What is a “Just and Equitable” outcome in Family Law

In the Context of Consent Orders:

When you apply for Consent Orders, you need to provide the Court with enough information in your application (including a summary of assets, liabilities, contributions, and future needs) to allow it to make this assessment. If the Court is not satisfied that the proposed orders are just and equitable, it may not approve them and may require the parties to provide more information this is known as a requestion.

The aim is to ensure that the agreement reached is fair, considering all the relevant circumstances, and not the result of one party being disadvantaged, uninformed, or pressured into an unfair agreement. In Australian Family Law, when the Court is asked to make Consent Orders about how property and finances will be divided after a separation, it must be satisfied that the proposed orders are “just and equitable.”

Essentially, this means the agreement must be fair and reasonable to both parties in all the circumstances of their specific case. It’s a core principle enshrined in the Family Law Act 1975 (primarily in Section 79 for married couples and

for de facto couples) to ensure that property settlements are not only agreed upon but also achieve a fair outcome.

“Just and equitable” does not automatically mean a 50/50 split of assets. The law recognises that every relationship is different, and what is fair in one situation may not be fair in another.

To determine if proposed Consent Orders are just and equitable, the Court (and by extension, the parties when drafting their agreement) will generally consider a process often referred to as the “four-step process”:

1. Identify and Value the Net Asset Pool:

1. • This involves listing all assets, liabilities (debts), and financial resources of both parties.

1. • Assets can include the family home, investment properties, bank accounts, shares, superannuation, cars, furniture, and business interests.

1. • Liabilities can include mortgages, loans, and credit card debts.

1. • The net asset pool is the total value of assets minus the total value of liabilities.

1. Assess the Contributions of Each Party:

1. • The Court looks at the contributions made by each person to the acquisition, conservation, or improvement of the property, as well as to the welfare of the family. Contributions can be:

1. • • Direct financial contributions: Such as income, wages, inheritances, or gifts received by one party that benefited the relationship.

1. • • Indirect financial contributions: Such as paying bills or making mortgage repayments out of one’s income, which allowed the other party to use their income for other purposes or to accumulate assets.

1. • • Non-financial contributions: Such as performing renovations or improvements to a property or acting as a director in a family business without significant remuneration.

1. • • Contributions as a homemaker or parent: The law specifically recognises the significant value of contributions made to the home and children, which enable the other party to work or pursue other financial opportunities.

1. Consider Future Needs and Other Relevant Factors (often referred to as Section 75(2) factors or Section 90SF(3) factors marriages or similar considerations.

1. • The Court then considers a range of factors relating to the future needs of each party. These can lead to an adjustment of the contribution-based entitlements. These factors include:

1. • • The age and state of health of each party.

1. • • The income, property, and financial resources of each party (including superannuation).

1. • • The physical and mental capacity of each party for appropriate gainful employment.

1. • • Whether either party has the care or control of a child of the relationship who has not attained the age of 18 years.

1. • • Commitments of each party that are necessary to enable them to support themselves or a child or another person they have a duty to maintain.

1. • • The duration of the relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration (or whose property share is being determined).

1. • • There is a significant need to protect a party who wishes to continue their role as a parent.

1. • • If either party is living with another person, the financial circumstances relating to that cohabitation can be taken into consideration.

1. • • Any child support that a party provides or might be liable to provide in the future.

1. Determine Whether the Proposed Division is Just and Equitable:

1. • Finally, the Court steps back and looks at the overall practical effect of the proposed orders. It considers all the circumstances and the findings from the previous steps to decide whether the proposed division of property is, in reality, fair and equitable to both parties. This involves an element of discretion to ensure the outcome is practically workable and achieves overall fairness.

1. When parties submit Consent Orders, they are essentially asking the Court to endorse their agreement as meeting this “just and equitable” standard. The Court has an overriding discretion and will not simply “rubber-stamp” an agreement if it appears to be significantly unfair to one party, even if they have both consented. This is why full and frank financial disclosure is crucial, so the Court can properly assess the fairness of the proposed orders.