Podcast Episode 10: Everything but the kitchen sink – what property isn’t.

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Jessica Hamilton (JH): Hello and welcome to the Family Five Podcast with Ivy Law Group where we tackle the tough family law issues in the time it takes you to drink your coffee. I’m Jessica Hamilton, I’m the Marketing Manager for Ivy Law Group, and I’m joined by my boss, Shane Neagle, who is the Director of Ivy Law Group and the family lawyer extraordinaire. In this podcast, we will take a five in five approach, five questions in five minutes. Our aim is to keep the podcast light, easy to understand, and to give you some valuable information to take away with you.

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JH: Alright, we’re back with another episode and we’re recording this from our brand new offices. How exciting. How are you Shane?

Shane Neagle (SN): The best. We can see the water. Woohoo.

JH: Yay. Alright, so today we’re going to be focusing on property and the title of this episode is: “everything but the kitchen sink: what property isn’t”. So Shane, when it comes to a property settlement, what is property and what isn’t property in a family law matter, because obviously we’re not talking about the kitchen sink here, are we?

SN: Sometimes we are! We had a case where the parties were fighting over a shower curtain, a statue, and another bit of property that had a bit of money in it, and it was a few million dollars.

So when we talk about property and family law, there’s an actual section of the Family Law Act (Section 4) that people can look at. It’s a very basic definition now, and it talks about things that are in our possession and/or in reversion. I won’t worry about reversion, other than say that’s the interest that we’re giving to somebody else, and you get back. But, the long and short of it (with  property) is all those things that you can bring into the partnership that you acquire together (during the relationship). And thirdly, even some assets (acquired) after separation and before a property settlement is reached.

But in essence, it includes all things such as real estate, jewellery, furniture in the house, shares, liabilities such as debts, credit cards and loans are all thrown into the mix.

JH: What about if someone’s purchased a company during the relationship? Is that part of the property pool?

SN: When lawyers are looking at assets and whether they form part of a marital asset pool, one of the big key things is about the length of the relationship. So a company that you say was bought or acquired during a relationship, if it’s a short relationship, it’s very unlikely to be forming part of the asset pool. However, normally, that would be in the mix – if you don’t mind me using that expression.

JH: Yeah, I’ll allow it.

SN: *Laughs* Alright.

JH: So you talked before about assets that are bought in before a relationship, during and after. So how does property get divided in a settlement following a separation? Can you walk listeners through the process, briefly?

SN: Briefly? I think this is the biggest, torturous part of this whole thing. It’s so difficult (to say it briefly). So the four steps are: identifying the assets and liabilities, and this is something else that’s unique, is the financial resources of the parties. I quickly just want to say with that, that wasn’t discussed when I talked about property, because sometimes it’s somebody who has got a beneficial interest in a trust from their parents that they’ll keep post property settlement and the court treats that as a financial resource.

The process requires the parties to assess what their contributions were. There’s things called direct and indirect contributions. And direct is where you brought in a million dollar house and the other person didn’t have anything. Indirect contributions (are) such (as) with homemaking. And then the third step is the court goes into assessing what are the future needs of the parties. And one person might be looking after the children, and/or have a lower income than the other party. What happens where all contributions were equal in the end, after 20 or 30, even sometimes 10 years, the court might make an adjustment over the asset pool to say, no, the person with the children or (who is) earning less (is entitled to more). That could be a man or a woman.

The fourth step is a process involving the court requiring itself to make a just and equitable property settlement. When it looks over, again – another layperson term – the spread, and it says, well, hang on, this person has got a lower income, they should keep the house and have a little bit more because the other person can easily gain refinance. There’s an interesting part to all of this is that there was a case of Stanford that went all the way to the High Court of Australia, and that determined there’s actually a fifth test, which is the fourth test back at number one. So what it said was, before we kick off, we need to work out whether this case needs to have any property settlement at all.

JH: Okay, so on that, how important is ownership when it comes to property? For example, if a house is 60% owned by one party and only 40% owned by the other, does that mean it’s split 60/40?

SN: The process would be, and again, it goes back to length of the relationship and different contributions, but all those things kind of get washed away in the sense that the court needs to make a just and equitable property division and the person holding 40% might be the one in the end that’s looking after the children or earning less income. And so the court might say, no, no, no. And if that’s the only one asset that’s a good example, then the court says, no, no, they get 60%. Does that make sense?

JH: Yeah, it does. Alright. So what happens then when you need to sell a property but one party won’t move out?

SN: It really does involve lawyers writing to them in the first place, or to their lawyer. If the person’s just not willing to move, then unfortunately you have to go to court and get a court order.

JH: So one of the many things that I’ve learned since I started working here was in regards to property and that dogs are considered property, which is quite interesting, because a lot of people consider dogs to be, you know, their children, and part of their home. So why are dogs considered property?

SN: First thing before I talk about, I’m very interested in this because we are always hearing about Spud, your dog from the refuge. And I’m just wondering, is there something you are trying to do with Spud? *Laughs*

Look, a dog is considered a chateau by the court. It’s something that (you) just hope that parties can come to an agreement about. I met someone, where he and his partner spent something like $90,000 arguing over the dog. That when the court’s considering these types of disputes, it applies the same principles that (it does to) other assets and it will seek to determine: the name the pet is registered in, whether the pet was paid for by one party or jointly, whether the pet was brought into the relationship by the other party, whether the children wish for the dog to remain with them and the other person’s got the children more, also the suitability of the homes.

JH: For the record, I do love my dog. Alright, so we’re at time now. So now it’s time to end with a lovely joke. Over to you, Shane.

SN: Can I tell two jokes? Uh, what did the dog say when he sat on sandpaper? Rough, rough. And secondly, why are lawyers like me so loved? Because we’ve got appeal. Get it. Appeal? Appeal? Court, get it?

JH: *Laughs* I think you’ve gone wrong if you have to actually explain the joke Shane. Thank you for listening everyone, and thanks Shane.

SN: Thanks so much Jessica.

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JH: Thanks for tuning in. And don’t forget to save us to your favorites wherever you listen to your podcast so that you don’t miss an episode. It’s important to note that the contents of this podcast are intended as a general guide to the subject matter. And if you are looking for specific advice about your individual circumstances, then we would recommend getting in touch with one of our friendly family lawyers.