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Beware of the time in which you must commence proceedings Commencing Application for Property Division Out of Time – Demonstrating Hardship

05/04/2021

The Family Law Act 1975 imposes time limits for the commencement of proceedings for property division and spousal maintenance.  These time limits are known as “Limitations Periods”.  The Family Court of Australia/Federal Circuit Court of Australia do not allow commencement of proceedings at any time a person may wish to commence proceedings.  The Limitation Periods apply in both the Family Court of Australia and the Federal Circuit Court of Australia however the Limitation Periods in some respects are different for each Court.  The failure to commence an Application in the Family Court/Federal Circuit Court before the Limitation Period expires can mean that an Application cannot be filed or processed in the Courts or if filed will not be determined by the Court unless the Court grants leave to the party to proceed.  The Court will require proof of appropriate grounds before granting leave to proceed.  If proceedings are commenced outside the Limitation Period, the Courts permission (Leave) must be obtained. 

How Long do you Have to Commence Proceedings? 

If You Are Married

In the case of married persons, the Application for property division must be filed with the Court within 12 months after the date on which the Divorce Order took effect or the date of the making of a Decree of Nullity of Marriage.

If You Are in a De Facto Relationship

In the case of a person in a de facto relationship the Application must be filed in the Court within 2 years after the end of the de facto relationship. 

Commencement of Proceedings Outside the Limitation Period – Leave of the Court is Required 

Proceedings which are not commenced within the applicable Limitation Period will not be allowed to proceed through to Final Hearing before the Court itself, grants Leave for the Application to proceed.  The Family Court/Federal Circuit Court can grant an extension of time and allow a late filed Application to proceed, but the Court must be satisfied as to various matters before the Court will grant Leave. 

Onus of Proof

The Applicant seeking an extension to allow the case to proceed bears the onus of proof to establish the relevant legal basis for the Court to allow the applicant to proceed with the case.  Whether Leave should be granted usually will be determined as a threshold matter at a separate hearing before the final hearing at the commencement of the final hearing.  The Court will examine the evidence in support of the Application to proceed.  There must be evidence of hardship as well as an explanation for the delay. 

When Will The Court Grant Leave?

The Family Law Act 1975 does not permit the Court to grant Leave unless the Court is satisfied that: 

  1. Hardship would be caused to a party to the relevant marriage (or de facto relationship) or a child if Leave were not granted; or 
  2. In the case of proceedings in relation to the maintenance of a party to a marriage – that, at the end of the period within which proceedings could have been instituted without the Leave of the Court, the circumstances of the Applicant was such that the Applicant would have been unable to support herself/himself without an income tested pension, allowance or benefits. 
  3. The Applicant seeking Leave to proceed out of time, must provide to the Court an explanation of the reason for the delay and failure to commence the proceedings with the Limitation Period. 

How does the Court approach the question granting Leave to a person who has not filed within the time Limitation Periods?

In deciding a Leave Application the Court:

  • Will determine as a threshold issue, whether hardship would be caused to the Applicant by denying the right to pursue the claim;
  • Will consider the explanation for delay; and
  • Is not required to undertake a detailed hearing of the whole claim on its merits;

What Constitutes Hardship?

The Family Court/Federal Circuit Court may take a generous approach to Leave Applications.  The test for hardship is normally satisfied by showing that the Applicant has a prima facie claim of some consequence and that person will be significantly worse off, if Leave is not granted.  The person applying for leave is not required to establish that the failure to grant leave would cause them poverty.  Hardship will not be established by merely showing the Applicant would be marginally better off if Leave were granted. 

Explanation for Delay

The Court will require evidence explaining why the proceedings were not commenced within time. 

Gadzen v Simpkin 2018 FFLA – De Facto Relationship 

In the case of Gadzen v Simpkin 2018 Family Court of Australia the Court (on Appeal) considered the legal test for hardship.  The de facto relationship commenced in 2001 and separation occurred in 2009.  There were no children of the partnership. 

Following separation, the parties came to an informal agreement whereby the de facto husband agreed to:

  • Purchase a home for his partner.
  • Pay her rent until purchase of the house.
  • Purchase furniture and electrical equipment.
  • Provide a legacy to his partner.
  • Bequest to her one third of his superannuation amount. 

For the most part, the de facto husband complied with the informal agreement. 

Almost seven years after the expiration of time for commencement of proceedings, the de facto wife made an Application to the Court for property division.  At first instance, the Trial Judge determined that the de facto wife would face financial hardship if she were not allowed to proceed with her Application for Property Division.  The Court granted her Leave to proceed.  The de facto husband appealed the Decision.

Gadzen v Simpkin - Decision of the Full Court of the Family Court of Australia 

The Court reviewed the earlier authorities and confirmed that the legal test for establishing hardship requires a consideration of the merits of the Application and whether there was a reasonable case to be heard. 

The Full Court determined that the Applicant de facto wife had no prospects of success in the case. 

The Appeal Court found that the Primary Judge failed to apply the test correctly and had only considered the Applicant de facto wife’s financial position and omitted to consider the costs associated with a case and the overall merits of her Application. 

The Full Court said: 

“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. 

Further, the matter with which the Court is concerned is not whether the Applicant or a child is suffering hardship but the question is whether the Applicant or a child would suffer hardship 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 child would suffer hardship if Leave were not granted”.   

If you are proposing to make an Application for property/financial settlement the best course is to file the application within time.  If you are out of time, there are avenues available to overcome this hurdle.  Our experienced Senior Family Lawyers can assist you in navigating this sometimes challenging path.  Please contact Richard Watson Senior Family Lawyer or his Personal Assistant Shereen Da Gloria to discuss your matter and seek timely advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.

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