The Difference between a Parenting Plan and an Order by Consent

Beatrice Zhang

Beatrice Zhang

Online Legal Information Author at Family Law Express
Beatrice is a second year student at the University of New South Wales, studying a combined Arts/Law degree. She majors in Development Studies, and as such is interested in social justice and law, particularly on an international scale. She plans on becoming a legal practitioner upon graduating.
Beatrice Zhang

parenting-orders

A parenting plan and a parenting order by consent (aka a consent order) are two of the methods available to separated parents who are creating a formal agreement concerning their shared parental responsibilities. Whilst the two methods are both written agreements binding the parties to their agreed roles and responsibilities of child-raising, there is one key difference: a consent order is developed through the court and is legally binding, whilst the parenting plan isn’t. This article will explain the finer differences between the two, so that upon reading this, parents are able to make an informed decision about which method better suits them.

What Are They?

A parenting plan is a formal written document, signed by both parties, which outlines how they plan to raise their child/ren and split the parental responsibility they had once shared. This plan is reached by the two parties together, and is a culmination of the deals and concessions that had to be agreed upon in order to come to a compromise. This is usually done without the external help of a legal professional, although both parties are free to consult one for advice should they feel the need to.

Whilst a consent order is also a formal written agreement detailing the parental arrangements, it differs from a mere parenting plan in that it is filed with the courts and recognised as legally binding document. As consent orders are processed by the courts, the process is more complicated than the process needed to create a parenting plan. The orders can be created in one of two ways: through the filing of a consent orders kit at a family law registry, or they can result mid-way through normal court proceedings, where parents previously in disagreement decide to agree to each other’s terms. The resulting consent order is one that is legally recognised and binding.

The Process

As the parenting plan is simply a plan for the relevant guardians of the child/ren, and is unaffiliated with the courts, the process of creating said plan is far more relaxed than the strict rules one has to follow to make consent orders. As the courts aren’t involved, the parents essentially set their own rules regarding the content, when and how the plan will be created, as they write up the plan themselves. It is recommended, but not necessary, to seek external advice from a counsellor and/or other important adults in the child/ren’s life.

In contrast, the two methods that can be used to create consent orders are both more structured, as there are official legal requirements which must be fulfilled. If the parties opt to use the consent orders kit, they must fill in the forms as per the instructions given in the kit, and submit it at the family law registry, where it is then reviewed and certified by a judicial officer. If the consent orders are developed through normal court proceedings, parents who were in conflict decide to agree to terms. These cases usually involve an Independent Children’s Lawyer (ICL), whose job is to act independently as the child/ren’s representative, and contribute to the development of the consent orders to best benefit the child/ren. A majority of consent orders are agreed to in court, rather than through the certification of consent order form.

parenting-plan-consent-orders-differences

Content and Language

Even though the two plans cover much of the same content – how the child/ren’s time will be split, particular responsibilities a certain parent must commit to, child support etc – the structure, length and detail of the parenting plan often differs vastly from those of the consent order.

In a parenting plan, the length and detail are left up to the parents’ discretion, as long as they both agree to the final document. In contrast, consent orders that requireform-filling need to be of a definitive structure, length and level of detail in order for the form to be processed and accepted by the Court. Consent orders that are developed through court will be guided by the court proceedings, and will usually have a structure, length and level of detail similar to one that was submitted through a consent order kit. It is also important to note that unlike the parenting plans, where the parties involved have the final say in what goes in the plan, with consent orders a judicial officer or the ICL has the final say and can add/remove provisions based on whether or not he/she agrees with them.

The type of language used in the documents can vary, as parenting plans are usually written in plain English, without the use of legal terminology, in order to be easily understood and interpreted by the two signees and other relevant relatives in the child/ren’s life. However, since a consent order is technically a legal document, and is written with the help of a legal practitioner, a judicial officer, and/or an ICL, the language tends to be more technical and legal in nature.

Legal Standing of the Respective Plans

An important matter of consideration when choosing a plan is the legal standing of the documents in the case of dispute, or non-compliance. A wronged individual is more likely to achieve justice if they are operating under a consent order. This is due to the legal nature of the order, where the breaking of a parenting order is the same as breaking the law. The court can and will penalise those who break a consent order, through means such as fines, jail time, community service, and compensation to the other party. The court can also order a change to the consent order which doesn’t favour the offender. The full list of penalties is listed in Division 13A of the Family Law Act.

The parenting plan on the other hand, is not a court order, and failure to comply with the plan is not the same as breaking the law in the eyes of the court. As such, parenting plans are strictly unenforceable. Interestingly, while they are less enforceable than consent orders, if a parenting plan is signed by both parties after a consent order, it supersedes the consent order, even though the parenting plan is not legally enforceable.

Time and Cost Required

Another pivotal point when choosing between the two options is the time and cost required to create the plan. For those looking to spend the least amount of time and money creating these documents, the parenting plan is the better choice.This is because while it is recommended that one seeks external advice, creating a parenting plan doesn’t require the services of a legal practitioner, and thus greatly reduces the total cost. Additionally, the fact that this document doesn’t need to be certified as a legal document in court means the cost of the court filing fee is also saved.

In contrast, hiring a lawyer is highly recommended with a consent order, even if it is not developed through court proceedings, as it is a legal binding document, and it would be unwise to sign it without ensuring one fully understands all the legal nuances of the document. This will cost significantly more than hiring a counsellor, but is vitally important to ensure full understanding of the legal rights and responsibilities, and to ensure one is acting within the law. Furthermore, a court filing fee will have to be paid for those created through a consent order kit, in order to get the document certified as a consent order. If the two parties choose not to hire a lawyer, the cost for filing a consent order is $145, as of January 2013.

Due to the nature of the documents, a consent order will also take more time to create than a parenting plan. A parenting plan is completed at the parties’ own leisure, as there is no external party overseeing the creation of the document, nor is there a set date by which one must complete it. Additionally, the parenting plan can be as detailed or brief as the parties choose, thus enabling them to spend as the amount of time they deem appropriate on creating the plan.The consent orders, on the other hand, are developed through the court, and as such must be completed during a specific time frame set by the court. Furthermore, the fact that the document is legally binding, as well as the more complicated language and minimum amount of detail required ensures that more time must be spent perfecting it.

Benefits and Disadvantages of Each

All in all, both plans have their benefits and disadvantages, and choosing one is simply a matter of personal preference and circumstance. The benefits of the parenting plan include the fact that the courts aren’t involved, making the document easier to change (with the consent of both parties) if circumstances change and/or difficulties in carrying out the original plan arise.  Additionally, the plain language and lack of legal terminology ensures that the plan is easy to understand by not only the two parties, but other individuals involved in the child/ren’s upbringing, such as grandparents, relatives, and child care workers. Additionally, a parenting order will generally cost less time and money to make.

However, the parenting plan is disadvantaged compared to the consent orders in how legally binding it is. The consent order benefits from having real legal power,which not only acts as a deterrent to breaking the contract, but offers a better means by which to penalise those that do break it. This is as the courts are able to directly punish the offender as a law-breaker. Furthermore, having a court, ICL and/or judicial officer, and lawyer overlooking the creation of the document ensures that everyone’s rights – the child/ren, mother and father – are adequately considered and protected, something that isn’t guaranteed with a self-regulated parenting plan.

However, one way in which it’s possible to have the best of both worlds is to convert a parenting plan to a consent order. This involves starting off with a parenting plan that both parties have agreed to already, and then converting this to a consent order with a consent orders kit, and then asking the Court to certify it. The only additional cost, compared to a normal parenting plan, is the $145 court filing fee. In this way, the parties get the ease and low cost of a parenting plan, with the legal benefits of a consent order.

From the points made previously, it is clear that whilst the information encapsulated within the actual parenting plan and consent order is very similar, the key difference lies in the creation of the document and its legal standing in the event of non-compliance. As such, parents who are looking at creating one of these documents should look at how they want to create it and what degree of legal enforceability they desire.

Family Law Express has sample parenting plans and consent orders in the Sample Legal Documents module, which parents should read over if they are considering either of the two options. We also have factsheets on how to develop parenting plans or consent order up on the website. These two can be accessed at:

www.familylawexpress.com.au/sample-legal-documents and www.familylawexpress.com.au/family-law-factsheets

Who, What & Where – Family Law Dispute Roadmap

Manisharaj Kaur Pannu

Manisharaj Kaur Pannu

Online Legal Information Author at Family Law Express
I am currently studying a Bachelor of Commerce (Accounting)/Laws degree at the University of Queensland. As my academic, professional and personal experiences have solidified my interest in commercial law, I am keen on pursuing a career in a commercial law firm that values excellence, diversity, and corporate citizenship.On a personal note, I am concerned by the diminishing access to the legal justice system facing our community, and wish to play a part in the efforts of ensuring that all Australians have equal access to the law to protect and enforce their legal rights.
Manisharaj Kaur Pannu

family-law-roadmapFamily Law issues such as a breakdown of a relationship, divorce, or dispute concerning parenting or financial arrangements can be stressful and traumatic for the parties involved.

In an attempt to resolve these disputes, many approach the courts. Nonetheless, courts are neither the simplest nor the sole avenue for dispute resolution. There are many stages involved prior to, and during a court process.

This article attempts to briefly explain these various stages and the role of the parties involved in each stage.

STEP 1:  ATTEMPT TO RESOLVE THE MATTER OUT OF COURT

Certain procedures such as applying for a divorce is a relatively straightforward process and often, a lawyer need not be involved. Nonetheless, a divorce does not resolve issues regarding children, property and other financial matters, and parties will need to make separate arrangements.  It is advisable that parties first attempt to settle these matters out of court.

1.1     Why Attempt To Settle Out Of Court?

Taking a matter to court can be a costly, complex and stressful process, and is often fraught with delay. It can also bear negatively on existing relationships and children. Parties have limited control over the process and no control over the outcome. There is no guarantee that a decision will be made in your favour.

On the contrary, attempting to reach an agreement out of court greatly reduces the financial and emotional burden on both parties. It enhances communication and often results in improved relationships, as it involves a relatively informal and non-confrontational process. Parties are free to control and tailor the process and the outcome according to their needs and underlying concerns. This flexibility will provide  parties with the opportunity to design an agreement that genuinely reflects both parties’ interests. Notwithstanding these advantages, attempting to settle out of court is dependent on the willingness of both parties to participate in good faith.

1.2     How To Settle Out Of Court?

Parties can choose to reach an agreement either on their own or with the assistance of a Family Dispute Resolution Service. 1

1.3     Family Dispute Resolution Service (FDR)

What is FDR?

FDR is a forum for parties to resolve family related disputes with the assistance of a FDR Practitioner. 2 An FDR practitioner is an independent, accredited professional who can assist parties to discuss issues, options and reach an agreement in relation to children, separation, property and other financial matters. 3 FDR usually takes the form of mediation with the FDR practitioner acting as a mediator. 4

What is Mediation?

Mediation is an informal, voluntary and confidential process in which parties to a dispute attempt to reach an agreement with the assistance of a mediator. Mediation is not a legal process, and a mediator does not provide legal advice. The mediator will help parties identify the nature and cause of the dispute, and to explore options for resolving the dispute. The mediator occupies a facilitative role for the content of discussion during the mediation, and will not determine the outcome of the dispute. It is important to understand that the mediator will not impose a decision, and will remain neutral throughout the process as an independent third party.

Is Communications In An FDR Mediation Session confidential?

Generally, communications to an FDR practitioner in an FDR mediation session are confidential5 and cannot be disclosed to anyone, including the Court.6 Please note that there are exceptions to this.7

Should I Get Legal Advice Before Attending An FDR Mediation Session?

You do not have to get legal advice prior to mediation but it is advisable that you do so, especially before signing any written agreement.

What Happens After I Attend An FDR Session?

The FDR practitioner will issue you with a certificate.8 The certificate is valid for 12 months from the date of the FDR Session.9

Is FDR Compulsory?

The law requires parties applying to the Family Court to make a genuine effort to resolve the dispute through family dispute resolution and obtain an FDR certificate.10 There are however exceptions,e.g. if the court is satisfied that there is a risk of child abuse of family violence.11

Do I Gave To Reach An Agreement In FDR?

No, you do not have to reach an agreement if you are unhappy with the outcome.

  1. Legal Aid Western Australia, Other ways to resolve a family law dispute (7 July 2013).
  2. Family Law Act 1975 (Cth) s 10F; Legal Aid Western Australia, Family Dispute Resolution (7 July 2013).
  3. Family Law Act 1975 (Cth) s 10G; Australian Government Attorney General Department, Family Dispute Resolution.
  4. Legal Aid Western Australia, Family Dispute Resolution (7 July 2013).
  5. Family Law Act 1975 (Cth) s 10H.
  6. Ibid s 10J.
  7. Ibid s 10H.
  8. Legal Aid Queensland, Family Dispute Resolution (25 November 2011).
  9. Ibid.
  10. Family Law Rules 2004 (Cth) reg 1.05; Family Law Act 1975 (Cth) s 60I.
  11. Family Law Act 1975 (Cth) s 60J.

Binding Financial Agreements (Pre-nups) in Australia

Katherine Patricia Finch

Katherine Patricia Finch

Online Legal Information Author at Family Law Express
University of Sydney
Katherine Patricia Finch

Latest posts by Katherine Patricia Finch (see all)

binding-financial-agreement-family-law-expressBinding Financial Agreements (BFA) are legally contractual agreements made between either de-facto or married couples before, during or after their relationship, regarding how their financial resources, assets and liabilities will be divided if their relationship ceases.  Australian BFAs are recognised by the Family Law Act 1975 (Cth) 1 and first became enforceable in 2000 with the enactment of the Family Law Amendment Act 2000. 2

Couples in unmarried cohabiting relationships, failing marriages and multiple subsequent marriages are becoming increasingly more common in current Australian society, which is why binding financial agreements are becoming increasingly more prevalent.

What kind of Binding Financial Agreements are there?

The term “Binding Financial Agreement” encompasses several types of contractual agreements such as Cohabitation Agreements, Pre-nuptial Agreements, Post-Nuptial Agreements, Divorce Agreements and Separation Agreements.

A pre-nuptial agreement is entered into before a couple gets married. A post-nuptial agreement is entered into after the couple is married. Divorce and Separation agreements are entered into by divorcing or separating couples. Cohabitation agreements are entered into by couples who will, do or have lived together.

Who can enter into a Binding Financial Agreement?

Binding Financial Agreements can be entered into by heterosexual or homosexual de facto couples, married or intending to marry, divorced, separated, cohabiting or intending to cohabit.

However, each person must have received separate legal advice from different lawyers working in different law firms. It is also important to note that a person cannot enter into multiple BFAs with different people at the same time.

When can you enter into a Binding Financial Agreement?

Binding Financial Agreements can be entered into by married couples before, during, or after their marriage, or after they divorce.  De facto couples can enter into a BFA before they commence living together, during their cohabitation together or after they separate.

How to enter into a Binding Financial Agreement:

binding-financial-agreement-download-samplesAccording to the sections 90 G1 3 and 90UJ(1) 4 of the Family Law Act 1975 (Cth), in order for a Binding Financial Agreement to be an enforceable agreement there are several requirements that need to be met. There must be a signed agreement and before the agreement has been signed the parties must receive legal advice required by the Act. Either before or after the parties have signed the agreement, each party’s legal practitioner must provide a statement to that party that the requisite advice has been given and a copy of the statement to the other party. Also, the agreement must not have been terminated or set aside by the court in order to still be valid.

Relevant Cases:

The recent ‘Pole Dancer Case’ is a landmark decision that has established that although wording in the Family Law Act before 2010 was relaxed in regards to the requirement for binding financial agreements to include statements that legal advice had been given to clients and signed by solicitors, BFAs created within those times are still valid.

The issue of ensuring each party has obtained the necessary legal advice has been discussed in Hoult v Hoult [2011], where it was held that certificates given with financial agreements do not amount to evidence that sufficient legal advice has been given by solicitors. This is crucial because if the requirements of sufficient legal advice are not met, the agreement may be invalid.

Uncertainties of BFAs:

Even small mistakes such as minor technical flaws made while drafting binding financial agreements can cause the whole agreement to be invalid, which is why it is of the upper most importance that agreements adhere strictly to the requirements set out in the Family Law Act (Cth).

An example of this can be seen in the recent high profile Grant Hacket case, where an error in his pre-nuptial agreements due to alleged negligence on behalf of his lawyers caused the couple’s agreement to fail, resulting in financial losses for Grant Hacket upon the ending of his marriage.

What do Binding Financial Agreements look like?

Sample pre-nuptial agreements can be found in the Sample Legal Documents module on Family Law express, while a legal practitioners factsheet on pre-nuptial agreements can be found in the Family Law Factsheets module.

  1. Family Law Act 1975 http://www.austlii.edu.au/au/legis/cth/consol_act/fla1975114/.
  2. Family Law Amendment Act 2000 http://www.comlaw.gov.au/Details/C2004A00736.
  3. s90 G1 Family Law Act 1975 http://www.austlii.edu.au/au/legis/cth/consol_act/fla1975114/s90g.html.
  4. s90UJ Family Law Act 1975 http://www.austlii.edu.au/au/legis/cth/consol_act/fla1975114/s90uj.html.

Disputing Legal Costs in Family Law Proceedings

Jessica Goddard

Jessica Goddard

Online Legal Information Author at Family Law Express
I am currently studying my fourth year of a combined Law and Social Science degree, majoring in development and cultural studies at Macquarie University, NSW. I have a strong passion for social justice and humanitarian issues and highly value the role of legal research and legal reform in positively impacting these areas. I have paralegal experience spanning a number of areas of law and endeavour to use my legal knowledge and skills to assist those facing legal complications or a challenge of their rights.
Jessica Goddard

Disputing Legal FeesFamily law proceedings can be both emotionally and financially challenging. Clients involved in family law proceedings generally have both the knowledge and expectation that they may incur significant costs throughout the process.

Whilst Legal Aid and Community Legal Centres aim to provide financial assistance to those suffering legal hardship, their limited funding means that too often families are faced with the heavy burden of extensive legal costs. Such legal costs are for the most part unavoidable but there are several avenues available for clients to dispute hefty and overzealous legal costs.

What costs should I expect?

Now to the question of what legal costs we are talking about. Schedule 3 of the Family Law Rules 2004 (Cth) (Family Law Rules), made under the Family Law Act 1975 (Cth) (Family Law Act) stipulates appropriate fees for lawyers to charge clients in family law matters. The Family Law Rules recommends that any time reasonably spent by a lawyer on work which requires the reasonable expertise of a lawyer should be charged at $212.85 per hour. For time reasonably spent on relevant work of either a lawyer or a law clerk, charges are suggested at $138 per hour, while chamber work for Junior Counsel is recommended between $244.40 and $348.55 per hour, and for Senior Counsel, between $409.35 and $701.75 per hour. In addition, recommendations are made for specific tasks commonly required of lawyer’s in family law proceedings.

.

..the reasonable expertise of a lawyer should be charged at $212.85 per hour.

Whilst it is important to note the Family Law Rules it must be remembered that they are merely guidelines. Community Law Australia have reported that hourly rates for lawyers can vary from $200 an hour to more than $600 an hour. 1 Such rates are of course dependent on a number of factors including the nature of the legal matter and the expertise and experience of the lawyer. Based on a compilation of previous studies, the Australian Government Attorney General’s Department estimated that a Family Court matter costed an applicant an average of $6,499.00 in legal fees and disbursements, and an average $8,807.00 for respondents. 2

What am I paying for?

There are a number of different costs associated with family law litigation. Most of these costs will generally filter through a clients’ lawyer and appear on an itemised bill but the various costs make a client financially liable to a number of entities. An unavoidable cost that clients in family law matters face is court fees, which, dependent on the nature of the application may initially range anywhere from $105 to $1205 for Family Court matters, and $105 to $800 in Federal Circuit Court matters. 3

…while chamber work for Junior Counsel is recommended between $244.40 and $348.55 per hour, and for Senior Counsel, between $409.35 and $701.75 per hour.

In addition, family law matters will generally always involve work by Counsel, that is, work by barristers in addition to that of solicitors. Counsel fees will vary depending on the experience of the barrister and the amount of time required of them in court. Clients involved in child custody disputes may also face an additional cost of an independent child lawyer, a lawyer appointed by the court to assess and represent the best interests of the child or children involved.

Disbursements, another major cost incurred by clients, are the costs of work associated with a matter not included in the hourly rate of lawyers. Disbursements can be the cost of anything from an assets or property search, to a process service fee for serving documents on a respondent party, to postage or printing costs for briefs and lengthy affidavits.

Under court orders, a client might also be liable to pay the legal fees of the respondent party in whole or part, these costs known as party to party costs. Whilst there are a number of circumstances in which the court may order party to party costs, the financial standing of parties is a significant factor. Where mediation and court hearings are involved, further costs are payable by the client; costs of a mediator, of professional witnesses, court hearing and mediation fees, and the additional costs payable to lawyers for preparation work.

What do these costs really look like?

Whilst costs will vary dependent on the nature of the matter, a look at estimates and statistics concerning the costs associated with divorce reveal the following.

Initial steps – the Application:

–          The cost of a divorce application = $800. 4

–          The costs of initiating an application for orders relating to children and financial matters = $500. 5

–          The cost of filing a response to these applications = $305. 6

–          The hourly rate of solicitors for conferences, the preparation of statements and relevant documents = an average of $300 per hour when dealing with a small tier firm and anywhere from $300 to $800 per hour when working with a top tier firm. 7

Pre-trial stage:

–          The above solicitors’ fees for further direction, conferences, documents, preparation and other relevant work.

–          Counsel fees = an estimated $1,000 per hour for Queen’s Counsel, $400-$700 per hour for Senior Counsel, and $250-$500 per hour for Junior Counsel for directions hearings, preparation, conferences, advice on evidence, and settling applications, statements of claim, affidavits, defence, opinions, written submissions and other documents. 8

Trial stage:

–          Costs of expert witnesses. Such costs are highly dependent on the profession of the witness and nature of evidence they are giving, but such costs can be similar to the hourly rate of solicitors.

–          Court hearing fees = $765 9 for each hearing day in defended matters, and a $560 10 additional daily fee for any and each extra hearing day.

–          Counsel daily hearing fees = an estimated $8,000 per day for Queen’s Counsel, $5,000 for Senior Counsel, and $3,000 for Junior Counsel. 11

Whilst the financial costs for an individual client are subject to variation, dependent on the nature and extent of their legal matter, family law litigation can often be lengthy. It is not hard for one to fathom that the above costs drawn out over substantial time periods translates into a heavy financial burden for clients.

How do I dispute my costly bill?

Moreover, The Family Law Act sets out costs allocation rules for family law issues. The Act is administered by the Family Court of Australia and the Federal Circuit Court of Australia in all Australian states, excluding Western Australia, and in the Australian Capital Territory. The Family Law Act’s cost allocation rules are administered in the Northern Territory by the Supreme Court. A similar statute, the Family Court Act 1997 (WA), is the relevant legislative instrument for costs allocation rules in Western Australia, administered by the Family Court of Western Australia.

The Family Law Act previously allowed for clients to challenge solicitor-client costs, that is, the costs charged by the solicitor to the client. But following legislative amendments, solicitor-client costs are only disputable under the Family Law Act if commenced prior to July 2008. The Family Law Act as it currently exists makes only party-party costs disputable, 12 that is, the cost that an individual is required to pay for the other party’s lawyers in the circumstance that the Court has ordered that party-party costs are payable. In such cases, Court orders may be made in relation to costs where upon a client serving their lawyer with a Notice Disputing Itemised Costs Account, the cost dispute cannot be resolved. However the more common legal costs in family law proceedings, solicitor-client costs, are dealt with by relevant State and Territory legislation and bodies.

Legislation regulating the legal profession, namely the Legal Profession 13 or Legal Practitioners 14 Act’s of all States and Territories, set out statutory rules relating to informing clients about costs, the recovery of costs, and the avenues available to dispute costs. Whilst State and Territory legislation slightly differs in wording, dispute avenues stipulated, and both inside and outside legislation, in the relevant Courts and bodies to hear cost disputes, the cost dispute procedures are quite uniform across Australia. Such uniformity holds open the avenues of mediation 15, obtaining a costs assessment 16, costs review 17or having costs ‘taxed’ 18, setting aside a costs agreement 19, and making a complaint 20 about your lawyer to the relevant professional body.

Step One of Disputing Legal Costs: Approaching Your Lawyer

Before resorting to these measures which can often involve more time, and in cases where an application is rejected, more money, State Law Societies and Legal Services Commissions recommend that the first step that clients should take in disputing costs is talking to their lawyer.

Discussing concerns regarding costs with their lawyer can help clear up confusion on the clients’ part and in some instances, may influence the reassessment of costs by the lawyer. The next step which should be taken, either preceding or following discussion of cost concerns with the acting lawyer, is requesting an itemised bill. Some lawyers may issue itemised bills in the first instance but others will purely issue a lump sum bill. Lawyers are required to issue itemised bills to clients within 21 21 or 28 22 days – dependent on the jurisdiction – of a request being made. Itemised bills can help clients understand the breakdown of legal work and costs.

If discussion with the acting lawyer and review of an itemised bill does not solve a client’s cost dispute then another appropriate avenue is costs mediation or costs dispute resolution, both of which can take place in formal and informal settings. Endorsed by a number of law societies, and in particular the Law Societies of Queensland 23, New South Wales 24 and the Northern Territory 25, this option allows clients and lawyers to discuss their dispute with an independent mediator. Acting as an intermediary and facilitator between client and lawyer, this person is generally a member of the relevant Law Society or Legal Services Commission.

While the costs mediator cannot give legal advice during the mediation, nor make decisions about the reasonableness or fairness of costs, this option provides a controlled forum within which clients and lawyers can attempt to resolve cost disputes. It also a dispute avenue which is notably a quicker and cheaper alternative to costs assessment and setting aside cost agreement applications.

Legal Avenues for Disputing Costs: Costs Assessment and Setting Aside Costs Agreements

If the client and lawyer are not able to resolve their cost dispute through discussion with one another or with a mediator then there are a number of formal avenues which the client can explore, the first of these being costs assessment. For the purposes of explanation,costs assessment, costs review, and the taxation of costs will generally be referred to as costs assessment. Costs assessment is the process by which an independent person is appointed by the relevant State or Territory Law Society or Court to review the whole or any part of legal costs and consider the clients objections to it.

The relevant Court differs between States and Territories, and in most jurisdictions is contingent upon the amount of legal costs being disputed. However, in all jurisdictions, the Supreme Court has the authority to carry out a costs assessment. Applications for costs assessments must generally be made without unreasonable delay or within 12 months of a client either receiving a bill or a request for payment, or paying their legal costs. Such applications can be made regardless of whether or not costs have been paid but it is important for clients to note that lawyers are entitled to take legal action against clients after 30 days of issuing a bill and not receiving payment. Hence it is recommended that clients explore cost dispute avenues within these initial 30 days.

In considering a costs assessment application the criteria that a costs assessor must consider include questioning whether or not it was reasonable to perform the specific work to which the legal costs relate 26, whether or not the work was completed in a reasonable manner 27, and the fairness and reasonableness of the amount of legal costs charged in relation to the work 28. After such consideration the costs assessor will determine the fair and appropriate amount of legal costs to be paid.

Here, a number of other factors must be taken into account, being; compliance with the relevant State or Territory legal professional act 29, disclosures made by the law practice [30 .Legal Profession Act 2004 (WA) s 301 (2)(b); Legal Profession Act 2006 (NT) s 341 (2)(b); Legal Profession Act 2004 (NSW) s 363(2)(b); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(b); Legal Profession Act 2006 (ACT) s 300 (2)(b); Legal Profession Act 2007 (TAS) s 327(2)(b); and Legal Profession Act 2007 (QLD) s 341(2)(b). ], any advertisements of costs 30 or expertise 31, the legal capability and responsibility displayed 32, any retainer 33, the nature of the legal matter 34, the quality of the work conducted 35, and the place 36, time 37, and any other relevant circumstances within which the legal services were provided 38. It is important to note that clients will incur a fee for costs assessment, such fee dependent on the Court and the result of the costs assessment.

A further avenue for disputing costs in family law proceedings available to those clients who entered into a costs agreement with their lawyer at the commencement of proceedings, is applying to have the costs agreement set aside. Similar to the costs assessment process, applications can be made to a costs assessor to have the whole or part of the cost agreement set aside.

The costs assessor will make the aforementioned considerations in relation to the legal costs as well as a number of further considerations concerning the disputed costs agreement and the conduct of the legal practice or practitioner whose costs the client is disputing. These further considerations include the existence of any inducement for the client to enter into the agreement
39 , the professional conduct of the legal practitioner 40, the extent to which the client was informed about the agreement 41, the conduct and circumstances of parties when the agreement was made 42 and during the course of the matter 43, and the form and manner in which the agreement addresses changed circumstances and costs 44. On assessment, certain provisions or the costs agreement in its entirety may be set aside.

Complaints and Disciplinary Action

Further to applications for costs assessments and the setting aside of costs agreements, another formal manner in which to dispute legal costs is through making a complaint. Complaints can be made to State and Territory Law Society’s, Legal Services Commissions, Legal Practitioners Conduct Boards, and Legal Profession Complaints Committees, all of which are stipulated under relevant legal profession acts as the authorised authority for complaints. In extreme cases, where legal costs are disputed and complaints are made to professional boards in cases of gross overcharging, a legal practitioner may face disciplinary action.

An important case, Council of the Queensland Law Society v Roche 45, established that excessive overcharging can result in a finding of professional misconduct against a legal practitioner. Council of the Queensland Law Society v Roche 46 held legal practitioner Mr Roche to be guilty of professional misconduct for failing to draw his clients attention to the provisions of a retainer, failing to provide his client with an estimate of the impact that a proposed increase in fees would have on the fees payable overall, and failing to advise his client to seek further advice before signing a new costs agreement 47. Whilst this can be considered an extreme case, the client’s bill in excess of $350,000 48, it is important to note that in such extreme circumstances, legal practitioners risk facing disciplinary action.

The Bottom Line

As previously noted, the first, and often most effective way of disputing costs can be for a client to discuss their itemised bill with their lawyer. Only after doing so should clients resort to other dispute methods which can be considerably timely, and, dependent on their result, create further financial expense for the client. If clients in family law proceedings cannot resolve costs with their lawyer and wish to explore the formal avenues of cost dispute then it is recommended that they contact a recognised Community Law Centre, Law Society, or Legal Services Commission for further advice.

  1. Community Law Australia, Unaffordable and out of reach: THE PROBLEM OF ACCESS TO THE AUSTRALIAN LEGAL SYSTEM, July 2012, 4.
  2. Attorney General’s Department, A Strategic Framework for Access to Justice in the Federal Civil Justice System, 2009, 41.
  3. Family Court of Australia, Federal Circuit Court of Australia, Court Fees, DLFee_0313_VI, January 2013.
  4. Chris Merritt, “Divorce fee ‘too high’ for poor”, The Australian, April 26, 2013.
  5. Ibid.
  6. Ibid.
  7. Lawyers and Legal Services Australia, Solicitor and Barrister Prices, 2014. Available from: http://www.legallawyers.com.au/legal-topics/law-firm-sydney/solicitor-prices/ (Accessed 05/04/2013).
  8. Ibid.
  9. Above, n4.
  10. Above, n4.
  11. Above, n7.
  12. Family Law Act 1975 (Cth) s 117; and Family Court Act 1997 (WA) s 237.
  13. Legal Profession Act 2004 (WA); Legal Profession Act 2006 (NT); Legal Profession Act 2004 (NSW); Legal Profession Act 2004 (VIC); Legal Profession Act 2006 (ACT); Legal Profession Act 2007 (TAS); and Legal Profession Act 2007 (QLD).
  14. Legal Practitioner’s Act 1981 (SA).
  15. Legal Profession Act 2004 (NSW) s 333(1)(a)(iii); and Legal Profession Act 2006 (NT) s 326 (1)(b).
  16. Legal Profession Act 2004 (WA) s 291(1)(a)(i); Legal Profession Act 2006 (NT) s 326 (1)(a)(i); Legal Profession Act 2004 (NSW) s 333(1)(a)(i); Legal Profession Act 2006 (ACT) s 291 (1)(a)(i);Legal Profession Act 2007 (TAS) s 315(1)(a)(ii);  and Legal Profession Act 2007 (QLD) s 331(1)(a)(i).
  17. Legal Profession Act 2004 (VIC) s 3.4.35 (1)(a)(i).
  18. Paralleling costs assessments in South Australian legislation is ‘taxation’ or ‘taxing’ of costs: Legal Practitioner’s Act 1981 (SA) s 42(1)(b).
  19. Legal Profession Act 2004 (WA) s 291(1)(a)(ii); Legal Profession Act 2006 (NT) s 326 (1)(a)(ii); Legal Profession Act 2004 (NSW) s 333(1)(a)(ii); Legal Profession Act 2004 (VIC) s 3.4.35 (1)(a)(ii); Legal Profession Act 2006 (ACT) s 291 (1)(a)(ii); Legal Profession Act 2007 (TAS) s 315(1)(a)(iii); and Legal Profession Act 2007 (QLD) s 331(1)(a)(ii).
  20. Legal Profession Act 2004 (WA) s 291(1)(a)(iii); Legal Profession Act 2004 (VIC) s 3.4.35 (1)(a)(iii); and Legal Profession Act 2007 (TAS) s 315(1)(a)(iv).
  21. Legal Profession Act 2004 (WA) s292(2); Legal Profession Act 2004 (NSW) s 332A(2); Legal Profession Act 2004 (VIC) s 3.4.36(2); and Legal Profession Act 2007 (TAS) s 316(2).
  22. Legal Profession Act 2007 (QLD) s 323(2).
  23. Legal Services Commission and The Law Society of Queensland, Your Right to Challenge Legal Costs, December 2013.
  24. The Law Society of New South Wales, Legal Costs – Your Right to Know, 2009.
  25. The Law Society of the Northern Territory, Your Right to Challenge Legal Costs, May 2010.
  26. Legal Profession Act 2004 (WA) s 301 (1)(a); Legal Profession Act 2006 (NT) s 341 (1)(a); Legal Profession Act 2004 (NSW) s 363(1)(a); Legal Profession Act 2004 (VIC) s 3.4.44 (1)(a); Legal Profession Act 2006 (ACT) s 300 (1)(a); Legal Profession Act 2007 (TAS) s 327(1)(a); and Legal Profession Act 2007 (QLD) s 341(1)(a).
  27. Legal Profession Act 2004 (WA) s 301 (1)(b); Legal Profession Act 2006 (NT) s 341 (1)(b); Legal Profession Act 2004 (NSW) s 363(1)(b); Legal Profession Act 2004 (VIC) s 3.4.44 (1)(b); Legal Profession Act 2006 (ACT) s 300 (1)(b); Legal Profession Act 2007 (TAS) s 327(1)(b); and Legal Profession Act 2007 (QLD) s 341(1)(b).
  28. Legal Profession Act 2004 (WA) s 301 (1)(c); Legal Profession Act 2006 (NT) s 341 (1)(c); Legal Profession Act 2004 (NSW) s 363(1)(c); Legal Profession Act 2004 (VIC) s 3.4.44 (1)(c); Legal Profession Act 2006 (ACT) s 300 (1)(c); Legal Profession Act 2007 (TAS) s 327(1)(c); and Legal Profession Act 2007 (QLD) s 341(1)(c).
  29. Legal Profession Act 2004 (WA) s 301 (2)(a); Legal Profession Act 2006 (NT) s 341 (2)(a); Legal Profession Act 2004 (NSW) s 363(2)(a); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(a); Legal Profession Act 2006 (ACT) s 300 (2)(a); Legal Profession Act 2007 (TAS) s 327(2)(a); and Legal Profession Act 2007 (QLD) s 341(2)(a).
  30. Legal Profession Act 2004 (WA) s 301 (2)(c)(i); Legal Profession Act 2006 (NT) s 341 (2)(c)(i); Legal Profession Act 2004 (NSW) s 363(2)(c)(i); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(c)(i); Legal Profession Act 2006 (ACT) s 300 (2)(c)(i); Legal Profession Act 2007 (TAS) s 327(2)(c)(i); and Legal Profession Act 2007 (QLD) s 341(2)(c)(i).
  31. Legal Profession Act 2004 (WA) s 301 (2)(c)(ii); Legal Profession Act 2006 (NT) s 341 (2)(c)(ii); Legal Profession Act 2004 (NSW) s 363(2)(c)(ii); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(c)(ii); Legal Profession Act 2006 (ACT) s 300 (2)(c)(ii); Legal Profession Act 2007 (TAS) s 327(2)(c)(ii); and Legal Profession Act 2007 (QLD) s 341(2)(c)(ii).
  32. Legal Profession Act 2004 (WA) s 301 (2)(d); Legal Profession Act 2006 (NT) s 341 (2)(d); Legal Profession Act 2004 (NSW) s 363(2)(e); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(e); Legal Profession Act 2006 (ACT) s 300 (2)(d); Legal Profession Act 2007 (TAS) s 327(2)(d); and Legal Profession Act 2007 (QLD) s 341(2)(d).
  33. Legal Profession Act 2004 (WA) s 301 (2)(e); Legal Profession Act 2006 (NT) s 341 (2)(e); Legal Profession Act 2004 (NSW) s 363(2)(f); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(f); Legal Profession Act 2006 (ACT) s 300 (2)(e); Legal Profession Act 2007 (TAS) s 327(2)(e); and Legal Profession Act 2007 (QLD) s 341(2)(e).
  34. Legal Profession Act 2004 (WA) s 301 (2)(f); Legal Profession Act 2006 (NT) s 341 (2)(f); Legal Profession Act 2004 (NSW) s 363(2)(g); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(g); Legal Profession Act 2006 (ACT) s 300 (2)(f); Legal Profession Act 2007 (TAS) s 327(2)(f); and Legal Profession Act 2007 (QLD) s 341(2)(f).
  35. Legal Profession Act 2004 (WA) s 301 (2)(g); Legal Profession Act 2006 (NT) s 341 (2)(g); Legal Profession Act 2004 (NSW) s 363(2)(h); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(h); Legal Profession Act 2006 (ACT) s 300 (2)(g); Legal Profession Act 2007 (TAS) s 327(2)(g); and Legal Profession Act 2007 (QLD) s 341(2)(g).
  36. Legal Profession Act 2004 (WA) s 301 (2)(h); Legal Profession Act 2006 (NT) s 341 (2)(h); Legal Profession Act 2004 (NSW) s 363(2)(i); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(i); Legal Profession Act 2006 (ACT) s 300 (2)(h); Legal Profession Act 2007 (TAS) s 327(2)(h); and Legal Profession Act 2007 (QLD) s 341(2)(h).
  37. Legal Profession Act 2004 (WA) s 301 (2)(h)(i); Legal Profession Act 2006 (NT) s 341 (2)(h)(i); Legal Profession Act 2004 (NSW) s 363(2)(j); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(j); Legal Profession Act 2006 (ACT) s 300 (2)(h)(i); Legal Profession Act 2007 (TAS) s 327(2)(i); and Legal Profession Act 2007 (QLD) s 341(2)(i).
  38. Legal Profession Act 2004 (WA) s 301 (2)(i); Legal Profession Act 2006 (NT) s 341 (2)(i); Legal Profession Act 2004 (NSW) s 363(2)(k); Legal Profession Act 2004 (VIC) s 3.4.44 (2)(k); Legal Profession Act 2006 (ACT) s 300 (2)(i); Legal Profession Act 2007 (TAS) s 327(2)(j); and Legal Profession Act 2007 (QLD) s 341(2)(j).
  39. Legal Profession Act 2004 (WA) s 288(3)(a); Legal Profession Act 2006 (NT) s 323 (2)(a); Legal Profession Act 2004 (NSW) s 328(2)(a); Legal Profession Act 2004 (VIC) s 3.4.31 (2)(a); Legal Profession Act 2006 (ACT) s 288 (3)(a); Legal Profession Act 2007 (TAS) s 312(2)(a); and Legal Profession Act 2007 (QLD) s 328(2)(a).
  40. Legal Profession Act 2004 (WA) s 288(3)(b); Legal Profession Act 2006 (NT) s 323 (2)(b); Legal Profession Act 2004 (NSW) s 328(2)(b); Legal Profession Act 2004 (VIC) s 3.4.31 (2)(b); Legal Profession Act 2006 (ACT) s 288 (3)(b); Legal Profession Act 2007 (TAS) s 312(2)(b); and Legal Profession Act 2007 (QLD) s 328(2)(b).
  41. Legal Profession Act 2004 (WA) s 288(3)(c); Legal Profession Act 2006 (NT) s 323 (2)(c); Legal Profession Act 2004 (NSW) s 328(2)(c); Legal Profession Act 2004 (VIC) s 3.4.31 (2)(c); Legal Profession Act 2006 (ACT) s 288 (3)(c); Legal Profession Act 2007 (TAS) s 312(2)(c); and Legal Profession Act 2007 (QLD) s 328(2)(c).
  42. Legal Profession Act 2004 (WA) s 288(3)(d); Legal Profession Act 2006 (NT) s 323 (2)(d); Legal Profession Act 2004 (NSW) s 328(2)(d); Legal Profession Act 2004 (VIC) s 3.4.31 (2)(d); Legal Profession Act 2006 (ACT) s 288 (3)(d); Legal Profession Act 2007 (TAS) s 312(2)(d); and Legal Profession Act 2007 (QLD) s 328(2)(d).
  43. Legal Profession Act 2004 (WA) s 288(3)(e); Legal Profession Act 2006 (NT) s 323 (2)(e); Legal Profession Act 2004 (NSW) s 328(2)(e); Legal Profession Act 2004 (VIC) s 3.4.31 (2)(e); Legal Profession Act 2006 (ACT) s 288 (3)(e); Legal Profession Act 2007 (TAS) s 312(2)(e); and Legal Profession Act 2007 (QLD) s 328(2)(e).
  44. Legal Profession Act 2004 (WA) s 288(3)(f) and (g); Legal Profession Act 2006 (NT) s 323 (2)(f) and (g); Legal Profession Act 2004 (NSW) s 328(2)(f) and (g); Legal Profession Act 2004 (VIC) s 3.4.31 (2)(f) and (g); Legal Profession Act 2006 (ACT) s 288 (3)(f) and (g); Legal Profession Act 2007 (TAS) s 312(2)(f) and (g); and Legal Profession Act 2007 (QLD) s 328(2)(f) and (g).
  45. (2004) 2 Qd R 574.
  46.  Ibid.
  47. Council of the Queensland Law Society v Roche (2004) 2 Qd R 574.
  48. Ibid.

How the Courts Divide Property in Divorce Proceedings

Dinesh Munasinha

Dinesh Munasinha

Online Legal Information Editor at Family Law Express
Dinesh is a lawyer with overseas experience currently completing the bridging course to be recognized as a lawyer in Australia. He has experience in successfully assisting individual as well as corporate clients in many areas of law. His strength is the ability to simplify complex legal issues, communicate effectively and find practical legal solutions for his clients.
Dinesh Munasinha

dividing-property-in-divorceWhere there is an irretrievable breakdown of a marriage, the party’s can apply for a divorce. An application for divorce is available 12 months after the date of separation. The Court must be satisfied that you and your partner have lived separately for a continuous period of 12 months and are unlikely to resume co-habitation. When approaching the Courts, the parties mainly have two matters which they typically seek a larger slice of; custody of the children, and ownership of property.

Property settlement often becomes a contentious issue and causes many disputes which end up in bitter, costly and time consuming litigation. Hence, it is important for one to clearly understand the factors which affect property settlement before engaging in legal battles. In this series of articles I will discuss the following areas:

Part 1 – How the Courts Divide the property in the case of a divorce or separation

Part 2 – Divorce & Property : The tax implications and what to look for

Part 3 – How to protect property in the event of divorce/separation

What is marital property ?

Every time the parties engage in a legal battle for dominion over matrimonial property the first thing they do is to map out a list of property. It is very important that you list out all types of property because some tend to forget not so visible but often significant assets like superannuation, licenses etc. These assets could also entail unforeseen issues, such as being encumbered by loans in which case the loan comes with the asset.

The loans may create a financial burden on the spouse who obtained the asset as it will expect the owner to service the loan by paying the monthly instalments.

However, the implication may be even more daunting, as in most relationships the partner may sign as a Guarantor to the loan, such as that of a loan to purchase the family house. In the event of a divorce, if the partner who obtains the property with the Loan defaults, the Guarantor will have to pay for that. These are commonly termed as ‘STD’ or ‘Sexually Transmitted Debt’. 1

Hence, dealing with property division is often comparable to walking on a mine field with hidden contingencies.

I have listed below the commonly applicable types of assets and liabilities which would help you to think through the process of listing all matrimonial property;

Assets

  • –          Pre-marital property brought into marriage
  • –          Bank accounts
  • –          Vehicles
  • –          land and buildings
  • –          shares and bonds
  • –          life insurance
  • –          interest in a partnership
  • –          household contents
  • –          redundancy payments
  • –          Superannuation
  • –          Licenses and trademarks
  • –          overseas property
  • –          assets on trust
  • –          future bequests under irrevocable wills
  • –          receivables

Liabilities

  • –          personal loans
  • –          mortgages
  • –          credit card settlements
  • –          overdrafts

The task of identifying and finding the value of assets may not be as daunting as you might think, if you have access to the right tools. You may consider using various web oriented software such as Divi to make your life easy.

Who get what? Is it always the call of the Courts?

It is not always the slam of the gavel by the judge which determines the division of property. More often, the parties nowadays decide and agree on a certain formula before approaching Courts. This has its advantages as it significantly reduces the cost of litigation. After all no one wants to feed the lawyers the bulk of their share before it gets split, do they?

In the event the parties agree on a satisfactory formula, they can refer it to Family Court to formalise the agreement by way of a consent order. If you are thinking about rushing to Courts with a half baked formula decided between you and your former partner, I need to warn you that not all financial agreement are deemed to be valid and enforceable under the law.

The agreement needs to satisfy the following criteria. 2

  • –           the agreement is in writing and signed by both parties;
  • –           the parties have signed a statement specifying that they have received independent legal advice from a lawyer in regards to specific matters;
  • –           certification from the lawyers which is attached to the agreement;
  • –           the agreement is not to be terminated or set aside; and
  • –           a signed copy is given to each of the parties to the agreement.

In some instances the parties argue that certain property divisions in the Agreement are against public policy, however, Court decisions indicate that the Courts generally go by what is agreed between the parties and seldom decide on public policy. 3 However, if the Agreement is silent on a particular property which needs to be divided, Courts are allowed to make such orders. 4

The 50-50 rule

There is a misconception among many that the split of property has to be equal. This may be the norm, but the Courts can, and have, on many occasions decided against a 50-50 split. 5

Generally speaking, the court considers issues such as financial and domestic contributions, and what is just and equitable.

How do the Courts decide on the “Just and Equitable” factor?

The Family Law Act 1975 sets out the general principles the court considers when deciding financial disputes after the breakdown of a marriage. 6 The general principles are the same, regardless of whether the parties were in a marriage or a de facto relationship. The Courts in 2003 devised a mechanism which is famously called the 4 step process when determining what is ‘just and equitable’ to the parties. 7

4-steps-divorce-and-propertyLet’s try to identify the elements of the four steps and how the Courts have dealt with each element.

How to value the property. In this section I have listed out some unique instances which one might come across when dividing and determining the value of the property. To better understand this, I have listed them in accordance with the 4 steps mentioned above.

Step 1: Requires all assets and liabilities to be identified. This includes superannuation entitlements, as well as assets  held personally, in partnership, in trusts,  or companies.

What happens to property that was owned before the marriage?Case law suggests that at the beginning of the marriage, greater weight will be given to the properties owned individually. However, the importance of property brought into a marriage initially is eroded the longer a couple stays married.How are lottery winnings and other windfalls divided?

Based on the facts, lottery winnings and other windfalls that come from the joint funds of a marriage and are likely to be split equally by the courts. 8

What about properties held in Trust ?

Trusts can cause some confusion. For example you may hold property in your name for and behalf of your parents, or conversely someone else may hold your property on your behalf. Law would recognize the beneficial ownership and care must be make necessary adjustments to understand who is the real beneficial owner. 9

What if one party disposes the property reducing the pool of assets for distribution?

In certain instances one of the parties may get into an arrangement to dispose a substantial asset with an agreement to repurchase it after the Courts decide on the property distribution. By doing so, the property pool at the time of approaching Courts can be severely eroded making the other partner loose out. 10 The Courts have a right to nullify these type of arrangements if the party affected apply to Courts. 11

How are Superannuation Funds valued?

The superannuation splitting law treats superannuation as a different type of property. It lets separating couples value their superannuation including the accrued interest and split the superannuation payments which they would eventually receive. The court is required to value the interest in accordance with any method set out in the Family Law (Superannuation) Regulations12 The said Regulations spell out the method of calculation depending on whether the value and the interest is paid on as a lump-sum or as a pension.

Step 2: Requires the identification of what contributions  (if any) each party made to the acquisition preservation improvement or maintenance of any asset. This includes not only financial contributions, but also non-financial contributions, and contributions as a parent and homemaker.

How is property divided for homemakers ?As highlighted by Professor Patrick Parkinson, recent cases have given more emphasis in assessing the needs of the homemaker. 13 The Courts have taken the view that the role of the homemaker should not be taken lightly and the role should be assessed and valued in terms of the cost it would have saved the family. This does not suggest that the Courts value the contribution at the commercial rate, like the rate for child care, or the rate of a chef etc. 14

What happens to business property in a divorce?

Case law in Australia suggests that if one party is involved in a business, the other party is still entitled to some share of the profits. 15 FamCA 688 – http://www.austlii.edu.au/au/cases/cth/FamCA/2002/688.html.  ] Judges again have discretion on how the business property is divided on the facts of each individual case, as well as the just and equitable requirements under the Act.

Step 3: The Court decides whether any adjustment is required for the future needs of each party, taking into account matters such as care of children, disparity in income earning capacity, health, age and availability of financial resources.

Does it matter as to who uses the property more? The use and maintenance of the property during and after separation is also another factor that the courts will consider in their assessment of how to divide property assets. In the instance where the one of the spouses stay separated for over an year at his or her parents place, would effectively weaken his/her case to state that he or she requires more assets to maintain himself and pay for rent as he or she is deprived of the matrimonial property.

Step 4: The Court must stand back and ensure, at the end of this process, that the proposed asset division is just and equitable.

Can Courts shift the balance to minimize hardship? In a recent case (2012) the Courts took the view that once the assets are divided, no party should be faced with sever hardships. 16 HCA 52 http://www.austlii.edu.au/au/cases/cth/HCA/2012/52.html. ] In this case the husband was allowed to keep the matrimonial home which was the substantial asset, taking into consideration his age and health, even though this meant that the major share of the assets divided in favour of the husband.

The last case I discussed to an extent changed the way Courts look at the 4 step process. It concentrated on the end result and its effects rather than the process of balancing the financial needs.

After following the four steps, a party can request spousal maintenance. However, spousal maintenance is only given if one person can financially maintain the other person and the other person cannot maintain themselves because of age, mental or physical incapacity, because of a child under 18 in their care or any other adequate reason. The court will consider a range of things when deciding on whether to grant spousal maintenance. You should seek legal advice if you want to apply for spousal maintenance.

You may just have the bed linen to fight over, or it could be an entire kingdom, the principles are same. Hence its best that you carefully consider how the property division is determined and how much you would likely be awarded, before you venture into costly litigation for more.

  1. See Chapter 13 – Sexually Transmitted Debt  http://www.alrc.gov.au/sites/default/files/pdfs/publications/ALRC69_Pt2.pdf .
  2. The criteria are spelt out in section 90G of the Family Law Act (1975); as discussed in  Senior v Anderson (2011) FLC 93-470 it is only if the judges hold that the financial agreement is invalid, that they proceed to decide outside the ambit of the Agreement.
  3.  See Mohamed v Mohamed (2012) NSWSC 852 – http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/852.html.
  4.  Section 90 G (2) of the Family Law Act; see also Pascot & Pascot (2011) FamCA 945  – http://www.austlii.edu.au/au/cases/cth/FamCA/2011/945.html.
  5.  Section 79 of the Family Law Act.
  6.  See Sections 79(4) and 75(2)) or a de facto relationship (see Sections 90SM(4) and 90SF(3).
  7.  See Full Court in Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervenor) 2003 FLC 93-143 – http://www.austlii.edu.au/au/cases/cth/FamCA/2003/395.html, although the approach had been established in earlier authorities.
  8.  There is a line of United States case law which recognizes the “community property” In re Mahaffey, 206 Ill. App. 3d 859, 564 N.E.2d 1300 (1990); In re Marriage of Swartz, 512 N.W.2d 825 (Iowa Ct. App. 1993); Smith v. Smith, 162 A.D.2d 346, 557 N.Y.S.2d 22 (1990); Ullah v. Ullah, 161 A.D.2d 699, 555 N.Y.S.2d 834 (1990); DeVane v. DeVane, 280 N.J. Super. 488, 655 A.2d 970 (App. Div. 1995).
  9.  See Grace v Grace (No 2) (2012) NSWSC 1321 -http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/1321.html.
  10.  See Cleary & Cleary (1999) FamCA 286 (http://www.austlii.edu.au/au/cases/cth/FamCA/1999/286.html.
  11.  The right is granted in section 85 of the Family Law Act to nullify such agreements.
  12.  See http://www.austlii.edu.au/au/legis/cth/consol_reg/flr2001397/.
  13.  Parkinson, Patrick. , Qualifying the homemaker contribution in family property law – http://flr.law.anu.edu.au/sites/flr.anulaw.anu.edu.au/files/flr/Parkinson_0.pdf.
  14.  See Apostolidis & Ors v Kalenik & Ors (2011) VSCA 307- http://www.austlii.edu.au/au/cases/vic/VSCA/2011/307.html.
  15.  See Figgins v Figgins [2002
  16.  Stanford v Stanford [2012