When it comes to family separation, reaching amicable decisions on how the two parties will divide property is possible without going to court. A consent order is a written agreement that sets out the orders that a court can make regarding your joint and individual property. It’s worth noting that consent orders can be used to decide how parents will care for their children after a family separation as well as for maintenance payments. Although some principles are similar, we focus our attention below on consent orders that deal solely with property to help assist with deciding whether it is appropriate for you and your family.
What is a Consent Order?
A consent order is, in essence, a set of written orders a court makes based on mutually agreed on terms of both parties. For property matters, the court will only make the orders if it is satisfied that the order would be considered “just” and “equitable” in the circumstances. The court can make the orders for both marriage and de facto relationship separations.
Consent orders differ from financial agreements as the court will need to approve the orders using the criteria of being “just” and “equitable”. Financial agreements may not require the court’s approval, however, they must nevertheless satisfy the criteria for creating a binding financial agreement (including the requirement of individual legal advice).
How do I Know if I Should Apply for a Consent Order?
After separation, a consent order can provide you with clarity on how property can be divided. However, it can only be used if both parties agree to the orders, otherwise, the court will need to get involved to determine how property will be divided. This is a litigious process and is best avoided if both parties can negotiate agreeable terms.
The alternatives to a consent order include:
- Go to court and allow the court to make a decision on how assets will be divided;
- Draft a financial agreement (as described above);
- Separate assets informally without any court or legal involvement.
The last option may leave both parties at risk of having the other party commence proceedings in court at a later date.
What is “Just” and “Equitable”?
Although you may reach an agreement on how property is divided, the court will still need to give its tick of approval before making an order. Three overarching principles will help the court decide if the order you request is just and equitable, including:
- Determining the property and debts of both parties, owned either individually or jointly;
- Looking at direct and indirect financial contributions the parties have made; and
- Considering the future requirements of the parties (e.g. earning capacity, parental commitments, health, etc.)
Although the court must decide on whether an order is just and equitable on a case by case basis, when coming to an agreement you should also take these factors into consideration.
What Property Does the Consent Order Need to Include?
Although already implied, it must be reinforced that parties need to make the orders by consent. A factor that ensures parties have provided consent is disclosing your financial circumstances (i.e. all of you assets and debts). Rule 13.04 of the Family Law Rules 2004 sets this out, stating that parties must make “full and frank disclosure”.
If you are unsure of what would be considered property, this list should provide you with an idea:
- Real property;
- Shares; and
- Interest in trusts.
If parties do not disclose all assets and debts, the consent order faces the risk of being set aside in the future. You will only be required to attend court upon request.
How Do I Apply for a Consent Order?
The Family Law Rules 2004 set out the requirements for applying for a consent order. The parties will need to complete an application form, but also provide the court with a copy of the orders that they would like made. There are time restrictions that set out when a consent order can be applied for (e.g. within 12 months of a divorce for married couples or within 2 years of the relationship breakdown for de facto couples).
Applying for a consent order is an option for many couples who have separated and can come to a decision as to how to divide property. As noted above, there are other options in reaching a property settlement so it is important to make an informed decision based on your circumstances. If you have any questions, get in touch with our family lawyers on 1300 544 755.