Perth Family law – Property Settlement

Family Court’s approach to property settlement

The guiding principle of property settlement is that it must be just and equitable and that it is appropriate for the court to make orders altering the existing property rights of the parties due to a marriage or De Facto relationship. In Perth property settlement proceedings, the court may make such Orders it considers appropriate, altering the interests of the parties to the marriage or De Facto claims in the property, not what other people, family members or colleagues and friends say.

4 Step process in determining a property dispute

In property settlement , there is often a dispute between parties as to the identity of assets or extent of assets, the value of assets  and assets which may have been disposed of or dissipated either before or after separation. In determining a dispute to property settlement, the Court considers 4 steps. Below is a summary of how the Family Court would approach a property settlement.

1. Identify and value the property, liabilities and financial resources of the parties as at the date of the hearing. The court considers the whole of the property of the parties however and whenever required. This requires parties to comply with their obligation to make full and Frank disclosure of their financial circumstances.
2. Assess their financial, non-financial and welfare contributions as a percentage of the net value of their property (total net assets or asset pool). A global approach has been applied by the courts as the guideline in most cases by assessing contributions in terms of a proportion of the total assets of the parties but that approach is not exclusive as an asset by asset approach can be employed.
3. Assess any relevant section 75 (2) factors, such as disparity of income, earning capacity and the capital cost of having the care of children under the age of 18. The Court adjusts the  entitlements based on future needs.
4. Consider the effect of those findings and specify what order should in all their circumstances be made for a just and equitable outcome to the parties.

Step 1 – Identifying the property of the property, liabilities, and financial resources of the parties as at the date of the hearing

What are the assets and liabilities of the parties?

The above question is answered by looking at the asset pool involved. The net asset pool is simply the party’s assets minus their liabilities. The list of assets and liabilities may include:

1. Those owed or owned by either party prior to the marriage or relationship
2. Those accumulated during the marriage or relationship
3. Those acquired during could post separation or the breakdown of their relationship

Property to which a party is entitled is defined to mean every possible interest a party can have and the courts power to alter the parties interest in all their property is regardless of when or how it was acquired and in whose name it is owned. Property has been held to include:

• All real and personal property such as houses
• Pre-marital property
• post separation lottery wins
• Partnership in firms for businesses
• Past and present inheritances
• Overseas property
• Long service leave if in a capital sum
• Compensation
• Licences and transferable licences to engage in trade
• Interest in land
• Redundancy payments
• Credit in loan account
• Interest in superannuation
• Company shares
• Trust assets
• Share options
• Royalty rights
• Life insurance
• Cars
• Furniture and chattels
• Antiques and collectables
• Tools of the trade
• Realisable controlling shareholding

The realisation expenses and capital gains tax are deducted from the pool for investment properties although the court held in one case (Blake [2007]) that capital gains tax allowances should only be made on properties intended to be sold immediately.

Why valuations of property in Family Court are important

In situations where parties do not agree as to the value of their property, a valuation is required. If a court is in doubt over different valuations it may order the sale of the property. Land is to be valued for its highest and best use value including its development potential. The principle also applies to plant and equipment which should be valued for continuous use. In certain situations, property appraisals may be enough to give an indicative figure of the property’s worth.

• Real estate requires a valuation from a licenced valuer
• Motor vehicles -a red book figure may be used in the absence of evaluation
• Superannuation – the latest member statement may be sufficient, however if there is still a dispute, then superannuation information forms may be filed to the Super Fund and a valuation of the interest can then take place
• A partnership can be valued
• A business requires evaluation

What the Court held not to be property

Non-transferable licences or rights and choses in Action such as a partnership interests which are not wholly or partially assignable are considered property, but a partnership in a law firm assignable with partners consent was held to be property by the court. Expected inheritance from living testator and capacity to borrow money was not considered to be property. Other things held by the court not to be property are:

• Money held back in a bank account in trust for a child
• Non- commutable disability insurance contingent on insured health

Financial Resources

The following interests have been held not to be property for inclusion in the asset pool but a financial resource for consideration under section 75 (2):

• Business goodwill that is personal and not commercial
• Long service leave if likely to be in cash
• A future pension entitlement
• Future benefit from past tax losses
• Anticipated inheritance if testator has lost testamentary capacity
• Accrued long service leave and annual leave if not paid out
• Overseas superannuation
• Assets of trust controlled by spouse parent’s

The family court will also have regard to the resources of a party or the benefits which may flow to the party pursuant to a trust or other family structure. The family court has power or jurisdiction to deal with any asset which is:

• Registered in the name of a company or trust which a party controls or in which a party has an interest. This includes assets held in established family trusts or business structures. For more information on this topic, see the topic Family Trusts in Family Court in our Blog
• Registered in the name of the party
• Registered in joint names

Separate asset pools

In certain situations, inheritance received late in a relationship or post separation can be treated as a separate asset pool.

Notional Property Added Back

The court has also recognised the concept of “notional property or add backs.” This concept means the Court may add back to the asset pool, those assets which:

• Formed part of the asset pool but have already been spent or disposed of. For example, funds invested in a joint account which existed at separation and may have been spent on a party’s legal fees.
• Have been prematurely distributed or disposed of by selling and benefiting from the proceeds of sale of an asset in which the other party had a legitimate interest. For example, by way of transfer to a third party or a gift to a third party.
• Have been wasted by one of the parties by way of wanton recklessness. This may include funds lost through gambling or extravagant expenditure.

The notional add back approach is used as an exception and not the rule by the court.

In determining the net asset pool , the court also considers the liabilities which may arise upon their division, transfer or sale of any assets. However they are exemptions available and some rollover relief on the transfer of assets between spouses or entities in which spouses have an interest in each case is different.

Effect of non-disclosure of assets in property settlement

The Family Court may make an order going beyond the identified property of the parties upon proof that a party has not made full and frank disclosure of their assets. A party to a property proceeding where there has been non-disclosure may apply to the Court for a matter to procced on an undefended basis.

Step 2 – Assessing Contributions

Once the asset pool has been identified, the Court’s role is to identify the types of contributions made by the parties to a relationship at the commencement, during and after their relationship has ended. At this stage the Court applies a percentage of that pool as an assessment of the parties contributions.

Types of contributions

1. Financial contributions made directly or indirectly by or on behalf of one party to the acquisition conservation or improvement of any of the property of the parties or either of them or otherwise in relation to any of that property and all property that has since the making of their contribution seem to be the property of the parties or either of them. Examples of this includes earnings or money or other assets brought into the marriage by a party or their parents or a party’s payment over deposit on a house, loan repayments or other outgoings or expenses to acquire maintain or improve real estate.
2. Non-financial contributions made directly or indirectly by or on behalf of a party to the acquisition conservation or improvement of any of the property of the parties or either of them or otherwise in relation to any of that property whether that property has since the making of the contributions seized to be the property of the parties or either of them. Examples of non-financial contributions include work done towards the maintenance or improvement of property including a business or a wife’s unaided child on home duties enabling their husband to pursue his business activities or career.
3. Contributions made by a party to the welfare of the family constituted by the parties and any children including any contribution made in the capacity of homemaker or parent. This type of contribution includes:

• • Pre cohabitation contributions
  • Contributions during cohabitation to property as well as homemaker and parent capacity
  • An asset brought into the marriage or relationship by party, the value of which as at the time of hearing is not its value as when first contributed
  • A party’s initial asset which was a springboard for acquiring more valuable property or other assets by the parties

Asset by asset approach to contributions

While a global approach is adopted in most cases an asset by asset approach may be taken in some cases. An asset-by-asset approach may be taken in the case of:

• Superannuation where significant contributions were made by the member spouse pre-relationship or post separation or both
• Super in the form of a pension payable to a member spouse for a disability arising from a work-related injury post separation
• A pension that cannot be converted into a lump sum payment
• An inheritance received by a party late in the marriage where the existence of other assets allow for a just result
• A short marriage where the parties kept their assets separately
• A long marriage where the parties finances were kept separate
• A long separation prior to the final hearing during which the party is informally managed different assets
• A property transferred to a party as a gift or under a partnership
• A post separation lottery win

Step 3 – Family Court’s approach to section 75 (2) as part of a property settlement

The Court’s determination of property settlement requires it to take into account and give appropriate weight to the initial contributions of the party. After that, the Court is required to consider the needs of each party and the factors known as “future needs.” In the case of a financially weaker party, the court will add a percentage of the asset pool to the contribution’s assessment for any relevant section 75 (2) factors. Alternatively, a specified amount may be awarded.

Section 75(2) Factors

These factors include those stated below:

• The age and state of health of each party
• Any disparity of income, earning capacity, property and financial resources
• Whether a party has the care of a child
• Each party’s commitments enabling self-support or the support of a child
• Each party’s responsibility to support another person
• A reasonable standard of living
• Any scope for increasing any capacity by paying retraining or reestablishment costs
• Effect of proposed order on creditors ability to recover debt
• A party’s contribution to other parties’ income, earning incapacity, property and financial resources
• Extend to which duration of marriage has affected a party’s earning capacity
• They need to protect a party wishing to continue their role as a parent.
• The financial circumstances of any cohabitation with another person
• The terms of any proposed property order
• Any child support paid or to be paid in the future for a child of the parties
• Any circumstance which the justice of the case requires to be taken into account
• The terms of any binding financial agreement between the parties
• The terms of any binding child support agreement between the parties

Economic and other consequences of divorce

The Court in certain circumstances is required to take into account the consequences of divorce and circumstances flowing on from that including any gaps between theory and real reality for employment especially for people in middle age lacking experience and confidence and who have been out of skilled workforce for many years. The Family Court also recognises and gives effect to certain situations  where there was  an acquisition and development of a party’s professional skills resulting in present high- or middle-income earning capacity  acquired during the marriage. For example, this could occur at the same time during which the wife could have sacrificed her professional skills and stayed home to care for the family and income opportunities foregone by reason of responsibilities to the children.

Other Section 75(2) Factors – contributions to other party’s child

The Court can award an adjustment in favour of the contributing party where a party provided financial, non-financial or welfare contributions to a child of the other party who is not their biological child. For example the payment of private school fees for the other party’s child can be taken into account.

Effect of proposed order on a party’s earning capacity

As part of its balancing Act in determining property settlement and division of the party assets, the Court is required to consider the effect of any proposed order on the earning capacity of either party to the marriage. For example an order which would deprive a party substantially of what he or she is entitled to by reason of contribution would not normally be considered just and equitable.

SUPERANNUATION

Treatment of superannuation of the parties

Property orders may include superannuation interests of spouses or De Facto partners. The Family Law Act enables valuation of the true worth of a superannuation interest of a party and empowers the court to make a splitting order requiring payments under a superannuation policy to be allocated between the member and the non-member spouse.

Superannuation splitting orders

Superannuation is an asset and can be taken into account in property settlement.

The Family Court may make the following orders in relation to a superannuation interest other than an unsplittable interest:

1. If the interest is not a percentage only interest -an order to the effect that whenever a splittable payment becomes payable in respect of the interest :
   • The non- member spouse is entitled to be paid the amount if any calculated in accordance with the regulations; and
   • There is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order. Before making such an order the Court must allocate a base amount to the non- member spouse not exceeding the value determined under the Act.
2. An order to the effect that whenever a splittable payment becomes payable in respect of the interest:
   • The non- member spouse is entitled to be paid a specific percentage of the splittable payment; and
   • There is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order.
3. If the interest is a percentage-only interest -an order to the effect that whenever a splittable payment becomes payable in respect of the interest:
   • The non – member spouse is entitled to be paid the amount if any calculated in accordance with the regulations to the percentage specified in the Order
   • There is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the Order
   • Percentage only interests is effected in rare circumstances unless one of the parties is a judge governor or member of parliament
4. Such other orders as the court thinks necessary for the enforcement of an order under paragraphs (a) (b) or (c)

Step 4- what orders should be made for a just and equitable outcome?

This is the final assessment stage once the asset pool has been identified, contributions and section 75 (2) or s90 SF(3) are assessed. This step is not an opportunity to make a further adjustment, it is however an opportunity for the court to determine finally how in reality a just and equitable order might be achieved based on the circumstances of the case before it. However the court may adjust its assessment of steps two and three because of its likely impact on a party’s financial position and where a split of superannuation is available, may adjust  the assets each party is to receive.

It is important to note that “the outcome” must be just and equitable overall for both parties not just for one of them.

What is meant by the “just and equitable” requirement?

The court can not make an order to alter the property interests of the parties unless it is satisfied that in all circumstances it is just and equitable to make such an order.

The Court, when considering what order should be made, takes into account the following:

• The financial contributions made directly or indirectly by or on behalf of a party or child of the marriage to the acquisition, conservation or improvement of any of the property of either party whether or not the property has ceased to be the property of that party.
• Any non-financial contributions may directly or indirectly on behalf of a party.
• The contribution by a party to the welfare of the family the parties and any children in the capacity of homemaker parent or otherwise.
• The effect of any proposed order upon the earning capacity of either party.
• Any relevant matters under section 75(2) or s 90SF (3).
• Any other older made under the Act affecting a party or a child.
• Any child support that a party has provided or is to or might be liable to provide in the future.

Future needs or section 75(2) Factors taken into account by the Family Court

• The age and state of health of each party
• The income, property and financial resources of each party and the physical and mental capacity of each for appropriate gainful employment
• Any disparity in the party’s current earnings
• Each parties’ earning capacity
• The commitments of each party that are necessary to enable the party to support himself or herself and a child to another person that the party has a duty to maintain
• Whether a party has the care of a child under the age of 18 years
• The level of child support if any being paid
• The eligibility of either party for a pension allowance or benefit or superannuation
• A standard of living that in all circumstances is reasonable
• Extend to which payment of maintenance would increase the earning capacity of an applicant by enabling them to undertake a course of education or training or establish themselves in a business or otherwise to obtain an adequate income
• The effect of any proposed order on the ability of a creditor of a party to recover the creditors debt so far as that effect is relevant
• The extent to which a party has contributed to the income earning capacity property and financial resources of the parties
• The need to protect a party who wishes to continue their role as a parent
• The extent to which the duration of the marriage our relationship has affected the parties end in capacity
• The financial resources relating to cohabitation with another person
• The terms of any property order that is in place
• Any child support that a party has provided, is to provide, or might be liable to provide in the future for a child of the marriage or relationship
• Any facts or circumstances which in the opinion of the court the justice of the case requires to be considered.

What About Capital Gains Tax, GST And Stamp Duty?

In determining the division of assets between parties , the court is required to consider the general principles for the proper approach to the effect of potential capital gains tax payable upon the sale of an income earning (investment) property when necessary. The guidelines below are applied whenever necessary by the Court as the justice and equity of each case requires:

1. Whether the incidents of capital gains tax should be taken into account in valuing a particular asset is dependent on the circumstances of the case including the method of valuation applied to the particular asset, the likelihood or otherwise of that asset being realised in the foreseeable future,  the circumstances of its acquisition and the evidence of the parties as to their intentions regarding that asset.
2. If the Court orders the sale of an asset, or is satisfied that a sale of it is inevitable or would probably occur in the near future, or if the asset  was acquired solely as an investment and with a view to its ultimate sell for profit, then generally allowance should be made for any capped against tax payable upon such a sale in determining the value of the asset for the purpose of the proceedings.
3. If none of the circumstances referred to in (2) applies to a particular asset the Court may make allowances for the capital gains tax payable on such a sale in determining the value of the asset as a relevant section 75 (2) factor. The weight to be attributed to that factor will vary according to the degree of the risk and the length of the period within which the sale may occur.
4. There may be special circumstances in a particular case which despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future may make it appropriate to take the incidence of capital gains tax into account in valuing that asset.

KEY FEATURES OF CAPITAL GAINS TAX (CGT)

• It takes effect upon disposal of assets acquired on or after 20 September 1985
• Governed by division 104 of the income tax assessment Act 1997 (ITAA)
• Capital losses can be offset against capital gains
• A full list of capital gains tax events (disposal is set out at section 104.5 of the ITAA)
• Asset is any property or legal or equitable right
• Includes goodwill of a business and an interest in a partnership
• Includes a building post CGT on land acquired pre-CGT
• CGT exemptions include pre CGT assets, the home, cars , motorcycles , collectables , personal assets , trading stock , bank accounts , life policies and superannuation funds
• Main residence exemption available to each spouse if they are separated
• Capital gain =capital proceeds – cost base of asset
• Capital loss = reduced cost base of asst- capital proceeds
• Cost base include price paid for asset, incidental and capital costs
• Reduced cost base is the same less deductible amounts
• 50% discount if asset held for 12 months before disposal
• Discount available to individuals and trustees but not companies
• Small business concession
• Roll-over upon marriage breakdown

Roll-over relief

Roll-over relief is available where an asset is transferred under a property Order or for a financial agreement between spouses or from a trustee to a spouse. Roll – over relief means the deferral of CGT liability until the transferee eventually disposes of the asset. The transferee is taken to have acquired the asset when the transferor did so the transferee’s eventual disposal of the assets:

• Will be CGT if the transferor had acquired it pre-CGT
• Will attract CGT if it had been acquired by the transferor’s cost base at all the time of transfer to the transferee plus incidental costs.

Income tax

Division 7A of the Income Tax Assessment Act 1936 (known as Division 7A)treats (deems) amounts paid or lent or debts forgiven by a private company to a shareholder or shareholders’ associate as dividends. Associate includes a shareholder’s spouse. This treatment takes into account the amounts income of the shareholder or associate. Exceptions include debt repayment and certain business loans.

Goods and services tax

GST is governed by a New Tax System (Goods and Services) Act 1999 (known as the GST Act). GST ruling 2003 /6 explains the GST be consequences of a transfer to a spouse over an enterprise asset of their spouses or either of them or a related entity registered or required to be registered for GST as a result of a property distribution under the family law Act. Enterprise asset is defined to include trading stock plants office equipment motor vehicles on real property. However it is imperative to seek advice from a tax accountant to determine exactly what items attract GST and what percentage of GST is payable.

The Court requires proof to prove what liabilities are or are likely to be.

Stamp duty

Section 90 of the Family Law Act exempts from any duty or charge under state or territory law transfers on other instruments executed for the purposes of or in accordance with a property or spousal maintenance order. This includes financial agreement transfers on other instruments. A transfer pursuant to a family law act order or financial agreement is also exempt from stamp duty regardless of the parties to the transfer although the transfer  should be identified in the order or agreement in the case of an agreement a separation declaration is also required.

In Western Australia, section 131 of the duties Act 2008, a nominal duty of $20 is payable on a transfer of property of the parties under the family law act or the family court Act Orders or under a Financial or Splitting agreement under the Family Law Act act if the transfer is to a party, a child or trustee of child relationship has ended and they transfer is to a party a child or child’s trustee. proof of the order or agreement is required. It is always a good idea to check with your settlement agent whether a transfer under a family court act order or agreement would be accepted or whether a separation agreement should be prepared for the transfer to be effective.

Can I get 50 % of our assets?

There is no presumption at law that property is to be divided equally or in any other way. How much a party gets is dependent on the circumstances of each individual case according to the principles of law under the Family Law Act or Family Court Act 1997 for De Facto couples in Perth Western Australia. Claims for property settlement and maintenance orders may be issued if either party is either present or ordinarily resident in Australia or is an Australian citizen when the application is filed. It does not matter if parties were married in another country so long as they fulfil this requirement, they may be entitled to property settlement and can issue proceedings in the family court.

What about De Facto partner’s claim to property?

A De Facto claim requires a two year relationship or a child or substantial contributions in relation to a De Facto relationship (and serious injustice if the order is sought is not made) or a registered relationship and that either party was ordinarily resident in Australia when the application was made and that (unless both parties were ordinarily resident there for a third of the relationship or substantial contributions have been made there) both parties were ordinarily resident there when the relationship broke down.

The Family Court can decline to exercise its powers where proceedings are pending in another country.

Delays and Time limits for commencing Applications for property claims

The deadline for a property or spousal maintenance claim application is 12 months after a divorce order has taken effect 2 years after the end of a De Facto relationship or 12 months after a binding financial agreement is set aside or except by leave or consent of another party. This timeline limit does not apply to Applications to set aside a property order or to vary, revive, suspend or discharge a maintenance order. The Court will not grant leave or permission for a party to file an application unless it is satisfied:

• That hardship would be caused to a party or a child if leave were not granted; or
• In the case of maintenance, that at the time of the deadline for issuing property proceedings the applicant’s circumstances where such that she or he would have been unable to support himself or herself without an income tested pension, allowance or benefit.

Leave for maintenance applications out of time

Each case is assessed on it’s own merit. However, the Family Court may grant leave to proceed out of time for maintenance if a party is likely on face value suffer hardship if the application was denied. The Court considers the reasons for the delay. The deadline for a property or spousal maintenance Holder is 12 months after a divorce order has taken effect or two years after the end of a De Facto relationship or 12 months after a Binding Financial Agreement is set aside except by leave or consent of the parties. Hardship is more than the loss of a right to commence proceedings , a party must have a prima facie claim worth pursuing. The Court also considers whether prejudice to the other party will occur in addition to the merits of the applicant’s claim.

The time limit does not apply to applications to set aside a property order or to vary or to revive suspend or discharge a maintenance order under section 83 of the Family Court Act. The Court shall not grant leave unless it is satisfied:

• That hardship will be close to a party or a child if leave were not granted; or
• In the case of maintenance that at the time of the deadline for issuing proceedings a party circumstances where such that he or she would have been unable to support herself or himself without an income tested pension allowance or benefit.

If the Court is satisfied as to hardship, then the court is required to consider whether in the exercise of its discretion the code should grant or refuse live to Institute proceedings.

An application for leave to proceed out of time cannot be continued after the death of the other party.

Adjournment of property settlement

The Court may if requested by either party adjourn proceedings if it is of the opinion that there is likely to be a significant change in the financial circumstances of the parties or either of them and that having regard to that change is likely to occur it is reasonable to adjourn the matter and an order made at that time is more likely to do justice than an order made immediately.

In forming an opinion as to the likelihood of a significant change in financial circumstances ahead, the court may have regard to any such change that may occur under a superannuation scheme or discretionary trust where its trustee distributes trust property to a party or by other means.

Interim property Orders

Interim orders in respect to property may be made before any adjournment where are appropriate if the Court is satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the Order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so in a given circumstance.

Partial property settlement

In certain situations involving a party to a marriage, if a party is going through properly settlement, a party can negotiate for a partial property settlement for an advance of money to each party towards legal costs, valuation fees and other expenses such as purchasing a home for example. This happens in circumstances where one party has no ready access to funds or realisable assets. Such funds can be characterised as partial property settlement and may be added back to the asset pool although they will be debited to each party’s entitlement when the final property division is calculated. Such payments can be documented as part of the ‘interim orders’.

Contact one of our Perth Family Lawyers at ABMS LAWYERS to find out whether you are entitled to partial property settlement on an interim basis on (08) 9468 3297 or at office@abmslawyers.com.au.

Declaration About Existence Of De Facto Relationship

Parties to a De Facto relationship may not automatically be entitled to a partial property settlement order if there is a dispute about the existence of a relationship and a dispute in respect to a party’s right to property orders. In WA, a respondent may seek an interim order dismissing the case for want of jurisdiction, however if the court does have jurisdiction it may still award costs. A declaration maybe sought that a De Facto relationship of at least two years existed or did not exist between the parties or that their relationship broke down before or that substantial contributions have been made.

A person is in a De Facto relationship with another person if they are not married or related to each other and having regard to all the circumstances of their relationship they have a relationship as a couple living together on a genuine domestic basis. A De Facto relationship includes same sex partners and can exist if a party is married to someone else or is in another relationship. Those circumstances may include:

• Length of the relationship
• Nature and extent of their common residence weather in sexual relationship exists
• Degree of financial dependence and support
• Ownership, use an acquisition of property
• Care and support of children
• Degree of mutual commitments to a shared life
• Reputation and public aspect of the relationship
• Whether the relationship is or was registered (for those in some other states)

Interim Injunctions To Preserve Property

Injunctions in Family Court can be made where a Party has commenced proceedings for Court Orders to prohibit the other party from accessing or dealing with property a certain way, for inspection or seizure of documents without notice to the Respondent or property or to alter their rights liabilities or property rights of a third party.

Injunctions where there is a risk of disposal of assets or their removal from Australia

An order may be mad restraining another party from removing property from Australia or dealing with property in or outside Australia. You have to file an affidavit that includes:

• A description of the nature and value of your spouse’s property so far as it is known to you in Australia and overseas
• The reasons why you believe that the property may be removed from Australia and may be dealt with or disposed of and why your spouse should be restrained by an order from dealing or disposing of the assets
• A statement about the damage you are likely to suffer if the order is not made
• A statement about the identity of anyone other than your spouse who may be affected by the Order and how the person may be affected.
• In some cases, the possibility open intention to do or to hide property or dispose of it may be sufficient to establish the probability of the risk of disposal with intent to defeat a court order. However you also need evidence of this intention, not just a suspicion. Your spouse may in certain situation appeal against an injunction when necessary.

Is there an alternative to applying for an injunction?

Where the risk of disposal relates to an asset that is small in value relative to the value of the asset pool such as a car for example:

• You should put your spouse on notice that you are aware of their intention to sell the asset.
• Object do they sell an call for a copy of the cell documentation so that the asset may be added back to the asset pool notionally and if your spouse spends the money on himself the proceeds of sale can be debited against his or her ultimate property entitlement.
• If the asset in question is real property, it may be quicker and easier to lodge a caveat against the property in question where the interest claimed is equitable or is co-owned inequity.

When not to apply for an injunction

• When the amount is small enough for your ultimate property recovery not to be jeopardised and you can prove the amount of value disposed of which can allow the Court to add it back notionally to the asset pool
• When the asset disposal is in the ordinary course of business
• When your only or main complaint is being excluded from access to the business or its record when your concerns are based on ambiguous statements by the other party
• When your case is based on mere suspicion or fear of assets being disposed of

Seizure of documents or other property

If you can prove your knowledge and existence and location of a vital piece of evidence or valuable item of property and your spouse fails to disclose it or to make it available for evaluation, you can apply to the Court for an order to seize property or documents. This type of Order is known as Anton Piller Order. This type of order entitles you to apply for such an order:

• Requiring your spouse to allow you alone or with another person to enter your spouses premises an inspect or seize documents or other property
• Requiring your spouse to disclose specific information relevant to the case
• Restraining your spouse for a period of no more than seven days from informing anyone else other than his lawyer that the order has been made.

An application for an Anton Piller order must be supported by an affidavit which includes:

• A description of the document or property to be seized or inspected the address of the premises where the order is to be carried out
• The reason you believe your spouse may remove destroy or alter their documents or property unless the order is made
• A statement about the value of the property to be seized
• If permission is granted the name of the person if any who you wish to accompany you do your spouse’ premises.

Can third parties be bound by court order?

The Court has the power in relation to the property of a party to a marriage to make a property order or grant an injunction in both marital or De Facto claims that is directed to, alters the rights, liabilities of property interests of a third party.

If you require further information of assistance in respect to your property or you suspect the other party may be hiding property to defeat your claim to that property, call one of our Family Lawyers at ABMS LAWYERS on (08) 9468 3297 or via email at office@abmslawyers.com.au

Setting Aside Or Varying Property Orders

The court may set aside or vary a property order and if considered appropriate make another order in substitution if it is satisfied:

• A miscarriage of justice by reason of fraud, duress, suppression of evidence including failure to disclose relevant information, they giving a false evidence or any other circumstance
• Circumstances since the order was made are such that it is impracticable for the order or part of the order to be carried out
• default in carrying out an obligation imposed by the order and in the circumstances that have arisen because of that default it is just an equitable to set aside or vary the order
• Exceptional circumstances since the order relating to the care, welfare and development of a child where the child or a party will suffer hardship if the order is not set aside varied or
• A proceeds of crime order having been made covering property of the parties or either of them or having been made against a party.
• The Court may also set aside transactions all dispositions made oh proposed to be made to defeat an existing or anticipated order of which irrespective of intention is likely to defeat any such orders. This includes bankruptcy insolvency orders charging money or property for course maintenance or payment into court all protection of good faith purchases etc.
• A person acting in collusion with a party may be ordered to pay the cost of add a party good faith purchaser or interested persons.

The Family Law Act allows the code to discharge a property order by consent of the parties. The court may also set aside consent Orders made by consent if it is of the view that a party will suffer loss or if one party acted improperly.

Orders may also be set aside by the conduct of the parties to a settlement. For example, when parties reconcile and do not implement the court order.it would be inferred from their conduct that they have consented do they setting aside of the original order.

Enforcement of property orders

The best means to enforce an order is to anticipate the need to enforce by including in the terms of settlement self-executing enforcement remedies. It is also wise to include an order to enable a registrar of the court to sign any document on behalf of a party who refuses to execute documents.

Other options for enforcement of court orders

• A party can enforce orders by issuing an application in a case to enforce an order pursuant to the court’s power to do so under section 105 of the family law Act. The application must be accompanied with an affidavit in support of setting out a party’s evidence.
• A party can issue a contravention application seeking orders that ensure compliance and also an imposition of a sanction. search orders can include costs against a party on an indemnity basis due to the breach of the court orders by another. Sometimes a sanction can include a fine. In very rare cases, a term f imprisonment can be imposed by the Court and it may or may not be suspended accordingly.
• The procedure also applies to parenting orders .

Effect of death on property proceedings

Where a party dies before property proceedings are completed:

• Set proceedings may be continued by or against the personal representatives of a deceased party
• The court may make a property order it would have made had the party not died, if still appropriate
• Set order is enforceable by or against the disease parties estate.

The proceedings need only be found not found and served before dates for these sections to apply.

In the case of a dispute as to who the executor of an estate is the proceedings as suspended until a grant of probate or letters of administration is obtained.

Bankruptcy and family law proceedings

The Family Court has powers to make a property order even though property has vested in the bankruptcy trustee of a party, altering the interest of the trustee in the vested bankruptcy property.

• Such an Order may require the trustee to transfer property to the non- bankrupt spouse.
• The bankruptcy trustee may be joined as a party to the proceedings in which a property order is sought, and a party was a bankrupt or before completion of proceedings a party becomes a bankrupt.
• The trustee in bankruptcy may also upon the application of the non- bankrupt spouse be restrained from distributing dividends among creditors. So may the trustee of a personal insolvency agreement.
• Upon a bankruptcy trustee becoming a party to the proceedings, the bankrupt party is not entitled to make a submission to the court in connection with any vested bankruptcy property.
• the four-step process to determining a property dispute still applies where a spouse is or becomes a bankrupt during the proceedings.
• Astor spousal maintenance the liability of a bankrupt party to maintain the other party may be satisfied in whole or in part by where of the transfer of vested bankruptcy property in relation to the bankrupt party.
• An application to discharge, suspend, revive or vary a spousal maintenance order may be issued by a trustee in bankruptcy.

Creditors and other third parties in property proceedings

The Court has the power to make a property order or grant an injunction that is directed to or alters the rights liabilities or property interests of a third party. Any person who is a creditor or third party may apply for leave to intervene in proceedings. A person granted leave to intervene is deemed to be a party to the proceedings with all the rights, duties and liabilities of a party.

The Orders the Court can make against a creditor or third parties are as follows:

• An order directed to a creditor of the parties to substitute one party for both parties in relation to their debt
• An order directed to a credit are of one party to substitute the other or both parties in relation to the debt
• An old are directed to a creditor of the parties that the parties be liable for a different proportion of the debt
• An order directed to a director of a company or to a company to register a transfer of shares from one party to the other.

The Court can only make other orders if:

• It is reasonably necessary or appropriate to effect the division of property between the parties
• It would not foreseeably result in the debt not being paid in full
• the third party has been given procedural fairness as to the making of the order
• The Court is satisfied that in all the circumstances it is just an equitable to make the order
• The court is satisfied that it considers the following matters:
• The taxation effect if any of the order on the parties to the marriage
• The taxation effect if any of the order on the third party
• The Social Security effect if any of the order on the parties to the marriage
• The third parties administrative costs in relation to the order
• as to an order relating to a debt, the capacity of the party to repay the debt after the order is made and hardship likely to be suffered by that party
• The economic legal and add a capacity of the third party to comply with the order
• Any other matters raised by the third party if joined to the proceedings
• Any other matters the court considers relevant

 Injunctions Binding Third Parties

The Court has powers to grant an injunction which binds a third party in respect to property settlement and similar to the above.

Frequently Asked Questions

Why should I disclose all my assets and income especially when the other party is refusing to disclose?

You should disclose all interests and assets regardless of whether the other party is disclosing or not. This is because there is an obligation on you to disclose all matters relevant to your financial position imposed on parties to Financial proceedings to be frank in respect to all their financial matters. The Family Law Rules which govern the way applications for financial settlement are dealt with in Family Court stipulates that parties to financial cases must disclose documents to the other party to the proceedings which is or has been in their possession or under their control which demonstrates their financial circumstances and is relevant to the issues in dispute in the case. The obligation to give full and frank disclosure is ongoing and continues from the time that financial settlement negotiations commence until final orders are made to resolve their financial matters.

The Family Court may make an order going beyond the identified property of their parties upon proof that a party has not made full and frank disclosure of their assets. A party to a property proceeding where there has been non-disclosure may apply to the Court for the matter to proceed to an undefended hearing.

Is money from parents or family members a loan or a gift?

It depends on the circumstances of each individual case and whether there is any evidence given by the creditor about the debt to be called in. Sometimes there are problems when it comes to assessing secured and unsecured liability upon the breakup of the marriage or relationship especially in circumstances where there is no evidence that such an amount was intended to be alone to the party. An example of this includes a case where a deed for money lent by a party’s father was dismissed as entirely self-serving as was a retrospective mortgage.

The Family Court treats gifts and loans differently. If money is given to you as a gift, then there is no expectation that it will be repaid. If money is given as loan, there is an expectation that it will be repaid. In family situations, there is usually no documentation to show that money was given as a loan or a gift which can complicate the situation.

What do I do if my ex is selling or disposing of assets?

You should not wait to see what will happen. You should act very fast and don’t waste time. The Family Court can make an order on an urgent basis to prevent a party from selling or disposing of assets if there is evidence that there is a real risk that the sale or disposal being undertaken to defeat the other party’s potential claim for a financial settlement. This type of order is known as injunction or restraint. In certain situations, when an asset has been disposed of or has been sold, the court may still make an order to prevent the proceeds of sale from being spent or dissipated pending a final settlement or final court orders being made. The Family Court can order that assets including the proceeds of sale of the property whether real or otherwise be preserved and not be dealt with or disbursed without the consent of the other party or until the Court makes an order as to the way the item is to be disbursed off if required.

Do I have to maintain my ex or pay Support or Maintenance?

Applications for Perth property settlement and spousal maintenance are  heard together but the court will rule on the entitlement to a property order first because after the property settlement they may not be no need for maintenance as well. In certain instances there is need for a distinction between a maintenance component and an order for lump sum maintenance because a maintenance component it’s part of an overall settlement order and as such is final and not capable or variation under a spousal maintenance order.

In some cases parties to a De Facto relationship or marriage may have the right to receive maintenance from the other party. A party to a De Facto  relationship or marriage is liable to maintain the other to the extent that they are reasonably able to do so if and only if the other party is unable to support themselves adequately whether it by:

• Reason of having the care and control of a child of the relationship who has not attained the age of 18 years
• Reason of age of physical or mental incapacity for appropriate gainful employment
• Or for any other adequate reason
• The court must determine whether the payer a is reasonably able to pay the payee and whether r the payee is unable to support themselves adequately. The family court has extensive power to order that the payer pay the other party aperiodic or lump sum  of maintenance.

The court may also consider it proper to order that in addition to paying a periodic sum, the payer pay certain expenses on behalf of the payee. The payments may include mortgage repayments associated with the home in which the payee he is living, private health insurance premiums, outgoings on the home or  associated with a home in which they pay is leaving or outgoings associated with any such home and other expenses which they pay is unable to meet themselves but which are or can be reasonably incurred.

The amount of spousal maintenance a party is liable to pay or maybe liable to pay to another party is determined based on the consideration of the parties respective financial and personal circumstances at a time of the hearing to determine the issue.

What should I bring to the initial consultation?

If you are wondering what to bring to your initial appointment with your Lawyer, you are not alone. Below is a list of the information that you should start collating when you plan to have a meeting with your Lawyer:

Dates of significant event

• When you met the other party
• When you commenced living together, got engaged or were married
• When your child/children were born
• When you separated from other party
• When you got divorced if applicable
• A list of assets you and other party own separately and jointly, when you purchased them and how much (don’t worry if you cant recall the dates of amounts)
• Any documentation relation to your debts and liabilities
• Any proof of ownership of assets and debits if any
• Names of the super fund and your superannuation entitlements and latest member statements and interest you and other party own as at the date of your appointment, if it’s a self managed super fund, then a deed and financial statements for the current /financial year
• Names of any family or unit trust under which you are a beneficiary
• Any address of real estate that you and other party owns
• Name of bank and accounts such as debit, credit card and loan accounts which you and your spouse /former  De facto conduct either in Australia and overseas
• Any overdraft and redraw facility, credit or borrowing facilities , lines of credits which you or your spouse can access and the limit of any such facilities
• Current balances on your debit and credit facilities
• Names of business and position of director/shareholders, company constitution,
• Names of shares and share certificates, life insurance policy, boats and marine craft, furniture and contents, tools of the trade, equipment and machinery
• Artworks/ antiques and collectable if any
• Jewellery
• Any loans which are not secured and outstanding  balances
• The address of any real estate which is owned by you or your spouse or former de facto
• Names of the registered proprietors or any real estate and estimate of value
• The full names and list of any assets and liabilities owed by any company in which you or your spouse  or de facto have an interest in, either as director shareholder
• The full names of the trusts/family unit trust, assets and liabilities of the trust in which you or your spouse  have an interest as a trustee or beneficiary or unit holder
• A list of the assets you or the other party have sold or disposed of since separation
• Name and value of any interest which you or the other party have in any deceased estate(s)
• Any other assets of significant value that can be realised into cash

If you require further information of assistance in respect to your property or you suspect the other party may be hiding property to defeat your claim to that property, contact us on (08) 9468 3297, via email, or make an appointment online.

Our Other Perth Family Law Services

Asset Division & Financial Separatioin|Binding Financial Agreements|Child Support And Child Maintenance
|De Facto Relationships|Divorce & Separation|Contraventions and Breaches of Court Orders and Enforcements|Family Violence Restraining Orders (FVROs) & Violence Restraining Orders|Form 11 Consent Orders|Mediation|Property Settlement