Codification and companion animals: important elements of the family law reforms

Published in Law Society of NSW Journal

Snapshot

• Significant changes to the Family Law Act 1975 (Cth) come into effect 10 June 2025. The changes focus on the financial and property aspects of relationship breakdown.
• The reforms explicitly address the economic ramifications of family violence in determining property settlements.
• There is also a shift in the treatment of pets, with the reforms recognising pets not merely as property but ‘companion animals’ who are an integral part of the family unit.

The Family Law Amendment Act 2024 (‘Amendment Act’) largely commences on 10 June 2025, making significant changes to the Family Law Act 1975 (Cth) (‘FLA’). It primarily deals with the property settlement and maintenance provisions for married and de facto couples in Parts VIII and VIIIAB of the FLA but also affects other aspects of family law.

What are the objectives of the property settlement reforms?

There are two major objectives. The first is to increase accessibility by codifying common law principles which guide the exercise of discretion. This is intended to assist the large number of self-represented litigants and litigants with multiple risk factors such as family violence, child abuse and mental health issues (Explanatory Memorandum).

The second objective is to strengthen the manner in which the economic consequences of family violence for separated couples is addressed. This is set against circumstances where over 80 per cent of applications filed in the Federal Circuit and Family Court of Australia (‘FCFCOA’) in FY2023 involved allegations of family violence (Explanatory Memorandum).

What are the property settlement reforms?

The Amendment Act changes the property settlement provisions of the FLA by:

• improving the way the property settlement framework is set out;
• codifying the concepts of ‘liabilities’ and ‘wastage’;
• co-locating all the factors that may be considered by the courts in determining a property settlement, rather than requiring cross-referencing to the maintenance provisions;
• prescribing companion animals (pets) as a specific type of property and setting out the relevant matters when making orders about them;
• expanding on and clarifying the meaning of ‘economic and financial abuse’;
• renaming the ‘contributions factors’ in ss 79(4) (married couples) and 90SM(4) (de facto couples) as ‘considerations relating to contributions’, and adding the effect of family violence as a consideration;
• renaming the ‘future needs factors’ in relation to property settlements as ‘considerations relating to current and future circumstances’, listing them in sections 79(5) and 90SM(5) and adding the effect of family violence as the first consideration;
• confirming the relevance of the housing needs of children in ss 75(2), 90SF(3), 79(5) and 90SM(5);
• inserting the parties’ duty of disclosure into the FLA, rather than it only being in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (‘Rules’); and
• expanding the types of proceeding which can be dealt with in a court-ordered arbitration and making other amendments to Div 4 of Pt IIIB.

In addition, changes to Part VIIIB of the FLA, dealing with superannuation, commenced on 10 December 2024.

What are the other reforms?

Other reforms in the Amendment Act include:

• section 60I certificates – the court will consider the exemption criteria prior to accepting an application for filing and reject it if exemption criteria are not met;
• less-adversarial trial (‘LAT’) approach – extended to apply to ‘property and other non-child-related proceedings’;
• children’s contact services – an accreditation scheme for practitioners and businesses will be established with standards for compliance;
• Commonwealth information orders (‘CIOs’) – section 67N is broadened to empower the court to make CIOs concerning actual or threatened violence against the child, a parent or another person the child lives with;
• removal of limitation on applications for divorce – sections 44(1B) and 44(1C) are repealed so there is no longer a requirement for a couple married for less than two years to attend counselling before filing an application for a divorce;
• protected confidences – safeguards regarding the disclosure and adducing of evidence of ‘protected confidences’ from health (both psychological and physical), family violence and sexual violence services; and
• costs orders – section 117 is repealed and the costs provisions placed into a new Part XIVC.

Property settlement framework

The Amendment Act seeks to codify the approach to decision-making in relation to property division so that it is clearer on the face of the FLA. However, the approach is described in the Amendment Act as the ‘property framework’ and in the Explanatory Memorandum as ‘the property decision-making framework’, rather than a stepped or methodical process.

Arguably, the FLA’s lack of clarity as to where section 79(2) fits in the property settlement process following Stanford & Stanford remains.

The new s 79(3) (with a corresponding s 90SM(3) for de facto couples) states:

‘In considering what order (if any) should be made under this section in property settlement proceedings, the court:

1. 1. is to identify:
      1. the existing legal and equitable rights and interests in any property of the parties to the marriage or either of them; and
      2. the existing liabilities of the parties to the marriage or either of them; and
   2. is to take into account (except for the purpose of making an order with respect to the ownership of property that is a companion animal):
      1. the considerations set out in subsection (4) (considerations relating to contributions); and
      2. the considerations set out in subsection (5) (considerations relating to current and future circumstances).’

Importantly, the framework is not entirely set out in s 79(3). The just and equitable requirement in s 79(2) (s 90SM(3) is re-numbered as s 90SM(2)) remains separate.

The new s 79(3) does not, therefore, restate the four-step process set out in cases such as Hickey & Hickey and Attorney-General for the Commonwealth of Australia [2003] FamCA 395. Nevertheless, it seems likely the court will still consider the four-step process to be the preferred approach.

Arguably, the FLA’s lack of clarity as to where s 79(2) fits in the property settlement process following Stanford & Stanford [2012] HCA 52 remains. A notation in the Exposure Draft of the Amendment Act, stating that the matters in s 79(3) can be considered in any order was removed, presumably, because it is illogical to assess contributions or s 79(5) factors before identifying and valuing the property pool. Section 79 does not state when the just and equitable requirement is to be considered.

Liabilities

Section 79(3)(a)(ii) (and s 90SM(3)(a)(ii)) includes a requirement to separately identify ‘liabilities’ in addition to legal and equitable rights and interests in any property of the parties. However, the wording of the primary obligation, that the court may make such order as it considers appropriate to alter interests in property (ss 79(1) and 90SM(1)), remains unchanged and without the word ‘liabilities’ inserted. Furthermore, the Amendment Act does not amend the definition of ‘property’ in s 4(1) to include ‘liabilities’. The terms ‘debts’ and ‘liabilities’ continue to both be used in the FLA and the distinction (if any) remains unclear.

The insertion of new clauses in ss 79(5) and 90SM(5) relating to liabilities and wastage may mean that liabilities are given greater attention. Previously, s 75(2)(ha) only looked at the effect on creditors but the new s 79(5)(e) (and s 90SM(5)(e)) is broader, and gives statutory recognition to the effect of liabilities on the parties.

Family violence

The amendments explicitly make the economic consequences of family violence relevant to the property settlement framework. According to the Explanatory Memorandum:

‘[t]he amendments make clear to the family law courts, and parties negotiating outside of court, that the economic consequences of family violence can be considered when resolving the property and financial aspects of relationship breakdown’ (at 6).

The Amendment Act addresses family violence by:

• expanding the examples of family violence to identify forms of economic and financial abuse-related conduct;
• expressly providing that the effect of family violence is relevant to the assessment of a party’s:
  • ability to make contributions to the relationship; and
  • current and future considerations;
• making family violence relevant to spousal maintenance proceedings;
• making family violence a relevant factor when determining the ownership of a companion animal; and
• including a current and future consideration for ‘the effect of financial and economic abuse on liabilities’.

Before 10 June 2025, s 4AB(2) included a short list of examples of economic and financial abuse. A new s 4AB(2A) has an expanded non-exhaustive list of examples including unreasonably denying financial autonomy, forcibly controlling a family member’s money or assets, sabotaging a family member’s employment or income, forcing a family member to take on a financial or legal liability, unreasonably withholding necessary financial support, and coercion relating to a dowry.

One of the key takeaways from the Amendment Act is the strong attempt to codify the common law to make property settlement principles more accessible to parties, particularly self-represented litigants.

While the longer list will likely increase the frequency with which such allegations are raised by parties, it also provides helpful clarity as to what may be such abuse.

The leading case on the effect of family violence on the assessment of contributions is Kennon & Kennon [1997] FamCA 27 (‘Kennon’), which the Amendment Act is intended to codify. Kennon established that, if the family violence had a ‘discernible impact’ upon the contributions and made them significantly more arduous than they ought to have been, this can be relevant to the victim’s property settlement entitlements. The Full Court of the Family Court of Australia made it clear that a Kennon claim should only apply to the most ‘exceptional’ cases.

Over the years since, a more expansive approach has been taken, for example, in Martell & Martell [2023] FedCFamC1A 71. Here, the FCFCOA confirmed there was no longer the concern expressed in Kennon about floodgates, as the amount of family violence both in the community and amongst family law litigants is significant.

Although Parliament appears to intend there to be better awareness by victims of the ability to make these claims, more frequent recognition of the impact of family violence and greater adjustments for family violence, it will likely be difficult to measure success as the courts are prohibited by current case law from taking a mathematical approach to s 79 (e.g. Jabour & Jabour [2019] FamCAFC 78). Contribution factors, for example, are not assessed with say 20 per cent for financial contributions and 5 per cent for homemaking contributions, but assessed globally. Family violence considerations will not be clearly identifiable.

The new s 79(4)(ca) (and s 90SM(4)(ca)) requires that, in the assessment of contributions, the court examine:

‘the effect of any family violence, to which one party to the marriage has subjected or exposed the other party, on the ability of a party to the marriage to make the kind of contributions referred to in paragraphs (a), (b) and (c)’.

Also introduced into the FLA is a new (and similarly worded) consideration of the effect of family violence relating to current and future circumstances, which is given prominence by being inserted at the start of the list of factors at s 79(5)(a) (and s 75(2)(aa), 90SM(5)(a) and 90SF(3)(aa)).

Constraints on the impact of these new provisions include that the ‘effect’ of the conduct must be examined, not simply the family violence of itself. Where the existence of family violence and/or the effect of it is contested, these cases will likely be quite expensive to run due to the increased size of affidavits, the evidence of medical and mental health professionals, longer trials and the greater challenges of achieving agreement without proceeding to trial.

Considerations relating to current and future circumstances

The previous s 75(2) factors are now largely in s 79(5) which applies only to property settlement applications (and s 90SM(5)). The removal of cross-referencing between the maintenance and property provisions of the FLA will make the process easier for litigants.

The new s 79(5) has, however, been adjusted from the former s 75(2) to suit property settlement applications and expanded to include the effect of family violence, the housing needs of children, liabilities and wastage.

The wastage test is similar to the test in Kowaliw & Kowaliw [1981] FamCA 70, save that:

• a more modern and clearer test is used, namely the party must have acted ‘intentionally or recklessly’ rather than ‘recklessly, negligently or wantonly’; and
• the wastage must be ‘material’, so as to discourage frivolous claims.

The catch-all provision, previously s 75(2)(o), is now at the end of s 79(5), re-numbered as s 79(5)(v). Being a general statement at the end of a list, it attracts the application of the ejusdem generis rule of statutory construction and takes its meaning from the preceding factors. Similarly, in s 75(2), which will solely deal with maintenance, s 75(2)(o) is re-numbered as s 75(2)(r). Other amendments to s 75(2) include the addition of s 75(2)(aa) to make the effect of family violence relevant. Similar changes are made to the s 90SF(3) factors.

Codification may limit the ability of the courts to respond to societal change.

There are some differences between s 75(2) and the new s 79(5), meaning that the factors will be different for property and maintenance claims.

Disputes about companion animals

The Amendment Act includes ‘companion animals’ (pets) as a specific category of property and sets out considerations that apply to determining the ownership of a companion animal. A companion animal is defined in s 4(1) as ‘an animal kept by the parties to a marriage or either of them, or the parties to a de facto relationship or either of them, primarily for the purpose of companionship’. Other animals such as assistance animals and animals kept as part of a business will continue to be dealt with in the same way as other types of property.

The new ss 79(6) and 90SM(6) provide that only two types of orders can be made: either one party has ownership or the pet will be sold.

The matters to be considered in making an order about a companion animal are set out in ss 79(7) and 90SM(7) and include the circumstances of acquisition, the history of ownership or possession, who cared for the companion animal, any family violence, any history of actual or threatened cruelty or abuse by a party towards the companion animal, and any attachment by a party or a child.

These new provisions change the law and do not simply codify the existing case law (e.g. Downey & Beale [2017] FCCA 316). The list of factors includes matters not relevant to other types of property.

Duty of disclosure

Prior to 10 June 2025 the duty of disclosure was only in the Rules. The Amendment Act inserts the duty of disclosure for financial matters into the FLA to better ensure parties are aware of their disclosure obligations, although parties and lawyers will need to refer to both the FLA and the Rules. The new duty is contained in s 71B(1) (and s 90RI(1)). Other relevant provisions include:

• types of proceedings covered by the duty (ss 71B(7) and 90RI(7));
• application of the duty to separated parties preparing for a proceeding (ss 71B(5) and 90RI(5)); and
• obligations on legal practitioners to advise clients as to their duties of disclosure (ss 71B(10) and 90RI(10)).

The content and application of the duty under the FLA appears similar to the Rules. There may, however, be disputes about which proceedings are covered. For example, s 71B(7)(ii) covers ‘matters that are or might become the subject of proceedings under … section 90K’ which could mean that, if there are proceedings on foot for enforcement of a financial agreement, the other party may be able to seek an order for extensive disclosure with respect to a possible application to set aside the financial agreement. Such a disclosure obligation may not arise under the Rules.

Conclusion

The effect of family violence will now likely be considered in a greater number of property settlement disputes. The constraints on the floodgates imposed by Kennon have been swept away, although it is clear from recent cases that the courts accepted they were already gone. The Amendment Act confirms family violence is common in property settlement applications under the FLA and encourages more victims of family violence to seek an adjustment in their favour for the effects of it. The codification of the law relating to wastage and liabilities is sensible, but court proceedings will likely be more expensive for litigants.

One of the key takeaways from the Amendment Act is the strong attempt to codify the common law to make property settlement principles more accessible to parties, particularly self-represented litigants (which will also assist courts dealing with those litigants). The re-structuring of the property settlement provisions is designed to make the process clearer but there is not clear guidance as to the approach or steps to be taken by the courts. Legislative change often creates uncertainties and unintended consequences. A codification cannot in a few words summarise the complexities and nuances of the common law. Further, the common law is not static: the evolution of the Kennon principle is an example of this. Codification may, therefore, limit the ability of the courts to respond to societal change.

^*A version of this article was first published in CCH Tracker and Wolters-Kluwer Australian Family Law & Practice.