Question 1

How does property settlement work?

Accepted Answer

While every matter is different, property settlement generally involves four key considerations:

Identifying assets and liabilities and financial resources;
Assessing contributions including but not limited to wastage and family violence;
Considering future needs;
Determining a just and equitable outcome.

We will guide you through each step and help you understand how the law applies to your circumstances.

Question 2

What assets and liabilities are considered in a property settlement?

Accepted Answer

The answer to this question can vary considerably when assessing interests in discretionary trusts, and we can provide advice after inspecting relevant documents.

Question 3

What happens if our financial affairs are complex?

Accepted Answer

The asset pool of the relationship can:

be complex;
involve multiple companies and/or trusts and/or businesses/ or partnerships;
involve one or both parties to the relationship in the control of the aforementioned entities and also third parties (which may or may not be related to the parties to the relationship);
intertwine their personal financial matters with the entities in which they control;
include entities of the parties which are the primary source of both parties’ incomes;
involve specialist knowledge of the business;
involve other family members;
be of high net worth; and
create complex tax ramifications upon property settlement that should be taken into account in the property settlement and considered before reaching an agreement.

The above issues are not a barrier to progressing your matter. Rather, it may be necessary to:

appoint a Single Expert Witnesses to conduct a:
a) licenced valuation of residential and/or commercial property; and/or
b) business valuations; and/or
c) valuation of a trust/s and/or company/ies/partnerships;
engage a forensic accountant or seek accounting advice;
obtain advice from a lawyer practicing in: commercial and corporate law, employment law, property law or Counsel.

It may be necessary to work with an independent accountant, financial planner, mortgage broker, corporate and commercial lawyer, property lawyer and other professionals. It may be appropriate to obtain an opinion from Counsel on a contentious issue of law or to represent you at Court Hearings or during a Mediation Style Conference.

Question 4

What is a financial resource?

Accepted Answer

The Court must also consider the financial resources of the parties. A financial resource is a financial benefit which a party to the relationship can reasonably expect will be available to them in the future. An example of a financial resource may be an interest in a deceased estate that is yet to be realised, an expectation to receive money from a claim such as an insurance or compensation payout, a beneficiary of a discretionary trust in which they have no control, the ability of a party to borrow funds at a heavily reduced interest rate, and/or potentially long service leave entitlements.

A financial resource is usually not specifically quantifiable and certain, and therefore it is not included in the asset pool available for division. Rather, the Court will consider a financial resource in the context of the asset pool and may or may not adjust the division to a party.

Question 5

How are contributions assessed?

Accepted Answer

Once the existing assets and liabilities of the relationship have been ascertained and a value attributed to the same, each party’s contributions are considered:

direct and indirect financial contributions towards the acquisition, conservation and/or improvement of property. For example, the former matrimonial home and/or investment property, shares, cash, art, inheritances and gifts etc, issues of wastage and family violence (making their contributions more arduous);
direct and indirect non-financial contributions towards the acquisition, conservation and/or improvement of property. For example, a party to the relationship (or a friend and/or relative) physically performing renovations on the former matrimonial home and/or an investment property; and
the contribution made by a party to the welfare of the family and any children of the relationship, including any contributions made in the capacity of homemaker or parent.

The Court will consider and weigh the above contributions, noting that no one specific contribution is legislatively more important than another.

When assessing contributions (positive and negative), the Court may consider the following factors:

the duration of the relationship;
each party’s initial contributions as at the commencement of cohabitation;
each party’s contributions during the relationship;
each party’s contributions post-separation; and
the impact each party’s contributions have made to the asset pool. For example, did the contribution increase or decrease the asset pool or have no impact at all?

Question 6

What future factors does the Court consider?

Accepted Answer

The Court is required to consider the future needs of the parties when determining what a just and equitable property settlement is. Future factors that the Court will consider are:

the age and state of health of each of the parties; and
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 including the impact of family violence and the capacity to earn an income and the long term ramifications of family violence; and
whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
commitments of each of the parties that are necessary to enable the party to support:
a. himself or herself; and
b. a child or another person that the party has a duty to maintain; and
the responsibilities of either party to support any other person; and
the eligibility of either party for a pension, allowance or benefit under any law of the Commonwealth; and
the need to protect a party who wishes to continue that party’s role as a parent; and
if either party is cohabiting with another person, the financial circumstances relating to the cohabitation; and
any child support under the Child Support (Assessment) Act 1989 that a party to the marriage/de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the relationship; and
the effect of any proposed order upon the earning capacity of either party to the marriage; and
any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.

Question 7

What does "just and equitable" mean?

Accepted Answer

The Court must consider if it is just and equitable to make an Order for property settlement and, if so, ensure such settlement is just and equitable to both parties by considering and weighing the legislative considerations.

Question 8

Do we have to go to Court to reach a property settlement?

Accepted Answer

It is preferable to reach an agreement regarding property settlement and/or spousal maintenance without commencing Family Court proceedings. Often the first step is providing your former spouse with your disclosure documents.

Question 9

What is full and frank disclosure?

Accepted Answer

Each party has an obligation to provide the other party with documents that are in their possession and control and are relevant to the dispute.

The obligation to disclose in a timely manner commences at the start of negotiations, is ongoing, and remains until the conclusion of your matter.

Some common examples of disclosure documents provided to the other party include but are not limited to:

a party’s three most recent tax returns and notice of assessments;
a copy of each party’s bank statements for all accounts in which they have an interest including bank accounts with a positive and negative balance, credit cards, personal loans, lines of credit and so on;
for a corporation, trust or partnership where the party has a duty of disclosure, the financial statements for the last three financial years including balance sheets, profit and loss statements, depreciation schedules and taxation returns and business activity statements for the previous 12 months;
a copy of the corporate constitution, trust deed and/or partnership agreement (where relevant); and
an appraisal of any item of property in which a party has an interest and the value is not agreed with the other party. For example, motor vehicles, real estate, boats, jet skis, art, furniture and chattels etc.

Each party should provide full and frank disclosure to the other party to:

facilitate the identification and valuation of the asset pool and each party’s contributions to the same (including contributions at the commencement of cohabitation, during and post-separation);
promote transparency;
facilitate negotiations;
increase each party’s capacity to make an informed agreement by consent; and
decrease the chances of a party seeking to set aside a Court Order based on a material failure to disclose and/or seeking cost orders in the Family Court of Western Australia.

In the event a party refuses to provide full and frank disclosure, you may commence Family Court proceedings and seek an Order for the disclosure and seek leave to issue a subpoena. If granted, a subpoena may be issued to obtain the disclosure that you require directly from the organisation and/or individuals.

Question 10

What happens if we reach an agreement?

Accepted Answer

Where the parties to a relationship reach an agreement by consent, they can reflect their agreement in a Form 11 Application for Consent Orders. This agreement is often called a “Form 11” or “Consent Orders”. Consent Orders comprise a Court form and Orders Sought.

If the Court considers the agreement is just and equitable (and complies with form), the Court will pronounce an Order on the same terms as the Order Sought without the parties having to attend a Court hearing.

If the Court does not consider your proposed settlement is just and equitable, or does not comply with form, it is likely your application will be requisitioned by the Court. Usually, this is an invitation by the Court to the parties to file amended/further documents or provide further evidence to the Court to address the requisition.

If the Court extracts an Order in the terms sought, it has the same effect as a court order made by a judicial officer after a court hearing. The Court order can then be used to facilitate the transfer of property between the parties of the relationship incurring nominal stamp duty and split superannuation from one spouse’s fund to the other party’s superannuation fund. The Order may also be used to provide Capital Gains Tax rollover relief and transfer motor vehicles and shareholdings.

There are limited circumstances where Court Orders can be set aside.

For clients who earn a high income, in addition to entering into a Form 11, the parties can enter into a Binding Financial Agreement in relation to spousal maintenance only.

Some parties who have children also enter into a Binding Child Support Agreement at the same time as the Form 11 and/or Binding Financial Agreement.

Question 11

What are my options to attempt to reach an agreement by consent?

Accepted Answer

Once the parties have provided full and frank disclosure, the parties should attempt to resolve the dispute in good faith and may choose to:

make a formal written offer of settlement; and
engage in verbal negotiations; and
engage in an informal conference, Mediation, Mediation Style Conference, Arbitration (financial issues only), Dispute Resolution Conferences. In child-related proceedings, unless there are special circumstances, the parties must attend Mediation and obtain a Section 60I Certificate before commencing an action in the Family Court of Western Australia;
Enter into Consent Orders.

Attempting to resolve the dispute by consent satisfies your pre-action procedures before commencing Family Court proceedings. Further, it is still beneficial to narrow issues in dispute even if the entire dispute has not been settled.

If you are unable to reach an agreement by consent, you may choose to commence proceedings in the Family Court.

Where an agreement cannot be reached, or where a party takes unilateral action to sell an asset of significant value, we can provide advice and representation through the Family Court process.

If court proceedings commence, we take care to draft your legal documents to place you in the strongest position to obtain the orders you seek. We can act as Counsel at Court hearings or instruct Counsel based on our close relationship with the same. We can prepare and represent you at Conciliation Conferences and Pre-Trial conferences and all Court events.

If you have received a Court judgement that is not favourable to you, we can provide you with advice about appealing the decision.

Question 12

What does the Family Court consider when adjudicating a spousal maintenance application?

Accepted Answer

A party to a marriage or de facto relationship is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

by reason of having the care and control of a child of the marriage or de facto relationship who has not attained the age of 18 years;
by reason of age or physical or mental incapacity for appropriate gainful employment; or
for any other adequate reason.

The Court may also consider:

the terms of any property settlement order;
the commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain; and
the responsibilities of either party to support any other person; and
the need to protect a party who wishes to continue that party’s role as a parent; and
if either party is cohabiting with another person, the financial circumstances relating to the cohabitation; and
any child support under the Child Support (Assessment) Act 1989 that a party to the marriage/de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the relationship; and
where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
the eligibility of either partner for a non-means-tested pension, allowance or benefit; and
the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income.

The Family Court will disregard any entitlement of the party whose maintenance is under consideration to an income-tested pension, allowance or benefit.

Question 13

What does spousal maintenance mean?

Accepted Answer

One party may have to financially support the other party even though the relationship has irretrievably broken down (including if the parties have divorced).

Where one party to the relationship has a need (which is often demonstrated in a shortfall between their expenses and their income), they can seek that their former spouse meets that need if they have the capacity to do so (which is often demonstrated by a surplus after the payment of their expenses).

To quantify the need, each party is required to specify their weekly income and expenses (on average) and itemise their assets, liabilities and financial resources. You may choose to review your bank statements and credit card statements as a practical way to ascertain and quantify your weekly income and expenses.

Question 14

What types of spousal maintenance are available?

Accepted Answer

Urgent Spousal Maintenance (often paid on an urgent and short-term basis pending an interim hearing of the matter);
Interim Spousal Maintenance (often paid on a short-term basis pending final resolution of the matter); and
Final Spousal Maintenance (often paid for a set period or on a fixed basis on final resolution or adjudication of your matter).

Question 15

How is spousal maintenance paid?

Accepted Answer

Spousal Maintenance can be paid in a variety of ways including, but not limited to: on a periodic basis per week or per fortnight, a single lump sum payment or by payment of an expense such as mortgage repayments and/or a combination of the above.

Often, spousal maintenance is paid as follows:

paid for a limited and fixed period;
weekly cash payments to assist a party to retrain/study to prepare for re-entry into the workforce;
weekly cash payments to assist a party when a party has the primary care of a young child or a child with additional needs which prevents or restricts their capacity to earn an income; and/or
when a person is unemployable.

Question 16

When does spousal maintenance end?

Accepted Answer

A party’s obligation to pay spousal maintenance can be terminated where:

the recipient of maintenance remarries or enters into a de facto relationship (unless the Court makes an Order that the payments should continue because of special circumstances); or
if either party dies (unless a lifetime maintenance order has been made); or
there is a change of circumstances which gives rise to varying, cancelling or setting aside the Order for spousal maintenance.

Question 17

How long do I have to apply for spousal maintenance?

Accepted Answer

For married couples, either party can make an application to the Court within 12 months of the Divorce Order becoming final; and
For de facto couples, either party can make an application to the Family Court of Western Australia within 24 months of the date of separation.

Question 18

Should I pay spousal maintenance if there is no Court Order?

Accepted Answer

This depends on each party’s circumstances.

If possible, we suggest you obtain family law legal advice before making spousal maintenance payments. In some circumstances, if you have been paying spousal maintenance, it provides the recipient with evidence of your capacity to pay and therefore strengthens their application to obtain a Court Order for you to pay spousal maintenance. However, depending on the circumstances, if you withhold financial support, you may be subject to allegations of family violence by exerting financial control over your former spouse.

Please contact Richardson Family Law to obtain advice tailored to your personal circumstances.

Question 19

Can property settlement and spousal maintenance be dealt with together?

Accepted Answer

Property Settlement

Our Expertise

Spousal Maintenance

Common Questions & Answers

Property Settlement

Resolving Property Disputes

Spousal Maintenance

General Questions

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