22 Jul Are you running out of time to resolve your family law property division?
Be aware of the time limitations that apply
Did you know, in the Australian Family Law system, legislation is set up to provide time frames for couples to bring an application to the Courts to finalise property matters with your former spouse or de-facto partner?
In relation to married couples, pursuant to Section 44(3) of the Family Law Act 1975, parties must bring an application for property settlement to the Court within 12 months from the date of Divorce Order being granted. In relation to de facto couples, pursuant to Section 44(5) of the Family Law Act 1975, parties are to file an application with the Court for property division within 24 months from the date of separation.
However, the lapsing of these time frames does not automatically protect a person from a future application for property orders by your former partner. A party can seek and obtain leave (permission) from the Court to file an application for property orders outside the above time frames. Section 44(4) of the Family Law Act 1975 enables the Court to grant leave to a party to commence proceedings for property settlement ‘out of time’ provided the Court is satisfied that “hardship” would be caused to the party if that leave was not granted.
In order to be successful in making a valid argument of hardship, the Court must first be satisfied that the party has a “prima facie” claim, i.e., has a real probability of success. If a party is successful in establishing this, they must then be able to satisfy the Court with valid reasoning as to why the Application is being brought out of time.
An interesting example was in the case of Ordway , where an ex-wife successfully sought leave from the Court to proceed with her application for property proceedings 26 years after her divorce order was made, the parties only having an informal financial agreement. The Judge held that the ex-wife would have suffered hardship, if leave was not granted to proceed out of time.
In the case of Richardson (2008) the wife was granted leave to apply for property and spouse maintenance orders 13 years out of time after the husband won $3 million in a lottery. However, in the case of Mackrell (2015) the wife’s application for leave to commence proceedings only 16 months out of time, was refused. The judge considered that as the parties had already implemented an informal division of their assets, that no hardship would be caused.
No one knows what their future may hold. It is always possible that in the future you or your ex may receive an inheritance, win the lottery or just successfully increase your wealth over time. This could be enough for a former partner to want to commence proceedings and make a claim for property adjustment many years after the end of your relationship.
The only guaranteed way of ceasing the financial relationship with a former partner and protecting yourself from future claims, is by obtaining property orders sealed by the Court. This can be easily done by Consent, where both parties agree, or through a Court Judgement. If the parties can agree on a property division, then that agreement must be formalised into “Consent Orders” which are filed in the Court, but without the need for the parties or their solicitors to appear in Court.
It is important that once separation has occurred you obtain expert Family Law legal advice. If you require advice about property settlement, your entitlements, or time limitations, please feel free to consult with one of our experienced Family Law solicitors at Solari and Stock on (02) 8525 2700.