In the Event of Divorce, How Does the Court Divide Property?

  • In Australia, the principles which apply are the same for married couples and de facto couples
  • First, work out the total value of your existing property, which each of you own, regardless of whether it is in joint or single names
  • Property includes real property, cash, shares, cars, businesses, trusts, boats, caravans, a windfall like a lottery win, or a chose-in- action
  • Deduct the value of existing debt, including mortgages, loans, credit cards, which attach to the property or stand-alone. The debt should be debt which was incurred during the relationship
  • Secondly, one needs to work out the direct and indirect financial and non-financial contributions, including homemaking contributions, which each party has made to the acquisition, conservation and improvement of the property referred to in the first step above
  • Financial contributions could be a deposit, mortgage payments, or cash used to buy property
  • Non-financial contributions are labour and time used to improve an asset, like a house or a business
  • Thirdly, there may need to be a further adjustment to the percentage split applied in the second step, having regard to what are known as section 75(2) factors. These factors used to be referred to as ‘needs’ factors
  • The needs factors look at how the marriage might have affected the parties and the party’s current financial status. For example,
  • The state of health of the parties
  • The desire of a party to maintain their role as a parent
  • Financial commitments of the parties
  • The extent to which a party has contributed to the earning capacity of the other party
  • The earning capacity of the parties
  • Finally, the court may stand back and look at whether the proposed settlement is just and equitable







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