Family Law Property settlement process

The Family Law – Property Settlement Process
The Family Court System in Australia
Applicable Laws

The Australian Constitution divides power between the States and the Federal (Commonwealth)
governments. The Federal parliament has the power to pass laws affecting the whole of Australia on
specific subjects defined by the Constitution, this includes the area of family law.

The Family Law Act 1975 was passed by the Federal parliament and applies to the whole of Australia. It
covers all aspects of family breakdown including separation and divorce, property settlement following
marriage breakdown, spousal maintenance and child care issues. It relates to the parenting of children
regardless of whether the parents were married or not. Some areas of family law are however still governed
by State parliaments.

Please note: Property disputes between de facto couples are governed by separate State Laws and are
not covered in this paper.

Applicable Courts

The Family Law Act set up two Family Courts, The Family Court of Australia and the Federal Magistrates
Court. The practice and procedure of these Courts are contained in the Family Court Rules 2004 and the
Federal Magistrates Court Rules 2001. The majority of applications can be filed in either Court however
the Federal Magistrates Court does not have powers to deal with adoption, property disputes when the
value is over $700,000 (except with the consent of both parties) and issues concerning the validity of a
marriage. Applications for divorce should be filed with the Federal Magistrates Court. The Federal
Magistrates Court aims to provide a quicker, cheaper service.

In practice, straightforward applications which can be determined at the first hearing date should be filed
with the Federal Magistrates Court. Your solicitor will be able to advise you on the most suitable venue for
your case.

The Child Support Agency governs all applications for financial support for children born on or after
1/10/89, children whose parents separated after 1/10/89 and children whose siblings were born after
1/10/89.

The approach taken by the Courts

The Courts apply basic principles contained in the Family Law Act which encourages parties to reach
agreement without the need for a Court hearing. Except in limited circumstances, parties are required to
demonstrate that they have tried other ways of resolving their differences before seeking the intervention of
the Courts. There are very good reasons for this. Family breakdown is a difficult and stressful time for all
concerned, particularly children. Courts encourage the amicable settling of family affairs to save time,
expense and further distress. Legal fees can be expensive and Court proceeding are often time-consuming
and stressful for all concerned. If parties can reach mutual agreement then arrangements can be put in place
much more quickly thus reducing the period of uncertainty and enabling parties to get on with their lives. A
mutual agreement has the advantage of making the participants feel that they have had some say in the
decision making process rather than waiting for a Court decision. Agreements are far more likely to be
adhered to if reached amicably and without resentment.

In the event that an application is lodged, Courts are not concerned with apportioning blame but rather with
finding workable and fair solutions. For this reason the principle of the no-fault divorce was established and
the only ground for divorce in Australia is the irretrievable breakdown of the relationship which must be

demonstrated by a 12 month separation. Courts make decisions on applications involving children on the
basis that the best interests of the child is the main consideration.

The need for legal advice

Before making any decision about whether to consult or hire a solicitor, it is important to think carefully
about your goals. The purpose of this kit is not to provide specific legal advice but to provide useful
information to enable you to make informed decisions.

Your time (and money!) will be better spent with a solicitor if you have some idea of your options and what
you would like to achieve. To that end AussieLegal can assist with a number of ancillary services (see
Further services below).

Why is a solicitor necessary?

Decisions made after the breakdown of a relationship especially where children or finances are involved
can have a huge impact on your future happiness and welfare. It is important to obtain the advice of an
experienced solicitor to protect your legal rights and financial interests. Solicitors are better placed to
achieve your goals and can navigate you through the legal procedures involved which can seem
complicated and confusing. A solicitor can also advice you on what you can realistically achieve.
Choosing and appropriate solicitor can be a difficult task, however.

How soon should I consult a solicitor?

Once you have considered the issues and made the decision to seek legal advice, the answer is as soon as
possible. The rules both in the Family Court and Federal Magistrates Court have now imposed deadlines
which must be compiled with. You will need to provide quite a bit of information for your solicitor and he
or she will need time to prepare your case properly. You may also find some peace of mind by getting the
ball rolling and trying to resolve issues as quickly as possible particularly when there are children involved.

Property Settlement Calculator
A financial settlement means the division of a married couple’s financial resources on separation.

The Family Law Act 1975 sets down the applicable law in relation to the division of property or liabilities
(debts) of people who have been married. However, if you have never been married, the appropriate laws
which govern your financial situation are the laws of the State where you live.

The meaning of property

Property can include your home, any other real estate, funds in banks, building societies, credit unions of
other financial institutions, investments, life insurance policies, an interest in a business, household
contents, any other personal property and Superannuation.

“Property” means the property to which a party to a marriage is entitled whether in “possession” (which
means entitled to it now) or “reversion” (which means entitled to it at some later time).

IMPORTANT: It makes no difference in whose name property is held. Property held by either party to
a marriage comes within the definition of matrimonial property and will be taken into account by the Court.
It may be relevant however whether the property is question was acquired before during or after the period
of the marriage but this will be discussed below.

The powers of the Family Court

The Family Court has wide powers to make orders altering the interests of parties of a marriage to property
of the parties to a marriage. This will determine how your property, financial resources and debts should
be shared between you.

Who can make an application?

The applicant (that is the person applying) and the respondent (that is the other party) must be parties to the
marriage. That means they must be married, be separated or be divorced. It also includes parties to a
marriage that has been declared void.

At least one of the parties to the proceedings must be present in Australia when the application is filed, or at
that time be an Australian citizen or resident.

The Family Law Act was recently amended to allow a creditor or any other person who may be aversely
affected by the making of a financial settlement order to become a party to proceedings. This could include
any children to the marriage.

The timing of the application

Applications for financial orders can be made at any time following separation. There is no requirement to
wait until 12 months have elapsed. However, once an application for divorce has been made and a decree
absolute dissolving the marriage ordered, parties have only 12 months within which to make an application
for property settlement and/or spousal maintenance (the subject of the following section). In limited
circumstances, the Court may give you permission to apply outside this time limit but you would need to
supply an affidavit (sworn statement) setting out reasons why the application was made late. You should
not assume that this permission would be granted. This 12 month time limit also applies to orders made by
Consent.

The importance of reaching agreement where possible

Parties are encouraged to reach agreement as to how divide their property and liabilities (if any) wherever
possible. You will avoid costly legal bills and have some certainty about the outcome of your negotiations.
This is a very complicated area of law and each case is different. It is difficult to predict with any degree of
certainty the exact outcome of any application you may make. The Court is obliged to consider a number
of factors in reaching a decision and can exercise a considerable amount of discretion in reaching a
decision. You are likely to face a period of uncertainty whilst waiting for the decision of the Court. If you
are unable to reach an agreement, the Court will be able to refer you to professional agencies who will be
able to assist you in negotiating an agreement. If you are able to reach an agreement, it is possible to
formalise that agreement and make it binding by applying to the Court for a Consent Order. The Court will
need to be satisfied that the order is properly drafted and that the terms are “just and equitable”. If you do
file an application, you will be required to demonstrate that you have followed the pre-action procedures
described in previous chapters.

The need for legal advice

The decisions you make about property settlement are some of the most important financial decisions you
can make. You may be under considerable emotional and financial stress when your marriage breaks
down. If you try and negotiate a settlement without the benefit of legal advice you may find that your
contributions to the marriage are not fully recognised and your welfare needs are not fully met. Parties can
sometimes experience a drastic fall in living standards when they divorce. In practice single mothers and
older women are particularly vulnerable.

This is a complicated area of law and it is important to be fully informed about your rights. Whilst it is
difficult to predict the exact outcome at Court, an experienced solicitor will be able to give you some
guidance about what to realistically expect drawing on experience in negotiating settlements and
conducting trials. This is turn may assist you in negotiating an agreement, protecting your interests and
avoiding the legal costs associated with a Court hearing.

Effect of a pre-nuptial agreement

Some couples decide to make a legally binding agreement about their financial arrangements in the event
that the marriage breaks down. These agreements can be made before marriage, during marriage or after
separation. The legal term for these agreements is ‘financial agreements’. To be legally binding, these
agreements must be signed by both parties and both parties must have sought independent legal and
financial advice. Courts can declare these agreements to be invalid if the conditions mentioned were not
met, there is evidence of fraud, they were entered into for the purpose of defeating legitimate creditors, or
the circumstances have changed making the agreement impracticable.

What to do if you believe that your spouse may be seeking to hide or sell property?

Parties have a duty to make full and frank disclosure about their financial situation. You should consult
your solicitor if you believe that your spouse is not complying with this requirement. Any orders made by
the Court may be set aside or varied in the event that parties fail to make full disclosure. If you believe that
your spouse wishes to sell property, you can apply for an Interim Order prohibiting the sale of assets until a
final settlement has been reached.

Superannuation Splitting Laws effective as of 28 December 2002

The Family Law Legislation Amendment (Superannuation) Act 2001 (FL Super Act) provides for the
payment splitting of a superannuation interest. Under the superannuation splitting laws, superannuation
interests are treated as property for the purposes of property settlement on marriage breakdown. This means
that people are able to make an agreement - known as a superannuation agreement - about how any
superannuation interests that either party has are to be split in the event of marriage breakdown.

A superannuation agreement is like a more general financial agreement in which people can agree about
how property other than superannuation is to be divided on marriage breakdown. However, because
superannuation interests are different to other property, there are special rules about what a superannuation
agreement has to say.

Provided that a superannuation agreement complies with the legal requirements detailed in the
superannuation splitting laws, the agreement is binding. If a superannuation agreement is binding, then:

• the trustee of a superannuation fund is required by law to implement it; and
• the Court is not able to make an order about the superannuation interest that is dealt with in the
superannuation agreement.

If people are unable to agree, then:

• the Court is able to make an order, as part of a property settlement order, about how any
superannuation interests are to be split; and
• the Court order is binding on the trustee of a superannuation fund, who has to comply with it,
provided that the legal requirements have been complied with.

Do the superannuation splitting laws apply to me?

The superannuation splitting laws apply to people who were married and who have divorced. They also
apply to people who are still married but who have separated and want to finalise arrangements about their
property. They apply regardless of whether people have divorced or separated before the superannuation
splitting laws commenced on 28 December 2002 - provided that final arrangements have not been made for
their property settlement.

The superannuation splitting laws also allow people to enter agreements, either before or during marriage
or after separation, about how, in the event of marriage breakdown, superannuation interests are to be split.
People are able to enter into a superannuation agreement before they marry, but the agreement does not
have any effect if the parties don't, in fact, get married. In these circumstances State law would apply.

If you have legally finalised your property arrangements before the superannuation splitting laws
commenced on 28 December 2002 then, generally, the superannuation splitting laws won't apply to you.
However, if there has been no formal legal arrangement about your property - perhaps because you have
made an informal arrangement with your former partner, then the superannuation splitting laws do apply to
you.

Also, if your property arrangements have been legally finalised but those legal arrangements were
subsequently overturned after the superannuation splitting laws commenced, then the superannuation
splitting laws apply to you.

Do I need to obtain legal advice?

Yes. If you don't get legal advice the payment splitting agreement won't be binding on the trustee of the
superannuation fund.

The basis of the Court’s decision regarding division of property
Section 79(4) and of the Family Law Act sets out the matters which the Court must take into account in
deciding whether to make any orders altering property interests which can be summarized as follows:

1. The financial contribution made by each party to the marriage or a child of the marriage, to the
acquisition, conservation or improvement of any of the property of the parties to the marriage or to
property that used to be owned by both/either party of the marriage;

2. The contribution (other than a financial contribution) made by a party to the marriage or a child of
the marriage to the acquisition, conservation or improvement of any of the property of the parties
to the marriage or to property that used to be owned by both/either party of the marriage;
3. The contribution made by a party to the marriage to the welfare of the family constituted by the
parties to the marriage and any children of the marriage, including any contribution made in the
capacity of homemaker or patient;
4. The effect of any proposed order upon the earning capacity of either party to the marriage;
5. The matters referred to in subsection 75(2) so far as they are relevant (see below); and
6. Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has
provide, is to provide or might be liable to provide in the future, for a child of the marriage.

The factors listed in section 75(2) relate both to property settlement (where relevant) and to the issue of
spousal maintenance (discussed in the next chapter). These factors can be summarized as follows:

• The age and health of the parties;
• The income, property and financial resources of each party;
• Whether either party has the care of any children under 18;
• The commitments necessary to support each party and any children or other people;
• Any responsibilities to support children or other people;
• Eligibility of either party for a pension, allowance or benefit;
• Reasonable standard of living where parties have separated or marriage dissolved;
• Duration of marriage and extent to which it has affected the earning capacity of a party seeking
maintenance;
• The need to protect the party who wishes to continue as a parent;
• If either party is co-habiting, the financial circumstances of that;
• Any child support assessment.

The aims of the Court in reaching a decision

The Court will reach a decision based on what is just and equitable on the unique facts of your case. The
Court will aim as far as possible to make orders which will finally determine the financial relationship
between parties.

Steps taken by the Court

The Court must firstly identify what the assets of the parties are, what the liabilities of the parties are, and
what their financial resources are. Financial resources, means people’s superannuation entitlements but can
also mean other things.

Whether you are negotiating with the other party to try and reach an agreement as to how to divide your
property between you, or if it has become necessary for you to commence proceedings in the

Family Court, you also need to go through the process of identifying both your and the other party’s assets,
liabilities and financial resources.

It is sometimes necessary to take steps quite early in the property proceedings to ensure assets are not
wasted, or the other party provides you with more information about their financial position. There are
applications that can be made to the Court in relation to these matters.

After the financial position of the parties is clear, then essentially the Court engages in a two step process:

1. Identifying the respective contributions (both financial and non-financial) of the parties and allocating
an appropriate percentage division of the total property.

2. Considering the matters under Section 75(2) and the other matters referred to in Section 79(4) of the
Family Law Act and identifying what, if any, adjustments should be made to the percentage division
after taking those factors into consideration.

General Principles

The following principles can be gleaned from an analysis of the statistics relating to the division of property
following the breakdown of marriage. It should be stressed that the Courts have a considerable amount of
discretion in this area and every case is different. The following general principles are provided as a guide
to how the Courts seem to apply the law in this area, but it is important that you seek legal advice regarding
your specific situation.

In practice, Courts draw a distinction between basic assets and non-basic assets.
Basic assets (meaning those that the majority of people have) include bank accounts, the marital home,
furniture and other property. Non-basic assets include superannuation, life insurance policy, investments,
business rights and inheritances.

An analysis of recent case history has revealed the following general observations:

• On average women who have custody of the child or children of the marriage receive two thirds
of the basic assets and one fifth of the non-basic assets.
• Women from marriages with lower asset wealth tend to get a higher percentage of the marital
assets on settlement.
• Women from marriages with higher value assets generally receive a lower percentage, but there is
a much wider range of results.
• In terms of contribution, where parties have the majority of their assets as basic assets and the
marriage has lasted for some time, the Court will usually regard the respective contributions to be
equal.
• Courts do not usually assess contributions to be equal when considering non-basic assets such as
private companies, major assets acquired prior to the marriage and inheritances.

Difficulties associated with asset division

Families with relatively low net assets are very limited in the extent to which they can address the
respective needs of the parties because their primary asset is commonly the family home usually with a
mortgage. Families in this position will typically have limited wealth in non-basic assets such as
investments which are more easily disposable. In these circumstances, it is difficult to divide assets in a
way that would assist parties with access to immediate financial resources whilst still securing the family
home for the resident parent and children.

Difficulties associated with single-parent mothers

Traditionally women have played a greater role in home-making and providing the primary care for
children. This role may often mean that they have made certain sacrifices in terms of their career
development during the course of the marriage. This may lead to some disadvantage in the labour market
particularly since their skills may be out of date. Traditionally women have been in a weaker position in
the labour market and their earnings lower than men. Marital breakdown can lead to a drastic fall in living
standards particularly for single parent mothers and older women.

The Court is obliged to take these factors into account. In terms of assessing contributions made during the
marriage, non-financial contributions such as home-making and childcare are given equal consideration.
The Court will then go on to make an adjustment to take into account the future financial needs of women
and children taking into account career prospects and childcare responsibilities.

Factors to consider

Some of the matters to be considered when negotiating or making an application for property settlement are
as follows:

• Superannuation - considerable changes have been introduced by the Federal Government as to
how superannuation will be dealt with (see the sub-sections on Superannuation, above);
• Capital gains tax and stamp duty;
• Whether it is appropriate in your circumstances for the property proceedings to be adjourned;
• Cases which involve farms;
• If there have been inheritances;
• Unusual contributions;
• Contributions after separation;
• Where there are family trusts;
• Where parties have been involved in companies.

Information to obtain

Make a list of what assets, liabilities and financial resources you and your spouse have in your name or
which are held on your behalf. Try and obtain documents to prove the existence of those assets, liabilities
and financial resources and what their values are now. This proof can be by way of a written, dated
appraisal for real estate or other items such as motor vehicle insurance papers, bank statements, credit card
statements and superannuation statements etc.

Ideally, you will want documents to show the value of those items:

• at the date that you started living with the other party;
• at the date that you separated; and
• at the time you negotiate the property settlement.

It may be difficult to obtain these documents. It may well be through the Court process that you can obtain
this information and those documents from your partner as they are required to disclose all relevant
material.

Property settlement calculator
Section 4: detailed case studies

DETAILED CASE STUDY 1

• Jack and Jill were married for 10 years and have recently had their marriage dissolved.
• They have 2 children aged 7 and 3.
• Jack works as a business development manager.
• Jill worked part-time as a legal secretary but gave up work when their second child was born.
• They own a home worth $500,000 with a home loan of $200,000 outstanding.
• The home was purchased with a deposit of $50,000 which Jack had saved prior to meeting Jill.
• Jack has a superannuation fund worth $120,000. Jill has a superannuation fund worth $40,000.
• During the marriage Jill inherited $50,000 from a relative.
• Jack has a bank account with $5,000.
• He has credit card debts of $6,000.
• Jill is a keen decorator and has made considerable improvements to their home which has added
to its value.

To assist Jack in estimating what the Court might consider a fair division of property given their history
and circumstances, Jack creates a list of the most important information and figures that the Court will take
into consideration:

General Information
Date married 1/6/1994
Date separated 1/10/2004 10.3 years
Age of child 1 if under 18 years 3

Age of child 3 if under 18 years

Personal details Jack Jill
Who was the primary carer during the marriage? Yes
Who worked full time during the marriage? Yes
Who decided to separate? Yes Yes
Who is currently living in the family home? Yes
Who will be the PRIMARY carer after separation? Yes

Basic Assets &
Liabilities at the time of marriage Jack Jill
Bank & credit union accounts 50,000
Money owing on credit cards
Real estate (primary residence)
Outstanding mortgage
Total market value of cars
Outstanding car loans / leases
Furniture & other assets
Other liabilities

Basic Assets & Liabilities now Joint
Money owing on credit cards 6,000

Real Estate (Matrimonial Home) 500,000
Outstanding mortgage 200,000
Other liabilities

Superannuation Jack Jill
Superannuation at the time of marriage 60,000 20,000
Superannuation now 120,000 40,000

Non-basic Assets & Liabilities at the time of marriage Jack Jill
Investment property (excluding primary residence)
Share & cash investments
Outstanding investment loans
Businesses
Outstanding business loans
Farms
Outstanding Mortgage
Inheritances

Non-basic Assets & Liabilities now Jack Jill
Real estate
Businesses where the person is the sole proprietor

Farms
Inheritances 50,000

Results

Summary of Asset Division Jack Jill

Basic net assets at the time of marriage 50,000 0
Basic net assets now 149,500 149,500

Non-basic net assets at the time of marriage 0 0
Non-basic net assets now 0 50,000


Estimated division of net assets 45% 55%
$ value of assets 231,205 277,795 509,000

In this case study, the likely division of assets, taking all factors into consideration, is a 55% / 45% split in
favour of Jill.

Note: Given the size of Jack’s super fund, if he wishes to maintain the fund as is, it is likely that Jill will get
the majority of the equity in their home.

Once the Percentage share has been agreed, the Court will make orders concerning the division of the
assets on the basis of the final percentage share. If Jack decides that he does not want to preserve his super
fund, the Court may order that trustee of the fund split the fund according to the agreed division of assets.

Discussion

Jack and Jill have 12 months from the date the decree was made absolute and the marriage dissolved to file
an application for property settlement or apply for a consent order on the basis of an agreement. A Court
would start by assessing their net assets. This figure is reached by adding up their assets and subtracting
their liabilities.

Basic Assets

The Court must then consider each parties’ respective contributions to the marriage - both financial and
non-financial. Jack was the main breadwinner and provided the initial deposit towards the purchase of their
home. Jill was the primary carer for their children, has contributed her inheritance, added to the value of the
home with DIY projects. Given the length of the marriage, the initial asset contributions by Jack and Jill’s
role as home maker, the Court is fairly likely to consider the financial and non-financial contributions of
each equal.

Non-Basic Assets

With respect to the non-basic assets such as Jill’s inheritance, the Court will usually allow the party who
has control of this group of assets to retain ownership. However, the other party will have the right to a
share in the growth in these assets during the period of the marriage. They will also be entitled to a further
share if they made any material, direct contribution to the development of maintenance of that asset. In
Jill’s case, her inheritance was placed in a deposit account and thus Jack’s claim will be limited to a small
share.

Superannuation

Jack’s superannuation is now a reasonably significant asset. Jill we be entitled to a an equal share of the
contributions that Jack has made to his fund since they were married. In the same way, Jack will be entitled
to a share of Jill’s super contributions. As Jack’s super is considerably more than Jill’s, these financial
resources have a significant impact (around 5%) on the final share of property.

Children & Other Factors

The Court must then consider the factors contained in section 75(2) where relevant. In this case the
relevant factors will include the length of the marriage and the fact that Jill has made a career sacrifice to
look after her children. This will affect her future earning potential. There is also the significant
responsibility of Jill being the primary carer of the 2 young children. Both these factors mean that the

percentage division of the assets will be adjusted in Jill’s favour. The Court will make a decision based on
what is just and equitable.


• Tom and Nicole have been married for 5 years.
• They have no children.
• Both owned separate properties when they met.
• Both properties were sold and the profits applied to the purchase of a joint property.
• Tom contributed $100,000 and Nicole contributed $50,000.
• The property is now worth $950,000.

• They have a home loan with $300,000.
• They both work full time and earn similar salaries.
• They both have substantial Superannuation funds and are well provided for in retirement.
• They have made a similar contribution during the course of the marriage.

To assist Tom in estimating what the Court might consider a fair division of property given their history
and circumstances, he creates a list of the most important information and figures that the Court will take
into consideration:

General Information

Personal details Tom Nicole
Who was the primary carer during the marriage?
Who worked full time during the marriage? Yes Yes
Who is currently living in the family home?
Who will be the PRIMARY carer after separation?

Basic Assets & Liabilities at the time of marriage Tom Nicole
Bank & credit union accounts
Real estate (primary residence) 100,000 50,000
Other liabilities


Other liabilities

Superannuation Tom Nicole

Non-basic Assets & Liabilities at the time of marriage Tom Nicole

Businesses

Farms
Inheritances

Non-basic Assets & Liabilities now Tom Nicole
Real estate
Farms
Inheritances

Results

Summary Tom Nicole

Basic net assets at the time of marriage 100,000 50,000

Non-basic net assets now 0 0


$ value of assets 550,000 470,000 1,020,000

Discussion

Given that this is a relatively short marriage, the Court will attach more weight to their initial contributions.
Their main asset is the matrimonial home. The Court is likely to order that they should each receive back
their initial contribution and the increase in the value of the property during the course of their marriage
should be split evenly to reflect their equal contributions to the marriage. There are no factors in section
74(2) which should alter the percentage split as they have the same earning potential and both have secure
financial futures.


• Sara and Ranjif have been married for 15 years.
• Ranjif’s family owned a shoe shop and Sara worked for him there.
• Ranjif had shares in some of his family’s businesses.
• He sold these shares and was able to contribute $700,000 to the value of their first home.
• During the course of their marriage, Sara looked after their 2 children and worked part-time as
a bookkeeper for the family business.
• Their home is now worth $1.5 million and is their primary asset.

To assist this couple in estimating what the Court might consider a fair division of property given their
history and circumstances, they create a list of the most important information and figures that the Court
will take into consideration:

General Information

Personal details anjif Sara
Who was the primary carer during the marriage?
Who worked full time during the marriage? Yes
Who is currently living in the family home?
Who will be the PRIMARY carer after separation?

Basic Assets & Liabilities at the time of marriage Ranjif Sara
Other liabilities

Real Estate (Matrimonial Home) 1,500,000

Other liabilities

Superannuation Ranjif Sara

Non-basic Assets & Liabilities at the time of marriage Ranjif Sara
Businesses
Farms
Inheritances

Non-basic Assets & Liabilities now Ranjif Sara
Real estate
Farms
Inheritances

Results

Summary Ranjif Sara


Non-basic net assets now 0 0


$ value of assets 928,500 661,500

1,590,000

Discussion

Sara’s non-financial contribution during the course of the marriage is recognised under the Family Law
Act. The Court should also recognise that Ranjif has made a large contribution to the purchase of their
house and given them a certain standard of living. The balance of these contributions is likely to result in
an initial split in favour of Ranjif in the region of 70:30. However the Court will then consider the

section 75(2) factors. The children will live with Sara and she will be able to earn a limited income doing a
part-time job. She does not have the earning potential of her husband and is the primary carer for the
children. She made certain career sacrifices to look after the children and her skills are out of date. A
consideration of these factors is likely to cause a percentage shift in her favour of some 10-15%.


• John and Deborah have been married for 10 years.
• They have a son aged 6.
• At the start of the marriage John worked as an IT Consultant and Deborah worked as a nurse.
• They purchased a home with a deposit provided by John and he paid for the home loan whilst
Deborah paid for the household bills.
• Deborah gave up work when their son was born.
• She met a contact at a mother and baby group which led to her setting up a business exporting
Australian-made health and beauty products. The business really took off and she began to
devote more and more time to the business. John started to work part time from home to help
look after their son.
• They have now filed a joint application for divorce.
• Their main basic asset is the family home now valued at $750,000 with a home loan of $350,000.
• Deborah’s business is valued at $1,000,000.

To assist Tom in estimating what the Court might consider a fair division of property given their history
and circumstances, he creates a list of the most important information and figures that the Court will take
into consideration:

General Information

Personal details John Deborah
Who was the primary carer during the marriage? Yes Yes
Who worked full time during the marriage? Yes Yes
Who is currently living in the family home? Yes
Who will be the PRIMARY carer after separation? Yes

Basic Assets & Liabilities at the time of marriage John Deborah
Other liabilities

Other liabilities

Superannuation John Deborah

Non-basic Assets & Liabilities at the time of marriage John Deborah
Businesses
Farms
Inheritances

Non-basic Assets & Liabilities now John Deborah
Real estate
Businesses where the person is the sole proprietor 1,000,000
Farms
Inheritances

Results

Summary John Deborah


Non-basic net assets now 0 1,000,000


$ value of assets 507,000 948,000 1,455,000

Discussion

Basic Assets

This is an example of the more traditional roles in a marriage being reversed. The same basic principles
will however apply. The starting point will be the parties’ respective contributions to the asset pool of the
marriage. The main basic asset is the family home with an equity of $400,000. The main non-basic asset is
Deborah’s business valued at $1,000,000. In terms of their respective contributions to the basic assets,
John provided the deposit and made the home loan payments at the start of the marriage. Initially Deborah
gave up her career to look after their child and run the home. However their roles reversed and John began
to sacrifice his career as Deborah’s business took off. John has made a larger contribution to the
accumulation of their basic assets. His percentage share will be further increased because his future
earnings are reduced as a result of his career sacrifice and he continues to be the primary care for their
child. As a result of these factors, he is likely to be entitled to at least a two thirds share of the basic assets.

Non-Basic Assets

In practice, the division of the non-basic assets is treated differently. Deborah has used her unique skills
and ideas to develop the business and make it a success but arguably she has been able to devote time to
this because of the fact that John was prepared to provide the support at home and play a bigger role in
child care. Statistics would suggest that a Court would award John with a fifth share of these assets as he
would be assessed as having made a lesser contribution.

Family Law Property settlement process

Family Law Property settlement process

Family Law Property settlement process

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