Since the 2009 amendments to the Family Law Act, de facto couples have the same entitlements as married couples for property settlement and spousal maintenance from their former spouse.
Whilst the right to claim a property settlement differs between the two types of relationships, once the court has jurisdiction, Judges apply the same legal principles to determining a property settlement outcome and whether a party has a legal obligation to provide their former partner with spousal maintenance.
Once a couple marry, they have standing to bring a property settlement or spousal maintenance application against their spouse following separation. They must do so within 12 months of their divorce order taking effect otherwise, they cannot proceed to court without the leave of the court outside of this time limit.
For de facto couples, the entitlement to make a claim against the property of the other party exists if they have lived together for at least two (2) years, have a child together or otherwise the party seeking a property settlement has made substantial financial contributions to the other party’s assets in the event of a shorter relationship.
A de facto spouse has two (2) years from their separation to apply for property settlement or spousal maintenance.
Once the jurisdiction of the court is established, an assessment of the matter is undertaken by the presiding Judge in order to determine the matter. The steps involved in this process include:
- Identification of the asset pool available for division between the parties – assets comprising real property, cash reserves, shares and other investments, cars, boats and yes, even the jet ski, superannuation and interests held by either party in businesses, whether within companies, trusts or multi-layered structures;
- An assessment of the contributions each party made to the asset pool, both of a financial and non-financial nature; and at the various stages of the relationship including before, during and after the relationship;
- A comparison of each party’s future needs with reference to several factors including the care of children of the relationship, the comparative income earning capacity, any financial resources of the parties, for example an interest in a Trust or an imminent inheritance or personal injury award; and
- Based on the percentage award for each party as a result of steps 2 and 3, a final assessment by the court as to what outcome represents a just and equitable (fair) division of the asset pool and a determination of the appropriate orders or allocation of assets so as to implement the decision.
While the court being called upon to make a decision is the exception these days given the time delays and associated cost (financial and emotional) in proceeding to final hearing, there are many opportunities and alternate options to resolve the matter without court intervention.
At an early stage of a property settlement matter, a competent lawyer will focus on the identification of the asset pool in order to provide prompt advice to their client about the likely range of entitlements were the matter litigated through the Family Law Court order. In doing so, the matter has every chance of settling, provided both parties approach the initial negotiations sensibly and realistically.
With the cooperation of both parties, a pre-Court mediation can be convened to attempt settlement of the matter. If properly prepared for and with the right mediator, settlement prospects are strong. As mediation is a compulsory step once the matter is before the Courts and the legislation requires this process to have occurred before the court may make an order finalising the matter, mediations are where most cases will settle.
The approach of our property settlement lawyers on property settlement matters is to remain resolution focused throughout and only once it becomes clear that settling the matter is an impossibility, do we ready the matter for trial. Unfortunately, the approach of a lot of family lawyers, particularly those that have been practising for a longer period and are set in their ways, approach matters in reverse – they, and consequently their clients, focus on the dispute and achieving justice or righting wrongs, however they rarely ever achieve this. As a result, such cases have little to no chance of family law settlement and with such a belligerent attitude of client and lawyer, the parties remain in contested litigation for many years and at considerable expense.
We refuse to conduct ourselves in this way and will not be bullied by lawyers who do – in some cases lawyers become so blinded by their views on a matter they are unable to properly advise their clients. This will then often result in poor outcomes for the clients, ones they were perhaps not even aware of and in some cases, orders made for the reimbursement of legal fees given the lawyer conducted the matter with their blinkers on.
We have experienced this a number of times in our practice on the gold coast in recent years and obtained costs orders against client and lawyer alike. This can become a very expensive exercise for the losing party, given they must pay not only their own legal fees but also contribute to the other party’s fees.