At Watson & Watson our clients come first. Please be assured of our continued dedicated services to all current and new clients.

As we have done in the past, we will continue to offer alternative conferencing methods ie video conferencing, skype or telephone conferences. Reviewing of all documentation provided to us prior to any initial conference will be all inclusive of our set fee. Do not hesitate to contact Shereen Da Gloria on (02) 9221 6011 should you have any concerns.

Personal Injury Awards and Family Law – Will I get to keep my compensation


The Family Court and Federal Circuit Court of Australia divide property between parties to marriage or de facto relationships. The Family Law Act of 1975 defines what is considered to be property. The Act defines property to which those parties are, or that party is entitled whether in possession or reversion. Property covers assets such as land, houses, shares, bank accounts, motor vehicles, art, antiques and superannuation.

In an Award of Damages Property for Family Law Purposes

An award for personal injury is in terms of its status, not as clear.  The Family Court and Federal Circuit Court has attempted to find a consistent manner of dealing with the issue of how to account for awards for personal injury in a property division case.  On balance, the Courts will take personal injury damages awards into account and they are not excluded from the Courts determination.  How are the damage awards taken into account?

In determining the outcome of a property case the Family Court/Federal Circuit Court will follow a four stage process which includes: 

  • Firstly identify the value of all property owned by the parties either jointly or separately.
  • Secondly consider the contributions of each of the parties to the marriage to the acquisition, maintenance and improvement of family properties.
  • Thirdly look at the future needs of the parties including their standard of living, their income and financial resources and their capacity for employment.  The Court will also look at the length of the marriage and the significance of children.
  • Fourthly the Court will deliver an outcome which is “just and equitable”.

Claims for Damages for Personal Injury

The right to sue for damages for personal injury is a right of a personal nature and does not constitute (and is not) property for the purposes of Section 79 of the Family Law Act.  In the case of Zorbas v Zorbas in 1990 it was held that “the right to sue is as chose in action which in turn generally classified as personal property”.

Case Law

In the case of Aleksovski v Aleksovski in 1996 the Full Court of the Family Cpirt considered how it would treat an award of damages for personal injury received by the wife during the marriage.

In that case the Trial Judge took the compensation award into account as a financial contribution made to the pool of property on behalf of the wife.  The Judge made a 15% adjustment to her for future needs.  On Appeal where the Full Court confirmed that an award of general damages is to be taken into account as a contribution by the party who received the payment.  Additionally the economic is taken to represent income lost during the relationship and is also regarded as a contribution by the party who suffered the loss.

An award of damages is not “quarantine” and the Court will take the damages into account but attempt to benefit the person receiving that award by regarding it as a contribution and as a factor to be taken into account in the making of any adjustment pursuant to Section 75(2) of the Act.

If you are in the process of negotiating a financial/property settlement with your spouse or partner and are the beneficiary of a personal injury payout and are concerned how this will impact upon your financial settlement, please contact Richard Watson Senior Family Law Solicitor or his Personal Assistant Shereen Da Gloria to discuss your concerns and seek timely advice.

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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