by Pankaj PawarSpousal Maintenance
If you have recently separated and are struggling to financially support yourself, you may be able to negotiate, or make a claim for, spousal maintenance from your former spouse or partner.
An Applicant must establish that they are unable to support themselves adequately, and that the Respondent has a capacity to pay spousal maintenance.
DSA Law have experience in representing Applicants in negotiating spousal maintenance payments, as well as making applications to the Court (as a last resort). We also have experience representing Respondents who wish to defend a spousal maintenance claim.
Our lawyers will provide you with practical legal advice relating to claims for spousal maintenance.
If you have recently separated and want to make a claim for spousal maintenance, you can reach out to the Family Law Team at DSA Law on (03) 8595 9580.
by Pankaj PawarLandmark reforms to Australia’s merger laws are on the way
On 10 April 2024 the Commonwealth Treasurer, Dr Jim Chalmers, unveiled reforms to Australia’s merger and acquisition clearance rules. From 2026, companies will need to notify and receive clearance from the Australian Competition and Consumer Commission (‘ACCC‘) for mergers and acquisitions over a certain threshold – to be decided by further consultation.
The recent acquisition by ANZ of Suncorp’s banking arm has ensured that the effectiveness of the current merger practices remain a trending issue. ANZ is revelling in a massive legal win after the ACCC’s rejection of its proposed $4.9 billion acquisition of Suncorp’s banking division was overturned on appeal.
The announcement of the reforms is in response to calls from the ACCC for greater competition, better protection of consumers and streamlining the approval process. In Australia, section 50 of the Competition and Consumer Act 2010 (Cth) prohibits the acquisition of shares or assets that would have the effect, or likely effect, of substantially lessening competition in a market. Unlike some jurisdictions in other countries, there is no mandatory threshold for notifying the ACCC about such transactions in Australia.
The new agenda proposes a complete overhaul. A shift away from the current court-enforcement model will remove the Federal Court’s role as ultimate arbiter, leaving the ACCC as the primary decision-maker. Consequently, the ACCC will take on a substantially more involved role. The ACCC will have the responsibility of conducting rigorous and evidence-based merger reviews, publishing new detailed guidelines, and providing detailed reasons for all its decisions.
The proposed reforms are set to apply from 1 January 2026 and notably include:
- ACCC will have power to block transactions: The applicable test has been clarified and considers whether a transaction has the effect, or likely effect to substantially lessen competition. The ACCC will be able to block that transaction in those circumstances. Additionally, mergers that create, strengthen or entrench a position of substantial market power may also be prevented.
- Mandatory notifications and clearance: Merger clearance from the ACCC will become mandatory and suspensory for mergers above a certain threshold. The thresholds will be subject to further consultation but will involve both monetary, such as revenue and profitability, and market share based tests.
- Analysis of cumulative effect of transactions in the last three years: Mergers from the previous three years will be aggregated to assess whether they exceed the thresholds. Serial acquisitions and those that increase market power and market concentration will also be considered.
- Public benefit review available: If a deal is blocked by the ACCC parties can apply for a review on the basis that the merger would result, or be likely to result, in a substantial benefit to the public. This benefit will need to outweigh the anti-competitive detriment of the merger. However, the proposed reforms have indicated a strict approach in the Tribunal’s decisions, meaning there will be limited opportunities for appeals and merit reviews. As a result, parties cannot introduce new evidence into their original application, except in very limited circumstances.
- Strict timelines and review phases: The proposal provides indicative timeframes including a 30-working day ‘Phase I’ review period. There will be the availability to fast rack straightforward cases to 15 working days. Any concerns raised during the first phase will proceed to a ‘Phase II’ review period. The parties will need to provide further information at this stage – more consultation on this point will occur this year.
- Increased public transparency: All mergers considered by the ACCC will be listed on a public register. The register will provide information regarding each merger, including the parties involved, a short overview of the transaction and its associated timeline.
- Filing fees for complex cases: Those matters that enter a ‘Phase II’ review will be subjected to filing fees between $50,000-$100,000 with an exemption for small businesses.
- Harsh penalties: Merger parties will face substantial penalties for failing to notify the ACCC of a notifiable merger or for proceeding to complete a merger ahead of the ACCC’s decision. Any merger, contract or connected arrangement to the merger put into effect outside the ACCC’s determination will be void. The ACCC will retain its powers to seek penalties in the Federal Court, including pecuniary penalties, divestiture of the shares or assets acquired, or an order that the transaction is void and that monies should be refunded to the vendor.
The Commonwealth Government will develop the reforms in consultation with stakeholders over the next 12 months. If you have recently or are considering, engaging in a merger that may affect competition in an Australian market, it is important that you understand the merger process and how to engage with the ACCC appropriately.
For expert advice and insight into mergers and acquisitions laws and the proposed clearance reforms, contact DSA Law – Lawyers & Consultants on (03) 8595 9580.
by Pankaj PawarStatutory Demands – When a debt owed by a company is due and payable
When a company owes a debt to a person, that person or company (the creditor), can serve a statutory demand on the company demanding payment of the debt pursuant to section 459E of the Corporations Act 2001 (Cth) (‘Corporations Act’).
According to the Corporations Act, the debt must be due and payable and at least $4,000, which is the current statutory minimum set out in the Corporations Regulations 2001 (Cth) (‘Regulations’). The statutory demand made by the creditor must contain certain information as set out under the Act, including the specific amount of the debt owed, or, if more than one debt, the total amount of the debts, and must be in the prescribed form which under the Regulations, is Form 509H.
If the debt owed is not a judgment debt (i.e., an order made by the court that the debtor company pay a sum of money to the person or company) then the statutory demand must also be accompanied by an affidavit that verifies that the debt is due and payable by the debtor company.
The company receiving the statutory demand (the debtor), once served with the demand, is required to either pay the debt strictly within 21 days after service, which is the statutory period under the Regulations, or to secure or compound for the amount of the debt to the creditor’s reasonable satisfaction within that time. Alternatively, the debtor company may make an application to the Court to set aside the statutory demand (discussed further below).
What happens if the debtor company does not pay?
If the debtor company fails to comply with the statutory demand and pay the debt within the 21 days, under section 459C(2)(a) of the Corporations Act, a presumption arises that the debtor company is insolvent, for 3 months following that date.
Within those 3 months, the creditor can make an application to the Court for the debtor company to be wound up in insolvency under section 459P of the Corporations Act. An application to wind up a company based on the debtor company’s failure to comply with a statutory demand, must be made by the creditor in accordance with section 459Q of the Corporations Act.
What a debtor company can do if served with a statutory demand
While the failure of a company to comply with a statutory demand appears to be a fairly simple way of establishing that the debtor company is insolvent, the company served with the demand can make an application to the Court for an order to set aside the statutory demand under section 459G of the Corporations Act.
Any application to set aside the statutory demand must be made within 21 days after the demand is served on the company. An affidavit in support must also be filed, and served together with the application, on the creditor company.
The grounds for bringing a setting aside application include the following:
- there is a genuine dispute about the existence or amount of the debt set out in the statutory demand;
- the debtor company has an offsetting claim;
- there is a defect in the statutory demand and unless it is set aside, substantial injustice will be caused; or
- there is some other reason for setting aside the statutory demand.
Where there is a defect in the statutory demand, except for the reason set out above, the Court must not, merely because of the defect, set aside the demand.
Circumstances in which a statutory demand may be set aside
The Court may set aside a statutory demand in circumstances where there is a genuine dispute between the debtor company and the creditor about the debt, if there is an offsetting claim, or for some other reason, such as an abuse of process.
i. Genuine dispute about the debt
What forms a genuine dispute was considered by the Court in Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd, where Northrop, Merkel and Goldberg JJ stated (at 464), that:
In our view a “genuine” dispute requires that:
- the dispute be bona fide and truly exist in fact;
- the grounds for alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived.
In Re Bastow Civil Constructions Pty Ltd, Black J observed that where there is a genuine dispute or an offsetting claim regarding the debt claimed in the statutory demand, or other reason that the demand should be set aside, and the demand is set aside, this ‘will often lead to disappointment’ as the merit of the dispute itself regarding the debt is not determined.
His Honour further noted that where genuinely disputed debts are the subject of a creditor’s statutory demand, and the statutory demand must be set aside, the costs ‘are wasted’, and the parties must commence proceedings to recover the debt in a Court which can determine whether there is a genuine dispute or an offsetting claim, which is the course that should have been taken ‘in the first place’.
ii. Abuse of process
The Court may set aside a statutory demand where it is an abuse of process.
What constitutes an abuse of process, was considered by the High Court in the decision of David Grant & Co Pty Ltd v Westpac Banking Corp (‘David Grant’). In David Grant, Gummow J observed that it ‘may transpire that a winding up application in respect of a solvent company is threatened or made for an improper purpose which amounts to an abuse of process’.
The Court of Appeal in the Western Australia decision of Createc Pty Ltd v Design Signs Pty Ltd (‘Createc’), considered the criteria for determining whether there has been an abuse of process. In Createc, Martin CJ (with Owen JA and Miller JA agreeing) noted that issuing a statutory demand for the ‘improper purpose’ of enforcing payment of genuinely disputed debt, ‘is an abuse of process’.
In the case of Re Zarzar Pty Ltd (‘Zarzar’), Barrett AJA noted that ‘the reality is that it is an abuse of the statutory demand process’ to rely on a statutory demand while suing for the debt claimed under the demand at the same time.
His Honour in Zarzar noted that issuing a statutory demand and commencing proceedings to recover a debt ‘have different objectives’. The purpose of serving a statutory demand is ‘to obtain the benefit of a presumption of insolvency’ if the company fails to comply with the demand, with the payment of the debt a ‘welcome by-product’ of that process. Whereas the aim of debt recovery proceedings, is to compel payment of the debt claimed.
Key takeaways:
For the creditor
A creditor owed a debt by a company, before issuing a statutory demand should consider whether there is a genuine dispute about the debt. Defending an application to set aside a statutory demand could be costly. If the demand is set aside, the creditor will have incurred legal costs, may be ordered to pay the other party’s cost, and be in no better position regarding the debt.
For the company served a demand
A company served with a statutory demand will need to act quickly as it will only have 21 days within which to pay the debt, or make an application to set the demand aside. Where the company fails to comply with the statutory demand, or have it set it aside, it may be faced with a winding up application before the Court.
For advice regarding issuing, or responding to, a statutory demand, contact DSA Law – Lawyers & Consultants.
by Pankaj PawarPre-Action Procedures In Family Law Property Matters
The Federal Circuit and Family Court of Australia (“FCFCOA”) has introduced stricter rules in relation to Pre-Action Procedures and attempts to resolve matters prior to the issuing of court proceedings. These rules are set out in Rule 4.01 and Schedule 1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Family Law Rules).
Parties must make a genuine attempt to resolve a matter outside of court, or if there is no resolution at least narrow the issues in dispute prior to commencing court proceedings.
The Pre-Action Procedures apply to all parties and their legal representatives.
All parties must:
- Read a copy of the “Before You File – Pre-Action Procedure for Financial Cases” Brochure which can be found on the FCFCOA website;
- Make enquiries about and invite the other party to dispute resolution;
- If dispute resolution has been attempted and has been unsuccessful, write to the other party outlining their position and any options for settlement and provide a reasonable time frame for a response;
- Exchange relevant documents if possible; and
- If all avenues for a settlement have been explored, provide the other party with written notice of their intention to commence court proceedings.
Parties must file a ‘Genuine Steps Certificate’ along with their Initiating Application in the FCFCOA outlining their compliance with the Pre-Action Procedures.
Are There Any Exemptions To The Pre-Action Procedures?
There are certain exemptions from complying with the Pre-Action Procedures, and these are as follows:
- If there are allegations or risks of family violence;
- If an application is urgent;
- If there would be a prejudice to the Applicant if required to comply with the Pre-Action Procedures;
- If there has been a previous application filed in the FCFCOA in the last 12 months by either party; and
- If a party is bankrupt.
If relying on one of the exemptions, parties must indicate this in their Genuine Steps Certificate filed with the court and also explain why they rely on such exemption in their Affidavit material.
What Is The Purpose of The Pre-Action Procedures?
The court’s objective is to encourage parties to disclose relevant financial information early on in the process and help them to resolve their matters quickly, without incurring the costs associated with litigation.
The court also encourages parties and practitioners to refrain from using the Pre-Action Procedures improperly and raising issues that are irrelevant to the resolution of a matter.
If you have recently separated and wish to commence the Pre-Action Procedures in order to commence negotiations, you can reach out to the Family Law Team at DSA Law on (03) 8595 9580.
by Pankaj PawarMajor Changes to the Fair Work Act 2009 (Cth)
Parliament has recently enacted two major law reforms to the Fair Work Act 2009 (Cth):
- Fair Work Legislation Amendment (Closing Loopholes) Act 2023
- Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024
These reforms to the Fair Work Act will have a significant impact on employers – the most notable reforms include:
Changes in the definition of ‘Employee’
In determining whether a worker is an employee or an independent contractor, consideration must now be given to:
- the real substance, practical reality and true nature of the relationship; and
- the whole relationship between the parties, including the terms of the contract and how the contract is performed in practice.
This overturns High Court rulings in ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 & WorkPac Pty Ltd v Rossato [2021] HCA 23 which determined a worker’s status by reference to an employee’s contractual terms. The test for determining an employee will now revert back to the ‘multi-factorial test’ used for decades prior to the aforementioned High Court decisions.
Changes to the definition of a ‘Casual Employee’
An employee is a casual employee only if:
- There is an absence of commitment to guarantee ongoing or permanent work by the employer; and
- The employee is entitled to casual loading or a specific rate of pay specifically for casual employees under a Modern Award.
Criminalisation of Wage Theft
Wage theft will now become a criminal offence with a maximum penalty of up to 10 years imprisonment.
The financial penalties have also been increased five-fold from 60 penalty units to 300 penalty units (as at 11 April 2024 the fine is $93,900) for contravention of any of the following provisions:
- National Employment Standards
- Modern Awards
- Enterprise Agreements
- Remedy Provisions
Employee Right to Disconnect
Employees will now have the statutory right to reasonably refuse to monitor, read or respond to contact from an employer outside of working hours.
How can DSA Law Help You?
If you require assistance in determining how such changes may affect you, please reach out to the Employment Law Team at DSA Law on (03) 8595 9580.
by theladA Fairer Approach to Existing Use Rights
Yesterday, the Victorian Government gazetted Amendment VC254, amending all planning schemes in Victoria. Significantly, this amendment changes the time period to apply in existing use rights applications relying on the ’15 year’ rule.
Pre-Amendment Provision
It has long been the case that all Victorian Planning Schemes provided that evidence demonstrating continuous use of land for a 15-year period established existing use rights. However, those rights were extinguished if, within the 15-year period, the responsible authority had issued a ‘clear and unambiguous’ written direction for the use to cease.
The relevant period
In 2017, in Octopus Media Pty Ltd v Melbourne City Council [2017] VSC 429 (Octopus Media), the Victorian Supreme Court held that the relevant 15-year period had to be the period immediately preceding the relevant application.
This meant that existing use rights could not be established in those cases where the use had been carried out for many years, including well in excess of 15 years, if the responsible authority issued a direction to cease before an application was made to prove those existing use rights – even if that direction was issued after the use had been carried out for 15 years (or more).
Amendment
Amendment VC254 reverses the effect of the decision in Octopus Media.
Clause 63.11 has been amended to read (emphasis added):
…it is sufficient proof of the establishment of the existing use right if the use has been carried out continuously for 15 years prior to a period of 15 years at any time before the date of the application or proceeding.
An existing use right may be established … unless any of the following apply:
…
The use ceased between the end of the 15 year period and the date of the application or proceeding.
The need for the 15-year period to commence immediately prior to the application is no longer required. A ‘clear and unambiguous’ direction to cease will now only defeat existing use rights if it is issued before the use has been carried out for the requisite 15-year period.
A fairer approach
While the 15-year rule can have the effect of making legal that which commenced unlawfully, its primary purpose has always been to prevent the necessity for the production of very old evidence to prove lawful establishment of a use before that use was regulated in any way by current planning scheme provisions.
While Octopus Media had the potential to displace the utility of the rule, Amendment VC254 ensures it will again allow recent evidence to be used to establish existing use rights.
If you or your business requires advice on existing use rights, or any other planning related matter please contact Luke English at our Mornington Office on 5975 2000.
by theladMajor Changes to Planning in Victoria
Today the Victorian Government has gazetted Amendment VC253 (Amendment), in relation to ‘small second dwellings’ – the well-publicised ‘granny flat’ component of the Government’s planning reforms.
The change, which introduces, for the first time, the concept of a ‘small second dwelling’, applies to all Victorian planning schemes (and the Building Regulations), and is part of the implementation of Victoria’s Housing Statement: The decade ahead 2024-2034.
In most zones, a small second dwelling of up to 60 square metres in size will not require planning permission (provided certain conditions are met). In the Green Wedge Zone (GWZ), Green Wedge A Zone (GWAZ) and Rural Conservation Zone (RCZ), a permit will be required but previously, a second dwelling was not permitted at all.
This represents a significant shift with various ramifications.
The strategic justification for this new policy is to meet the need for more housing, and as expressed by the Premier:
‘There will be no restrictions on how a small second home can be used – they can be used flexibly, whether it’s keeping family members closer, providing temporary housing or being rented out for additional income.’
The Amendment seeks to generate positive social effects in terms of addressing housing affordability, increasing housing choice and allowing for more intergenerational living.
To build them, a number of requirements must be met, including:
- The small second dwelling must be the only small second dwelling on the lot. That is, there will be a maximum of two dwellings permitted per lot – the existing dwelling plus the small second dwelling.
- The small second dwelling must have a gross floor area of 60 square metres or less, and must include a kitchen sink, food preparation facilities, a bath or shower and a toilet and wash basin – i.e. be a self-contained residence.
- It is not a short cut to creating two lots! The subdivision clause of the various zones states that:
‘A permit must not be granted which would allow a separate lot to be created for land containing a small second dwelling.’
- The minimum garden area requirement still applies.
- Under the Building Amendment (Small Second Dwellings) Regulations 2023 a minimum area of 8 square metres of private open space for a small second dwelling will have to be provided, along with a clear and unobstructed path from the front street to the small second dwelling.
- A permit is required for a small second dwelling on a lot less than 300 square metres.
- There is no requirement to provide car parking for a small second dwelling as Clause 52.06 Car parking does not apply.
Further requirements also apply (including in some cases, the need for a permit) where land is affected by a planning scheme overlay.
Notably, the land use term ‘Dependent person’s unit’ (DPU) has been deleted from planning schemes. Presumably, dependent persons are expected to make use of the small second dwelling provisions instead. This means that there is no longer a requirement to prove a dependent relationship, and the building need not be movable, but the dwelling will be restricted to 60 square metres, whereas previously DPUs could be constructed to any size.
Obviously, it remains to be seen exactly how many of these small second dwellings will be built and how they come to be used.
We can provide advice as to whether your particular circumstances may accommodate a small second dwelling under these changes, and certainly in those zones where a permit is required – GWZ, GWAZ & RCZ – we can assist with the planning permit process.
Alternatively, it may be that the usual process for creating two or more dwellings is more appropriate for a given situation.
The other big unknown is what impacts small second dwellings will have on neighbours, who, in most cases, will have no opportunity to object to their construction. We can provide you with advice about other rights you might have.
Please contact Luke English or Sarah Davison of our Mornington office with any questions about the small second dwelling reform.
by theladSeparation Under the Same Roof
In Australia, there is a ‘no fault’ system for divorce. This means that the court is not concerned with, and does not consider, any of the reasons as to why the marriage came to an end.
The only requirements for a divorce are:
- That you have been separated for at least 12 months;
- That the marriage has broken down ‘irretrievably’; and
- That the other party has been served with your Application for Divorce and accompanying court documents.
In some cases, parties separate and continue to reside under the same roof for all or some of the 12 month period before they apply for a divorce. This could be for a number of reasons such as financial constraints or accommodating the needs of the children of the marriage and so on. Some parties remain separated under the same roof for a few days, months or even years.
Parties that have remained separated under the same roof can still apply for a divorce, however will need to provide further information to satisfy the court that they have in fact been separated during this period. Examples of such information is as follows:
- Details as to sleeping arrangements (i.e separate bedrooms).
- Whether the intimate relationship has ended.
- Changes in domestic tasks (i.e each attending to own cooking and cleaning duties).
- Reduction in outings as a family or attendance at shared activities.
- Advising family and friends of the separation.
- Maintaining separate finances (i.e separate bank accounts, each paying for own groceries).
- Whether any relevant government body has been informed of the separation (i.e Centrelink, Services Australia, the Child Support Agency).
Parties are required to advise the court of the additional information by filing an Affidavit and should also explain why they have not yet separated their households.
If the parties are able to provide sufficient information to satisfy the court that they were in fact separated whilst remaining under the same roof, then it is likely that a divorce will still be granted.
It is important to remember that a divorce will only formally end a marriage, and is separate to a financial settlement and formalizing arrangements for the care of children.
If you have been separated and wish to file an Application for Divorce, you can reach out to the Family Law Team at DSA Law on (03) 8595 9580.
by Pankaj PawarTrees on Neighbouring Land
The issue of trees overhanging boundaries is probably something we can all relate to. Is it their responsibility or yours? And are there specific laws that relate to the tree in question? There can be heavy fines for unauthorised removal or destruction of publicly owned trees and for trees protected by planning schemes or local laws.
We can advise you about planning and local laws and assist you in resolving your concerns without getting yourself in trouble.
Court
Litigation is costly and stressful, and all avenues to resolve disputes without going to court should be explored.
If a dispute between neighbours about an overhanging tree gets to court, the court will consider a number of issues, including:
- The neighbourhood’s general environment
- How long the issue has been ongoing
- The impact on you and your property
- What reasonable people would think of the interference
If you have any issues with overhanging trees and think you need to speak to a lawyer, please contact our Melbourne City office on 8595 9580 or Mornington office on 9575 2000.
by Pankaj PawarPenalties of up to $2.5 Million to Apply to Companies Relying Upon Unfair Contract Terms
As of 10 November 2023, a new unfair contract term (‘UCT’) regime will take effect in Australia.
Changes
The Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 attained royal assent on 9 November 2022 and will introduce a range of changes to both the Competition and Consumer Act 2010 (‘CCA‘) and the Australian Securities and Investments Commission Act 2001 (Cth).
The main amendments include:
- Broader Definition of ‘Small Business’
The UCT regime applies to standard form consumer contracts and small business contracts. Currently, a ‘small business’ is defined as an entity that employs less than 20 people. Under the new UCT regime, this definition will expand to entities that employ less than 100 people OR has a turnover of less than $10 million over the previous income year.
- Increased Civil Penalties
The maximum penalties for companies in breach of the CCA have been increased to the greater of:
- $50 million;
- 3x the value of the benefit obtained (if it can be determined); or
- 30% of the company’s turnover during the period of the breach
The maximum penalty for individuals in breach of the CCA has been increased to $2.5 million.
- Greater Powers of the Courts
The new amendments grant the Court multiple new powers – these include but are not limited to:
- Void, vary or refuse enforcement of a contract
- Order an injunction to prevent a party from relying upon an unfair term or contract in the future.
- Determination of whether a Contract is a ‘Standard Form Contract’
The Court may now determine a contract is a standard form contract despite the existence of one or more of the following:
- An opportunity for a party to negotiate changes to the terms of the contract, that are unsubstantial in effect.
- An opportunity for a party to select a term from a range of options determined by another party.
- An opportunity for a party to another contract or proposed contract, to negotiate the terms of the other contract or proposed contract.
- Penalties
Under the current regime, terms that were deemed to be unfair would only be void and enforceable; no other penalties would apply. Under the new changes, an entity will be prohibited from entering into a contract with an unfair term and/or relying upon an unfair term – if breached, the entity will be liable for penalties.
The maximum penalty for a company that breaches these new stipulations is $2.5 million.
What can you do to avoid being found guilty of unfair contract term use?
If your business relies on standard terms and conditions or standard form contracts, you should engage with a lawyer to have those reviewed to ensure they do not offend the current or impending regime.
How can DSA Law Help You?
If you require assistance in determining whether the new regime will affect you, or in determining whether a contractual term is enforceable or not, please reach out to the Commercial Law Team at DSA Law on (03) 8595 9580.
by DSA LawSection 32 & PEXA
What is a Section 32 Statement?
The section 32 Statement is a mandatory document containing information regarding a property which may affect the land being sold.
Section 32 of the Sale of Land Act 1962 (Act) states that a vendor under a contract for the sale of land must give to a purchaser, before the purchaser signs the contract, a statement signed by the vendor that contains various prescribed matters and attaches the documents specified in the Act.
The Act also states that the vendor may sign the statement to be given to the purchaser under this section by electronic signature.
Who prepares a Section 32 Statement and what is included?
The vendor’s legal representative will prepare the Section 32 Statement which is not limited to but may include:
- Register Search Statement confirming the title details;
- Copy of plan of subdivision detailing the boundaries of the lot;
- A planning statement including relevant responsible authority;
- Confirmation of the services connected to the land;
- Certificates from relevant local authorities; and
- Any building permits.
Who reviews a Section 32?
As a purchaser your legal representative will examine the Section 32 and offer advice regarding any concerning matters that may affect the property.
What is PEXA?
Property Exchange Australia (PEXA) is a digital workspace where financial settlements are completed by sending electronic instructions to financial institutions. Used by conveyancers, lawyers and financial institutions to transfer ownership and complete financial settlements of property sales and lodge documents with Land Registries.
If you have any conveyancing requirements, please call our Melbourne city office on 8595 9580 or, if on the Mornington Peninsula, please call 5975 2000.
by Pankaj PawarWhat is a Binding Financial Agreement?
Binding Financial Agreements 101 – What do I need to know???
A Binding Financial Agreement (“BFA”) is a legally binding agreement which deals with the division of parties’ assets, liabilities, superannuation and financial resources outside of court.
BFAs can deal with the whole of your property and finances, or they can be limited to one aspect only such as spousal maintenance.
BFAs can be entered into by both married or de facto couples, and can be made:
- Prior to marriage or cohabitation (often referred to as a Prenup);
- During the marriage or de facto relationship;
- Following separation; or
- Following a divorce order being made.
BFAs are governed by Part VIIIA and Division 4 of Part VIIIAB of the Family Law Act 1975 (Cth)
What are the requirements for a Binding Financial Agreement to be binding?
In order for the BFA to be binding, both parties must sign the agreement.
Prior to the signing of the agreement, both parties must receive independent legal advice from a solicitor in relation to:
- The effect of the agreement on their rights;
- The advantages of the agreement; and
- The disadvantages of the agreement.
Each party must receive a statement of independent legal advice signed by the solicitor who provided the party with the advice, confirming that the advice was given, either before or after the agreement has been signed. This statement must also be provided to the other party or their solicitor. Often, the statement of independent legal advice is annexed to the agreement itself.
At times parties desire to resolve their financial matters without having engaged a solicitor, however in order for a BFA to be binding and enforceable, independent legal advice must be obtained.
If the BFA is entered into following separation, a separation declaration must be signed by either of the parties and attached to the BFA unless the agreement was made after a divorce order.
Lastly, the BFA must not have been terminated or set aside by the court.
What are the advantages of a Binding Financial Agreement?
There are various benefits of entering into a BFA, which include:
- If entering into the agreement before or during a marriage or de facto relationship, parties have the benefit of planning how their property and finances will be divided prior to a separation taking place. This provides certainty and peace of mind in the event of a separation.
- Having the ability to resolve financial matters outside of court, which can often be a costly, daunting and a lengthy process which parties may seek to avoid.
- Reaching a settlement based on the terms agreed to by the parties, rather than being bound by a decision made by the court.
- Having the ability to move away from the principles of justice and equity in family law court settlements and crafting a more personalized agreement.
- Precluding either party from making a claim against the other in the future and providing finality (unless the agreement is set aside- see below).
What are the disadvantages of a Binding Financial Agreement?
Some disadvantages of entering into a BFA can include:
- If entering into the agreement before or during a marriage or de facto relationship, either parties’ circumstances may change after separation, and this may not be taken into account in the agreement, resulting in a dissatisfactory outcome.
- Once fully executed, the terms of the agreement cannot be altered unless the parties enter into a new agreement, terminating the previous BFA.
- As BFAs are entered into outside of court, the terms of the agreement will not be approved by the court as being a just and equitable settlement and may be subject to being set aside by the court if challenged by a party.
When can a Binding Financial Agreement be set aside?
There are various circumstances in which a BFA can be aside, and these include some of the following:
- The agreement was obtained by fraud.
- The agreement is void, voidable or unenforceable, for example if the binding requirements were not fulfilled.
- Circumstances have arisen since the agreement was made that make it impracticable for the agreement or part of the agreement to be carried out.
- Since the agreement was made, a material change in circumstances that relate to the care, welfare and development of a child of the relationship has occurred. As a result of the change, the child, or one who has caring responsibility for the child, a parent, person with residence order or specific issues order in relation to the care, welfare and development, or a party to the agreement will suffer hardship if the court does not set the agreement aside.
- A party to the agreement engaged in unconscionable conduct in the process of developing the Financial Agreement, for example duress, this is more commonly a concern in agreements being entered into before a marriage.
Summary
Overall, a BFA is an effective way to deal with property and finances if the parties are able to reach an agreement outside of court. If the parties have followed the requirements to ensure that the agreement is binding, such as obtaining independent legal advice from a solicitor prior to signing, there will be less risks associated with the agreement being challenged.
It is important to receive advice as to whether a BFA is right for your particular situation. If you have recently separated or wish to crystalize how your property and finances will be divided in the event of a breakdown of your marriage or de facto relationship, please reach out to the Family Law Team at DSA Law on (03) 8595 9580 we are here to help.