Spouses may now be liable for their ex’s unpaid taxes
December 19, 2017
Summary
The Family Court has the power to substitute one spouse for the other in relation to their outstanding tax liability with the ATO pursuant to section 90AE of the Family Law Act 1975 (Cth) (“the Act”).
Section 90AE(1)(b) provides the Family Court with the power to direct a creditor of one party to a marriage to substitute the other party, or both parties, in relation to a debt owed to a creditor.
Previously, it has been murky as to whether the ATO falls under the definition of ‘creditor’ for the purposes of section 90AE.
Tomaras [2017]
In Tomaras & Tomaras and Official Trustee in Bankruptcy and Commissioner of Taxation [2017] FamCAFC 216 (“Tomaras”), the Applicant had failed to pay a number of ATO assessments over her seventeen year relationship with the First Respondent.
The Applicant sought orders that the First Respondent be substituted for her in relation to her debt with the ATO and that he be solely liable for that debt.
The ATO intervened and in short, argued that section 90AE did not expressly bind the Crown.
The solicitors for the Applicant argued that the ATO was already deemed a creditor for the purposes of section 79 of the Act (being the section that gives the court powers to alter property interests) and so it ought to be a creditor for section 90AE as well.
The Full Court held that the ATO did fall under the definition of creditor for the purpose of section 90AE.
The Full Court did note however that the success of the substitute would be influenced by the recoverability of the debt when deciding whether to substitute a party. In this case, the First Respondent was bankrupt in 2013.
Importance
Spouses need to be mindful that they may ultimately be responsible for their ex-spouses tax liabilities and penalties.
Spouses may now seek that their ex-spouse be substituted for their outstanding tax liabilities instead of otherwise being paid from the available property pool as part of a final property settlement.
Solicitors can no longer assume tax liabilities fall in the hands of the original tax paying party.
Such substituted orders may lend themselves as another creative tool to effect property settlement.
Gender Dysphoria in Children – Landmark decision of the Full Court of the Family Court
December 2, 2017
What is gender dysphoria?
Gender dysphoria is when a person’s physical gender conflicts with the gender with which they identify.
Stages of treatment
Hormone treatment for gender dysphoria in children occurs in two stages.
Stage 1 treatment is seen to be largely reversible. It involves the child taking puberty blockers to prevent the development of secondary sexual characteristics such as the development of breasts, body hair and vouch breaking. They can be used safely for three to four years. Prior to the Full Court’s decision of Re Jamie (2013), parents of children diagnosed with gender dysphoria required the Family Court’s approval to authorise Stage 1 treatment.
Stage 2 treatment is seen as being more irreversible. It involves administering cross-sex hormones that cause a child to develop pubertal characteristics of the sex with which they identify. For example, voice depending is irreversible while breast development requires surgery to reverse. Stage 2 usually commences when the child turns 16 years. Parents of a child previously needed to apply to the Family Court for approval for their child to undergo Stage 2 treatment.
New approach
The Family Court has recently held in the decision of Re Kelvin (2017), that it is no longer mandatory to apply to the Family Court for orders approving Stage 2 treatment of a child with gender dysphoria where:
- The child consents to the treatment;
- The treating medical practitioner agrees that the child has sufficient maturity and competence to give that consent; and
- The parents of the child consent to that treatment.
Reason for new approach
The Full Court has held that the risks involved in irreversible treatment no longer outweigh the therapeutic benefits to the child such that Court intervention is required.
Facts of Re Kelvin (2017)
In the Kelvin case, the subject child was born a female and had fulfilled the criteria for gender dysphoria from 9 years old. He had transitioned socially and was living as a male.
He had not undergone Stage 1 treatment and going through female puberty had caused him significant distress.
At 17 years old, Kelvin wished to commenced Stage 2 treatment. Both of his parents supported him in his application.
Conclusion
Parents of children diagnosed with gender dysphoria who satisfy the above requirements will no longer be faced with the expenses (in some cases), delay, uncertainty and stress of court proceedings.
A huge breakthrough for families with gender disordered children.
5 Main Ways to Handle a Separation
December 1, 2017
Separating from your partner can be complicated. There are various ways to manage the process. You should seek legal advice as early as possible. It may save you a lot of money, either by making sure that you obtain a fair outcome, or by avoiding the cost and delay of going to court.
You can follow different paths to resolve your family law dispute.
Negotiation
The Family Court of Western Australia encourages you, and your family lawyer will encourage you to try and reach agreement about financial and/or parenting matters, before you go to court.
If you can negotiate a settlement, you retain a degree of control over the outcome. If you end up in court, you effectively hand over the responsibility of resolving your dispute to an independent Judicial Officer, who may make a decision that you or your ex-partner might not like.
Family Dispute Resolution
Family Dispute Resolution is a form of Alternative Dispute Resolution (ADR) used mainly in relation to parenting disputes. You must, with only some exceptions, attend Family Dispute Resolution conducted by a qualified Family Dispute Resolution Practitioner before you can file a parenting case in the Family Court.
The Family Court can order you to attend further Family Dispute Resolution after proceedings have been issued.
Mediation Style Conference
A Mediation Style Conference is another form of ADR and follows a procedure designed specifically for family law financial cases. You can deal with parenting issues at a Mediation Style Conference although this is not common.
The Mediation Style Conference will usually be chaired by an independent mediator who is often an experienced family lawyer, a barrister, or a retired Family Court judge. Lawyers for each party will also attend the conference to provide advice along the way. The conference can take a half-day or a full day depending upon the complexity of your matter.
A Mediation Style Conference can be expensive. However, if you reach a settlement, you will probably save a large amount of money by avoiding court proceedings.
Divorce
You cannot negotiate a divorce. You must obtain a divorce order from the Family Court to terminate a marriage. You must have lived separately and apart from your spouse for at least 12 months prior to filing your divorce application.
A divorce order does not resolve parenting or financial matters.
Court proceedings
If you and your ex-partner can’t reach an agreement in relation to parenting or financial matters, you have no option but to file court proceedings.
Just because you file proceedings, it does not mean that you will end up at a trial. You will have many opportunities to settle your case before then. Most cases do settle before trial.
However, generally speaking court proceedings should be an option of last resort. It can be expensive, stressful and it can take a long time to get a result. You may also not get the result you intended.
However you choose to deal with the issues arising out of your separation, it is wise to seek legal advice as early as possible to ensure the best outcome for you and your family. Paterson & Dowding based in Perth, has an experienced team of dedicated family lawyers, Accredited Family Law Specialists and nationally accredited mediators, who can assist you to resolve your family law matter. Call Paterson & Dowding today on (08) 9226 3300 or visit www.patersondowding.com.au to find out more.
