The Court’s Approach to an Application for a Property Settlement after the Limitation Period has Expired
Parties can apply to the Family Court or Federal Circuit Court (collectively referred to as ‘the Court’) for a property settlement within 12 months of their divorce becoming final.
In proceedings between parties to a de facto relationship, either party can apply for a property settlement within 2 years of separation.
Parties who seek a property settlement after the limitation period has expired, require leave from the Court to apply out of time. This leave is discretionary and is treated as the exception to the rule.
The Court applies the following test when deciding whether to grant a party leave to apply for a property settlement out of time:
- Does the Applicant have a reasonable prima facie case for relief had proceedings been instituted in time – in all of the circumstances, taking the Applicant’s case at its highest and having regard to the likely considerable legal expense of further litigation, would it have been just and equitable to make an order for an adjustment of the parties’ legal proprietary interests;
- Would the denial of the claim for leave cause the Applicant or a child of the relationship, hardship – hardship is more than the loss of the right to apply to the court for a property settlement. In the matter of Whitford the Court said, when discussing the meaning of hardship: “The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits. If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted … If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.”
- Does the Applicant have an adequate explanation for the delay – has the Applicant been diligent in making the application for a property settlement? Whilst an adequate explanation for the delay is considered by the court, a lack of an adequate explanation is not a barrier to the Court granting an extension of time if the first two factors are made out. However, it is taken into account by the Court when considering the matter overall in determining whether or not to grant leave. The Court will also consider the degree of prejudice to the Respondent is leave was to be granted. Prejudice is not limited to the Respondent progressing their finances following the conclusion of the limitation period, but may include the unavailability of evidence and witnesses, and the decline in the Respondent’s memory given the passage of time which may impair the Respondent’s ability to respond to the primary application for a property settlement.
If the Court is satisfied that the Applicant has a prima facie case and to refuse them leave would cause hardship, and that hardship is not outweighed by the hardship of the respondent, then the Court may grant leave.
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