Dividing property after separation can be challenging and, while avoiding court is the preferred approach to finalise a property settlement, this is not always possible. Court proceedings can exhaust time and money. When the pool of assets is quite modest, the impact of excessive legal and court costs can put a significant dent in the value of the property a couple has worked hard to obtain.
To target these issues, the Government has introduced a Small Claims Property Pilot program to help parties with small asset pools reach a fair division of assets with minimal cost and without extensive delay, as is often the case for family law matters. Known as the Discrete Property List, the program has been implemented by the Federal Court registries in Brisbane, Parramatta, Adelaide and Melbourne.
The program commenced in January 2020 and will run for two years. Afterwards, its success will be assessed with the possibility of expansion into other regions and on a more permanent basis.
If you are separated with a net joint asset pool of $500,000 or less, you may be eligible to access the program and have your matter dealt with more efficiently and cost effectively by the Federal Court.
The Discrete Property List
The program forms part of the $98.4 million Women’s Economic Security Package (WESP) to fund services and initiatives aimed at supporting victims of family violence and resolving family law disputes.
Traditionally, apart from urgent matters, family law property cases progress through the court in the same manner and within the same timeframe irrespective of the size of the asset pool or complexity of issues involved. This approach has contributed to an excessive backlog of cases which could potentially be lifted by fast tracking some of the smaller, simpler matters.
The program deals with property related matters only, which are referred to as Priority Property Pools under $500,000 (PPP500) cases. A PPP500 case is one where:
- the parties’ net property (including superannuation) is $500,000 or less; and
- there are no entities owned or controlled by either party that will require valuation or expert investigation (for example, a family trust, company or self-managed superannuation fund); and
- neither party is seeking orders for parenting or child support.
The objectives of the program are to:
- fast-track and finalise simple property matters involving small asset pools at minimal expense for the parties involved;
- reduce the current backlog of cases within the family law system and the waiting time for other matters;
- assign a Magistrate to deal with smaller, less-complex matters while freeing up Judges to deal with more complex matters and children’s matters.
Processes and timeframes
The Federal Circuit Court has issued practice directions for parties involved in a PPP500 case. Rather than waiting to be heard by a Judge, matters in the Discrete Property List will, in the first instance be assigned to and case-managed by a Registrar.
In most cases, the matter will be dealt with exclusively by the assigned Registrar with an outcome anticipated within 90 days or the matter referred to a Judge for case management or listed for hearing.
The program fosters early dispute resolution and features intensive monitoring for compliance and exchange of documentation between the parties. To improve the potential outcome using these processes, there is close involvement to ensure cases are properly prepared before alternative dispute resolution takes place.
A PPP500 case will typically take the following path:
- Proceedings are commenced by the parties filing an Initiating Application and a Financial Summary. Prior to the first court date, the case will be confirmed as a PPP500 and preliminary directions made by the Registrar in chambers for financial disclosure and the exchange of relevant documents, such as valuations and expert reports, between the parties.
- On the first court date before the Registrar, and assuming the parties have exchanged the required financial information, a ‘balance sheet’ is settled and the parties may be referred to private mediation, a conciliation conference or Legal Aid conference.
- Alternative Dispute Resolution may take place with a Registrar, external mediator or at a Legal Aid conference. Following, the parties may be in a position to settle the matter by consent, and in such cases, legally binding orders can be made.
- If the matter does not settle, a second court date is arranged – factual issues are identified, the balance sheet is re-checked and settled, and the Registrar’s involvement comes to an end. The case is then referred to a Judge.
- A procedural hearing is convened where issues are identified, and directions made for a final hearing. Parties may have the option to consent to a less adversarial hearing on the papers. If a traditional hearing is preferred, the parties should identify the issues in dispute and relevant evidence in support of their respective positions.
- Final hearing takes place.
Legal and other costs for small property cases can be grossly disproportionate to the actual value of the asset pool. With cases taking up to two years to reach a final hearing, parties endure expenses in addition to legal and court costs such as maintaining and insuring assets pending their potential sale, storage fees and short-term accommodation costs. The parties must also contend with the emotional impact of court proceedings and the feeling of being ‘in limbo’ until a property division is finalised.
It is anticipated that PPP500 cases will proceed more expeditiously through to settlement, alleviating some of the emotional and financial stress to those with modest asset pools and freeing up the Court to deal with more complex family law matters.
If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email email@example.com.