Separating married couples usually wish to become financially independent of each other even though the divorce has not been formalised. If the parties cannot agree on how their assets and liabilities should be divided, then either of them can apply to the Family Court or the Federal Magistrates Court for an order settling property issues.

An application for a court order to settle property issues can be made at any time after the marriage has broken down. However, once a divorce has been granted, the application must be made within 12 months of the date on which the divorce decree became final. If an application is made outside that time limit, the court has discretion on whether the matter proceeds.

Couples who agree on how their property should be divided can finalise their arrangements by consent order or by agreement. In some limited circumstances, an agreement may not be binding, for example, if someone has failed to disclose relevant information, or if there has been a material change in circumstances relating to a child.

There are advantages and disadvantages with consent orders and financial agreements. It’s important that both parties seek independent legal advice on which method is preferable in their circumstances and how to meet the specific requirements for financial arrangements.

Court orders for property disputes

Every order made by the Court concerning the division of property must be just and equitable in the circumstances. The Court will consider each party’s contribution to the assets of the marriage and the needs of each party. The Court considers the following:

·   Contributions made by each party to the assets’ purchase, maintenance and improvement over the history of the marriage. Factors such as whether the asset was inherited by one of the parties or was the result of a windfall will be considered. A party’s contribution to the assets can be financial or non-financial (such as the contribution of a husband or wife as a home-maker or parent), direct or indirect (such as where one spouse’s salary meets the running expenses of the household while the other salary is saved for some agreed improvement).

§ The effect an order has on the future earning capacity of the parties. For example, if the main financial asset of the marriage is a farm or a business, the consequences of the sale of that asset will be considered.

§ An assessment of the need of one party to be maintained by the other. The Court will consider a person’s age, state of health, income-earning capacity, and which party is looking after the children of the marriage. For example, if one parent has custody of the children of the marriage, the Court may grant that parent an additional percentage of the matrimonial home to cover the need to house the children.

The Court can make a number of orders when settling property disputes, including a declaration specifying the particular interests of the husband and wife for the assets of the marriage; an order for the property to be sold or for transfer of the registered ownership of property between the parties; an order for the sale of particular assets and a distribution of the proceeds; and/or an order for the payment of money by one party to the other.