This week Justice Minister Andrew Little tabled the Law Commission’s final report on its review of the Property (Relationships) Act 1976 (the Act).
The Act sets out how relationship property should be divided when a relationship ends by separation or death.
The report makes 140 recommendations and concludes that, while many of the existing rules within the Act are satisfactory, the Act is no longer fit for purpose, and recommends a new Act be introduced covering relationships ending by separation.
Minister Little says [t]he report’s overall conclusion is that the PRA is out-of-date and no longer fit for purpose in the 21st century.
The report notes that one of the principles of the Act is that matters should be resolved as inexpensively, simply, and speedily as is consistent with justice. This means that division of property at the end of a relationship should be just and the process for achieving that should be efficient. While there is a paucity of hard data, the research and the submissions received by the Law Commission indicated that the vast majority of relationship property matters are resolved out of court and that generally, out of court resolution is quicker and less expensive than court-based resolution and can result in more enduring and satisfactory outcomes for separating partners and their children.
This has certainly been our experience in terms of our Family Law mediation, arbitration and arb-med services and therefore it is not surprising that the Law Commission’s recommendations are largely focused on encouraging partners to resolve their relationship property matters out of court whenever appropriate. Importantly, the report notes, this requires efficient court processes and strict consequences for non-compliance with procedural rules in court so that the threat of court action and court-imposed penalties effectively deters partners from engaging in bad behaviour when resolving relationship property matters out of court.
The report recommends that voluntary out of court dispute resolution for relationship property matters should be promoted by:
- including in the new Act a statutory endorsement of voluntary out of court dispute resolution to resolve relationship property matters out of court and making it clear that relationship property matters can be determined through arbitration;
- introducing new pre-action procedures in the Family Court Rules 2002 that will provide a clear process for partners to follow when attempting to resolve relationship property matters out of court that would put parties on notice of, among other things, their disclosure obligations and the process for disclosure, the prohibition on disposing of family chattels without the other partner’s consent, and participation in out of court dispute resolution such as mediation and arbitration; and
- requiring applicants to court to acknowledge in court application forms that they have received information about the pre-action procedures and the availability of dispute resolution services.
The report also recommends that the Government should consider extending a voluntary modified FDR service or other form of publicly funded dispute resolution service to relationship property matters in light of the recommendations of the Independent Panel appointed to examine the 2014 family justice reforms and the Government’s response to those recommendations.