Delays in the Court system have attracted some media attention
in recent months. The Family Court system is widely acknowledged to
be one of the most overcrowded court systems in Australia; with two
judicial positions from the Federal Circuit Court and one from the
Family Court remaining vacant, and a further six judges expected to
retire within the next year.
These delays have, and will continue to have, significant, and
often adverse, impact upon businesses that are drawn into Family
Law proceedings, such as pending time and assets complying with
In the event that interest in a business becomes part of a
Family Law dispute, full and frank disclosure can be sought. We
have written before about disclosure obligations concerning your
personal financial circumstances in Family Law proceedings - the
same is true for businesses. With Family Law proceedings now taking
up to three years from start to finish, obligations to provide
up-to-date disclosure can place a significant strain on your staff
and resources. Businesses involved in a Family Law matter are
expected to disclose the following:
The Court takes these obligations very seriously. In 2014, in
the matter of Shaw & Shaw, the husband was awarded only 5% in
the property settlement. When he appealed this decision, the Court
found that he had "failed in any meaningful way or at any
reasonable level, to comply with his obligation of full and frank
disclosure" so the property division accounted for the lack of
disclosure provided. This case illustrates why it is so important
that business owners and accountants understand these obligations,
and know what information is necessary to provide in order to
prevent unnecessary expenses and any future litigation.
Interests that a person has in a business may also impact upon
any Orders that are made for spousal maintenance. Spousal
maintenance is an Order for scheduled payments aimed at making sure
that a spouse isn't financially disadvantaged as a result of
the separation. For more information on spouse maintenance, see
Malcolm Gittoes-Caesar's article 'Spouse Maintenance - Am I
entitled to it, or will I have to pay it?'
If the Court grants Orders for spousal maintenance, it can now
extend far beyond the length of the trial, and involve a serious
long term obligation for one party to assist in maintaining the
other. This has had, in our experience, an adverse impact upon
businesses that are involved in the proceedings. This can lead to
monies being drawn out of the business involved, and, consequently,
It's very difficult to alter spousal maintenance orders, and
involves an application to be made to the Court so you need to
consider these issues before any Orders are made, and before the
first day of court.
It is therefore important that you speak to a lawyer, not only
in relation to Family Law matters, but to ensure that the right tax
structure is implemented, and to ensure that any monies that are
required to be paid to the other party by way of spouse
maintenance, don't have a significant adverse impact upon
personal and business assets.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Sect.117 can deal with false statements and knowingly making false allegations of violence could justify a costs order.
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