Be On Time or Pay The Price – Time Limits for Property Settlements

Be on time or pay the price – time limits for property settlements

It is essential that all parties to relationships that have broken down are aware of the time limits within which they can apply for a property settlement and/or spousal maintenance.

A person who was married must commence proceedings for property settlement and/or spousal maintenance within 12 months from the day their Divorce Order became final.

A person who was a party to a de facto relationship must commence proceedings for property settlement and /or spousal maintenance within two years from the date of separation.

If a person does not make their application for property settlement and/or spousal maintenance within the above time limits, they will need the leave of the Court (the Court’s permission) to make an application out of time. This leave is not granted automatically.

The Court must determine the following for leave to be granted out of time:

1. That hardship would be caused to a party to the de facto relationship/marriage if leave were not granted; or
2. If the proceedings relate to spousal maintenance – at the end of the time limitation period (the period within which proceedings could have been commenced without the leave of the Court), the circumstances of the applicant were such that the applicant would have been unable to support himself/herself without an income tested pension, allowance or benefit (i.e. that they were in receipt of an income tested Centrelink benefit at the time of the expiration of the time limit).

There are a number of other matters that the Court will take into account when a person makes an application for property settlement and/or spousal maintenance out of time, including the following:

1. the length of the delay;
2. The reasons for the delay;
3. The strength on the merit of the applicant’s case; and
4. The degree of hardship which would be suffered unless leave was granted.

There are occasions when leave is granted out of time after an extended delay, however this is not usual. One such case is Colfer & Colfer [2011] FMCAfam 1416. In this case the parties married in 1967, separated in 1974 and were divorced in 1976. The wife filed an application for leave out of time on 29 July 2011, almost 34 years out of time.

In this case the wife had full use and benefit of the family home from the time of separation. The husband had contributed significantly to the mortgage payments for the home since separation (he paid the mortgage in full until 1982 and paid half of it until 1985 ) and had also paid spousal and child maintenance, including for a period after the children reached adulthood. He only ceased paying maintenance to the wife in 2008. The wife received a major inheritance in or around early 2010 and was the primary carer for the parties three children, one of whom suffers disabilities.

By the time the matter was determined by the Court, the husband had retired and realised some of his superannuation entitlements. The Court found that the wife became aware of the time limitations many years ago. The Court was not satisfied that the lack of commitment in pursing her options was an adequate or reasonable explanation for such a lengthy delay. The court also found that the wife had not established hardship and that there would be substantial prejudice to the husband if leave had been granted. The wife’s application was dismissed.

In a later case of Card & Mathis [2012] FMCAfam 1007 the wife made an application for leave to bring proceedings for property settlement out of time. The parties separated in November 1994 and their divorce became final on 12 January 2002. The wife had 12 months from 12 January 2002 to file her application and did not do so.

The wife filed her application for leave out of time on 24 January 2012 – 9 years after the time limit expired.

In this matter, the wife had withdrawn property proceedings in 1995 as she was running out of money. It was her evidence that her solicitor did not follow her instructions in 2002 and that the Court rejected her application three times in 2004. The wife also alleged that she wrote to the husband in 2008 seeking a property settlement however, she did not follow up on that letter.

The Court considered the parties financial and non-financial contributions during the relationship and post separation as well as the parties’ financial circumstances at the time of the hearing. The Court found that they could not assess the extent to which she might be successful if allowed to bring her application and could not dismiss the possibility that she had some prospects of obtaining a small payment from the husband if she were permitted to proceed.

Although the Court also found that she would suffer hardship if her application was refused, they assessed that on the best evidence available at the hearing, the amount she could hope to receive was very small and her very lengthy delay mitigated against her being allowed to proceed. The wife’s application was refused.

You should, therefore, give consideration to the steps you wish to take to finalise your property settlement as soon as possible after separation. You need to be on time, or you risk missing out on your property settlement entitlement. You should seek legal advice as soon as possible after separation so that you can take the appropriate steps to ensure that you receive your entitlement.

If you need assistance or would like some more information, please do not hesitate to contact McLaughlin & Associates Lawyers on phone 07 3808 7777 or email us at legal@mclaughlinlawyers.com.au.