Understanding Section 79: A comprehensive guide to property division in Australia

When it comes to separating or divorcing in Australia, the division of property can at times be a complicated and emotionally charged process.

Section 79 of the Family Law Act 1975 provides a framework to ensure a fair and equitable division of property between separating or divorced couples.

Scope and power of section 79

Section 79 grants the court broad powers to make orders altering the property interests of parties to a marriage or de facto relationship.

The court can transfer existing interests or make any other appropriate order regarding the property of either or both parties.

Identifying the property pool

Before dividing property, the court must identify and value all assets, liabilities, and financial resources that constitute the property pool.

This includes assets held in Australia and overseas and including, for example, real estate, vehicles, business interests (held through companies or trusts) and shareholdings.

The court generally determines what property is owned at the time of a final trial which includes any assets owned at the commencement of the relationship and those acquired or disposed of during the relationship or since separation.

Assessing contributions

A primary consideration under Section 79 is each party’s contributions, both financial and non-financial, towards acquiring, preserving, or improving the property pool.
Financial contributions include direct monetary contributions like income earned during the relationship, inheritances, or gifts received.

Parenting /homemaker contributions refer to the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage.
Non-financial contributions are contributions, other than monetary, that increase the net asset pool of the parties. These can include, for example, home improvements, renovations, and gardening.

The court carefully assesses each party’s direct and indirect contributions to the property pool during the marriage or relationship, as well as any contributions made before or after the relationship.

Future needs and other factors

In addition to contributions, the court must consider factors in section 75(2) of the Family Law Act 1975 when dividing property under Section 79, including age, health, income, property, and financial resources of each party, care and responsibility for any children of the relationship, capacity for gainful employment, effect of any proposed order on a party’s earning capacity, length of the relationship, protection of children’s interests, and any other relevant factors, such as financial or non-financial contributions to family welfare.

To determine property division under Section 79, courts generally follow a structured four-step process:

1. Determine and value all assets, liabilities and financial resources comprising the property pool.
2. Assess the contributions made by each party towards acquiring, preserving, or improving the property pool.
3. Evaluate the future needs of each party, considering factors like age, health, income, earning capacity, and care of children.
4. Ensure that the proposed property division is just and equitable, taking into account the factors in steps 2 and 3.

Exceptions and special considerations

Certain types of property, such as superannuation interests, inheritances, gifts, and personal injury settlements, may be treated differently under specific rules and circumstances. The court may consider the nature, source of funds, and contributions made towards these items when determining their treatment in the property division.

Alternative dispute resolution

Before commencing court proceedings, parties are encouraged to explore alternative dispute resolution methods like mediation and negotiation for cost-effective and amicable resolutions.

These methods can help parties reach a final settlement without the need for litigation.

At O’Sullivan Davies, our experienced family law team is dedicated to guiding clients through the complexities of property division under Section 79 of the Family Law Act 1975.

We understand the emotional and financial implications involved, and we strive to ensure that our clients’ rights and interests are protected throughout the process.

If you’re facing a separation or divorce and have concerns about property division, don’t hesitate to contact us.

Our knowledgeable professionals will provide personalised advice and support to help you navigate this challenging situation with confidence and achieve a fair and equitable outcome.