If no agreement can be reached then an application for property orders must be submitted to either the Family Court of the Federal Circuit Court. An application must usually be made within 12 months of your divorce becoming final.
Property orders are legally binding arrangements made by a judge which cover the following:
- Division of property, finances and debts after a marriage breakdown;
- Spousal maintenance
The decision is then made through a court hearing. The judge makes the decision following a hearing of evidence. Both parties must fully disclose their respective financial circumstances. A failure to make proper disclosure of a relevant matter is taken very seriously.
It can take more than a year for a final hearing to take place. At a final hearing all the witnesses who have sworn affidavits will usually be required to attend court to be cross examined and other
evidence will be tendered to the judge including financial documentation.
What will a judge consider?
The Court will ascertain the net asset pool of the parties, being the total value of all the assets owned by either or both parties. The net asset pool includes property acquired before or during the marriage, as well as after separation.
Determining the net asset pool can be highly complicated. Accurate valuation of assets requires that many factors are taken into consideration, such as issues regarding taxation, stamp duties, and the appreciation or depreciation of asset values.
In determining how to divide the net asset pool, the Court will assess the contributions from both parties (both financial and non-financial). Contributions that may have been made by either spouse include:
- Financial contributions (derived from employment income, investments, etc).
- Non-financial contributions (as a homemaker or primary carer of children).
- Gifts, bonuses and inheritance.
- Initial contributions (assets that existed before marriage)
Once the court has assessed the contributions of the parties as a percentage, it may make adjustments to that percentage taking into account the future needs of both parties. These include:
- Age and health
- Capacity to earn money
- The property and assets of each party (matrimonial / family home, investment property, shares, cars, jewellery, savings, furniture and effects)
- New relationships (and new financial circumstances)
- Future parenting responsibilities (care and support)
Finally, the Court will consider the practical effect of the proposed property settlement to determine whether it is just and equitable to both parties.
Superannuation is dealt with separately to property orders. However, a Court will normally take it into account when making a decision on property.