Pre-action procedure for financial cases

This brochure provides information for people considering applying to the Family Court for financial orders. In particular, it provides information about pre-action procedures required before starting a case. For more information, see Rule 1.05 and Schedule 1 of the Family Law Rules 2004.

Pre-action requirements also apply to parenting disputes. For more information see the separate brochure ‘Before you file – pre-action procedure for parenting cases’.

What is required?

The aim of the pre-action procedures is to explore areas of resolution and, where a dispute cannot be resolved, to narrow the issues that require a court decision. This should control costs and if possible, resolve disputes quickly, ideally without the need to apply to a court.

The pre-action procedure applies to:

• anyone considering starting a case
• anyone named as a respondent if a case is started, and
• their lawyers (if any).

The Family Law Rules require prospective parties to genuinely try to resolve their dispute before starting a case. Except for those situations listed under the heading ‘What applications are exempt?’, all prospective parties must:

1. Participate in dispute resolution services, such as family counselling, negotiation, conciliation or arbitration.
2. If dispute resolution is unsuccessful, write to the other parties, setting out their claim and exploring options for settlement.
3. Comply, as far as practicable, with the duty of disclosure (see page 4).

Anyone who does not comply (unless exempt) risks serious consequences, including costs penalties. See ‘Compliance’ on page 2.

What applications are exempt?

Pre-action procedure is not required for applications:

• for divorce only, or
• for child support only, or
• where the case includes the Court’s bankruptcy jurisdiction.

 

 

Also, the Court may accept that it is not possible or appropriate for the pre-action procedures to be followed in cases:

• involving urgency
• involving allegations of family violence
• involving allegations of fraud
• where there is a genuinely intractable dispute (for example, where one person refuses to negotiate)
• where a person would be unduly prejudiced or adversely affected if another person became aware of the intention to start a case (for example, where there is a genuine concern that the other person would attempt to defeat the claim if they had this prior knowledge)
• where a time limitation is close to expiring
• where there has been a previous application about the same issue or subject in the last 12 months, and
• where there is a genuine dispute about either the existence of a de facto relationship, or whether a party’s choice to agree to the jurisdiction of the Family Law Act 1975 in relation to the property or maintenance of a party to a de facto relationship should be set aside.

General information and parties’ responsibilities

Pre-action procedure objectives

• To encourage early and full disclosure through the exchange of information and documents about the prospective case.
• To help people resolve their differences quickly and fairly, and to avoid legal action where possible. This will limit costs and hopefully avoid the need to start a court case.
• Where an agreement cannot be reached out of court, to help parties identify the real issues in dispute. This should help reduce the time involved and the cost of the case.
• To encourage parties to seek only those orders that are realistic and reasonable on the evidence.

YOUR OBLIGATIONS AS A PROSPECTIVE PARTY TO A CASE

At all stages during the pre-action negotiations and during the case itself, should you ultimately apply to a court, you must keep in mind:

• the importance of identifying issues early and exploring options for settlement
• the need to avoid protracted, unnecessary, hostile and inflammatory exchanges
• the impact of correspondence on the reader, particularly on the other party in the case
• the need to seek only those orders that are realistic and reasonable on the evidence and that are consistent with current law
• the principle of proportionality and the need to control costs; because it is unacceptable for the costs of any case to be disproportionately high compared with the financial value of the subject matter of the dispute, and
• the duty to make full and frank disclosure of all material facts, documents and other information relevant to the dispute – see page 4 for more on disclosure.

Parties must not:

• use the pre-action procedure for an improper purpose; for example, to harass the other party or to cause unnecessary cost or delay, or
• in correspondence, raise irrelevant issues or issues that might cause the other party to adopt an entrenched, polarised or hostile position.

The Court expects parties to take a sensible and responsible approach to pre-action procedures. You are not expected to follow the pre-action procedures to your detriment if reasonable attempts to follow them have not achieved a satisfactory result.

Compliance

If a case is then started, the Court may consider whether the requirements have been met and, if not, what the consequences should be (if any).

The Court may:

• where there is unreasonable non-compliance, order the non-complying party to pay all or part of the costs of the other party or parties in the case, and/or
• take compliance or non-compliance into account when making orders about how your case will progress through the Court. (See, for example, Family Law Rules 1.10, 11.03 and 19.10.)

In addition, the Court may ensure that the complying party is in no worse a position than he or she would have been if the other party had complied with the pre-action procedure. Examples of non-compliance with a pre-action procedure include:

• not sending a written notice of proposed application
• not providing sufficient information or documents to the other party
• not following a procedure required by the pre-action procedure
• not responding appropriately within the nominated time to the written notice of proposed application, and
• not responding appropriately within a reasonable time to any reasonable request for information, documents or other requirements of this procedure.

The pre-action procedure ~ step-by-step

STEP 1 Invite the other parties to participate in dispute resolution

A person who is considering filing an application to start a case must:

1. Give a copy of this brochure to the other prospective parties to the case.
2. Invite the other parties to participate in dispute resolution. For more information about dispute resolution or to find an agency near you:

• go to familyrelationships.gov.au, or
• call 1800 050 321.

STEP 2 Agree on a dispute resolution service and attend the service

Each prospective party must:

• agree on an appropriate dispute resolution service, and
• make a genuine effort to resolve the dispute by participating in dispute resolution.

If an agreement is reached, you and the other party may enter into a financial agreement or apply to court for consent orders. For more information, or to get a Consent Order Kit, go to www.familycourt.gov.au, call 1300 352 000 or visit your nearest family law registry.

STEP 3 Written notice of issues and future intentions

If:

• no dispute resolution service is available
• a person refuses or fails to participate, or
• agreement is not reached through dispute resolution, then a person considering applying to a court must give the other person/s written notice of the intention to start a court case (called a notice of claim), setting out:
  • the issues in dispute
  • the orders to be sought if a case is started
  • a genuine offer to resolve the issues, and
  • a nominated time (at least 14 days after the date of the letter) within which the other person must reply.