As is common across most jurisdictions, there are specific deadlines in place for issuing Court Proceedings with respect to a property settlement in Family Law matters.
For parties to a marriage, an Application can be made to the Court for a property settlement provided their Application is filed within 12 months after the date of Divorce. Parties who are in a de facto relationship must file an Application within 2 years from the date of separation.
If the relevant time period has passed, the alternative available is to obtain leave from the Court which is colloquially known as permission to file your Application out of time.
Will the Court automatically grant leave?
When considering whether a property settlement can proceed out of time, the Court must be satisfied that hardship would be caused to either party or a child of the relationship if leave is not granted.
Hardship is not defined by the Family Law Act 1975 Cth. The Court considers the following factors when making a determination:
- Is there a prima facie case worth pursuing? Does your Application have a real chance of success?
- Does the benefit, or the anticipated result from your property settlement outweigh the cost of the legal proceedings?
- Is there an adequate reason for the delay in seeking a property settlement?
Lacy & Cloet  FCCA 791
The recently published judgement of Lacy & Cloet  FCCA 791 (“Lacy & Cloet”) considered an Application for a property settlement made out of time for a de facto couple.
The relevant facts in the case that the Court considered were as follows:
- Ms Lacy (the Applicant) and Mr Cloet (the Respondent) met in late 2008/ early 2009. They commenced cohabitation with Ms Lacy’s sister. Mr Cloet was still married at the time to his previous Wife. Mr Cloet paid rent to Ms Lacy’s sister.
- Mr Cloet purchased a property in 2012 in his sole name for $399,000 with an associated mortgage of $364,930 (known as Property X).
- Ms Lacy maintained that she contributed $24,000 towards the deposit to Property X and thereafter paid $1,000 per month towards the mortgage until separation in September 2014.
- Mr Cloet maintained that he contributed $15,440 of savings to the deposit and Ms Lacy loaned him $8,560, which he repaid to her. The sum of $15,440 was savings that Mr Cloet deposited into Ms Lacy’s bank account. The regular payments of $1,000 made by Ms Lacy thereafter were her contribution to rent.
- The parties separated in September 2014 and Mr Cloet remained living in the property.
- Ms Lacy issued proceedings nearly 5 years later on 11 April 2019 seeking the property pool be divided on a 50/50 basis.
- Importantly, at the time of the Hearing, both Ms Lacy and Mr Cloet were residing with their new partners, each with a young child.
Did the Court grant leave?
Ultimately, the Court dismissed Ms Lacy’s Application for a property settlement out of time. The Court’s decision was predicated on the following factors:
- The benefit or result that Ms Lacy would receive from a property settlement would likely be outweighed by the cost of litigation. At the time of the Court Hearing, Ms Lacy’s legal fees were already estimated to be in the vicinity of $75,000. Ms Lacy’s contribution to Property X would unlikely be seen as more than payment for rent.
- The parties’ were in similar financial positions and there was a modest pool of assets between them. They each had new partners and young children.
- Ms Lacy did not provide an adequate reason for the delay in filing an Application for a property settlement. The parties had been separated for nearly 5 years at the date of filing and Mr Cloet had arranged for Ms Lacy to receive legal advice at the time of separation.
How we can help
Lacy & Cloet emphasises the importance of obtaining legal advice at separation so you are aware of all applicable time limits and you can make an informed decision regarding an anticipated property settlement.
In matters where there is only a small property pool available for distribution, it is important to consider if the cost of litigation may be greater than or similar to the overall amount you may be entitled to receive. For expert advice and guidance, please do not hesitate to contact us.