Altering a Property Settlement

When a property settlement is finalised, either through a court order or a Binding Financial Agreement, this formally ends a former couple’s financial relationship. In most cases, this is an irrevocable end. However, there are some circumstances when the courts might consider altering a property settlement. This article looks at the instances when the courts may make new orders in the interests of justice.

Altering a property settlement by private agreement

A significant proportion of couples who separate will privately agree on the division of their property. These arrangements may seem final to the parties involved, but they are not enforceable court orders and they do not prevent either party from bringing an application for a further property settlement through the Federal Circuit and Family Court of Australia or the Family Court of Western Australia.

Altering a property settlement by binding financial agreement

Another option is to finalise a property settlement through a Binding Financial Agreement (BFA). In these cases, the parties can agree privately on financial arrangements following their separation. The BFA is a legal document recording the agreement between the parties and is usually enforceable in the court. However, the court might consider altering a property settlement by setting aside a BFA if the agreement is:

• impractical
• incomplete and uncertain
• unconscionable
• the result of undue influence, duress, fraud or misrepresentation or
• a fraud on a third party

In addition, if there are children of the relationship, changes in the circumstances of the children may motivate the court to set aside the BFA.

When the court decides to set aside a BFA, then the parties can bring a new application for a fair property settlement. This could result in a different outcome for the division of property.

Enforceable property settlements

There are several ways that a separated couple can reach a property settlement that is enforceable by a court. The first way is to apply for Consent Orders. These orders are used when the parties have been able to agree on how to divide their property, and they simply ask the court to issue the agreement as an order. The court will only issue Consent Orders if it considers that the agreement reached between the parties is fair in all of the circumstances.

The second option for an enforceable division of property is for the former couple to ask the court to decide how their assets should be divided. The court will hear all the relevant evidence and issue a decision on how to divide the property as Final Orders. If either party believes that the court made a legal error in its decision, they have 28 days to file an appeal. This means that a higher court will review the case to determine whether there was a reversible error in the original decision.

Setting Aside Court Orders

The court is usually reluctant to re-open property settlement proceedings after they are finalised through a court order. In previous cases, the Family Court held that the parties must show that it would be a “miscarriage of justice” if the existing orders remained in place (Suiker & Suiker (1993).

Circumstances where the court might grant leave to reconsider a property settlement and vary or set aside existing Final Orders include:

1. If there are provable allegations of duress or fraud, false evidence or if one partner failed to fully disclose their true financial position. For instance, the court may set aside an order if it possible to prove that one partner did not disclose a sizeable asset. The asset must be substantial enough that it would have changed the outcome of the Final Orders.
2. If the circumstances of one of the parties has substantially changed and it is now impractical to carry out part or all of the terms of the Orders.
3. If exceptional circumstances have impacted the care, welfare, or development of a shared child, then the court might make an exception to prevent the primary caregiver from suffering undue hardship. For example, if a child of the former couple is diagnosed with a serious medical condition after the Final Orders are made, the primary caregiver may need additional financial assistance to manage the care of the child.
4. If one of the parties failed to discharge an obligation mandated for discharge by the Final Order or Consent Order, and the other party experiences damage because of this default, then it is just and equitable to alter the property settlement and make another order that accounts for these detrimental consequences.
5. If the courts have made a Proceeds of Crime order to recover property referred to in the Final Orders.

Variances of final court orders most commonly occur when one party fails to disclose materially relevant financial information which would have changed the outcome of the property division if it was disclosed at the time.

Before making an application to vary Final Orders, it is important to consider the potential delays and costs, as these disadvantages could outweigh the potential benefit. In any case, if you find out new information about your former partner’s financial position after a final property settlement, you should seek legal advice right away. You may have grounds to set aside a property settlement. The family lawyers at Go To Court can help if you need advice about applying to set aside a property settlement, or any other family law matter. Please get in touch on 1300 636 846.