This article continues the discussion on the financial side of marriage. Thus far, we have briefly reviewed child maintenance, maintenance for a child over the age of 18 and spousal maintenance. The following discussion will provide a brief overview of what is often a very contentious aspect of the dissolution of a marriage – property settlement.
Under the Family Law Act, property means property to which the parties to a marriage or union other than a marriage are entitled in possession or reversion. In its most simple form, possession means actual physical control of goods or land and reversion can be illustrated where A grants land to B for life, A has an interest in reversion, since the land reverts to him on B’s death. Similarly, a person who lets or sublets land to another retains an interest in reversion. Examples of property therefore include a house, land, motor vehicle, shares in a company, an interest in a private superannuation fund and the surrender value of an insurance policy.
The Act provides that in proceedings between the parties to a marriage or union in respect of the existing title or rights to property, the court may declare the title or rights, if any, that a party has in respect of the property. In addition to a declaration, the Act also provides that in proceedings in respect of the property of the parties to a marriage or union, or of either of them, the court may make such order as it thinks fit altering the interests of the parties in the property.
The Court’s order may include an order for a settlement of property in substitution for any interest in the property; and an order requiring either or both of the parties to make, for the benefit of either or both of the parties or a child of the marriage or union, such settlement or transfer of property as the court determines.
A common question is: how does the Court arrive at its decision as to the respective shares, if any, the parties to a marriage should be granted? The overarching basis is that it must be just and equitable for the Court to make the order altering the parties’ interest in a property. This means that the Court will seek to be fair to both parties and its order will be based on the principle of fairness.
As with other areas of law discussed in previous articles, the Court must consider a number of factors before making any decision regarding property settlement. The factors under section 53 (2) of the Act which pertain to maintenance, briefly reviewed in previous articles, will be considered provided they are relevant to the issue of property settlement.
Additionally, the Court will examine factors under section 57 (3) of the Act. These are the financial contributions made directly or indirectly by or on behalf of a party or a child to the acquisition, conservation or improvement of the property; the contribution made directly or indirectly by a party to the marriage or the union, including any contribution made in the capacity of homemaker or parent, to the welfare of the family which constitutes the parties to the marriage or union and any child of that marriage or union; the effect of any proposed order on the earning capacity of either party; and any other order that has been made under the Act in respect of a party.
All the above factors are applied to a three-step process which constitutes the Court’s approach to deciding property settlement matters. Firstly, the net property of the parties must be identified and valued by the Court. Secondly, the respective contributions of the parties within the terms of section 57 (3) must next be considered and evaluated. Thirdly, relevant section 53 (2) factors are then considered. The court will then consider whether its proposed order is just and equitable.
Property Settlement can be a complex aspect of Family Law. It frequently involves mortgages, calculating equity, valuing the role of a homemaker and determining financial contributions over the course of many years when the parties lived in harmony and often discarded receipts, financial records and other important documentation. It is always best to invest in a consultation with your attorney-at-law to discuss the particular facts of your case which will then inform the best application of the law to your circumstances.
Where the parties are willing to meet and discuss the issues, there may be significant common ground to form the basis of an Agreement and the Court may be asked to decide only those matters on which the parties could not agree. This will save the parties time and legal expenses and may result in an outcome which is satisfactory for both sides.
Deborah N. Carrington is an attorney-at-law. Queries or comments on this article can be sent to the author at [email protected]