Property Settlement

The Approach to Property Settlement

The guiding principle of property settlement is that it must be “just and equitable” and that it is appropriate for the Court to make orders altering the existing property rights of the parties.

There is no presumption that assets are divided equally or in any other way.

Below is a summary of how the Family Court would approach a property settlement.

Identifying the property of the parties

The net asset pool is simply the parties’ assets minus their liabilities.

What are the assets and liabilities of the parties? The list of assets and liabilities may include those

  • owned or owed by either party prior to the marriage
  • accumulated during the marriage
  • acquired or incurred post separation.

The Family Court has jurisdiction to deal with an asset which is

  • registered in the sole name of a party
  • registered in joint names
  • registered in the name of a company or trust which a party controls or in which a party has an interest.

The Court also has regard to the resources of a party, namely benefits which may flow pursuant to a trust or other family structure.

There are often disputes between litigants as to

  • the identity of assets
  • the value of assets
  • assets which may have been dissipated either before or after separation.

The Court has also recognised the concept of an “add-back” or “notional property”. This means that the Court may “add-back” into the asset pool assets which

  • formed part of the asset pool but have already been spent (for example funds invested in a joint account which existed at separation which have been spent on a party’s legal costs)
  • have been prematurely distributed or disposed of (for example, by way of transfer to a third party or gift)
  • have been wasted by one of the parties by way of wanton recklessness (gambling or extravagant expenditure)

In determining the net asset pool, it is necessary to consider any liabilities which may arise upon the division, transfer or sale of any assets. There are exemptions available and some rollover relief on the transfer of assets between spouses or entities in which spouses have an interest. Every case is different and therefore it is important to seek advice as to what the net asset pool is in your case.

Assessing the contributions of the parties

Having determined the net asset pool, the Court assesses the contributions which each party has made to the acquisition, conservation and improvement of the assets.

In assessing contributions the Court considers

  • financial contributions (made directly or indirectly)
  • non-financial contributions (made directly or indirectly)
  • any contributions made to the welfare of the family, including a contribution as a homemaker or parent.

The Court assesses these contributions retrospectively

  • from the date cohabitation commenced until the date of marriage
  • from the date of marriage to the date of separation
  • from the date of separation until the date of a settlement or final hearing.

In long marriages the Court will look at all of the assets and examine the manner in which they have been accumulated. In a short marriage, it may be more appropriate to examine contributions on an asset by asset basis.

Assessing the Parties Future Needs

The Court will then consider the parties future needs by reference to Section 75(2) of the Family Law Act 1997 (Cth) for married couples or s.205ZD(3) of the Family Court Act 1997 (WA) for de facto couples

Some of the more common factors which assume prevalence in property cases are

  • the age and state of health of each party
  • the income, property and financial resources of each party
  • any disparity in the parties current earnings
  • each party’s earning capacity
  • whether a party has the care of a child under the age of 18 years
  • the level of child support (if any) being paid
  • if a party is cohabiting with anyone else

The question of how much weight is placed on each of the factors, and the effect on the property settlement is a matter to be determined by the judicial officer hearing the case.

Each family has a different set of circumstances and there is no “one size fits all” solution to a property settlement dispute.

For advice about property settlement please contact one of the experienced family lawyers at Carr & Co on (08) 9322 8000 or