Out of Time Property Applications under the Family Law Act: Requirements and Considerations
The Family Law Act 1975 (Cth) (“the Act”) sets out the legal framework for resolving property disputes between parties to a marriage or a de facto relationship. The Act imposes strict time limits for initiating property proceedings after the breakdown of the relationship. Section 44(3) of the Act provides that parties to a marriage have 12 months after the date of divorce to file an application for property orders. The de facto equivalent pursuant to section 44(5) of the Act is 24 months from the date of separation. These time limits are intended to promote finality and certainty in family law matters and to avoid prejudice to third parties who may have acquired interests in the property.
However, there may be circumstances where a party wishes to apply for property orders after the expiry of the relevant time limit. In such cases, the party must seek leave (or permission) from the court to proceed out of time. The court has discretion to grant or refuse leave, depending on whether it is satisfied that hardship would be caused to the party or a child of the relationship if leave were not granted, and whether it is just and equitable to do so. This essay will examine the legal principles and case law that guide the court’s decision on granting leave for out of time property applications.
The first requirement for obtaining leave is to establish that hardship would be caused to the party or a child of the relationship if leave were not granted. Hardship is not defined in the Act, but it has been interpreted by the courts as meaning “something more than mere inconvenience or difficulty” ¹. Hardship must be substantial and real, and it must arise from the inability to pursue a property claim ². The court will consider the financial circumstances and needs of both parties and any children, as well as any other relevant factors, such as health, age, employment prospects, contributions, future inheritance, etc. It is important to understand that this is not the plain English meaning of hardship as the Court, in essence, looks at what would likely be achieved if the application were allowed and measures, put simply, the prejudice having regard to all of the circumstances, of not allowing the party to pursue that outcome. There may be extreme hardship in an ordinary sense where the party is in poverty, however, if the Courts preliminary assessment is that the party would achieve $1000 and the legal costs in achieving it may be in the order of $50,000 then the party could not demonstrate hardship. Therefore, there must be a real opportunity to pursue a commercially viable outcome and the court will determine that as best it can on a preliminary basis on the information before it. Relevantly, the Respondent is not required to file financial documents and the burden is on the applicant,
The burden of proving hardship lies with the applicant, and it is not enough to merely assert hardship without providing evidence ³. The applicant must also show that the hardship is causally connected to the delay in bringing the application ⁴. For example, if the applicant’s financial situation has deteriorated due to factors unrelated to the relationship breakdown, such as gambling losses or poor investments, then hardship may not be established ⁵.
The court will also consider whether hardship would be caused to the respondent or any third parties if leave were granted. For instance, if the respondent has remarried and acquired new property with their new spouse, or if third parties have obtained interests in the property by way of mortgage or sale, then granting leave may cause hardship to them ⁶. The court will balance the competing interests and hardships of all parties involved and determine whether it is fair and reasonable to allow the application to proceed.
Just and Equitable
The second requirement for obtaining leave is to show that it is just and equitable for the court to grant leave. This involves a broad assessment of all relevant circumstances, including:
- – The reasons for the delay in bringing the application;
- – The prejudice or detriment suffered by either party due to the delay;
- – The merits and prospects of success of the substantive property claim;
- – The conduct and behaviour of both parties during and after the relationship;
- – The public interest in finality and certainty in family law matters.
The court will exercise its discretion based on justice and fairness, taking into account the overall justice of the case. The court will not grant leave if it would be futile, vexatious or an abuse of process. The court will also not grant leave if it would be contrary to public policy or undermine public confidence in the administration of justice.
Making an out of time property application under the Family Law Act is not an easy task. The applicant must satisfy two stringent criteria: hardship and just and equitable. The court has a wide discretion to grant or refuse leave, depending on all relevant circumstances. The court will balance the interests and hardships of all parties involved and determine whether it is fair and reasonable to allow the application to proceed. Therefore, parties who wish to apply for property orders after the expiry of the time limit should seek legal advice as soon as possible and act promptly and diligently in pursuing their claim.
- Innes v Innes (1979) FLC 90-674 at 78-614.
- B v B (1997) FLC 92-755 at 84-304.
- C v C (1986) FLC 91-730 at 75-995.
- P v P (1987) FLC 91-818 at 76-282.
- W v W (2004) FLC 93-204 at 79-928.
- M v M (1988) FLC 91-979 at 77-293.
- R v R (1991) FLC 92-217 at 78-725.
- S v S (1992) FLC 92-279 at 78-929.
- G v G (2000) FLC 93-035 at 86-726.