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Keeping the Home – At what cost is it viable?


The issue of who gets the matrimonial home following separation is an immediate issue upon separation.  Who stays in the home after separation often affects the outcome of the matter and more importantly, the time and cost it takes to either settle the matter or have the matter determined by the Court. 

It is important to remember that following separation the resolution of the property distribution is one that should be attempted without it causing overburdening costs in particular, debating issues that may appear important but should not be, and will not be critical in the overall outcome of resolution by Court determination. 

However each issue debated (in particular at Court by way of an Interim Application before the final hearing) (an Application in a Case) will be at a large cost to one and more often, each of the parties to the marriage or de facto relationship.  The effect of unnecessary debate and Applications to Court is that the asset pool that would otherwise be divided between the husband and wife (or the two parties to the Defacto Relationship) are dissipated to the Lawyers, Experts and all others involved in the debate and resolution of who gets what and how the matter is resolved.  

At Watson & Watson we take a realistic and common sense approach, in particular, as to an early consideration of what are the realistic parameters of a settlement and what are the outer limits of possible outcomes and accordingly what are the possible and equally, what are the impossible outcomes? 

We find many cases in which the party for whom we do not act are arguing and seeking Orders which are impossible outcomes on a determination of the matter and Orders which would never be made by the Court. 

One for example is whether the Matrimonial home will need to be sold to allow a distribution of the assets available to the parties.  If the range of outcomes are considered at an early stage and it does not allow either party to hold the Matrimonial home then it will be sold in particular, when the only logical outcome is that the home (or other assets) has to be sold to achieve a distribution of the assets between the parties to the marriage or de facto relationship.

In those circumstances why is it that some use the home as an apparent “bargaining chip”.  The cost associated with such action is large and is borne firstly by the party making the Application.  In our view it would be better to take action to resolve the issues or if the whole matter cannot be resolved, resolve as much as possible (such as an agreed sale of the matrimonial home) rather than wasting those large sums debating about a matter that cannot, and on a proper analysis could never, be achieved.

If you find yourself in such circumstances you need to step back and consider the cost and likely outcome and if necessary, seek a second opinion, as to what is the possible range of outcomes. 

To enable proper consideration of the matter at the outset there should be:

  1. A careful identification of the assets and liabilities of the Marriage/Defacto Relationship;
  2. An understanding of the parties earning capacity and financial resources; and
  3. The borrowing capacity of the parties and the ability to achieve the financial outcome that is sought by either party.

In undertaking the initial analysis one does not need the exact value of every asset or liability, however you should focus on the main valuable assets and liabilities from which you can ascertain a draft balance sheet of assets and liabilities.

It becomes very clear at a very early stage of the matter what are the likely outcomes (within 10% of the net value of the assets) and for example, whether the matrimonial home needs to be sold.  However in many (too many) cases it is still the focus of the debate (with the associated costs) for a long time, sometimes for years, often up to and including the Hearing of the matter.  There is no logical reason why any person would pay their Lawyers and associated Valuers and Experts for this when logic dictates the position adopted is a doomed position.

If one or either party may be able to maintain and retain the former Matrimonial home as part of their share of the asset pool, then the Court usually would allocate the home to one party or the other.  Similarly in a settlement, the home (and other assets) could be allocated to one party or the other.  Of course this depends upon the assets available for distribution, liabilities of the parties and the value of the home compared with the overall assets available.

During the progress of the matter further information will be required.  In our view it is appropriate that the parties provide the information as early as possible with the supporting documentation.  This would allow for a cost efficient method of obtaining and reviewing the information.

We are surprised at the large number of cases in which one or each party makes claims and Applications to the Court which are not realistic and on a common sense review, would be clearly known to be unrealistic.

There are some who believe that this type of litigation will bring the other party to their knees and the other party will settle by conceding.  However this does not often occur. 

If one party becomes aggressive in the conduct of his or her claim, it could result in:

(a)       The other party adopting the same aggressive manner including each engaging expensive Lawyers to undertake a battle; or

(b)       The other party may maintain their opposition to unreasonable demands on a reasonable and cost efficient manner and carefully consider each claim made and choose their battle.

Neither of the above is the outcome you would want, especially if you are paying or are obliged to pay the high cost of Lawyers, Consultants etc for the Applications.

We have been involved in many cases where it was clear that the outcome sought by the other party was simply unattainable by that party.

The usual outcome is that each party must pay their own legal costs of the proceedings out of the share of the net assets or proceeds they receive on the determination of the allocation of assets between the parties.

If you do not have the funds to pay costs then it is open as a possibility (not necessarily a probability) that:

  1. An Application can be made to the Court by one party (the less financial party) to obtain funds from the other party on account of costs and/or;
  2. The Solicitors will agree to receive their costs at the end of the Hearing from the assets that party receives; or

If one party has provided funds to the other party to enable the second party to pay their Lawyers usually by Court Order, then an adjustment is most often made so as to achieve

the outcome on the basis of the principle that each party pay their own costs.  These are payable/paid from your share of the assets pool.  It is false economy to run up a bill for costs and think that somehow you are not going to have to pay for it.

There are some circumstances in which one party may be ordered to pay the other parties costs however it is not the usual Order.  One of the best ways to protect ones costs so that one does not have to pay the other party’s costs or that a possibility that you would obtain a costs order is by way of an appropriate offer of compromise to settle the various claims.  If at the Hearing of the matter a party has made an offer and the outcome for that party is more favorable that what the offer was, then there is a prospect to obtain a costs Order from the date of the offer. 

We have on numerous occasions been approached by persons who have found themselves in the battle where the costs of each party has well exceeded the realistic (or even unrealistic) difference between the best result achievable and the worst result achievable in a fully contested Hearing.  This could have been, and should have been, ascertainable almost from the initial consultation and a brief review of information that was available at that time.

If you find yourself in such a situation please contact Richard Watson Senior Family Law Solicitor or Shereen Da Gloria his Personal Assistant to discuss your matter and obtain advice from our experienced Family Law Solicitors who can assist you in all aspects of Financial Property and any related matters.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.

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