The Family Law Act 1975 (Cth) sets out the general principles the Court will consider when determining financial disputes after separation. The general principles are the same regardless of whether the parties were married or in a defacto relationship.
The first question the Court needs to determine in an application for property alteration is whether it is just or equitable to make any order adjusting the existing legal and equitable interests of the parties in matrimonial property.
Provided the Court is satisfied that it is 'just and equitable' to make any order at all, it will then take the following four steps:
(1)Identify and value the assets, liabilities and financial resources of the parties.
(2)Identify and assess the contributions (financial and non-financial) made by the parties to the assets available for division.
(3)Consider whether there should be an adjustment made to the contribution-based assessment; and
(4)Assess whether the proposed outcome of the above three steps is just and equitable.
It is beyond the scope of this publication to address in detail each of the above steps, however if you would like advice about your property settlement please do not hesitate to get in touch with one of our Family Lawyers.
Identifying and valuing property
It does not matter in whose name property may be held, as property is defined quite broadly and includes legal and equitable interests of the parties. Each party provides evidence as to the assets, liabilities and superannuation of each of them (and any corporate structures in which they or each of them have an interest) and the values of the property. It is sometimes necessary for parties to engage, or the Court will appoint, an expert to provide a formal valuation if value cannot be agreed.
The recent decision of Forsburg & Stubbs is a good example of what not to do if, you and your former spouse jointly appoint a single expert to value property and you disagree and/or dispute the formal valuation.
In this case, a single expert appointed by the parties valued the disputed property at $265,000.
The wife, who disputed the valuation went on to instruct her own shadow expert to provide a separate valuation. In doing so, the wife provided instructions to the shadow expert that were partisan and contained numerous irrelevant matters. She then made an application to the Court, seeking leave to rely upon the shadow expert's valuation. The wife's shadow expert valued the property at $430,000.
The Court commented on the wife's behaviour saying at  'what [she] should have done was pose specific questions to the expert before bringing an application to call adversarial evidence.'
What she should have done was engage the shadow expert to undertake the shadow report and questions should have then been put to the single expert based on the shadow expert's report.
This case is a good reminder that the law is quite specific when it comes to expert evidence.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.