MCG Legal    Blog    Property Settlements – for both married and de facto relationships

The Court Process

Sadly, not all relationships last. Many couples are able to successfully negotiate the division of their assets and care of their children without legal intervention. But, there are some who cannot and that’s where we get involved. This article will explain the general court processes and the approach the Court adopts when parties cannot agree on the division of assets, or the time each party spends with their child/children.

Joint Property

For many couples the assets they accumulate during their relationship represent their entire life’s savings. More and more people are utilising the Family Law and Federal Circuit Courts, waiting lists are growing and so are the delays in having matters dealt with. It is important that all parties seriously consider mediation and/or negotiation prior to litigation. There will be occasions where mediating and/or negotiating is not possible, e.g. where threats of violence have been made by one party against the other or one party is unwilling to participate.

The legal process

Where the parties have exhausted attempts to resolve the matter without Court proceedings, and either party decides Court is the only option left, then the process is as follows:

  1. One party files material in Court supporting their wish on how the issues in dispute (be it financial or children’s matters) should be resolved. This party is known as the Applicant.
  2. The Applicant receives their “sealed” material from the Court, together with the first appearance date and is required to serve the other party with a copy of that material.
  3. The non filing party known as the “Respondent” is served with a copy of the Applicant’s material and then files material in response to support their wishes which is also filed with the Court.
  4. The parties attend Court on the date provided for the first “mention” of the matter.

Directions regarding property pool

  1. Each party appears in front of the Judge at the first appearance date and their respective legal representatives will attempt to negotiate and put in place directions, or procedures for both parties to follow to help move the matter to either a resolution or trial, such as valuing assets and having to attend mediation. Proposed directions are not always agreed and that will lead to a short appearance before the presiding Judge who will determine any issues in dispute and the matter will then move forward. The Judge might agree with the submissions made by your legal representative and Order certain things to occur, such as the appointment of an independent expert to assist the Court in resolving a dispute. Alternatively, the Judge might issue an Order that they think most appropriate under the circumstances, which effectively takes a different position to you or you both. Decisions made at these appearances are generally decisions for the short term issues, such as preserving assets or appointing independent experts.
  2. The process will be to have the matrimonial property pool, being the assets, liabilities and superannuation and their values agreed to by both parties or not agreed then valued.

Once that is done the parties usually undertake mediation and if that does not resolve the matter there will be a further Court mention of the matter before a trial date is given whereby a Judge will hear from both parties and decide the matter.

How would Courts decide the matter?

First, it must be determined that it is just and equitable to make orders. In most situations it will be just and equitable to do so.

The Courts then generally adopt a four step approach to dividing matrimonial assets. The steps are:

  1.  Identifying and Valuing Matrimonial Assets, Liabilities and financial resources (a financial resource could be an income producing business, distributions from a trust fund etc.). This process is usually completed through directions from the first appearance at Court. We have outlined how that works earlier in this article and those directions are a part of the Court undertakings assessment. If you cannot agree on the value of the assets, liabilities and financial resources in the “asset pool” then an expert will be appointed to value the disputed asset. The expert’s costs will usually be paid equally by both parties, but a party who holds a stronger financial position may be ordered to pay at first instance and be reimbursed at settlement. In certain circumstances assets can be excluded from the pool, e.g. you owned an asset before you met your spouse; your spouse did not contribute to it during the relationship; and it was never mixed with your “matrimonial assets”, that asset may be excluded.
  2. Identifying and Assessing the contributions of the parties. The Courts will look to assess both the financial and non-financial contributions of both parties. Financial contributions can be things such as your incomes, your financial resources, any inheritance received, what you entered the relationship with or any windfalls you may have had during the relationship which have contributed to the financial position of you both. Non-financial contributions can be the non-paid labour of one of you in maintaining or improving the matrimonial property as an example. The Court will also assess contributions to the care and welfare of the family which will include the primary care provided to the children and the domestic responsibilities of the family such as cleaning, vacuuming, washing, ironing and those types of domestic chores. The Court will look to make adjustments in assessing those contributions to ensure that both parties are receiving a fair and equitable distribution of the property pool. In assessing those contributions in a relationship where both parties have started with no financial resources, one of the parties has been the primary income giver while the other party has been the primary care giver to the children and the relationship is long in length it is the usual case that such an assessment of those contributions would be equal between the parties. The weight given to the primary caregiver is considered equal to that of the primary income provider. It is, of course, dependent on the factors of any matter and advice should always be sought.
  3. What future circumstances might influence the Court in deciding how to divide the matrimonial assets? If a party is in a financially disadvantaged position at the time of separation, then a financial adjustment will be made in their favour to counteract that imbalance. For example, a party who earns substantially less than the other party, will receive a financial adjustment in their favour, which effectively gives a party more of the asset pool than they would otherwise have received, if not for that financial disparity. A party who is significantly older than the other party will likely receive a financial adjustment in their favour, as they closer to retirement age and have less opportunity to earn an income. There are many other examples of how adjustments might be made in one party’s favour because they are find themselves in a position of disadvantage.
  4. In all of the circumstances is making an Order just and equitable? Where the Court has evidence that the parties have lived separate financial lives, the Court might determine that it is not prepare to make any Orders. This is more common in short relationships where the parties are yet to “pool” their assets, but holds true for longer relationships where assets have been “quarantined”. Where assets are held jointly, or both parties make contributions to an asset that is held by one party, the Court will likely determine that it is just and equitable to make an Order altering the property interests of the parties.

Whilst this article gives you a view of the Court process it is always wise to seek legal advice as to the particulars of your relationship so you have an understanding of what your entitlements may be and you initially start to negotiate a resolution with your former partner or spouse which is normally what occurs prior to legal intervention.

At MCG Legal we have a number of legal representatives who are able to assist in resolving your family law matters – if you are unable to agree on how to divide the matrimonial assets and require assistance with your property settlement matter, you should always seek legal advice.

We hope this article has assisted you. Should you have any questions don’t hesitate to contact us.

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