When a married couple or a de facto couple separates, an application may be made to a court for property orders. These are orders adjusting the distribution of assets between the two parties in a way that is fair and equitable. An application for property orders must be made within one year of the date of divorce or within two years of the date of separation. This page deals with property settlements in Australia.
Property orders are governed by the Family Law Act 1975 and the Family Court Act 1997 (WA).
In Western Australia, property matters are determined by the Family Court of Western Australia. In the rest of Australia, they are determined by the Federal Circuit and Family Court of Australia.
For a couple to be eligible to apply for property orders, they must fulfil criteria set out in the legislation.
The five-step test
When a court determines the appropriate property orders to make in a property settlement matter, it applies a five-step test. This test is used to assess how much each party has contributed to the relationship, what their needs are, and what distribution would be fair.
The five steps are as follows:
- Identify the assets for division. This includes assets held by each party individually and assets held jointly.
- Assess what would be a just and equitable outcome. This involves assessing whether it would be fair for each party to walk away with what they have in their possession. If it would, there is no need to proceed any further.
- Identify and assess the contributions each party has made to the relationship. This includes financial contributions such as income and inheritance and non-financial contributions such as childrearing, housework and emotional support.
- Assess the future needs of each party. This step includes assessing each party’s health, their financial resources as commitments (such as carer’s responsibilities).
- Review whether the proposed division is just and equitable. Here the court will assess whether any further amendments are required. The settlement should be a ‘clean break’, ending the financial ties between the parties.
Applying for a property settlement
Before a former couple can apply to a court for a property settlement, they must make full financial disclosure to each other and make reasonable attempts to resolve the matter. If the matter cannot be resolved without intervention of the court, an application can be made.
The application can be completed by the party themselves or by their lawyer. However, if a party decides to represent themselves, they should always obtain legal advice before filing an application.
When initiating property proceedings, the following documents should be filed:
- An initiating application
- A financial statement
- An affidavit
- A superannuation Information Request Form & Declaration (if applicable)
The original documents as well as two copies must be filed, and the prescribed filing fee must be paid.
This document sets out the orders that the party is asking the court to make and the details of the parties and the relationship. It may set out interim orders as well as final orders. Interim orders are orders that relate to immediate matters such as obtaining valuations, paying any outstanding joint expenses, paying spousal maintenance or an interim property settlement.
This document sets out the party’s income, expenses, assets (including superannuation) and liabilities.
This document sets out the evidence in support of the orders that the party is seeking. The applicant should ensure that all of the matters that the court is likely to consider are addressed in this document.
Superannuation Information Request Form & Declaration
This document is filed if the applicant is seeking a superannuation splitting/ flagging order or if further information is needed.
Court process for property settlements
After a party has filed an application, the matter will be listed for a case assessment conference before a registrar who will help the parties to attempt to reach an agreement. The parties are required to exchange financial documents at least two days before the case assessment conference.
If the parties are represented, their lawyers will be involved in the conference.
If an agreement is reached, the registrar will make legally binding orders. If no agreement is reached, the registrar will:
- Determine the main areas of disagreement and the facts that are not in dispute.
- Consider what information each party needs to provide about areas of disagreement and disputed facts.
- If appropriate, recommend other services that might help settle the dispute.
- Make orders for the filing and service of a Financial Questionnaire and the filing of a Balance Sheet.
After the case assessment conference, the matter may be listed for a conciliation conference, or it may be allocated a date for a hearing.
Preparing for trial
A property matter will go through at least one procedural hearing before it reaches trial. This procedural hearing will be used to determine the issues in dispute and what evidence is needed to decide them.
The final hearing is conducted before a judge alone. Evidence is given in affidavit form and witnesses are cross-examined on the contents of their affidavits.
If you require legal advice or representation in any legal matter, please contact Taylor Rose.