Former spouses or de facto partners may disagree about the value of assets, their respective contributions, what should happen to the family home, how a business should be treated, or what percentage of the property each person should ultimately receive.

If you cannot agree, it does not necessarily mean that you need to go straight to Court.

Australian family law provides several ways for separating couples to attempt to resolve a property dispute. In fact, before commencing most financial or property proceedings, parties are generally required to take genuine steps to try to resolve their dispute, unless an exemption applies.

How is a property settlement determined?

There is no automatic rule that property must be divided equally after separation.

The outcome depends upon the circumstances of the particular relationship.

Broadly, determining an appropriate property settlement involves considering matters including:

• the parties' existing property, liabilities and financial resources;
• financial and non-financial contributions;
• contributions as a homemaker and parent;
• relevant current and future circumstances; and
• whether the proposed outcome is just and equitable.

The Court applies the principles contained in the Family Law Act 1975 when determining property disputes for both married and eligible de facto couples.

For a more detailed explanation, read How Is a Property Settlement Calculated After Separation in Australia?

What should happen if negotiations have stalled?

A disagreement does not necessarily mean negotiations have failed permanently.

Sometimes the difficulty is caused by a specific unresolved issue, such as:

• the value of the family home;
• the value of a business;
• incomplete financial disclosure;
• disagreement about contributions;
• whether one person can refinance and retain the home;
• how superannuation should be treated;
• disagreement about particular liabilities; or
• substantially different views about the appropriate overall division.

Identifying the issues actually preventing settlement can help determine the next step.

For example, obtaining a joint valuation of a property or business may narrow a dispute about value considerably.

Financial disclosure is an important part of the process

It is difficult to negotiate a property settlement properly if the parties do not have adequate information about their financial circumstances.

Parties to a family law financial matter have extensive disclosure obligations. The pre-action procedures also require parties, as far as practicable, to comply with their duty of disclosure by exchanging relevant documents before proceedings are commenced.

Disclosure may include documents relating to:

• bank accounts;
• property;
• mortgages and other liabilities;
• superannuation;
• companies;
• trusts;
• businesses;
• investments;
• income; and
• other relevant financial interests.

If one party is refusing to provide relevant financial information, this may need to be addressed before meaningful negotiations can occur.

Read Duty of Financial Disclosure in Family Law Property Settlements for more information.

Can solicitors negotiate a property settlement?

Yes.

Many property matters are resolved through negotiations between the parties and their solicitors without requiring a final Court hearing.

A solicitor can assist by identifying the relevant legal and factual issues, obtaining disclosure, arranging valuations where necessary, making or responding to settlement proposals and advising about the range of potential outcomes.

Written offers can also help narrow the issues between the parties.

The objective is not simply to exchange competing percentages. Effective negotiations should identify why each party says a particular outcome is appropriate and what practical arrangements are required to implement a settlement.

Can you use mediation?

Yes. Mediation or another form of dispute resolution can be particularly useful where direct negotiations have reached an impasse.

The Federal Circuit and Family Court of Australia requires prospective parties in financial matters to make inquiries about dispute resolution and, where it is safe and appropriate, participate in a dispute resolution process before filing proceedings, unless an exemption applies. This may include negotiation, conciliation or arbitration.

During mediation, an independent mediator assists the parties to explore whether an agreement can be reached.

The mediator does not determine the outcome for the parties.

If agreement is reached, the terms can then usually be documented and formalised.

What if the other person refuses to negotiate or mediate?

One person cannot force the other to agree to a property settlement.

However, refusing to engage does not necessarily prevent the matter from progressing.

The Court's pre-action procedures set out steps to be followed where dispute resolution is unsuccessful, unavailable, or another party refuses or fails to participate. These can include providing written notice of the issues in dispute, the orders that would be sought, and a genuine settlement offer before proceedings are commenced.

If reasonable attempts to resolve the dispute are unsuccessful, an application can ultimately be made to the Federal Circuit and Family Court of Australia.

There are exemptions from the usual pre-action requirements in certain circumstances, including some matters involving family violence, urgency or potential prejudice.

When might Court proceedings become necessary?

Court proceedings may become necessary where the parties cannot resolve the dispute despite genuine attempts to negotiate.

Proceedings may also be required where, for example:

• a party refuses to provide disclosure;
• there is a significant disagreement about the property available for division;
• a business or trust structure requires investigation;
• assets may be sold or dealt with;
• one party refuses to participate meaningfully in negotiations;
• urgent orders are required; or
• the parties have fundamentally different positions that cannot be resolved.

Court proceedings do not necessarily mean the matter will ultimately proceed to a final trial.

Agreement can still be reached after proceedings have commenced. The Court's own information expressly recognises that parties may reach agreement at any stage of the proceedings.

What happens when a property case is filed?

A financial or property proceeding is generally commenced by filing an Initiating Application (Family Law), together with the other documents required by the Court.

These commonly include a Financial Statement, Financial Questionnaire, Genuine Steps Certificate and Undertaking as to Disclosure. Additional material is required in some circumstances, including where interlocutory orders are sought.

The Court then allocates the matter a first Court event and manages the case through the applicable case management pathway.

The process may involve further disclosure, valuations, dispute resolution and other procedural steps before a matter is ready for final determination.

Can the Court make temporary orders before the final property settlement?

Yes.

Sometimes an issue cannot wait until the entire property dispute is resolved.

A party may seek interlocutory orders, sometimes referred to as interim orders, while the substantive proceeding remains on foot. The Court's Financial Proceedings Practice Direction expressly provides for an Initiating Application to include an application for interlocutory orders.

The orders required depend upon the circumstances of the case.

For example, a dispute may arise concerning the sale of property or another financial issue that needs to be addressed before the final property settlement can be determined.

Urgent applications are dealt with under specific Court procedures, and urgency does not automatically mean that an earlier hearing will be granted.

What if the property settlement involves a business, company or trust?

Property settlements involving businesses, companies and trusts can be more complicated.

Issues may arise concerning:

• the value of a business;
• company shares;
• retained earnings;
• shareholder or director loans;
• trust interests;
• control of a trust;
• business liabilities;
• income generated by the business; and
• the distinction between legal ownership and the broader financial circumstances of the parties.

Expert valuation evidence may also be required where the parties cannot agree on the value of a business or other significant asset.

For more information, read Complex Property Settlements: Businesses, Companies and Trusts.

What if you eventually reach an agreement?

Reaching an agreement is not the end of the process.

The parties should consider formally documenting their property settlement so that their financial relationship is properly resolved.

Two common options are:

• Consent Orders; or
• a Binding Financial Agreement.

Consent Orders are orders agreed between the parties and made by the Court. The Court must be satisfied that proposed financial or property orders are just and equitable.

Read Property Settlement Consent Orders: How Do They Work? You can also read Consent Orders vs Binding Financial Agreements: What's the Difference?

What if no agreement is ever reached?

If the parties cannot resolve their dispute, the Court can ultimately determine the property settlement.

Each party can present their case and relevant evidence, and the Court will determine what orders should be made under the Family Law Act 1975.

A final hearing is therefore available where agreement cannot be reached, but it is not the outcome of every property proceeding.

The Court describes litigation as a last resort after genuine attempts to resolve the matter have failed.

Are there time limits for starting property proceedings?

Yes, and they are important.

For a married couple, property proceedings generally need to be commenced within 12 months after a divorce order takes effect.

For a de facto couple, proceedings generally need to be commenced within two years after the breakdown of the de facto relationship.

Proceedings can sometimes be commenced outside these periods, but additional requirements apply. A person seeking to commence proceedings out of time may need the Court's leave.

Importantly, a married couple does not have to wait until they are divorced before resolving their property settlement.

If a limitation period is approaching, legal advice should be obtained promptly rather than allowing negotiations to continue indefinitely.

Does going to Court mean the other person pays your legal costs?

Not necessarily.

People should not assume that commencing or successfully defending family law property proceedings means the other party will automatically pay their legal fees.

Costs are a separate issue and depend upon the circumstances and the applicable family law principles.

The way parties conduct themselves can nevertheless have costs consequences. For example, the Court warns that unreasonable failure to comply with required pre-action procedures can result in an order to pay all or part of another party's costs.

This is another reason why genuine attempts to resolve a dispute should be taken seriously.

When should you get legal advice?

It can be useful to obtain advice before negotiations become entrenched.

Understanding your position can help you assess whether a proposed settlement is appropriate, what further information is required and whether a dispute could be resolved without Court proceedings.

Legal advice may be particularly important where:

• there is substantial property;
• a business, company or trust is involved;
• one person is withholding financial information;
• there are significant superannuation interests;
• the family home needs to be sold or refinanced;
• there are concerns about assets being disposed of;
• negotiations have stalled; or
• a limitation period is approaching.

Property settlement lawyers on the Gold Coast

Not agreeing at the beginning does not necessarily mean a property dispute

needs to end in a final Court hearing.

Negotiation, disclosure, valuations and dispute resolution can often help narrow the issues and may ultimately result in an agreement.

Where agreement cannot be reached, Court proceedings provide a process through which the dispute can be determined.

This article provides general information only and is not legal advice. Family law outcomes depend upon the individual circumstances of each matter.