Most family law property matters are resolved by agreement.
Sam McGee has written previously about how family law disputes can be resolved without going through the courts at all.
Even when court proceedings have been started, in the vast majority of cases a compromised agreement is reached at some point.
Whether or not there are court proceedings on foot, it is critical that once an agreement has been reached it is made binding. One of the ways to make an agreement binding is to apply for final orders to be made by consent.
Even when by consent, final orders can only be made by the court if the court is satisfied that, in all the circumstances, it is just and equitable to make those orders.
This means that getting final orders by consent really has two steps:
- Coming to an agreement with the other party, and
- Persuading the court that the agreement is “just and equitable” so that orders can be made.
In a recent case listed in Melbourne, a husband and wife reached an agreement for a property settlement that provided for the wife to receive a payment from the husband of $30,000. This was out of an overall property pool of $251,000 (non-super) and $54,000 (super). The husband was retaining the rest of the pool and all of his super.
Effectively, the wife was getting between 9% and 10% of the overall pool.
Court proceedings were already on foot (and a final hearing was a week away) when the agreement was reached. The husband and wife sent their agreement to the court and requested that final orders be made by consent. The agreement appears to have been sent to the court without any supporting information explaining how the agreement was a just and equitable outcome.
Federal Circuit Court Judge Anthony Kelly directed that the parties file an agreed Statement of Agreed Facts so his Honour could consider whether he could make the orders as agreed.
A statement of agreed facts was filed, but his Honour found that he “could not, without more, make a final order approving the parties’ proposed compromise.”
Reading the judgment, it seems that there was just not enough meat on the bones in the Statement of Agreed Facts to justify the agreement. This resulted in an exchange in court where his Honour commented “I am concerned that an award of 9% [to the wife] for even a relatively brief marriage is not just or equitable and I cannot approve it and will not approve it.”
It is difficult to imagine that after that exchange the wife would have still been prepared to agree to only a payment of $30,000.
To me, the lesson from this case is less about whether or not the agreement was fair and more that it is very important that when asking a court to make consent orders a lot of care and attention goes into explaining why the agreement is an appropriate outcome. Skimping on this step can result in further delays, more costs and – worst of all – it can disturb the agreement altogether.
It is possible to make agreements about family law property settlements binding without going through the court system and for advice about that or any other aspect of your family law matters you can see a member of our Family Law team by calling 03 5445 1000.