Generally, a couple has 12 months from the date of divorce to make a property claim in the Court. For de facto couples, this rule is 2 years from the date of separation.
However, nothing is ever black and white.
The Family Law Act allows claims to be brought out of time and claims have been allowed to proceed out of time by a few days… to years.
A court has the power to approve an application out of time if it is satisfied that:-
- hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
- in the case of maintenance – that at the end of the period within which the proceedings could have been instituted, the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.
The latest case on the subject has been allowed to proceed 26 years (that’s not a typo!) after the date of divorce. This is the case of Ordway [2012] FMCAfam 624 (13 July 2012).
In this case, the Court considered many factors that contributed to the wife applying out of time. These were:-
- An informal Agreement was in existence between the parties;
- The husband had promised to transfer a property to the wife, and she had believed that this would occur;
- The wife was employed by the husband, and did not want to put her employment at risk;
- There was a significant power and financial imbalance between the husband and the wife;
- The husband had been aware of the legal position and the wife had not;
- The wife took appropriate action once the husband advised her that he would not transfer the property and she became aware of the position at law.
What are the implications of this case?
This case highlights a need for parties to finalise their agreement relating to property and financial affairs after separation or divorce in a way that is binding.
It also illustrates the Courts willingness to accept applications out of time where it can be shown that hardship would otherwise be caused to one of the parties.
So if you have avoided finalising property settlement and think that by allowing time to run out that you will be safe – you need to think again. If you want control over the settlement of property and wish to avoid court proceedings it is prudent to put a financial agreement in place so that issues are settled with certainty.