Red flags to look for when spotting financial abuse
While visiting Australia, I had the opportunity of going to the Family Court of Australia in Sydney and discussing the differences between family law in Australia and England with lawyers David Barry, Suzanne Pigdon and Rosemary Norgate. While some of the themes and terminology were familiar, there are some fundamental differences from which I think we could learn a thing or two.
The Family Law Act 1975 covers divorce, what we call financial provision and arrangements for children. You could say that this is easier to digest than the various pieces of legislation English law has covering those same issues for married, unmarried, heterosexual and same sex couples.
Like in England and Wales, divorce in Australia will be based on the ground that the marriage has broken down irretrievably. This will be proved if a couple have been separated for a period of twelve months. There are no fault based facts upon which to have a divorce in Australia straight away. In contrast, the law in England and Wales currently allows divorce immediately on the basis of fault, e.g. unreasonable behaviour or adultery. Failing that, a couple have to wait for a period of two or five years in order for their divorce to be based on separation.
The divorce process in Australia is entirely separate to the process of resolving financial issues and, unlike England and Wales, couples do not need to initiate any divorce proceedings to be able to submit a financial settlement to the court. The divorce process also appears to be much quicker in Australia; approximately three months from filing the application until the final divorce order (their version of our decree absolute). Unlike in England and Wales, there is no longer a decree nisi followed by decree absolute. Instead, when the Registrar first hears the application, the final divorce order can be made straight away although it does not come into effect until 28 days later.
The most significant difference between family law in Australia and England, I found, was that the legislation provides protection for those in de facto relationships (we call them cohabitants), who are entitled to the same financial rights and remedies as married couples. It is a common misconception in England and Wales that cohabitants are entitled to financial provision on separation when in fact they have no automatic right to anything.
Also unlike England and Wales, there is no presumption or starting point that the matrimonial assets will be divided equally between the parties. Instead, the court in Australia will undertake the following exercise:
However, there are a number of principles in the above which are in common with the system in England and Wales - we too have a process of full disclosure, financial contributions are considered as equally valuable as contributions in the home and our judges check any award against the principle of fairness.
It came as no surprise to me that the treatment of maintenance claims in Australia is different to that in England and Wales (and especially London). While provision is made for a parent (married or unmarried) who has to look after small children (such provision being by way of maintenance for a short period or by awarding more capital), it is generally expected that maintenance will only paid for a short time and that both parties should ultimately be financially independent of one another. The Family Law Act in Australia also provides for consideration of whether a clean break is appropriate and it seems that the concept is applied more robustly than in parts of England and Wales.
In most cases in Australia, child maintenance is determined by the parents or the child support agency in accordance with the formula set out in the Child Support (Assessment) Act. While there is no legislation providing for financial claims for unmarried parents on behalf of children (which we have in England and Wales in Schedule 1 of the Children Act), the impact of this is not as stark as I thought it could be, given the availability of financial claims for unmarried / de facto couples and the provision for child support.
If done properly, I was told that pre (or post) nuptial agreements (or Binding Financial Agreements as they are known in Australia) will be enforced. This, unlike England and Wales, is provided for in legislation and means that Binding Financial Agreements are enforceable contracts and can exclude the jurisdiction of the court.
Like England, parents in Australia do not have to have an order dealing with the arrangements for their children and so court applications or orders are only required when parents cannot agree. In contrast to England, however, there is a firm presumption that both parents should be equally involved in their child's upbringing. Parental responsibility is equal (unless altered by the court) but when it comes to living arrangements, an equal division of time between parents must also be considered. An arrangement such as five nights a fortnight with one parent and nine with the other (which is only recently becoming more common for families we advise) might only be considered a basic starting point in Australia. This is interesting especially given that, like in England, the child's welfare is the paramount consideration when making decisions affecting them. Outcomes determined in line with this principle on our side of the world can be very different, however.
There does not seem to be an equivalent obligation to attend a Mediation Information Assessment Meeting (MIAM) in Australia, but mediation is still considered a successful alternative to court. In children (rather than financial) proceedings, parties must first attend a meeting with a family dispute resolution practitioner and obtain a report confirming that they have engaged in alternate dispute resolution and genuinely tried to settle matters before they can proceed in court. This goes further than our MIAM but only applies to children proceedings.
I was told that the availability of mediators at court (conducting sessions with the parties' lawyers present) was a successful model and perhaps also something our English legal system would benefit from.
Exploring the broader and specific differences in family law between Australia and England and Wales was enlightening and helpful at a time when we are faced with the prospect of a number of changes being made to family law in England, some of which may be out of step with society today and others potentially forced by our exit from EU legislation.
I would like to thank the lawyers who gave up their time to speak to me, show me around the court and check this blog.
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