By Emily Austin.

The Family Law Act 1975 (Cth) has been under intense scrutiny in the past few years, the subject of multiple reports and enquiries which has invited feedback from many stakeholders. As a consequence of this, the Parliament is currently discussing the Family Law Amendment Bill (No 2) 2023 which proposes sweeping changes, particularly relating to how the family law Courts determine parenting matters.

In addition to these reforms, the Attorney General’s Department has introduced a further draft Family Law Amendment Bill (No 2) 2023 that seeks to address further concerns raised by various stakeholders, specifically concerning property matters and expanding the Court’s powers to case manage, with the hope it will reduce current delays experienced by the Courts.

This article discusses these proposed amendments as contained in the Family Law Amendment Bill (No 2) 2023.

Property: Codification of the Duty of disclosure

One of the proposed reforms is to legislate existing obligations placed on parties to provide to each other full and frank disclosure of all information relevant to the proceeding. This “duty of disclosure” currently exists within the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) and pertains to both property and parenting matters.

The proposal to codify these obligations within in the Family Law Act 1975 (Cth) relates only to disclosure obligations in property matters. It’s inclusion in the face of the legislation strengthens the importance of the duty and makes them more visible to clients (and their legal representation). The proposal also introduces a positive obligation on legal representatives to advise their clients on the duty of disclosure, encourage compliance with them, and warn them of the consequences of a failure to comply.

The consequences of a party’s non-compliance are similarly proposed to be comprehensively set out in the legislation. These include:

  • Taking the non-compliance into account when making a final property order.
  • Making a costs order against the contravening party.
  • Making further orders about disclosure compliance.
  • Staying or dismissing all or part of the proceedings.
  • Imposing sanctions in accordance with section 112AD, which includes amongst others sanctions, fines or possible imprisonment.
  • Punishing a person for contempt.

Court’s Case Management Powers

The proposed amendments contained in the Family Law Amendment Bill (No 2) 2023 include the introduction of additional powers to assist the Court in case managing matters with the view these will reduce the delays the Courts (and parties engaged with the Court process) have historically laboured with. These include the following:

i. Dismissing Applications that are not exempt from Section 60I

Section 60I of the Family Law Act 1975 (Cth) obligates parties to a parenting dispute to undergo family dispute resolution in an attempt to resolve the matter prior to initiating proceedings with the Court. There are circumstances where attending family dispute resolution is not appropriate, such as where there is a risk of family violence, and these are recognised by the Court in a list of exemptions contained in the legislation.

Under the current system, parties filing a parenting application in reliance with a section 60I exemption have their applications automatically filed. The question of whether the exemption has been properly made out is dealt with by the Court once the matter has already commenced.

The proposed amendments provide the Court with powers to reject parenting applications that are found to be non-compliant with the pre-action procedures and have not demonstrated that an exemption pursuant to section 60I applies at the time of filing.

This proposal upholds the Court’s strict pre-action procedure requirements is consistent with the Court’s firm view that many matters can be dealt with outside of the Court’s ambit, through processes such as family dispute resolution.

ii. Divorce Hearings

Over the past few years, the Court has sought to significantly simplify the Divorce process. The Court frequently makes Divorce Orders “on the papers”, without requiring the attendance of the parties to the Divorce Application. Where attendance is required it is done so via a simple telephone link.

Under the current system, the Court only requires the appearances of parties or their legal representation where an Application is made by one party only (known as a “Sole Application”) AND where there are children under the age of 18 years of age.

The proposed amendments seek to further streamline the Divorce hearing process, and parties would no longer be required to attend a divorce hearing where it is a Sole Application AND children under the age of 18. This will significantly reduce the number of matters requiring the Court’s time, freeing up Deputy Registrar’s to deal with Divorce matters which unique issues, such as where a divorce is contested, or a party is seeking substituted or dispensation of service.

As is the general mantra of the Family Law jurisdiction, the Court retains an element of discretion, and can request that parties attend a divorce hearing if further explanation is required.

Property: codify property law principles:

The proposed amendments contained in the Family Law Amendment Bill (No 2) 2023 also seek to codify long-standing common-law principles relating to how the Court determines property matters.

(1) The “Four Step” Process

Ask any family lawyer about the Court’s approach to decide a property settlement in the family law jurisdiction and they will, without a doubt, recite a widely accepted “four-step process” including as follows:

1. Establishing the legal and equitable interests of each party to construct a balance sheet of the assets and liabilities of the relationship.
2. Assess the contributions made by each party to the balance sheet.
3. Consider potential “future needs” of each party.
4. Determine whether it is just and equitable to make an order for a property settlement.

An extensive body of caselaw, including the most commonly cited case of Stanford, has developed and clarified these “steps”. The proposed amendments seek to legislate them into the Family Law Act 1975 (Cth) to make it clear to solicitors and their client’s alike of the Court’s approach to property settlement matters.

(2) Legislating family violence in property matters

The Family Law Act 1975 (Cth) in its current form does not identify how family violence could have a bearing on the “steps” referred to above, specifically its impact on a party’s contributions or future needs.

This is not to say that family violence has not made its way into family law discourse. There exists a significant body of case law, such as the case Kennon that illustrate the Court’s view that family violence does in fact, play a determinative role in its decision-making regarding property adjustments. For example, the presence of family violence in the relationship could have the effect of reducing a parties’ capacity to make financial contributions such as remaining in paid employment. Family violence could also justify an adjustment on the basis of future needs due to a party requiring ongoing physical or psychological therapy.

In keeping with this body of case law, the proposed amendments seek to expressly prescribe family violence as a factor which should be taken into account in the Court’s assessment of a party’s contributions (or lack thereof) and/or as a future needs factor.

The inclusion of family violence as an explicit consideration in the face of the legislation is a clear recognition of family violence as a live issue in the community. The amendments do not go so far as to punish such conduct (which is not a function of the family law Court, nor consistent with its “no-fault” principles), rather the impact that such conduct has will impact the Court’s determination of what is a just and equitable property split.

Want to find out more about what this might mean for you? Contact us any time.

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