Property Settlement in Australia

Property Law in Australia

The court’s power – redistributing property on a discretionary basis

Under s 79 of the Family Law Act, the court has the power to redistribute the property of one or both spouses (parties to a marriage). For example, the court might make an order requiring one spouse to transfer the matrimonial home to the other spouse. However, the Family Law Act contains no concept of “matrimonial property,” which means that the court’s power is not limited to property that was acquired during the marriage. In practice, s 79 is of the greatest importance and has been the subject of many past cases.

The redistribution of property is not governed by specific laws or regulations, such as a rule that certain property should be shared equally between the parties. Instead, the court is given discretionary power to make whatever orders are appropriate in each particular case.


A four-step approach

When determining an application under s 79, the court should go through the following four steps:

  • (a) Assess the extent of the parties’ property. This step includes identifying title to property, as well as each party’s superannuation interest. Once the property has been identified, its value should be ascertained by agreement or formal valuation.


  • (b) Consider the parties’ respective contributions, which might be direct or indirect, financial or non-financial. Contributions to the welfare of the family, including contributions as a homemaker or parent, will also be considered.


  • (c) Consider the parties’ present and future needs, means, resources, and actual and potential earning capacity. These factors are often referred to as s 75(2) factors, or “maintenance factors.”


  • (d) Consider the effect of the above findings and make an order that is just and equitable given all the circumstances of the case.

It is often stated that the contribution component of the process is retrospective, looking to the past, while the s 75(2) factors are generally prospective, looking ahead to the parties’ future needs and resources. 


Percentages, not fixed amounts

After the court considers what division of the net property is appropriate given the parties’ contributions and makes revisions to that division in light of the s 75(2) factors, the resulting orders usually give each party a percentage of the property’s current value, rather than a fixed amount. Prior case law may be said to have established guidelines regarding the use of percentages, and the failure to follow these guidelines may render a trial judge’s decision liable to be overturned on appeal if there is no adequate explanation for the use of different criteria.


Just and equitable — s 79(2)

Section 79(2) provides that the court shall not make an order under s 79 unless it is affirmatively satisfied that, given all the circumstances of the case, it is “just and equitable” to make the order. When it comes to demonstrating what would be just and equitable, the onus is on the applicant, who should place all relevant evidence before the court.