COMMENCING PROPERTY PROCEEDINGS OUT OF TIME

“Am I out of time to commence property proceedings?”

The Family Law Act 1975 (Cth) imposes time limits, on when parties can commence proceedings in the Court in relation to a property settlement.

Time Limits Imposed by the Family Law Act

Pursuant to Section 44 of the Family Law Act, property proceedings are required to be commenced within the following time frames:

  1. Within 12 months from the date on which a Divorce Order takes effect; or
  2. Within 2 years after the breakdown of a de facto relationship.

In the event the above time limits pass, a party is only able to commence property proceedings with either the consent of the other party or with leave of the Court.

Seeking Leave out of Time

The Court will only grant leave to commence property proceedings out of time, if satisfied that hardship would be caused to a party of the relationship or child if leave were not granted.

What is Hardship?

To establish the requisite hardship, the Court must be satisfied that the Applicant has a prima facie case.  A prima facie case is one that has a real probability of success.

But even if the Applicant can show that they have a case with real prospects of success, and that the requisite hardship can be established, this does not automatically mean that leave to commence proceedings out of time will be granted.  Although the Court can provide leave, in cases where hardship is established, it still has discretion to decide whether or not it should grant the leave.  In making this decision, the Court can give consideration to factors which include:

  1. The length of the delay;
  2. Whether there is an adequate excuse for the delay;
  3. Any prejudice or hardship that may be experienced by the Respondent as a result of the delay (i.e. have they reorganised their affairs on the reasonable expectation that property proceedings would not be brought against them? Or were they led to believe that no application would be made against them).

Case Law

Ordway & Ordway [2012]

In this case, the Wife sought leave to commence property proceedings 26 years after the Divorce Order was made, meaning her application was seeking leave to commence property proceedings 25 years out of time.

In this case, post separation the Husband and Wife had entered into an informal arrangement between themselves, whereby the Wife remained living in the former matrimonial home owned by the Husband, and the Husband paid all expenses associated with the property and the expenses for the children and the Wife following separation. Further, the Wife had made renovations to the property and had made contributions to the Husband’s business.

The Wife was successful in her application for leave, and the Court accepted that the reason for her delay was because she did not want to upset the informal arrangement that had been in place following separation.   The Court found that the Wife had shown that she would be caused hardship if her application for a property settlement was not allowed out of time, and noted that in the circumstances of this case there was a significant power imbalance between the Husband and the Wife.

Slocomb & Hegewood [2015]

In this case, the Wife sought leave to commence property proceedings 18 years out of time.

Initially, the trial Judge found that while the Wife had established the requisite hardship, and that she had a case that had reasonable prospects of success, she had not provided an adequate explanation for the 18 year delay.  The trial judge found that prejudice would be suffered by the Husband if leave were granted out of time, as a result of the significant contributions he had made to the relationship home and his reliance on the fact that no future property claim would be brought against him.

The findings of the Trial Judge were overturned by the Full Court of the Family Court on appeal.  The Full Court allowed the Wife’s appeal and granted her leave to commence property proceedings out of time. The Full Court found that there was some reasonable explanation for the Wife’s delay and that the Husband had been just as inactive as the Wife in protecting his rights.

Although the delay in this case was significant and the assets held by the parties were not substantial, the Court found that leave should be granted in the interests of justice.

Gadzen & Sinkin [2018]

In this case, the de facto Wife sought leave to commence property proceedings 7 years out of time, following the breakdown of a de facto relationship.

The were no children of the relationship, and at the commencement of the relationship the de facto Husband had assets worth $4,750,000 and the de facto Wife had assets worth approximately $83,000.

The Court found that the de facto Husband had made overwhelmingly greater financial contributions than the de facto Wife.  Post-separation the de facto Husband paid a $100,000 deposit towards the purchase of a property in the de facto Wife’s name, and for 7 years following separation he paid the interest only mortgage repayments on the property at approximately $2,000 per month.

Further, approximately 4.5 years following separation, the de facto Wife moved into her new Husband’s property and commenced receiving rent from the property purchased in her name, without making any contributions to the mortgage.

In total it was found that post-separation the de facto Wife had received approximately $465,000 by way of payments/contributions from the de facto Husband, despite the fact that at the time of the hearing her total assets were only worth $134,600.

In this case the Court found that the de facto Wife had not established that she had a potential claim that could be deemed to have reasonable prospects of success, and dismissed her application for leave to commence property proceedings out of time.

In this case the Wife’s prospective legal costs in pursuing her claim were estimated to be between $100,000 to $150,000.

Conclusion

Although these cases provide some indication as to the approach that may be taken by the Court in relation to applications under section 44, it must be remembered that each case is assessed and approached based on its own individual circumstances.  Legal advice should be obtained before any application is made to the Court to commence property proceedings out of time.

If you have any queries in relation to Family Law matters please do not hesitate to contact:

Vicki Kelly, Accredited Family Law Specialist, vkelly@mtpartners.com.au

Emma Shuttleworth, eshuttleworth@mtpartners.com.au

Disclaimer:  This article is intended to provide general information only, and is not to be regarded as legal advice. Formal legal advice should be sought in relation to particular transactions or circumstances.

Recent Posts

Leave a Comment