A financial separation is often a difficult and stressful process for both parties involved, particularly so where your ex-partner maintains control over joint assets or has a much higher earning capacity. Unfortunately, it is sometimes the case that one party to a financial separation maintains financial control over the other due to their higher earning capacity or control over joint assets. For example, this may be the result of one party withdrawing from the workforce during the relationship to take on the role of the primary carer of the parties’ children.
As the process of finalising financial settlements can often take months or even years to be resolved, it may be the case that the party with a lower earning capacity will face financial burdens and may require additional funds to support their daily living expenses, legal fees and/or educational costs. In these circumstances the burdened party may seek what is known as a ‘partial property settlement’; this is essentially an ‘advance’ of funds which can be paid before the final settlement is complete.
Partial property settlements can be ordered in these circumstances to counteract the inequity in the parties’ access to assets and/or financial resources during negotiations or proceedings. These settlements are recognised and accounted for in subsequent negotiations and proceedings as a distribution made in the otherwise burdened party’s favour.
What do I need in order to be successful in a partial property settlement?
The Family Court of Western Australia under sections 79 and 80 of the Family Law Act 1975 (Cth) has the discretion to make an interim property order when it is appropriate and in the interests of justice. The primary consideration for the Court when adjudicating these matters regards the current financial circumstances of the parties as opposed to the purpose for which the funds are sought.
An application for partial property settlement requires the applicant to satisfy the Court of the following elements:
- A source for finance of the payment can be identified;
- There is a party with the majority control of assets or relative financial strength;
- The payment must not be more than the party will ultimately receive from the settlement;
- There is a reasonable explanation on what the funds are for; and
- It is ‘just and equitable’ and in the interest of justice to make the partial property settlement order.
It is noted that the Court does not make interim cost orders such as partial property settlements without a strong consideration to the circumstances of each party. Essentially, the Court will make this determination on the basis of the evidence that is before it with respect to the value of the asset pool, the initial contributions of the parties and the contributions of the parties throughout the marriage, but most importantly, if it considers it is just and equitable to do so.
An applicant must convince the Court on the evidence at hand that you will, without doubt, receive more in the financial settlement than you are asking for on this interim basis. This is to ensure the payment cannot cause injustice later on where the relationship assets have already been spent.
Where the Court makes this order, it is described as an ‘add-back’. That is, the funds which are distributed to a party via a partial settlement will be acknowledged and added back to the value of the asset pool available for distribution, but is recognised to have been distributed in one party’s favour already.
Is partial property settlement my only option?
Other orders can be sought to remedy the discrepancies in parties’ resources during family law proceedings. These include seeking a periodical or lump sum for spousal maintenance under ss72 and 74 of the Family Law Act or seeking a “dollar for dollar” order under s117(2) to cover the expense of legal fees.
How can I apply for a partial property settlement?
If you have not commenced proceedings but seek to have a partial property settlement, you can apply for this via interim Orders sought in your initiating documents before the Court. If proceedings have already commenced, a partial property settlement must be applied for via a Form 2, ‘Application in a Case’. These can be filed on the eCourts website after paying the relevant fee.
If the contents of this article appear relevant to your circumstances, or if you require any assistance with your family law matter, please contact our office on (08) 9408 5212.
Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.