Family Law – Property Pools Under $500,000

The Federal Circuit Court has issued Practice Direction No2 of 2020 which sets out more streamlined procedures for dealing with matrimonial property settlement matters. 

The new procedures apply to cases with a total net value of property less than $500,000 (called PPP500 cases i.e. Priority Property Pool cases) and apply to family law property settlements in Brisbane filed after 1 March 2020.

The purpose of the Practice Direction is expressed to achieve “just, efficient and timely resolution” of cases with less than $500,000 net property for distribution. In order to achieve this the [practice direction requires:

• The parties attend mediation or some other alternative dispute resolution at the earliest possible opportunity; and 
• If alternate dispute resolution isn’t successful, to provide for a less adversarial hearing or a hearing “in chambers” without the need for witnesses and cross examination.

The process is being trialled in the Brisbane Family Court Registry (and in Paramatta, Adelaide and Melbourne), and is available if an initiating application has been filed for a matrimonial property or de facto property settlement after 1 March 2020.

To be eligible a matter, as stated above, must have total assets and super less than $500,000 and there must be no entities such as companies, SMSF or trusts requiring valuation or other expert evidence to determine issues such as control. If the criteria are met the Court may declare the matter is a PPP500 case. 

There are specific exclusions to the pilot program for any matters involving parenting applications (including where parenting and property issues are relevant), contravention applications, child support or child maintenance issues or spousal maintenance issues. 

Bringing a PPP 500 Application

Pursuant to Rule 2.04 Federal Circuit Court Rules 2001 (“the Rules”) a new for called the Financial Summary form has been approved.

Where litigants consider that the PPP500 ought to apply, they may commence proceedings by filing the Initiating Application along with the Financial Summary form. 

In situations where proceedings have been commenced in the regular manner (with an Initiating Application, Affidavit in support and Financial Statement), the court may subsequently designate the matter as being a PPP500 matter and direct the filing of a Financial Summary form.

When the matter is commenced by way of the streamlined process, aspects of the Rules such as the filing of Affidavits or Financial Statement are suspended until directions provide otherwise. For example, if mediation is unsuccessful and the matter requires a decision by a Judge, direction for Affidavit and Financial Statement will likely be made. 

The Financial Summary form

The Financial Summary form requires information similar to that which would be included in an Affidavit in a property settlement matter. However, with the information being provided in question and answer style, it is likely to make the form easier for self-represented litigant to complete and directs attention to what is relevant.

The form has 11 parts covering information about the parties, any alternative dispute resolution they have attended, information about any existing agreements (parenting or property), a series of questions towards financial factual matters, personal circumstances, income, debts and expenses, children and parenting arrangements, changes to property and a balance sheet of the relationship (i.e. a list of assets, liabilities and superannuation).

The Process in a nutshell

The process can be summarised as comprising 6 steps in the PPP500 procedure. These are:

1. Once the Application and Financial Summary is filed, or the case has been designated as PPP500, a Registrar of the Court can make directions in chambers for certain things to be done before the first Court date. These could include valuations conducted, disclosure of bank statements, tax records, payslips etc.
2. At the second stage the parties and their legal representatives appear before a Registrar in Court to make sure that the matter is ready for alternative dispute resolution to occur. This would require making sure there is an agreed balance sheet, disclosure has been completed and prior directions complied with. Cost penalties could apply to any party who has failed to comply with directions. If an interim decision is required on an issue, the matter could also be referred to a Judge to determine the interim issue.
3. The third stage is attendance at alternative dispute resolution. This would likely be a Registrar run Conciliation Conference in the majority of cases, but it could be an external mediation, Legal Aid Conference or even arbitration.
4. If the matter is not resolved at alternative dispute resolution it will return before the Registrar for the second Court date. At this stage it is anticipated valuations and disclosure will be complete, offers exchanged and balance sheet ready to be finalised. Further negotiation may take place and the mater may be stood down for this to occur and if the matter is close to resolution it may be obtain a further Court date before referral to the Judge. A Registrar may discuss the merits of each party’s case and provide information about less adversarial process and for the matter to be heard “on the papers” i.e. by a Judge in chambers – not open Court. In a typical case this would be the last of the Registrar’s involvement before the matter is referred to a Judge for case management.
5. Once the matter is before the Judge the Judge will finalise the balance sheet, identify evidentiary issues and make directions for the final hearing – such as for Affidavits and Financial Statement to be filed.
6. The last step being the hearing whether it occur in chambers, as a less adversarial trial (i.e. one where Division 12A Family Law Act 1975 applies and the rules of evidence do not apply – unless the Court decides otherwise) or as a traditional trial. 

It is envisaged that at any time during the process if the parties are able to reach a final agreement, Orders could be made in chambers by a Registrar. 

This would occur with a signed and dated agreement being emailed to the Registrar, a clean Word copy of the Minute of Order, evidence of procedural fairness for a superannuation split and a letter addressing matters of “justice and equity”.

It is hoped that these measures will lead to timelier and less expensive resolution of smaller property matters, with the Registrar led part of the process being envisaged as being completed inside 90 days. 

Peter Hooper – Hooper Mill Family Lawyers Gold Coast and Brisbane – We are Family Law Specialists, providing Expert Family Law advice and representation.