Introduction
It is important for class action group members to understand the legal fees associated with pursing a class action lawsuit. This article will break down the costs and consider how legal fees are structured into the three main categories of ‘no win, no fee’ basis, Group Cost Orders (GCO) and litigation funding.
How Legal Fees Are Structured in Class Action Lawsuits
‘No Win, No Fee’
A class action that operates on a ‘no win, no fee’ basis means that the applicant will not be required to pay the associated legal and professional fees until the conclusion of the matter. In this instance, the applicant will only be required to make payment if the case is successful. However, on a ‘no win, no fee’ basis, the applicant will still often be required to pay any disbursements that are incurred including filing fees, court fees or miscellaneous search fees. Matters which operate with this fee structure are usually charged on an hourly rate basis.
Group Cost Orders
GCOs require law firms to dictate a specific percentage for the split of recovery and legal fees. For instance, in a split of 80/20 the class members would receive 80% of the settlement and the other 20% would go towards the associated legal and court costs. This structure assists with increased certainty for clients as it specifies the exact percentage that they are required to pay for legal representation.
Litigation Funding
This involves funding from a third-party litigation funder who assists with paying the costs of legal fees arising from the class action. When this structure is utilised, the litigation funder and the law firm will re-acquire their costs through the settlement monies. As a result of the funding supplied by the third-party funder, they often obtain more from any settlement while the group members receive a lower payment in comparison to class actions that operate on a ‘no win, no fee’ basis or on a GCO.
Costs Associated with Class Action Litigation
Costs associated with class action litigation range from counsel costs, court fees, expert witness costs, administrative fees and legal professional fees. It is difficult to identify an exact figure representing the cost of running a class action as it varies on the size of the class, whether settlement occurs and specific intricacies in the court proceedings.
How Legal Fees Are Divided in Class Action Settlements
Legal fees are divided differently depending on the fee structure selected for the class action. For instance, in a ‘no win, no fee’ structure the class members will likely pay a fee from the settlement monies covering the hourly work of the lawyers, whereas a GCO ensures a percentage divide between the professional fees and the amount received by the class members with respect to the settlement monies. Lastly, where there is a third-party funder, they will often receive more in settlement monies meaning that group members will receive slightly less.
Conclusion
If you have any further questions about fee structures for class action lawsuits, please reach out to our office and we can assist you with navigating the complexities of class actions.
*This article was prepared with the assistance of Grace Tully
In September 2024, the Australian government introduced the Privacy and Other Legislation Amendment Bill 2024 to the floor of Parliament. The Bill proposes various measures to improve privacy protection for individuals in the context of a rapidly evolving digital landscape, with the risk of personal data being subject to misuse or mishandling increasing amidst the broad adoption and reliance on digital technologies. This bill aims to take a major step toward enhancing the rights of individuals in Australia while ensuring that businesses and organizations operate with transparency, accountability, and respect for personal information.
The need for comprehensive privacy reforms in Australia has grown as digital services, e-commerce, and online platforms have become integral parts of everyday life. Personal data is now being collected, stored, and analysed on an unprecedented scale, often across multiple sectors, including health, finance, government, and retail. While this data-driven economy has brought significant benefits, it has also led to increasing concerns about privacy breaches, misuse of data, and surveillance practices.
In the wake of high-profile data breaches, including incidents involving large corporations and government agencies, there has been mounting pressure on the Australian government to update its privacy laws to reflect modern realities. The introduction of the Privacy and Other Legislation Amendment Bill 2024 signals the government’s recognition of these concerns and its commitment to safeguarding individuals’ rights in an increasingly interconnected world.
The proposed amendments follow the publication of the Privacy Act Review Report which contained 116 proposals for reform, the Bill implementing 23 of the proposals agreed to by the Government.
Key reforms
Expansion of the Information Commissioner’s Powers
If passed, the Bill would see an expansion in the enforcement powers of Australia’s federal privacy regulator, the Office of the Australian Information Commissioner (OAIC), as well as granting it new functions and capabilities.
Children’s Online Privacy Code
Amidst concerns surrounding children’s right to privacy, the amendments would require the Information Commissioner to develop and register a Children’s Online Privacy Code (COP Code) within two years of the commencement of the relevant provisions.
While the Information Commissioner has previously provided guidance as to how privacy protections under the Privacy Act should apply to children, the Bill proposes the imposition of specific enforceable obligations with respect to the handling of children’s personal information, increasing protections for children available under Australian law. The COP Code would apply to online services likely to be accessed by children, including broadly accessible platforms which do not have measures to prevent access by children.
A draft of the COP Code will be made available for public consultation prior to its finalisation and registration.
Automated Decision-Making
Given concerns about the potential for automated decision-making to result in unfair treatment and discrimination, particularly in relation to the use of biased or inaccurate information and in application to unique circumstances, the Bill proposes various measures to increase transparency where the use of computer programs may reasonably be expected to significantly affect an individuals’ rights or interests. This may include where automated decision-making is used to determine issues like individual’s access to healthcare; housing benefits; or contractual rights.
If passed, the Bill will increase individuals’ capacity to ascertain what personal information about them is held by entities and for what purposes. Further, individuals may request that entities amend information held or take further action if the use of automated decision-making has result in an interference with their privacy or unlawful discrimination.
Statutory Tort for Serious Invasions of Privacy
While Australia has a range of laws which seek to address invasions of privacy, their content varies between jurisdictions. The Bill proposes a new statutory tort for serious invasions of privacy in circumstances where a reasonable expectation of privacy exists.
While the tort seeks to improve protections for individuals against invasions of privacy, it includes various defences and exemptions for legitimate activities considered essential to the proper functioning of Australia’s democracy. For example, where a defendant claims that there was a public interest involved in the invasion of privacy, the plaintiff must demonstrate that the public interest in privacy protection is of greater importance.
‘Doxxing’ Made an Offence
The proposed Bill would make amendments to the Criminal Code Act 1995 to introduce two new offences targeting ‘doxxing’ practices, broadly considered the ‘intentional malicious exposure of an individuals’ personal data online’.
If passed, the Bill would make it an offence to publish an individual’s personal data using a carriage service in a manner considered menacing or harassing. The Bill would introduce a further offence where an individual is targeted based on the possession of a protected attribute, such as race, religion, or sex.
Facilitating Information Sharing
Despite generally increasing privacy protections, the Bill gives the Minister authority to make ‘eligible data breach declarations’ to prevent or mitigate the risk of harm in the event of a significant data breach. This would allow entities to disclose personal data for specified purposes related to protecting individuals from harm.
Overseas data flows
The Bill proposes amendments to increase the ease of the overseas disclosure of personal information. The Minister may prescribe an overseas jurisdiction if satisfied that it has a substantially similar privacy framework to Australia, meaning entities will not be required to take ‘reasonable steps’ to ensure the recipients’ practices are compliant with domestic law. Importantly, the Minister will be unable to prescribe a jurisdiction if its privacy laws would not allow individuals to enforce the protection of their personal information.
Criticisms
Despite the broad support for the reforms, the Privacy and Other Legislation Amendment Bill 2024 has not been without criticism. Some stakeholders, particularly within the tech industry, have expressed concerns about the potential compliance costs and the burden that the new regulations could place on small businesses. Others have raised questions about the effectiveness of the bill in addressing the challenges posed by rapidly advancing technologies, such as artificial intelligence, which may not be fully accounted for in the proposed framework.
Additionally, there are ongoing debates about how the bill balances privacy protections with the need for innovation and technological advancement. Some experts have argued that the bill could benefit from more nuanced provisions that account for the complexities of emerging technologies, while others worry that overly stringent regulations may stifle innovation.
Takeaways
The Bill proposes substantive changes to the Privacy Act and is expected to be followed by further amendments to Australia’s privacy regime. It reflects the growing recognition of the need for robust privacy laws in an increasingly digital world, where personal data is a valuable commodity, and its protection is paramount.
Australian entities should review their existing compliance practices and develop plans to address any gaps, particularly in relation to areas expected to receive increased scrutiny if the Bill is passed.
*This article was prepared with the assistance of Clea Phillips
Before comparing how child custody laws operate across different Australian jurisdictions, it is important to note that the Family Law Act 1975 (Cth) governs parenting matters in every state and territory except Western Australia. WA instead operates under the Family Court Act 1997 (WA), although the underlying principles are very similar. Across all jurisdictions, the best interests of the child are the paramount consideration, consistent with Australia’s obligations under the United Nations Convention on the Rights of the Child.
A Parenting Order deals with one or more aspects of parental responsibility. Under section 64B(2) of the Family Law Act and equivalent provisions in the WA Act, these orders may include:
Under section 60CA, the Court must treat the best interests of the child as the paramount consideration. Section 60CC outlines the factors used to determine best interests, including child safety, the child’s views, their developmental and cultural needs, the capacity of each parent, family relationships, any history of family violence and other relevant circumstances. Western Australia applies an equivalent list of considerations through sections 66 and 66C of the Family Court Act (WA).
Parental responsibility is defined in section 61B of the Family Law Act as all duties, powers and authority parents have regarding their children. Section 61C confirms that each parent automatically has parental responsibility unless a Parenting Order states otherwise. Since May 2024, the law no longer includes a presumption of equal shared parental responsibility.
WA follows the same approach under section 61 of the Family Court Act (WA). Parental responsibility may be allocated solely, jointly or in a way tailored to the child’s needs and safety.
The term “custody” is no longer used in Australian family law. Instead, Orders address where a child lives and the time they spend with each parent.
Across NSW, QLD, the ACT and WA, courts consider the full range of best interest factors. Decisions involve assessing:
No formula applies. Each case is determined on its evidence and the child’s specific circumstances.
Family law practitioners support parents by:
Experienced family lawyers ensure that the child’s best interests remain central and that parents receive accurate, practical and supportive legal guidance.
Although the Family Law Act applies in NSW, QLD and the ACT, and WA applies its own statute, the principles are largely aligned. The main differences relate to the court structure and the interaction with local domestic violence or child protection systems. The following section summarises these differences clearly and concisely.
| Jurisdiction | Governing Legislation | Domestic Violence Framework | Child Protection Agency |
| NSW | Family Law Act 1975 (Cth) | Crimes (Domestic and Personal Violence) Act 2007 (NSW) | Department of Communities and Justice |
| QLD | Family Law Act 1975 (Cth) | Domestic and Family Violence Protection Act 2012 (Qld) | Department of Families, Seniors, Disability Services and Child Safety of Queensland |
| ACT | Family Law Act 1975 (Cth) | Family Violence Act 2016 (ACT) | Child and Youth Protection Services (CYPS) |
| WA | Family Court Act 1997 (WA) | Restraining Orders Act 1997 (WA) | Department of Communities – Child Protection and Family Support (CPFS) |
This comparison shows that while the substantive parenting laws are similar, the surrounding systems parents may encounter differ depending on the jurisdiction.
Across NSW, QLD, the ACT and WA, courts focus on the best interests of the child when determining Parenting Orders. These Orders cover where a child lives, the time they spend with each parent and the allocation of parental responsibility. While most jurisdictions apply the Family Law Act, WA uses its own legislation through a separate Family Court system. Local family violence laws, child protection involvement and practical regional factors may also influence outcomes.
Whether a parenting matter is amicable, complex, or high-conflict, early and reliable legal advice ensures that the child’s welfare and stability remain at the centre of decision-making.
For jurisdiction-specific guidance on parenting arrangements and Parenting Orders, you can access tailored advice from experienced family lawyers in the following locations:
When a person dies without a valid will, or when the appointed executor cannot act, formal authority is required before their estate can be administered. In Western Australia (WA), this authority is granted through Letters of Administration, issued by the Supreme Court of Western Australia. The grant enables an administrator to collect assets, pay liabilities, and distribute the estate in accordance with WA’s intestacy laws under the Administration Act 1903 (WA).
Letters of Administration are required in WA where:
Eligibility is determined by the Administration Act 1903 (WA). Priority to apply generally follows this order:
The applicant must demonstrate to the Court that they hold the appropriate priority and that other individuals with equal or greater entitlement have been notified or have consented.
An application for Letters of Administration in WA typically includes:
These materials must be prepared with precision, as the Supreme Court of WA conducts a detailed review before issuing the grant.
Applications are filed with the Supreme Court of Western Australia under the Non-Contentious Probate Rules 1967 (WA). The Court will examine:
Letters of Administration are only granted when the Court is satisfied that all procedural and evidentiary requirements have been met. Applications can be more complex than probate applications because the Court must be assured that no other executor or will exists and that the correct person is applying.
Once Letters of Administration are granted, the administrator’s duties include:
Administrators must comply with strict fiduciary obligations. They must act honestly, keep accurate records, avoid conflicts of interest, and act solely in the best interests of the beneficiaries.
While the overall purpose of Letters of Administration is consistent with other Australian jurisdictions, WA has several important distinctions:
These jurisdiction-specific differences mean that careful preparation is essential to avoid delays or requisitions from the Court.
Letters of Administration in Western Australia are essential where a deceased person leaves no valid will or where no executor is able to act. The process requires establishing eligibility, preparing detailed affidavits, notifying family members, and complying with the requirements of the Supreme Court of WA. Once appointed, administrators must administer the estate in accordance with Western Australian intestacy laws and their fiduciary duties.
Seeking guidance from an experienced estates lawyer can assist in navigating the process, avoiding delays, and ensuring that the estate is finalised correctly and efficiently.
The team at Chamberlains is ready to help with any application for Letters of Administration.
We’re With You.
When a person dies without leaving a valid will, or when the will does not appoint an executor who is willing and able to act, the deceased’s estate cannot be administered without formal authority from the Court. In Queensland, this authority is known as Letters of Administration, and it is granted by the Supreme Court of Queensland. The purpose of the grant is to empower the administrator to collect the estate’s assets, pay debts, and distribute the remaining property according to Queensland’s intestacy laws.
In Queensland, Letters of Administration are required when:
The Succession Act 1981 (Qld) sets out the order of priority for those who may apply. Generally, the following people may apply, in order:
The Court requires evidence that the applicant has the strongest claim to administer the estate and that other potential applicants either consent or are unsuitable.
Preparing an application for Letters of Administration in Queensland requires a number of documents, including:
Queensland places strong emphasis on proper notice and accurate disclosure of the estate’s assets and liabilities.
The application is lodged with the Supreme Court of Queensland once all documents are prepared and the statutory notice period has passed. The Court examines:
If satisfied, the Court grants Letters of Administration, formally empowering the administrator to manage the estate.
Once Letters of Administration are granted, the administrator must:
Administrators hold significant legal responsibility. They must act honestly, avoid conflicts of interest, and comply with their fiduciary duties. Distribution must follow the statutory formulas, which differ from those in NSW and other jurisdictions.
Although the overall purpose of Letters of Administration is similar throughout Australia, Queensland has several unique procedural requirements:
These requirements mean that applications for Letters of Administration in Queensland are often more time-consuming and technically detailed than straightforward probate applications.
Letters of Administration in Queensland are essential for the lawful administration of an estate where there is no valid will or no capable executor. The process involves demonstrating eligibility, preparing detailed affidavits and supporting documents, and obtaining approval from the Supreme Court of Queensland. Once appointed, administrators are responsible for collecting assets, paying liabilities, and distributing the estate according to Queensland intestacy laws.
Because the process can be complex and emotionally challenging for families dealing with a recent loss, obtaining professional legal guidance can ensure compliance with the Court’s requirements and help avoid delays.
The team at Chamberlains is available to support you through every stage of the process.
We’re With You.
When a person dies without leaving a valid will, or if the will does not appoint an executor or the appointed executor is unable or unwilling to act, the process of administering the deceased’s estate requires formal legal authority. This is where Letters of Administration come into play.
In NSW, Letters of Administration allows the administrator to manage and distribute the estate of a deceased person who did not leave a valid will, or where the will does not appoint an executor.
Once Letters of Administration are granted, the administrator can collect the deceased’s assets, pay any debts and taxes, and distribute the remaining assets according to the intestacy rules (laws that dictate how an estate is distributed when there is no will).
Administrators are required to act in the best interests of the beneficiaries and adhere to fiduciary duties, ensuring proper management of the estate.
In the ACT, Letters of Administration are required when a person dies intestate (without a valid will) or when the will does not appoint an executor.
Eligibility: Individuals with a vested interest in the estate, such as the deceased’s spouse, children, or other close relatives, can apply. The spouse generally has priority, followed by children or other relatives if no spouse is present.
Required Documents: The application requires the death certificate, any existing will, an affidavit from the applicant, consents from other family members and specific forms required by the Supreme Court of the ACT.
Court Process: The application is submitted to the Supreme Court of the ACT. If the court is satisfied with the application and supporting documents, it will issue the Letters of Administration.
After receiving the Letters of Administration, the administrator is responsible for gathering the deceased’s assets, settling debts and taxes, and distributing the estate according to the intestacy rules.
Administrators in the ACT must adhere to fiduciary duties, ensuring that they manage the estate in accordance with legal requirements and in the best interests of the beneficiaries.
While the processes for obtaining Letters of Administration in NSW and the ACT are similar, reflecting their common legal principles, there are jurisdiction-specific rules and forms to follow. Both jurisdictions require the applicant to demonstrate their right to act as administrator and ensure proper management of the estate.
Letters of Administration are essential for managing the estate of a deceased person who did not leave a valid will or where the will does not appoint an executor. Understanding the application process and requirements in NSW and the ACT can help streamline the administration of an estate and ensure compliance with legal obligations. For those involved in estate administration or seeking Letters of Administration, seeking the right legal advice can provide valuable guidance and help resolve any potential issues and finalise the estate.
The team are here to assist with any applications for Letters of Administration.
The team at Chamberlains are here to help guide you through the process. Were With You.
What are Directors Duties?
Company directors have duties imposed on them under both the Corporations Act 2001 (Cth) (Act) and common law, which ensure that they are acting ethically. These include duties for directors to:
In the past, directors’ duties have usually included keeping adequate accounting records for the company or not trading while insolvent, however, there has been a move to include duties relating to cybersecurity. This would mean that, in circumstances where a director could have protected the company further with respect to a cybersecurity breach but failed to do so, the director could be found to be in breach of their directors’ duties.
This is particularly relevant with the Australian Securities and Investment Commission (ASIC) preparing to strike back against directors as evident at the Australian Financial Review Cyber Summit held on 17 September 2024.
A Case Study: ASIC v RI Advice Group Pty Limited [2022] FCA 496
RI Advice Group Pty Limited (RI Advice) holds an Australian Financial Services Licence and is a Financial Services Licensee pursuant to section 761A of the Act.
On 5 May 2022, the Federal Court of Australia declared that RI Advice Group Pty Limited (‘RI Advice’) breached sections 912A(1)(a) and (h) of the Act by failing to implement adequate cybersecurity documentation and controls. Despite suffering nine cybersecurity incidents between 2014 and 2020, including hacking and phishing attacks, RI Advice did not promptly adopt recommendations from independent cybersecurity experts. The court highlighted that cybersecurity risks are evolving and require ongoing management. As a result of the declaration, RI Advice was ordered to enhance its cybersecurity measures and contribute to ASIC’s costs.
Decision
The Federal Court found that RI Advice’s cybersecurity practices were insufficient, noting failures in areas such as anti-virus software and multi-factor authentication. Although the Court did not impose penalties, the decision clarified that licensees now have clear statutory obligations under the Act regarding cybersecurity.
Takeaway
In light of the Federal Court’s decision, licensees must prioritise cybersecurity as an essential component of their corporate governance. Implementing robust cybersecurity policies, conducting regular threat assessments, and ensuring ongoing employee education are vital steps to mitigate risks.
As ASIC enhances its regulatory oversight, failure to comply with these obligations could lead to significant legal and financial consequences, reinforcing the need for comprehensive cybersecurity strategies across all levels of the organisation.
Conclusion
Directors and licensees should be aware of the threat of cyber-attacks and take precautionary steps to prevent them from occurring. If you are unsure about whether your company is taking reasonable steps, please reach out to our lawyers at Chamberlains Law Firm who can assist you to ensure that you are mitigating the risk of a cyber-attack.
*This article was prepared with the assistance of Grace Tully
Family provision and disputed will claims allow eligible individuals to seek a greater share of a deceased person’s estate where they believe they have not been adequately provided for. Although the core principles are similar across Australia, each jurisdiction has its own legislation, eligibility rules, time limits and court processes.
This consolidated overview outlines the key features of family provision claims in New South Wales, the Australian Capital Territory, Queensland and Western Australia.
| Jurisdiction | Governing Legislation | Time Limit to File | Key Eligible Persons |
| NSW | Succession Act 2006 (NSW) | 12 months from date of death | Spouses, de facto partners, children, dependants, close personal relationship |
| ACT | Family Provision Act 1969 (ACT) | 6 months from death/grant of probate | Spouses/de factos, children, dependants, close personal relationship |
| QLD | Succession Act 1981 (Qld) | Notice: 6 months; Claim: 9 months | Spouses/de factos, children, dependants |
| WA | Family Provision Act 1972 (WA) | 6 months from grant of probate | Spouses/de factos, children, dependants, certain maintained relatives |
In NSW, eligible persons may apply to the Supreme Court of NSW under the Succession Act 2006 (NSW) if a will (or intestacy) fails to make adequate provision for them.
The applicant must show that the will (or intestacy) did not adequately provide for their proper maintenance, education or advancement in life. Financial need and the applicant’s personal circumstances are central considerations.
Family provision in the ACT is governed by the Family Provision Act 1969 (ACT). Claims are made to the Supreme Court of the ACT.
The applicant must show that they did not receive adequate provision for their proper maintenance and support. Financial circumstances and the size of the estate are relevant.
In Queensland, claims are brought under section 41 of the Succession Act 1981 (Qld) to the Supreme Court of Queensland.
Similar to NSW and the ACT, the applicant must show inadequate provision for their maintenance, education and support.
Family provision claims in WA are governed by the Family Provision Act 1972 (WA).
Applicants must establish that they have not received adequate provision from the estate, considering their financial needs and the deceased’s obligations.
Regardless of jurisdiction, the best way to reduce the risk of family provision disputes is to:
Family provision claims play a crucial role in ensuring vulnerable beneficiaries receive fair treatment. Understanding eligibility, legal grounds, and procedural requirements helps executors, beneficiaries and families navigate these disputes more confidently.
For executors, omitted beneficiaries, or those facing potential estate disputes, obtaining advice from experienced Will Dispute Lawyers can be invaluable. The team at Chamberlains is available to guide you through every stage of a contested or disputed estate matter. We’re With You.
Competition is a natural part of operating a business. In Australia and across the globe, there are certain rules and regulations designed to promote open and effective competition. Understanding these rules is crucial to operating a business.
In Australia, anticompetitive behaviour refers to behaviours that have the effect of limiting or preventing competition, being predominantly regulated under the Competition and Consumer Act 2010 (‘the CCA’). The CCA acts to prevent businesses from acting anticompetitively in a way that has the purpose, effect, or likely effect of substantially lessening competition within a market.
A market is considered an area of close competition between firms in which there exists the potential for substitutability between products and supply sources in response to price incentives (Re Queensland Cooperative Milling Association Limited and Defiance Holdings Limited (1976) 8 ALR 481).
‘Substantially lessening competition’ refers to a circumstance where businesses engage in conduct which has the effect of substantially reducing or restricting competition within the market, with the meaning of ‘substantially’ to be determined relative to the size of the particular market.
Whether a business is taken to have substantially lessened competition will be based on several factors, including:
The following are several examples of anticompetitive, illegal behaviour under Australian law.
Cartel activity
It is illegal for businesses to collude to create a ‘cartel’ within a market, as opposed to competing with one another.
Cartel activity may involve:
Price maintenance
Price maintenance is generally seen where a supplier provides a retailer with a minimum resale price, this being illegal.
While suppliers may recommend retail prices, prices should ultimately be left to the retailer’s discretion. Suppliers are not able to withhold their goods if a retailer decides to sell below their recommended price.
As such, suppliers must refrain from the following:
Exclusive dealing
Exclusive dealing generally occurs where one party imposes restrictions on the choices or behaviours of another party, such as the purchase of goods conditional on conducting trade with a third party.
While exclusive dealing is often a legitimate aspect of business, it can become problematic where it has the effect of substantially lessening competition in the market.
Collective bargaining and boycotts
Collective bargaining occurs where competitors jointly negotiate with a supplier or customer over terms, conditions, and prices, collecting agreeing to refrain from acquiring or supplying goods or services.
A collective boycott refers to when competitors jointly refrain from conducting trade with another negotiating party and make the resumption of trade conditional on the party agreeing to their terms and conditions.
Predatory pricing
While businesses are generally able to make their own decisions relating to pricing, predatory pricing may occur where a business with substantial market power consistently offers lower prices than competitors as a means of substantially lessening competition within the market, seeking to:
Key Takeaways
Anticompetitive behaviour is bad for consumers, businesses, and the broader economy, resulting in inflated prices and diminishing competition. It is important to understand what anticompetitive behaviour constitutes, not only to recognise it in others, but to ensure you are not engaging in it yourself.
Section 106B of the FLA gives the Court the power to set aside or restrain transactions which avoid orders or anticipated orders of the Federal Circuit and Family Court of Australia (“FCCFOA”). This section aims to prevent family law litigants from engaging in transactions that attempt to disperse, hide, undervalue or alter the interests of their spouses or own assets before orders are made or are about to be made about a property settlement. This section ensures that the marital property pool remains intact and prevents transactions that could ultimately affect this pool to the detriment of one party’s interest.
How does s106B work?
Section 106B is a powerful provision which allows the FCCFOA to deal with creditors and third parties in relation to matrimonial assets. This provision attempts to cover the following subject materials being, bankruptcy, insolvency, orders charging money or property for costs, maintenance or payment into court and protection of bona fide purchasers. Please note that the subject materials listed are not exhaustive regarding the types of transactions protected under s106B. For example, when s106B is successfully applied in the context of a debt, the creditor may find itself either unsecured or only partly secured.
This provision gives the Court the ability to set aside or prevent the making of an instrument or disposition made or proposed to be made to defeat an existing or anticipated order which regardless of intention, is likely to defeat that Order. Austin J within Markham & Markham and Ors [2010] FamCA 460 explained that the provision relates “dispositions” which are individual transactions and that the subject disposition is liable to be set aside regardless of intent to defeat a court order, its disadvantageous effect may be enough for the Court to intervene. This disadvantageous effect arising from the disposition is to be assessed objectively not subjectively by the Court.
Types of transactions which may be characterised under s106B?
This provision deals with a broad range of transactions and is best explained through case law. For example, within the case of Ivanovic [1999] FamCA 2087 Lidenmayer J set aside an assignment by a husband who was seeking to assign the remainder of his interest in the matrimonial property to his brother during the course of proceedings. Noting that this order was made under the previous s85 of the FLA, which has since been replaced by s106B.
Another example is in the case of Heath [1984] FamCa 17 whereby the Court set aside a mortgage which was taken out against the matrimonial home by the Husband, which was in breach of his undertaking to the Court as this mortgage would defeat the claim of his wife.
Transactions which are not captured by s106B are transactions which would occur in the normal course of business. For example, within the case of Gelly (No. 2) [1992] FamCa 84 the Court did not set aside distributions made by the Husband to his two adult children from a family trust controlled by the Husband which occurred months before family law proceedings where commence. The Court determined that these distributions did not affect the anticipated orders of the Court as they were categorised as normal and prudent in the course of business and there was no evidence of bad faith by the trustee.
What are some important things to consider?
Family law property orders are made based on shared matrimonial asset pool and are awarded based on contributions to the relationship and future needs of the parties to a marriage among other things.
Section 106B aims to protect the interests of the parties in regards to matrimonial assets to prevent the disposal of assets or alternation of interests in anticipation of orders. Therefore, if you are considering employing any disposition instrument with respect to any part of the matrimonial during family law proceedings seriously consider the effect of the instrument, as section 106B can apply irrespective of any intent or bad faith by a party.
Summing up
Section 106B aims to prevent parties from hiding, undervaluing, or altering assets before orders are made, thereby safeguarding the marital property pool and ensuring fairness. It applies objectively, regardless of intent, allowing the court to intervene if a transaction adversely affects the property settlement.
*This article was prepare with the assistance of Zoey Hayes