Australian Immigration Daily News

 WHAT EVERY SIGNIFICANT INVESTOR VISA APPLICANT SHOULD KNOW ABOUT AUSTRALIAN DIVORCE AND FAMILY LAW

 David Barry

Accredited Specialist family lawyer

 1.               Australian family law may well apply to the divorce or family breakdown of a SIV applicant:

1.1.                If two people are married and following the breakdown of their marriage there is a dispute over money (property settlement or spouse maintenance) then one party can apply to an Australian court if either party  to the marriage is:

1.1.1.           “ordinarily resident” in Australia; or

1.1.2.           present in Australia on the date they apply to a court.

1.2.                If following the breakdown of a marriage one person wants to end the marriage status then that person can apply to an Australian court for a Divorce Order (legal end of the marriage contract only) if either party to the marriage is:

1.2.1.           “domiciled” in Australia; or

1.2.2.           “ordinarily resident” in Australia for 1 year.

1.3.                If two people are in a de facto relationship and following the breakdown of that relationship there is a dispute over money (property settlement or de facto maintenance) then one party to the de facto relationship can apply to an Australian court if either party is:

1.3.1.           “ordinarily resident” in Australia; or

1.3.2.           present in Australia on the date they apply to a court;

              and one of the following applies:

1.3.3.           at least one third of the de facto relationship occurred whilst the two people were “ordinarily resident” in Australia; or

1.3.4.           the person seeking the Order made “substantial contributions” in Australia at the time they apply to a court; or

1.3.5.           the two people were “ordinarily resident” in Australia when the relationship broke down.

1.4.                If there is a dispute over care arrangements for a child then one party can apply to an Australian court if either parent or the child is:

1.4.1.           “ordinarily resident” in Australia; or

1.4.2.           present in Australia on the date they apply to the court.

1.5.                If two countries have the legal ability (jurisdiction) to determine money claims following the breakdown of the marriage/relationship the issue is whether the Australian court is a “clearly inappropriate forum”. If two countries have the legal ability to determine arrangements for the care of a child the issue is what is in the “best interests” of the child.

1.6.                Assumptions implicit in the above:

1.6.1.           “De facto relationships” exist where two unrelated people “have a relationship as a couple living together on a genuine domestic basis” but you don’t have to live in the same house and a de facto relationship can exist between two people even if one person is legally married to a third person. De facto relationships include same sex relationships.

1.6.2.           Dealing with disputes over money and the divorce (legal end of the marriage contract only) are separate concepts under Australian family law.

1.6.3.           “Ordinarily resident” is a complex factual enquiry. SIV: is not permanent residency but residence for up to 4 years; unlimited right to work/study, but residency requirement is only 40 days per annum albeit cumulatively calculated over the 4 years of the visa. Further, a SIV Applicant must have a genuine and realistic commitment to reside in the relevant Australian state or territory.  The SIV file is likely to be very material to any issue of residency in a family law context.

2.               How the Australian courts determine care arrangements for children

2.1.                Australian legal test – what is in the best interests of the child guided by the objects and principles of the Family Law Act and based on consideration of relevant matters under the welfare checklist that considers numerous factors such as the child’s age, sex and health as well as the capacity of both parents to care for the child.

2.2.                Both parents are presumed to have “parental responsibility” for a child unless there is good reason otherwise. “Parental responsibility” is the legal power to make decisions for the children (eg, what school they go to or what religion they practise). “Parental responsibility” is legally separate from how a child’s time is divided between the parents but if both parents have “parental responsibility” then a court must consider whether the child should spend “equal time” with both parents or spend “substantial and significant” time (ie, weekends, holidays and school days) with both parents.

2.3.                Hague Convention on the Civil Aspects of Child Abduction - only applicable between Hong Kong/Macau and Australia. Mainland China is not a party. Simply put, if a child is removed from Australia and taken to mainland China then it will be more difficult to return that child to Australia when compared to the legal situation that would exist if the child was taken to Hong Kong.

3.               Property Settlement (division of capital assets)

3.1.                Australian court orders are made against the individual (spouse or partner) or third parties (such as companies) and, as such, are of worldwide application (ie, the Australian court can make an order dealing with ownership rights in assets outside of Australia).

3.2.                Enforceability of an Australian Order in the foreign jurisdiction where the assets or income are located needs to be considered with advice from a local lawyer. Assuming a foreign Order needs to be enforced in Australia, only Hong Kong is a specified country in the Foreign Judgments Regulation 1992 (albeit none of the United States of America are specified in this Regulation so the common law rules about enforcement of judgments apply).

3.3.                There are our steps to calculate property settlement (applies to married and de facto relationships ie, same financial consequences of breakdown irrespective of relationship status):

3.3.1.           Calculate the net assets at the current date – every asset is “in” even if bought after the breakdown of the relationship. If a spouse/partner “controls” a company or trust then the assets of that entity will be “in”.

3.3.2.           Look backward and determine the contributions of the parties and assess those contributions.  Contributions are financial (eg, earning income), non-financial to property (ie, renovating a property) and homemaker/parent. No discrimination between contributions – a breadwinner is equal to a home maker.

3.3.3.           Look forward to determine the “future needs” of the parties. A further award of part of the assets can be made to one of the parties to the relationship based on factors such as ongoing care of children, age, health or income inequality.

3.3.4.           Determine what order adjusting the property interests of each party is just and equitable.

4.               Financial arrangements for support of former spouses or de facto partners (spouse maintenance - “Australian Alimony”).

4.1.                In certain circumstances, separating couples can have an obligation to provide ongoing maintenance (weekly payments or a lump sum payment) to their former partner. In broad terms, a party to a marriage or de facto relationship (first person) can be liable to pay financial support for the other person to the relationship (second person) if the:

4.1.1.           second person is unable to adequately support himself or herself by reason of having the care and control of a child of the relationship, by reason of age or physical/mental incapacity for appropriate gainful employment or any other adequate reason so that their reasonable needs are met; and

4.1.2.           first person has the financial capacity to support such needs.

4.2.                Any liability to maintain a former partner can continue until their death or until they have the capacity to support themselves, such as from the proceeds of a property settlement, the investment of assets, employment or living in a further de facto relationship or marriage with a third party.

4.3.                Ongoing maintenance payments are rare under Australian family law settlements or orders and would be rarer still where there are significant assets as the ongoing needs of a spouse can usually be met from their property settlement.

5.               Financial arrangements for support of children (child support and child maintenance)

5.1.                In certain circumstances, the Department of Human Services (Child Support) can calculate an amount of money for one parent to pay to a second parent to support a child. This is an “assessment of child support” which is based on a formula that looks at the taxable incomes of the parents and the number of nights the child lives with both parents.  An assessment is a necessary step in applying to a court to increase the amount of child support payable in “special circumstances”.

5.2.                To obtain an assessment of child support the child needs to be present in Australia or “ordinarily resident” in Australia on the day the application for assessment is made and both parents need to be either a “resident of Australia” or resident in a “reciprocating jurisdiction” on the day the application for assessment is made.

5.3.                Mainland China is not a “reciprocating jurisdiction” for the purpose of child support assessment. Residency of the parents for child support purposes will be determined in accordance with the tax residency of the parents. If a parent is a tax resident for the purpose of the Income Tax Assessment Act 1936 then they will be a resident for the purpose of child support.

5.4.                Assuming an assessment is incapable of issuing then one parent can apply to a court for a child maintenance order under the Family Law Act.  This would take longer and the capacity for enforcement needs to be considered albeit there ought to be at least $5m of assets in Australia that could be garnished.

 6.               Australian court/resolution process

6.1.                Alternatives to litigation (eg, conciliation and counselling) are a compulsory part of the Australian court process.

6.2.                Australian court proceedings regarding family law are not public.

6.3.                Mandatory requirements for full and frank disclosure of financial information in a sworn/affirmed format with detailed discovery of documents concerning financial situation is compulsory.

Australian “pre-nuptials” or “post-nuptial” agreements are legally available but not necessary binding. Asset planning and structuring with minimisation of potential family law claims can be undertaken