Family Law Property Settlement and the Stanford 5 Steps

Part VIII of the Family Law Act 1975 (Cth) (the 'Act') sets out the relevant provisions regarding how property interests should be altered for married couples. For de-facto couples, the applicable provisions for property settlement are laid out in Part VIIIAB of the Act. At present, the High Court case of Stanford v Stanford [2012] HCA 52 provides detailed guidance on the operations of Part VIII and Part VIIIAB of the Act.

Stanford v Stanford [2012]

In Stanford, the High Court suggested that when considering how properties should be allocated in a property settlement, the Court should follow the following five steps:

1. Identify the legal and equitable interests of parties.
2. Determine whether it is just and equitable to make an order under section 79(2) of the Act?
3. Examine each parties' contributions as set out in sections 79(4)(a)-(c) or 90SM(4)(a)-(c) of the Act to determine each party's entitlement.
4. Consider matters in sections 79(4)(d)-(g) or 90SM(4)(d)-(g) of the Act including sections and make future needs adjustment
5. Consider the impact of the proposed orders and make orders that are just and equitable.

Step 1 – Identify the legal and equitable interests of the parties

Under this step, the Court will identify all the legal and equitable interests of each party. Such interests will include all the parties' properties, debts, liabilities and financial resources.

It is noteworthy that the Court will consider family companies and family trusts as marital assets if they are alter egos of a spouse.

Step 2 - Is it just and equitable under section 79(2) to make an order at all?

In most cases involving property settlement, parties to the proceeding will no longer be in a marital relationship and are no longer using the property in the same way. Given this, the parties' property interests need to be altered to help them move on to live their separate lives. In most cases, the Court will likely find that it is just and equitable to make orders under this consideration.

Step 3 – Assessing Contribution

When assessing each parties' contributions, the Court is obliged to consider the following factors:

1. Direct and indirect financial contributions (section 79(4)(a) or section 90SM (4)(a) of the Act
   
   Direct financial contributions are the assets each party brought into the marriage.

ol start="2">Non-financial contributions (section 79(4)(b) or section 90SM (4)(b) of the Act)Non-financial contributions are contributions a party made to increase the size of the total asset pool.

ol start="3">Contributions made to the welfare of the family or ‘homemaker’ contributions (section 79(4)(c) or section 90SM (4)(c) of the Act

Under this consideration, the Court will take into account the contributions each party made to the welfare of the family.

Step 4 – Future Needs Adjustments

When assessing a party's future needs, the Court will look to section 75(2) or section 90SF(3) of the Act. These factors include considerations such as each party's health and age, parenting obligations, the standard of living, and the like. While the list of considerations provided under section 75(2) is comprehensive, the Court will only need to consider the relevant factors when making future need adjustments in each case.

Step 5 – Orders Must be Just and Equitable

In this final step, the final orders the Court make altering the parties' property interests must be just and equitable.

Conclusion

As discussed above, the family law property settlement process can be complex and unnerving. However, at HandO Lawyers, we are here to provide you with expert legal advice and help you to go through this process as smoothly as possible. If you are going through a separation and want to sort out your finances and parenting arrangement, HandO Lawyers now offers online services in English and Chinese.



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Please note that this article does not constitute legal advice, and HandO Lawyers will not be legally responsible for any actions you take based on this article.