Page created 13 July 1999
Last updated 06/08/99

3. Option one

The proposal in the DP
WLSN response
The starting point of 50/50 and barriers to negotiating beyond 50/50
The question of future needs
Matrimonial property pool may be reduced by financial agreements
Spouse Maintenance -the myth of ‘double dipping’

4. Option two

The proposal in the DP
WLSN response
Not a ‘community of property’ regime - the language of deception
Complexity would lead to uncertainty and litigation
Future needs -limited scope to cater for them

1.  The WLSN recommends the current discretionary model addressing the distribution of property upon marriage breakdown be retained.

2.  The WLSN does not support the proposal to introduce a 50/50 starting point for property division based on the presumption of equal contributions.

3.  The WLSN recommends community and judicial education about the significance and value of non-financial contributions to family property.

4.  The WLSN recommends that the Family Law Act be amended to include a specific reference to violence as a relevant factor when determining contribution. There should be no requirement to prove a causal link between the experience of violence and women’s economic disadvantage.

5.  The WLSN does not support the narrowing of the list of relevant factors to be considered when assessing a party’s future needs.

6.  The WLSN recommends that the impact of violence experienced during the marriage be considered in relation to future needs, as well as in relation to contributions.

7.  The WLSN recommends that there should be no erosion of the right to claim spouse maintenance but that a dedicated set of factors specific to spouse maintenance be introduced into the current law.

8.  The WLSN does not support amendment of the FLA to provide that spouse maintenance automatically cease upon a party commencing a defacto relationship.

9.  The WLSN does not support the introduction of provisions limiting when an application for spouse maintenance can be made unless adequate safeguards are introduced to prevent unjust outcomes arising from the amendment.

10.  The WLSN recommends the retention of a ‘catchall’ phrase requiring that justice and equity be done between the parties in all the circumstances.

12.  The WLSN recommends that binding financial agreements should not be introduced. In the event that the Government does proceed to introduce them, adequate safeguards against unjust outcomes arising from reliance upon binding financial agreement must be included in the law.

13.  The WLSN recommends that the legislation explicitly state that parties can choose to ‘trade off’ their superannuation entitlement for a greater share of the present assets.

14.  The WLSN recommends that if the approach to superannuation proposed in the Position Paper is adopted then the exceptions to the 50/50 split be expanded.

15.  The WLSN recommends that the legislation explicitly state that parties can choose to ‘trade off’ their superannuation entitlement for a greater share of the present assets, that the exceptions to the 50/50 split be broader and that the court retain its discretion to make orders that are just and equitable in the circumstances.

16.  The WLSN recommends that in circumstances where it is impossible for fair outcomes to be achieved by the mere variation of the superannuation percentages, the Family Court should have the power to allow a party immediate access to their share of the superannuation entitlement (or a proportion of their share) at the time of separation.

17.  The WLSN recommends that the definition of matrimonial property be broadened to include educational and professional qualifications acquired through the marriage.

18.  The WLSN recommends that the Family Law Act be amended to incorporate a principle recognising the importance of the parent with the primary care of the children having a family home.

19.  The WLSN recommends the creation of a statutory right of action for damages for the infliction of domestic violence under the Family Law Act, with a course of violent conduct to be proved rather than specific elements of each incident in recognition of the unique nature of violence in the home.

20.  The WLSN recommends s79A be amended to include the following grounds for setting aside property orders:

• where one party has failed to provide full and frank disclosure of their financial position
• where either or both the parties did not have independent legal advice as to their entitlements and the consequences of agreeing to the order proposed, as well preferably as financial advice
• where the imbalance of power between the parties was such as to vitiate consent - for example where there has been a history of violence or serious emotional abuse in the marriage.

19.  The WLSN recommends the Family Court have the power to apportion or assign debts as part of the property adjustment in a fair and equitable way.

20.  The WLSN recommends the Family Court be given the power to appoint an auditor in cases where a person refuses to provide information to the Family Court about their financial affairs.

21.  The WLSN recommends the Family Court in a hearing prior to the conciliation conference be able and willing to deem the value of an asset rather than the question of non-disclosure being left to the final hearing.

22.  The WLSN recommends that the filing of subpoenae without leave of the Court should be allowed prior to the Conciliation Conference.

23.  The WLSN recommends that there should be a requirement for exchange of properly prepared and sworn financial statements before mediation can proceed.

24.  The WLSN recommends written independent legal advice be compulsory before and after a mediation and before the signing of a property agreement.

25.  The WLSN recommends that in no circumstances should mediation be compulsory or conducted in circumstances where there is a power imbalance between the parties. We recommend that the Commonwealth develop guidelines for determining when mediation is and is not appropriate, taking into account the extensive research in this area.

26.  The WLSN recommends a low-cost, user-friendly small claims jurisdiction be established in the Family Court to provide a forum for determining small property settlements for parties in dispute and for whom mediation will not provide a just result.

27.  The WLSN recommends that the Commonwealth Guidelines on Legal Aid be amended to provide that the presence of violence during a marriage should be a priority factor when determining grants of aid in the area of property distribution and spouse maintenance.

28.  The WLSN recommends a sustained program of community education to improve understanding of and access to family law.

Women’s Legal Services Network

The Women’s Legal Services Network (WLSN) is a national network comprising all of the following community-based services:

• Women’s Legal Services (Adelaide, Alice Springs, Brisbane, Canberra, Cairns, Darwin, Hobart, Katherine, Melbourne, Perth, Sydney and Townsville);
• Indigenous Women’s Legal Services (Adelaide, Brisbane, Cairns, Hobart, Melbourne, Perth, Sydney and Townsville);
• Domestic Violence Legal Services (Alice Springs, Darwin, Melbourne and Sydney);
• Rural Women’s Outreach Workers (Dubbo, Lismore, Mildura, South Hedland, Toowoomba and Warrnambool).

Some of the Agencies in the Network have been operating for over 15 years, others have been operating since 1996 following the expansion of Commonwealth funding for women’s legal services. All share the objective of improving women’s access to justice. These services have vast experience nationwide in advising and assisting women in relation to the law and the legal system. All of the Women’s Legal Services collect data on the clients they assist and the types of matters in which they are seeking advice. Many thousands of clients contacting these services every year have family law problems, including domestic violence protection issues. The Women’s Legal Services not only play a vital role in legal service delivery, they have considerable expertise in family law and how it works on the ground.

Development of this submission

The WLSN prepared an Issues Paper in response to the Government’s Discussion Paper (DP). Over 1000 copies were distributed, to all the organisations within the WLSN, to the broader community legal services network through the National Association of Community Legal Centres, to all the agencies that comprise the Women’s Services Network (WESNET), to organisations which specialise in providing services to women of non-English speaking backgrounds and indigenous women and to academics, Government Departments (State and Commonwealth), non Government organisations and interested individuals.

The following targeted consultations were held:

• a public forum for women from a non-English speaking background (NESB women) in Sydney
• a teleconference with representatives of non-English speaking background communities from around Australia.
• a public forum in Warrnambool, Victoria for women who live in remote and rural areas
• a teleconference with representatives from organisations operating in rural and remote Australia
• a public forum in Canberra where Stephen Bourke of the Attorney-General’s Department spoke, as well as Grania Sheehan of the Australian Institute of Family Studies and a representative of the WLSN
• a teleconference with representatives from the Indigenous Women’s Projects nationwide to canvass the impact of the proposed changes upon Aboriginal and Torres Strait Islander women.

This Submission draws on those consultations and other input from member organisations, as well as relevant literature and research including the report "Fair Shares? Barriers to equitable property settlements for women" (April 1999).

The context for the proposed changes

The current law creates a discretionary framework which has as its desired outcome, a distribution of the matrimonial property which is ‘just and equitable’(s.79(2) of the Family Law Act (FLA)). To determine what is a just and equitable settlement, the law recognises it is necessary to consider the past contributions of both parties’, and their future needs, giving each set of factors equal weight and importance. We are aware that some groups are making representations to Government that the laws governing matrimonial property are unclear and uncertain, that men are being disadvantaged on divorce, and that reform is necessary to protect their interests. However, all the empirical research indicates that women are financially disadvantaged on divorce.1. Laws should not be changed on the basis of false or misinformed information.

The Government’s objectives

The Attorney-General said in his speech at the launch of the DP at Parliament House on 30 March 1999 that the Government is committed to reforming matrimonial property law to ensure ‘both greater certainty and clarity when matrimonial property is reallocated on marriage breakdown and to protect the interests of all parties’. However, the WLSN considers that rather than achieving greater certainty and clarity, both Options in the DP could make family law more complex, more unclear and likely to encourage more litigation. This will cause more delays in the Family Court.

The WLSN’s objectives

The WLSN supports changes to the law and its procedures which will deliver  fair and just outcomes, in an efficient, timely, and affordable manner. However, the social reality of the marriage relationship and its economic consequences for women must be acknowledged when developing reform proposals that will protect the interests of all parties. We believe the following principles/objectives should inform changes to the law on family property adjustment:

• proper recognition of the value of women’s unpaid labour looking after the home and family
• proper recognition of the consequences of the sexual division of labour in the home on women’s earning capacity
• proper recognition of and compensation for the effects of domestic violence
• where there are dependent children, the importance of the primary carer retaining the family home
• capacity to achieve fair outcomes in a wide range of circumstances, including where there is a small property pool or substantial debts.

2. Assumptions and Themes underlying the Government proposals

The WLSN has identified a number of flawed assumptions underlying the DP. These assumptions are set out below together with our response.

Women and men are more equal in the workforce now so property should be divided equally upon marriage breakdown.

Although women’s participation in the workforce has increased over the last 25years, women are over-represented in work which is low paid, part-time or casual. There are few signs that women’s employment status is improving relative to men’s. 2. Women do not enjoy wage parity with men when they do the same work. 3. Women still do most of the housework and childcare, which is confirmed by the most recent data from the ABS.4. Women’s earning capacity in most cases therefore is lower than men’s. Women of non-English speaking background experience additional barriers to obtaining full time, permanent, properly remunerated work. 5. Aboriginal women continue to be disadvantaged and discriminated against in employment. Women living in rural and remote areas also experience particular barriers to financial independence. Rural women often leave well paid positions with potential career options to go with their husband to remote locations because it will increase his pay and prospects. As a likely result, her participation in the workforce is marginalised and her career options limited. In the farming context, many women will work on the farm assisting their husband in a variety of ways, from being the farm’s ‘bookkeeper’ and ‘business manager’ to doing physical work on the farm. They therefore do not pursue employment opportunities outside the farm. Alternatively, many rural women obtain paid work off the farm to cover the cost of its day to day operation or to service debt - but this paid work is seldom secure, full time, or well-paid. As the WLSN pointed out in its submission to the HREOC Pregnancy Discrimination Inquiry, ‘Women generally suffer substantial loss of earnings, job security and superannuation entitlements when they have children. Fathers are not affected by parenthood in the same way. The WLSN is uniquely placed to comment on the bind that mothers are caught in – denied economic independence by labour market conditions and the domestic division of labour, then castigated for their financial dependence when relationships break down. 6.’ In the context of family law, reforms based upon a false premise of economic equality between the parties to a marriage will perpetuate unjust outcomes.

Parties to a marriage are in an equal bargaining position to negotiate over property

The proposals in the DP assume parties have equal bargaining power and are therefore equally able to negotiate knowledgeably and effectively in the shadow of the law. In most cases such equal bargaining power does not exist. The marriage relationship is not immune to the inequalities between men and women in society. The gender power imbalance may be exacerbated by other factors in particular relationships. Our consultations indicated that where an Aboriginal woman has married a non-Aboriginal man, or where a women of non-English speaking background marries a man of English-speaking background the power imbalance is acute. Women who have experienced domestic violence cannot be expected to negotiate on an equal footing with their abuser. If the law is to deliver fair outcomes, it must take account of these inequalities.

A typical family law property dispute involves large amounts of property

The DP is based on a presumption that the whole community is middle-class, affluent and professional. It does not take into account the experiences of women in low-income households with few assets. The DP often refers to typical family property as being the farm or a business. It does not address the problem of how to achieve just outcomes where there is a small property pool, or where all that is left is debt. Yet in the majority of cases the property pool is small. Typically, it may include a mortgaged home, a car, a small amount of savings and some superannuation. The size of the pool determines whether it is a viable option to consider initiating proceedings in the Family Court. The reported cases of the Family Court often refer to ‘modest’ property pools being in the vicinity of $350 000-400 000, because that is the bottom end of the scale of cases that come before it. The people who generally access the Family Court are people who have assets of this amount or more. The  Fair Shares Report highlighted the shortcomings of the current system in dealing with small property pools and the equitable division of debts. We believe that the Government must address these problems in its reform of family property law.

The Child Support Scheme means the day-to-day support of children does not need to be considered in property and spouse maintenance proceedings

It is assumed in the DP that because of the existence of the Child Support Scheme, there is no longer a need for the day-to-day support of children to be taken into consideration in property and spouse maintenance proceedings (DP, para 6, p 2). It is assumed that child support adequately covers the cost of bringing up children. The facts are that child support does not cover the full costs of caring for a child, many liable parents do not pay what they are supposed to pay and others try to avoid paying. All women consulted by the WLSN confirmed that to exclude questions relating to child support, which is integral to issues regarding the cost of caring for children, will create a system which ignores the economic disadvantage which flows from being the primary care-giver. 7.

Changing the law will solve the problem of unfair property division - process and access issues are not relevant

Serious concern was expressed in all the consultations held by the WLSN about the lack of attention in the DP to ‘access to justice’ issues. It was strongly felt that Government has wrongly assumed that all sections of the community have equal access to the Family Court, legal services, and other forms of alternative dispute resolution. The DP suggests that "the current regime does not meet the needs and expectations of the community that it is intended to serve"(DP para 8) but does not consider that this may in large part be due to deficiencies in the legal system other than the law itself. We refer again to the Fair Shares report which highlights the need for substantial reforms to family law process and procedures as well as increased access to legal and related services. The lack of access to legal services is at crisis point, underlined by the findings of a recent study of the Family Court of Australia  8. which found Judges, Judicial Registrars and Registrars believed that in only 39% of cases did the unrepresented litigant fully understand the proceedings. We believe Government needs to address the following problems urgently:

• denial of legal aid in family law property disputes where violence is an issue
• lack of access to legal services, especially in rural and remote areas and especially for Aboriginal women and NESB women
• a failure to acknowledge and provide for linguistic and cultural diversity in primary dispute resolution services
• lack of knowledge and understanding of the Family Court and its processes, particularly among some Aboriginal and NESB communities

The proposal in the DP

Option One proposes a starting point of 50:50 for dividing the property based on the assumption that each person has contributed equally to the property. It is presented as very similar to the current law with a few minor changes to the factors to be considered in assessing parties’ contribution and future needs. The onus is on the party asserting that they have made a greater contribution, or have greater future needs, to prove their claim to more than half of the property.

WLSN response

Analysis of all the elements of Option One reveals that the impact of the proposed changes would be regressive for women. It invites a mathematical approach to calculating contributions which is universally rejected as a method capable of promoting just outcomes. The WLSN believes it will probably encourage more litigation, and result in more inequitable settlements for women. We do not believe it will achieve the Government’s aim of protecting the interests of both parties. All women consulted saw the 50/50 starting point as placing an even greater onus on women to prove their entitlement to more than 50% of the property. In many cases the property will be divided 50/50 in circumstances in which this will not be fair because people will believe that is all they are entitled to.

The starting point of 50/50 and barriers to negotiating beyond 50/50

The fact that under the current law many women with primary care of the children receive a straight 50/50 or 60/40 division of the assets by way of negotiated settlement when they would often be entitled to more is borne out by research, including the  Fair Shares Report . The AIFS report, Superannuation and Divorce in Australia9. makes a similar finding regarding women from low asset marriages where it seems superannuation is generally not taken into account. Even in cases where women with children receive 60% of the property, their standard of living after separation is much lower than men. 10.

Women’s contributions undervalued

The point was often made in our consultations that women’s contributions tend to be systematically undervalued in property settlement negotiations. When a wife has made a substantial financial contribution by way of part time or full time paid work, as well as fulfilling the primary caring role she is rarely credited for this extra contribution. Similarly, when a homemaker/carer of children makes a non-financial contribution, eg to renovation of the home, or running the family business, this extra contribution is rarely taken into account. Their non-financial contributions both towards the acquisition or improvement of property and as a homemaker towards the welfare of the family are undervalued. This difficulty in having their contributions properly valued was identified in the Fair Shares Report is one of the key barriers to fair outcomes for women. Under Option 1 the two different types of non-financial contributions, currently acknowledged at law (s79(4)(b) and (c) of the Family Law Act) will be collapsed into one causing these contributions to be even further undervalued than they are now. This would be a retreat to the position pre-1983 when the law was amended in an attempt to properly recognise the value of non-financial contributions.

The impact of a 50:50 starting point for assessing contributions

A presumption of equal contributions may at first seem helpful in remedying the undervaluation of women’s contributions. However, the WLSN is concerned that what is supposed to be a starting point for division will create an expectation in the community that property division begins and ends at 50/50. As 95% of property settlements are negotiated by agreement between the parties it is important to minimise the scope for misunderstanding and misrepresentation of the law. It will be hard for women to convince their ex-husbands that they have contributed more than 50% in the face of that presumption. The question of contribution is a complex one in some cases and straight forward in others. The current law is clear on this point.11. Flexibility within the discretionary model is integral to the law’s capacity to recognise the diversity and complexity of family relationships.

The WLSN recognises Option One does allow for one person to argue for more than 50% on contribution. However this argument is most likely to be made, and to succeed, where it is about disparate financial contributions. This is most likely to be argued by men. The more difficult arguments about contribution are generally the arguments made by women in relation to non-financial contributions. The issue then becomes a gendered one. Although the DP anticipates circumstances where a person could argue their contributions are greater than 50%, all of the discussion is centred on financial issues, not non-financial.

From starting point to end point

It is likely that a presumption that contribution are 50/50 will mean that property is actually split 50/50. The Australian Law Reform Commission Report, Matrimonial Property, found "that equal sharing of property at the end of a marriage is not necessarily fair sharing. A just sharing of property should be based upon practical rather than a merely formal view of the equal status of husbands and wives within marriage.....Thus, a just sharing of property should take into account any disparity arising from the marriage in the standards of living reasonably attainable by the parties after separation 12.". The ALRC recognised that changes to legislation espousing notions of formal equality will not address the social and economic inequities experienced by women as a result of the sexual division of labour within marriage.

In consultations, rural and remote women, Aboriginal women and NESB women all confirmed that if the community perception is of a 50/50 rule, it will be much more difficult for a woman to argue beyond that point, particularly where she is from a small community and concerned about the impact of the negotiations upon ongoing relations with the community. If men believe that women are only entitled to 50% of the basic assets, women will have a difficult choice of either commencing Court proceedings or settling on 50%- and Court proceedings are not a real option in most cases.

Once the language of a starting point is introduced into legislation, it easily becomes the end point. The ‘future needs component’, will be sidelined and only considered worthy of attention in ‘special cases’. WLSN notes that the Bill introduced by the previous Labour Government was drafted on the basis of a 50/50 starting point, but s86B of that bill (the Family Law Reform Bill (No 2) 1995) provided that the property be divided 50/50 unless this division would not produce a just and equitable result. The WLSN believes the discretionary model should be retained notwithstanding our concerns regarding the persistent undervaluing of women’s non-financial contributions. We believe the problem does not lie in the law itself, but rather the interpretation and application of the law. This will not be overcome by the introduction of a presumption which will further undervalue non-financial contributions.

WLSN recommends community and judicial education about the significance and value of non-financial contributions to family property.

Recognising the impact of domestic violence on contributions

The WLSN supports the proposal in the DP to make domestic violence a relevant factor in assessing contributions. However the DP does not expand on when and how violence will be taken into account, or how violence will be defined at law. All women consulted by the WLSN considered it imperative that any definition of violence at law reflects the many different forms of violence experienced by women in the home, including emotional, fiscal, psychological and physical, and the consequences of this violence. Unless there is a clear statement in the law of how domestic violence should be treated in property adjustment, it will be impossible for an abused woman to successfully argue against her perpetrator that his treatment of her caused her contributions to the marriage to be more difficult and, therefore, her contribution should be quantified at greater than 50%. The shocking reality for most victims is that they cannot even get a minimum of what they are entitled to and simply ‘walk away’ because it is too hard and there is a lack of legal and other support services available to assist them. The Fair Shares Report found that a history of violence in the marriage is a barrier to fair property settlements for a number of reasons including:

• a genuine fear for the safety of their children and themselves which overrides any ‘need’ to pursue their claim for property
• lowered self confidence which results in a desire to reach settlement as soon as possible - "peace at any price"
• fewer options for formal assistance for women who are victims of violence
• violence has an impact upon contributions and upon future needs which is not adequately recognised in the law

The report confirmed that until violence is referred to in the Family Law Act as a relevant factor in determining contribution it will be underestimated in its relevance.

Research conducted by the Australian Institute of Family Studies as part of the Divorce Transitions project, demonstrates that there is a clear ‘accumulation of disadvantage’ experienced by women who have been subjected to violence by their husbands. These women suffer severe financial disadvantage both during the relationship and post separation, the disadvantage increasing proportionately to the severity of violence. The Research ‘Spouse Violence and Post - Separation Financial Outcomes’ (AIFS, forthcoming) found 66% of women who had suffered severe violence are living below the poverty line. The Report further found that 49% of women who suffered severe violence receive less than 40% of the total assets. As the severity of violence increases, the proportion of the property pool allocated to women diminishes. It is regrettable that publication of this important research, commissioned by the Office of Status of Women, has been delayed until after the consultation period for the Government’s DP. The WLSN appreciates the fact that Grania Sheehan of the AIFS was able to present some of the findings to the Community Forum in Canberra on June 10, 1999. However, it is vital this research be made available to inform policy and law reform in this area.

The question of future needs

Under Option One, where either party is seeking a departure from the 50/50 split, there will be scope as at present to consider the future needs of each party. The proposal would however reduce the factors that can be taken into account, and would specifically exclude the following factors that must currently be considered:

• the need to protect a party who wishes to continue that party’s role as a parent
• whether child support is payable and if so, how much and is it likely to be paid
• the impact of the length of the marriage upon one person’s income, earning capacity, property and financial resources.

The WLSN believes that the exclusion of any of these factors would be a regressive step for women. They help to ensure that the whole experience of the marriage relationship and the economic and social consequences of its breakdown are considered, including the question of future financial responsibilities.

Child Support Scheme

Although the provision in the Family Law Act which deals with child support (in s75(2)(na)) cannot directly address or remedy problems regarding recalcitrant non-payers of child support, it does ensure that the fact of non-payment is taken into account when considering a party’s future needs. It also recognises the fact that child support does not cover the full cost of caring for children. Unfortunately there are many circumstances where a parent primarily responsible for the care of the children does not receive child support and is not likely to receive child support. Examples reported during our consultations include:

• where a liable parents refuse to pay the amount they are assessed to pay.
• there are liable parents who will never be assessed to pay child support except at a nominal amount because they have a history of unemployment or because they are in a position to structure their financial affairs to artificially depress their personal income from which child support is calculated.
• in rural, remote and regional areas women reported that in many cases periodic child support calculated according to the formula is unlikely to be at a proper rate because in most cases the liable parents are ‘income poor’ but ‘asset rich’. This is particularly the case in farming communities.

Further it appears the recent amendments to the Child Support (Assessment) Act 1989 which commenced 1 July 1999 have not been taken into account in the DP. For example, the amendment extending child support to include ‘in kind’ contributions eg a motor vehicle - means that a contribution which in many cases a person would have received as part of a property settlement over and above ongoing periodic child support may now serve to be treated as child support, thereby reducing the woman’s share of the assets.13.

The WLSN does not support the narrowing of the list of relevant factors to be considered when assessing a party’s future needs.

Taking domestic violence into account in assessing ‘future needs’

For the reasons discussed above, we believe that unless there is a specific reference in the ‘future needs’ factors to the impact of violence experienced during the marriage - for example on the future earning capacity of a party - then this will continue to be overlooked to women’s detriment.

Matrimonial property pool may be reduced by financial agreements

The Government presents Option One as being little different from the current property regime apart from the introduction of the 50/50 starting point (DP para 10). It assures the community that all property no matter when acquired is included in the matrimonial pool in line with current practice. However, there will be unlimited scope for property to be excluded from the pool by binding financial agreements. There has been no community consultation on this aspect of the Government’s proposals and there is no information provided in the DP. We believe it is very important that all the matrimonial property should be in the pool and available for distribution. Binding financial agreements will provide a mechanism for excluding financial assets. This will exacerbate existing tendencies to elevate and privilege financial over non-financial contributions, to the detriment of women. The WLSN does not support the introduction of binding financial agreements, as discussed above/below.

Spouse Maintenance -the myth of ‘double dipping’

In the DP the view is expressed that the Family Court is overcompensating women when making property orders because the proposed property allocation is adjusted on the basis of the future financial needs of a spouse without precluding the making of an order for spouse maintenance (DP paras 1.8, 5.23 & 5.24). No empirical evidence is offered to support this proposition and in fact the evidence is to the contrary. The Government’s proposals for reform of spouse maintenance appear to be based upon false perceptions in the community rather than research. The myth of ‘double dipping’ is exploded by the most recent report of the Australian Institute of Family Studies, ‘Spousal support in Australia- A study of incidence and attitudes,’, which found that spouse support continues to be 'rare, minimal and brief ' 14.. Over the last ten years, spouse support has occurred in less than 7% of cases, usually lasts for two years and averages about $128 per week (pp 7-11).

The Kay Committee of the Family Law Council 15. found two-thirds of consent orders for spouse maintenance are made as lump sum amounts or property transfer and are designated as such under s77A of the Family Law Act. Unfortunately that Committee also found that although a high number of spouse maintenance orders under s77A, no spouse maintenance is in fact paid. It seems lawyers are using s77A as an estoppel device. That is, by deeming a percentage of the financial settlement as spouse maintenance, it prevents a further application for spouse maintenance in most cases. So women are not receiving anything more on top of their property orders under s79.

In fact recent judicial statements overseas and in Australia endorse spouse maintenance as an appropriate tool to assist women in obtaining just outcomes. Particularly in cases where there is a modest property pool, it can help to redress the economic disadvantage experienced by women arising from the sexual division of labour within the family. 16.

The recent AIFS study referred to above found majority support for the proposition that spouse support should be paid in certain circumstances. However it reported different views across the community. Most notably, it found women who had initiated the separation, or who had experienced violence during the relationship, or who had spent considerable time outside the paid workforce (usually caring for children), were less likely than other women to believe spouse support should be paid and accordingly do not seek it to be paid. These are obviously the group of women most likely to be in need of spouse support yet they do not see it as an option. It is clear from the research that disadvantaged women entitled to spouse maintenance do not apply for it. This confirms the experience of the WLSN and indicates a need for appropriate reforms as well as a commitment to legal education, ensuring access to legal aid, legal advice and representation.

Need to reform the spouse maintenance provisions

The WLSN agrees with the proposition in the DP that the way the law is currently framed is confusing and can create an impression of ‘double-dipping because the same set of factors is relied upon for both property applications and spouse maintenance applications. We support the suggestion that the factors specifically relevant to the questions whether spouse maintenance should be paid, and how much, should be more clearly distinguished from the factors relevant to property adjustment.

The WLSN recommends that there should be no erosion of the right to claim spouse maintenance but that a dedicated set of factors specific to spouse maintenance be introduced into the current law.

Treatment of de-facto relationships

The WLSN does not support spouse maintenance payments automatically ceasing upon a party commencing a defacto relationship. Although many people now live in defacto relationships rather than marry, the definition and legal status of defacto relationships vary from state to state. In some states there is no legislative scheme. There is no legal obligation for people in defacto relationships to financially support each other as there is for married couples under the Family Law Act. Law-makers and Courts continue to treat such relationships and property rights upon separation differently. 17. Generally a relationship would not be accepted as ‘de facto’ unless it is of at least 2 years duration. In some jurisdictions, same sex relationships are accepted as de facto. Not until there are consistent laws regulating the adjustment of property upon relationship breakdown for parties in a defacto relationship, which place a similar obligation to support each other as provided under the Family Law Act, should the right to spouse maintenance automatically cease when the recipient enters a defacto relationship. Rather than introducing an automatic cut-off, the current legal position should continue to apply whereby the resources of the new relationship are to be considered.

The WLSN does not support amendment of the FLA to provide that spouse maintenance automatically cease upon a party commencing a defacto relationship.

Time for making maintenance applications should be limited

The DP proposes the introduction of provisions limiting when an application for spouse maintenance can be made. This proposal appears as an attempted reassertion of the overriding importance of s81 of the Family Law Act which provides that, ‘…as far as practicable (the Court shall) make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.’ The WLSN does not believe the clean break principle should be applied to prevent women seeking financial support. We agree with the Family Court’s comment in the decision of Best 18, where it ‘recognised that the clean break principle may have been taken to extremes in the past and requires careful reconsideration in the light of changing economic and social circumstances’.

The proposal in the DP

Option Two would create a very different family property regime from the present one. It would provide that on marriage breakdown each party would be entitled to 50% of the ‘communal property’. Communal property is defined as property obtained during the relationship and any increase in the value of the property owned by either party before the relationship. A person would be able to seek more than 50% on the basis of future need or the ‘economic consequences of the marriage and its breakdown’.

WLSN response

The WLSN considers that Option Two is extremely regressive for women. It sets up a systematic regime of ‘exceptions’ to the rule of community of property effectively depressing the value of the property to be divided. It excludes all property previously owned by one party prior to the marriage. It encourages the making of binding financial agreements to exclude separate property converted during the relationship, and it anticipates that certain classes of property obtained by one party during the marriage will be excluded. It appears the underlying purpose of this option is to ensure that property redistribution on marriage breakdown is minimal. It also has the effect of giving primacy to financial rather than non-financial contributions. This will particularly disadvantage women. Many women who already experience their non-financial contributions being undervalued will find, under Option two, such contributions are irrelevant and of no value.

Not a ‘community of property’ regime - the language of deception

In consultations, Aboriginal women, women of non-English speaking background and rural and remote women all reported that they found the description of this option as a ‘community of property’ regime, based upon notions of marriage as a partnership, very misleading. They had not understood, until it was explained to them, how narrowly communal property is defined and what would be available for division. The terms used for this proposal create a false impression of its practical impact, which would be to reduce substantially the property available for division. The implications of this proposal are illustrated by the following example.

The only property of the marriage is a property bought into the relationship by one party, such as a farm or a business. Although both the husband and the wife work hard in the business or on the farm for 10-15 years the value of the business or farm only increases slightly in value. The wife in those circumstances would walk away from 10-15 years of work with half of the small increase in value, not half of the whole value of the farm or business. This represents minimal recognition of her contribution during the relationship. By comparison, under the current law the financial contribution of the husband in bringing the farm or business into the relationship would be recognised. However so would the contribution the wife had made to the farm/business, whether it be financial or non-financial. On the basis of these contributions she would be entitled to a share of the full value of the farm/business.

Complexity would lead to uncertainty and litigation

Apart from the unjust impact of the exclusion of prior owned property, there is no explanation in the DP as to how any increase in value of property is calculated. If concepts similar to those calculating a capital gain for the purposes of capital gains tax are applied 19, it is likely the increase in value of the asset will be even further depressed and the process of valuing this increase will be difficult, costly and encourage further litigation. The complexity is illustrated in the following example:

The Husband and Wife are married for 25 years. They have accumulated all of their property during their marriage which consists of a home, a holiday house, a car and some savings. After 15 years of marriage the Husband received a compensation payment of $70 000. They bought the holiday house with the money. The holiday house is now worth $100, 000. Under Option Two the value of the compensation payment ($70 000 or could it be more? could it be less?) may be excluded from the communal property leading to an unjust result. There are many uncertainties flowing from Option Two in this common scenario. Under the current law, the value of the compensation payment would be regarded as a contribution made by the Husband. It would be offset by the subsequent contributions made by both parties and the intention by the husband for the money to be spent to benefit the family.

We believe the complexity of this regime will encourage more litigation, as has been the experience in New Zealand where a similar regime operates. Questions such as what is separate property, what is communal property or what percentage of the value of an asset should be considered communal or separate, will all have to be tested in a range of scenarios. In our view, this proposal will promote neither certainty of outcomes nor just outcomes.

Property not included in pool of assets

To systematically exclude assets from the property pool or to assume that the full value of a contribution made at the commencement of the relationship or during the relationship has the same value at the end of the relationship is in direct contradiction of established principles recognising that the value of a contribution made at the outset of a relationship or during a relationship is eroded by the subsequent contribution of the other party. 20.

Future needs -limited scope to cater for them

One person may be given more than 50% of the communal property only if their future needs require it. However, this will not ‘cure’ the inequities arising from the narrow definition of communal property. Once property is excluded from the available pool for distribution, it cannot be taken into account when looking at satisfying the future needs component. A larger share of a restricted property pool, which does not reflect the real contributions of the parties, will not be adequate. This may be especially true in cases identified by rural and remote women, where the one major asset of the relationship may be the farm inherited by the husband which does not increase in value despite hard work by both parties, and after separation the wife is the primary carer of the children.

Alternative approaches to ‘future needs’

The DP suggests two alternative approaches under Option Two for departure from equal sharing. The first is similar to the present law, except the list of factors to be considered in determining future needs would be reduced in the way proposed in Option One. (we do not support this reduction of factors for reasons outlined under Option One above) In addition, the provision allowing for consideration of ‘any other fact or circumstance’ would be removed. We do not support this proposal. At the moment this catch-all phrase provides the Court with a broad discretion to enable it to do justice between the parties in the particular circumstances of a case. It provides the flexibility to ensure just outcomes in a range of circumstances without creating any sense of uncertainty.

The WLSN recommends the retention of a ‘catchall’ phrase requiring that justice and equity be done between the parties in all the circumstances.

The Canadian model

The second approach is based on Canadian law. Its stated objectives are to promote economic self-sufficiency, relieve economic hardship and take into account economic advantage and disadvantages. Although the language of this approach is couched in feminist terms, this approach could never achieve its stated purpose within the context of Option two. The proposal is undeveloped and unclear and seems incongruous in light of the proposals defining communal property - ie the Government has been very clear about how assets can be excluded from the communal property, effectively depressing its value to the point where it would be impossible to compensate a woman for the economic consequences experienced by her upon marriage breakdown. It seems likely under the current proposal that rather than encourage clarity and certainty whilst protecting the interests of the parties, this alternative will encourage litigation and disillusionment. Further, the DP makes it clear that under this Option, even if both persons are in paid work but have different earning capacities, this would not be an adequate reason in itself to depart from the presumption of equal sharing. It will be incumbent on the person with the lower earning capacity to prove that it is caused by the marriage. The requirement to prove this causal connection is a denial of the generally accepted relative economic position of women to men.

The WLSN does not support the introduction of a communal property regime as defined in Option 2. The WLSN does not support the proposal for a non-rebuttable presumption that communal property, narrowly defined, be divided 50/50. The WLSN does not support either approach to future needs under this option.

Spouse maintenance

The Government’s proposals under Option two regarding spouse maintenance are quite unclear (DP para 5.49). Apart from a suggestion that the spouse maintenance component will be taken into account at the time of the global assessment of the parties financial circumstances, there is no clear reference to when it would be appropriate for a periodic spouse maintenance order to be made.

5. Related Government Proposals for Family Property Law Reform

Both Options One and Two in the Government’s DP are being proposed as part of a larger package of reforms to family property law, which will have a profound effect on how property settlements are negotiated. These are the proposals to allow binding financial agreements to be made, and proposed changes to the treatment of superannuation.

Binding financial agreements

The Attorney General announced that the Government would introduce legislation to enable a husband and wife to enter into binding financial agreements before or during marriage or on separation (Attorney-General’s Press Release, 19 February 1999). These agreements will enable parties to exclude property from the matrimonial property pool to be divided if they separate.

Why women are more likely to be disadvantaged

The WLSN is concerned that the introduction of binding financial agreements will have a negative impact on women for the following reasons:

• it is well documented that women already suffer economic vulnerability after separation. 21. If some or all property is able to be excluded from the pool of assets to be divided on separation this will have the effect of further entrenching the economic disadvantage that women face after separation.
• women are generally in a weaker bargaining position than men. This is a result of factors such as:

* economic inequality: women generally have substantially less financial resources than men. They are often not aware of the financial resources of their husbands. Both women and men undervalue the non financial contributions made by women to the marriage 22;

* domestic violence: the threat of or actual violence or emotional abuse against women and children makes it very difficult for a woman to refuse to sign a document presented to her by her husband and to seek to have the agreement set aside;

* women from non-English speaking backgrounds often have poorer English language skills than their husbands, are more dependent upon them, and do not understand the Australian legal system. They may assume that signing such an agreement is standard practice, or something they are required to do by law. Women may be pressured into signing an agreement by, for example, false threats of deportation by their husband;

* in rural and remote areas the major asset is the family farm. If this asset or the inheritance of this asset is excluded from the asset pool there is no other property left to divide. Woman who have lived and worked on the farm as well as being primarily responsible for the raising of the children for a long period of time will be left with no property or financial resources if the marriage breaks down. The WLSN agrees with the recommendations of the report of the Australian Law Reform Commission, Equality before the law 23, the decision of the Full Court of the Family Court in Lee Steere 24, and the concerns expressed in our consultations that to exclude the farm from the property pool would result in unfair outcomes for women.

The need for adequate safeguards

Although the WLSN opposes the introduction of binding financial agreements, if they are introduced adequate safeguards must be included in the legislation to ensure that women are not further disadvantaged after separation.

The Attorney General’s proposal is that:

• the agreement will be binding if each party has received either independent financial or legal advice 25;
• an agreement will only be set aside if the narrow contractual principles of unconscionable conduct, undue influence and duress can be proved.

The WLSN believes these safeguards are wholly inadequate and makes the following proposals:

• both parties to receive adequate independent legal advice. The agreement must be accompanied by certificates of independent legal advice for each party. These must contain a statement by the solicitor that the party has been advised of the effect of the agreement on his/her rights, if it is prudent and beneficial for him/her to enter into the agreement and if the agreement is fair and reasonable in light of the reasonably foreseeable circumstances at the time of signing;
• both parties to receive adequate independent financial advice;
• the agreement to be registered in court;
• the agreement to be in writing, signed by both parties and witnessed;
• the agreement to contain full disclosure of financial assets and resources by both parties.
• the Family Court to have the power to set aside or vary the terms of the agreement if:

• there is a failure to fully disclose financial assets and resources;
• the financial agreement is unfair;
• circumstances have arisen since the agreement was entered into which make the agreement inequitable eg the birth of a child or illness of a spouse or child;
• there was violence in the relationship;
• the procedural requirements are not complied with.

The issues which we have raised in relation to binding financial agreements are more fully considered in an additional paper which the WLSN will publish shortly and forward to the Attorney-General’s Department.

Superannuation

As observed in the Australian Law Reform Commission Report,  Equality before the Law , "Superannuation has been a source of difficulty, inconsistency and injustice for women in family law."( p.28 ). These problems are identified in the Fair Shares Report (p.11-14), and borne out by the findings of the Australian Institute of Family Studies (AIFS) in their report  ‘Superannuation and divorce in Australia’. The AIFS found that superannuation is growing in significance as an asset of the marriage, with the superannuation often being of similar value to the family home. The importance of this shift in investment priorities cannot be understated. It means whereas previously couples invested in assets where women’s and men’s contributions were considered equal (although the nature of the contribution takes different forms eg the family home, holiday home), they are now investing in assets that tend to be divided in favour of men. The report confirms that unless reform takes this shift into account women’s share of the assets on divorce may decline (p. 6). In particular we believe the Government must recognise:

• the uneven distribution of superannuation amongst men and women and the reasons for this;
• that in the majority of cases where there is a modest asset pool, superannuation is not taken into account as a relevant financial resource although this is the group for which superannuation has the greatest relative importance.

The Government’s proposals

In the Government’s Position Paper. ‘Superannuation and Family Law: A Position Paper,’26 (the Position Paper) it proposed that superannuation be treated as property, rather than a financial resource as at present. This would make it easier to work out how it should be divided or taken into account. Parties would be encouraged to agree privately about how they wish to divide the superannuation. However, if they cannot agree and they go to the Family Court, the Court will only have the power to divide the superannuation interest 50/50. The Court would have the power to make orders which bind the Superannuation Trustees. Different factors apply for division depending on whether the fund is an Accumulation scheme or a Defined Benefit Scheme.27. The Position Paper sets out five exceptions to the rule of 50/50 division, which are quite limited in their scope. They are, in brief:

• when the fund is less than $2000 in value it will not be divided at all;
• where the parties have a number of superannuation funds and it is possible to offset each person’s interest in one fund against another;
• where it would be necessary to sell a business and this would have a serious effect on the income producing capacity of one or both parties;
• where it would be otherwise necessary to sell the family home and this would cause serious disruption to care arrangements for the children of the parties (or others for whom one or both of the parties have caring responsibilities, including frail aged parents).

WLSN response

The WLSN supports the Government’s proposals to reform the law to enable superannuation to be treated as property, and to give the Family Court the power to make orders binding third parties. However we have some serious concerns about the proposals.

Superannuation under Option One: Under Option One the superannuation proposals in the Position Paper will be modified. Superannuation will be divided on the same basis as other property - that is, on the basis of past contributions and future needs, with a 50:50 starting point.

Superannuation under Option Two: Under Option two, superannuation will be treated as set out in the Government’s Position Paper.

Concerns about the proposals for superannuation under Option One and Option Two

• We are concerned that one consequence of the proposed reforms will be the forced sale of the family home.

Under the current law, 46% of women have managed to keep the family home by offsetting their interest in their husband’s superannuation against his interest in the property.28. This has meant less disruption to children on family breakdown because in most cases the children are living with their mothers after separation.29.

Allowing flexibility in the percentage allocation of superannuation (as proposed under Option One) will not necessarily prevent the sale of the family home, because as with the situation under the Position Paper, women will not be able to raise enough money to buy out their husband’s interest.

The Government’s Position Paper was in part a response to the complaints articulated by some groups who under the current system may receive a future intangible entitlement, while women receive most of the family property. If the reforms as proposed are implemented, there will be cases where the husband will refuse to contemplate such a trade-off arrangement. Furthermore, the Court may be reluctant to make orders that mean the husband retains no current assets, only a future superannuation entitlement.

• the proposal outlined Option two is unfair and punishes parties who are unable to reach a private agreement

Government policy to encourage parties to enter into private agreements at separation is one thing. To ‘punish’ parties for failing to come to a private agreement by imposing a 50/50 split unless a party can satisfy the Court that one of the specified exceptions applies, is another. The proposal assumes all parties after separation are capable and willing to negotiate on a bona fide basis. It ignores issues of power imbalance (caused by, for example, violence, inter-cultural communication problems and lack of understanding) which preclude fair negotiation. It only takes one unreasonable party to make negotiation impossible. The constraints on the Court’s discretion mean there will be no relief to the victim of unreasonable behaviour. Indeed it may well have the effect of encouraging one party not to negotiate a property settlement because under the default position at the Family Court, that party could be better off.

50% of the superannuation will lead to unjust outcomes

It seems likely that under both Option One and Option Two that the result will be that women are entitled to 50% of the superannuation. Arguing for a higher percentage holds all the difficulties women will face in arguing for a higher percentage of the property generally (see above under Option One and Option Two) 50% of superannuation will not generally provide women with financial security in retirement whilst adding to the immediate financial difficulties facing women after divorce.

The WLSN supports the conclusion of the AIFS Superannuation report that "an equal split of superannuation fails to recognise that men and women are not equally able to provide for their own retirements, a fact that may justify giving women more than a half share of superannuation assets." (p.7).

Early access to superannuation share

The WLSN believes there will be circumstances where it will not be possible for just outcomes to be achieved by the mere variation of the superannuation percentages. In these cases the Family Court should have the power to allow a party immediate access to their share of the superannuation entitlement (or a proportion of their share) at the time of separation. This proposal is not vastly different to the proposed exception to the 50/50 split rule where it would otherwise be necessary to sell the home and this would cause disruption to care arrangements for the children (see above).

This proposal does not pose a threat to Government policy promoting self funded retirement. In cases where the superannuation is relatively substantial, there are generally other assets of considerable value. A request for access to the superannuation would not be successful because the existance of other property would mean that a just outcome could be achieved without allowing access to superannuation. Where the property and superannuation is of modest value, the division of the superannuation is likely to result in two fairly small funds, which would not support either party without Government assistance. In that case the husband is likely to be employed on a full time basis and will soon recover the lost value of his superannuation. The wife’s superannuation entitlements are likely to remain low as she is less likely to be employed full-time or continuously because of her caring responsibilities. If the family home must be sold, the wife may lose her only opportunity to own her home because a bank is unlikely to lend her enough money to buy another property given her financial position and prospects. The relative value of the wife’s share of superannuation at the time of separation, where it may enable her to buy out the Husband’s interest in the family home, is far greater to her than at retirement.

The WLSN recommends that in circumstances where it is impossible for fair outcomes to be achieved by the mere variation of the superannuation percentages, the Family Court should have the power to allow a party immediate access to their share of the superannuation entitlement (or a proportion of their share) at the time of separation.

Fair outcomes should be the objective of family law property reform

Both of the Government’s Options make the objective of ‘certainty of outcome’ the highest priority at the expense of fair and just outcomes. Nowhere in the DP is the question explored whether certainty of outcomes is an appropriate and achievable objective in the context of property distribution upon marriage breakdown. The WLSN believes that the objective of law reform in this area should be to provide for fair distribution of property on marriage breakdown. We have indicated above where we support aspects of the Government’s proposals as assisting towards that objective. We believe changes to the law and to legal procedures, and improved community access to legal assistance, are all necessary. We also believe a sustained program of community legal education would help dispel myths and misconceptions about family property law, and improve understanding of and access to the law. Our proposed ‘Option Three’ includes proposals for change in all these areas.

Proposed changes to the substantive law

Broader definition of property

There are circumstances where the professional skills and qualifications of one or both of the parties are their most valuable asset. Situations arise where one party, often the wife, has supported the other party through law school or medical school for example and when the marriage breaks up he walks away with an enhanced earning capacity. At the moment degrees and qualifications acquired during marriage are not classed as matrimonial property, although the question has been sympathetically considered by the Family Court.30. This can have unfair consequences, especially in a context where educational qualifications are increasingly at a premium. We believe it is becoming anachronistic not to class qualifications as property and include them in the pool for adjustment purposes.

The WLSN recommends that the definition of matrimonial property be broadened to include educational and professional qualifications acquired through the marriage.

The importance of a family home

We have discussed the importance of the family home earlier in the context of superannuation. We believe that similar arguments can be made for introducing a principle into the property adjustment regime that where it is in the best interests of the children, there should be a presumption that the parent with primary care of the children retain a family home. Introducing such a principle would ensure that in negotiations and decision making over property distribution there would be proper recognition of the housing needs of the children and their primary carer.

The WLSN recommends that the Family Law Act be amended to incorporate a principle recognising the importance of the parent with the primary care of the children having a family home.

Compensating women for domestic violence - a statutory right of action

As discussed earlier in this submission, women who have been subjected to domestic violence during their marriage are not being adequately compensated in property settlements. Indeed the research indicates that they are receiving much less than they are entitled to under current law. We have made recommendations above for amendment to the Family Law Act to ensure that domestic violence is considered in relation both to contribution and to future needs. However, the WLSN also considers it important to provide for a statutory right of action under the Family Law Act to claim damages for the infliction of domestic violence. We refer to the Family Law Council’s Discussion Paper on this issue Violence and the Family Law Act: financial remedies (August 1998) and enclose a copy of the submission in response from the Women’s Legal Centre (ACT & Region). A person making such a claim for damages should have to prove a course of violent conduct, rather than specific elements of each incident, in recognition of the unique nature of violence in the home. It is now urgent that the Government move to implement this reform given the recent decision of the High Court, Wakim; Ex parte Mc Nally31 declaring cross-vesting legislation to be invalid. This means it is now impossible for victims of violence to commence civil damages claims in the Family Court. A specific cause of action is necessary to reflect and compensate the real nature and particular consequences of domestic violence. The short comings of traditional tort law in this field have been identified both by commentators and the Family Court in Kennon32, where ‘it was recognised to require each alleged assault to be separately identified and proved in a domestic violence case could be unfair to claimants33’.

The WLSN recommends the creation of a statutory right of action for damages for the infliction of domestic violence under the Family Law Act, with a course of violent conduct to be proved rather than specific elements of each incident in recognition of the unique nature of violence in the home.

Expanding the grounds for setting aside consent orders

The report Fair Shares and other research demonstrates that women often enter into ‘consent orders’ without a full appreciation of their options and entitlements, and without adequate independent legal advice as to the consequences. Women’s Legal Services frequently see clients who have agreed to inequitable orders that they subsequently bitterly regret, with no idea of the difficulty of revisiting those orders. At the moment the grounds on which orders can be set aside under s79A of the Family Law Act are narrow. The only ‘hardship’ provision relates to children or their care, rather than to the applicant herself (s.79A(1)(d)). There is possibly scope for broadening the application of these provisions in s.79A(1)(a) which refers to miscarriage of justice by reason of fraud, duress etc or ‘any other circumstances’. This section is rarely used so there is little guidance as to its interpretation. The law should allow agreements to be set aside not only when a person has failed to disclose all of the property, but also in cases where because of the power imbalance between the parties the woman has agreed to a property settlement which is the very least she is entitled to. The provision should be broadened to recognise the circumstances many women face when being confronted with a demand to sign a Consent order. These are generally more subtle and more powerful than the circumstances encompassed by the legal concepts of duress and fraud. In this regard, we refer to the section of this Submission concerning binding financial agreements.

• where one party has failed to provide full and frank disclosure of their financial position
• where either or both the parties did not have independent legal and financial advice as to their entitlements and the consequences of agreeing to the order proposed
• where the imbalance of power between the parties was such as to vitiate consent.

Dealing fairly with debts

At present the Family Court only has the power to provide that one party indemnify the other in relation to joint debts. This means credit providers still retain a cause of action against the indemnified party. The WLSN notes that in relation to superannuation, it is proposed to grant the Family Court the power to make orders which bind third parties, that is the trustees to the superannuation funds. The WLSN proposes that the power to make orders binding on third parties be extended to cover a range of third party creditors. The concept of ‘sexually transmitted debt’ is well known, the subject of comment by academics and the Courts. The recent 1998 decision of the High Court, Garcia v National Australia Bank Limited confirmed, ‘there is still a significant number of Australian women in relationships which are, for many and varied reasons, marked by disparities of economic and other power between the parties,34’ In these circumstances it is essential that the Family Court have the power to indemnify those debts which are ‘sexually transmitted’ and to then make orders appropriately assigning all of the legal responsibility of the debt to the correct party. Quite apart from circumstances where there is a question mark as to whether a woman should be legally responsible for any portion of a debt, there are very many cases where parties are jointly and severally liable for the full amount of a debt. In appropriate circumstances the Family Court should have the power to assign the debt to either the party who is enjoying the property the subject of the debt, or the joint liability severed, so that each party is only liable for a declared share of the debt.

Power to appoint an auditor

In the Fair Shares Report, 69% of respondents said difficulty in obtaining full disclosure of the husband’s assets and liabilities was a significant impediment to achieving fair outcomes. The power to appoint an auditor when one party refuses to co-operate and flouts Court orders and the disadvantaged party cannot afford to engage an expert, would assist in dealing with many protracted and difficult cases. The role of the Court-appointed auditor would be similar to the role adopted by the Child Representative - the ‘honest broker’. We propose that, like the child representative, the costs of the Auditor would be recoverable from the recalcitrant party’s share of the property pool. The WLSN recommends the Family Court be given the power to appoint an auditor in cases where a person refuses to provide information to the Family Court about their financial affairs.

Power to deem property values

In most cases where one party refuses to disclose the value of an asset or ‘wastes’ an asset, the question of deeming a value to the undisclosed asse t35, is a matter generally left to the final hearing, which means in most Registries of the Family Court, due to the actions of one party, the other party is forced to wait up to two years for a resolution. If procedures could be introduced into the Court to ensure all issues regarding non-disclosure of assets, the value of all assets and a ‘deemed’ value attributed to any undisclosed assets, are addressed by way of hearing prior to the Conciliation Conference then this will ensure the parties have a real opportunity at the Conciliation Conference to negotiate a settlement without experiencing the appalling delay in obtaining a final hearing.

The WLSN recommends the Family Court in a hearing prior to the conciliation conference be able and willing to deem the value of an asset rather than the question of non-disclosure being left to the final hearing.

Filing of subpoenae

We believe that the Family Court’s simplification procedures should be reviewed to allow the filing of subpoenae without leave of the Court prior to the Conciliation Conference .This proposal would give parties the greatest opportunity to ensure issues concerning disclosure of all assets of the matrimonial pool can be addressed prior to the Conciliation Conference so that the opportunity to negotiate an outcome is not lost or unduly delayed. The WLSN recommends that the filing of subpoenae without leave of the Court should be allowed prior to the Conciliation Conference .

Safeguards should apply to Primary Dispute Resolution

We believe that as increased emphasis is placed on mediation as a method of resolving disputes, and reaching agreements, there must be safeguards in place to ensure the process and outcomes are fair. In particular, it is essential that parties should share information before negotiation commences. Requiring an exchange of sworn financial statements would help prevent circumstances where a person fails to disclose assets of the marriage or attempts to undervalue the assets. Unless both parties have all the relevant information they are not even at first base in terms of equal bargaining position. NESB women reported in many cases they have limited knowledge or control of family finances which make it difficult for them to enter into mediated agreements. A number of NESB workers reported they had female clients whose Husbands had the only access to bank accounts eg he had the pin number and cards for teleaccess.

The WLSN recommends that there should be a requirement for exchange of properly prepared and sworn financial statements before mediation can proceed.

Independent legal advice

Mediators cannot provide legal advice to either party to the mediation, and it is imperative that participants in a mediation have a full understanding of their legal entitlements, preferably in writing. The requirement to obtain legal advice after mediation before committing to any property agreement is of equal, if not higher, importance particularly in light of the findings of the Fair Shares report. All the family law practitioners interviewed for that research noted that women are far more likely to make concessions in a mediation than men. "This ‘giving in’ as many described it was motivated by a range of factors including wanting to bring an end to the conflict, knowing that they can’t afford to fight the matter in court anyway; and in particular wanting to reduce the threat that he might pursue custody/residence of the children. (p.24)

The WLSN recommends written independent legal advice be compulsory before and after a mediation and before the signing of a property agreement.

Mediation not appropriate in all circumstances

Any mediation conducted in circumstances of power imbalance is likely to result in an unfair agreement, as well as being an abusive process in itself. Power imbalance in a relationship can be caused by violence, by a lack understanding of the financial issues and a lack of familiarity of the ‘negotiation’ environment - particularly for NESB women and Aboriginal women. For NESB and Aboriginal women who have married outside their culture, the power imbalance of the relationship can be compounded by their sense of the mediation environment as culturally foreign.

Small property pools

As indicated previously, a majority of participants in the Fair Shares project said a small property pool was an issue which significantly impedes women’s ability to obtain a fair property settlement because if the property pool is small, it is simply not viable to commence proceedings in the Family Court. This is apart from issues of legal representation. They also said a substantial sum of matrimonial debt significantly impeded women’s ability to obtain a fair property settlement for the same reasons. Often, substantial debt and modest property pools go hand in hand. The WLSN supports moves by the Government to establish a small claims jurisdiction. We believe it should be located in the Family Court. There should be a small filing fee, jurisdiction up to a stipulated amount, an environment where self-representation would be encouraged, a less formal and more directed, inquisitorial style of proceedings, a regular circuit for rural and remote areas, no cost jurisdiction and a right of appeal to a single Judge of the Family Court. The WLSN further proposes the procedures of this small claims jurisdiction be developed in a user-friendly way that can accommodate cultural diversity, and be responsive to the needs of a local area.

The WLSN recommends a low-cost, user-friendly small claims jurisdiction be established in the Family Court to provide a forum for determining small property settlements for parties in dispute and for whom mediation will not provide a just result.

A legal framework which is culturally sensitive

The need for access to legal services that are culturally sensitive to the needs of the community was reiterated across the country by women from non-english speaking backgrounds and Aboriginal women.

Aboriginal women made the following points:

• issues of access to the law must be approached in recognition of the diversity of Aboriginal women’s experience. For many Aboriginal women talking about reforms to family law is like talking a foreign language - the Family Court does not go to remote places, its judicial processes are foreign and its laws seem foreign
• Aboriginal women in isolated regions cannot access legal representation, legal advice or a Court eg in Cooper Pedy, South Australia many intermarriages between Aboriginal women and the mainly immigrant men take place. The nearest place the Family Court visits is Port Augusta - a seven hour drive if a woman has access to a car - public transport is generally not an option because of costs and because most Aboriginal mothers will be looking after more than two or three children close in age.
• Aboriginal women mistrust the legal system given their historical experience and experiences of today - in most cases the only court Aboriginal women have had contact with are the Criminal courts and Children’s courts.
• Aboriginal women have limited access to culturally appropriate legal representation- Community Legal Centres and Indigenous Women’s Projects are mainly resourced to give advice, Legal Aid is generally not an option and many Aboriginal Legal Services throughout Australia either have policies of non-representation when the matter involves two Aboriginal people or have a policy of not granting assistance in family law matters

Women from non-english speaking backgrounds reported similar issues to those raised above as well as reporting that the Family Court has failed to make its processes, procedures and the law understandable to NESB women. The Family Court has not tried to make its legal education material available in different languages and has predominantly relied upon written material where in many cases it would be more appropriate and effective if legal education is conducted orally.

The Family Court is often a foreign concept to NESB women who, given the current Immigration laws 36, generally come from other cultures where there is no such thing as a Family Court. Again, as experienced by Aboriginal women, often their only experience of the Courts is in a coercive context. The current legal system does not accommodate different cultural experiences.

Aboriginal and NESB women recommended the following:

• Family Court to continue to conduct cross-cultural education of all its staff in association with specialist community organisations
• Legal education conducted by the Family Court and Government must be in languages other than english and must also be conducted in culturally appropriate ways
• Culturally sensitive Court support workers employed by the Family Court
• mandatory use of interpreters

Legal aid

It is clear that a majority of women who suffer violence are not accessing the legal system to seek property settlements or spouse maintenance. The reasons for this are detailed in Fair Shares, discussed above. A crucial factor is that at the moment it is virtually impossible to obtain legal aid for a property settlement. The WLSN believes that if legal aid were available to women experiencing domestic violence to help with property division, some of their difficulties would be alleviated. Mediation is not an option in these circumstances. For women with modest assets or superannuation it is highly unlikely they will be able to engage a private lawyer. They are therefore without any form of assistance.

Community education

The WLSN agrees that there is a lack of knowledge and understanding in the community about how family law works and what purposes it is intended to fulfil.

The false perception that there is a lack of certainty in the current law, should be addressed not by changing the current law, but by providing more community legal education about how the law works. The WLSN also identified a strong need for community education among Aboriginal communities and NESB communities. WLSN recommends a sustained program of community education to improve understanding of and access to family law.

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