New court process for property pools under $500,000
A change in court process may sound dry, if you have separated and your net property pool is under $500k, this affects you. The changes to the court process starting this week are very important.
Courts dealing with family law matters have been under significant government and media scrutiny in recent years, partly due to the large backlog of cases and the resulting delays and increased legal costs for litigants. From 1 March 2020, the Federal Circuit Court is therefore implementing a new strategy for dealing with smaller property cases (those with net property pools less than $500,000 including superannuation) in several of its registries, including Brisbane.
It is important to note that the law on ‘How’ a property division is determined is not changing, it is the court ‘process’ that is changing.
From 1 March 2020 these cases will be referred to as “Priority Property Pools under $500,000 Cases” or ‘PPP500 Cases’ and will be subject to simplified procedures, different forms and more intensive case management from the court.
In introducing this new change, the government has referred to research from the AIFS (Australian Institute of Family Studies) showing that approximately 57% of court applicaions for property settlement were for less than $500k and on average the time in court to finalise an application, was 15 months.
The procedure will not apply to cases involving entities such as companies, trusts or self-managed superannuation funds or cases which also involve parenting or child support issues.
The court has stated that the purpose of the PPP500 procedures is to achieve a just, efficient and timely resolution of PPP500 cases at a cost to the parties that is reasonable and proportionate in the circumstances of the case.
The purpose will be achieved by identifying and narrowing the issues in dispute and assisting the parties to undertake Alternative Dispute Resolution (ADR) at the earliest opportunity, and where ADR is unsuccessful, providing an opportunity for a less adversarial trial or a hearing on the papers.
The most significant changes in the PPP500 procedures are:
- New Forms: If your case is PPP500, then apart from filing an Initiating Application with the court, you will also need to file a PPP500 ‘Financial Summary’ form. The PPP500 ‘Financial Summary’ form will be filed instead of an Affidavit and Financial Statement. The PPP500 Financial Summary form requires less information and is more directive and therefore should be easier for litigants to complete themselves or require less time (and cost) for their lawyer to complete.
- New Procedures Before the First Court Date: Before the first court date, a Registrar will review the application and issue directions as they see as appropriate or necessary in that case, which the parties will be expected to comply with before the first court date. This is unlike a normal property application where no directions will issue until the first court date. These directions will include things like requiring the parties to exchange financial disclosure documents, requiring the parties to appoint a valuer if they cannot reach agreement about values, and discussing an appropriate process for ADR.
- The First Court Date: The Registrar will expect the parties to have complied with the directions order and will want to settle the ‘Balance Sheet’ (of assets and liabilities) at the first court date. If the matter hasn’t settled by this point the Registrar will make directions for the parties to attend ADR, being either a Conciliation Conference, Legal Aid Conference or private mediation. In Queensland, the State Legal Aid office has been given additional funding to enable them to facilitate conferences in appropriate PPP500 cases.
- The Second Court Date: If the matter doesn’t resolve at ADR then the Registrar will review the ‘Balance Sheet’ and prepare a set of agreed facts so the case can be transferred to the judge for judicial management.
- Judge-led Phase: The matter will come before the judge for a procedural hearing. The judge will finalise the ‘Balance Sheet’ and identify the issues in dispute. The judge will make directions for a final hearing, including the filing of Affidavits and a Financial Statement. The judge may hear a trial in the traditional process or make directions to hear a trial on the papers or by way of a less adversarial trial (where the rules of evidence do not apply).
Summary
It is important to remember that the majority of property settlement cases are resolved through negotiation and agreement and do not go to court. This new court process is only for those property cases where agreement can’t be reached and an Application to the court is filed.
Need advice?
For a fixed-cost no-obligation initial consultation contact Michael Lynch Family Lawyers by calling (07) 3221 4300 or emailing to [email protected].
