In today’s blog we’ll tackle a popular topic, namely Consent Orders and answer the most common questions we receive daily from our customers on this topic.
Why Consent Orders?
Consent Orders are the most popular and affordable way for separated couples to resolve property settlement in Australia – there are more than 10,000 Applications made to the Court each year.
Anyone coming out of a marriage or de facto relationship can use Consent Orders to attend to their property settlement and parenting arrangements after separation.
What makes an Application for Consent Orders such a popular way to settle?
The main reason is that parties can obtain a legally binding Court order for property settlement, without having to go through the stress and expense of a court case. In fact, in an Application for Consent Orders, the parties do not even have to set foot inside a court room.
Instead, the parties complete a paper application and file it with the Court electronically or by post. Please note filing by post is currently unavailable due to coronavirus restrictions.
If your application has been completed correctly, and your settlement is fair (just and equitable), the Court will approve your application and make binding Consent Orders to finalise your settlement.
While Consent Orders can be obtained for property settlement and parenting arrangements, the focus of this article will be the use of Consent Orders for dividing property in a legally binding way.
If you have questions regarding the parenting side of things, don’t hesitate to reach out to our friendly Support Team.
Okay, without further ado, lets jump right in.
1) What is a Consent Order?
A Consent Order is a written agreement that is completed and signed by both parties and then sent to the Court to request legally binding Consent Orders.
If your application is completed properly, and your settlement proposal is considered fair, the Court will approve the application and issue sealed Consent Orders. ‘Sealed’ means the orders have been stamped by the Court.
Separated couples (married or de facto) can apply for Consent Orders to finalise property settlement and/or parenting arrangements.
The Consent Order documents contain the relevant details regarding how the parties’ assets, debts and superannuation will be divided between them on a final basis. You won’t have to attend any court hearings, as your application is processed internally by the Court.
2) Are Consent Orders legally binding?
A Consent Order is made in the Family Court of Australia and is a legally binding document. It is called a Consent Order because both parties consent (agree) to the making of the Order.
When approving your Application, a Registrar of the Court (a type of judicial officer, a bit like a judge) will place the date and the Court Seal (a red stamp) on your Application for Consent Order documents.
From that day forward the agreement set out in the sealed Consent Order is considered official and binding. That means that each of the parties is bound to follow the Consent Orders and stick to the agreement set out therein.
If a party breaches Consent Orders, there may be financial and practical consequences including, for example, the breaching party having to pay any costs incurred by the other party as a result of the breach.
The main advantage of using an Application for Consent Orders to settle property is that you get the full legal protection of a formal court order. This is achieved without ever having to step foot in a court room or going through expensive and stressful court proceedings.
Parties are not required to have a legal representative (lawyer) to make an Application for Consent Orders, although they can choose to hire a lawyer to provide advice and/or draft and file the application on their behalf.
3) What alternatives are there to Consent Orders?
By reaching an informal property settlement agreement with your former partner you immediately save a lot of time, stress and thousands of dollars in legal fees! Next you will need to turn your ‘informal’ agreement into a ‘formal’ and legally binding property settlement.
Remember, your informal agreement is not legally binding. Even if you write it down and sign it before a Justice of the Peace, it will not be recognised under Australian law as a legally binding property settlement.
To prevent the risk of either party claiming for property settlement at a later date, it is important to formalise your settlement in a binding way.
There are only three ways to achieve a legally binding property settlement in Australia:
- Application for Consent Orders
- Financial Agreements (also known as Binding Financial Agreements)
- Adversarial litigation in court
Let’s take a closer look at the pros and cons of each of the options:
✓ Settle without having to go to Court
✓ Save thousands in legal fees
✓ Full legal protection of binding Court Orders
✓ Legally enforceable in the Family Courts
✓ Quick and easy compared to litigation
✓ Just and equitable
✓ Legal representation not compulsory
✓ Settlement approved by the Court
X Can’t be used for pre-nuptial agreements
Under the Family Law Act, parties can enter into a private legal agreement regarding how property and financial arrangements will be dealt with in the event of a breakdown in the relationship.
This type of agreement can be entered before the relationship (‘prenuptial’), during the relationship, or after separation.
Financial agreements should be drawn up by experienced lawyers and typically cost many thousands of dollars to prepare. The parties are required by law to each have their own separate legal representative (lawyer) to review and certify the financial agreement before signing.
Financial agreements are not reviewed or approved by the Family Courts when they are made. The only time a Court will review a financial agreement is if one of the parties disputes some aspect and applies to the Court to enforce the agreement.
The Court will then decide whether the agreement is binding or not.
If the financial agreement was drafted incorrectly or other issues arise, the Court can set it aside and declare it invalid. This means the parties to financial agreements rely heavily on the skill of the lawyers who drafted it to ensure the likelihood of it being binding and enforceable.
✓ Settle without having to go to Court
✓ Suitable for pre-nuptial agreements
✓ Quick and easy compared to litigation
✓ Likely to be legally enforceable if drafted correctly
X Not reviewed or approved by the Court when made
X Both parties must each have a lawyer
X Unregistered, private agreement
X Legal enforceability uncertain until assessed by the Court
X Can be unfair to one party
X Can be expensive compared to an Application for Consent Orders
LITIGATION IN COURT
The option of last resort involves taking legal action against the other party in the Family Courts. By initiating court proceedings, you begin an adversarial process, which means each party is competing to convince the judge they are right, and the other party is wrong.
This typically involves a long, stressful and expensive process in which each party will spend tens of thousands of dollars with their legal teams.
✓ May be appropriate in urgent situations or where one party refuses to negotiate
✓ May be appropriate if there has been family violence and a party is at risk
✓ May be appropriate where a party is intentionally depleting the property pool or hiding major assets
✓ Legally binding court orders
X Lengthy, drawn out process (between 1 and 3 years on average)
X Increased emotional and financial stress
X Parties are generally disadvantaged if they don’t have legal representation
X Increased conflict and animosity between the parties
X Uncertain outcome – it will be up to the Judge to decide
X Very expensive compared to settling outside court
Here’s what the Family Court website has to say about the advantages of avoiding litigation in Court:
4) Why settle without going to Court?
Reaching an agreement with the other party offers many advantages, such as:
- you make your own decisions
- you greatly reduce the financial and emotional costs of legal proceedings
- your continuing relationship as parents, if you have children, is likely to work better
- you are able to move forward and make a new life for yourself, and
- you may improve communication with your former partner and be better able to resolve disputes in the future.
It saves you time and money if you can reach agreement without going to court. You also know exactly what each of you will get, whereas, by going to court, there is uncertainty waiting for a judicial officer to decide for you.
Additionally, long court proceedings can increase stress and add to the pressure that you and your family are under.
5) Can I use Consent Orders for property settlement and/or parenting arrangements?
Yes, parties can use the same application to apply for either property (financial) orders, parenting orders or both at the same time. The focus of this article is on property Consent Orders. If you have questions about parenting Consent Orders, please contact our Support Team.
6) My bank has requested a legally binding agreement before they will transfer the family home. Can I use Consent Orders for this?
Yes. Banks and lenders will frequently request that parties to a joint mortgage provide a copy of a binding settlement agreement before the bank will go ahead and approve refinancing of the mortgage and transfer of the family home or investment property.
Consent Orders are the most common type of legal agreement provided to banks and lenders in Australia in these circumstances.
Once you have a sealed copy of your Consent Orders from the Court it is simply a matter of providing a copy to your bank or lender so you can move forward with refinancing and property transfer.
7) How do Consent Orders work?
Consent Orders are written terms of agreement between the parties. The Consent Orders are set out in a document called a Consent Minute of Order (CMO).
The CMO is drafted in the language used specifically by lawyers (aka “legalese”!) to ensure that the Orders will be approved by the Court and are capable of being followed and enforced by the parties at law.
Each Consent Order is different from the next. The contents change from case to case to reflect the parties’ circumstances and agreed terms of settlement.
In short, the contents will depend on what kind of agreement you and your former spouse have in place. Typically, the consent order will deal with the following items:
- How the parties’ assets will be divided
- How and when any transfers of property between the parties will be conducted
- How the parties’ liabilities will be divided
- How the parties’ superannuation will be divided (which may simply involve each party retaining the super they already have, or to seek a super splitting order to split super from one party to the other).
- Any other matters relevant to the parties to ensure their settlement is smooth and represents a clean break.
8) What do I need to do to get a Consent Order?
To obtain Consent Orders you will need to prepare and complete an Application for Consent Orders (made up of two separate documents) which reflects your settlement agreement and lodge it with the Court.
The documents will need to be drafted correctly and be in alignment with one another to ensure that the Court will approve and seal the proposed Consent Minute of Order. You can check out our Property Settlement Kits or contact our Support Team if you have any questions.
9) How to apply for Consent Orders
There are two main documents which must be lodged with every Application for Consent Orders. Together, these two documents allow the Court to understand the circumstances of the parties and what kind of property settlement orders they are seeking:
Application for Consent Orders (‘ACO’) document
The job of the Application for Consent Orders document is to provide the Court with all the facts and information about the circumstances of the parties, the relationship, the children and the proposed division of property.
Consent Minutes of Order (‘CMO’) document
The job of the Consent Minutes of Order document is to tell the Court exactly the legal orders you are asking the Court to make.
Consent Minutes of Order contain specific legal language and formatting and must be drafted correctly to avoid your application being refused. Lawyers typically charge thousands of dollars to prepare Consent Minutes of Order documents.
Should you need further information, our Property Settlement eGuide goes into greater depth including Step-by-Step instructions regarding the process of formulating your agreement and preparing and lodging your Application for Consent Orders.
Should you wish to lodge electronically via the Commonwealth Courts Portal, watch the video below for further information and instructions.
10) How much will it cost and how long does it take?
The current Court filing fee to lodge your Application is $165. From the date of lodging you should expect it will take between 6 to 12 weeks for the Court to process your application and issue sealed Consent Orders.
This is a fraction of the time it takes to undertake adversarial litigation and grind through the Court system.
Ok, I’m ready. How do I get started?
At eDivorce Australia, our Property Settlement Kits start from just $249 and include a completed Application for Consent Orders document and Consent Minute of Order document PLUS a free copy of our Step-by-Step Property Settlement eGuide (normally $29) the contents of which will help you to address your questions.
If you also seek to include Superannuation Splitting as part of your settlement, you should select one of our Property Settlement Kits with Super Splitting which are priced at $349 and also include a completed Application for Consent Orders document and Consent Minute of Order document PLUS a free copy of our Step-by-Step Property Settlement eGuide (normally $29).
We hope you found today’s blog about property consent orders useful. Please do not hesitate to contact us if you have any feedback or queries.
The eDivorce Team
Bonus Content: Are you ready to eFile Your Application with the Family Court?
Check out this helpful video about how to eFile your Application via the Commonwealth Courts Portal. Any questions, just let us know.