How will the Court approach my property settlement

Following separation, you can move forward and finalise the property from the relationship up to two years following the breakdown in a de facto relationship  and 12 months following the making of a divorce orders.

To determine the legal basis to divide property, the Court follows a structured, multi-step process grounded in both statute and case law. The process is designed to ensure that any alteration of property interests between parties is “just and equitable” as required by section 79(2) of the Family Law Act 1975 (Cth) (for married couples) and section 90SM (for de facto relationships). The leading authority is Stanford v Stanford [2012] HCA 52, which clarified the approach.

The Four-Step Process

Preliminary Step: Is it “just and equitable” to make any order?

• Before embarking on the four-step process, the Court must first determine whether it is just and equitable to make any order at all. This is a threshold question, not a mere formality. The Court must consider the parties’ existing legal and equitable interests and whether there is a proper basis to disturb them (see Stanford v Stanford).

Step 1: Identify and Value the Property Pool

• The Court identifies all assets, liabilities, and financial resources of both parties, regardless of whose name they are in. This includes real property, personal property, superannuation, trusts, companies, and any assets disposed of in anticipation of separation.

• Accurate valuations are required for all items, and the “balance sheet” is prepared.

Step 2: Assess Contributions

• The Court assesses the contributions of each party to the acquisition, conservation, or improvement of the property. This includes:

• Direct financial contributions (e.g., wages, inheritances)

• Indirect financial contributions (e.g., gifts, support from family)

• Non-financial contributions (e.g., renovations, managing investments)

• Contributions to the welfare of the family (e.g., homemaking, parenting)

• Contributions are considered across three periods: at the start of the relationship, during the relationship, and post-separation.

Step 3: Consider Future Needs (Section 75(2) Factors)

• The Court considers the future needs of each party, including:

• Age and health

• Income, property, and financial resources

• Care of children under 18

• Ability to earn income

• Any other relevant circumstances (including family violence, if it has impacted contributions or needs)

• The Court may adjust the division to account for disparities in these factors.

Step 4: Ensure the Outcome is “Just and Equitable”

• The Court reviews the proposed division to ensure it is just and equitable in all the circumstances. This is a holistic assessment and may result in further adjustment.

• The Court is not required to make an equal division; the focus is on fairness, not equality.

Key Points and Discretion

• The Court has broad discretion, but must apply the statutory framework and relevant case law.

• The process is not strictly formulaic; each case turns on its facts.

• The Court must provide reasons for its decision, referencing the statutory factors and evidence.

• Discretion is exercised to achieve fairness, not equality, and to address the unique circumstances of each family.

If you are seeking further guidance in relation to dividing the assets from your relationship or marriage, please contact Gannon Family Law to discuss further.