Almost Everything you Ever wanted to Know about Consent Orders but were too frightened of being bored to death to ask

Transcription

1 Almost Everything you Ever wanted to Know about Consent Orders but were too frightened of being bored to death to ask Drafting correct consent orders that best protects your client s interests is the subject of this session. It deals with best practice drafting techniques covering a range of situations. The session includes: Common pitfalls and problems Family law consent orders key issues Documenting the intention of the parties Dealing with assets in consent orders Dealing with children in consent orders Gaining independent legal advice Ensuring finality practical considerations The Family Law Rules 2004 (Cth) ( the Rules ) provide a framework to obtain consent orders in the Family Court of Australia (FCA) both in matters which have been filed and in matters where there is no litigation on foot. FAMILY LAW RULES 2004 RULE How to apply for a consent order (1) A party may apply for a consent order: (a) in a current case: (i) orally, during a hearing or a trial; (ii) by lodging a draft consent order; or (iii) by tendering a draft consent order to a judicial officer during a court event; or 1

2 (b) if there is no current case by filing an Application for Consent Orders. Note: A case guardian for a party seeking a consent order (other than an order relating to practice or procedure), must file an affidavit setting out the facts relied on to satisfy the court that the consent order is in the party's best interests (see paragraph 6.13(1)(d)). (1A) A party who files an Application for Consent Orders if there is no current case must: (a) lodge a draft consent order; or (b) tender a draft consent order to a judicial officer during a court event. (2) A draft consent order must: (a) set out clearly the orders that the parties ask the court to make; (b) state that it is made by consent ; (c) be signed by each of the parties; and (d) be accompanied by additional copies of the order: (i) so that there is a copy for each person to be served and an additional copy for the court; and (ii) each of which is certified by the applicant's lawyer, or by each party to the application, as a true copy. (3) Paragraph (1)(b) does not apply if a party applies for a consent order: (a) for step parent maintenance under section 66M of the Act; (b) relying on a cross vesting law; (c) approving a medical procedure; (d) for a parenting order when section 65G of the Act applies; or (e) for an order under the Assessment Act or Registration Act. 2

3 (4) A party applying for a consent order in a case mentioned in subrule (3) must file an Initiating Application (Family Law) as soon as the consent is received. Note: If an independent children's lawyer has been appointed in a case, the court will not make a consent order unless the independent children's lawyer has also signed the draft consent order (see subrule 8.02(4)). The rule in the Federal Circuit Court Rules is somewhat more straight forward and appears at Rule 13.04: 1) The parties to a proceeding may apply for an order in terms of an agreement reached about a matter in dispute in the proceeding by filing a draft consent order signed by each party. consent (2) The draft consent order must state that it is made by (3) The Court may make such orders as the Court considers appropriate in the circumstances. (4) If a Registrar has power to make the order, the Registrar may, unless the Registrar considers that the matter should be brought before the Court, make an order in accordance with the terms of the draft consent order. There are some practical issue in respect of consent orders which apply whether the order is a financial or a parenting order. They include: You cannot file an old consent order (it must have been signed within 90 days of filing): Rule 10.18; 3

4 Consent orders submitted may be requisitioned or refused: Rule Particularly if timeframes are tight particular care should be taken to anticipate any difficulties. Financial matters When parties present consent orders to the Court, particularly without any interlocutory or final hearings the Court is called upon to make orders without the benefit of much information. The application form for consent orders tries to address this by requiring disclosure of all relevant assets, liabilities, financial resources and superannuation. Principles have developed in the case law concerning the exercise of that discretion (principally be Registrars of the Court). It is worth reviewing the principles in Harris v Caladine (1991) 172 CLR 84. The review is by of hearing de novo. The orders are no longer by consent. The original judicial officer was required to be satisfied as to the provisions of s79(4). From the judgment of Brennan J: The provisions of s.87 thus suggest that the direction given to the Court by s.79(4) to have regard to the factors therein mentioned applies to the making of consent orders as well as to the making of orders not by consent. 11. It does not follow that, when a consent order is sought in a s.79 application, it is necessary to conduct an inquiry into each of those factors. The Court may be satisfied that a provision is proper by reference not only to the material before the Court relating to the factors mentioned in s.79(4) but by reference to the advice available 4

5 to the respective parties and the consent which they respectively give to the making of the order. In the majority of cases, once it appears that the parties are conscious of the factors mentioned in pars (a) to (f) and have taken them into account before consenting, the provisions "with respect to financial matters" proposed for incorporation in the consent order will be seen to be "proper". The factor mentioned in par.(g) may require independent inquiry by the Court, but that question does not arise in this case. Nevertheless, when an application for a consent order in a s.79(1) matter is made there is a discretion to be exercised with reference to the propriety of the provisions with respect to financial matters. The making of a consent order in a s.79(1) matter is not automatic. The upshot is that the judicial officer is required to independently assess the merits of the orders against the statutory framework but will obtained some comfort if both parties have had independent legal advice. It is of course possible to enter into consent orders with a person who is not legally represented. Some caution is required: Make sure the other party is under no illusion that you represent their interests in the proceedings; No matter how amicable the interests of two separated spouses cannot be represented by the same solicitor. He or she would be negligent in their duty to one and arguably both parties; Make sure that the orders your client signs are accurate. Non lawyers may not be as careful to note any changes made prior to signing; If the orders are made in chambers then the Registrar bears responsibility for determining the appropriateness of the settlement. 5

6 If the consent orders are to be made in open court then the Judge (or other judicial officer) is responsible for ensuring the justice and equity of the adjustment. It is advisable to have the self litigant attend at court and formally place his/her consent on the Court record. Some areas of concern when it comes to drafting the orders themselves (as opposed to the application) include: Ensuring that the orders are drafted in personam (ie they require a named party to undertake a specific act); Incorrect order Within 7 days of this order the house at 333 Bona Vista Avenue, Carlton be listed for sale by private treaty. Correct order That within 7 days of this order the applicant and respondent do all and things and sign all documents necessary to ensure that the house at 333 Bona Vista Avenue, Carlton be listed for sale by private treaty. Make sure that all parties who your client seeks to bind are parties to the proceedings (this may include corporate entities); Example An investment property is owned by the husband and his brother. It is to be sold as part of the settlement. 6

7 Incorrect order That within 7 days of this order the respondent do all and things and sign all documents necessary to ensure that the house at 333 Bona Vista Avenue, Carlton be listed for sale by private treaty Correct orders 1. That Roger Climpson ( the husband s brother ) be joined as second respondent to these proceedings. 2. That within 7 days of this order the applicant and the second respondent do all and things and sign all documents necessary to ensure that the house at 333 Bona Vista Avenue, Carlton be listed for sale by private treaty 3. Make sure the legal ownership of assets is clear to you before you draft the orders (ie is a motor vehicle owned by an individual or a company); Make sure that if you seek to attract the stamp duty exemption provided by section 90 of the FLA. For orders about real property use the folio identifier to assist with stamp duty exemption. Consent orders containing superannuation splitting orders In any matter in which a party seeks a splitting order of the superannuation interest or interests of one or both the parties the Rules require that procedural fairness be accorded to the trustee. Rule provides: 7

8 (1) This rule applies in a property case if a party intends to apply for a consent order which is expressed to bind the trustee of an eligible superannuation plan. (2) The party must, not less than 28 days before lodging the draft consent order or filing the Application for Consent Orders, notify the trustee of the eligible superannuation plan in writing of the following: (a) the terms of the order that will be sought to bind the trustee; (b) the next court event (if any); (c) that the parties intend to apply for the order sought if no objection to the order is received from the trustee within the time mentioned in subrule (3); (d) that if the trustee objects to the order sought, the trustee must give the parties written notice of the objection within the time mentioned in subrule (3). (3) If the trustee does not object to the order sought within 28 days after receiving notice under subrule (2), the party may file the application or lodge the draft consent order. (4) Despite subrule (3), if, after service of notice under subrule (2) on the trustee, the trustee consents, in writing, to the order being made, the parties may file the Application for Consent Orders or lodge the draft consent order. It may be that in situations of urgency a court may consider abridging the time provided it has the consent in writing of the Trustee. Collateral purpose In times gone past (it would never happen now!) clients sought the assistance of lawyers to enter into consent orders in circumstances where their relationship had not broken down. There was no jurisdictional bar to such applications since the power was the marriage power and not dependent on divorce or separation. 8

9 However, entering into consent orders by an intact couple to avoid creditors or as an asset protection strategy is considered by the Court to be, following successive amendments to the Act to recognise the rights of third party creditors, anathema to the proper administration of justice. Lawyers who are aware that an order may have the effect of defeating creditors are bound to draw this fact to the Court s attention. For the impact of such transactions see: Trustee for the Bankrupt estate of Lasic v Lasic 232 FLR 121; (2009) 41 Fam LR 369. The role of Notations It is common practice amongst some firms in Sydney to include recitals, notations and definitions in their consent orders. A notation is not an order. Its function is to formally place on the court record a piece of information which one or both the parties consider relevant to the settlement, its implementation or future litigation. A party who breaches the terms of a notation cannot be held to have contravened a court order. In a property order where one party fears a non disclosure issue and wishes to reserve their position should that suspicion be well founded so as to more easily ground a section 79A application a notation may be appropriate. In a parenting matter notations are often used to deal with the legal threshold issues which flow from an application of the principles in the decision of Rice v Asplund (1979) FLC

10 For example: The wife is living in New Zealand. The children are living with the husband in Sydney. The wife asks for the following notation to the consent orders. The parties agree that the wife s residence in New Zealand has been necessitated by her caring responsibility for her ill elderly mother. Theparties agree that the making of these orders shall not be a bar to the wife seeking to change these orders on return to Australia. In effect what the notation is doing is explicitly foreshadowing a change of circumstances which would ground a reopening and expressly stating the intentions of the parties. Example A asserts that B s father died after proceedings commenced. B s father was very wealthy and B should have received many millions of dollars. B states that he was not a beneficiary of his father s will. A asks B to agree to the following notation: 1. B has warranted to A that he was not a beneficiary under his father s will. 2. B has taken legal advice and has been advised that he does not have a claim against the estate. 3. B has warranted to A that there is no other collateral deed or agreement which has been reached so as to provide B with monies from the estate of his father following completion of these proceedings. Matters to which one cannot consent 10

11 It is not possible to give the Court jurisdiction by consent (the Court either has jurisdiction or it doesn t). Parties to a de facto relationship which broke down prior to 1 March 2009 (1 July 2010 in South Australia) The provisions of Part VIIIAB of the Family Law Act ( the Act ) apply if and only if the either: (a) the parties were in a de facto relationship as at 1 March 2009 (or for SA 1 July 2010); OR (b) both parties consent to jurisdiction. Schedule 1 to the Family Law Amendment (Validation of Certain Orders and Other Measures) Act 2012 set the proclamation date for the commencement of Part VIIIAB of the Act at 1 March 2009 in respect of claims in New South Wales. Schedule 1, Division 2 of the Family Law Amendment (De Facto Financial Matters and Other Measures Act 2008 at item 86 states that subject to item 86A Part VIIIAB does not apply in relation to a de facto relationship which broke down before commencement. Item 86A allows parties to opt in. It requires independent legal advice and certificates attesting to same. The framework mirrors that applicable to advice in Financial Agreements. The advice must predate the consent orders. It is prudent to attach the certificates to the orders or have them filed and marked as Court s exhibits. 11

12 Parenting matters I adhere to simplicity as the key criterion in parenting consent orders. Precedents are useful in respect of certain categories of orders. For example: 1. Calculating school holiday length 2. Calculating school holiday changeover 3. Calculating when time recommences Otherwise, reliance on precedents risks neglecting the individual circumstances of the child(ren)/parent(s). Precision in drafting saves time and legal fees. It also helps to ground successful Contravention Applications. Scenario Order provides for alternate weekend contact> Order reads: 1. During term time the children live with the applicant from 10am Saturday to 6pm Sunday each alternate week. 2. The respondent shall make the children available for changeover at the Caltex on the Cnr of the Boulevarde, Carlton. 12

13 The applicant turns up at the Caltex at 10am on the first Saturday after term has started following school holidays. The respondent and the children are not there. The applicant texts the respondent: Where are u? The respondent texts back: Beach. Y? The applicant says responds: Caltex as per orders It degenerates. Can the applicant bring a Contravention application? Probably not. How will the applicant prove the orders referred to that Saturday and not the following Saturday? What order would work better? During term time the children live with the applicant from 10am Saturday to 6pm Sunday each alternate week, with the first such occasion each school term to be the first Saturday after school term begins.. Family violence and consent orders There are specific provisions in the Rules of the FCA which relate to the making of consent orders in parenting matters where there are allegations of violence. A Judge is entitled to decline to make consent orders where he or she is of the view that having regard to allegations of violence (or indeed any other serious matter involving the best interests of a child) the orders would not be in that child s best interests: see T and N (2003) FLC This was also the subject of discussion in Reid v Lynch [2010 FamCAFC 184 per O Ryan J: 13

14 there are circumstances in which a trial judge should refuse to proceed with a hearing if the evidence is manifestly inadequate to enable a proper decision to be made, and where it is possible for that evidence to be obtained. The judge in such circumstances has the right, and possibly the duty, either to require the parties to call additional evidence, or to call the evidence if it is available: see Re Evelyn (1998) 23 Fam LR 53 at 65; FLC at 85,103. Rule 10.15A applies: (1) This rule applies if an application is made to the court in a current case for a parenting order by consent. (2) If an application is made orally during a hearing or trial, each party, or if represented by a lawyer, the party's lawyer: (a) must advise the court whether the party considers that the child concerned has been, or is at risk of being, subjected to or exposed to abuse, neglect or family violence; (b) must advise the court whether the party considers that he or she, or another party to the proceedings, has been or is at risk of being subjected to family violence; and (c) if allegations of abuse or family violence have been made must explain to the court how the order attempts to deal with the allegations. (3) For any other application each party, or if represented by a lawyer, the party's lawyer: (a) must certify in an annexure to the draft consent order whether the party considers that the child concerned has been, or is at risk of being, subjected to or exposed to abuse, neglect or family violence; (b) must certify in the annexure whether the party considers that he or she, or another party to the proceedings, has 14

15 been or is at risk of being subjected to family violence; and (c) if allegations of abuse or family violence have been made must explain in the annexure how the order attempts to deal with the allegations. A similar but not identical rule is contained in the Federal Circuit Court Rules, Rule 13.04A: (1) This rule applies if an application is made to the Court for a parenting order by consent in relation to a family law proceeding. (2) The parties must advise the Court whether or not any of the following allegations have been made in the proceeding: abuse or neglect; (a) allegations of child abuse or neglect, or a risk of child violence; (b) allegations of family violence, or a risk of family (c) allegations of mental ill health that is alleged to adversely impact on parenting capacity; (d) allegations of drug or alcohol abuse; (e) allegations of serious parental incapacity; (f) any other allegation involving a risk to the child. (2A) Each party must also advise the Court, apart from any allegations made during the proceedings: 15

16 (a) whether the party considers that the child concerned has been, or is at risk of being, subjected or exposed to abuse, neglect or family violence; and (b) whether the party considers that he or she, or another party to the proceedings, has been, or is at risk of being, subjected to family violence. (3) If an allegation mentioned in subrule (2) has been made, or a party advises the Court of any concerns mentioned in subrule (2A), the parties must explain to the Court how the parenting order attempts to deal with the allegation. (4) If the application for the parenting order will be considered in chambers, the parties must attach to the draft parenting order the approved form signed by each party or their legal representative. It is worthwhile warning your client above this as lawyers are from time to time instructed to enter into settlements which do not appear to objectively constitute proper arrangements for the subject children. It is a fine line between obtaining the orders which your client seeks and discharging your duty under the Rule. Whenever there is an issue your duty is to the Court to comply with the rule with candour. Consent Orders in Appeals If the parties to an appeal agree that the appeal should be compromised by way of consent orders the proper approach is to sign draft consent orders: Rule The Full Court of the FCA must determine whether or not the appeal should be allowed or otherwise. They can decline to allow the appeal and make the consent orders. 16

17 The parties in a financial matter who continued to be in agreement after the refusal of the Court to make orders would be free to enter into consent orders under section 79A of the Act and then enter into a Financial Agreement. But query whether orders under section 79A made by consent would be refused in those circumstances. You cannot consent to the Full Court ordering that your client have the benefit of a certificate under the Federal Costs Proceedings Act as the discretion to order such costs must be exercised by the Court itself. Suzanne Christie Culwulla Chambers 19 June