GUARANTEES: Security for lenders

Published by Law Society of New South Wales

In a recent case, the court of appeal considered a case where a mortgage was varied, lengthening the term, increasing the principal and raising the interest rate, after the guarantors had resigned as directors of the company which had taken out the mortgage. The lender, who suffered a shortfall on the sale of the security, sought to recover from the guarantors.

The court concluded that the variations altered the nature of the guarantors’ obligations. By reason of the increase, the guarantors would have been exposed to a potentially greater risk of being called upon to meet a default by the company of its obligations under the mortgage, “even if their liability was limited to the original sum lent to the  company ($240,000) plus interest”.

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CLASS ACTIONS: Things to know

Published by Law Society of New South Wales

In the current economic climate it is not surprising that investor class actions are receiving increased attention.

There is some suspicion and confusion about class actions. Some people have an enduring belief that they must be taking on an unacceptable level of risk if they get involved. Equally, some may just have an aversion to continuing in a claim commenced without their express consent, despite the fact that it could benefit them financially to do so.

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DE FACTO RELATIONSHIPS: Am I entitled to a property settlement?

Published by Law Society of New South Wales

If you were in a de facto relationship which has broken down since 1 March 2009, you can make a claim for a property adjustment under the Family Law Act. However, you usually need to show that you have lived together for at least two years.

If your relationship has lasted less than two years, you may claim if there is a child of the relationship; or you are caring for a child of the other party, and the failure to make an order would result in serious injustice to you; or you made substantial contributions (financial or personal) for which you will not receive adequate compensation if the court does not make a property order, and the failure to make an order would result in serious injustice to you.

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Law Reform: Less Australia/New Zealand legal divide

Published by Law Society of New South Wales

The Australian and New Zealand governments have signed an agreement to make it easier to enforce certain judgments and sanctions between the two countries. It is also intended to streamline the process for resolving civil proceedings that cross the Tasman.

The direct result of this reform will be that parties in Australia or New Zealand with decisions not involving money that are captured by the trans-Tasman law reform will have more options for enforcement and a higher likelihood of success in enforcing when the defendant is in the other country or has property there.

The majority of civil proceedings will be able to be served in the other country without separately seeking permission from a local court, excluding such civil proceedings as dissolution of marriage, enforcement of maintenance obligations and enforcement of child support.

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I do not want to be covered by the new property settlement laws relating to de facto and same sex couples- what can I do?

It is possible for a couple living in de facto relationship to make it clear that they do not want the recent changes to the laws to apply to their relationship.

Couples can make an agreement about how they will distribute their property and maintain each other if their relationship breaks down at some future time. The agreements are called binding financial agreements and can only be entered into after both parties have obtained independent legal advice.

The agreements must be in writing and there must be a certificate from each of the solicitors who provided the advice confirming they explained the law and the advantages and disadvantages of the agreement to the party.

Binding financial agreements can be made before entering into a relationship or during a relationship.

If you have a problem and require the assistance of an experienced and caring family and relationship lawyer, Mullane & Lindsay’s family Law team of Mark Sullivan, Vivien Carty, Ashleigh John and Kristy Davis at can assist you.

Property Settlement: What is a de facto relationship?

A de facto relationship is a relationship that two people who are not married or related by family have as a couple living together on a ‘genuine domestic basis’. It can exist between 2 people of the opposite sex, or between 2 people of the same sex.

All the circumstances of the relationship will determine whether a couple have a de facto relationship.

These include:

• the duration of their relationship 
• the nature and extent of their common residence 
• whether a sexual relationship exists 
• the degree of financial dependence or interdependence, and any arrangements for financial support, between them 
• the ownership, use and acquisition of their property 
• their degree of mutual commitment to a shared life 
• whether the relationship has been registered, in a State or Territory with laws for the registration of relationships 
• the care and support of children, and 
• the reputation and public aspects of their relationship.

If you have a problem and require the assistance of an experienced Newcastle Family Lawyer’s, Mullane & Lindsay’s family Law team of Mark Sullivan, Vivien Carty, Ashleigh John and Kristy Davis at can assist you.

New Judge for Family Court in Newcastle

On 13 July 2009, Justice Stewart Austin was sworn in as a Family Court Judge, resident in Newcastle. He replaced Justice Graham Mullane who retired in 2008. The Honourable Graham Mullane is now a consultant with our firm.

Mullane & Lindsay’s Family Law Partner Mark Sullivan had the privilege of appearing before the Chief Justice of the Family Court and Justice Austin on behalf of the 2,400 + Members of the National Family Law Section of the Law Council of Australia to welcome Justice Stewart Austin to the Bench of the Family Court.

In his address Mark said it was a credit both to Justice Austin and to the Attorney General that his appointment has been so warmly received by the legal profession and is regarded widely as a quality choice.

“Today is a day for optimism, for His Honour and for all those associated with the Family Court in Newcastle…We applaud the Family Court and the Attorney General’s commitment of judicial resources to the Newcastle Registry and the timely baton change. We look forward to His Honour hitting the ground and running. We wish His Honour every success in his new role.”

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Making the process easier for adoption

The process for adopting children has become a little less onerous under recent amendments to the Adoption Act in New South Wales.

The length of time a child has to live with adoptive parents before an application for adoption can be made has been reduced.

The length of time a child has to live with a step parent has decreased from three years to two years, and the time a child has to live with a relative has decreased from five years to two years.

The legislation has also made amendments in favour of couples wishing to adopt children, who now need only to have lived together as a couple for a continuous period of two years, as opposed to the previous requirement of three years.

Adoptive parents still need to comply with age and jurisdictional requirements under the Adoption Act, before an Application can be made to adopt a child.

Ashleigh John is a member of Mullane & Lindsay’s Family and Relationship Law team.

If you require any further information regarding adoption or any other family and relationship law matter, please contact Ashleigh or any of the Mullane Lindsay Family Law team, Mark Sullivan, Vivien Carty or Kristy Davis. Kristy Davis is present at our Tea Gardens office on Wednesday afternoons by appointment. (Tel: 4928 7300).

The Duty of Banks to Protect Borrowers

It is not widely understood that although banks and other lenders are entitled to advance their own commercial interests in making loans; they also have obligations to borrowers which, if breached, might result in a loan agreement being declared void.

A recent NSW Supreme Court case of Satchithanantham illustrates one aspect of the duty owed to borrowers.

The case was factually complex but, in essence, the borrower, Mrs S, was prevailed upon by her (bankrupt) husband to take out a loan, secured by mortgage on the family home. The Court held that when the loan application was signed, the bank officer involved did not make adequate enquiry about the stated purpose of the loan or as to Mrs S’s capacity to repay the loan.

As it happened, the Court also held that Mrs S had been deceived (by her husband) into believing the loan was an ‘ordinary’ home loan for a specific amount - in fact it was a line of credit for a substantially greater amount and which could be cancelled at any time whether or not repayments were in default.

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Name calling can hurt…the hip pocket!

Calling a grandfather a “paedophile” within the hearing of four (4) people, in the context of a Family Law dispute over arrangements for a small child, has cost the child’s grandmother $30,000.00 in damages plus interest and Court costs in a decision of the NSW District Court handed down in October 2008.

The maternal grandmother of a 2 year old boy was ordered to pay the money to the paternal grandfather after the Court found that telling the boy’s paternal Aunt, within the hearing of the boy’s father, the father’s girlfriend and also a work colleague of the Aunt, that “You know your Dad’s a paedophile - a complete stranger came up to me in the street and told me” was defamatory of the paternal grandfather, and not merely “vulgar abuse”.

The Judge said that the allegation that the paternal grandfather is a paedophile “is at the top of the range in terms of seriousness in relation to defamatory meaning”. The Judge said that in the context of a family dispute about the arrangements for the child “an allegation of paedophilia about any member of the family was highly inflammatory and likely to cause ordinary right thinking members of the community to think less of such a person”.

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