VIC Debts re Consent Orders for Financial Settlement

[GlassHalfFull]

Will try to keep this brief, but in summary, I am negotiating with my ex's solicitor about what should be included in the application for consent orders. I have a debt of about $60-70k to my solicitor for parenting matters, whereas my understanding is that my ex has paid off her solicitor in full already.

If I include my debt, my net assets effectively are negative and I owe more than I own. This obviously affects how my financial situation is viewed in the application, particularly given the agreement in principle that I've reached with my ex about the financial separation which is quite generous toward her (we each keep our own super entitlements, even though she has far more super than I do). Her solicitor has said that if I insist on including my legal debt outstanding in parenting matters, they will include the legal debt that my ex has incurred but already paid in full.

Is this fair or commonplace? I can see both sides to this. If you used money to purchase say a car, you would still be left with an asset that has a value. However, if you used money to pay for legal assistance, you have no asset to show for it but you've nonetheless received a benefit from it. On the other hand, a debt is a debt, and my debt reflects the reality of my current financial situation, whereas she does not have a debt because she has a higher income than me and has been able to pay it off.

So effectively, while we may have in theory have paid a similar amount for our legal assistance for the parenting matter (it's unclear but I suspect my solicitor did a lot more work, given I was the applicant and all progress in parenting matters was like quicksand where my ex resisted at every stage until the last moment), the reality is that I have a debt and she doesn't. Should expenses incurred and paid for count towards the settlement? In that case, surely the differential in incomes should be factored in too? I would estimate that in the almost 4 years since we separated, she has earned $250k more than I have.

 

[Atticus]

The default position regarding legal costs in family law is that each party covers their own costs.

(1) Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.

SOURCE >>> FAMILY LAW ACT 1975 - SECT 117 Costs

Her solicitor has said that if I insist on including my legal debt outstanding in parenting matters, they will include the legal debt that my ex has incurred but already paid in full.

I can see your point that you have a debt & that debt will affect you moving forward whereas she has no debt ... Unfortunately, legal fees incurred by each party are not considered a debt that should be shared equally (unless agreed of course) Whether they are paid or not is not relevant.

If it were to go to a contested hearing, a judge may take that debt into account & how it will affect you moving forward ... They may not too.

Great system isn't it ... Lawyers love it. A win win whatever happens .... Sucks balls

Unless her including her legal bill along with yours means you are in a better potion then if neither parties legal costs are included, then maybe time to just Cut your losses & be done with it. Easy for me to say!

 

[GlassHalfFull]

The default position regarding legal costs in family law is that each party covers their own costs.

(1) Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.

SOURCE >>> FAMILY LAW ACT 1975 - SECT 117 Costs


I can see your point that you have a debt & that debt will affect you moving forward whereas she has no debt ... Unfortunately, legal fees incurred by each party are not considered a debt that should be shared equally (unless agreed of course) Whether they are paid or not is not relevant.

Yeah, that's right. And that's why I wonder if the income we're accrued since separation should be considered, since 'disposable income' that they have saved (or spent) since separation should really be considered an asset that they have acquired. If it were in the accumulated in the form of a physical asset like a car, it could and probably would be split, whereas it seems if you just spend money on frivolous things (or lease a car where it's something you pay to use but never an asset that would appear on an balance sheet?) then it seems there's no way to account for it?

Or are disposable incomes and the differential of this between the two parties over the period between separation and settlement considered? It's hard to know where the dividing line is between what you can claim and what is off-limits. But really, if financial settlements are considered not from the time of separation but at the date of the orders, then surely income accumulated beyond 'reasonable living costs' should be considered, even if it's been spent?

 

[Atticus]

All reasonable questions, & I'm sure you could find a lawyer who is willing to argue the point with a colleague in front of a judge .... with more of YOUR money.

Unless her including her legal bill along with yours means you are in a better potion then if neither parties legal costs are included, then maybe time to just Cut your losses & be done with it.

After $60-70K in legals & years dealing with a person who enjoys your agony, this is how I would be looking at it I think. Like I said, easy for me to say

 

[GlassHalfFull]

If there's a legal argument to be made at all, either in court or in negotiations, I'm prepared to self-represent... The way I see it, I should be entitled at least to what I've already informally agreed to with their side, but realistically I am probably entitled to a lot more the more that is factored in. For example, income differentials, superannuation differentials, and the fact that they have declared the chattels to be of 'nominal' value when likely they have a combined 'fire sale' value of in excess of $10-15k, and she has kept almost all of it by taking out an IVO on me the moment we separated. So although I've spent a lot to get to where I wanted to be for parenting matters, I feel like I have very little to lose with regard to self-representing in property negotiations. If anything, I suspect her lawyer may advise her to concede a little in order to avoid incurring further costs, so the power dynamic shifts a little in my favour for once I think.

And yes, there's the 'cut your losses' argument and it's a fair one, but I just don't like the idea of her getting away with twisting the truth to convince a judge by making it look like the orders by consent is more fair than it really is. I suspect her solicitor is deliberately playing all kinds of games with the balance sheet so that it looks acceptable and less likely to be questioned/scrutinised by a judge. The proposed property split in the draft application, even without the lies and twisted truths and superannuation factored in, is about 90%/10% in her favour.