Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Family Law (Self-Assessment) Bill 2019

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

 

 

 

 

2019

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

THE SENATE

 

 

 

 

 

FAMILY LAW (SELF-ASSESSMENT) Bill 2019

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

(Circulated by authority of Senator P. L. Hanson)

 



FAMILY LAW (SELF-ASSESSMENT) BILL 2019

OVERVIEW

1.                   Family law reforms have long been focused on delays arising inside family courts, despite the fact that delays outside courts also drag on for almost two years, sometimes a decade. For battlers with belligerent spouses there can sometimes be no payment ever.

2.                   The Family Law (Self-Assessment) Bill 2019 (the Bill) solves these innate delays at low cost by requiring separating couples to self-assess and narrow their disputes promptly, within a defined statutory time frame. Under current law, obligations to comply with the Family Law Act 1975 (Family Law Act) are enlivened only once litigation ensues at great cost to spouses, children and taxpayers. This Bill would make compliance with the Family Law Act mandatory, not optional, not deferred and not dependent on wealth or bargaining power.

3.                   In 2014 the Australian Institute of Family Studies found that ordinary Australian voters wait, on average, 15-23 months to settle their relationship property disputes outside court. Delays are a most odd outcome given that the proper purpose of the grant of vast discretionary powers to judges was to achieve:

 

…sweeping away the laws and procedures of the past and providing a new era of calmness and rationality… which would introduce speedy, less expensive and less formal procedures. (Attorney-General's Department press release, 1975)

 

4.                   In broad outline this Bill will now require a separating couple to act rationally by:

·          Locking in a division of 35% of the net value of the family home promptly for each of them, unless one of them can show cause that a court would make a lower allocation due to ill health or special circumstances;

·          Self-assessing their remaining relationship wealth on an internet portal, with the protection that the financially disadvantaged spouse (in 94% of cases, the female) ordinarily must be allocated not less than half the value of their relationship property in 60 days;

·          Paying up by selling the family home at auction or to one of them, and to the extent there is disagreement locking up residual sums in a joint bank account while they mediate, negotiate, or arbitrate the remaining real issues or amount in dispute;

·          Only making exceptions in limited circumstances commensurate with current legal policy and that are otherwise consistent with utilitarian justice;

·          Not affecting citizens’ rights to litigate after the event. However, much like income tax self-assessment, the economic incentive to litigate and to bicker post payment reduces in a somewhat linear fashion.

5.                   A similar obligation requires the self-assessment of middle-class shared parenting disputes in a timely manner. A residential parent (usually the mother) must articulate reasons for not enabling at least standard contact hours by the father with their children. These changes will ensure that scarce state resources are redeployed to protect those parents and children at real risk of violence, not merely those in conflict.

6.                   This Bill will have the same economic effect as increasing Federal Circuit Court expenditure by 34% and quadrupling the effectiveness of taxpayers’ money used to assist middle class divorcees (which throughout this Explanatory Memorandum includes de facto couples for ease of reference)). This Bill will effect a more significant reduction in family violence than all other measures enacted or funded by this Parliament. These changes are opposed, but of course, by the Law Council of Australia who saw a prior draft of this Bill.

7.                   Throwing money at family law problems won’t fix the problems because of the fundamental mismatch between the interests of the law society and the interests of Australian society. Our society needs low conflict, high certainty. Lawyers sell hours and so, unsurprisingly, a system they manage takes forever. Rather than spend tens of millions of dollars of other peoples’ money with no deliverables in sight, this Bill proposes creating core compliance obligations. This Bill is large, but one ninth the size of the Taxation Administration Act 1953 . The Federal Court has two judges with expertise in tax matters sorting out problems for 12 million taxpayers. The family courts have over 80 judges for 130,000 divorcees.

8.                   This Bill does not propose to change the policy of the Family Law Act but, instead, to restore the original intent of the Parliament by creating a compliance timetable and process, such that:

·          A claim will be made online, with a self-assessment system for financial disputes. Solvency is to be achieved by a series of minimum compliance rules that strengthen the vision of the Hon Lionel Murphy QC, former Senator, Attorney-General and Justice of High Court of Australia, that family law justice be rational, prompt, focused, and simple. To date courts have failed to achieve, and in some instances failed to seek to achieve, these proper purposes; and

·          A system of parental self-assessment will enable children to enjoy more support from their non-residential parents. Providing material solutions for families at a time of family dissolution is a core role of a legal system. The current regime provides little certainty and exacerbates much distress. It is incongruent with society’s needs for reduced levels of gender conflict.

9.                   These changes come at no cost to other taxpayers. They move compliance burdens from the weak to the powerful and their advisors. They will result in a wealth transfer from lawyers to clients. They will deliver what courts and lawyers have failed to achieve.

10.               One great Australian social policy innovation of the last half-century has been the introduction of a system of self-assessment of taxes. Self-assessment has been a huge success, copied by many other countries. This Bill will apply self-assessment to the area of relationship property disputes and will shift the burden from the state and off the shoulders of the compliant spouse. It does so in the case of financial disputes because:

·          a dispute of smaller quantum solves more quickly than disputes about total wealth;

·          cashflow solvency is critical for the meek;

·          automating the payment of rational minimum sums enhances compliance, which is otherwise effected at the leisure of the stronger spouse until the state intervenes at great cost;

·          this system of deadlines imposes an effective cap both on fees and the asymmetric benefit of delays that family courts have refused to price properly; and

·          more scarce state resources can then assist those with forms of abuse or violence rather than those arguing over who keeps the BMW and who gets the Porsche.

11.               The context for change is the collapse of family courts, which service providers seek to fix by throwing money at a solution which supports their business model. In other words, most suggestions for fixing the system involve requests or demands for more taxpayer money for lawyers and courts. Voters, by way of contrast, demand their representatives ignore the special interests and instead convene a royal commission into family law courts. These demands are reminiscent of the demands for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

12.               Ignoring yet again these calls, a review of family law is being undertaken by the Australian Law Reform Commission (ALRC) which released a discussion paper in October 2018 and is due to report to the Attorney-General on 31 March 2019. It appears that the ALRC proposes to do little for the middle class and battlers other than propose a series of legal hubs, employing lawyers and others at great public expense. The ALRC report will not be costed. The last prior report on family law reform, by the Productivity Commission issued in 2015, has still not been substantively debated 4 years on.

13.               By way of contrast this Bill:

·          is capable of enactment without the expenditure of public funds; and

·          deals with matters the ALRC will likely not canvas, far less provide solutions for; and

·          can be implemented in a matter of weeks, for the direct benefit of approximately 350,000 voters who are fed up with now decades of ineffective attempts at reform.

14.               The importance of reform for battlers is manifest. Far too many Australians fall outside the system if their spouse is belligerent or wants to string out payment. This inability to triage disputes imposes unacceptable costs on voters and divorcees.  

15.               Reform of this nature is inevitably opposed by those who confuse their interests with the public interest. Yet, the tax avoidance industry, the ambulance chasing industry, and the construction payment delay industry, have been changed in the very same manner as proposed here. Change is long overdue. It’s time.   



POLICY SYNOPSIS

Problems encountered by the rich and the subsidised in family courts

16.               The problems of our family courts are well known and include:

·          Each morning in every federal circuit court across the nation the same melancholy charade is played out at huge emotional and financial cost to spouses. Allegations abound, no matter how historical, which most frequently result only in the prolonged delivery of judgements making distinctions of no appreciable financial difference.

·          Courts refuse to factor in the economic costs of delay, creating 'free-rider problems'. Meanwhile barristers receive a payment priority over education expenses, all in the best interest of someone else’s child.

·          Registrars and Legal Aid are underfunded.

·          The views of child psychologists are adopted without adequate scrutiny.

·          Access to justice is mispriced, and judicial attempts at adversarial justice has proved utterly farcical.

·          The needs for certainty, solvency, and dignity are nowhere to be found;  

·          The shared parenting laws have been eviscerated, resulting in low levels of equal parenting relative to other countries;  

·          The consequent loss of public confidence in even modest levels of competence of the family law industry have rendered court orders unenforceable.

17.   This is not a legal system to be proud of. It is barely a legal system at all - no law, equality of representation by counsel impeded, no precedent, and pervasive group think.    

18.   Society must triage its disputes and protect the weak. To reduce financial violence being perpetrated or enabled by the state, litigation must go the way of the jousting tournaments that it replaced. The people have entrusted the least accountable branch of government with far too much power. A system that optimises rehabilitation and dignity, not maximises processes and fees, is most sorely needed.

The problems for the middle class and battlers

19.             The fish rots from the head down. For those who end up negotiating on average for 23 months in the shadow of the rule of lawyers, further problems arise including that:

·          In the absence of law or guidelines, economic coercion abounds such that citizens in similar situations end up being treated capriciously, not with the dignity that Senator Murphy envisaged;

·          Orwellian slogans about the “best interests of children” remain vacuous and provide no legal guidance, just more vitriol;

·           Negotiations occur in the shadow of a system whose outcomes are not determined by legal precedent, nor by applying rational financial principles;

 

·          The incentives of solicitors and financially powerful spouses incline always toward delay, stoking existing anger about relationship breakdown;

 

·          Couples are frequently precluded from self-solving their financial dispute when State and Territory magistrates issue family violence orders for allegations of anger, yelling, or “the silent treatment”. After holding a two-minute hearing, magistrates then habitually anoint only fellow lawyers to facilitate spousal communications. Many Australians simply cannot afford solicitors. Many disputes thus fester - with the consequent return of fault-based divorce by another name.

 

20.   The causes of relationship breakdown are many. Prominent among them is financial distress. The current dispute resolution method of turbo charging that financial stress facilitates much predatory behaviour by spouses and solicitors.

The externalities that arise when the legal system is rendered unworkable

21.             Failures in the family law system have a material impact on children, on parents and on relatives. For our government, costs are incurred in the funding of:

·          Courts, often for the wealthy;

·          Legal Aid and advisory support services;

·          Relationships Australia;

·          the welfare system; and

·          Domestic violence initiatives.

22.               Costs are also incurred by children through youth suicide, education fees being used to pay barristers and child psychologists, and reduced child support for children as capital is squandered. In large part these problems arise because the Family Law Act provides a discretion to courts to resolve family law matters, but in doing so it mandates very few obligations unless and until parties commence legal proceedings. Recourse to courts is at present the only mechanism provided in the Family Law Act to compel some form of material mandatory action.

The system ignores those who can’t pay lawyers or have lawyers funded by the state

23.               A great many citizens are left to bargain in the shadow of the rule of lawyers. Others are simply so financially intimidated that they don’t even bother trying. Payment delays are pervasive across all sectors of society. Absent minimum compulsion, far too many spouses have begun to use the system to intentionally delay payment or for other purposes that were not intended by the Parliament over 44 years ago. Outcomes via both litigation and negotiation are often haphazard, idiosyncratic, slow and financially violent, and result in a sense of pervasive unfairness.



The proper purpose

24.               Family courts have failed to enunciate legal precedent which would achieve objective, consistent and purpose-based outcomes. Family courts have also failed to deploy insights from finance in financial disputes. The consequence is that the meek are not shielded by the Family Law Act. Spouses in similar circumstances end up with different outcomes especially if they are belligerent, or well-funded. This is the very antithesis of the outcome expected by those politicians who voted for the 1975 Act.

25.               Current processes all too often result in limited interim distributions of property and retention of money not even in contention. That does not meet the proper purpose of a law which was enacted to ensure rationality prevails. The calmness that Senator Murphy expected has been subsumed by an unconscious bias favouring the economic incentives of litigation lotto retailers.

26.               Civil society wants politicians to ensure that litigation is used but sparingly in relationship matters, and in any event only in a manner that demonstrably works to reduce conflict, not to monetise it. 

Delay is pervasive even if courts aren’t involved

27.               Commonwealth resources currently prioritise and support those who use courts. The rationale that lobby groups have proffered for doing so is that courts deal with couples in high conflict and that other citizens settle their affairs amicably. These assertions are fundamentally incorrect. Access to courts is dependent on wealth and liquidity, or for battlers, on haphazard access to state subsidies dependent on prevailing Legal Aid budgets. For those who cannot incur the financial impost of bespoke litigation, or indeed are too terrified by the horrific tales as retold by the many thousands who have experienced it, solutions still take up to 23 months, according to research under taken in 2014 by the Australian Institute of Family Studies. This approach most often skews outcomes to the benefit of the party with the greater bargaining power, not the person with the most just case. Lucrative and theoretically perfect as this might be in some cases, it is irrational and unjust in far too many instances.

28.               This Bill remedies many of these problems by creating primary compliance obligations on separating couples themselves to narrow, articulate and self-solve disputes relating to relationship property and time spent with their children. These new obligations are created outside of the court system. The Bill creates a resolution mechanism that shifts the project management and compliance burden on to the spouses themselves and removes it from the state, so as to ensure that the family law system meets the contemporary needs of Australian families regardless of their socio-economic status.

Regulatory capture by the service providers

29.               The ALRC was tasked by former Attorney-General George Brandis QC, with undertaking a review of the Family Law Act. The ALRC was commissioned in the face of strong demands from a large number of Australians for a royal commission into the family law system. Those calls for accountability and transparency were ignored in circumstances where no debate whatsoever had occurred in Parliament about the 2014 recommendations of the Productivity Commission to enable better access to justice in family law matters. The ALRC had no seat at the table for the meek or the middle class and drew on no expertise from judges outside the family law echo chamber who had demonstrable public policy experience with reforming failed institutions of state. The ALRC has now foreshadowed in its discussion paper that it will not even debate the recommendations of the Productivity Commission and will not address, far less recommend solutions for, many of the problems that the equitable model of judicial determination imposes on society. The ALRC report will not be costed when it is delivered, meaning that, at very best, any solutions it proposes are years away and the system will remain lawless for some considerable time. The ALRC has been but an expensive exercise in group think and regulatory capture.

30.               The Parliament has been inundated with reports and recommendations over four decades from experts and has also been presented with thoughtful input and insight from our voters. Notwithstanding all this effort, many recommendations take years to action and some are ignored without any public discussion at all. The dialogue is very often only undertaken in an echo chamber with service providers, not the public. Service providers assert that more funding is needed for courts. Parliament has not, and realistically can never, satiate those demands. A new approach is required. In the face of political inertia, this Bill would implement a more effective and immediate solution to the problems facing many voters - in this year, not 2020, 2022 or some indeterminate time.

What happens in financial disputes?

31.               The vast majority of our fellow Australians who separate from their relationship partner - 98% according to the Australian Institute of Family Studies - end up splitting their wealth in a discrete range of essentially 50 to 65% in favour of the financially disadvantaged spouse. In 2014 the Australian Institute of Family Studies found that the disadvantaged spouse received at least 50% and the stronger spouse, most often the male, at least 35% in 94% of separations. Only in 4% of separations does the male spouse receive more than the female spouse. The residual 1.8% of couples are short relationships or unusual fact patterns. At present an average female spouse with children receives 57% of relationship wealth, pre fees, and after 23 months of haggling.

32.               For the average separating couples, their expected maximum rational dispute rarely exceeds $70,000. Yet the average cost of litigation for each spouse in the Family Court exceeds $100,000. Access to a court is well beyond the reach of many citizens. The lack of any obligation in the Family Law Act to even make a compulsory minimum payment between the couple inflicts an unacceptable burden across our community, most often to the detriment of our most disadvantaged families. Part 2 of this Bill thus provides substantive outcomes, not merely a process, for those Australians that we represent who deserve social priority by reason of necessity, not wealth, lack of wealth or time of filing of a legal document. The process envisaged by Part 2 of this Bill could be activated and online by the end of this financial year.

 

33.               Part 3 of this Bill enables a person to self-assess their parenting arrangements in a similar manner to a financial assessment. Exceptions are made for family violence and persons for whom shared parenting is better dealt with in courts. Part 3 does not compel or narrow disputes in the same manner as Part 2. Instead it requires residential spouses to be rational and to explain themselves if they fail to agree to standard contact hours for the other parent. Where excuses, not reasons, are given, penalties apply. Where anger is an issue, a new Anger Management Programme is adopted that works elsewhere.

 

Efficiency via technology

34.               The web-based portal on which communications are to occur will illuminate pathways for those persons and explanations for the rationale of rules. The portal provides a set of traffic lights and does not provide legal advice. Domestic violence refuges and non-profit legal organisations also play an enhanced guardianship role under this Bill. Accredited family law specialists can, during the assessment phase, certify for their clients that a court would, not might, come to a different result.

35.               The Family Law Act was enacted with the objective of removing fault-based divorce. Since that time society has become more attuned to the need to reduce domestic violence. At law, ‘family violence’ extends beyond assault or threats, to include a wide variety of behaviour, some of which fault-based divorce once called ‘unreasonable behaviour’. Or unreasonable as alleged in front of a magistrate who refuses to hear both sides of the dispute. This Bill does not seek to limit the current expansive legal definition of ‘family violence’ but rather requires spouses to distinguish between violence and non-cooperative conduct arising by reason of the separation process and to determine whether unacceptable conduct that should permanently impoverish a child has occurred. Magistrates don’t pay attention, child psychologists are unable to offer any factual evidence for the validity of their prognostications, and family court judges are overwhelmed.

36.               Devolving the primary responsibility to parents, when becalmed, is the only viable way to start to bring some order to chaos. If there is no consequence to delay or unreasonable behaviour, there is no system. If there is no system, then chaos, conflict and anger grow at exponential rates that no government can fund and no society can tolerate. The current system is unsustainable. Moving the compliance burden so that those in need get priority will have more effect than turbo charging the current shambles with cash.   

The burden of compliance cannot be forced onto all other taxpayers

37.               The reforms presented in this Bill come at no ongoing cost to the Federal Treasury. The registry established by this Bill, when enacted, will be a user-pays service. An average 90-day payment cycle will result in significant reduction in financial and emotional stress for both parents and also for their friends and relatives who support them during prolonged battles - most often involving all hell and fury, but so very often signifying nothing.

38.               The Bill will generate substantial external benefits also for those who do not use it, but bargain in its shadow. A spouse now can fall back on a system with a 90-day timetable. Spouses are thus able to insist solicitors solve and document disputes in 30 days or they will have recourse to this Bill. At present solicitors take 690 days on average outside courts to do just that. Imposing the same sorts of timetables on divorce lawyers as corporations impose on commercial lawyers may not go down well at the annual family law conference in Suva. But it will be welcomed by divorcees and de factos, their extended families, The Federal Treasury, and a great many lawyers who understand the stigma that the family lawyers create which unfairly maligns the public profile and good work of lawyers generally.

Why enlivening personal compliance obligations is so much more efficient than throwing money at the problem, yet again

39.               This structural reform is intended to:

·          Ensure weaker financial spouses share in the lifetime wealth they helped create, at much lower economic cost than they currently incur and in one seventh of the time currently experienced. It is not designed as a precursor only to litigation;

·          Free up courts from processing uncontroversial disputes that are straightforward;

·          Improve the compliance culture;

·          Deliver a marked reduction in spousal conflict;

·          Ensure the state is not itself an enabler of financial violence;

·          Save government significant amounts of money while delivering justice to more citizens, especially those cowered by the need to litigate;

·          End the pauperisation of children whose parents divorce. Education, not idiosyncratic litigation, is in the best interests of Australian children.

40.   Litigation is too costly, too painful, too destructive, and far too inefficient. It need be deployed only sparingly, not habitually.

The benefits of this reform

41.               This is a community-originated initiative. It can be implemented within 90 days and have a strong, positive impact beyond the formal justice system. It will also:

·          reduce pressure on welfare payments that are currently incurred while assets remain locked up and are not allocated promptly;

·          reduce financial pressures on Legal Aid funded organisations and empower those good Australians who work in them to deliver more substantive justice to a wider range of Australians in respect of family law matters, by using paralegals to drive the claims processing model set out in this Bill;

·          reduce reliance on the publicly-funded federal mediation services, which have struggled to succeed. The interim wealth distributions required by this Bill will ordinarily be used to access and pay for the services of private sector mediators and solicitors who are not time-constrained;

·          reduce pressure on publicly-funded courts to enable them to do what they must do - deal with complex facts, not rising property prices, nor spend inordinate time on a myriad of single instances;

·          reduce domestic violence arising from verbal confrontations maximised by the existing high contact and high conflict litigation system and its marked propensity to exacerbate non-cooperative behaviour. The reduction in the need to make expansive ambit claims enables those at risk of harm to get priority based on need, not priority based on the date of filing; and

·          send an emphatic message that Dickensian delays in making payments to your life partner or forbidding an engaged parent to play a role in their children’s pathway in life, are now not going to be tolerated.

Access to justice and other important systemic clarifications

42.               This Bill also adopts a 2014 recommendation of the Productivity Commission to reduce eye-watering legal fees incurred during a divorce. The Bill achieves this objective by enabling anyone with an Australian law degree, or other relevant legal training, to assist those with below average wealth, even if that lawyer is not a paid-up member of a law society.

43.               Far too many voters are being forced to self-represent by judges who do not release sums not in rational contention. Adversarial justice without adversaries leads to Pythonesque pantomimes being played out at great public expense every morning in public courts across the country. This Bill will enact a solution. Solicitors with relevant training, even if not overseen by a Law Society, are infinitely preferable to the current numbers of litigants in person. Price competition is infinitely preferable to taxpayer largesse.

44.               Law Society self-regulation has proved a woefully inadequate protection for purchasers of family law legal services. For the new class of lawyers permitted to sell their advisory services to the public, a more transparent disclosure regime is adopted. While solicitors can still engage in family law disputes despite multiple complaints against them, the new advisers are to be limited by a three strikes rule.

45.               The Bill also requires family law courts to comply with the visionary goals espoused by Lionel Murphy so that justice administered in them must be speedy, less expensive and less formal. Moreover courts, and the judges who are their officers, must apply discretions consistently as an institution so that rationality now prevails.

FINANCIAL IMPACT

46.               This Bill is not costed as part of the current Budget because it does not require funding. User fees will only apply to citizens who register on the portal, or a spouse of the same if called upon.

47.               Some cost savings are expected as a result of reductions in court queues. This Bill does not seek to directly harvest those savings but rather to provide less strain on the resources of our courts that are administering the Family Law Act.

48.               The government currently funds various family law matters. These include the Family Court, Federal Circuit Court, telephone advice lines, community legal aid and Relationships Australia. In addition, welfare payments are considerable. While no known costings are publicly available, former Cabinet Minister the Hon. Kevin Andrews MP estimated the Federal Government incurs costs of approximately $100,000 per divorcing couple. Slow financial outcomes also impact the willingness to work or expand business, and thus also has a negative effect on tax receipts. This Bill will also reduce all of those costs.

49.               Access to justice is critical to underpin the rule of law in our society. Social order depends upon the good, the bad, the meek, and the rich, all existing under and bound together by the same law. A dearth of clear law, and in its absence a lack of material guidance, has rendered the Family Law Act ineffective. Whatever excuses may be proffered, justice can no longer result in haphazard outcomes, be dependent on access to borrowings from relatives, or to the personality of judge allotted to the case rather than the institution entrusted with the statutory discretion. The Family Law Act is an important part of the social justice fabric of our country because it reflects the Australian value of a fair go. This Bill seeks to ensure just outcomes apply at the lowest possible cost in financial and emotional terms for a large number of our voters. Lawlessness and free-riding will no longer be tolerated.



Summary of the Bill

Policy background

50.             This Bill emanates from community frustration with the length of relationship disputes, regardless of litigation. While it is frequently claimed that family courts “only” deal with high conflict couples, the available data and feedback more strongly suggest that courts most frequently service those wealthy enough to afford litigation or those funded into it via legal aid. Courts somewhat manage but do not determine seven out of eight property cases before them. Those cases often involve real estate in wealthier postcodes that “settle” by naked coercion, denial of access to lawyers, or for the same sums offered years earlier but only accepted moments prior to a hearing. As a consequence of “anything goes”, many middle-class families are waiting for up to 23 months to agree their affairs outside courts. Some Australians abandon claims altogether or do not pursue them. A few spend decades in a lawless wilderness. This Bill seeks to reduce one of the causes of entrenched spousal conflict - being the abject failure of the legal system to apply rational concepts of financial solvency. In doing so this Bill will increase the ambit of the application of the policy objectives of the Family Law Act.

51.             This Bill will significantly improve the efficiency of outcomes for those Australians who seek to bargain in the shadow of the system and who cannot afford to litigate, nor have recourse to legal aid. Currently middle-class spouses spend 15-23 months struggling to self-solve their affairs in the face of lethargy by their partner or by reason of benefit a person can derive from not cooperating to resolve a dispute. The costs of that approach fall on their spouse and upon all other taxpayers. This Bill brings that free ride to an end. In addition, those who seek to use the publicly subsidised court system to defer and deter payments are no longer able to do so. Courts are instead to focus on the real issues in dispute - being those that cannot be solved by the hard work of solicitors.

Part 2 financial matters

52.             This Bill changes opportunities and incentives to engage in non-cooperative behaviour by separating couples and solicitors in relation to the division of relationship property. This Bill achieves those objectives by:

·          Requiring that there be a minimum presumptive payment of a sum of money to each spouse, or in some cases a distribution in kind, where matters are not in dispute - or not rationally capable of being disputed. The Bill would enact a presumptive minimum distribution of 35% of the net equity of the family home to each spouse, with the evidentiary and compliance burden falling on the spouse who would prefer inaction or reduced payment or no payment. The spouse who resists this division must show cause and reduce the minimum pool only by rational means. The net economic effect of the presumption will be to reduce the bargaining power of those who irrationally use the Family Law Act for an improper purpose. Litigation will no longer be a barrier to justice.

·          The effect of the minimum payments rule is to force those spouses who seek not to action a rational and standard distribution of their wealth to enunciate only a rational reason to resist. Rational reasons may include a short marriage or a spouse with health issues. Rational reasons may also be given and quantified by a solicitor in a manner congruent with law. But assertion of a desire not to pay for any reason until you get to the steps of court two years later, or to paint the house, would no longer be acceptable under this Bill. When this Bill comes into force, compliance with the Family Law Act will not depend upon the whim of a spouse, a strong bargaining position, or by a solicitor who follows their economic incentives, whatever their good intentions may be.

·          Spouses are then required to file a self-assessment statement to effect a splitting of the balance of their relationship property and are encouraged by this Bill to self-solve their differences or to mediate. To inhibit the making of stratospheric ambit claims a presumption of boiling the dispute down to not more than 10% is created, because data suggests those are the habitual outcomes and that is where the protections best apply. A number of habitual variations are permitted, including than a spouse may engage an accredited family lawyer to certify a variation that a court is most likely to permit, not merely assert a position that reflects their best case. Likewise, a spouse must take a position reasonably supportable in identified case law, as has long been required in US civil litigation and in relation to tax penalties. A best case can, of course, be pursued in court, post substantive payment, just like an income tax assessment. But the days of family law firms engaging in misleading or unconscionable conduct in connection with a relationship dispute will largely come to an end. This cultural change is most important.    

·          Any remaining funds in dispute, habitually less than 7% of a couple’s relationship property, are locked up in a joint bank account if that is possible. To unlock the residual sum in the bank account a couple must mediate or negotiate. They are alerted also to the sensible option to arbitrate outside public courts at low cost. Protections for domestic violence victims in relation to compulsory mediation for parenting found in the Family Law Act are effectively replicated in this Bill. Those exemptions are widened further where a Legal Aid organisation acts in good faith as a guardian of the meek.

Bounded self-assessment, not a third- party assessor

53.               In an ideal reform package, an independent assessor would have determined the residual sum, just as assessors can determine income tax matters and child support payments. An ideal person would be an approved family law arbitrator as many are retired judges able to assess a proximate outcome after 3 hours reading. The time value of money would render residual distinctions financially somewhat irrelevant.

54.               However, our Constitution vests the judicial power of the Commonwealth in our courts. The judicial power precludes a final determination of a dispute other than by agreement. It is also claimed by The Law Council of Australia upon reading a draft version of this Bill that a financial assessor could not make an interim assessment - even if enforcement of it was done in the manner the High Court has already approved in relation to other forms of executive action, for example in relation to company takeovers. And even if the final determination was left to courts, the Law Council has proffered no reasons for this alleged constitutional vibe, from which, oddly, or not, their members benefit.

55.               All too frequently, meandering allegations of vast powers which have no bounds limit good public policy making. A power which was designed to stop kangaroo courts and protect the public is now said to result in a constraint that somehow does not apply to child support assessment, but for some reason does apply to property matters, in a manner which those who practice law have yet to articulate.

Self-assessment narrows disputes

56.               Accordingly, this Bill is tabled without granting powers to an independent assessor.

57.               Self-assessment does not involve a third party and accordingly an individual exercises no judicial power against themselves. Self-assessment can be bounded by rationality requirements. Accordingly, financial disputes will now be reduced by 85% when this Bill is enacted, or more habitually, by 93% within 6 weeks.

58.               The shrinking of the quantum of the financial dispute, and the removal of coercive bargain power will thus ensure that, even absent third party intervention, conflict is much reduced, and solicitors must focus on the real issues in dispute rather than the pursuit of the sale of the benefits of delay. There is to be no continuing tragedy of the commons.

59.   This Bill ensures that relationship property self-assessment must be rational, not spiteful, nor stratospheric. The Bill ensures that dispute resolution is effective by:

·          Creating an overarching obligation to facilitate the just, prompt and inexpensive allocation of relationship wealth; and

·          Providing that self-assessments must reflect a person’s most likely outcome, not their best case, which they remain free to pursue in the courts; and

·          Setting a statutory compliance deadline for clients and for solicitors; and 

·          Fortifying those obligation by penalties; and 

·          Providing that residual sums in dispute are locked up, so that no one spouse enjoys an economic benefit by delay; and

·          Exposing a defaulting spouse to an adverse interim outcome; and   

·          Nudging both spouses towards private sector financial arbitration; and

·          Effecting rounds of mediation, or negotiation. prior to litigation commencing and as public money is being spent. 

60.               In addition to the statutory safe harbours, three other key mitigants apply:

·          Compliance exclusions are permitted based upon the good faith concerns of Legal Aid folks about domestic violence victims; and

·          Exclusions are made where a family law expert certifies that a Court would not ordinarily come to the result in the then prevailing circumstances. This is not an opportunity for family law experts to white-ant the assessment regime. Instead an Accredited Family Lawyer may only give a certificate for their client that reflects the most likely outcome. If a solicitor wishes to pursue a client’s “best case” they must do so in our courts. The certificate places a rational limitation upon the ambit of the assessment otherwise to be made; and

·          Doctors can issue certificates where a person has an illness that either precludes their ability to self-assess or where the person has a life-threatening disease that requires special intervention by setting aside a health provision. Doctors are inexpensive and trustworthy. Marriage is still an arrangement that provides shelter in times of sickness and in health.

61.               By these methods, family lawyers are to cease being gun slingers for hire and become the healers of conflict that our Parliamentary predecessors envisaged .

Part 3 Parenting self-assessments explained

62.               The objective of Part 3 of this Bill is to reduce reliance on elongated processes which result in standardised outcomes in any event. This Part requires residential parents (most often the mother) to provide reasons why a non-residential parent (most often the father) can’t get standard time with their children. The requirement to give reasons is not to be undertaken in cases of:

(a)   physical violence; or

(b)   at the direction of a legal aid organisation or shelter even if a family violence order has not been issued; or

(c)   in some circumstances where shared parenting is to be discouraged. These include fathers who are incarcerated; or

(d)   where a father is angry, and refuses to undertake an anger management programme, a concept which has worked well and has been adopted in New Zealand.

63.               Failure to respond promptly, as in Europe, attracts penalties.

64.               Part 3 of this Bill does compel a residential parent to hand over children. In the context that Part 2 reduces coterminous financial tensions, self-assessment is more likely to result in rational outcomes.

65.                A Standard Parenting Plan is provided. If fathers can make the standard hours, they can make application for four nights per fortnight. If they seek more, or they seek variations they must use existing processes.

66.               Mothers can refuse to permit access if they give reasons in writing why parallel post-divorce parenting is impossible. But what residential parents can no longer do once this Bill is enacted is to refuse to enable shared parenting for no reason or for concerns as to peripheral issues such as the father’s cooking skills, or his mother’s views. The state simply does not have sufficient resources to monitor all matters where people want to disagree with the law or raise every issue as if fault was still relevant.

67.               The new regime in Part 3 does not create parental rights of access to children, as is in vogue in the North American state legislatures.

 

68.               This Bill, in its infancy, had envisaged the creation of parenting assessors, comprising those with expertise in domestic violence to vet and approve contact hours. The Law Council considered that this would, in their view, be unconstitutional even though enforcement would have occurred in the very manner the High Court approved in 2008 in relation to the enforcement of orders relating to company takeovers. Accordingly, this Bill, as presented, only requires residential parents to articulate concerns and act rationally. There are penalties now for failure to do so.

69.               The experience in Europe is that nudging people to likely outcomes early has a salutary effect on behaviour whatever the final legal consequence. Requiring parents to write down a parenting self-assessment reduces tension between them and operates at low cost whatever its formal legal status.

70.               Part 3 of this Bill is designed to:

·          Provide clarity about “standard parenting outcomes”. Some men find out about that in pubs. Some law firms tell fathers that they “will win” equal time. Yet the number of reported equal times decision by Australian family courts in the last decade is zero, or close enough. Shared parenting, least so the lawyers believe, was effectively meant to include only part time parenting. Their comprehension of the sharing concept means only “shared partially” and does not mean “shared equally”, at least once lucrative litigation has commenced.  

·          Introduce a low-cost model to better triage parenting disputes by de-escalating financial stress under Part 2, and then requiring residential parents toplease explain” why access to the children is denied where, on its face, the father is an engaged parent. Accordingly, this Part excludes from the assessment regime more complex matters upon which courts should focus and delineate; and

·          Free up resources, so they can be better prioritised to help those at risk. Discussions absent resource allocation imperatives are pointless.

71.                The early stage triage model proposed in this Bill stands in stark contrast to what has been achieved during the last decade since shared parenting was introduced against the industry’s wishes. Under the current model:

·          There is no law and no process. Everything gets tipped into court. From the trivial to the serious and from the belligerent to the meek. The 2006 mediation requirements are enforced, but only haphazardly.

·          Courts provide no screening mechanism. Court queues include the next Rosemary Batty as well as those who think that: 

 

“[He] can have 50[per cent] custody. I wouldn’t fight that. He’s actually a fantastic father. But I want my $60 million. I want that waterfront…..“The only tool I have to fight with is the kids. He loves those children. The only way I can get my $60 million is a really dirty fight about the kids.”

 

(extracted from Osferatu v Osferatu (No 2) [2013] Fam CA 644

·          Litigants must wait for a judge to finish their immigration case workload

·          Litigants must wait for an expensive report from a child psychologist with not a clue about domestic violence, and pay $28,000 for the privilege   

·          Courts pretend that the child psychologist really did such a thorough job, that there is no point in releasing fees to enable their evidence to be tested by a parent.

·          Judges can appoint an Independent Children’s Lawyer, who they hope might talk to the child and might turn up

·          Judges may have a meandering and gendered chat about that most nebulous of concepts “the best interests of the child”; and

·          Judges demand that “totally useless politicians across the spectrum” provide unlimited funding with no deliverables and no metrics

·          The litigation industry elevates form over substance by pretending that parenting orders are enforceable.

·          Society makes no follow up just in case this is all somewhat of a charade.

72.               Courts have failed children. They are to be used as a last resort, not as a first resort.

73.               Ideally, if the constitutional ambit claims of the Law Council were contradicted by a public law expert, real justice could be delivered to more citizens promptly. Appointing independent parenting assessors with expertise in the real concern society shares - domestic violence - and drawn from a Parenting Panel comprising mothers and fathers, would be optimal.

74.               There is no reason why Australia shouldn’t have the same rates of equal parenting as other countries. There was never a Parliamentary intention that going to a family court placed a limit on equal parenting as the largely ignored equal time presumption in Section 65 DAA of the Family Law Act makes manifestly clear. The parenting self-assessment regime set out in this Bill, and the coterminous shrinking of financial angst, is not a perfect solution. But it is a solution that works elsewhere to ensure that domestic violence which impacts post separation parallel parenting is addressed in courts. Other parenting concerns require more astute queuing solutions.

75.               The views of the child psychology experts are not based on science or follow up. Abolition of this “expertise” was recommended by the House of Representatives Standing Committee on Social Policy and Legal Affairs in its 2017 report A better family law system to support and protect those affected by family violence chaired by Ms Sarah Henderson MP. That report also gathers dust.

Part 4 of the Bill - compliance  

76.               To ensure that dispute resolution is markedly more efficient, this Bill also enacts:

·          the 2014 recommendation of the Productivity Commission that legal advice on family law matters can be given by persons who are not members of a Law Society. This will also reduce the number of self-represented litigants in family courts; and

·          the insight of The High Court that family courts would better resolve matters by enunciating and consistently applying legal precedent rather than preferring more bespoke deliberations that create distinctions of no appreciable financial difference. Great power was only given with great responsibility.

77.               A small number of persons are not thought suitable to be included in the financial assessment regime. These approximately 800 couples are “outliers” (unusual fact patterns); those with wealth in excess of $10 million and those at high risk such as bankrupts or where Proceeds of Crime orders have issued. The other 64,200 couples who separate are not to incur delays because of difficulties that affect a small number of their fellow citizens.

Compliance mechanisms

78.             The use of an electronic portal to direct separating couples has several benefits:

·          It provides process guidance regardless of socio-economic status at low cost.

·          It is accessible at all times with high level security. Australians conduct much of their social lives and arrange their finances online, but we lag behind similar countries in providing online legal solutions.

·          Because responses must be made in a prescribed form, an electronic portal reduces the vitriol of direct spousal communications. The system is to be used primarily by persons who are unable to resolve matters themselves.

·          An electronic portal best optimises the position of those with domestic violence issues, whether embedded in formal orders or otherwise by allowing their addresses and contact details to be redacted. Dialogue between spouses thus become focused, factual, rigorous and mediated by software that scans for inappropriate language or vitriol. Spousal interaction, and hence conflict, is much reduced.

·          It provides, much like the Torrens title register, a final record of matters and is not complicated by emails or letters on numerous correlated issues, or which are non-responsive or not understood.

·          It assists all spouses to comprehend the normal range of outcomes which parents should generally expect to arise. At present each solicitor advises each spouse of their best outcome, not necessarily their most likely outcome at law. There are very few Australians who ever obtain their best case, especially in a frictionless manner, and promptly. In addition, for persons who are not wealthy, legal advice is sparse, expensive, and by emphasising only a best case, can be misleading. The online system guides and prioritises early mid-range outcomes and alters the focus from each party’s “best case” position that they may or most likely will not achieve in a court. A spouse is of course free to pursue their best case in the courts should they wish, and the difference then may be or may not be financially material given the time value of money and the priorities given to scarce judicial resources.

·          It keeps a record of delays occasioned by spouses and by solicitors, which are relevant in terms of the penalties applied under the proposed Act.

79.               For those who truly do need domestic violence protection they can now obtain an order without fear that they will be worse off financially as a consequence.They are paid in 90 days under a claims model, rather than 690 days under the present approach.

80.               In relation to financial matters, the Bill would implement a comprehensive online disclosure regime which seeks to remove much of the need for courts to act as a public common for information exchange. This Bill provides that spouses are no longer obliged to go to court to obtain specific disclosure, but rather the obligation to be frank and to make full disclosure arises as a direct legal consequence of the intimate relationship itself. In addition to specific disclosure requirements there are also:

(a)   General obligations of good faith requiring disclosure of material items without being asked; and

(b)   An ability for solicitors and forensic accountants to ask more detailed questions and to suspend a payment if less than effusive responses give rise to a reasonable cause for them to suspect that a spouse has not disclosed with due candour, pending intervention; and

(c)   A requirement to lodge an accountant’s valuation for a business.

81.             This Bill will not apply in Western Australia, which has its own parallel family law system.   

 



NOTES ON clauseS

PART 1 - preliminary

Clause 1 - Short title

82.                Clause 1 is a formal provision specifying the short title of the Bill.

Clause 2 - Commencement

83.                Clause 2 specifies that the Act will commence on the day the Act receives the Royal Assent.

Clause 3 - Application to Crown

84.                Clause 3 provides that the Act would bind the Crown in each of its capacities but would not make the Crown liable to be prosecuted for an offence.

Clause 4 - External Territories

85.                Clause 4 provides that the Act would apply in every external territory.

Clause 5 - Interpretation

86.                Clause 5 would define key terms used in the Bill that are not found in the Family Law Act. Some new definitions are derived from New Zealand, American or Canadian law. Generally, the same legal dictionary applies.

87.                Subclause 5(1) sets out the special definitions. Particular attention is drawn to the definition of legal aid organisations which includes domestic violence shelters, even if they do not provide legal advice as such. This is because the Bill enables those who give guidance to the meek to be excused from compliance with this Act if matters relating to family violence arise and in the absence of a family violence order

88.                Subclause 5(2) provides that a spouse cannot require their spouse to engage legal assistance during the summer break when solicitors are generally not available.

89.                Subclause 5(3) applies trade practices definitions of “engaging in conduct” which includes “doing an act” and “refraining from doing an act”.

90.                Subclauses 5(4) and (5) ensure that parts of the Family Law Act apply in the case of controlled companies and trusts, and that deeming rules also operate as intended and in the same manner as in the Family Law Act.

91.                Subclause 5(6) ensures that “writing” includes email.

92.                Subclause 5(7) provides for a substance over form test when responding to information and claims completed by their spouse, frequently without legal assistance. This provision impedes the making of pedantic arguments that a claim which can be understood did not comply with each and every requirement of form on its face, such as recording a date of separation if that is not a material issue. Matters of form have been an impediment to the making of similar claims under construction payment laws and when refusing to pay on insurance claims. This subclause uses similar tests to those imposed on insurers who argue claims are not properly lodged - they must show materiality.

93.                Subclause 5(8) provides a method to determine which spouse must first lodge a notice of financial self-assessment under section 11. The “first spouse” (the financially dominant one, usually the male) must make an offer of at least 50% of the couple’s net wealth - or if they don’t offer at least half they must seek specific legal advice or otherwise certify compliance with a specified exemption. The presumption not to pay at least half should only be claimed by approximately one in twenty males who separate and will generally result in a maximum 15% wealth gap between couples, more habitually a 7% gap. Special ordering rules apply to same sex couples in like manner.

PART 2 - FINANCIAL DISPUTES

Clause 6 - Objectives of this Part and Overarching Obligations

94.                Subclause 6(1) provides a high-level overview of the Part and clarifies that it is a mechanical regime designed to give effect to, and in case of conflict be overridden by the Family Law Act.

95.                Subclause 6(2) provides a synopsis of how the objectives of this Part will be achieved.

96.                Subclause 6(3) provides guidance to citizens to understand the purpose of the Bill, as many users of it cannot afford legal representation. The outline is not intended to be comprehensive. Readers should rely on the substantive provisions.

97.                Subclause 6(4) limits Part 2 to property matters involving a division of wealth. Other financial disputes, such as spousal maintenance and private school fee payments, are not covered by this new regime.

98.                Subclause 6(5) moves the compliance burden from our overcrowded courts onto each spouse. It is now to be the job of separating citizens to comply with the Family Law Act rather than for the Commonwealth to cajole them to do so, and for other taxpayers to fund the cost of doing so.

99.                This new subclause deploys similar language to overarching purpose rules found in legislation such as Part 2 of the Civil Procedure Act 2010 (Vic) . However, the obligation to narrow and solve relationship property disputes:

·          arises well prior to a couple filing in our overburdened courts; and

·          applies to people regardless of an intention to litigate; and

·          gives rise to pecuniary penalties if spouses fail to comply with it and allows courts to make swift interim property orders against a spouse who just can’t be bothered .

100.            Subclause 6(6) limits the overarching obligation, so that it does not apply to legal aid organisations, which are defined in clause 5 to include a wide variety of not-for-profit groups who do good in our community. This subclause ensures that the new compliance regime primarily applies to those with private sector solicitors, who are now required to optimise compliance, and for the self-represented.

 

 

Clause 7 - Sharing of relationship wealth



101.            This clause allows any spouse who has separated to make a financial claim. The entire concept of a “claim” is somewhat antiquated. Modern couples share wealth, they don’t really make “claims” to carve out interests in the property of the male. Nonetheless the making of a claim enlivens this regime, meaning that couples can come to an amicable arrangement without using it. However, if solicitors dawdle or financially stronger spouses prevaricate either spouse may enliven this compliance regime by an electronic filing on the portal. The concept of sharing specified in the title to the section is important in terms of changing the culture of claims, counter claims and legal alterations. A new focus upon cashflow, and upon fair sharing are the central concepts of this new regime.

102.            Subclause 7(1) provides that Part 2 applies when a spouse lodges a financial claim on the portal and does not apply if the couple are otherwise in agreement.

103.            Subclause 7(2) excludes a number of circumstances that innately involve complexity - such as those with working farms.

104.            Subclause 7(3) ensures that a spouse must provide details of any jurisdictional challenge made under subclause 2 as soon as possible. The objection must be detailed, robust, specific and verified.

105.           Subclause 7(4) requires responses to be recorded on the portal and not in private emails. This ensures compliance deadlines are met, are recorded and spouses do not meander. Solicitors and clients are, subject to family violence orders, not precluded from simultaneous private correspondence seeking alternative settlement arrangements.

106.            Subclause 7(5) requires spouses to notify each other of a forwarding email address so as to make onboarding to the portal easier. Special protocols apply to separating spouses with family violence orders who may otherwise use email addresses for nefarious purposes.

107.            Subclause 7(6) deals with persons whose whereabouts are unknown. Subclause 7(7) provides for physical delivery of notices where a spouse fails to provide an email address. Notification by email of a claim is an evolving issue in some laws, but in this instance a “claim” for division of wealth is somewhat fictitious, for the clear expectation upon separation is that people must ordinarily divide their wealth, not run, hide and pretend that only some of their emails are oddly disappearing into an electronic trash bin. The subclause also provides for a fine of approximately no more than $21,000 for failure to notify.

108.           Subclause 7(8) clarifies that banks, lenders, trade creditors, the Tax Office and other creditors owed money by one spouse alone, who is the legal owner of assets, may still seek recourse against those assets even if a financial assessment is made and paid under this Act.

109.           Subclause 7(9) requires compliance to be undertaken on the electronic portal so as to reduce confusion about deadlines pending and information provided.

110.           Subclause 7(10) is an immunity from liability clause.

 

Clause 8 - Disclosure, verification and valuation obligations

111.           Clause 8 moves the disclosure burden to individuals. Under this Bill separating spouses are now obliged to disclose and value wealth and do not need to be taken to court in order to be told to do so. This clause specifies who must carry out the valuation process, replicating the practice of family courts - a single expert valuation. There is only to be one independent valuer. Those spouses disagreeing with value determined under this section must file in court seeking that recognition be given to a different prevailing value.

112.           Subclause 8(1) establishes a standard disclosure regime for all assets, and liabilities. A spouse subject to this Part must also separately disclose other relevant information such as income, and covert payments prior to announcing their divorce.

113.           Subclause 8(2) specifies a very high standard of disclosure. A separating person is held to the same standard of integrity as a person who seeks an insurance contract - you must disclose with full candour, even without being asked a specific question. Presently “full and frank disclosure” is only required for litigants, ensuring integrity is effectively mandatory only 9 months after a solicitor has used valuable state resources. This Bill requires disclosure by reason of the romantic relationship, not by reason of legal filings. This subclause also requires disclosure of the wealth of third parties in some circumstances and if called upon. This last requirement to disclose the wealth of others, as best as one can, arises because the Family Law Act ascertains the financial resources of another person, such as a wealthy parent or new relationship partner, if relevant, in determining a fair property allocation.

114.           Subclause 8(3) allows a family lawyer or forensic accountant to suspend payments for spouses who hide assets or fail to respond by way of a statutory declaration.

115.           Subclause 8(4) enables more specific regulations to be made dealing with a variety of details such as the fees for valuation and Australian accounting standards for a going concern business.

116.           Subclause 8(5) allows the portal, and often in fact at the behest of a spouse, to ask verification questions regarding missing assets or cashflows to related persons. The reasons the portal submits these information requests as an intermediary is to de-escalate direct disputes between spouses.

117.           Subclause 8(6) relates to the responsibility and cost of applying for a valuation for a business. It is no longer acceptable to self-value a business or rely on a general conversation with a business broker if spouses are unable to agree value themselves.

118.           Subclause 8(7) allows an accountant who is valuing a more complex business to be granted an extension of time if their client pays some undisputed value and a holding fee so their life partner is not held financially hostage.

119.           Subclause 8(8) ensures that one professional valuation suffices for the purposes of an assessment, as it does for a court.

 

120.           Subclause 8(9) requires an accountant’s valuation of a business unless that business is a company that is effectively a means to provide a salary, is publicly listed, or is not controlled by a spouse and associates. A valuation by a business broker or by the entrepreneur themselves is not sufficient. Small businesses are exempt where the cost of valuation can be as large as 20% of fees paid to solicitors. A special exemption does apply if an accountant can confirm that an easier value assessment is habitually used in the sale of a business of the kind in question, or if a family law expert certifies that a court would not require a valuation. If a valuation is provided by an expert it prevails. The legislative purpose is to replicate the same requirements insisted upon when applying for a Consent Order, protecting a spouse with limited financial skills, while not imposing high transaction costs on small business.  

121.           Subclause 8(10) requires that the valuations are undertaken at arm’s length.

Clause 9 - Substantial liquidity event

122.           Clause 9 allows for solvency at the earliest possible time, by reducing the quantum of the sums in dispute. The effect of this section is to require that uncontested sums, or sums which are not objectively capable of dispute, are paid as early as possible. This clause establishes a rebuttable presumption that each spouse will, in a long marriage, at least receive 35% of that couple’s net housing wealth, and accordingly that sum should be paid without delay or, ordinarily without undue fuss. A family home is usually to be put on the market, in the ordinary course when the couple agree, or if they don’t then in 90 days from the date of the claim under clause 13, or at the time a person effects a buyout under clause 10. Where children are part way through a school year the realisation process can be deferred under subclause 14(5).

123.           The purpose of a liquidity event is to narrow the focus of all financial disputes and to initiate the process of financial separation. Currently family courts do have plenary power to make interim distributions. Yet they refrain from enabling substantial liquidity, other than to pay barristers and solicitors, and this lack of financial empathy inflicts an unacceptable burden on the Commonwealth to provide welfare, or upon relatives to provide loans to which courts pay little financial cognisance. The Hon. Lionel Murphy QC did not envisage a timid use of powers to resolve disputes - the very purpose of wide discretion was speed, not references to collating balance sheets for all assets as a pool via a process of turgid interrogatories. There is no good reason why family courts, using existing plenary powers already granted by the Parliament, couldn’t start the very same process of dispute truncation at 9 am tomorrow morning. 

124.           Clause 9, together with clause 11, moves most of the compliance burden onto the shoulders of spouses who currently abuse the system. Henceforth they must pay sums or transfer property not in rational dispute unless they can provide good reason for a lower distribution, in which case they must effect that lower sum immediately. State intervention is itself a costly resource and should only be deployed where reasonable people make all efforts to narrow their disputes. The automation of minimum compliance tasks without the need for turgid judicial direction is a long overdue reform that few, other than those selling process delays, will quibble with.

125.           The requirement to narrow relationship property disputes and provide information without being told to do so each time is efficient for divorcees and other taxpayers. Solvency will ensure that should matters proceed to litigation the time of our highly skilled judges is not spent on mundane project management tasks nor involved in correcting arithmetical error or misdescriptions of legal title. Narrowing the focus of financial disputes greatly assists those who are terrified of litigation and miss out entirely. It is infinitely preferable to the various forms of economic coercion required by current dispute maximisation theology.

126.           The presumption at this first stage relates only to the family home, that still being the main repository of family wealth. The minimum payment regime will allow many Australians to move to a new house in a timely manner. The minimum payment regime also assists in disempowering legal owners of assets from refusing to make any payment of any kind based on whim. The Bill does not require minimum solvency for other major assets for those who are not home owners. This is because to do so requires additional legal infrastructure for little immediate social benefit. A couple who do not own a family home (or cash proceeds) must move straight to the next step and sort out their affairs knowing that a distribution of at least 35% of relationship property is ordinarily expected, and that failure to act now attracts personal penalties.

127.           The benefit of this minimum payment regime is that:

·          All spouses get paid. Not just those who can afford a lawyer

·          Claims for maintenance are financially less relevant.

·          those who have a real point of difference are separated from the free-riders very early on

·          Financial violence is markedly reduced

128.           The costs of the minimum payment regime are that:

·          Relationship property is still required for some 

·          Some disputes may still last 23 months, albeit for smaller amounts

·          Unfairness will arise for a few when delivering gains for the many

129.           Subclause 9(1) provides that a claim may be made under this clause if either or both spouses own an interest in a family home.

130.           Subclause 9(2) sets out a formula to determine a value. For most families the sum due is not a fixed sum but rather the market value as determined by an auction or public tender of the property, less bank debt and sales expenses.

131.           Subclause 9(3) allows for a number of variations from the standard 35% presumption. The most important of these is that an accredited family lawyer (a solicitor with special skill recognised by their law society) certifies that a lower sum would be paid based on prevailing law. If that is the situation each spouse receives a lower sum as a minimum payment. The current practice of making vague and misleading claims based on supposed negotiating ability in court foyers is no longer to be effective. If a solicitor has an opinion and can identify relevant case law their client can rely upon it. If the solicitor merely believes the position is possible, the solicitor must assist the assessment, advise their client to pay, and seek an adjustment via litigation (as is the case with income tax assessments).

132.           Subclause 9(4) provides that in the ordinary course of events each spouse will, upon sale of the family home or by payments having that effect, receive 35% of the net equity value of the family home. The obligation to pay and to put the house on the market is found in clause 14.

133.           Subclause 9(5) makes two special exceptions. If the sale of the home and repayment of debt would result in negative equity no payment is required. Or if the relationship is less than 4 years and there are no children the interim sum for that short marriage is calculated with reference to financial capital provided.

134.           Subclause 9(6) directs solicitors as to what they must do if they advise their client that their situation is unusual. It requires the solicitor to be a specialised family lawyer approved by their law society. Ambit claims are discouraged, as the assessment process is not a forum for an argument about a theoretical best case but rather is a requirement to pay a sum based on the most likely outcome. On average a female spouse with children in a long relationship receives 57% of the asset pool, reflecting longevity, parenting responsibilities and the gender wage gap.

135.           Subclause 9(7) clarifies that variations must only be sought on the portal by the narrow gateways which it provides.

136.           Subclause 9(8) prohibits and details variations which are not rational and which this Bill will not allowed to be made. It is currently possible for a spouse to have no basis in law on which to refuse to make payment. Because the legal system is unwilling to sort wheat from chaff early, family courts become clogged. There is no need for a massive taxpayer bailout of family courts because 8 out of 9 cases currently in court queues settle fairly under this Bill, rather than go to court and be sorted by economic attrition at a later point, as is currently the case.

137.           Subclause 9(9) ensures that variations reduce the common pool in which the couple share. The purpose of equal burden sharing is again to reduce incentives to make stratospheric ambit claims.

Clause 10 - Special circumstances for buying out your spouse

138.           Clause 10 provides for alternative arrangements that have the same economic effect as the substantial liquidity event mandated by clause 9. Rather than selling the family home by way of public auction, one spouse can buy out the other. This clause ensures these alternative financial arrangements have the same economic consequences as the ordinary auction regime in clause 9. It provides a pathway to that interim outcome by requiring finance to be confirmed, not vague proposals to be uttered.

139.           Subclause 10(1) provides a statutory option for one spouse to buy the other out of the family home. Either the claimant may exercise this buyout option at the time that they lodge a claim, or if the claimant does not do so, the other spouse may exercise the buyout. In each circumstance this statutory option between former partners must be exercised in a timely manner and the purchaser must demonstrate that they have the financing from a bank to do so, or that the bank confirms the existence of the same from a relative.

140.           Subclause 10(2) ensures that the buyout option is only exercised fairly and not in all circumstances. Most especially one spouse cannot buy out a property previously owned by the other spouse’s parent. Where the person with whom a child of the marriage resides elects to defer settlement under clause 13, the buyout rights are deferred in like manner.

141.           Subclause 10(3) deals with a spouse who already owns the family home solely in their name and has other assets or finance which they can use to meet the sums otherwise due under Clause 9. This subclause provides that spouse must demonstrate the money is in fact available by producing a bank letter of credit, not a mere promise.

142.           Subclause 10(4) enables a spouse, usually the mother, to remain in the family home if stability would benefit the children such as during HSC year. This subclause creating a statutory right of residence reflects the thinking of the NZ Law Reform Commission in its issues paper of 1 November 2018 on the IP44 Te Arotake i te Property (Relationships) Act 1976 : He Aronga i Mariu ai.

143.            The right to postpone realisation is dependent upon:

·          A letter from an accredited family lawyer that a family court would permit residence in the prevailing circumstances (for example dealing with instances where the non- residential spouse is rendered insolvent);

·          A duration not longer than a year (usually until the January);

·          The spouse who remains in the home to in fact, not in law, service the mortgage on such terms as they can negotiate with their bank, sometimes interest only in a rising property market. The non-resident spouse remains liable to the bank, but only on a contingent basis.

144.           This clause would enact the first statutory recognition of children’s interests in property matters. It would operate at low cost and without recourse to courts. For a spouse with cancer or a similar disease section 7(2) contains an exemption from the assessment regime. Those who suffer ill health remain subject to directions of a court, as is presently the case. 

145.           Subclause 10(5) deals with unusual circumstances where family members have advanced a loan to buy the family home and there is a genuine dispute about whether that loan was at arm’s length. In that case the principal sum is placed in escrow until the matter is resolved.

146.           Subclause 10(6) guides people the subject of a family violence order issued by a state or territory court. It ensures that there is no conflict between federal and state law that may give rise to an argument under section 109 of the Constitution that a state family violence order is void because it purports to exclude communications arising under federal law. This subclause also ensures that there is no excuse or confusion by persons the subject of a family violence order that they are thereby rendered helpless by the magistrate who issued it. Each spouse can interface with the independent portal and not engage in heated confrontation directly with each other. The vague standard language used in the drafting of some state or territory family violence orders preclude too many valuable communications and create far too many prisoner’s dilemmas during negotiations. There is to be no excuse for failing to comply, whatever protocol about fellow lawyers that a magistrate may or may not have made in relation to clauses about communication.

Clause 11 - Self-assessment

147.           Clause 11 requires the separating spouses to set out what they each believe is a just and equitable outcome under the Family Law Act a month after disclosures and valuations are made. In order to ensure the financial assessments of their position are not stratospheric claims, the self-assessments must meet minimum integrity standards. The most important constraint is that the financially stronger spouse (usually the male) must at least offer half to “his wife”, must address superannuation, and must otherwise show cause why their circumstances differ from the range of ordinary outcomes.

148.           Subclause 11(1) provides for each spouse to self-assess their most likely, and not most desirable, outcome. The self-assessment is not a consent order, it merely facilitates payment of sums, transfers of assets and discharges of liabilities. It does not bring to an end claims under the Family Law Act. This section reverses the current compliance burden - a sum is due under this Act unless a legal specialist can confirm a court would order not make such an arrangement and their client complies with it, not merely argues for years on end that it is a vaguely tenable position at law.  

149.           Subclause 11(2) requires the financially stronger spouse, which in 94% of disputes is the male partner, to submit an assessment involving at least half the couple’s relationship ending up with the weaker financial spouse (usually the female spouse). This is a presumptive minimum - many (men) will offer more than half be paid to their (wife) so as to avoid the subsequent need for mediation. This is a presumptive minimum and accordingly people who don’t want to offer at least half must otherwise show cause by producing medical certificates or lawyers’ certificates or complying with other relevant exemptions. Spouses must make a good faith effort. The self-assessment must be for the most likely sum. The United States Code of Civil Procedure has long had equivalent rules, and the taking of a reasonable position at law also arises in relation to tax penalty assessments. 

150.           Subclause 11(3) requires the second spouse, most often the wife, to narrow their claim to at least 60% of net wealth or show cause. This is a maximum claim - they can always, for example, offer 50/50 or can offer to move to the average outcome - a 57/43 deal, which given the time value of money is the same deal as a 60/40 deal anyway. Or they can show cause if their husband has ‘done a runner’ to London and that they seek 100% of the net wealth. But solicitors may no longer make ambit claims based on what they believe is achievable if delays arise in litigation. The rationale for this form of bid management is to achieve a proximate compromise without, in a great many cases, the need for mediation, face to face dialogue, or any further legal delay. It also enables any subsequent mediator to suggest a workable compromise based on each spouse’s stated analysis of what is fair.

151.           Subclause 10(4) requires each spouse to focus on the real issues in dispute and not to raise issues such as conditions upon the children’s school lunches, or other smaller issues they seek to sweat. The mental health industry, not the legal industry, is best triaging those concerns.

152.           The average outcome for female spouses with children under the Family Law Act is a 57% allocation of relationship property. Some spouses do receive a split higher than this, but after legal fees and the economic consequences of delay, their net gain is often much less than even a 50/50 split. Under this Bill a financially weaker spouse can seek a higher sum if supported by a certificate from an Accredited Family Lawyer. Otherwise, at a minimum the spouses are in “the usual ten percent range” within 60 days, or in many instances 3 to 5% apart in weeks, even if they don’t want to speak to each other. The standard response forms on the portal will not allow for vitriol trading, merely the statement of financial position.

153.            Subclause 10(5) excludes certain items from self-assessment such as gifts or compensation for personal injury. The purpose of these exclusions is to speed up many impediments that practically arise in the absence of clear law. While excluding some items of property will doubtless be unfair in certain individual circumstances there is a broader efficiency dividend that arises from the certainty this regime creates. Couples remain free to litigate under the Family Law Act, if, for example, the male spouse believes a gift not expressed to be for both of them from the wife’s aunt was actually intended for both and based on the three or four legal theories currently in vogue one favourable to them may be preferred. While some assets are excluded this subsection does not preclude their existence being taken into account in determining a just and equitable outcome.

154.            The exclusion of pre-relationship superannuation reflects that courts have at least two methods to include or exclude superannuation. Until the full Family Court stabilises its views and sets consistent guidance a more prudent and mathematically based approach is taken.

155.            The exclusion of pre-relationship property that are not the fruits of the relationship, in second marriages where there are no children reflects the growing international trend found in all other countries legal systems towards greater clarity. It is also a recognition that multiple splitting scenarios are frequently unfair for those in second, third, and fourth marriages who seek the triumph of true love over experience.

156.            Subclause 11(6) provides that the self-assessment notice is a payment obligation that has effect unless subsequently overridden by agreement, by arbitration or by a court. Accordingly, a self-assessment notice is not an offer capable of unilateral withdrawal but is itself a separate obligation to pay and comply by the person making it. This subclause does not inhibit the making of more generous offers outside the portal which are conditional on entry into a consent order or binding financial agreement. Compliance is required to the extent it does not contradict the other spouse’s self-assessment notice. 

157.              Subclause 11(7) sets out the features and requirements of a self-assessment notice.

158.            Subclause 11(8) allows a self-assessment notice to address certain issues such as payment upon the happening of future contingent events. The requirements still need to remain congruent with the overarching obligation to reasonably truncate the dispute

Clause 12 - Joint control of assets where matters not resolved

159.            Clause 12 requires couples to lodge money into a joint bank account to the extent they cannot agree. If the asset is not cash, then a security interest must be offered having similar economic effect. In general, this bank account will hold an amount equal to no more than ten percent of the value of the family home. Neither spouse can withdraw it by themselves until there is

·          agreement by each spouse to release; or

·          a court order otherwise; or

·          a spouse makes no effort.

160.            Subclause 12(1) provides for the establishment of a bank account with the likes of ANZ, Westpac, NAB and CBA with each spouse as a signatory. If the asset in dispute is something like a work of art or employee shares that are not capable of sale, then the spouse who has legal title must create a security interest over it. Superannuation would be an ideal asset in which to generally bridge the gap. However, while super flagging (restriction notices on transfers) is viable it is not explored at this juncture. Nor are other methods of stake holding or payment collateralisation provided for in the Bill in order to reduce complexity.

161.            Subclause 12(2) limits account withdrawals until the spouses finally agree under a consent order, or a court directs otherwise, or they agree themselves.

162.            Subclause 12(3) deals with persons who are non-compliant to be certified as such for the purposes of seeking relief in court.

163.            Subclause 12(4) ensures defaulters must pay not argue their case. Similar rules work wonders in relation to contractors’ payment disputes.

Clause 12A -interim allocation of relationship property 

164.           Clause 12A requires spouses to transfer assets in dispute pending a final court order. For those couples whose specific circumstances are not covered by this clause they must mediate, negotiate or arbitrate under clause 13. These rules in this clause are not a self-assessment nor an assessment by a third party but are a requirement of law. If a person then takes no action the interim allocation becomes final, as a matter of law.

165.           For most spouses who are engaged in a genuine dispute this clause does not apply and they are required to seek to resolve their dispute under clause 14. Courts still retain their powers to make interim orders under the Family Law Act and should commence exercising their existing powers in the robust manner that Senator Murphy envisaged. 

166.           Subclause 12A(1) awards the family home to the compliant spouse where one spouse makes no effort.

167.           Couples living overseas are required by subclause 12A(2) to split their Australian property equally.

168.           Subclause 12A(3) provides an outcome for battlers in the lowest quintile of wealth and for a couple who want to sweat the small stuff or try to make silly conditions.

169.           Subclause 12A(4) provides that persons who fails to respond to offers of mediation or arbitration are liable to a fine.  

170.            Subclause 12A(5) imposes obligations on a spouse to comply with these deemed interim proximate arrangements until a final order is made.

171.           Subclause 12A(6) requires legal practitioners to assist people with residual sums by requiring they assess only their most likely financial case and seek alternative dispute resolution.

172.           Subclause 12A(7) limits the ambit of this deemed interim allocation regime where an Accredited Family Lawyer certifies the interim arrangement is markedly at odds with what a court would habitually order. The regime also ensures that a refund is due should a court make a final determination of a matter.

173.           Subclause 12A(8) gives family courts powers to make quick orders so as to narrow issues and the quantum in dispute where a person breaches their overarching obligation, is otherwise dilatory, or it is in the interests of justice to do so.

Clause 13 - Obligations to mediate or try to arbitrate

174.           Clause 13 requires spouses still bickering over the residual sums to mediate or offer to arbitrate or put in offers to settle the residual disputes. Even if they want to go to court, they have to keep seeking to resolve matters while other taxpayers’ money is being spent. The same sort of exemptions apply as apply under current law for compulsory parenting mediation. Crucially family violence victims don’t mediate face to face.

175.           This Bill seeks to harvest insights arising from academic research so as to deliver positive externalities arising from cooperative behaviour and improve the impact of mediation of relationship property disputes by way of:

·          the 35% minimum payment to reduce stress;

·           the reduction in unconscionable bargaining power by joint escrow to align the need for speed;

·           the requirement to state a position by self-assessment so as to focus on interests, not positions;

·          Making a consequence of a failure to engage in good faith, that a compliant spouse habitually be quickly awarded all sums pending a final order. This, more than any other measure, will change the current compliance culture.

·          using the portal to avoid a prisoner’s dilemma when swapping information, and encourage an outcome that optimises the wealth of their children; and

·          time-bounding outcomes

176.           Subclause 13(1) requires the making of “genuine efforts” to resolve a dispute. This requirement is similar to rules found in other civil procedure regimes.

177.           This subclause does not restrict a person from going to court. Nonetheless when consuming scarce public resources, a person may be self-reliant, not state reliant. The section does not deploy the gateway mechanism preferred for parenting of obtaining a certificate from a Family Dispute Resolution Practitioner. This is because courts don’t have resources to enforce the existing section 60I requirements, and because the obligations under this Act have effect unless a court orders otherwise. Under current law judges have to order mediation and often have no time to do so. Now that onus is reversed.

178.           Subclause 13(2) provides that if one spouse cannot be bothered complying then the sums in the joint bank account are then paid to the spouse who is trying hard.

179.           Subclause 13(3) specifies that a person must either make an offer electronically, or mediate, or offer to arbitrate. Arbitration on the papers costs approximate $3,000 and is often undertaken by retired judges.

180.            Subclause 13(4) provides that mediation is not required for domestic violence and in other limited circumstances. These exemptions reflect the exemptions currently permitted where joint parenting issues arise under the Family Law Act. Three important differences arise under this Bill are:

·          Compliance must be undertaken and must be recorded on the portal. Presently courts are allowing couples to file in courts without trying mediation. The portal will in that case issue a default certificate, and the disputed sum will be paid to the compliant spouse.

·          There is an additional exemption from the requirement to mediate. A legal aid organisation can, even if a family violence order doesn’t exist, excuse a person from compliance. The reason for this is that some spouses are terrified of applying for a family violence order and it can be more appropriate to arbitrate on the papers. The claims processing model set out in this Act will treble the effective footprint of legal aid organisations in respect of relationship property disputes as they will use lower cost paralegals to process most online claims.

·          The obligations to continue to make settlement offers is not to be a one-off event and is to be an open communication offer - meaning it can be shown in litigation. Academic research based on a concept called game theory indicates that even if the first mediation fails, a second and third round, especially after a cooling off period, is highly successful as each side reveals their preferences. Offers “without prejudice” may also be made outside the system.

181.           It is expected that the self-assessment regime and mediation will lead to mutually advantageous speedy outcomes - at the cost of divorcees, not taxpayers. This will reduce queues in courts in relation to relationship property matters by up to 70%. A presentation by Judge Joe Harmon in 2016 ‘Should Mediation be the First Step in all Family Law Act Proceedings?’ ( Australasian Dispute Resolution Journal , volume 27, part 5) and aspects of game theory have informed thinking on this new regime. Judge Harmon had no part in the preparation of this Bill.  

182.            Subclause 13(5) requires those with a domestic violence order to make an offer by way of online bid. This will also assist couples who are geographically remote and for whom mediation is especially difficult- but less so with modern communications

183.           Subclause 13(6) enables a court to direct that a residual dispute is so unique, or the prevailing law is so unclear, that the matter is better able to be determined by litigation. Exemptions are also permitted at the direction of senior lawyers where matters are intractable and also raise such issues. Where spouses can’t be bothered making an effort, the compliant spouse’s mediation obligations are suspended.

Clause 14 - Compliance obligations for financial disputes

184.            Clause 14 establishes a timetable for payment of money or delivery of assets (like a car each) under this Act. This clause requires spouses to pay promptly. In most cases the payments will ensure that between 85-95% of a couple’s relationship wealth is solved within two months. There is little wrong in focusing disputes on the real sums in dispute. Exemptions are given to lawyers but only where:

·          that person is an expert in family law; and

·          that expert certifies the most likely scenario, not the best case achievable; and

·          unlike the present regime the lawyer’s advice is based firmly on law, not on their ability to negotiate under a broken-down system in a lucrative manner.

185.            The general obligation is to act promptly. Different compliance times apply for different classes of assets. In general house sales are expected to occur and payment be made within 90 days of the lodgement of a claim. However, it is acceptable if the house is put on the market and fails to sell for reasons outside the spouses’ control, such as having no bidders even without a reserve. For other classes of assets, such as cars, furniture and chattels, transfers are to be made “promptly” - meaning ordinarily a week or month. This stands in stark contrast to the longest payment delays experienced in family courts - over 12 years in relation to business assets.

186.            Subclause 14(1) establishes a general obligation to pay “promptly” without setting a specific date for each asset.

187.            Particular attention is drawn to paragraph 14(1)(d) in which, prior to the sale of the family home, spouses have a general obligation to pay a sum by drawing on cash or home loans that have revolving credit facility to the extent they can. This provision should remove some maintenance applications before courts. It also underscores the policy of this self-assessment Bill which focuses upon free cash flow and solvency, not balance sheet values alone when determining a just and equitable outcome. If spouses are capable, they must cooperate to keep each other solvent. Because of the short period of times no adjustment is made for the time value of money.

188.            Subclause 14(2) contains “machinery provisions” in relation to any real estate, including but not limited to the family home.

189.            Subclause 14(3) establishes a more general obligation to sign other documents to get assets sold and spouses paid in relation to other types of assets.

190.            Subclause 14(4) confirms that a financial assessment is not the surrender of legal rights. Only a consent order, binding financial agreement or order of court can achieve those outcomes. An assessment can order the sale of property necessary to make a payment. Spouses are not precluded from making generous offers outside this system to incentivise a timely consent order to be entered into.

191.            Subclause 14(5) protects children from moving out of a family home until all matters are settled if the couple fall within the first two quintiles of wealth - our most disadvantaged Australians. Note also that clause 10 enables a 12-month cooling down period where children live in the family home.

192.            Subclause 14(6) requires spouses to divide their chattels by a set of statutory rules and not to require another adult to sort small matters out for them. The subclause excludes certain personal items such as aboriginal art.

193.            Subclause 14(7) replicates furniture order rules found in domestic violence legislation.

194.           Subclause 14(8) provides for a form of statutory restitution for a spouse, where the other spouse dithers.

195.           Subclause 14(9) specifies a penalty for any person who breaches this clause.

Clause 15 - Enforcement and remedies

196.            This clause provides a penalty for those who don’t comply with their self-assessment notices to the extent their assessment doesn’t contradict their spouse’s self-assessment.

197.           Subclause 15(1) specifies that once made no other sum may be set off against an assessment, such as claims that a wife separately defamed a husband.

198.           Subclause 15(2) gives each spouse an equitable interest in the family home if they are not registered on title. Most family law firms already refuse to engage in Torrens title fraud schemes as do most reputable real estate agents. This clause now gives spouses who have been defrauded a direct right against persons who profit from fraud.

199.           Subclause 15(3) provides severe penalties for non-disclosure.

200.           Subclauses 15(4) to (6) specify further matters relating to enforcement of the scheme established by the Bill.

PART 3 - PARENTING DISPUTES

Clause 16 - Shared Parenting obligations

201.             Clause 16 requires couples to support each other and their children without a court having to sort matters out for them. While parenting orders are not legally binding other countries already require that post-separation shared parenting arrangements be recorded in writing. When this Bill is enacted parents must comply with the shared parenting regime even if, personally they don’t like the 2006 shared parenting law. or want to use the system for a strategic reason. The Standard Shared Parenting Plan is set out in Schedule 1 and is the primary assessment and claim document. It may be altered for matters such as pick up times, days of the week spent, and child handover arrangements. 

202.            There is no obligation in the Family Law Act, nor any statutory presumption that courts will give real effect to, that encourages equal shared parenting. This Bill does not seek equal parenting. This Bill seeks to ensure that where there is no good reason to allow 4 nights a fortnight to the non-residential spouse that court intervention is not required.

203.            The purpose of these rules is to ensure that scarce resources of public courts are not devoted to mundane parenting disputes with somewhat common proximate outcomes. Instead courts should henceforth only prioritise matters that:

·          involve physical violence; and

·          are truly intractable not merely gaming the system for profit; and

·          involve noncompliance and penalties

204.            This clause requires spouses to:

·          record in writing their reasons for failing to adhere to standard terms (for example it may well be that the spouse asking for standard terms); and

·          mediate the gap, if safe; and

·          use state resources as a last resort.

205.            State intervention is almost always suboptimal. For much of the last decade family courts seem to have placed too much weight on a contested study that purported to show that toddlers spending time with their fathers was suboptimal. Solicitors who acted as “Independent Children’s Lawyers” failed to challenge this dogma with any rigour whatsoever - in many instances extrapolating its findings to make conclusions even the study did not purport to find. This sorry saga raises questions not only of unconscious bias in decision making, but also whether courts have the requisite subject matter skills to determine parenting issues at all. This should never have been missed in any system, far less an adversarial system.

206.            This Bill provides exemptions only where:

·          a spouse has a track record of physical abuse; or

·          a legal aid organisation, not a magistrate, looks at the matter.

207.            The new measures set out in this Bill, while not making shared parenting compulsory, involve a more efficient use of resources to initiate post separation parallel parenting.

208.            Subclause 16(1) sets out the general goals for parents to be responsible for their children and not let matters drift. The policy reason for mediation is that two parents are, most often, better at solving a problem than a person representing the state. As well as setting the ground work for future cooperation mediated outcomes are more likely to require fewer enforcement resources by the state, be more granular and fact specific, and encourage future cooperation for the benefit of children generally. It is to be recalled that these dialogues will take place after substantive financial settlement, giving parents less to bicker over.   

209.             Subclause 16(2) creates a general obligation for each spouse to care for their children and to assist the other in times of need.

210.            Subclause 16(3) creates general obligations to support shared parenting. Disputes about whether a former husband can cook or merely reheat pizzas are not disputes that should consume scarce public resources. Long term the economic outcomes for children generally are optimised where shared partnering is given effect to - whether it be equal shared parenting, part time parenting, weekend parenting, or holiday contact only.

211.            Subclause 16(4) lists the sorts of exemptions in respect of which shared parenting won’t apply because courts have a role to play. These are the types of sorting rules that courts should have developed since 2006 but have failed to do so. This section codifies permissible reasons for not optimising shared parenting outcomes.

212.            Subclause 16(5) requires lodgement on the portal of verification of claims for exemption.

213.            Subclause 16(6) requires those with family voice orders to comply via the portal only.

214.            Subclause 16(7) clarifies that a court is not limited by an earlier self-assessment.

215.            Subclause 16(8) requires lodgement on the portal of verification of living arrangements.

216.           Subclause 16(9) provides that a person who breaches clause 16 is liable to a pecuniary penalty not exceeding 100 penalty units.

217.            Subclause 16(10) requires notification of family violence orders by the applicant.

Clause 17 -Self Assessment of Parenting Matters

 

218.           Clause 17 allows non-residential parents to apply for access to children without the need to have the matter determined in court. The clause does not automatically grant access but rather requires reasons to be given with a view to avoiding litigation. A personal view Shared Parenting is not personally acceptable generally will attract a fine. A view that Sunday without overnight care because the father lives in a shared house with 3 other men will not attract a penalty being imposed by a court. No response will attract a penalty. Regimes of this nature drive compliance, whatever their effect at the margins.

219.            Subclause 17(1) allows non-resident parents to seek access only if they pay child support and are able to verify they are suitable. Mainly this regime is aimed at middle class engaged fathers who are being denied access to their children. This regime flushes out the reasons and ensures state resources are only used where they have maximum effect. The regime requires substantive compliance with Part 2.

220.            Subclause 17(2) requires the residential parent to respond to the request and to set out their reasons in writing if they decline.

221.            Subclause 17(3) specifies the requirements of a notice of self-assessment.

222.            Subclause 17(4) requires that once a parenting self-assessment is made, each parent must give effect to it. Solicitors who have experience with less than half the divorcing population believe that processes of this kind have no legal consequence and thus a result of a misunderstanding of consequence. European countries take a different approach. Parents should record their arrangements in writing to provide clarity and act as a cathartic reflection point. This new regime takes that same approach, ignoring legal form and instead focusing upon substantive outcomes. Experience in other countries indicates that nudging people to results which are in any event likely, even where it does not have force of law will achieve much greater social justice than courts have managed to achieve in the last decade.

223.            Accordingly, the self-assessment regime included in this Bill does have the effect that any subsequent belligerent behaviour which is irrational or is used to pursue other objectives will attract a fine by reason of conduct.

224.            Subclause 17 (5) imposes a requirement not to harass by lodging multiple applications for access

225.            Subclause 17(6) provides a penalty for breach of the clause.

Clause 18 - Anger management programme

226.            Clause 18 reflects a simplified version of a statutory programme that a person with a family violence order, but no history of physical altercation, must undergo in New Zealand. In essence, because divorce and separation are often times of, and or caused by, mental health issues, much of the interaction between parents becomes difficult.

227.            Currently we treat family violence issues primarily by the legal system. We are losing that battle. Allowing magistrates to issue more and more pieces of paper without due process based on a rerun of fault-based divorce charades has not proved workable. The lucrative but futile legal response is very often a spectacular failure - family violence orders are only complied with by ‘good parents’ who are yelling but are ignored as ‘parking fines’ by the physically abusive. Civil disobedience is rampant and community attitudes reflect the findings of the most comprehensive academic study to date. Namely that family violence orders are all too frequently used by lawyers to obtain collateral financial benefit in family court disputes.

228.            An alternative to more lawyers at least for some but not all parents, is to deal directly with underlying mental health issues and with gendered responses to confronting unfairness. Failing to deal with the causes of conflict has become far too expensive. Accordingly, when applying for access privileges to see their own biological children some non-resident parents may benefit from undertaking an anger management programme, in the private sector, and at their cost.

229.            These programmes are effective, do change behaviour and perspectives on how others see the parent and how best to deal with former relationship partner as ties are severed. As in other areas of social policy neither law nor education alone is a magic cure for all families. Courses of this nature are currently voluntary in our country, but also achieve much.

230.            Subclauses 18(1) and (2) specify who must attend these courses. For persons who have family violence orders, but no history of physical altercations, attendance is mandatory. Also, if a third person believes a spouse is perpetually angry, they may attest that attendance is useful. Otherwise attendance is not ordinarily required simply by reason of an application having been made. The purpose is not re-education in and of itself. The purpose is to create an inexpensive cooling down period, to recalibrate perspectives, and to de clutter those who otherwise sit in court foyers for years getting more frustrated, not less. Diversionary programmes are a better queuing management technique than an exasperated self-represented litigant imploring a family law judge not to eviscerate the language of section 65DAA of the Family Law Act.

231.            Subclause 18(3) provides an effective remedy for those who cannot be bothered making the effort to attend the programmes - they cannot qualify and must spend money pursuing contact in the courts.

232.            Subclause 18(4) requires attendance and comprehension by applicants. While it is never envisaged that such a course will cure all mental health issues, courses of this nature are effective in altering perspectives and giving time for reflection on personal standards, much like drink-driving education courses have an impact on the road toll but are not the only solution to that problem. Courses of this nature are already run by community groups in Australia and this clause seeks to formalise these arrangements in the same manner as occurs in our near neighbour. The programmes are low cost, user pays, solutions.

233.            Subclauses 18(5) to (7) direct that the outcomes of the programmes to be relayed to the portal.

234.            Subclause 18(8) ensures that if a person remains uncooperative or belligerent and fails such a programme that there is no obligation for the residential parent to comply. The matter is then left for our courts to determine, using the judicial power judicially not as individual officers of the courts.

Clause 19 - a new compliance culture

235.            This clause seeks to effect a significant reduction in the cost of legal advice, by finally introducing competitive pressures on members of the law society. The Australian Productivity Commission recommended deregulation of the giving of family law advice in 2014.

236.            Some American states already enable deregulated legal services in family law matters for the benefit of their divorcees. Accountants already give legal advice in Australia on taxation matters for the benefit of business, notwithstanding rules regarding the carrying on of a legal business. Australian family law mediators currently “nudge” divorcees to “normal range outcomes” in circumstances where solicitors advise only on a client’s “best case”, sometimes omitting to even mention the clients most likely outcome. Retired lawyers and law students already help out battlers, other than on a fee for service basis, in family law matters. Self-regulation by law societies has resulted in a marked lack of transparency for purchasers of legal services, long delays, very few efficiency benefits and uncompetitive pricing.

237.            It costs a divorcee approximately $100,000 in legal fees for a full hearing in the Federal Circuit Court. That is a sum in excess of 5% of family wealth for the person’s protected by this proposed clause and 10% of their children’s wealth, often more. Eye watering legal fees are forcing far too many citizens to self-represent in the very public courts that their taxes fund. Lawyers kvetch that the self-represented “waste more time” than solicitors do. The only solution the legal profession supports is to increase taxpayer largesse by hiring more lawyers. That confusion of the public interest with self-interest is unconvincing. The funding option is not affordable, even at lower per hour rates.

238.            This section removes the law society’s legal monopoly as it pertains to family law, enabling access to justice at competitive rates, and replacing the failed self-regulation regimes with disclosure and conduct requirements.

239.            Subclause 19(1) empowers a person with an Australian law degree to assist battlers, even if that person is not a member of a law society. Wealthy Australians will still continue to be serviced only by members of a Law Society for the reason that wealth is a proxy for legal complexity. In addition to Australian qualified lawyers, conveyancing firms, and lawyers who have practised law in other common law countries can also assist battlers, as can those working inside legal aid organisations. People with these skills will better assist public courts than self-represented citizens currently do. The interests of Australian society are to henceforth to prevail over the interests of the Law Society.

240.            Subclause 19(2) allows retired legal practitioners and other qualified lawyers to provide legal and family law compliance assistance to battlers. For those without practising experience an insurance policy is required for an amount which will have a modest price impact. This subclause also requires disclosure by this new class of adviser. The disclosure of complaints on their website provides consumers with considerably more relevant information than is currently disgorged by the law society as a self-regulator. Some family lawyers currently provide family law advice even though they have over 35 hidden complaints lodged against them, some over 100 complaints in a 5-year period. By way of contrast this Bill provides a three-strikes and you are out rule for legal advisers who are not members of a legal guild.

241.            Subclause 19(3) provides a penalty for breach of the new section.  

242.            Subclause 19(4) provides that an advisory business may incorporate just like a law firm. The work of the corporation must nonetheless be undertaken by individuals who are qualified under this section.

243.            Subclause 19(5) requires courts to schedule appearances in half hour blocks and to use video conferencing if tenable. Currently barristers charge half day or full day fees as a brace of barristers bargain like rug traders in court foyers, all at great cost to their clients.

244.            This subclause also emphasises:

·          the objectives of Senator Lionel Murphy QC that family courts must be run in a manner which optimises the dignity of the individual; and

·          the requirements of the High Court that matters be solved by developing precedent and not by forlorn attempts to reinvent the wheel each and every morning.  

245.            This clause does not:

·          price-cap legal family lawyers to a percentage of assets or directly in the manner suggested many years ago by the Honourable Michael Kirby AC CMG ;

·          seek to pay family lawyers last so that their micro economic incentives align with those of their clients and the court;

·          remove lawyers after 3 complaints or 101;  

·          require the Law Society to better carry out its self-regulatory role by speeding up the 18-month delays taken in investigating poorly performing solicitors or by requiring its members to disclose the same to purchasers of legal services; or

·          require mental health furloughs; 

·          prohibit the stranding of clients in public courts;

·          ration access to courts by law firms unable to solve matters on their own in a manner disproportionate to their peers or only proportionate to their post codes;

·          proscribe such predatory behaviour as voluminous information demands, last minute responses, failing to disclose relevant information to judges, burning up scams, and dealing efficiently with self-represented litigant’s.

Clause 20- Regulation making powers

246.           This clause is similar to the existing powers given in section 125 of the Family Law Act that enable the Governor-General to make regulations which clarify and evolve more specific details that will better give full effect in this Act.

 

SCHEDULE 1

247.            Schedule 1 contains the Standard Parenting Plan which is used in Part 3. The Plan is not perfect, it is average. Those who already agree can also use it as a free precedent. The international trend is away from court orders and towards more flexible and cooperative solutions.



STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Overview of the Bill

The Family Law (Self-Assessment) Bill 2019 ( the Bill) creates new obligations on divorcees and de facto couples. Under Part 2 of this Bill those persons must:

(a)   Disclose their financial wealth to each other in a standardised manner on an internet portal;

(b)   Narrow their dispute to rationally contested sums, and to the extent they believe that their particular situation varies from the most likely range of outcomes to show cause for the variations they seek, to the extent it is material and based on controlling legal principles;

(c)   Pay uncontested sums and to solve matters themselves or via mediation. Mediation is intended to take place only for a limited period once the online disclosures are made and where safety is assured.

It is expected that most separating couples will not use this system but may refer to it if their spouse is unreasonable or their spouse or solicitor delays justice. This system will be of maximum benefit to spouses facing a complete refusal to pay, whether based on law, a belief in the same, or belligerence.

Part 3 of this Bill creates a more civilised pathway to shared parenting for the benefit of children whose parents are of good character.

This Bill deliberately replicates existing provisions in the Family Law Act and the Civil Dispute Resolution Act 2011 , the Family Law Amendment (Parenting Management Hearings) Bill 2017. It also draws upon Canadian and New Zealand relationship property splitting laws.

Human rights implications

The Bill engages the following human rights:

·          Eradication of discrimination against women: Articles 2 and 3 of the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW).

·          The right to a fair hearing: Article 14(1) of the International Covenant on Civil and Political Rights (ICCPR)

·          Best interests of the child: Article 3(1) of the Convention on the Rights of the Child (CROC).

·          Protection of children on dissolution of a marriage, and generally: Articles 23(4) and 24(1) of the International Covenant on Civil and Political Rights (ICCPR), and Article 3(2) of the CROC.

·          Eradication of discrimination against women: Articles 2 and 3 of the CEDAW. The CEDAW provides for key principles of equality which cover many aspects of women’s lives, including marriage, family relations and equality before the law. In particular:

Article 2 provides that parties agree to pursue the elimination of discrimination against women, including by introducing new laws or policies, changing existing discriminatory laws and providing sanctions for discrimination where appropriate.

Article 3 requires parties to take appropriate measures to ensure women’s full development and advancement, so that they can enjoy human rights and fundamental freedoms on the same basis as men.

Discrimination against women may include failing to pay a spouse in a timely manner. This Bill ensures that each spouse, including transgender and same sex couples are treated equally.

·          The right to a fair hearing: Article 14(1) of the International Covenant on Civil and Political Rights (ICCPR). Article 14(1) of the ICCPR provides, amongst other things, the right to a fair hearing. The Bill enables a hearing to be made following payments of sums not rationally in dispute.

Nothing in the Bill precludes access to a court.

·          Best interests of the child and the protection of children on dissolution of a marriage, and generally: Articles 3(1) and 3(2) of the CROC and Articles 23(4) and 24(1) of the ICCPR.

The CROC recognises that children are entitled to special care and assistance, and that they should grow up in an atmosphere of happiness, love and understanding. In particular:

Article 3(1) of the CROC provides that in all actions concerning children the best interests of the child shall be a primary consideration.

Article 3(2) of the CROC provides that parties will take appropriate measures to ensure that children have the protection and care necessary for their well-being.

This Bill does not affect substantive law in that regard in a positive or negative fashion. It merely requires that each spouse state their case and that to the extent possible they meet existing requirements of law.

The Bill contains substantial safe harbour protections for children and the meek, such as:

·          Replicating exemptions form mediation where a person may be subjected to physical violence;

·          Removing existing acts of financial coercion; and

·          At the behest of a legal aid organisation that specifically protects those at greatest risk of harm.

Conclusion

The Bill is compatible with human rights because it promotes the protection of human rights.

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Senator Pauline Hanson