Property

When can I seek a property settlement?

There is no ‘waiting time’ for commencing proceedings for property settlement or for entering into an agreement dividing the property of the relationship between partners. Accordingly, a couple does not have to have been divorced or even separated before sorting their property issues out. However, you must commence property proceedings within one year of obtaining a divorce order.

How the Court divides property

• The Court follows a four-step process in resolving property disputes. These steps are as follows:
• the Court firstly identifies and values the net property (including superannuation) of the parties (in other words, all property of the parties after debts have been taken into account);
• the Court then considers the contributions that each party has made to that property;
• the Court next examines the parties’ present and future needs; and
• finally, the Court is only permitted to make an order that is just and equitable in all the circumstances.

Contributions

In examining contributions, the Court looks at three things:

• the direct and indirect financial contributions the parties have made to the acquisition, conservation or improvement of the property;

• the direct and indirect non-financial contributions the parties have made to the acquisition, conservation or improvement of the property; and
• the contributions made to the welfare of the family, including in the capacity of homemaker or parent.

Present and future needs

As well as contributions, the Court looks at a whole range of factors set out in s 75(2) of the Family Law Act that focus on the parties’ present and future needs. Issues such as health, carer responsibilities, relative earning capacity and so on are relevant here.  Some of the more significant s 75(2) factors are as follows:

• the age and state of health of each of the parties;
• the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
• whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
• the responsibilities of either party to support themselves and anyone else, including children;
• the eligibility of either party for a pension, allowance or benefit;where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
• the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
• the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant;
• the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
• the duration of the relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
• the need to protect a party who wishes to continue that party's role as a parent;
• if either party is cohabiting with another person - the financial circumstances relating to the cohabitation;
• any child support that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage;
• any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.

Disclosure

There are stringent rules that apply to the disclosure of parties’ financial affairs, and which generally require that parties make full and frank disclosure of all of their financial interests before proceedings are commenced. The Court expects that parties will seriously embark on this process of sharing complete and accurate financial information at an early stage. If the Court believes that a party to family law proceedings has concealed assets or income, the Court can impose harsh penalties, including making orders that give the lion’s share of the property that the Court knows about to the other party.

Spousal Maintenance

Sometimes one of the parties to a relationship needs assistance with living and other expenses after separation. The Family Law Act provides for the payment of spousal maintenance in circumstances where one party has the required level of need and the other party has sufficient means to pay. The availability of spousal maintenance is in addition to the availability of child support payments, so it is possible that a party with sufficient means may be required to pay both child support and spousal maintenance to their former partner. 

Spousal maintenance orders tend to be relatively short term, and are often focussed on assisting the recipient to retrain so that they can re-enter the workforce.

Urgency

Just as the Court has powers to deal with urgent issues around children, it also has extensive powers to make urgent orders in relation to property, particularly where there is a risk that property of the relationship might be sold, concealed or dissipated. These powers include:

• the power to stop a party from disposing or otherwise dealing with property;
• the power to compel one party to continue to make mortgage payments;
• the power to compel the sale of a property (for example, if one party will not cooperate with a sale, but also refuses to pay the mortgage, thus placing the parties at risk of a mortgagee repossession);
• the power to exclude one party from the home, particularly where there is a risk of family violence;
• the power to compel one party to pay urgent spousal maintenance to the other.

Quite apart from these Court-based remedies, it is also possible for a party who is concerned that real estate might be disposed of to lodge a caveat preventing the sale of the property. Because caveats do not have the status of Court orders, the person lodging a caveat can be compelled to remove it by an administrative process allowed for by the Department of Lands. Nevertheless, a caveat can provide some useful breathing space while you consider whether or not to seek the assistance of the Court.