Are you a family lawyer who has advised clients in the past or you may currently have clients who have been separated and divorced a long time and your advice is now sought to finalise a property settlement? There are many reasons for this situation occurring including: parties put their head in the sand, not wanting to have difficult conversations about property division, they may be over ‘fighting’ or one party may think its strategically better to delay property settlement by stalling all efforts by the other party to negotiate or expeditiously resolve the case, by non disclosure etc, which causes a long delay from the time of separation to eventual property settlement or lastly, the parties may have informally agreed on financial matters, then after some time passing one of the party reneges or there may be a change in circumstances, causing the one party to seek your advice on formalising a property settlement and by the time this occurs, many years may have passed. What are some of the issues that arise and what are some things to consider in such cases?
The first ‘threshold’ to consider is the time limitations for filing property applications:
- Section 44 (3) Family Law Act 1975 (Cth) says that for 12 months from when the divorce takes effect, which is 4 weeks after the decree nisi, a party can institute property proceedings.
- Section 44(5) Family Law Act 1975 (Cth) provides that for parties in a defacto relationship, they must make application within 24 months from separation.
If the parties are outside the limitation period, leave must be obtained from the Court to file a property application. The Court will grant leave if it is satisfied that the ‘threshold grounds’ in section 44(4) Family Law Act 1975 (Cth) are met. If one is met, then the party must satisfy the court why leave should be granted and there a prima facie case. If there is a prima facie case the question is then, would the grant of leave enable the court to do justice between the parties?
In exercising discretion, the court will look at, amongst other things: the reason for delay, prejudice, merits of the case and the degree of hardship if leave were not granted.
If leave is granted by the Court and a client is permitted to file a property application, other important considerations include:
- Section 79(2) Family Law Act 1975 (Cth) is it ‘just and equitable’ for the court to make orders? [ Bevan  FamCAFC 116 & Bevan  FamCAFC 19]
- Was there an informal agreement between the parties with respect to property division? [Fielding & Nichol  FCWC 77 compared with Berrell & Berrell (No.3)  FamCA 1012]
- Post separation contributions to property – global approach or asset by asset approach? Its not a mathematical exercise rather discretionary. [Field & Smith (2015) FLC 93-638; Eufrosin & Eufrosin  FamCAFC 151]
How To Advise Clients: Post Separation Contributions:
- Are there traceable financial transactions post separation?
- Have separate financials post separation i.e. open up a different bank account, keep the income streams separate; pre and post separation
- Keep pre and post separation assets clearly defined and separated.
- If you are representing a client whose prospects of financial prosperity are likely to improve post separation, seek to negotiate and/or mediate to finalise the property settlement, post haste.
- Review your clients evidence in order to advise your client about what is the appropriate approach to be taken by the court, especially if you are seeking an asset by asset approach or wishing to quarantine assets from the property pool , i.e. was there a valuation of assets at the time of separation and how were any funds disbursed if assets were sold post separation and the acquisition of further assets, any evidence as to contributions?
This is only a snapshot of the difficulties and issues that arise in such cases with direction provided on where to find guidance in such matters.
If you are in need of a family law barrister and mediator who can assist you navigate long delay cases to achieve optimal results, please contact Louise on (02) 9336 5399 or firstname.lastname@example.org
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