How Coes the Court Divide Assets and Debts?

If you cannot reach an agreement with your ex partner, you may apply to the court for a property settlement. Section 81 of the Act imposes an obligation on the court to try and bring to an end the financial relationship between the parties. However, nobody can tell you what orders a judicial officer will make because there is no formula used to divide property.

A decision is only made after all evidence is heard based on what is just and equitable (fair) based on the unique facts of your case. This requires consideration of the relevant law, and precedents set by the Family Court since it commenced operation on 5 January 1976.

When dividing assets and debts, the court is guided by a set of general principles after the breakdown of a marriage (79(4), 75(2)), or a de facto relationship (90SM(4) and 90SF(3)). These principles are the same, regardless of whether the parties were married or in a de facto relationship.

The court makes four separate determinations:

1. What is the asset pool of the parties?
2. What did each party contribute to the relationship?
3. What are the parties future needs?
4. Is the result just and equitable?

Step 1: What is the Asset Pool of the Parties?

The asset pool includes every type of property including:

1. Real estate
2. Shares
3. Money
4. Bank accounts
5. Businesses
6. Debentures
7. Motor vehicles
8. Furniture
9. Interests in trust
10. Superannuation
11. Long service leave entitlements
12. Potential compensation claims
13. Debts owed to you
14. Debts owed to your partner

You should keep accurate records to prove the existence of the above.

Step 2: What did Each Party Contribute to the Relationship?

The second step is to determine contributions each party made towards the acquisition, conservation or improvement of assets and to determine, if there should be any change of the interests of the parties in the assets. Contributions can be direct or indirect, financial or non-financial.
Financial contributions

The most common financial contributions during a relationship are in the form of wages and earnings. Indirect financial contributions can also include monetary gifts, including gifts from grandparents and inheritances.

Non-financial contributions

Non-financial contributions include any labour that may have increased the value of the property as well as contributions made to the welfare of the family through unpaid work at home and care of the children

Step 3: What are the Parties Future Needs?

After deciding whether there should be an adjustment, the court decides if there should be any further adjustment based on the parties’ needs, such as:

1. The age and health of each of the parties;
2. The income, property and financial resources of each party;
3. The physical and mental capacity of each party for employment;
4. Whether either party cares for a child of the relationship under the age of 18;
5. Whether the parties’ are eligible for any kind of pension or allowance;
6. Whether the parties’ have any responsibility to creditors and what prospects the creditors have of recovering those debts; and
7. If either party is living with another person and the financial circumstances relating to that.

There are fifteen factors for consideration covering what each party is likely to need what each is able to pay to support the other. They may be found in section 75 of the Act.

Step 4: Is the Result Just and Equitable?

The court asses this by looking at the contributions made by either party and their future needs. Before negotiating with your ex, speak to our Adelaide family lawyers about your situation. It is important to understand how these four steps apply to your property settlement calculation, so that you do not settle for less than what is fair.

Divorce and De Facto relationship Property Settlement.

The Family Court has the discretionary power to change property interests on marriage breakdown if it is satisfied that, in all the circumstances, it is fair to make the order. Proceedings for property orders are commenced by filing:

Married couples

1. An application in initiating proceedings;
2. Marriage certificate or divorce or nullity order;
3. Statement of financial circumstances; and
4. Completed superannuation information form.

Your ex must then file a response to your initiating application.

De facto relationships

You are in a de facto relationship with another person if you are not legally married but are in a relationship as a couple and living together on a genuine domestic basis. You may in a de facto relationship even if:

• One or both of you are still married to someone else;
• One or both of you are in another de facto relationship; or
• You are in a committed relationship with your partner but don’t live together on a full time basis.

You can pursue a property settlement if one of the following conditions exists:

• You lived in a de facto relationship for at least two years; or
• You have a child from the relationship; or
• It would be unfair not to recognise a de facto spouse’s financial or non-financial contribution

When can I Apply for a Property Settlement?

Different time limits apply for bringing proceedings under the Act depending on whether you weremarried or in a de facto relationship.

If you were married

The time limit is one year after a divorce order takes effect. You must be separated for a period of 12 months before applying for a divorce, which means there is a minimum period of two years before the limitation date.

If you were in a de facto relationship

The time limit  for filing an application is two years after years after separation. Therefore the date of separation is more important when a de facto relationship breaks down and begs the question:

When Does Separation Occur?

Separation occurs when one party communicates to the other party that the relationship is over. In Australia the law is not concerned with whose “fault” it is that the relationships broke down.

Unlike marriages, when de facto relationships begin is a frequent source of conflict. Under the Act, individuals in relationships less than two years do not always have an automatic right to apply for financial orders.

What Type of Orders can be Made?

Common orders may include:

1. For the home to be sold and proceeds of sale to be divided;
2. One person keeps the home as long as they pay the mortgage and make a possible payment to the other person;
3. Orders relating to personal property such as motor vehicles, home contents, or the division of these items;
4. Splitting superannuation.

I Missed the Deadline - What do I do?

This is not necessarily the end of the world. Our experienced family lawyers may convince the court to grant you permission to apply for a property settlement outside of the time limit under section 44(6). The court must be satisfied that:

1. Hardship would be caused to the party or a child if permission was not granted; or
2. In the case of spousal maintenance applications, the applicant would be unable to support themselves without a pension, benefit or allowance.

If you missed the time limit, you must provide the court with reasons for the delay and demonstrate hardship.

If hardship is established, the court will consider the following elements in deciding whether to grant discretion:

1. The length of the delay beyond the expiration date;
2. The reasons for the delay;
3. The strength and merits of the applicants case; and
4. The prejudice to the other side resulting from the delay.

How can I Prevent my ex from Selling the House?

Our experienced Adelaide family lawyers can help you lodge a caveat over the property title. We can also help you get court orders in place to stop property being sold or money being spent. If this is something you are concerned about, contact Stanley & Co lawyers for a complimentary, no obligation consultation.