If you were in a marriage or de-facto relationship that has ended, it is important that you seek advice as to your rights to ensure that the assets and liabilities concerned are divided in an appropriate matter. This is known as a property settlement. The Family Law Act enables the courts to make orders to adjust property interests when it is just and equitable to do so.
When should a person seek advice in relation to a property matter?
The court has certain time limits for filing applications in the event parties cannot agree on how to divide their property. For this reason it is important to seek advice soon after the ending of your relationship.
If you are or were married, you must commence any court proceedings for a property settlement within 12 months from the date of your divorce. It is possible to commence court proceedings outside of this time limit, however you would need permission from the court to do so.
If you were in a de facto relationship, you have two years from the date of final separation to commence court proceedings. Again, it is possible to commence proceedings outside of this time limit, but only with permission from the court.
We encourage people to seek advice early on so that you may attempt to negotiate a resolution as soon as possible. In the event the parties cannot agree on the outcome, you will still have enough time to prepare an application to be filed at court within the relevant time limits.
If you wish to make an application and are outside of the time limits, Hosking Legal can provide you with advice regarding the merits of seeking the court’s permission to bring a late application.
Why attempt to settle the matter without going to court?
In family law, there are certain pre-action procedures that must be complied with before filing an application for property and financial orders. These pre-action procedures are designed to encourage the early resolution of matters.
Whether your matter is filed in the Family Court, or more usually the Federal Circuit Court, we encourage parties to attempt to settle the matter before commencing court proceedings. There are advantages to alternative dispute resolution which include:
- You have more control over the outcome instead of having orders imposed on you by a Judge
- Parties have more opportunity to have their ‘say’ about things that might not be admissible in court proceedings
- You can ask for a confidentiality form in private mediation so that open discussion can take place without fear of it being ‘used against you’ later in court proceedings
- A substantial saving in legal fees
- You risk a costs order being made against you if you file without first attempting to resolve the matter by agreement.
What happens if you agree?
If there is an agreement on how assets and liabilities should be divided, then that agreement can be formalised in writing. In many cases the agreement can be written in the form of court orders which can be filed with the court by consent. Property orders made under the Family Law Act will provide for certain exemptions from stamp duties on property transfers that would otherwise be payable.
What happens if you can’t agree?
If parties cannot agree on how to divide their property and liabilities, then you may file an application at court for property orders.
During court proceedings, parties are required to file an application containing the orders they seek, a financial statement setting out their financial position and an affidavit with information about the contributions they made during the relationship and their future needs. Each party is also required to provide documents to the other party that show their financial position.
How does the court determine a property matter?
The parties must identify and value all the property, assets, liabilities, financial resources and superannuation held by them. The court must have a full and complete account of each party’s financial position.
The court looks at whether any adjustment of property interests should be made based on past contributions. In making this assessment, the court will consider the following factors:
- Direct financial contributions made by each party (at the commencement of the relationship and during it)
- Financial contributions made on behalf of each party
- Non-financial contributions made by each party
- Contribution of the parties as a homemaker and parent
- The effect that any orders will have on the earning capacity of each party
- Any other court orders that are in place
- Whether a party is paying or receiving child support
The court then looks at whether any adjustment of property interests should be made based on the future needs of the parties. In making this determination, the court will consider many factors including the following:
- The age and state of health of each of the parties
- The income, property and financial resources of each party
- The ability of each party to find employment
- Whether one party has the care of children under 18 years of age
- The ability of each party to support themselves
- The responsibility of a party to support another person
- Whether a party is eligible for a pension, benefit or allowance
- The standard of living that is reasonable
- Whether or not the payment of maintenance will allow one party to undertake training so that they may find adequate employment
- The duration of the relationship and the effect that has had on a person’s earning capacity
The court stands back and looks at what orders would be ‘just and equitable’ in all the circumstances. A court cannot make an order if it is not just and equitable.
What kinds of orders can a court make?
The court can make many different types of orders including the following:
Real estate, other assets and liabilities
The court can order that real estate be transferred from one person to another, or sold. The court can order that other assets, such as motor vehicles, be transferred from one person to another. The court can also order that parties are responsible for various debts and liabilities. For example, the court can order that a person be responsible for repayments on a credit card.
The court can make orders in relation to superannuation. There are two types of possible orders; a splitting order and a flagging order.
A splitting order means that a superannuation interest will be split between the member spouse (holder of the superannuation before orders are made) and the non-member spouse. The non-member spouse receives a superannuation interest which they can leave with the same superannuation fund, or transfer into another superannuation fund of their choosing. The money remains in the fund until it becomes payable, such as when you reach retirement age.
A flagging order places a ‘flag’ on the superannuation fund. A payment cannot be made from the fund until the flag is lifted. This enables the split of the funds to be determined at a later date.
The court can order a person to pay maintenance for the support of a spouse or a child under the age of 18 years. This maintenance payment can be in the form of a lump sum payment, or periodic payments. A court can also order that an adjustment of property interests be made by way of maintenance.
Maintenance orders are designed to adjust for any disparity in earning capacity between the parties and to ensure that the needs of both parties, and any children, are adequately met.
Urgent and interim orders
Property and maintenance orders are usually made on a final basis when the court determines the final distribution of property. However it is possible for the court to make certain urgent and interim orders if it is proper to do so. For example, a court may order that a person has a right to occupy a home, that a certain asset be sold and the proceeds divided a certain way, or restrain a person from dealing with certain property until the court makes final orders.
Speak to one of our family law solicitors today
At Hosking Legal, we offer advice and representation in relation to all aspects of property disputes in Wollongong following the breakdown of a relationship. We provide realistic advice and will keep you informed of estimated costs along the way. If you would like advice about obtaining property and financial orders, feel free to contact our office in Wollongong and arrange to speak with one of our family law solicitors.