Are you separating?
Do you need assistance with the challenges your property settlement presents? If so, read on.
In a relationship where one party who holds the controlling financial interest in property it is often necessary to consider whether orders should be sought at an early stage to “level the playing field”.
Interim orders to consider in such cases include:
- Interim property settlements under section 79 of the Family Law Act (“the Act”)
- Spousal maintenance under sections 72 and 74 of the Act
- Costs orders under section 117 of the Act
The court has power under section 80 of the Act to make orders for interim property settlements and spousal maintenance by way of payment of a lump sum and periodic payments. Separately, under section 117 of the Act the court may make an order for costs where there are circumstances that justify doing so.
Interim property settlements
When making an order for the alteration of property interests a court is required to consider the contributions of both parties, any future needs as set out in section 75(2) of the Act, including but not limited to the health, earning capacity and care of any children to the relationship and what is just and equitable in the circumstances. Accordingly, it is important that the court has as much evidence relating to these matters as possible from an early stage. It has been noted that for an interim property settlement to be made the court must consider what is “just” in the circumstances, the circumstances need not be compelling.
Where orders are sought at an early stage it is also important to ensure that any interim property settlement does not displace any final settlement claim. The applicant for interim orders must therefore demonstrate the asset pool is sufficiently large to enable the interim orders to be implemented and should provide evidence as to the intended application of the funds. If assets are tied up in property the court has previously made orders for parties to obtain a further loan to access the funds, although if this is to occur it would be important to ensure that the interim adjustment does not draw so heavily on the asset pool to defeat any final claim.
A person has a right to spousal maintenance if, on the balance of probabilities, the Applicant cannot adequately support themselves and the other person is reasonably able to do so. The inability to support oneself may be due to having the care and control of a child to the marriage, the person’s age, physical or mental incapacity for appropriate gainful employment or any other adequate reason having regard to section 75(2) of the Act.
If the court is satisfied that the Applicant cannot adequately support themselves and the Respondent is in a position to support them, they can make any order they consider proper. This can be order for lump sum maintenance or for periodic payments.
The court may make orders for costs under section 117 of the Act in circumstances that would justify it doing so, otherwise each party is to bear their own costs.
In determining whether the circumstances justify making an order for costs the court is to have regard to:
- The financial circumstances of each of the parties;
- Whether either party is in receipt of legal aid;
- The conduct of the parties in relation to the proceedings;
- The failure of either party to comply with previous orders of the court;
- Whether either party has been wholly unsuccessful in their application;
- Whether an offer of settlement has been made in writing and the terms of that offer, and,
- Such other matters as the court considers relevant.
In practice, costs orders at an interim stage are typically by way of lump sum or what is commonly referred to as a “dollar-for-dollar” payment. The court is reluctant to make orders where the party who is bound by the order has little control over the expenditure of the applicant for costs orders, which can occur where a retrospective order is to be relied upon. The dollar-for-dollar payment enables the Respondent who is bound by the order to control how much is spent as it requires any amount spent on their litigation to be matched by a payment to the other party.
It can be difficult at an early stage to ensure there is sufficient evidence before the court for financial orders to be made, particularly where the responding party has failed to provide full and frank disclosure in accordance with the Rules. In such cases it may be necessary to issue subpoena to ensure the court can feel confident that sufficient funds are available for the interim orders as well as any final orders that will be made. Proper searches into property and business interests may also assist in identifying what assets are available so that the court can properly identify the pool.
Doolan Wagner Family Lawyers offer specialist family law advice in St Leonards on Sydney’s North Shore. If you would like some confidential advice about where you stand in your separation please contact us on 9437 0010 or by email Enquiries@dev.elevatebusiness.com.au.
We have experienced family lawyers available to help you in this difficult time.
These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.