After many months of negotiation, perhaps even appearances in court, the divorce is final, the property settlement is agreed and you have a legally binding Order which outlines who pays what to whom.  Finally, it’s all over ... or is it?

 

Unfortunately, there are times when one person doesn’t honour all of the undertakings outlined in the Order.  This is called being in breach of (or contravening) the order.

 

What is a breach of orders?

A person breaches (contravenes) an order if they:

1. Intentionally fails to comply with the order, or

2. Makes no reasonable attempt to comply with the order, or

3. Intentionally prevents compliance with the order by a person who is bound by it, or

4. Aids or abets a contravention of the order by a person who is bound by it.

 

Case Study

Simone* and her ex-partner had Court Orders for a property settlement sealed in Victoria at the beginning of this year. The Orders outlined the requirements of each person in relation to splitting the Superannuation the couple had accumulated in a Self-Managed Super Fund.

When a couple separate, Superannuation is regarded as a financial resource. It is considered as a separate type of asset. 

Orders often include instructions for splitting Superannuation and transferring a portion from one party to the other.  The amount isn’t received as cash.  It is transferred to another fund nominated by the receiving party and is subject to all of the normal laws around accessing Superannuation amounts, for example, it is usually retained in the fund until retirement age is reached. 

In Simone's case, the Orders relating to Superannuation stated:

Within 30 days of the date of the Orders:

• the Wife to resign her position of Trustee and relinquish any entitlements she has as a member of the couple’s Self-Managed Super Fund and provide the Husband with rollover documentation to enable her interest in the said Fund (the sum of $13,800) to be rolled over to a nominated super fund of her choice.

• the Husband be solely liable for and indemnify the Wife in relation to all liabilities including income tax, capital gains tax and the like, as they fall due and payable by the SMSF.

Simone duly resigned and provided her husband with the necessary documentation to facilitate the rollover to proceed.

The husband insists to Simone that he has transferred funds to her nominated fund but to this date, the funds have not been reflected in the balance of her superannuation policy balance.

Simone has contacted her husband repeatedly about the issue but he is refusing to provide proof of the transfer or the current valuation of the couple’s SMSF.

Given Simone has already approached her own Superannuation Fund, who confirmed that the funds have not been received, what are her options to retrieve the money owed to her?

*Name has been changed.

 

What are Simone's options to enforce the orders?

Divorce Resource referred the question to Evgeny Vasilyev, Lawyer, Barrister and CEO at Genuine Legal.  A fixed fee law firm with offices across Australia.

Mr Vasilyev advised that Simone's issue "is purely relating to the enforcement of the current Court Orders," and "compliance with the Court Orders is not optional”. 

“If the Husband does not comply, the Wife is able to file an Enforcement Application with the Family Court. 

Once the Wife initiates the enforcement proceeding, the Husband will have to respond and produce evidence of his compliance with the Orders,” he explained.

Pursuant to sections 90XA and 90XT (previously 90MA and 90MT) of the Family Law Act 1975 the court may make such orders as it thinks necessary for the enforcement of a payment split.

The Orders can also bind the Trustee of the SMSF (case BAR & JMR (No. 2) [2005] FamCA 386 (19 May 2005). 

Mr Vasilyev advised that in this case, "the wife can also seek costs".

 

Filing an Enforcement Application

The Family Court form required for Application – Contravention is available here. 

The equivalent form for use in the Family Court of WA is available here.

The form must be completed and served by special service on the person who has contravened the Order. 

There is no fee for filing this application.

The Family Court advises that you should seek legal advice before filing a contravention application. 

Genuine Legal offer a free one-hour consultation and set price legal fee packages.  

Visit the firm's website to find out more about their packages or to book a free consultation.

 

 

 

Published by, Christine Weston, Divorce Resource

The information in this article is general in nature and should not be considered as legal advice. You should seek the advice of a registered professional who will be able to appropriately assess your specific circumstances before offering their expert opinion.

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