Mediation about Property

Property mediation is a structured process to help separated couples work out how to divide their financial affairs.

A neutral third party (a mediator, or Family Dispute Resolution Practitioner) guides the discussion, helping you talk through and make decisions about assets, liabilities and superannuation.

The aim is to reach practical agreements that allow you to move forward and establish separate financial lives. It can be used whether or not court proceedings have started.

Property mediation follows a structured process.

The first step is for me to meet individually with each of you. These meetings allow me to understand your situation from both perspectives, assess whether mediation is appropriate, and work out the best way to run the joint sessions.

After that, we move to joint session(s). Most matters involve two sessions, each up to three hours. These may take place with everyone together in the same online session, or separately, depending on what will work best.

A key part of the process is sharing information about your financial circumstances. There is a legal obligation to provide full and frank disclosure, so we begin by identifying assets, liabilities and superannuation, and building a shared understanding of your financial history and current positions.

It is common for gaps or disagreements to arise at this stage. I will assist you to identify what further information is needed and how to resolve any differences.

Once this information has been gathered, you will each need to obtain legal advice. This is done separately, as lawyers cannot advise both parties. In some cases, legal advice may already have been obtained before mediation.

Working through the information together in mediation is often more efficient and less costly than doing so separately through lawyers. It can also help reduce misunderstandings and ensure that both of you are working from the same set of facts when legal advice is obtained.

There are situations where it is important to obtain legal advice before sharing information. If that applies, I will let you know. You are also free to seek legal advice at any stage if you would prefer to do so.

Once the information is clear and legal advice has been obtained, we move to decision-making. I will help you explore options for dividing assets, liabilities and superannuation, and consider how those options compare to what the law regards as fair, as well as how they meet your individual needs and goals.

In property mediation, the conversation is structured to follow the same four-stage process used by the Court to determine what is a fair settlement.

There are two reasons for this:

1. It ensures you are both fully informed and able to assess how any agreement compares to the outcome a court might reach; and

2. It allows any agreement to be formalised more efficiently (and therefore less expensively).

The four-stage process

Stage 1 — What is there to be divided

This involves identifying all assets, liabilities and superannuation. It includes everything held jointly, individually, and any interests held with third parties. These are brought together to determine the overall “pool”. 

Stage 2 — Contributions (the history of the relationship)

At this stage, we consider the contributions each of you has made. This includes both financial contributions and non-financial contributions such as homemaking and parenting.

We also take into account any significant assets brought into the relationship, as well as events such as inheritances or compensation payments. A broad understanding of financial arrangements since separation is also relevant.

Stage 3 — Future needs

This stage looks at what the future is likely to hold. It includes factors such as income-earning capacity, care of children, age, health, and the financial circumstances of any new relationships.

In a court setting, the outcome of stages 2 and 3 is used to determine the percentage division of the asset pool.

Stage 4 — Applying the outcome

At this stage, those percentages are applied to the asset pool to work out who receives what.

The Court also considers whether the outcome is “just and equitable” in the particular circumstances.

How this works in mediation

Court decisions about property division are discretionary. This means there is usually a range of possible outcomes, rather than a single “correct” result.

When you obtain legal advice, you will generally be advised of a range within which a court outcome is likely to fall.

In mediation, you have the opportunity to work within that range, while also taking into account what matters to you.

For example, it may be important that one of you retains the family home so that your children have continuity, or that superannuation is divided in a particular way. As we work through the process, I will help you explore whether your preferred outcomes can be achieved in a way that is consistent with what the law considers fair.

It is unusual for agreements to fall outside the range of what a court would consider fair. If this does occur, I will help you understand the implications and decide whether you would prefer to adjust the agreement or proceed with your preferred outcome. Formalising agreements that fall outside that range can be more complex, but it is still possible.

Lawyers do not usually need to attend property mediation. However, most people will need some input from a lawyer during the process.

For many people, the most effective approach is to work with a mediator first, so that financial information is gathered and shared in a structured and cooperative way.

Once that information is clear, a lawyer can provide advice about your entitlements. You can then return to mediation to make decisions about how your assets, liabilities and superannuation should be divided.

After an agreement is reached, a lawyer can assist with drafting the documents needed to formalise the outcome.

In some situations, it is helpful for lawyers to attend the mediation sessions. This may be the case where:

• the asset pool is complex;

• there are technical issues that need to be addressed during discussions; or

• one or both of you would prefer support in presenting your perspective.

If you are unsure what level of legal involvement would be appropriate, this can be discussed at the outset.

The time needed for property mediation can vary, but most situations are resolved within about two months, although this will depend on the complexity of the issues involved.

When both people are willing to participate, the initial individual appointments are usually held within one to two weeks of first contact. A first joint session is then typically arranged one to two weeks later, with a further session around three weeks after that.

If one person needs to be invited to mediation, the process may take a little longer. When I send an invitation, the other person is given up to three weeks to decide whether they would like to participate. If they respond sooner, the process can move more quickly. If they take the full time, the first joint session will usually take place around four to six weeks after initial contact.

If you would both prefer to move more slowly, that can also be accommodated.

I conduct all mediations online using video, so you can participate from a setting that feels comfortable and private.

Sessions may take place with everyone together in the same online session, or separately, with each of you in your own online space. If you have a lawyer or support person, they can join the session with you.

If using this technology is new to you, I will help you get set up and comfortable before the mediation. There is no additional charge for this.

At the beginning of the mediation, I will check in with you to make sure everything is working smoothly.

Many people find online mediation more convenient and easier to manage than attending in person.

If you would like more detail about what happens during these sessions, you can refer to the section titled “What happens in a property mediation?”

If you reach an agreement

It is usually a good idea to formalise any agreement you reach about property settlement. This helps ensure the settlement is final, and may also provide significant stamp duty and tax benefits.

There are two main ways to formalise an agreement:

Consent Orders

Consent Orders are generally the simpler and less expensive option. They must be reviewed and approved by a Registrar of the Family Court. This means the agreement will need to fall within a range that the Court considers fair.

Binding Financial Agreement (BFA)

A Binding Financial Agreement may be more suitable where the agreed outcome is less likely to be approved by the Court. These agreements must be drafted by a lawyer, and each person must receive independent legal advice for the agreement to be binding.

If you are using Consent Orders, it may be possible to prepare some of the documents yourself. However, I recommend obtaining legal advice and assistance with drafting to ensure the agreement is properly finalised.

I can talk you through these options during mediation if helpful.

If you don’t reach an agreement

If you are not able to reach agreement in mediation, you will need to consider what steps to take next.

This may involve applying to the Court, or using arbitration. In arbitration, a specially trained and accredited lawyer makes a binding decision in a similar way to a judge.

It is important to obtain legal advice before starting court proceedings, both to understand your options and to ensure you have complied with the Court’s pre-action requirements.

Not necessarily.

If you are able to reach agreement about property settlement without a mediator’s involvement, you do not need to attend mediation.

However, there is a legal requirement that people make a genuine attempt to resolve their dispute before applying to the Court for property settlement orders. Attending mediation is a common way to meet that requirement.

Unlike parenting matters, there is no certificate required before filing a court application. However, if you commence court proceedings without attempting mediation (or another appropriate form of dispute resolution), there may be consequences later in the process.

It is also common for the Court to order mediation after proceedings have started. If this happens, mediation becomes compulsory.

Even where mediation has already been attempted, a further mediation may be ordered. Cases often resolve at this stage, as the steps taken during the court process can change how each person views the issues and what outcomes are acceptable.

Your safety is central to the process.

Mediation will only go ahead if it can be conducted safely (both physically and emotionally), and in a way that allows each person to participate freely and make informed decisions.

In some situations, additional support—such as lawyers, financial advisers or support people—may be involved to ensure there is a level playing field in terms of information and understanding.

At the beginning of the process, I meet with each person individually. These meetings allow me to understand the situation from both perspectives and assess whether mediation is appropriate.

A history of intimidation or family violence does not automatically mean that mediation cannot take place. In many cases, the process can be structured so that everyone is safe and able to participate on an equal footing.

If I form the view that mediation is not appropriate, I am not able to proceed.