It is a high priority for most people at this time to understand what is happening and to have great confidence that their family lawyer will show them how to keep control and to take charge when things seem to be falling apart.
At ATKINSON VINDEN ... we understand the importance of feeling comfortable and confident in your lawyer. That is why we have a special Family Law Team that specialises in this area and can put you at ease and help you through the divorce process.
We have a great deal of experience and we take a special interest in every client. You will receive regular contact from us and you will always be able to speak to your family lawyer when you need to. You can also expect urgent treatment whenever a fast reaction is needed due to unexpected events.
The Decisions You Make Now
Separation is emotional and difficult for all concerned. It's often hard to know whether the decisions you make now will be right for the long term.
It's not made any easier if you're not sure where you stand legally.
- Do I need a written agreement with my spouse about dividing assets?
- Is maintenance payable?
And what about the children? Where will they live? Who will be responsible for their welfare? What contact will they have with parents and extended family? Who pays child support? These are vital issues for the months ahead.
The following sets out the most important legal issues you need to consider at the early stages of your separation. Remember, though, that your case is unique, so do not commit yourself to a course of action that might affect your long term interests without getting legal advice from a solicitor.
When you do seek advice, be sure to prepare yourself before your first meeting. This will save you a lot of frustration and money.
Meet The Team:
Associate & Accredited Family Law Specialist
- How the Court determines a property settlement for separated married couples
- How the Court determines a property settlement for separated de facto couples
- Domestic Violence - Apprehended Violence Orders
- Protecting your assets when entering into a relationship
- How to reduce legal costs in Family Law proceedings and when Costs Orders may be made against a Part
- When Children Divorce...Common Law Family Law Questions Asked By Grandparents
Atkinson Vinden now offers its family law clients a collaborative law approach in resolving their family law matters. Collaborative law is an exciting adjunct to our family law practice. Collaborative law evolved overseas in the early 1990s as a dignified and pro-active method for separating couples to resolve all of the issues arising upon the breakdown of their relationship without litigation.
The Collaborative law approach enables parties to adopt a more wholistic approach and allows individuals to have greater control of the outcome thereby reducing conflict at a time of considerable stress. A collaborative approach requires that the parties work in a co-operative fashion together so as to identify the needs, not only of themselves but the other party and their children and to learn as much as they can about all of the issues to help them make the best choices that they can.
Consequently the collaborative approach may involve other experts, such as financial consultants who can advise both parties about the best ways assets can be divided. A child psychologist may also help the parents identify what their child will need from each of them when they parent their child after separation. Counsellors can also provide support for the emotional and psychological needs of the parties in working through the emotions that arise upon the breakdown of a relationship.
Given the nature of this approach, both parties need to be assessed as suitable and also need to be willing to engage in the collaborative process in good faith. If you feel that the collaborative process may assist you in resolving your family law dispute then please contact Annabel Murray of the family law team at Atkinson Vinden for further information.
Sole ground for divorce
The sole ground for a divorce is that the marriage has broken down irretrievably. This is established if you have separated and lived apart for a period of not less than 12 months before the filing of the application for divorce. However, there may be circumstances where you are living under the one roof (see "Separation" below).
Note: On considering an application for divorce, the Court must be satisfied that there is not a reasonable likelihood of a reconciliation between the parties. If there is, the Court may adjourn the hearing and order that the parties attend counselling to explore reconciliation.
Separation involves the break down of the marital relationship as a whole and means more than the physical separation of the partners. Normally, separation occurs when the spouses cease to live together in the same residence. It is a requirement that one spouse communicate to the other their view the marriage has broken down and they wish to separate, and then act upon it.
However, people may continue to live under the one roof and be considered separated if the Court determines that the marital relationship has broken down. The Court will look to a number of factors in determining if the parties have truly separated or not. These factors may include whether the parties have:
- ceased to sleep together;
- ceased to engage in social activities together;
- ceased to have joint finances;
- advised other people that they consider themselves separated.
Spouses may sometimes resume living together after an initial separation. Provided that this period of resumption of cohabitation is no more than 3 months, the earlier period of separation may be added to the later period of separation in calculating the 12 month separation period required for a divorce Application.
Applying for divorce in the Federal Magistrates Court
Either you or your spouse individually or jointly, may apply for a divorce after a 12 month separation period. It is done by way of written application filed in the Federal Magistrates Court of Australia. A prescribed application form is used. A filing fee is payable. This fee may be waived depending on the financial circumstances of the applicant. Your marriage certificate must also be filed. If the original is not available, a copy can be obtained from the Registry of Births, Deaths & Marriages. The application must then be served upon the other spouse - called "the respondent". The proper serving of the application is important as the Court must be satisfied at the hearing that the respondent has personally received the application, unless it is a joint application. In the event the respondent cannot be personally served with the application, then the applicant may apply to the court for permission to give the respondent some other form of notice of the application.
The application must include details of the marriage and of the breakdown of the marriage including the date of separation. If there are children of the marriage under the age of 18, it must also contain sufficient details to allow the Court to determine whether proper arrangements have been made for them. If you were born overseas, the court must also be satisfied either you are now an Australian citizen and domiciled in Australia, or have been ordinarily resident in Australia for the past 12 months.
Where you have been married for less than two years at the time of the filing of the application a certificate from a counsellor must be filed indicating that you and your spouse have considered reconciliation with the assistance of the counsellor. Alternatively, you may ask the Court to waive the counselling requirement in special circumstances.
The application for divorce will be listed for hearing approximately six to eight weeks after it is filed. The application must be served on the respondent at least 28 days before the hearing or 42 days before the hearing when the other party is served outside of Australia. The respondent may attend the hearing to dispute whether the parties have been separated for more than twelve months or whether appropriate arrangements have been made for the children. Generally however, the respondent does not appear at the hearing.
As the applicant, you will need to prove that your spouse has been properly served within the required time. This can be proven by the respondent attending the hearing and confirming receipt of the papers. In the alternative, the applicant or their lawyer may file an Affidavit of Service sworn by the person who served the Application (this person cannot be the applicant spouse). Service can be effected by post provided the respondent signs an Acknowledgement of Service within the time periods for service. The Registrar may also ask questions about any aspect of the application, including the arrangements for any children. If there are no children of the marriage under 18, or if it is a joint application, the parties don't need to attend the hearing. However it is a good idea to attend the hearing to ensure any problems can be dealt with.
If the Court is satisfied that the applicant has complied with the requirements of the Family Law Act for divorce, a Decree Nisi of the dissolution will be granted at the hearing. You are still legally married until the divorce becomes final. The divorce will become final (Absolute) one month and one day after the hearing.
After the divorce
The divorce has no effect on rights or obligations relating to property, children or child support. Applications for Orders in respect of children can be made before or after the divorce. Any application in respect of property or spousal maintenance can be made before a divorce. If you file an application in respect of property or spousal maintenance after a divorce has been granted, then it must be filed within 12 months after the Decree becomes Absolute. After that period, a property application or spousal maintenance application can only be filed with the consent of the other party or proceedings commenced with special leave of the Court.
The granting of the divorce will not revoke any Wills that you or your spouse have made. The divorce will revoke any gift given in a Will to your spouse or any appointment of them as an executor, trustee or guardian. It is therefore advisable to carefully review your Will following divorce to ensure it has the effect you desire. A divorce may affect the rights of a party to the estate of the other party if they die without a Will.
A divorce may affect the entitlements of you and your ex-spouse under superannuation or insurance policies. It may also affect your social security entitlements, tax and immigration status.
On the divorce becoming Absolute, which occurs one month after the hearing, you are free to remarry. The Court will issue a sealed Order approximately 6 to 8 weeks after the hearing. A marriage celebrant may request to see the Order prior to a subsequent wedding.
Determining the parenting arrangements of children
Deciding on the living arrangements for the children of the relationship is an immediate priority for most separated parents. Agreement between the parents can be reached informally or by the making of a Parenting Order, by consent through the Local Court, Family Court or Federal Magistrates Court. However, legally, both parents retain joint equal parental responsibility for their children following separation until the Court makes a Parenting Order otherwise.
The Court can also make Parenting Orders dealing with the living arrangements of the children of a relationship with the consent of both parents or as a result of a contested hearing.
What Parenting Orders can be made by the Family Court?
The court can make a parenting order that:
- Specifies where the child will live. The Order can stipulate that a child lives with one parent only or with each parent, under a shared care arrangement. In either situation, each parent is equally responsible in respect of all other matters affecting the child (unless a court order specifies otherwise).
- Specifies the time the child will spend with the other parent or communication with that parent.
- Deals with all other aspects of parental responsibility such as religion, education, discipline, medical treatment, extra curricular activities and other issues of specific concern to a particular parent or child. Such an order can also be made giving one parent sole parental responsibility in respect of the day to day or long term care, welfare and development of the child.
What factors are considered by the Family Court in making Parenting Orders?
The best interest of the child is the Court's paramount consideration in making a Parenting Order. The Family Law Act states that children have the right to know and be cared for by both their parents and have a right to spend substantial time with both parents unless it is contrary to their best interests.
The Court is first required to consider whether spending equal time with both parents is in their best interests and reasonably practicable. If not, then the Court must consider whether spending a substantial amount of time with each parent is in the child's best interests. When determining what is in the child's best interests, the Court must have regard to the following factors:
- any views expressed by the child, if the child is of a mature age or the Court considers they are mature;
- the nature of the relationship of the child with the parents and any other significant persons;
- the effect of any changes in the child's circumstances;
- practical difficulty and expense of a child having contact with a parent;
- capacity of each parent or other person to provide for the needs of the child including the emotional and intellectual needs of the child;
- attitude to the child and responsibilities of parenthood demonstrated by each parent;
- child's maturity, sex and background;
- need to protect the child from physical and psychological harm;
- any family violence involving the child or a member of the child's family;
- any other circumstance so long as it is relevant to the welfare of the child;
- whether the Parenting Order is likely to cause either party to pursue further proceedings.
Who can apply for a Parenting Order?
Generally, the parents are the parties who seek Parenting Orders in respect of their children. However, any other person who is concerned with the care, welfare and development with the child can also apply, including relatives or other significant persons.
How does a person apply for a Parenting Order by consent?
Where you can agree upon the living arrangements of your child/ren, you can formalise these arrangements if you choose, by applying for a Consent Order through the Local Court, Family Court or the Federal Magistrates Court. You can also choose to keep the arrangements informal by not going through this process. Your individual circumstances will determine whether there are advantages to formalising these arrangements. We would suggest that you discuss this with one of our Family Law lawyers before reaching any decision.
What if parents cannot agree about their childre's living arrangements?
If you cannot agree over the living arrangements of the child/ren, and want the Court to be involved, then an Application for Parenting Orders must be made to either the Local Court, Family Court or Federal Magistrates Court. However, before applying for any Parenting Orders you must invite the other party to participate in mediation. If the invitation is accepted, then both parties must pursue mediation with view to reaching an agreement. If no agreement can be reached, or if the invitation to mediation is not accepted, then an application for Parenting Orders can be made to Court.
If you require Orders urgently, our lawyers will apply for Interim Orders for you immediately. If it is not urgent, a Directions Hearing or Case Assessment Conference will be allocated about 6 weeks from the date of the filing of the Application.
Prior to a Case Assessment Conference and/or Directions Hearing, both parents will generally be required to attend mediation with a Family Court Family Consultant to attempt to reach an agreement. Both parties are also required to attend an information session at the Family Court. This information session is conducted by a Court Officer. He/she will explain the Court proceedings, including the cost and time involved of the court action. Immediately following the information session you and your lawyer will be required to attend a Case Assessment Conference. This is conducted by a Registrar and a Family Court Family Consultant in matters involving only children's issues.
If an agreement is reached by the parents, the Court can make Consent Orders in accordance with your agreement. Our Family Law lawyers can assist in preparing the Consent Orders on your instruction. If agreement has not been reached after Case Assessment Conference, the Court will make directions for the ongoing conduct of your matter.
If the matter is conducted in the Family Court, the hearing will take place in a different format to the past. On the first day of hearing, the parties address the Judge directly and explain from their point of view what concerns them, the proposals they have and why, or what they consider to be the issues. From this the Judge determines what issues need to be determined in order to decide the matter, and how evidence will be given.
Note: It is only a minority of parents who cannot agree on arrangements for their children and find it necessary to make an Application to a Court to decide.
Independent Children's Lawyers
In some cases a lawyer can be appointed to represent children in situations where the Court or a parent consider that the children may require their own legal representation. This may apply, for example, where the children are old enough to express a view or preference of their own or where there are allegations of abuse. The Court may appoint an independent children's lawyer whether the parents consent or not.
In some cases the Court can direct that a report be obtained from an expert such as a child and family psychiatrist to examine the children and parties. The expert will provide the report to the Court regarding the various factors the Court needs to take into account and where the opinion of the expert is warranted.
How can I change Parenting Orders?
Parenting Orders are not final. They may be varied with the consent of the parties. Alternatively, one of the parties can apply the Court to vary the Orders. For the Court to agree to vary the Orders, it must be shown that it is in the best interests of the child to make this change. It is necessary to show that circumstances have changed since the earlier Order was made so as to warrant the Court changing the Orders.
Financial Support for Children born after October 1989
Section 3 of the Child Support (Assessment) Act 1989 clearly states that parents have a primary duty to maintain their children. Child Support is payable until the child turns 18 years or completes year 12. For the vast majority of children, the Child Support (Assessment) Act applies.
There are three ways that financial support for children can be arranged after parents separate:
- Child Support Under the Child Support Assessment Act
A child support assessment is based on a formula, and collected through the Child Support Agency (CSA). CSA website is found at www.csa.gov.au. The child support assessment sets out the minimum that the parent is to pay. Parents can pay more if they choose to. The formula takes into account the income of each parent, the number of children, the living expenses of the parents and the living arrangements of the children.
- Child Support By Agreement Between The Parents
If parents can agree on an amount other than that assessed by the CSA formula they may, in certain circumstances enter into a private Child Support Agreement registered with the CSA. The parents can then choose to collect child support privately or to ask the CSA to collect the payments. A Child Support Agreement can also provide for child support to be paid in ways other than by cash payments to the carer; for example, the payment of private school fees, sporting activities or health fund contributions etc.
- What happens if the parent ceases paying child support
If this happens the CSA will pursue the outstanding payments. If necessary, payments will be deducted from the paying parent's wages by the employer before those wages are paid.
Review of child support liability
The formula assessment can be reviewed by the Child Support Review Office in limited circumstances including:-
- where the capacity of either parent to support children is significantly reduced because of their duty to maintain another person or child including themselves;
- where the capacity of either parent to support children is significantly reduced because of high cost of exercising contact;
- the special needs of the relevant child including cost of caring for or educating the child in a way in which the parents had intended before separating;
- the assessment is unjust and inequitable because of the payer's income, earning capacity, property or financial resources;
- the assessment is unjust or inequitable because of a prior payment or transfer of property made to the payee parent for the child's benefit.
- high child care costs (exceeding 5% of carer's income) for child under 12 years.
Applications for review under these grounds are made to the Child Support Review Office. If either party is dissatisfied with the decision of the Child Support Review Office, an Application can be filed in Court seeking a judicial determination.
Child Maintenance and the Family Law Act
Child maintenance is calculated under the Family Law Act in the following circumstances only when:
- the parents separated before October 1989 and all children of the relationship were born before that date;
- the liable parent is not resident in Australia;
- a child or a third party with an interest in the child's welfare (but not the formal care and control) seeks child support.
In the above circumstances, and presuming you cannot reach agreement with the other party, child maintenance will be determined by a Court. There are three basic steps to determining the amount of child maintenance:-
- determine the financial needs of the child;
- determine the extent to which the child has financial resources to meet those needs; and
- compare the financial ability of each party/parent to meet the needs of the child. In doing this, the Court will look at the financial resources and income of each party and will assess the reasonable needs of each party.
Spousal Maintenance for Married Couples
Spousal maintenance refers to maintenance which is payable by one partner to the other partner. A partner to a marriage is liable to maintain the other partner to the extent that they can reasonably afford to do so and if their spouse is unable to support him or herself adequately because:
- he/she has the care and control of a child of the marriage who is under 18 years of age;
- of their age or their physical or mental incapacity for appropriate or gainful employment; or
- any other reason, and having regard to the factors identified in section 75(2) of Family Law Act.
Parties may agree to Spousal Maintenance by entering into Consent Orders which may be made in the Local Court, Family Court or Federal Magistrates Court. If no agreement can be reached, a party may apply to any of these Courts for a Spousal Maintenance Order. The spouse applying for spousal maintenance is the applicant spouse.
Note: The conditions under which Spousal Maintenance is payable to a former partner of a de facto relationship differ from the above. Refer to 'How the Courts determine Spousal Maintenance for separated de facto couples' information sheet.
How Spousal Maintenance is determined
The Court will look firstly to the reasonable needs of the applicant spouse and their capacity to provide for those needs (not taking into account any entitlement the spouse may have to social security). Their capacity to provide is based on their income, property and financial resources. If there is a shortfall between the applicant spouse's needs and capacity, the Court will consider the other spouse's reasonable needs and their capacity to provide for their own needs. If that spouse has surplus capacity of income, property or financial resources after providing their own reasonable needs, the Court will consider how much of that surplus should go to meeting the shortfall of the applicant.
Common situations where Orders for Spousal Maintenance are made
Common scenarios in which Orders for Spousal Maintenance are made include:-
- where a spouse is left with the care of young children restricting their ability to earn an income for themselves;
- where an elderly spouse cannot earn an income due to their age or lack of work experience;
- where there are few assets of the marriage available for division between the parties, and one party has significantly greater income than the other;
- where one spouse requires a temporary Order for Spousal Maintenance to support them until they receive their share of the marital property.
When can Spousal Maintenance be sought?
Spousal Maintenance can be sought at any time prior to a divorce. This includes where the parties have not separated but one spouse is failing to properly support the other. More commonly, Applications are made for Spousal Maintenance after separation. Applications for Spousal Maintenance must be made within twelve months of the divorce orders coming into effect. After twelve months from the date of the divorce, Spousal Maintenance proceedings may only be commenced with special leave of the Court.
Types of Spousal Maintenance Orders
Common types of Spousal Maintenance Orders include:-
- Periodic Order for payment of a specified amount on a weekly or monthly basis: The amount to be paid may increase to reflect increases in the CPI inflation index or other relevant factors. A periodic Order may be final and therefore continue indefinitely or until a specified event has occurred, such as children reaching a certain age. Alternatively, a periodic Order may be interim and only continue for a short period until the matter is further considered by the Court (perhaps on determination of a property settlement).
- Lump sum payment of a specified amount on a one-off basis: The lump sum amount may be a specified monetary amount or through the transfer of property.
Spousal Maintenance and Property Settlement Orders
A Court may Order interim Spousal Maintenance until a final property settlement is reached. The Court will then re-consider whether Spousal Maintenance remains appropriate following the spouse receiving their share of the marital property.
Any transfer of property will be presumed to be by way of property settlement (ie. not Spousal Maintenance) unless the Order specifies it. It is therefore essential that Spousal Maintenance be clearly identified in any Consent Orders. If not, the payer spouse may be disgruntled if the payee spouse subsequently seeks Spousal Maintenance after having already received a benefit that he/she had intended to be Spousal Maintenance.
Varying or ceasing Spousal Maintenance
Spousal Maintenance will automatically cease on the following events:
- death of the recipient spouse.
- death of the paying spouse (unless the Order was made prior to 1983 and was stated to continue for the life of the recipient spouse).
- the remarriage of the recipient spouse, unless a Court orders otherwise (due to special circumstances). There is a duty on the recipient spouse to inform the other on their re-marriage. Payments made after re-marriage can be recovered from the recipient spouse.
A Court can make an Order discharging, reducing or increasing an amount of Spousal Maintenance if it is satisfied:-
- there has been a change of circumstances of either party since the Order was made.
- since the Order was made the cost of living has changed to justify varying the Order. An Order can only be varied on this basis once every twelve months.
- where the original Order was made by consent, it was not proper or adequate for the support of the recipient spouse. In so deciding, the Court shall take into account any prior payments or transfers by way of Spousal Maintenance or property settlement.
- material facts were withheld from the Court or false evidence was given.
Spousal Maintenance and Taxation
The recipient spouse does not pay tax on their Spousal Maintenance payments (unlike social security benefits or pensions which are taxable). Payments of Spousal Maintenance by a paying spouse are not tax deductible. Some paying spouses may therefore prefer to meet their Spousal Maintenance liability obligations by lump sum transfer of assets rather than by periodic payments from net income.
How the Courts determine spousal maintenance for separated de facto couples
Spousal maintenance for separated de facto couples is determined under the Property (Relationships) Act 1984 and not the Family Law Act. The Court can make an Order for spousal maintenance of a de facto partner where:
- the applicant is unable to support him or herself adequately because they have to care for a child of the relationship or of the other party who is under twelve years (or sixteen years if handicapped). The Order for spousal maintenance will cease on the child reaching the age of twelve years (or sixteen years if handicapped); or
- the applicant is unable to support himself or herself adequately because their earning capacity has been adversely affected by the circumstances of the relationship and the maintenance Order would increase their earning capacity by enabling them to undertake a course or program of training. The period of the Order cannot exceed three years after the day on which the Order is made or four years after the parties have ceased to live together (whichever is the earlier).
Where the spousal maintenance Order has been made for both childcare and for retraining then the longer of the two sets of time limits will apply. For example, if the child is seven years of age, the spousal maintenance continues beyond the three or four year limit (for retraining) until the child reaches twelve years of age (or sixteen if the child is handicapped).
An Application for spousal maintenance must be made within two years of separation. An Application cannot be made if the applicant is in another de facto relationship or marriage. An Order for spousal maintenance will cease on the death or marriage of either party.
What the Court considers in determining spousal maintenance
In considering an Application for spousal maintenance, the Court considers:-
- the income, property and financial resources of the parties;
- the financial need and obligation of the parties;
- the responsibilities of each party to support other persons;
- any property settlement between the parties;
- payments by one of the parties to the other for maintenance of a child.
How the Courts determine child support for children of separated de facto couples
Financial support for a child of a de facto relationship is determined by the same child support legislation as applies to children of married parents. Orders in respect of parenting arrangements for children are determined by the Family Law Act. Refer to 'Child Support' and 'Determining the parenting arranges of children' Information Sheets.
How the Court determines a property settlement for separated married couples
Less than 30% of property settlements between married couples actually go to Court. The majority of couples are able to resolve their issues without commencing Court action. However, in the event that Court action is commenced, the Family Law Act and case law of the Family Court provides the methodology to determine the entitlements of each spouse. An Application may be commenced at any time after separation, but must be brought within 12 months after the granting of a divorce. Special leave of the Family Court is required to commence proceedings outside this time period.
Prior to commencing Court proceedings, certain 'Pre Action Procedures' must be complied with. This includes making a full and frank disclosure of financial circumstances of each party and verifying it and participating in alternate dispute resolution in an attempt to reach agreement. Alternate Dispute Resolution may include negotiation or mediation. If this process fails to result in resolution, then the parties may commence court proceedings for a Court determination as to property settlement.
The methodology undertaken by a Court to determine a property settlement involves a four-step process as follows:
Step 1 - Identify and value all assets, liabilities and financial resources of the marriage
All property assets and liabilities of both spouses are included in the asset pool available for division irrespective of when acquired or by whom. Where the value of property is not known, particularly real estate or an interest in a company or business, an expert valuer's opinion is usually necessary.
Step 2 - Assess contributions made by each party to the property of the marriage. This includes:-
- Direct and indirect financial contributions: including pre-marital contributions, inheritance or gifts, compensation payments, and income applied to mortgage and general outgoings.
- Direct and indirect non-financial contributions: including a party's physical efforts to a business or to the household.
- Homemaker and parent contribution: including contributions as homemaker and caregiver to the children. Whilst it is difficult to give an exact financial value to such contributions, they are generally recognised in a substantial way.
The assessment of contributions of each party is represented as a percentage of the net assets. However, the assessment is not done with reference to any mathematical formula.
Step 3 ' Based on other factors in respect of each party, consider whether either party is entitled to receive an additional percentage of the net assets
Section 75(2) of the Family Law Act lists various factors to be taken into account in determining the adjustment of the property of the marriage to either party. These factors include:-
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 of a child of the marriage who is under 18 years of age;
- Commitments of each of the parties necessary to enable them to support themselves, or a child or other person they have a duty to maintain;
- Any entitlement of either party to a social security benefit or entitlement under a superannuation fund;
- The extent to which one party has contributed to the income, earning capacity, property and financial resources of the other;
- The duration of the marriage and the extent to which it has affected the earning capacity of either party;
- Any child support payable by one party to the other and whether it is, in fact, being received;
- Any other relevant factors or circumstances.
Step 4 - Consider how each party is to receive their entitlement and how to divide the property after applying steps 1, 2 and 3.
A party may receive their entitlement by having specific property of the marriage transferred to them. Alternatively, property may be sold and the sale proceeds divided in a proportional manner. It is necessary to take into account any liabilities, including capital gains tax, if applicable.
Note: Property transferred between spouses through a Court order may avoid stamp duty and capital gains tax. The retention of a property by one of the spouses will also avoid the costs of selling which ordinarily reduce the share received by each spouse.
When a party commences Court proceedings for property settlement, the early stages of the proceedings are designed to assist with settling the matter. One of the Court events in the early stages is a Conciliation Conference, which is a form of mediation conducted in-house by the Court.
Although parties may commence Court proceedings seeking a determination of their property settlement, the matter can settle at anytime. When a matter settles, the terms of the settlement is commonly formalised by Court Order.
How the Court determines a property settlement for separated de facto couples
Division of property of separated de facto couples is governed by the Property (Relationships) Act 1984 ('the Act') or by general common law principles.
Conditions for determination under 'the Act'
You or your de facto partner may seek to have the property of the relationship divided under the Act provided that:-
- you have lived together in a de facto relationship for not less than two years. 'De facto relationship' means that you have lived together as husband and wife on a bona fide domestic basis although not married; or
- you and your de facto partner have a child; or
- one of you has made a substantial contribution to the property of the relationship or has the care and control of a child of the other party and the failure to make any Order would result in serious injustice.
An Application must be filed within two years of the day on which you ceased to live together. If two years has passed, in limited circumstances, the Court may grant special leave to file an Application out of time.
If your relationship does not fall within the above requirements, or the two year period has expired and special leave is not granted, division of the property of the relationship may be possible under common law as outlined below.
How the Courts divide property under the Act
The Court will consider the:-
- financial and non-financial contributions made by each of you to the acquisition, conservation or improvement of the property (whether held jointly or solely by either partner);
- financial resources of each of you;
- contributions made, including any contribution made in the capacity of homemaker and parent, by either of you to the welfare of the other partner or any children of the family. Less weight will be placed on this in a de facto matter than in a marriage case.
An Application can be made to the Local Court, District Court or Supreme Court.
Division of property of separated de facto couples under Common Law
If a relationship is not covered by the Act, or the time period for bringing an Application under the Act has expired, either party can apply to have the property of the relationship divided under common law. For example, common law could remedy a situation where:
- property can be shown to be held on trust by one party for the other because the other has made a financial contribution;
- it was intended by the parties that property would be held on trust by one of the parties for the other;
- it would be unconscionable for a party to claim legal entitlement to property without recognising the contributions made by the other party.
Cohabitation and Separation Agreements
You are able to enter into an Agreement before, during or after a de facto relationship as to how property is to be divided between you and your de facto partner. The Court is restricted in making Orders contrary to the Agreement if:-
- the Agreement is in writing and signed;
- each party obtains independent legal advice prior to entering into the Agreement. Each advising solicitor must provide a certificate verifying the nature of the advice given.
If the formal requirements are not met, the Court is still required to have regard to the Agreement when making Orders.
Domestic Violence - Apprehended Violence Orders
When can an A.V.O. be made?
An Apprehended Violence Order (A.V.O.) can be made in a Local Court if the Magistrate is satisfied that the Applicant has reasonable grounds to fear, and in fact fears, any of the following:
- an act of personal violence against them by another person ('the Defendant');
- harassment or molestation of them by the Defendant;
- stalking of them by the Defendant;
- intimidation of them by the Defendant (where the Defendant has a domestic relationship with the Applicant).
The victim does not have to be physically assaulted or to suffer physical abuse to have an Order granted by the Court; intimidation or harassment by the Defendant is sufficient. Actual or threatened damage by the Defendant to the property of the Applicant are also grounds for an AVO application.
What types of A.V.O. can be made?
The Magistrate may make Orders that:
- restrict the Defendant approaching the Applicant;
- restrict the Defendant going to the residence, workplace, place of education or other place frequented by the Applicant;
- restrict specified behaviour of the Defendant which might affect the Applicant;
- restrict the possession of firearms by the Defendant;
- extend the Order to protect other persons with whom the Applicant has a domestic relationship, including children.
A.V.O.'s can be made for a maximum of two years. A Respondent may appeal to the District Court against the making of an A.V.O. The Applicant and the Respondent (or Police if they sought the A.V.O.) can apply to the Local Court for variation or revocation of an A.V.O.
How do you apply for an A.V.O?
You may apply for an A.V.O. yourself, or the Police may apply on your behalf. The Police are obliged to apply for an A.V.O. where they suspect or believe a domestic violence offence has been, or is likely to be, committed.
When the Police bring an Application for an A.V.O on your behalf then the Police Prosecutor must represent you in Court. You are not entitled to have your own private lawyer appear for you.
You can apply for an A.V.O. yourself by lodging a complaint with a Clerk of a Local Court. The clerk will prepare a summons containing details of the Orders you seek and the incident causing you to have fears for your safety. The Application will be listed in Court and a copy served on the Defendant. You may represent yourself or have a private lawyer appear for you. The Police Prosecutor will generally not appear unless Police have been involved.
Orders can be made by consent at the first Court date. If the Defendant does not consent to the AVO, the matter will be set down for hearing at a later date. At the hearing, evidence will be given by each party and any supporting witnesses.
Defending an A.V.O.
Defending A.V.O.'s can be stressful, costly and time consuming. You may choose to consent to the Orders sought (or different Orders agreed to by negotiation) without admitting the allegations made by the Applicant.
An A.V.O. however has serious consequences (see below) and you should only consent after careful consideration. If you do not consent to the Orders sought, the matter will proceed to a hearing. At a hearing, you are entitled to give evidence and cross-examine the Applicant. You are entitled to be represented at Court by a lawyer.
Consequences of an A.V.O.
The making of an A.V.O. does not constitute a criminal offence. A breach of an A.V.O. - if proved - however is a criminal offence (regardless of whether the particular incident that gave rise to the breach is itself a criminal offence). A report of an alleged breach of an A.V.O. will result in arrest and criminal charges being laid. Unless the Defendant pleads guilty, a Court will need to determine whether the A.V.O. was breached or not.
Depending on the terms of the A.V.O., an A.V.O. may restrict the Defendant spending time with their children. A Court Order allowing time spent between a parent and child will prevail over an A.V.O. but only to the extent that the Court Order is inconsistent with the terms of the A.V.O. Therefore terms of the A.V.O. that are not inconsistent continue to be in force.
An A.V.O. sought by a Police Officer for the protection of children could restrict the Defendant from obtaining or remaining in employment in any child related fields.
An A.V.O. may also restrict the ability of the Defendant to attend counselling and mediation with the Applicant.
Some of the consequences of domestic violence
- Domestic Violence may result in an A.V.O. as discussed above.
- Domestic Violence may be the basis of criminal charges being laid irrespective of whether an A.V.O. is sought.
- Domestic violence may allow the victim to seek compensation from the Victims Compensation Tribunal. If an award of compensation is made, the Tribunal may seek contribution from the violent spouse.
- A spouse (or other member of the family who is a victim of domestic violence or abuse) may sue the violent spouse for damages arising from an incident of domestic violence.
- In some Family Court property settlement cases, the Court has held that a spouse may be entitled to a greater share of the property due to domestic violence from the other violent spouse during the relationship. This is because contributions to the property of the marriage where domestic violence has occurred may be considered greater than when no domestic violence took place. The domestic violence may also have reduced the victim's income earning ability and therefore entitle them to a greater share of the existing property.
- Family violence is a factor taken into account by the Family Court when determining Parenting Orders and arrangements for the care of children following separation. This includes violence towards children and violence between parents in the presence of children. It also includes violence which has not taken place in the presence of children and of which they might not be aware.
Protecting your assets when entering into a relationship
Formal agreements Background
Currently, nearly one third of all marriages in Australia end in divorce. Following separation, ex-spouses and partners may be entitled to seek a division of the assets of the relationship. This includes all property held jointly or individually regardless of whether the assets were acquired before the commencement of the relationship or after separation. In order to claim for property settlement, it does not matter which partner paid for the asset, or from where they got the funds.
How to protect your assets when entering a relationship
There are a number of practical steps that can be taken to protect your assets including entering into a formal agreement with your partner (see 'Formal agreements with your partner: cohabitation, pre-marital and financial agreements'). It is sensible to consider these steps on entering into a relationship. It is also advisable to review them on the occurrence of significant events in your relationship such as birth of children, purchase of property, receipt of significant gifts or other payments.
The best way to protect your assets will depend on your particular circumstances. Some of the steps below can have negative effects such as tax liability. We would recommend that you should seek legal and accounting advice before embarking on any particular course of action.
Practical steps to help protect your assets
- Keep your property and finances as separate from those of your partner as possible. Hold separate bank accounts.
- Contribute equally (or at least by clearly agreed shares) to household expenses.
- Avoid having your partner work in your business. If they do, pay them an appropriate wage to avoid subsequent allegations of their non-financial contributions to your business.
- Consider how real estate should be held eg solely, jointly or by a third party such as company or trust.
- Keep records of all financial transactions during the relationship.
- Keep assets held by you prior to the relationship in your sole name. Avoid selling such assets and rolling them over into jointly owned property. If you do, keep clear records of your contributions to jointly owned property.
- Keep lump sums of money received during the relationship in your name and avoid placing them into jointly held assets.
- If significant gifts or loans are received from family, document such gifts or loans at the time of receipt.
- Avoid accepting liability for debts of your partner. Avoid entering into joint loans, giving guarantees, being a partner or director in their business.
- Make a Will setting out what will happen to your property on your death.
- Consider whom you nominate as beneficiary of your insurance or superannuation policy.
Although these practical steps will not prevent a claim in respect of assets you bring into the marriage, it may assist with more clearly identifying your contributions, which is of importance when determining your entitlements.
Formal agreements with your partner: cohabitation, pre-marital and financial agreements
The purpose of Agreements is not just to avoid legal disputes that arise after separation. An Agreement may also reduce the chances of disagreement arising between the partners during the relationship.
De facto couples: cohabitation and pre marital agreements
De facto couples may enter into a pre marital Cohabitation Agreement at any stage of their relationship. The Agreement can provide for the division of property on separation and financial arrangements during the relationship. The Agreement does not need to be registered by a Court but it is necessary that each partner receive independent legal advice prior to entering the Agreement.
Typically, an Agreement may provide that partners will retain all assets owned by them prior to the relationship. It may also provide that any assets acquired during the relationship will be divided evenly or retained by the partner purchasing it.
If the Agreement is properly made and each partner has received independent legal advice prior to entering the Agreement, a Court cannot make an Order inconsistent with the Agreement except in limited circumstances. This may include:
- where the circumstances of the parties have so changed since entering into the Agreement that it would lead to serious injustice if the Agreement was to be enforced;
- where the partners have, by their words or conduct, revoked or consented to the revocation of the Agreement.
Married Couples can make binding financial agreements
Since December 2000, the Family Law Act has allowed married couples to enter into binding financial agreements before and during marriage and after separation. Properly prepared financial agreements can prevent spouses making Applications to a Court seeking property settlement or spousal maintenance after separation. Each spouse must obtain independent legal advice as to the agreement. Court approval is not necessary. There are only limited grounds to seek the setting aside of a financial agreement.
How the Courts generally view Agreements
Currently there have not been any cases decided where a binding financial agreement has been set aside. It is expected though, that a binding financial agreement will not be set aside unless a party can establish one of the grounds to set aside exists. This may arise if there are children of the marriage, and the agreement does not contemplate or make provision for this.
How to reduce legal costs in Family Law proceedings and when Costs Orders may be made against a Part
Without Commencement of Court Proceedings
There are three main ways to reduce the cost of legal action in a Family Law matter.
Reach agreement with your partner instead of going to Court
You may be able to reach agreement through:
- private discussion;
- by counselling and/or mediation. We can recommend counsellors and mediators; or
- by negotiations through lawyers.
If agreement is reached you may apply for Consent Orders at the Family Court or the Federal Magistrates Court to achieve finality, certainty and enforceability in the agreement.
Note: It is a requirement to pursue alternative dispute resolution, such as mediation or negotiation, prior to commencing any Court proceedings.
If Court proceedings are commenced:-
- Seek realistic Orders. We can advise as to the likely outcome of having those orders made if the matter is heard by a Judge;
- Continue to negotiate an agreement through private discussion, negotiations, counselling, mediation;
- Make full use of Court dates to explore settlement especially at Conciliation conferences, court ordered mediation, or other court events;
- Have your lawyer make a formal Offer of Settlement. Both you and your spouse will be required by the Court Rules to make genuine offers;
- Apply for waiver of Court filing fees if possible;
- Comply with all Court Directions and Rules about providing information. Failure to do so, may allow the other party to seek an order for costs against you.
Working with your Lawyer
As Lawyers generally charge by time, you can save their time - and therefore your money - by promptly providing all documents and information requested by them.
A Family Law lawyer is required to disclose how his or her costs are calculated. They should provide you with a written Costs Agreement at the outset and an estimation of the likely costs of the action. If the matter does not resolve and progresses into Court action, then your lawyer will be required to provide you with an update on estimated costs as the matter progresses.
Note: Property transferred between spouses pursuant to a Court Order may avoid stamp duty and capital gains tax. The retention of a property by one of the spouses will also avoid the costs of selling which can reduce the share received by each spouse.
When Children Divorce...Common Law Family Law Questions Asked By Grandparents
I gave my daughter $50,000.00 for the deposit for the first home with her husband. Now they are divorcing. Is her husband entitled to half of that money?
Generally, all of the property of both spouses (regardless of how it was acquired) is included in the marital asset pool for division between them. Therefore, your gift of $50,000 goes into the pool. Your gift will be presumed to be a contribution made on behalf of your daughter which may result in her being entitled to a greater share of the pool. The contribution of your gift however may be balanced by other financial and non-financial contributions. The Court will also look to the future financial needs of each party and give a greater share to a spouse with greater needs. If you gave your daughter the gift some years ago, it may be of less significance in dividing the asset pool now.
It may have been preferable to 'lend' the deposit to your daughter rather than give it by way of a gift (see below).
I want to lend my son $100,000.00 to help him establish a business. What happens if his wife leaves him?
The first step in dividing the property of a marriage is to calculate the total asset pool available for division between both spouses, taking into account all of the assets and debts. Generally, your loan to your son would be treated as a loan owed back to you in the event of him separating. His wife may argue that the loan is not owing to you, or that is has been waived by you. It is not uncommon after separation for a dispute to arise over whether money is lent to a spouse by another family member, or is, in fact, a gift.
Before lending the money to your son you should consider carefully how the loan should be documented to protect both you and your son. It may be advisable to enter into a loan agreement with your son that sets out the terms and conditions of the loan. You should keep clear records of the original amount lent and any amounts repaid. You might consider securing the debt by requiring that your son give you a mortgage over real property. It will then be necessary to consider whether the mortgage should be registered against the title or not. Proper documentation of the loan will prevent your son's wife disputing the existence of the debt in the event of separation.
My husband has died and my daughter and son-in-law have asked me to move in to their house. I want to build a granny flat at the back of the home, which will cost me $65,000.00. Do I get my money back if they separate?
Unless you become a registered proprietor of the property, you have no immediate right over the property. In the absence of any clear agreement, your legal rights to require repayment of the $65,000.00 (or the amount by which the granny flat has increased the value of the property) are unclear. You may be entitled to make an application to a Court to receive an interest in the property. Alternatively, if your daughter and son-in-law become involved in Family Law proceedings, you may be entitled to intervene in those proceedings.
A preferable course of action however would be for you, your daughter and son-in-law to enter into an agreement before the construction of the granny flat to avoid any uncertainty or dispute in the future.
My children own a five- acre property. My wife and I spent my superannuation payout of $200,000.00 building a home for ourselves in the back paddock. Do we own the house? Can we leave the house to be shared amongst all of our children in our Wills?
Unless you are registered on the title of the property, you have no rights as the property owner. You may have some rights to make an application seeking a declaration of an interest in the property in your favour. Such proceedings can be costly and unpredictable. Ideally, you should have had your children agree to you being registered on the title of the property before the construction of the home. You should seek legal advice now to attempt to negotiate an agreement with your children to protect your interests. As you currently have no legal interest in the property, you cannot leave it to the beneficiaries of your Will.
I tried to help my son after he got married three years ago by selling my own home to him and his wife at a reduced price of $270,000.00. I think it was really worth $350,000.00 back then. I always thought that they would pay me the difference of $70,000.00 if I needed the money. They are now divorcing and the wife says the house was only worth $170,000.00. Is that fair?
It is common for family members to sell properties to relatives at a reduced price. This may assist relatives to acquire real estate. It may also reduce stamp duty payable on the transfer. Unfortunately, a Court will normally only take into account the value of the property shown on the Transfer and used for calculation of stamp duty. Such informal arrangements in respect of the transfer of property (initially intended to assist family) can create significant difficulties years afterwards when relationships fail or disputes arise.
An alternative course of action would have been to obtain a valuation of the property at the true market value ($350,000.00) at the time of the transfer. However you would then have been required to pay stamp duty on this value.
What rights do I have to see my grandchildren?
Grandparents do not have any automatic rights to see or care for their grandchildren. Happily, most parents who separate are able to reach sensible and informal agreements in respect of the care of their children (including spending time and communicating with extended family members such as grandparents). If a sensible agreement cannot be reached, grandparents as well as other persons significant to the care of the children may make an application for parenting orders. The Family Law Act recognizes that one of the principles underlying the parenting provisions under the Act is that unless it is or would be contrary to a child's best interests, children have a right to spend time on a regular basis and communicate with people, such as grandparents and relatives who are significant to their care and welfare. Your lawyer may be able to assist you in negotiating parenting orders to include agreed times with grandparents.