Property Settlement or Property Alteration Orders

A Divorce Order is made 1 month and 1 day after a Divorce Order is granted at a Divorce Hearing. From this date, you have 12 months to commence Court proceedings or to file Property Alteration Orders by Consent. For De Facto Relationships, you have 2 years to commence Court proceedings after the date of separation. After this time expires, you may only commence Court proceedings if you have “Leave” (special permission) from the Court, which requires you to establish reasons why you should be allowed to do so. “Leave” is at the Court’s discretion and therefore you cannot be certain that you will be granted permission to commence substantial proceedings.

It is important, that you commence arrangements to obtain a property settlement in advance of filing an Application for Divorce, as it is not necessary to wait until after divorce proceedings are either commenced or finalised, as these two matters run independently of each other. Should your property settlement matter not appear to be finalising close to the 12-month expiry period (for married couples) or 2 year expiry period (de facto couples), we will provide you with fresh advice about commencing Court proceedings.

Whilst spouses remain separated, but not yet divorced, any receipt of income or assets or occurrence of liabilities or losses by either party, will be considered to form part of the parties’ total asset pool. Such events may or may not affect the parties’ final property settlement outcome.

In seeking to obtain a settlement, spouses may enter into a Financial Agreement or Consent Orders, each option should be considered in light of your circumstances.

In engaging in the settlement process, spouses should make full and frank disclosure of all aspects of their circumstances throughout this process, especially in seeking to execute Consent Orders or obtaining Court Orders. Failing to fulfil this obligation may result in being found guilty of contempt of court, ordered to pay costs or the proceedings being stayed or dismissed.

Reaching Settlement – Options Available

To reach a settlement, parties usually enter into negotiations with the guidance of their Family Law Solicitor as well as participate in a Family Dispute Resolution Conference (Mediation) with a Family Dispute Resolution Practitioner (if appropriate). Commencing Court proceedings is the last resort and should only be commenced in circumstances where no other appropriate means of alternative dispute resolution is available.

Arbitration

Arbitration is another means of private alternative dispute resolution, which may only be evoked by the parties with their consent through a written contractual agreement (or by a Court Order in extant proceedings). Arbitration is conducted by a Family Law Arbitrator and can occur at any point in the matter. Whilst Arbitration is not a judicial process, procedural fairness or due process must still be afforded and demonstrated to have been so afforded.

At the completion of the Arbitration, the Arbitrator delivers an Arbitral Award. Either party can apply to the Court to register the Arbitral Award and must notify the other party of this. Registration is particularly important as it is a pre-condition of being able to enforce the Arbitral Award. A party, upon receiving notice that the Arbitral Award is to be registered, may within 28 days raise reasons why it should not be registered.

Some important aspects of Arbitration include, but are not limited to:

  1. the parties being able to select the Arbitrator.
  2. the process of Arbitration can occur quicker than a Final Court Hearing.
  3. the parties (in consultation with the Arbitrator) have the flexibility to coordinate when or where Arbitration can occur.
  4. the Arbitration process is less formal.
  5. Arbitrations are private and confidential.
  6. the parties cannot issue Subpoenas if there are no Court proceedings on foot (Subpoenas can only be issued in extant proceedings).
  7. a registered Arbitral Award can only be reviewed by a Court on limited grounds such as questions of law, resulting in either affirming, reversing or varying the Arbitral Award, therefore rehearing of the issues is not available.
  8. an Arbitral Award can only be set aside or varied by a Court on limited grounds such as:

(1) fraud or non-disclosure of a material matter;

(2) the Award or Agreement is void, voidable or unenforceable;

(3) change in circumstances which make it impracticable for the Award to be carried out; or

(4) there was bias, lack of procedural fairness in the way in which the Arbitration process, as agreed between the parties and the Arbitrator, was conducted.

Court Proceedings

Should a matter not settle through alternative dispute resolution processes, such as Mediation or a spouse does not consent to attend Arbitration, consideration should be given to commencing Court proceedings in advance of the expiration period.

The Court, in determining Property Alteration Orders undertakes a 4-Step approach:

Firstly, the Court determines the parties’ total asset pool, by accounting all the parties’ assets, liabilities and financial resources, held both solely or jointly. Each party must make full and frank disclosure of this to the Court. The usual course is to determine this asset pool on a global basis, rather than by an asset-by-asset approach. This step also takes into account any “add-backs” for any distributions already made, losses or wastage of assets and legal fees as well as the implications of Stamp Duty, Capital Gains Tax and any other applicable taxes.

Secondly, by assessing each party’s financial contribution and non-financial contribution made directly or indirectly to the marriage, being the acquisition, conservation or improvement to any of the parties’ property. This also includes property that has ceased to be the parties’ property. Further, an assessment of contributions made to the welfare of the family, including contributions in the capacity of homemaker or parent.

Thirdly, by considering the effect of any proposed Order upon the future needs of either party. The Court takes into consideration the earning capacity of each party, the effect of Child Support that a party has provided, is to provide or might be liable to provide in the future for your child.

Fourthly, the Court must be satisfied whether, in all the circumstances, it is just and equitable to make the proposed Property Alteration Order.

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