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Property settlement with a toxic spouse

Updated: Sep 15, 2021

Photo by Devon Janse van Rensburg on Unsplash

Separating from a life partner you share a home with is difficult enough when they’re rational, reasonable and empathetic. But what happens when your other half is none of those things?

The Australian Family Law Act requires that separating parties make a “clean break” from each other, financially. It sounds easy enough. But there’s no mathematical formula. And people’s versions of events correspond with their perspective and interests. Which means one family lawyer’s 55% to the husband could be another’s 60% to the wife.

Mediation and collaborative practice are wonderful tools to bridge these gaps for couples who are willing to treat each other with respect and dignity, and to be open and honest in their dealings with each other. However, there is a small percentage of the population who prefer to hide their assets, exaggerate their liabilities, and otherwise work to scupper property settlement negotiations.

Fortunately, the family law system in Australia has developed and embraced three distinct pathways to help resolve property disputes in a timely and fair manner. The first is the PPP500 list, the second the discrete property list and the third is arbitration.

The snappily named “PPP500 list” is for cases where the net value of the priority property pool to be divided is under $500,000. If your matter is identified as eligible to take this path, you can expect a short-form expedited hearing which is more informal and less expensive than a traditional trial.

The judge will decide what information is put before the court, and how the hearing will be run. This neatly sidesteps a number of problems inherent in Australia’s adversarial legal system. In particular, a toxic spouse’s propensity to mislead, divert and delay the traditional court process.

If your net property pool is greater than $500,000, you may consider the discrete property list for your property-only matter. This list was established in November 2019 by the Sydney and Brisbane registries of the court. Instead of a judge, matters in this list are case-managed by a judicial registrar.

The discrete property list is incredibly efficient. The registrars are hands-on and active in moving cases forward, particularly when parties refuse to disclose financial information. Particularly useful are the registrars’ powers to order that specific documents be produced and valuation experts appointed.

Negotiations with toxic individuals which have taken months can sometimes be settled within weeks with a strongly worded direction from a registrar of the discrete property list. Just like in the schoolyard, sometimes the best way to deal with a bully is to tell the principal.

The discrete property list can also lead to judicial decision-making or alternate dispute resolution. The list expects that valuations and exchange of financial information will take place within four weeks of filing. But if they don’t, and a party has failed to comply with the relevant court rules or orders, the registrar can refer the matter to a judge.

If your toxic ex-partner does provide full disclosure of their financial information, the family court has recently embraced a third pathway which can help resolve your property dispute. It’s called arbitration and can be undertaken if you and your ex both consent to it.

Essentially arbitration involves a suitably qualified third-party deciding how to divide your property. It involves the matter being decided on the evidence submitted, without you or your ex-partner being cross-examined.

This is a fundamental protection if you’ve been involved in a toxic relationship, as cross-examination can be triggering. Avoiding it means that the process is likely to be less traumatic. It’s also usually less expensive and time-consuming than litigation.

Pre-action procedures are required to be followed before applying to the court for any of its processes, including arbitration. And it’s important that you choose a path which is appropriate for your circumstances and your financial situation. So, speak to your lawyer, or contact for further information.

Leaving a toxic relationship is difficult. Negotiating your property settlement can be just as challenging (if not more so). Don’t forget to make time for self-care and to surround yourself with people who love you. It will make all the difference.



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