When it comes to separation. Does anyone really get a fair deal?

We look at Family Law Property.

When parties separate, the two main issues are:

who cares for the children?

how is the property divided?

The Family Law Act 1975 is very specific in relation to what the Court can take into account, when deciding how to divide the assets of parties in dispute. 

Obviously, if the parties can agree as to the division of the assets, then the asset pool will not be reduced by legal process in which, ultimately, a third party or judge will decide as to what it (or he/she) considers fair in all the circumstances. There is a view, often expressed by the judiciary,  that a good result in a property settlement is one in which neither party is happy. Parties often have a wish list and a position that they can live with and, in my experience, the latter is what ultimately is the best result.


There are several factors which are taken into account, when deciding who gets to keep what assets. These include:

The initial assets and liabilities of each party at the commencement of the relationship.

The contributions made by each party during the relationship, which can include financial, care of the children, provision for the welfare of the family, and income.

The age(s) and need(s) of the child(ren).

The work capacity of each of the parties.

The future needs of each of the parties.

The health of each of the parties.

Individual contributions, which may be financial and non-financial.

The most important step, in any Family Law property settlement, is to agree on a balance sheet, which should set out the assets, their values and the liabilities. If this can be agreed upon, then the net asset position of the parties is ascertained. The next step is to divide those assets, so that they are “fair” according to the principles of the Family Law Court.

Interestingly enough, if a party wants to keep an asset, the other party will value that asset at a high value, and vice versa. If there can be no agreement as to the value of the asset, then an independent valuation needs to be made. For example, if one party wishes to keep the house, then an independent Certified Valuer needs to be engaged, at considerable cost, to make that decision. The values of other assets are reasonably easy to ascertain, such as superannuation, investments, bank accounts, income earned, credit card debts and mortgage balances.

It also should be remembered that, just because an asset is in one person’s name, it does not mean that that person will retain the asset, nor that it should not be included in the Court’s assessment. The Family Law Act provides that all parties must give “full and frank disclosure” of all their assets and liabilities.


Superannuation is considered as an asset of both parties, notwithstanding that it might be in the name of one party. Difficulties arise in relation to the valuation of businesses, tools, boats, jewellery, personal effects, household furniture, and other possessions.

Another issue relates to liabilities. Disputes  arise about whether or not one party’s parents gifted or loaned monies to the parties for the purchase of the home, cars, or to pay off debts. If it is a loan, then there should be evidence to support that loan, by way of a Loan Agreement.  Without such evidence, difficulty can arise in identifying a sum of money as either a gift or loan.

The value of the assets are taken as at the date of the hearing or settlement, not at the date of separation. Depending upon the circumstances, parties can either benefit (e.g. by the rapid rise in real estate values), or lose out because of the devaluation of assets, such as motor vehicles and other value-deteriorating assets.

Another complication arises as to who will be obliged to meet  mortgage repayments, especially if one party is living in the house with the children, and (perhaps) has no financial means to pay the mortgage. The same applies to the repayments of car loans and other personal loans.

There is no easy solution as to how the assets will be divided, as each party will want to ensure their future financial security. The division of assets will often mean a change in lifestyle, as the assets, which were shared previously, now need to be divided. This is particularly true in relation to the ownership of the matrimonial home.

Formal Agreement

Any agreement in relation to the division of the assets should be done by way of a formal arrangement, either in a Binding Financial Agreement, or Court Orders. This, to some extent, ensures certainty for the future, and means that each party can move on to the next stage in their lives.

Seek Advice

It is always best to get good quality legal advice in relation to these issues, rather than to seek advice from a neighbour, friend or relative, that might have been through a similar process, as each case, like every marriage, is very different in all circumstances.

It also should be understood that facts are those that can be verified, not what is hoped that the Court might accept.

Finally, if you expect the world to be fair with you because you are fair, you are fooling yourself. That’s like expecting the lion not to eat you because you didn’t eat him in the jungle.

James Paton.

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