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5 reasons why consent orders rock

If you have separated from your partner, you will likely need to divide your property. If this is done informally (by a simple agreement), the outcome is not enforceable by the courts, and you may miss out on protections such as the exemption on duty for property transfers. There are two ways to formalise your property settlement.

Consent orders vs financial agreement

The first option, and the one that I recommend to my clients, is to apply to the family court for financial consent orders (“consent orders”). Consent orders involve you agreeing with your former partner about how to divide your property fairly. You then submit an application to the courts for approval.

The second option is to enter into a binding financial agreement (“financial agreement”). This involves the parties and their lawyers negotiating an agreement which they believe is just and equitable. Each party needs their own lawyer to provide them with advice.

When I explain the two options, many people hear that consent orders involve the courts and immediately want to explore the other option. But the court's involvement is the first reason I recommend consent orders.

#1 | The court approves consent orders

Consent orders require that the family court consider the property pool, the parties’ contributions and future needs, and decide whether the overall division requested is just and equitable. In essence, using consent orders ensures that an independent party has found the settlement fair to both parties.

Financial agreements don’t involve an independent party checking that the resulting property division is actually fair. As a result, it’s entirely possible that one person may end up with more than their fair share of the property pool, especially if they have more resources than the other party.

Fortunately, you do not need to actually attend court in person (or online) to obtain consent orders. The decision is made by a judicial registrar in their chambers. If the court agrees with the orders as drafted, they’ll stamp and “make” the orders. They’ll also enforce them, which brings me to reason 2.

#2 | The court enforces consent orders

Once consent orders have been made, they will be enforced by the family court unless they are set aside. For instance, the court can set aside consent orders if one party suppressed information or gave false evidence.

However, the person applying to set aside the order must establish that there was a miscarriage of justice. In my experience, the likelihood of consent orders being set aside is low. It is difficult to find any case involving the setting aside of financial consent orders.

In contrast, there is a long history of instances when the courts have set aside financial agreements. Most usually, when the financial agreement has been entered into by a bride-to-be before the wedding in circumstances where the groom has told her to sign the agreement, or the wedding was called off.

The Australian Master Family Law Guide (the bible for family law practitioners) lists 10 grounds for finding that a financial agreement will be void or voidable (that is, capable of being set aside), including duress, undue influence, and unconscionability.

In my experience, many relationships involve a power imbalance, often because one person is the sole or primary breadwinner. The party with greater financial power may use their power to overbear the other party, resulting in an unjust financial agreement.

Such financial agreements are likely to be overturned if they are subsequently challenged in court. It might make sense that you’d use a financial agreement and take this risk if it were a cheaper option than consent orders. But it’s not. Which leads me to reason 3.

#3 | Consent orders are less expensive

Cost is one of the biggest reasons that consent orders beat financial agreements hands down. In a financial settlement, if a couple can agree on the value of their property pool and how they’d like to divide it, I can (and have) finalised consent orders for less than $1,300 plus GST.

It’s hard to pin down the actual cost of a binding financial agreement. However, according to Mr Google, the cost can range from$2,000 to $10,000 per party. Anecdotally, I’ve heard that around $6,000 to $8,000 in total is a fairly standard cost for a financial agreement.

My usual quote for consent orders (for a straightforward property pool) is $2,000 to $3,000 plus GST. So why the disparity in cost?

One reason consent orders can be less expensive is that they can be finalised by only one lawyer. That lawyer can only act for one party, not both. However, if the unrepresented party agrees (knowing the court will have the final say on whether the division is fair), the court will accept orders with only one lawyer on the record.

For that matter, the court will also accept an application for financial consent orders with no lawyers involved – they’ll just scrutinise it a little more closely.

Another reason consent orders are less expensive is that the process involves a standard application form which the court provides. This document has boxes that the parties complete to show their details, a complete summary of their agreed property pool, and a summary of how they contributed to the relationship.

Your lawyer will draft “proposed orders” to accompany the application form. These proposed orders explain to the court what the parties would like from their property settlement (for example, the house is transferred to one party, the car is transferred to the other).

Most lawyers have template orders for each scenario, and if they don’t, they can use the orders made by judges in other family court proceedings as a baseline to begin their drafting. Easy peasy.

The primary reason financial agreements are more expensive is that they require two lawyers to independently advise their clients about the advantages and disadvantages of entering into the agreement.

The increased cost also reflects the risk that the lawyers take in providing this advice because they cannot rely on the courts to verify that the agreement is fair. But financial agreements are better because they’re more likely to be accurate, right? Not quite. See reason 4.

#4 | Errors are usually caught in consent orders

Lawyers are human (well, most of us). Sometimes we make mistakes, like the well-meaning lawyers who both inappropriately advised their clients to transfer marital property to a third-party company.

If we draft consent orders that don’t properly explain the rationale for the property division, or that contain errors, the court will issue what’s called a “requisition”. This is a request for further information or amendment, which the lawyer must answer or remediate before refiling the application.

In contrast, errors in financial agreements are only discoverable after clients have spent thousands of dollars on agreeing them. And given that an error will usually be in one party’s favour, the other party will likely need to spend thousands of dollars more on fixing the error by taking it to court.

Speaking of timing, this is reason number 5 why I love consent orders.

#5 | Consent orders are reasonably quick

Historically, the time taken to obtain consent orders was a major deterrent. The court took a lot of time to even issue a requisition concerning consent orders which have been filed. However, in recent years this has changed.

From 1 September 2021 (when the two family courts merged into one), the court has hired and delegated power to a large number of judicial registrars. These registrars can make financial orders which are agreed to by all parties. As a result, the time taken for the family court to review and issue consent orders has reduced significantly.

I was interested to see how great the time reduction was in practice, so I reviewed my own case files. The average time it took the court to issue consent orders I filed from 1 September 2019 to 1 September 2021 was 7.5 weeks from the date of filing.

The average time it took for consent orders to be made from 1 September 2021 to 1 May 2023 was just 4.8 weeks. Admittedly, it still takes longer to have the court approve consent orders than to finalise a financial agreement, which can be signed on the day it’s negotiated.

But a bit over a month does seem a reasonable time to wait if you can save a lot of money and have the certainty that the agreement is fair to both parties.

What will you choose?

Ultimately the decision to settle your marital property division with a financial agreement or consent orders is yours. However, if your family lawyer says you need to use a financial agreement, maybe ask them a few more questions about why they recommend this path – and definitely ask them to provide a cost comparison.



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