property settlement
Those deadlines exist for good reason. Potential defendants should eventually be able to rest easy knowing that litigation will not be commenced against them. Time limits provide an impetus for persons with reasonable claims to make a decision about whether or not they intend to pursue that claim.
But what do you do when the deadline has passed and you realise that you need the Court’s assistance to resolve a dispute as to the division of your and your former partner’s interests in property?
Issuing Property Proceedings Past Deadline
In short, sections 44(3) and 44(5) of the Family Law Act 1975 specify that:-
- Parties (or former parties) to a marriage can apply for an adjustment of property interests prior to obtaining a divorce, within 12 months of a divorce being granted, or by consent between the parties; and
- Parties to a de facto relationship that has broken down can apply for an adjustment of property interests within two years from the date of separation, within 12 months of a Financial Agreement being set aside or declared invalid, or by consent.
If the relevant time for issuing proceedings has passed and you are unable to obtain your former partner’s consent to issue proceedings, your only alternative is to seek leave (permission) from the Court to do so. Under sections 44(4)(a) and 44(6)(a), the Court can only grant leave if it is satisfied that a party or a child would otherwise suffer hardship.
Court Enquiries to Determine Leave
In determining whether to exercise its jurisdiction to grant leave to issue proceedings, the Court will make the following enquiries:-
Is there a prima facie case?
At this stage, the Court asks whether, had the window for issuing not passed, the applicant would have had a case to pursue via the Court system. This is not an analysis as to the strengths of that case or whether the case would have been successful, but merely a determination as to whether there would have been a case to hear at all.
Would a party or a child suffer hardship if leave were not granted?
Here, the Court is not concerned with the “hardship” that comes merely with the loss of the right to issue proceedings. Rather, it wants to know whether denying the applicant the right to bring the application would cause an injustice having regard to “the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time.” (Gallo v Dawson [1990] HCA 30 at 480)
Does the applicant have a reasonable explanation as to the delay in bringing proceedings?
In a limited number of cases, the Court has found that the degree of hardship can override an inadequate explanation for delay. However, it is prudent to establish that you had made some attempt to resolve the issue in a timely fashion.
The Court will deal with each application for leave to apply for property settlement out of time on the particular facts of the case.
Case Study: Gadzen & Simkin
In the 2018 decision of Gadzen & Simkin, the Full Court of the Family Court found that the trial judge had failed to analyse the costs that would be incurred by Ms Simkin in bringing her case if leave were granted for her to do so. The Full Court said that even if hardship is established, the Court must be satisfied that by granting leave the hardship may be alleviated. If the costs of bringing the application outweigh the value of the applicant’s potential claim then the hardship cannot be remedied and leave should not be granted. Mr Gadzen was successful on appeal and the Orders made by the trial judge were set aside.
The Full Court re-exercised the trial judge’s discretion. The evidence was that Mr Gadzen had made overwhelming direct financial contributions to the relationship, Ms Simkin had received $467,121 in benefits post-separation and had net assets worth approximately $134,600, and Ms Simkin (on her own evidence) would likely expend approximately $150,000 pursuing her claim. The Full Court did not grant Ms Simkin leave in circumstances where it was “unable to see how [her] potential claim in property settlement proceedings could conceivably approach, let alone exceed, that which she holds together with that which she has received.”
Applying for leave to issue property proceedings out of time is a costly, stressful, lengthy and ultimately unpredictable process. It is important to understand what time limits apply to your particular circumstances at the outset. Advice should be sought from an experienced family lawyer if you have missed the deadline.
For more information please contact a member of the Family Law team.