Effect on Creditor

Secured creditors

If your debt is secured, you can rely on the security to get your money back. If there is any surplus after the secured assets have been valued or sold, it will be paid to the liquidator. Any shortfall can be claimed for as an unsecured creditor.

Unsecured creditors

An unsecured creditor must complete a proof of debt form and provide supporting evidence of the debt owed. The proof of debt lets the liquidator know how much the company owes the unsecured creditor and why.

The company may not have enough money available to make any payments at all to unsecured creditors. If the liquidator recovers money the Corporations Act sets out the priority of payments. Unsecured creditors rank at the bottom but before the members of the company. If there is money available to pay unsecured creditors, these creditors may be entitled to payment (dividend payment), assuming that their proof of debt is accepted by the liquidator.

A liquidator investigates transactions involving unsecured creditors. These transactions are known as unfair preferences.

An unfair preference is a payment made to a creditor in the six months before the liquidation started (or the date that the winding-up application was filed in the case of court liquidation). The payment must have been received while the company was insolvent or it causes the company to become insolvent, and the creditor must have received more than it would have received in the liquidation in circumstances where they knew, or ought to have known, that the company was insolvent.

A liquidator has the power to claw back the unfair preference and may do this via an application to the court. If you receive a preference claim, it’s best to seek legal advice.

Clewett Lawyers has the expertise in house to work with you through this process and advise you how best approach these claims. Please contact our team on 07 3210 6500.

Denial

Is this actually happening?

Denial is generally the first stage of the grieving process and is usually accompanied by feelings of shock, resignation, indecision and withdrawal. These feelings tend to come in the early stages of a separation as you try to adapt to such a significant change. Denial is said to be a human defence mechanism which is used to subconsciously protect ourselves from harm. In certain circumstances, these feelings are intensified if one partner is unaware of the extent of the relationship problems and therefore the separation has come as a complete shock to them.

Anger

How dare he!? She never worked and only used me for my money!

Anger usually comes after the initial feelings of denial and shock have worn off. Feelings of anger are often supplemented with feelings of resentment and give rise to hostile actions and/or thoughts and behaviours, particularly towards your former spouse. These types of feelings and behaviours can also extend to friends, in-laws, your children and even yourself. This can be the most confusing and intense part of the grieving process. Others may also express anger towards you because they are frustrated by your changed behaviour. Professional Counselling can help during this time.

Bargaining

What if I changed? I promise I’ll be better.

The next step in the grieving process includes thoughts of “what if?” and tends to leave you feeling at fault and thinking about all of the things that you could have – or should have – done differently in the relationship. This phase can often see people desperately trying to rekindle with their former spouse or anxiously looking to start a new relationship in order to “move on”. Thoughts can often be frantic and impulsive during this time and can drastically impact upon your decision making ability.

Depression

I don’t know if I can do this anymore.

After the feelings of denial, anger and bargaining subside, overwhelming feelings of despair and anguish can often set in. This stage of the grieving process leaves you feeling hopeless and detached from the world. You might have trouble sleeping and you may become frustrated easily or find yourself feeling extremely irritable for no apparent reason. More often than not people will also experience episodes of fatigue and might find themselves unmotivated and disinterested in life. This is an extremely difficult phase of the grieving process and medical assistance together with counselling can be useful at this time.

Acceptance

Let’s look to the future…

Acceptance is the final stage of the grieving process and will enable you to start moving forward with your life. You will regain your sense of self-worth and purpose during this time. You may start feeling hopeful again and will find yourself planning for the future.

It can take weeks, months or even years to move through the five stages of grief after a breakup – everyone is different. The main thing to remember is that all of these feelings are normal and will take time to process. If you do find yourself stuck however it might be helpful to speak to a trained professional (including your Family Lawyer) so they can assist you to work through any issues that may be holding you back.

For more information on separation, or other family law matters, please contact our office for a free initial consultation.

Requirements to establishing a limited recourse borrowing arrangement

SMSF Trust deed

The trust deed that governs the SMSF must permit the Trustee of the SMSF to enter into a limited recourse borrowing arrangement. Therefore the SMSF Trustee should have power to borrow funds, acquire and mortgage the property.

It may be necessary to amend the trust deed of the SMSF to allow the Trustee to borrow and acquire the property.

Bare Trust

A Bare Trust must be established. Lawyers will prepare a trust deed for the Bare Trust. A Company will also be incorporated to act as the Trustee of the Bare Trust. Please note, the Trustee for the Bare Trust cannot be the same as the Trustee of the SMSF.

Acquisition of the Property

The Trustee of the SMSF approaches the lender to obtain a limited recourse loan. Therefore the Trustee of the SMSF is the borrower, signatory on the loan and mortgage documents with the lender.

The Trustee of the SMSF may obtain the loan from a financial institution or a related party of the SMSF.

If the loan is obtained from a related party, the terms of the loan documents must comply with the arm’s length rules contacted in the SIS Act. The ATO also provides a guideline (Practical Compliance Guideline PCG2016/5) which sets out the loan terms that can be used for related party loans. It is important that these rules are followed as failure to do so may result in tax and compliance  issues.

The purchaser on the contract for the property is the Trustee of the Bare Trust. The Trustee of the Bare Trust acquires the legal title to the property while the SMSF Trustee acquires a beneficial interest in the property.

Clewett Lawyers can assist preparing, reviewing or amending:

• SMSF Trust deed;
• Bare Trust deed;
• Incorporation of a Corporate Trustee;
• Loan or security documents;
• Purchase contracts;
• Advice in relation to compliance with the SIS Act.

In order to involve the Court’s jurisdiction, you would need to demonstrate that you have lived together for a period no less than two years. This is irrelevant however if there is a child (or children) of the relationship.

With regard to determining whether you are living together on a genuine domestic basis, the Family Law Actdirects the Court to consider:

• The duration of the relationship;
• The nature and extent of common residence;
• Whether a sexual relationship exists;
• The degree of financial dependence or interdependence and arrangements for financial support;
• The ownership, use and acquisition of property;
• The degree of mutual commitment to a shared life;
• Whether the relationship is or was registered under a prescribed law of a State/Territory;
• Arrangements for the care and support of children; and
• The reputation and public aspects of the relationship.

From the above list neither factor is more important than the other but the more factors that exist increase the likelihood of the Court determining that a de facto relationship exists.

Contrary to popular belief, the Family Law Act also recognises the fact that a person could be in multiple de facto relationships, and is possible that a person who is married could still be a party to de facto property proceedings.

What this could mean for you?

You might find yourself in a de facto relationship without knowing it, which could mean that your assets are at risk. If you are unclear as to whether a Court would consider you a de facto, you should consult a Lawyer. If you are in a de facto relationship, you may wish to consider entering into a Financial Agreement (or better known as a prenuptial agreement) to ensure your assets are protected if you separate.

For more information on de facto relationships, or other family law matters, please contact our office for a free initial consultation.

When deciding who gets what from the property settlement, there is a four-step process that is adopted under the Family Law Act.

Step 1

The first step is to identify and value all property of the relationship (including debts).  This property can include things you got before the relationship commenced or even after the relationship has ended.

Step 2

The second step is to take into account what each person has given to the relationship (contributions) including (but not limited to) earnings, savings, gifts, inheritances, property owned before the relationship, improvements to property and contributions as a homemaker.

Step 3

The third step is to then consider the other factors set out in the law, including (but not limited to):

• How much money each person could earn in the future;
• The age and health of each person;
• The responsibility for looking after other people; and
• The length of the relationship.

Step 4

The final (fourth) step is to consider what is ‘just and equitable’ (fair) to both parties.  To decide what a fair division of property is, the law looks at all of the things mentioned above.  The law does not look at who left the relationship.

Whilst property settlement is just one part of the family law process, we hope this information helps to dispel any myths in relation to the assumed division.

For more information on property settlement, divorce or other family matters, please contact our office for a free initial consultation.

The Canberra Hospital argued that it did not breach its duty of care to the young woman and that it had an excuse from being found negligent under a law that says that the obligations of the hospital were limited by the funding and other resources reasonably available to it. There was no evidence provided by the hospital about its ability to provide additional nursing staff, that the man could not have been placed in another ward, that it could not provide an emergency warning system or that there was a shortage of beds.

Queensland has similar laws to the ACT about the limits of public authorities.

Justice Elkaim decided that the hospital had been negligent because the hospital had allowed the young woman to be “exposed” to a “foreseeably dangerous person”.

If something like this has happened to you or someone you know, or you have had a bad hospital experience, you may like to contact Catherine Cheek of our office. She has years of experience in advising people in this area of law.

When are Prenups most appropriate?

Generally speaking, in those cases where:

• One person has much more property than the other when the relationship begins;
• One person is, or may later become, entitled to an inheritance or gift;
• You are moving into a second or subsequent relationship where children from former relationships might need to be protected financially, or
• You both simply want to make sure the terms of any property division are agreed up front and will not end up the subject of protracted and invariably costly litigation.

Are Prenuptial Agreements Binding?

These agreements are not binding unless the formal requirements under the Australian Family Law Act are met.

The Agreement will only be binding if the following requirements are satisfied:

• The agreement is signed by all parties;
• Before signing the agreement, each party was provided with independent legal advice about the effect of the agreement on the rights of that party and about the advantages and disadvantages to the party making the agreement;
• Before signing the agreement, each party was provided with a signed statement by his or her respective lawyer certifying that the advice referred to above was provided to that party;
• A copy of the statement referred to in 3 above was provided to the other party;
• The agreement has not been terminated and/or has not been set aside by a Court.

Couples may choose to enter into an informal agreement (which can be written or verbal), but any such agreement is not legally binding (enforceable) by a Court.

Such agreements can however be taken into account by a Court if a judicial determination is required to be made.

Can you cancel or change an agreement?

In certain circumstances, either party has the right to challenge a legally binding agreement.
Couples can agree to vary the terms of – or even terminate – an agreement. If your partner does not agree, you must prove:

• There was a fraud (dishonesty) including non-disclosure of a material matter at the time the Agreement was made;
• The agreement is not practical to carry out (not merely inconvenient);
• The other person has acted in an unethical or unfair way. (For example, a party has entered into the agreement for the purposes of attempting to defraud or defeat a creditor or creditors).

What can a Prenuptial Agreement cover?

• How a couple’s assets and money will be divided in the event of a future separation. This also includes assets such as a family business, a trust, investments, an entitlement to an inheritance, superannuation or even a pension entitlement. It also includes debts and liabilities of the relationship such as an obligation under a contract.
• The financial support (maintenance) of either party (during the marriage and/or after divorce), and
• Any other incidental issues particular to you and your relationship.

Legal advice

It is highly recommended that you obtain legal advice from a lawyer who has sufficient experience and expertise to advise about Binding Financial Agreements if you:

• Are considering signing a financial agreement (or consent order); or
• Seek to change or cancel an existing financial agreement or consent order.

The failure of a party to obtain the correct and independent legal advice can (in certain circumstances) give rise to a court setting aside the agreement.

More information

For more information on prenuptial agreements, divorce or other family matters, please contact our senior family lawyer, Mark Orchard, for a free initial consultation.
Phone: 07 4639 0358
Email: morchard@cp484.ezyreg.com

The considerations for deciding a parenting arrangement

Under section 60CC(3)(a) of the Family Law Act, a child’s wishes are one of 16 factors the court must consider when deciding what parenting arrangement is in a child’s best interest.  In and of itself, a child’s wish may not be definitively determinative of the dispute.  Interestingly, a child’s wish is not one of the primary considerations the court must take into account when deciding what is in the child’s best interest.

The two primary considerations are:

• The benefit of a child having a meaningful relationship with both of the child’s parents; and
• The need to protect the child from physical or psychological harm.

Developmentally appropriate concerns like homesickness will not usually cause a Court to terminate overnight time with a non – residential parent of a school aged child.

The court will decide how much weight it places on the child’s view based on an assessment of:

• The child’s maturity;
• His/her level of understanding;
• Whether the wish is well informed; and
• Whether or not the child has been influenced (usually by one or other of the parents).

For example, if a seven-year-old is assessed as exhibiting high levels of maturity and understanding of the conflict between her parents then the court may place considerable weight on her views.  Equally, if a 14-year-old expresses a wish to move overseas to live with his Father because he buys him whatever he wants, but the Mother has previously been the primary carer, a court may assess the child as lacking maturity or as having been influenced by factors not in the child’s best interest, and give little weight to his wishes.

In another example, an older child may be at an age where their resistance to spending overnight time with a parent is given a great deal of weight but the wishes of a younger sibling who is also resistant, will not be so persuasive. The older child would probably be permitted to stay with the preferred parent but the younger child would not.

Who assesses the child’s maturity and level of understanding?

The most common way for a child to express their view is through an interview by a court consultant or a privately-funded family report writer who is usually a trained counsellor, therapist or psychologist.

The family consultant or family report writer interviews and observes the parents, the children and any other people living in the same household as the children, such as step-parents and step-siblings.  During the interview, the family report writer will usually make enquiry as to the child’s wishes and ask questions to assess their maturity and level of understanding.  In some circumstances, due to the children’s ages or other factors, a family report writer may decide not to ask the child for their wishes.  A family report is then prepared for the judge containing recommendations about what future parenting arrangements the judge should consider.  The judge will usually follow the recommendations outlined in the family report.

It is often the case that a child prefers not to give their opinion as they are afraid of hurting the feelings of one or both parents.  Additionally, some children find the family report process intimidating and do not feel comfortable expressing their views to a stranger.

There is no ‘Magic Age’

There is no fixed age when a child can decide on where they should live in a parenting dispute.  Instead their wishes are one of many factors a court will consider in reaching a decision.  There inevitably comes a time when a child is able to ‘vote with their feet’ (so to speak), and place themselves physically where they want to be. That time is not attached to any specific age, but is rather the product of maturity and a level of independence.

The Court will be reluctant to separate siblings who are usually strongly attached to one another, however the Court will rarely seek to force a mature and insightful child to spend time with a parent they refuse to see.

We believe that parenting disputes are best resolved outside of court and to what we can to encourage our clients to only apply to the court when all other options have been exhausted.  If you are unable to resolve your parenting dispute, we encourage you to speak to us about the various out-of-court dispute resolution options available.  A number of these options can involve your children, such as child inclusive mediation and counselling.

Should you require further advice in relation to resolving a parenting dispute or any other family law matter, please contact our Senior Family Lawyer, Mark Orchard.

Adult Child Maintenance – What does the Family Court consider?

Adult Child maintenance orders are decided on a case by case basis, based on what is considered to be reasonable in each particular case.

The Court will consider if there is a need for a continuing financial relationship between the child and the parent. For example, the child might be a full-time student at University who does not have the means or ability to support financially himself or herself. Or the child may require continuing financial support due to medical reasons.
It is not necessary for a “warm relationship” to exist, or even for there to be regular contact between the parent and child for maintenance to be awarded.

The Court will balance the parents’ resources and the child’s actual and potential resources in determining the claim. The Court will also consider other ways the child could finance their education, such as deferring their studies, obtaining part-time employment or studying part-time.

How Does the Court Go About Assessing Child Maintenance?
Either the child or a parent can apply to the Family Court for the financial support of an adult child.

Once the Court determines that the child does require financial support, then it will look to the parents for their respective contributions to that support and will assess each parent’s ability to provide financial support based on the incomes of each parent and the financial ability of each parent to provide the financial support. This could mean that one parent is assessed to pay more than the other to assist the child financially.

The Court, when deciding to Order child maintenance has a wide discretion and can determine if the maintenance should be paid in a lump sum, or by instalments.

Child Support is possible for an adult child.
The obligation to financially support children can therefore continue after the child reaches 18 years of age.

In any case, there should be a cost/benefit analysis of your personal circumstances, and the costs of seeking an order for adult child maintenance, to decide whether or not making an application is the right decision for you and your child. Please consult one of our experienced Family Lawyers regarding the legal costs for each stage of your matter.

More information

Find out more about our Family Law services, or contact our experienced family lawyer, Mark Orchard, for a free initial consultation.

Phone: 07 4639 0358
Email: morchard@cp484.ezyreg.com

In assessing whether you are living together on a genuine domestic basis, the Court may look to

• The duration of the relationship;
• The nature and extent of common residence;
• Whether a sexual relationship exists;
• The degree of financial dependence or interdependence and arrangements for financial support;
• The ownership, use and acquisition of property;
• The degree of mutual commitment to a shared life;
• Whether the relationship is or was registered under a prescribed law of a State/Territory;
• Arrangements for the care and support of children; and
• The reputation and public aspects of the relationship.

No one factor should be considered more important than any other. However, it would be expected that the more factors that can be proved would help to determine that there was a de facto relationship and, conversely, the more factors that can be disproved would help establish that there was not.

Similarly, there are no minimum or maximum amounts that can be attributed to any factor, such as a minimum number of nights per week that might indicate if a ‘common residence’ has been maintained.

In 2009, the Federal Government made amendments to the Family Law Act that gave de facto couples – including same-sex couples – almost the same rights and obligations as married couples.

The Family Law Act recognises that a party could even be in multiple de facto relationships, and that even a person who is married could still be a party to de facto property proceedings.

Unlike marriage, de facto status is not entirely portable. While it is recognised in all states of Australia, Canada and New Zealand, it is not recognised in the USA and many other countries.

More information

Find out more about our Family Law services, or contact our experienced family lawyer, Mark Orchard, for a free initial consultation.

Phone: 07 4639 0358
Email: morchard@cp484.ezyreg.com