In September 2017, the Australian Law Reform Commission (‘ALRC’) received Terms of Reference from the Attorney-General to undertake a comprehensive review of the family law system. The review was the first since the commencement of the Family Law Act 1975 and the final report, titled ‘Family Law for the Future: An Inquiry into the Family Law System’, was tabled in Parliament and released to the public on 10 April 2019.

In its final report, the ALRC made 60 recommendations for reform including a recommendation that the federal family courts eventually be abolished and that family law disputes to be determined by the states and territories. The Liberal government’s plan to merge the Family and Federal Circuit courts was previously dealt a blow when it failed to pass through the Senate in early April 2019.

One of the ALRC’s most controversial recommendations in its report was for the inclusion of a statutory presumption that parties to property settlement proceedings made equal contributions during their marriage/relationship, with limited exceptions. The current approach is that each party to the relationship retains what is legally theirs, with the court having power to alter property interests if it is just and equitable to do so and in accordance with a set of legislated considerations.

The recommendation for a presumption of equal contributions arose out of concerns that there is a high degree of uncertainty about the current regime for property settlements and that individuals often determine it “too hard” to pursue a property settlement.[1] Submissions to the ALRC noted that the Family Court had previously operated from a starting point of equal contributions prior to the 1984 High Court decision in Mallet v Mallet which said that such a presumption was not authorised by the legislation.[2]

Submissions to the ALRC suggested that a legislated 50/50 starting point would significantly reduce the complexity, length and legal costs of contested property cases. It was also submitted that a 50/50 starting point would remove any “criticism by one party of the other about their supposedly inadequate contributions” which would help to maintain workable relationships post separation.[3]

The ALRC had made similar recommendations in a 1987 report in which it explained that the current approach of assessing the respective contributions to a marriage or relationship engendered expense, delay and bitterness.[4]

The exceptions to the presumption recommended by the ALRC would arise in circumstances where there was evidence that one party had:

  • Wasted assets;
  • Deliberately or unreasonably damaged property;
  • Accumulated liabilities for his or her own benefit;
  • Received compensation for pain and suffering or economic loss which have not been dissipated during the relationship; and/or
  • Received inheritances or gifts.

It is however, often considered a strength of our current family law system that our courts have the discretion to consider contributions on a case-by-case basis. The point has been raised that if this particular ALRC recommendation is implemented, there is a risk that it might result in such contributions being overlooked.

On publication of the ALRC report, the Attorney General said that there would be a “further period of engagement with key stakeholders” in order to develop options for reform and to respond to the report “in a manner that delivers just, effective and safe outcomes for Australian families”.[5]

If you are going through a family law property settlement and expect there to be discussion about contributions, please do not hesitate to contact Rowan Skinner & Associates Lawyers for advice.

[1] Australian Law Reform Commission, Family Law for the Future – An Inquiry into the Family Law System, Report No 135 (2019) 223.

[2] Mallet v Mallet (1984) 156 CLR 605.

[3] Australian Law Reform Commission, Family Law for the Future – An Inquiry into the Family Law System, Report No 135 (2019) 221.

[4] Australian Law Reform Commission, Matrimonial Property, Report No 39 (1987).

[5] Attorney-General for Australia, ‘Australian Law Reform Commission Review of the Family Law System’ (Media Release, 10 April 2019).