Consent Orders: The Importance for Separating Couples

When partners decide to separate, a key issue to be addressed, among others, is how they are going to divide up their property between them.

Separating couples have several options available to them to come to a settlement about their joint property and finances. A Consent Order is one of these options and can provide for both financial matters and children’s care arrangements. In this guide, we look at Consent Orders, how they work, and other options available.

What is a Consent Order?

Where the separating parties have agreed about a division of their property, there is a way in which consensual, legally binding orders can be obtained from the Court without needing actually to go to Court. Consent Orders put into effect the arrangements agreed upon between the parties.

Consent Orders can cover not just property matters and how property (including superannuation) will be divided between the parties but also whether spousal maintenance is to be paid and, if so, how much. They may also cover parenting arrangements and how the children should be looked after.

Consent Orders can still be made if Court proceedings have been issued and a negotiated settlement has been reached. If proceedings have not commenced, the Court can be asked to make Consent Orders. As such, there is no Court Hearing, but they are enforceable.

An application setting out the proposed orders is filed with a Court. The parties are responsible for preparing the Orders and providing the necessary information to the Court.

The Court will need to be satisfied that the suggested property orders are ‘just and equitable’ and for parenting orders that they are in the child’s ‘best interests’ before it grants the Orders.

The benefits of Consent Orders

There are several benefits to formalising an agreement with Consent Orders:

• once made, the Orders are enforceable against the other party if any of the arrangements are breached;
• they are a considerably cheaper option than Court proceedings;
• in respect of property matters, they provide evidence to enable avoidance of stamp duty and capital gains tax when transferring property, such as the matrimonial home, and shares from one party to the other;
• they are final although in some very limited circumstances the Court has the authority to set them aside and make new Orders. 

A limitation, should it be relevant, is that they cannot be used for pre-nuptial agreements, unlike a Binding Financial Agreement.

Consent Orders must be filed within 12 months of divorce or two years after the breakdown of a de facto relationship.

Radney & Radney (2022)

In this very recent case, the couple had been married for 21 years before separating in 1985 and finally divorcing in 2000. They did not pursue a property settlement at any time. The wife continued to live in the former matrimonial home.

In 2019, the ex-husband, now in a de facto relationship, cancelled the joint tenancy in the home. This meant, should he die first, he could leave his share of the house as he chose to in his estate rather than it becoming wholly owned by the surviving joint tenant, his ex-wife, upon his death.

In 2020, the former wife applied for a property settlement transferring the property title to her alone, even though this was 19 years out of time. Before the matter could be settled, the husband died, and the ex-wife’s application had to be dismissed on a technicality. 

However, had the husband survived it is quite possible the Court would have granted the settlement despite it being, by now, 21 years or so since the divorce. With all the time she had lived in the former matrimonial home, she may well have been able to demonstrate that she would suffer hardship should the husband have been allowed to retain ownership of his half share of the property and it passing on to his estate upon his death.

The implications of the case

As the case study example underscores, there are risks to informal arrangements and demonstrates the importance of formalising family law property settlements.

At the time of an amicable enough separation, an informal agreement may seem the most cost-effective option. However, future circumstances are unknowable except they will change. The risk of a future claim can remain relevant for many years to come. 

Consent Orders present some important advantages in that they are cost effective, reasonably quick, legally binding and have the advantage of maximum possible finality.

The parties are required to provide detailed information and are almost certain to need legal advice regarding the application to the Court.

Other settlement options 

Other options other than litigation (which can be a lengthy and costly procedure), include a non-legal arrangement and a Binding Financial Agreement.

Non-legal arrangements

Whilst it is a matter for the parties to decide which option is most appropriate for them, it should be noted that an informal arrangement is usually unsatisfactory for the very reason they are not legally binding. If one party breaches the terms, then there is little or no remedy for the breach. Such arrangements lack finality, which can be a problem should one party wish to change the terms of the agreement after a year or so.

Binding Financial Agreements

Binding Financial Agreements (BFA) are one way of legally formalising an agreement. To do so, both parties must obtain independent legal advice regarding the proposed agreement and its implications. They are not reviewed by a Court and do not, for example, cover parenting arrangements. The grounds for setting aside a Binding Financial Agreement are wider than in the case of Consent Orders.

Contact our Property Settlement and Family Law Solicitors in Sydney, NSW

If you are considering separating or have already done so, expert legal guidance can help clarify your options and the best way forward. Szabo & Associates Solicitors can provide high-quality specialist advice regarding property settlements and all family law matters.  Please contact us on 02 9158 6026 or complete the online contact form.