Pre-action Procedure for Financial Cases

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Pre-action Procedure for Financial Cases
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Pre-action Procedure- Financial Cases

• Rule 1.05(1)- each prospective party to the case
  must comply with the pre-action procedures.
• Schedule 1 part 1 of the Family Law Rules 2004
  (FLR)- provides for the pre-action procedures
  in respect of financial cases.

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Objectives of pre-action procedure

• Under Sch.1, Pt. 1 cl.1(5) FLR
• To encourage early and full disclosure.
• To help people resolve their differences and to
  avoid legal action.
• To help parties identify the real issues in
  dispute.
• To seek only those orders that are realistic and
  reasonable on the evidence.
• It aims to avoid the need to start a court case
  and reduce the time and cost of the case.

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Obligations of each party

• Under Sch.1, pt.1 cl.1(1) FLR
• General Obligations- each prospective party is
  required to make a genuine effort to resolve the
  dispute by
• participating in dispute resolution
• If dispute resolution is unsuccessful, write to
  the other parties, setting out their claim and
  exploring options for settlement
• Comply, as far as practicable, with the duty of
  disclosure.

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Obligations of each party

• Under Sch.1, Pt.1 cl.1(6) FLR
• Each party must
• negotiate subject to the need to protect the
  interests of the child
• explore options for settlement, identify the
  issues and seek resolution of them
• avoid protracted, unnecessary, hostile and
  inflammatory exchanges
• seek only those orders that are reasonably
  achievable on the evidence
• control costs
• make full and frank disclosure of all material
  facts

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Obligations of each party

• Under Sch.1, Pt.1 cl.1(7) FLR
• Parties must not
• use pre-action procedures for an improper purpose
  (to harass the other party or to cause
  unnecessary cost or delay)
• raise irrelevant issues or issues that may cause
  the other party to adopt an entrenched, polarised
  or hostile position

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Lawyers Obligations

• Under sch.1 pt.1 cl.6 FLR
• Lawyers must as early as practicable
• advise clients ways to resolve the dispute
  instead of legal action
• advise clients of their duty to make full and
  frank disclosure
• notify the client if it is in the clients best
  interests to accept a compromise or settlement
  and whether the settlement is reasonable
• advise clients of the estimated costs of legal
  action
• actively discourage clients from seeking orders
  that is not reasonably achievable

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Conflict of Clients interests and Lawyers

• If there is Conflict between
• the duty as a officer of court of not misleading
  the court and,
• The overriding duty to his or her client
• lawyer has an obligation to take the appropriate
  action, that is, to cease to act for the client.

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Exemption from pre-action procedures

• under sch1,pt.1 cl.1(4), cases exempted from
  following pre-action procedures include cases
• Involving urgency
• involving allegations of family violence or
  fraud
• where one person refuses to negotiate
• where a person would be unduly prejudiced or
  adversely affected if another person became aware
  of the intention to start a case

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The pre-action procedure step-by-step

• Under sch.1 pt.1 cl.3 As suggested by the
  Before you file pre-action procedure for
  financial cases of FC, there are five steps.
• STEP 1 Invite the other parties to participate in
  dispute resolution
• Give a copy of the pre-action procedures to the
  other prospective parties to the case
• make inquires of dispute resolution services
  available and invite the other parties to
  participate in dispute resolution.

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The pre-action procedure step-by-step

• STEP 2 Agree on a dispute resolution service and
  attend the service
• agree on an appropriate dispute resolution
  service, and
• make a genuine effort to resolve the dispute by
  participating in dispute resolution.
• If an agreement is reached- enter into a
  financial agreement or apply to court for consent
  orders.

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The pre-action procedure step-by-step

• STEP 3 Written notice of issues and future
  intentions
• If no dispute resolution service is available or
  a person refuses or fails to participate, or
  agreement is not reached through dispute
  resolution
• a person must give the other person/s written
  notice of the intention to start a court case
  setting out
• the issues in dispute
• the orders to be sought
• a genuine offer to resolve the issues, and
• a nominated time (at least 14 days after the
  date of the letter) within which the other person
  must reply.

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The pre-action procedure step-by-step

• STEP 4 Replying to the notice of claim
• After receiving the notice of claim, the other
  party must reply in writing stating whether the
  offer is accepted
• If agreement is reached- enter a financial
  agreement or file an application of consent order
• If the offer is not accepted, set out in a
  letter
• the issues in dispute
• the orders you will seek if a case is started
• a genuine counter offer to resolve the issues,
  and
• a nominated time (at least 14 days after the date
  of the letter) within which the claimant must
  reply.

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The pre-action procedure step-by-step

• STEP 5 Taking other action
• Where an agreement is not reached after
  reasonable attempts to resolve it by
  correspondence, or
• the proposed respondent does not respond to a
  notice of intention to start a case
• a party may start a case and file an application
  in court

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Disclosure and exchange of correspondence

• Under sch.1 pt.1 cl.4
• Parties have a duty to make timely, full and
  frank disclosure of all information relevant to
  the issues in dispute.
• In summary, documents may include
• a schedule of assets, income and liabilities
• a list of documents in the partys possession or
  control that are relevant to the dispute, and
• a copy of any document required by the other
  party, identified by reference to the list of
  documents.

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Disclosure and exchange of correspondence

• In a maintenance case, document includes
• the partys taxation return (most recent
  financial year)
• the partys bank records (previous 12 months)
• the partys three most recent pay slips (salary
  or wages payment)
• any other document relevant to determining the
  income, expenses, assets, liabilities and
  financial resources of the party.
• In a property settlement case, document includes
• the partys three most recent taxation returns
• documents about any relevant superannuation
  interest

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Disclosure and exchange of correspondence

• For a corporation (business), trust or
  partnership where the party has a duty of
  disclosure, the document includes
• financial statements for the three last
  financial years
• Business Activity Statements for the previous 12
  months
• For corporation, most recent annual return,
  constitution
• For any trust, the trust deed
• For any partnership, the partnership agreement

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Disclosure and exchange of correspondence

• Third-party disclosure
• To provide written authority authorising a third
  party (for example, an accountant) to provide a
  copy of the document to the other party.
• Inspection
• Parties should agree to a reasonable place and
  time for the documents to be inspected and
  copied.
• Undertaking
• The documents will be used for the specific
  purposes of the case only.

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Expert witnesses

• Under sch.1 pt.1 cl.5
• Parties may require information be obtained from
  an expert witness, provided that
• an expert must be instructed in writing and must
  be fully informed of his or her obligations
• information obtained must relate to an issue in
  dispute
• agreement to obtain information from a single
  expert
• Exchange of reports if separate experts report
  are relied on at a hearing.

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Non- Compliance

• Under sch.1 pt.1 cl.1(2) 1(3)
• All parties are expected to have followed these
  pre-action procedures before filing an
  application to start a case, otherwise
• serious consequences, including costs penalties
  may result
• Under sch.1 pt.1 cl.2
• If there is Non-compliance with the pre-action
  procedures
• The court may take into account non-compliance
  when making orders about case management and
  considering orders for costs.
• Unreasonable non-compliance- pay all or part of
  the costs of the other party or parties in the
  case.
• The court may ensure that the complying party is
  in no worse a position as if the pre-action
  procedures had been complied with.
• Examples of non-compliance with pre-action
  procedures includes
• not providing sufficient information,
• not following a procedure required by the
  pre-action procedures etc.

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Reference

• This slide has been prepared in accordance with
  the brochure Before you file pre-action
  procedure for financial cases of Family Court of
  Australia and Family Law Rules 2004 and for
  studying purposes only. Please refer to the
  sources for detailed.