How Do You Stop The Disposal Of Assets In A Property Settlement?

February 9, 2022    propertylawyersperthwide
How Do You Stop The Disposal Of Assets In A Property Settlement?

Often in cases of property settlement, an aftermath of divorce, one of the parties hides or disposes of assets in order to defeat the claims of the other party. It is common in high conflict financial disputes where post-separation, the former spouses transfer assets to their family members and friends in an attempt to remove those assets from the available property pool for division.

So, it becomes imperative for the other spouse to take necessary measures to stop their ex-partner from disposing of the assets or, if already disposed of, seek legal assistance to recover those assets from them. If you are facing property settlement issues with your ex-spouse and need legal assistance in Perth, approach the property lawyers Perth WA and discuss your case with them.

Now let’s know the ways to stop the disposal of your assets in a property settlement.

When Does The Court Make An Order For Moving Divorce Assets?

If any of the parties of a separated couple disposes of assets, the court will make an order in the following situations:

  • Transfer of an asset from a liquid asset, for example, cash, to a risky investment or an illiquid asset.
  • Transferring a property into a company.
  • Transferring a property to another family member.
  • Transferring of the assets to a new company after dissolving the old company to prevent the other party from accessing them. The new company assets may not come under the powers of a court, and so a party chooses transfer as the safe option.

Ways To Stop The Disposal Of Assets In A Property Settlement

Setting Aside A Transaction

According to Section 106B under the Family Law Act 1975, the court has the power to set aside a transaction that’s designed to defeat an anticipated or existing order in family law proceedings. However, the court will not provide relief in every situation where a former spouse has disposed of assets. It is because the party seeking the relief must prove that their entitlements have not just been ‘reduced’ but ‘defeated’ by the transaction, which is quite difficult to prove.

Notional Add Backs

Prior to the decision of the High Court in Stanford (2012), if a party had recklessly or deliberately wasted property or in case of premature distribution of properties to one of the parties, those properties could be ‘added back’ into the parties’ asset pools and treated as ‘notional properties’ for the property settlement purposes.

However, post Stanford, the family law courts are not willing to add back the ‘notional’ properties to the pool of assets. It is because the High Court said that only existing equitable and legal interests in a property should be identified. However, it is still possible to notionally add back a property provided the court is furnished with the right evidence to substantiate the add back.

Section 75(2)(o)

Where a court doesn’t add back property, it can still use its discretion to consider the reckless or deliberate waste of property as a relevant factor as mentioned in section 75(2)(o) under the Act. It won’t mean that the court would do a dollar to dollar adjustment to account for the dissipated property. Instead, the party’s conduct in wasting a property will act as one of the factors that the court will consider while making orders that are fair and equitable.

Freezing Order

A freezing order or injunction is given by a court to stop a person from dealing with or disposing of an asset. The order is generally made without giving any notice to the respondent and remains in place only until the next hearing of court when the respondent gets an opportunity to be heard.

The order is usually granted only before the orders of the final property settlement are made, where it is mandatory to prevent the court’s subsequent orders from being deemed otiose. The assets’ value covered by a freezing injunction must not be greater than the claim of an applicant to a property settlement. It is always recommended to hire property settlement lawyers who can better prepare and present the case before the court.

Protecting Other Assets

It makes more sense to protect the assets from the very beginning than try to win them back after they have been disposed of. If there is real estate property in the sole name of a party, there may be possibilities to register a caveat over the property’s title. Maybe there are good amounts of money in a joint bank account of a separated couple; a party can request the bank to demand joint signatures for any withdrawal of money.


You need to keep the above points in mind if you are going through property settlement problems with your ex-partner. Approach the best property settlement lawyers in town – Property Lawyers Perth WA and get started with your legal proceedings.

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