Property Mediation – How has the process changed since the FLA was amended?

The Full Court held that where family violence made a party’s contributions ‘significantly more arduous’, that could be taken into account. Sections 79(4)(ca) and 79(5)(a) codify and arguably broaden this — and family violence expressly includes economic and financial abuse.

For mediators: Kennon claims were historically rare and hard to run. Under the codified provisions they are expected to become more common in property matters — including matters that settle at mediation.

A family-violence adjustment must be properly reasoned — it is not automatic.

The trial judge divided property 59:41 in the wife’s favour on the basis the husband’s family violence significantly impacted the burden of her contributions. The Full Court allowed the husband’s appeal — not because family violence was irrelevant, but because the reasoning was inadequately explained. The impact may be considered in contributions and in future needs, but if the future-needs route is taken the judge must explain the ‘predictive prospective factors’, e.g. the ongoing impact on earning capacity.

For mediators: a finding of family violence does not translate automatically into a percentage. In mediation, help parties think through how the violence actually affected earning capacity, contributions and financial position — not just whether it happened.

Full judgment — AustLII

Family violence weighed holistically — no separate ‘percentage’.

A positive finding that family violence made the wife’s contributions more difficult was considered holistically with the other contributions — there was no separate, itemised ‘family violence percentage’.

For mediators: courts are treating family violence as one strand in a holistic assessment, not a standalone head of adjustment. Manage expectations of a dramatic separate uplift carefully.

Full judgment — AustLII

Financial control recognised as family violence affecting contributions.

The judge found family violence in the form of financial and other control hampered the wife’s ability to contribute. With other factors, her contributions were assessed at 57.5% — although no specific percentage was attributed to the family violence alone. A clear example of economic abuse forming part of the property analysis under the new framework.

For mediators: financial control — restricting access to money, information or employment — is family violence for these purposes. This has direct implications for intake and screening in property matters, not just parenting matters.

Full judgment — AustLII

When must a court make findings about family violence? (A parenting case — the principle carries across.)

Reviewing the authorities, the Full Court held that where allegations are central — particularly serious incidents going to safety — the court should endeavour to make findings; where they are not central, it need not be ‘distracted by the quest’.

For mediators: family-violence material needs to be linked to the decision being made. It also helps explain to parties why a court may never adjudicate their allegations — one more reason a self-determined outcome can serve them better.

Full judgment — AustLII

The leading authority on the amended s 79 — the end of balance-sheet add-backs.

The first appellate decision interpreting the amended s 79. The Full Court held that property which no longer exists cannot be ‘property’ for the purposes of s 79(3)(a), so notional add-backs can no longer sit on the balance sheet. Spent or dissipated funds are instead considered through historical contributions (s 79(4)) or current and future circumstances (s 79(5)) — including wastage under s 79(5)(d).

For mediators: the familiar mediation balance sheet with an ‘add-backs’ section no longer reflects the law for post-amendment matters. Dissipated funds are a conversation about contributions and adjustments, not notional assets.

Full judgment — AustLII

The transition case — Shinohara does not apply to pre-amendment matters.

A $22.6M pool with $3.8M in add-backs. The Full Court confirmed Shinohara’s reasoning applies only to matters determined under the amended Act; the orthodox add-back approach under the previous law was not in error.

On debts: a claimed $1M ATO liability was excluded because there was no evidence of how the debt arose or where the income went.

For mediators: two frameworks are currently in operation depending on when a matter is determined — and a claimed liability needs evidence behind it. A useful discipline to bring into the disclosure stage.

Full judgment — AustLII

The most detailed appellate application of the new provisions so far.

Existing property is identified under s 79(3)(a) (‘existing’ is not redundant — the inquiry is what exists at hearing); post-separation spending is considered via s 79(5)(d) (wastage), (n) and (v); and a failure to account for significant dissipation is likely to affect whether an order is just and equitable under s 79(2). The Court cautioned against a ‘cookie-cutter approach’ — the discretion remains broad.

For mediators: the case to cite when explaining where each type of ‘spent money’ argument now belongs. If parties are talking in percentages, ask about the range — no lawyer can promise a specific outcome, and there is no formula.

Full judgment — AustLII

Wastage and misappropriation claims need real evidence.

The appellant sought to add back $217,194 allegedly misappropriated. An accountant’s report identified suspect transactions but could not identify who was responsible. Absent further evidence, the claim failed — and the appeal with it.

For mediators: a suspicion of dissipated funds is not enough. Parties raising wastage in mediation need to understand what they would actually have to prove.

Full judgment — AustLII

Adopting part (but not all) of a party’s proposal is not procedurally unfair.

A 40-year relationship. The husband argued it was unfair for the judge to adopt some of his proposed orders but not others. The Full Court found no error: the defeat of a litigant’s expectation is not of itself procedural unfairness, and no error was established in the treatment of add-backs.

For mediators: outcomes are packages — a court can accept part of a proposal and reject the rest, and no party is entitled to their whole package. Encourage parties to present proposals they can live with as a whole.

Full judgment — AustLII

Non-disclosure will not stop the court making just and equitable orders.

The husband claimed a pool of about $50M. After finding he had failed to make full and frank disclosure, the trial judge found the pool was at least $565.9M — including a company interest of $493M — and the Full Court dismissed his appeal. The case illustrates the range of consequences: adverse inferences, findings on an incomplete picture, and costs.

For mediators: the clearest recent example for explaining why hiding assets does not work — the court proceeded on the picture most unfavourable to the non-discloser. Persistent resistance to disclosing can itself be a red flag for financial abuse worth screening for.

Full judgment — AustLII

Persistent non-disclosure: adverse inferences, credit findings and costs.

The primary judge found repeated failures to comply with disclosure and that the husband lacked credit. The Full Court confirmed that inadequate disclosure affects the assessment of evidence, supports adverse inferences, and can bear on the onus of proof. His appeal was dismissed with fixed-sum costs. Failing to call an available witness (his mother, on an alleged loan) also attracted an adverse inference.

For mediators: useful when reality-testing a party resisting disclosure — litigation treats non-disclosure harshly, and undocumented ‘family loans’ fare poorly. Ask for documents or evidence of what a party claims, to share with the other.

Full judgment — AustLII

Disclosure is for the proceedings — using it for a collateral purpose is an abuse of process.

The husband commenced Australian property proceedings predominantly to use interlocutory disclosure to gather evidence for ongoing Chinese litigation. The Full Court upheld summary dismissal as an abuse of process and ordered fixed costs of $80,837.90.

For mediators: financial information exchanged in a dispute resolution process is for resolving that dispute — a good anchor for explaining confidentiality and proper purpose at intake.

Full judgment — AustLII

On a $153M pool, the Full Court ‘entirely rejected’ the idea that contributions to the welfare of the family carry less weight than contributions to property or income — ‘an incorrect, and now outdated, notion’. For mediators: powerful language for parties who undervalue a homemaker’s contribution.

By majority, three family trusts were declared property of the husband because his voting rights gave him effective control — he did not need to have exercised it. For mediators: relevant to intake and suitability where family trusts are involved, and to knowing when a matter needs legal and accounting advice alongside mediation.

Litigation funding orders must be founded on evidence of the reasonableness of the sum sought, should not be routinely filed, and any inequality in interim funding can be taken into account later under s 79(5). For mediators: context for parties worried about unequal access to funds while a matter is on foot.

Final orders were amended under the slip rule to share the wife’s historic tax liabilities — an order neither party sought. The Full Court allowed the appeal: substantially controversial changes cannot be made under the slip rule. For mediators: unresolved tax positions (e.g. years of unlodged returns) are a recurring landmine — surface them at intake.