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Financial Arrangements
The Court encourages, and expects, divorcing couples to try to come to an amicable agreement regarding their financial arrangements. An agreement reached in this way can be made legally binding by registering it with the Court as a Consent Order.
Orders fall into two categories these being parenting orders covering the care arrangements for the children, and financial orders covering spouse maintenance as well as the division of property, superannuation, financial assets and liabilities.
The remainder of this section describes Financial Orders. More information on Parenting Orders can be found on the Childcare Arrangements page.
Time Limit for Financial Orders
Applications for spouse maintenance or property division must be filed separately from the divorce itself and within 12 months from the date the divorce becomes final. If this 12 months time limit is missed, you will need the Court’s permission to apply for financial orders.
Spouse Maintenance
A separated person does not automatically get spouse maintenance from the other spouse. A separated person who is not caring for children and who is able to support themselves will probably not be awarded maintenance.
To obtain a court order for maintenance, a spouse will generally have to prove that they cannot support themselves properly because of following:
- he or she is unable to work;
- old age or sickness, either mental or physical;
- the need to care for children under the age of 18 years;
- some other reason
In addition, the person seeking maintenance would have to show that his or her spouse is able to pay the maintenance.
Unlike a married person, a person in a de facto relationship cannot claim spouse maintenance.
Property
There is no presumption that each spouse will receive 50% of the property and the Court has very wide powers to divide the property in whatever way it thinks is fair.In making a property order the Court will look at the following:
- the financial contributions of each spouse;
- the non-financial, homemaking and parenting contributions of each spouse;
- the ability of each spouse to provide for themselves and any children in their care in the future;
- the child support under the Child Support (Assessment) Act 1989 for a child of the marriage that a spouse provides currently or is to pay in the future.
The Court will also take into account what net assets each party originally brought into the relationship and what other outside assistance has been contributed, for example:
- inheritance;
- interest free loans;
- substantial financial gifts.
Superannuation
The court views superannuation as a financial resource rather than as actual property because people who are members of a superannuation fund are not generally entitled to any benefits until they retire. A person who has looked after children has usually made an indirect contribution to the build-up of the superannuation entitlement during the marriage, but the court has limited power to order direct payments to the non-member partner.It is advisable to seek specific legal advice about your particular circumstances.
Step 1 - Pre-Action Procedures:
Before deciding to proceed to Court action in order to reach an agreement regarding the split of the financial assets and spouse maintenance, it is advisable to try and resolve this by negotiation. Family Dispute Resolution services (mediation and conciliation services) can help people going through separation and divorce to resolve these disputes without having to go to court. More information about how to do this and help with finding a registered family dispute resolution provider can be found at Family Relationships Online or Relationships Australia.
Both husband and wife must comply with the duty of disclosure of assets so that each party is aware of the financial position of the other. This takes the form of exchanging various financial documents. For example:
- A schedule of assets, income and liabilities.
- A list of documents that each spouse has in their possession that is relevant to the dispute.
- A copy of any document required by the other party and identified in the list of documents.
Should it not be possible to come to an amicable agreement, court proceedings will be started as outlined in the steps below. One of the parties will have to give notice to the other of the intention to claim and the details of the claim. The respondent will be required to reply within a set period (at least 14 days).
The kinds of documents the Court considers appropriate to exchange depend upon whether it is a case for maintenance or property settlement:
Documents to Exchange in Maintenance Cases:
- Tax returns and assessments for the most recent financial year.
- Bank records for the previous 12 months.
- The three most recent pay slips if the husband/wife receives wages or salary.
- Where the party owns or controls a business, the business’s Business Activity Statement for the previous 12 months.
- Any other document that is relevant in determining the income, expenses, assets, liabilities and financial resources of both husband and wife.
Documents to Exchange in Property Settlement Cases:
- The three most recent taxation returns and assessments.
- Documents regarding any relevant superannuation interests. This includes the completed Superannuation Information Form, the trust deed and last three financial statements for self-managed funds, and the value of the superannuation interest including how it was valued and any documents working out this value.
- For corporations (businesses), trusts or partnerships where the husband/wife has a duty of disclosure under Rule 13.04, financial statements for the last three financial years are required. These include balance sheets, profit and loss accounts, depreciation schedules and tax returns. Additionally any Business Activity Statements for the 12 months prior to the court date is required.
- For corporations, the most recent annual return listing the directors, shareholders and the corporation’s constitution.
- The trust deeds for any Trusts the parties have.
- The partnership agreement and any amendments to it for any partnership the parties have.
- If the parties have not agreed a value, market appraisals of any property in which they have an interest in.
Step 2 - Filing of Application:
Either the husband or wife (the Claimant) files their application with the financial orders they are seeking to the Family Court. Included in this is their financial statement, the marriage certificate and the filing fee payable. The application is given a first court date which is normally approximately 28 days later.
Sealed copies of these documents are served on the Respondent who is given a date by which they must respond in writing stating whether they accept the Claimant’s offer. If the offer is accepted, the agreement can be formalised or made legally binding in a Consent Order without having to proceed to trial.
If the Respondent does not accept the offer, he/she must reply in writing stating the following:
- the issues that are still in dispute;
- the orders the Respondent will seek if a case is started in the Court;
- a genuine counter offer to resolve the issues;
- the date by which the Claimant must reply giving at least 14 days to do so.
Should the Respondent not reply, the Claimant’s obligation to continue with pre-action procedures end and the matter will proceed to Court.
Step 3 - First Court Date:
The first court date will be either a Directions Hearing or a Case Assessment Conference conducted by the Deputy Registrar. The purpose of the Hearing or Conference is to attempt to negotiate a settlement. The Deputy Registrar will ensure that the pre-action procedures outlined above have been complied with properly.
If an agreement is not reached at this time, then the Deputy Registrar will direct that a Conciliation Conference be held and also give instructions for what preparations the parties must make for that Conference.
Step 4 - Conciliation Conference:
The Conciliation Conference is led by the Deputy Registrar in an office and both parties and their lawyers attend it. Its purpose is to be a time where detailed negotiations take place with the assistance of the Registrar to try and resolve matters and come to an agreement.
If an agreement cannot be reached, the Registrar does the following:
- issues a Trial Notice;
- gives details of the preparation required for the case to be heard;
- allocates a date for the Pre-Trial Conference.
Step 5 - Pre-Trial Conference:
The husband, wife and their lawyers attend the Pre-Trial Conference which is conducted by a Registrar.
The Registrar ensures that all previous directions and instructions have been followed and complied with. The Registrar also allocates the date the case will be heard before a Judge.
Step 6 - Final Hearing:
The Final Hearing is also known as a Trial and will have been allocated a day or number of days depending upon the complexity of the case. Sufficient time will be allocated to allow the parties and their witnesses to give their evidence as well as for the lawyers to give their submissions to the Judge.
At the end of the hearing, after listening to all the evidence and submissions, the Judge gives the judgment and makes final Orders formalising the proceedings.
