When considering property proceedings, the Court is required to make orders that are just and equitable. In doing so, they are required to consider the range of contributions made by both or either party, make adjustments based on section 75(2) factors, and then consider the Orders that would ensure a just and equitable outcome for both parties.
The significant weakness to this approach, by placing such discretion in the Court’s hands, is the lack of certainty for parties.
When considering the contributions made by each party, the Court turns to Section 79(4) of the Family Law Act 1975, which considers contributions in the following categories:
- Financial contributions (income);
- Non-financial contributions (renovations, creation of a business); and
- Contributions as homemaker and parent (care of children and maintenance of marital home).
The Court will then turn to Section 75(2) of the Family Law Act 1975, which considers any adjustments that should be made for future needs. This includes (but is not limited to) future earning capacity and care of children.
The case of Stanford & Stanford (2012) FLC 93‐418 clarified that despite the Court’s discretion, the following “steps” should be followed, to allow for a structured process:
- Identify the current asset pool, being the existing legal and equitable interests.
- Consider factors in section 79(4) and section 75(2).
- Consider what, if any, Orders should be made that are just and equitable (section 79(2)).
Following Stanford, parties can no longer presume that they will be entitled to an adjustment of property interests purely based on contributions made during the relationship.
Why is the length of a marriage relevant?
The Family Court has the discretion of adopting either the asset-by-asset approach or the global approach when considering the parties’ financial contributions. The approach to be considered is usually determined by the length of the relationship.
There is no definition of a short or long relationship. However, a long relationship is usually one of 10+ years. Although it is not uncommon for one party to enter a relationship with significantly more assets than the other party (such as a property owned prior to the relationship), when considering a long relationship, it is likely both parties have made considerable contributions either financially, non-financially or as homemaker and/or parent. In such cases, less significance is given to the initial financial contributions (having been offset by other contributions over the long relationship). It is common for a court to find that parties have contributed equally to a long relationship notwithstanding the initial contributions attributed to one party, particularly where the parties have children.
A short relationship is usually up to 5 years in length. When considering a short relationship, and the facts allow, the Court will often assess the parties’ financial contributions on an asset by asset basis, particularly where there are no children to the relationship. In situations where parties own property prior to the commencement of the relationship, the court may find the other party made little or no contributions to those pre-relationship assets. Each case is different and depends on the specific facts, so we encourage parties to speak with a family lawyer before negotiating or agreeing to a property settlement where there is disparity in the parties’ respective contributions either prior to, or during a marriage or relationship.
Holden Barlow Family Lawyers Perth is a Quality Practice accredited by the Law Society of Western Australia.