When determining a property settlement, the Court first decides whether it is necessary for a property adjustment to be made to the parties' existing entitlements. If there is a justification for this, the Court then embarks on the following steps to determine a financial settlement.
The starting point is to identify the parties' existing legal and equitable interests in property and their liabilities: in practice, a balance sheet of every asset, debt, superannuation interest and financial resource. A thorough and well-considered approach to this step is often the most significant determinant of whether a party achieves a strong outcome.
The Court then assesses the contributions each party made throughout the relationship and since separation. These include direct financial contributions such as income, property brought into the relationship, inheritances and gifts; non-financial contributions such as renovations or unpaid work in a family business; and contributions to the welfare of the family.
The Court then considers each party's current and future circumstances: age and health, income and earning capacity, the care of children under 18 and the need to provide them with appropriate housing, among other factors. These considerations can justify an adjustment in favour of the party facing greater future need.
Finally, the Court considers whether the Orders are just and equitable in all the circumstances. There is no fixed formula and no two cases have the same considerations and issues. For this reason, the Court has been dismissive of the practice of pointing to similar past cases as a guide to what percentage division would be appropriate.
