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If you have divorced your spouse or separated from your partner, it is important to consider your financial position and possibly seek property settlement orders, whether or not you are seeking money or financial adjustment in your favour.


You have 12 months from the date of your divorce to apply to the Federal Circuit Court of Australia or Family Court of Australia for property settlement orders. If you have separated from your partner of a de facto relationship, you have 2 years from the date of separation to file for property settlement orders. This applies to both an Application for Consent Orders or Initiating Application.


There are four key steps relevant to property settlement determinations as dictated by the leading case authority of Stanford & Stanford (2012) 247 CLR 108.


STEP 1:   Identifying the Net Asset Pool:

Before discussing how you and your ex-partner are going to fairly divide the property and liabilities, it is first necessary to identify the existing legal and equitable financial interests between you and your ex-partner. This includes identifying the values of existing assets, liabilities, superannuation, financial resources, and any significant dispositions of property in the 12 months before separation. Once these items have been identified, you can then start discussing what you are actually going to divide. The parties complying with the obligation of full and frank financial disclosure from the outset is very important for this stage. After viewing the financial documents between both parties, it will then become easier to start preparing a joint balance sheet and discuss the values of certain items that are to comprise the asset pool. Expert or independent valuations may be required in the event the values of significant items are disputed.


STEP 2:   Assessment of Contributions

After the net asset pool, and items therein, has been defined and the parties have established the scope of the subject matter they are discussing, the Court then determines the contributions the parties have made to the acquisition, conservation and improvement of the property pursuant to section 79 of the (or section 90SM of the in the case of a de facto relationship).


The Court will consider:

  • Contributions each made at the start of the relationship;

  • Contributions each made during the relationship; and

  • Any contributions made after separation.


Contributions can be direct and indirect, financial and non-financial as well as relating to the welfare of the family unit. The length of your relationship will impact the assessment of contributions. The Court has accepted that in mid- to longer range relationships, all other contributions being equal, and where each party has worked equally hard in their respective spheres (whether as breadwinner, homemaker and/or caregiver) that the assessment of contributions will often be 50/50.


However, there are circumstances where the Court will determine that the contributions between you and your partner are not equal; for example, where one party made a greater initiation contribution or has received a significant inheritance/gift.


In shorter relationships the Court is more likely to determine contributions on an asset by asset approach. The Court will also give more weight to the financial contributions of the parties in shorter relationships.


STEP 3:   Future Matters

Once the Court makes an assessment of financial and non-financial contributions to the net wealth of the marriage to consider whether it should alter the existing legal and equitable interests in property, the Court then assesses the future differences between you and your partner and may make an adjustment if one party comes out of the relationship in a potentially better position than the other. In making this assessment, the Court considers the factors set out in section 75(2) of the Family Law Act (or section 90SF(3) of the Family Law Act 1975 in the case of a de facto relationship) which includes:


  • 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;

  • commitments of each of the parties that are necessary to enable the party to support himself or herself; and a child or another person that the party has a duty to maintain;

  •  the responsibilities of either party to support any other person;

  • subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under: any law of the Commonwealth, of a State or Territory or of another country; or any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party;

  • 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;

  • (ha)  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; and

  • the duration of the marriage 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;

  • the terms of any order made or proposed to be made under section 79 in relation to the property of the parties; or vested bankruptcy property in relation to a bankrupt party;

  • the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to a party to the marriage; or a person who is a party to a de facto relationship with a party to the marriage; or the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii);

  • any child support under the Child Support (Assessment) Act 1989 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;

  • the terms of any financial agreement that is binding on the parties to the marriage;

  • the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

At this stage, the Court will arrive at an assessment of your entitlement as a percentage of the property pool, adjusted from the assessment of contributions.


STEP 4:  Would altering and adjusting the interests be just and equitable?

After the Court considers the above three steps, the final step is for the Court to review its assessment and make any further adjustments it considers necessary to achieve a fair and equitable distribution. The Court will then divide the net property of the parties to achieve the property adjustment division.


Property settlement orders can be made by consent or through an application to the Court. The process involved with property settlement orders is more complex than what is described above and it is recommended that you obtain legal advice from a family lawyer.


At KF Lawyers, we have experienced family lawyers who deal with property settlement negotiations and Court proceedings. We deal with simple and complex asset pools, including matters involving multiple businesses, overseas assets, and proceeds of crime. If you wish to discuss your options, please contact KF Lawyers for a free initial consultation.

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