Just and Equitable Property Orders

The Court’s power to make orders altering the interests of the parties to the property of the marriage is contained in section 79(1) of the Family Law Act 1975.

However, section 79(2) of the Family Law Act states the Court shall not make an order unless it is satisfied that in all the circumstances of the case that it is “just and equitable” to make the order. This is the fourth and final step of the four-step process adopted by the Court when determining the financial property settlement.

Section 79 2) is expressed in negative terms, (see the case of Teal & Teal [2010]), and states that the Court shall not make an order unless it satisfies itself that it is just and equitable under the circumstances of the case to do so.

In the case of Bevan, the Full Court allowed the appeal by the wife against the trial judge’s decision to award a 60/40 division of the matrimonial property in favour of the wife which meant that she would have to sell her home to pay the husband his share of the award. The parties in that case had been separated for 18 years and the husband had told the wife that she could retain the assets during which time the wife dealt with the assets without reference to the husband.

The Full Court allowed the wife’s appeal and left the existing property interests as it was. Notably, the Full Court did not make a costs order despite the wife succeeding in the appeal in view of the fact that the husband would have to pay for his legal costs.

When considering this step, the Court looks to the effect of its findings made at the previous three steps and then proceeds to make an order if it just and equitable to do so.

The Court does not just consider the percentage division but makes an assessment as to whether the effect of the order that it now proposes to make is just and equitable.

In the case of Bonnaci (2012) at paragraph 61 of the judgment, the Court stated that, “the Full Court has said on a number of occasions the so-called fourth step is not an opportunity to make a further adjustment; it is an opportunity for the judicial officer to determine finally how, in reality, a just and equitable order might be achieved based on the circumstances of the case before it.”

When undertaking this step, the Court has to “stand back” and look at the reality of the percentage division at which it has arrived (see the case of Tomasetti [2000]).

In Norman & Norman [2010] the Full Court explained that the legislation does not envisage a “substantial step” or a further significant adjustment as a final step. Rather the Full Court, by reference to the judgment of Gibbs CJ in Mallet, explained “[it] is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result”.

And in the matter of Teal, “For all its usefulness and merit as a “disciplined approach” or a “structured process of reasoning”, the “three-step” or “four-step” approach merely illuminates the path to the ultimate result.”

Section 79(2) confers a wide discretion with each case turning entirely on the view taken by the judicial officer of the facts and merits of that case.

This power is a discretionary power and is dependent on the facts of the case; therefore no two decisions can be the same. The Court however does not have an unfettered discretion.

In the matter of Norman & Norman [2010] the Court held that, “It is the Act which ultimately governs the process and the parameters of the s79 exercise. The legislative requirement is to “take into account” the matters enumerated in the sub-paragraphs of the section. There is no legislative requirement as to the process that should attend it (save that, ultimately, it must produce a just and equitable outcome).”

In the decision of the High Court in Mallett v Mallett [1984] Chief Justice Gibbs at paragraph 608 said:

“…[Parliament] has conferred on the court a very wide discretion to make such order as it thinks fit when it is satisfied that it is just and equitable that an order should be made (see sub-s (1) and (2) of s 79), although there are some broad principles to which the court is required to give effect, and some circumstances which it is required to take into account … The circumstances which the court is specifically required to take into account may be regarded as falling within two main classes. First, the court must consider the extent to which either party has in the past contributed to the acquisition, conservation or improvement of the property … Secondly, the court must consider all those circumstances which relate to the present and future needs, and to the means, resources and earning capacity, actual and potential, of the parties: see s. 79(4)(d) and s 75(2)(a)-(m) … The Act does not indicate the relative weight that should be given to different circumstances, or how a conflict between opposing considerations should be resolved – those things are left to the court’s discretion, which must, of course, be exercised judicially.

A brief analysis of the case law shows that the four step process is a guide to what matters must be taken into account; however, step four of the process, that the division of property is to be “just and equitable”, means that the Court has to deal with each case on its own merits in determining, after considering all necessary matters, what should be the applicable result in the particular case it is deciding.

As each case must be determined on the specific circumstances, it is important to obtain legal advice from a family lawyer who has experience in property settlement matters and a good knowledge and understanding of the case law to be able to determine your likely entitlements.

If you require assistance obtaining Property Orders to finalise your family law property settlement, the experts at Prime Lawyers – Family Law Division can help. Contact us to make an appointment with a family lawyer at your nearest Prime Lawyers office.

We have offices in Sydney, Parramatta, Chatswood, Sutherland and Wollongong.