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The Law and You: am I out of time for dividing property?

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When separating from your spouse or partner, you need to be aware of time limitations for dividing assets, debts or superannuation.

This includes those in your name or your spouse or partner’s name. You don’t want to run out of time when formalising your property settlement. This exposes you to additional steps, risks and costs including:

  1. Asking the Court’s permission to have your matter heard when it usually wouldn’t hear it—called ‘seeking leave’
  2. Satisfying the Court that a party or a child of the relationship would suffer hardship if the matter was not heard. This involves persuading the Court that the application has good prospects of being successful.

This is no guarantee that the Court will grant you leave to have your property application heard. If you’re unsuccessful, this will result in you paying costs and potentially an order from the Court that you have to pay your ex-partner’s costs for responding to the application.

Here are some scenarios that illustrate the difference in time limits if you’re married versus if you’re in a de facto relationship.

I’m married and separated but not divorced

Parties have to be separated for 12 months before they can apply for a Divorce Order. Once the Order has been made and becomes ‘absolute’ (1 month and 1 day following the divorce order being made), parties have 12 months (the date the Divorce Order became absolute) to file their Agreement at the Court, or for one party to have filed an Application seeking property settlement.

Example: Harry and Sally were married on 10 October 2008. They separated on 5 July 2017. It’s been more than 12 months since they separated but they’ve not yet divorced. Harry has filed a sole application for divorce, but it’s not come before the Court. Harry and Sally have been negotiating their property matter and are working on Consent Orders to file at the Court to formalise their agreement for property matters. There’s no issue with them being out of time yet, but they need to be mindful that the clock will start ticking once the Divorce Order has been made.

I was married and a divorce order was made more than 12 months ago

Parties that haven’t formalised their property matters or instituted proceedings within 12 months of their Divorce Order becoming absolute have to make an application to the Court (this could be by consent) that there will be hardship if the matter isn’t heard.

Example 1: Ellen and Patrick were divorced on 3 February 2014 and hadn’t formalised their property settlement. Patrick filed an application three years after the Divorce Orders, two years late. The Court didn’t grant leave because Patrick didn’t have satisfactory reasons for the delay, didn’t establish that he had a real probability of success in his property application and Ellen had moved on and would face prejudice if she was dragged into litigation.

Example 2: Evie and Jake were divorced on 12 April 2016. They haven’t formalised their property matters but have been negotiating and come to an agreement they want to formalise. They seek by consent that the Court hear their matter and make the property orders that they’re seeking by Consent, arguing it would be an injustice if their property interests weren’t altered. They own a house in joint names. The Court grants leave, and their orders are made by consent, finalising their matter.

I separated from my de facto partner more than two years ago

Parties in de facto relationships have 24 months from the date of separation to file their Agreement at the Court, or for one party to have filed an Application seeking property settlement.

Example: Anna and Tom separated on 1 November 2010. They haven’t formalised their property matters as Anna was concerned about causing tension a dispute with Tom. For eight years Anna has lived in the former matrimonial home she jointly owned with Tom. She had renovated and continued working in Tom’s business. Tom had paid all expenses associated with the property and supported the children and Anna. The Court granted Anna leave to institute property proceedings finding that otherwise she would suffer hardship and be left with nominal assets.

What are the take-home messages?

  1. The discretionary nature of Family Law Courts means it’s extremely important to formalise property settlement or institute proceedings to obtain property settlement orders within time limitation periods. There’s no guarantee the Courts will hear your matter if you’re out of time.
  2. Failure to formalise your property settlement or start proceedings in time may leave you exposed to assets, debts and superannuation you’ve accumulated post separation being included in the property pool for distribution between you and your former spouse or partner.

 

Catherine Coles

This column was prepared by Catherine Coles, who has been practising exclusively in family law since April 2011. Catherine is an accredited specialist in family law and has been recognised by Doyle’s Guide as one of the ACT’s leading Family Lawyers. Contact Catherine or another specialist in Family Law at Watts McCray Lawyers Canberra to talk about a contravention issue.

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