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Binding Financial Agreements and Consent Orders

Binding Financial Agreements and Consent Orders

Separation | Boylan Lawyers

Binding Financial Agreements and Consent Orders

 

Separation is one of the most strenuous times a person can go through. The process of dividing property can sometimes be worse than the final split itself.  It may seem simple at first, but the reality soon hits things can become complicated. It can become more than just “You take this, and I’ll keep that”.  Properties can be in joint names, mortgages and debts are also often in joint names. Superannuation is considered property of the relationship and so that also needs to be factored in. What was a simple and amicable split has now turned nasty and hostile. The idea of writing and signing an agreement can seem quite scary, but all is not lost!

Written agreements are quite common. This is especially the case when people are trying to arrange for the transfer of property and the division of superannuation between parties. In fact, in order to divide superannuation a written agreement needs to be provided to the superannuation company (trustee). So, what does a written agreement look like? Can I afford it? Do I need to go to court? Do I need a lawyer?

There are two main types of written legal agreements that can be made. They are binding financial agreements (BFA) or court orders. Court orders can be made by the court by applying to the court. While some matters need to go through the court process to resolve issues that cannot be resolved by agreement, they can also be made by consent between parties which don’t involve going to court, just an application to the court.

In this article, we’re focusing on agreements made together, or by consent. So that is binding financial agreements or Consent Orders. Often, we’re asked what is the better agreement to have?

The answer can vary for many reasons. Binding financial agreements may be appropriate for some people but completely inappropriate for others. It will depend on the individual circumstances of each case. However here is a guide that might help make that decision a bit easier.

This is intended as a guide only and you should always seek legal advice on your individual circumstances. While lawyers do charge a fee, it is a small cost for reducing the stress and complication that can arise when trying to draft a written agreement between two people who are still dealing with the raw emotion of separation.

Costs

Binding financial agreements are generally cheaper. There is no filing fee with the court and the main costs are just in drafting the order and getting information.

Consent orders have an application and agreement (orders) to create as well as a filing fee with the court.

Time

Because there is no need to file with the court, the process of creating and signing a binding financial agreement is much shorter.

Independent overview

Binding financial agreements are drafted with lawyers (sometimes without) on the bases that they are just and equitable. The reality is that they sometimes are not. People can end up agreeing to something when they are entitled to more. Once you have signed a binding financial agreement, it becomes legally binding and to overturn it you have to make an application to the court. This can create more costs for both parties.

Consent orders are looked over by a Registrar of the Court – they go through the calculations and information provided in the application to assess if the orders are just and equitable. For example, if the orders state a 80-20% split but it has been a long relationship with equal contributions, they will send the order back and ask for an explanation for the one sided split or that they agreement reassessed and resubmitted.

Stamp duty

Often people have houses and parties can save on transfer costs with consent orders. This helps both parties as they have a legally binding and fair order while maintaining their estate’s wealth.

What if someone doesn’t do what they are supposed?

A good agreement will have clauses that allow for the resolution of an issue arising from someone not doing what they are supposed to (i.e. not paying money). Many binding financial agreements as these clauses, however, there are circumstances where a party will have to initiate proceedings with the Court to get the agreement to be followed. This can be quite a costly exercise as you need to explain the agreement to the court, explain how it is a good agreement, in that it is fair and just; and then explain to the court what has happened and what orders you are seeking resolve the issue. Essentially you are asking the court to make a binding financial agreement into a court ordered order.

Consent orders work differently. They generally will have a clause that allows the Registrar of the Federal Circuit Court or Family Law Court to sign on behalf of the non co-operative party. This is a simple application, without a filing fee, and does not require the costs of an initiating application and affidavits. You don’t have to explain the agreement to the court because the court has already seen it and agreed with it.

Clean cut

Consent orders made by the Court are designed to create a clean cut between parties. No longer are they bound together financially. This means if a house is to be transferred, timelines for that to occur do not drag out forever.

Binding financial agreements, while also looking to create a clean cut, are not as bound to rules of a quick resolution. Some binding financial agreements can last for years, but for good reason. It may allow time for one party to take over the mortgage on the house, for instance. The issue arises when years down the track, what seemed like a good idea, is no longer possible or wanted. The agreement is still binding and still must be followed.

 

It is important to know that both documents are legally binding. Binding financial agreements come from a place where there is trust between parties. Consent orders also come from a place of trust but also come from a place where people want a little reassurance that when things go wrong, they can be resolved more quickly and efficiently.

 

At Boylan Lawyers, we can complete both forms of agreement with advice on the best option for your individual and personal circumstances. We can assist you to draft a written agreement saving you and your ex-partner time and stress.

If you are going through separation and want to know what your rights are, please contact us and make an appointment.

Contravening Parenting Orders During COVID-19 Lockdown

Contravening Parenting Orders During COVID-19 Lockdown

Co-parenting COVID-19 | Boylan Lawyers

COVID-19 has caused a great wave of issues throughout our community. One of those issues has been the significant increase in disputes regarding the care of children in separated families. Some parents have elected to depart from the usual care arrangements without consultation with their counterpart. This has resulted in a variety of disputes concerning the contravention of an order whereby a parent has intentionally failed to comply with an order.  It has also aggravated issues that would have otherwise remained dormant. 

The increased of the rising disputes is evident by the need by the Family Court to create a special Court list for parent related disputes that arise due to the coronavirus. [See: http://www.familycourt.gov.au/wps/wcm/connect/fcoaweb/about/news/jpd032020]

The general comments by the Family Court have been that parties need to use common sense as a result of their response to the challenges created by the pandemic.

Unfortunately, such common sense is not always possible among parents because there is a level of animosity which makes it very difficult for reasonable discussions to take place. 

What is in the interest of the child remains the paramount consideration.  Family Law Act 1975 (Cth) sub-div. F div. 13A pt. V11, s. 43(1)

Kardos & Harmon [2020] FamCA 328 (7 May 2020) is a recent judgement in the family Court which highlights the need for parents to be pragmatic when dealing with the COVID-19 pandemic.

In that matter, the father lived in Brisbane and made an application that final orders had been contravened by the mother who resides in Adelaide. The mother contended that the circumstances of the COVID-19 pandemic provided a reasonable excuse for her not to travel to Brisbane to deliver the child.  The court found that the mother had not contravened the final orders and had established that she had a reasonable excuse for non-compliance with them. The Court went on to vary the final orders to facilitate the father spending time with the child. The net effect of the court’s orders were that the father would need to travel to Adelaide, and be subject to quarantine requirements, should he wish to see the child however in the event that he did not travel to Adelaide then the child would have make up time with him at a later date.

Kardos & Harmon provides some guidance to parents in different states or territories, but it becomes more difficult for those within the same state.  In those cases, whether there is a reasonable excuse is a far more difficult question to answer.  Those parents who tie themselves to the public health notifications (such as https://www.sahealth.sa.gov.au/wps/wcm/connect/public+content/sa+health+internet/conditions/infectious+diseases/covid+2019/coronavirus+disease+2019+covid-19), which are considered by the Court, will most probably find it difficult as the restrictions ease.   Not long ago most state governments were considering whether schools would be open or not and parents choosing to keep children at home for their safety. Things have changed dramatically since then and now what was once a reasonable step would now be seen as unreasonable.  This should cause great alarm for those parents who have acted unilaterally to contravene orders under the guise of a reasonable step in response to COVID-19.  In hindsight, their actions will not be viewed positively.

Different judges will have different interpretations of when a party is acting from a health and well-being approach as opposed to capitalising or taking advantage of the crisis. It would depend on the context and history of the particular matter and the nature of the contravention.  The result is that parents must seek legal advice to understand their position in light of their specific circumstances. Those who are opportunistically taking advantage of some of the restrictions should be immediately cautioned and asked to reconsider their position. 

In addition to getting specific legal advice about parents breaching orders because of COVID-19 restrictions, there are also resources that can help guide parents with the difficulties of managing parenting during the pandemic. One of those resources has been produced by the Law Council of Australia and can be found below. It provides practical steps that can assist parent’s with coping. 

The time taken to traverse the Family Court system is increasing exponentially with these matters.  There is always an opportunity to privately mediate the issues in order to reach a pragmatic compromise however if that is not possible then matters must be advanced as a priority rather than being delayed as each day goes by.