Grainger transfer the property to Mrs Grainger's Trustee in Bankruptcy or alternatively pay the Trustee the equivalent value.

Mr Grainger responded arguing that as Mrs Grainger was a bankrupt Ms Bloomfield, as a creditor, did not have standing to bring her Application.

The first Judge decided that Ms Bloomfield did have standing. Mr Grainger appealed.

On appeal the Full Court of the Family Court agreed that Ms Bloomfield had standing to bring her application as, while the Family Law Act had been amended to restrict applications by creditors seeking involvement in property division proceedings nothing in the Act stopped a creditor bringing an application to set aside a Binding Financial Agreement.

Whether the Binding Financial Agreement should be set aside will now be determined by the Court. 

Valuing a business for family law property division

The valuation of a business is a complex objective. When it is to be done for consideration of how to divide property in family law matters it is even complex.

This is because the concept of 'fair market value' - the price that might be negotiated in an open market between an informed and willing buyer and an informed and not anxious seller, both acting at arms length - is confronted by the strategic interests that are characteristic of family law disputes.

In family law, allegations can be made that the value of the business has changed since separation. For example, one party has eroded the working capital, or that assets have now been hidden, or even that existing trade has been deliberately impaired. The party working in the business may allege that public statements by the other party following separation are harming the operation or profits of the business.

These issues are all relevant in the preparation of a business valuation.

But even in the absence of such allegations the value of a business will simply be influenced by the "value to the owner"; so that the history of a business having been passed down through a family, or established with another family member, the continued employment of a party or even that the business operates out of the family home are also considered in valuing a business for family law purposes.