There is four step process that needs to be followed in order to obtain a property settlement. Recent case law has provided that there is an additional fifth step that the court must consider in addition to this four step process.
In Stanford v Stanford  HCA 52, it was held that the court must consider whether it is ‘just and equitable’ to make an order that alters the parties interests. In some circumstances where parties have kept their finances completely separate, it may not be just and equitable to interfere with that parties finances.
Usually in a situation where the marriage or de facto relationship has broken down irretrievably, and the parties have intermingled their finances to some degree, there would be sufficient grounds to establish that it is just and equitable for a settlement order to be made.
Firstly, the assets & liabilities in the marriage or de facto relationship need to be identified.
When determining how to divide the asset pool the court will look to the contributions each party made upon entering the relationship, combined with those made throughout the duration of the relationship.
Both financial and non-financial contributions are taken into account by the court.
Some contributions the courts may consider include:
After all of these contributions have been identified the court will make a decision on the overall contributions of the parties in percentage form. For example; Wife 55%, Husband 45% or vice versa.
The court will then consider the future needs of both parties to determine whether or not any adjustments need to be made to the percentage decided in Step 2.
These adjustments could be due to things such as:
This new percentage is then applied to the asset pool to determine what each party is entitled to receive.
The final step is to determine whether or not the result is ‘just and equitable’. This simply means is the result fair for both parties?
If the result is fair for both parties then the settlement process is completed, if it is not fair then changes may need to be made to ensure that both parties are achieving a fair outcome. If both parties agree on a settlement a solicitor can draft the documents to complete the settlement for them.
What happens when both parties don’t agree?
If an agreement cannot be reached by both parties, they may be required to commence court proceedings to achieve a settlement by making an application to the court for Final Orders.