The breakdown of a marriage or a relationship is stressful and fraught with emotion. Unfortunately, parties then need to turn their minds to resolving property and children’s matters. Litigation in the Family Court is a costly, time consuming and stressful experience. It is advisable (and in some cases mandatory) that parties attempt to settle their affairs outside of court.

It can be difficult for parties to take control of their affairs and to settle matters without legal advice. This is particularly so if parties do not know what their property entitlements are likely to be, or what “the norm” is in relation to contact with children of the relationship.

PRE-ACTION PROCEDURES

Prior to commencing proceedings in the Family Court, the parties must employ “primary dispute resolution methods” in an attempt to resolve their dispute. Primary dispute resolution methods include: “negotiation, conciliation, mediation arbitration and counselling”. The pre-action procedures are compulsory unless you can show:

1. For a parenting case – that there are allegations of child abuse or family violence;

2. For a property case- the case involves allegations of family violence or fraud;

3. The application is urgent;

4. You would be unduly prejudiced;

5. There has been a prior application to the court within 12 months of the commencement of the case.

PROPERTY MATTERS

The Family Court adopts the following procedure when making an order for an adjustment of property interests of the parties:

1. Identification and valuation of assets

The court will firstly determine what the parties own at the time of the hearing. The court may however take into account notional property where, for example, a party has disposed of property prior to the hearing.

All of the property owned by both parties will be taken into account. This means that property acquired before the marriage, during the marriage and after separation will all be regarded as forming part of the “pool of assets” (regardless of whose name the property is in).

After identifying the parties’ assets, a value must be attributed to those assets. It is then necessary to deduct an amount equal to any encumbrances on the property. For example a mortgage would be deducted from the market value of a property to determine the net value of the asset.

If the parties cannot agree upon the value of an asset, a valuation must be obtained. The Family Law Rules provide that the parties may only submit one joint expert report in respect of a particular asset. This means that the parties must agree upon a valuer and if they cannot do so, the court can nominate a valuer. The costs of any valuation are usually shared equally by the parties.

If the court is unable to attach a value to any particular asset, the asset will be sold.

In making an order, the court will have regard to the competing claims and relevant considerations broadly. The court will not undertake “a precise mathematical exercise”. It is not possible for the court to do so in any event as many of the matters that are taken into consideration when property interests are being determined cannot be quantified.

2. Contributions by each party

The second stage of the procedure is for the court to consider the contributions made by each party over the duration of the marriage. The relevant matters to be considered are as follows:

1. The assets held by each party together with the value at the commencement of the relationship;
2. Any gifts, inheritances, windfalls and lump sum payments during the period of marriage or since separation;
3. Financial contributions made by each of the parties;
4. Non-financial contributions made by the parties to the acquisition, conservation and improvement of the assets including contributions made by or on behalf of a party to the marriage;
5. The contributions made by a party to the marriage to the welfare of the family including in the capacity of homemaker or parent.

3. Consider any adjustments to be made

The third stage is to consider whether any adjustments should be made for the future needs of the parties under s79(4) or s75(2) of the Family Law Act.

4. Consider whether the orders proposed are “just and equitable”

There is a legislative requirement that a court not make an adjustment under s79 unless it is satisfied that it is just and equitable to do so.

The court will firstly have regard to all matters in section 79(4) such as the age and state of health of the parties and then consider whether it is just and equitable to make an order.

Consent Orders

If the parties are able to reach an agreement in relation to the distribution of their assets, they may:

1. See a solicitor to draft Consent Orders on their behalf. Those consent orders would then be sent to the other party for their consideration. There would normally be some negotiation by the parties in respect of the substance or the precise terms of the agreement. Once an agreement is reached, each party would sign the consent orders and these would then be filed with the Family Court. Consent orders are binding upon both parties. Consent orders are enforceable and there are penalties for breaching them.

2. Download an Application for Consent Orders Kit from the Family Court website and complete the necessary forms once the parties reach an agreement.

3. Have a solicitor draft a Binding Financial Agreement.

Commencing Proceedings in the Family Court

Unfortunately, if it appears that the parties are unable to reach a settlement following negotiations, it may be appropriate to commence proceedings in the Family Court. This can be done by filing an Application for Final Orders. It can take 1-2 years for a matter to reach a final hearing in the Family Court.

If there are urgent matters that cannot be resolved by the parties an Application in a Case (a type of interim application) can be filed. As previously mentioned it can take up to two years for a matter to reach a final hearing in the Family Court (a final hearing is when everything is resolved once and for all). There are some issues that clearly cannot wait for 1-2 years to be resolved and therefore the court has the power to make interim orders after a short hearing. The interim orders will apply until the final hearing.

Examples of interim property applications include the following:

a) An application that one party continue to pay the mortgage on a property;
b) An application for maintenance;
c) An application for the sale of the former matrimonial home;
d) An application for the sale of an asset or payment of a liability;
e) An application for exclusive occupation of the former matrimonial home.

Author Bio: Elizabeth Lane has many years experience working with the Family Lawyers Wollongong Prime Lawyers Wollongong.

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