Limitation Periods for Property Settlements

It can be a stressful time for all involved when a relationship breaks down and knowing what initial steps to take can be overwhelming. The Family Law Act 1975 (Cth) is the relevant legislation that applies to property settlements of marriages and de facto relationships. The first step is being mindful of the limitation periods imposed by the Family Law Act with respect to commencing proceedings in relation to property applications.

Where there is a breakdown of a marriage, a property application is to be made within 12 months after a divorce order is granted and for de facto financial matters, proceedings may only be instituted within 2 years following the end of a de facto relationship.

In the circumstances that the limitation period has expired, all is not lost as the court may grant a party leave to apply after the end of the limitation period.

The Court is likely to grant leave if:

1. the Court is satisfied hardship would result to the applicant or a child of that relationship if leave were not given; and
2. the applicant has a reasonable claim to adjust property interests. “Hardship” has been defined to mean “substantial detriment”, with the meaning of that phrase depending on the circumstances of each individual case. Substantial detriment requires more than the loss of that right to litigate and it must be shown that hardship will result from the loss of that right.

In addition to showing that hardship will result to the applicant or child if leave is not granted, the applicant is to show that the substantive application would probably be successful if heard on its merits, since if there is no real probability of success, the Court could not be satisfied that hardship would result if leave were not granted.

Relevant considerations the Court may look at include:

1. the length of delay;
2. the explanation for the delay; and
3. whether the respondent can point out any prejudice should the leave be granted.

Although the Court can grant leave to make an application in relation to property settlements, it is best to resolve the matter or issue proceedings to protect your rights prior to the limitation period expiring.