Key Words: Family law, property settlement; out of time; section 44, hardship, leave for out of time application.

The case of Slocomb v Hedgewood [2015] FamCAFC 219 (12 November 2015) was a Family Court of Australia (“FCA”) Full Court hearing to determine to leave to appeal a decision made by the Federal Circuit Court of Australia (“FCC”). The matter was heard by Judges May, Ainslie-Wallace & Johnston.

The Wife in the case had submitted an application for property settlement. The Application was 18 years outside of the statutory time limit. The Wife’s application was refused by the FCC as she did not provide an adequate explanation for lodging outside of the time limit. The Wife sought leave to appeal the FCC decision to the FCA.

Background

The Husband and Wife commenced living together and married in 1989. After about 5 years the parties separated in 1994. During the period they were married they had 3 children together. At the time of separation, the children were 4, 3 and 1 years of age. In September 1995 the parties divorced.

At separation, the main property available for the division was the family home with equity of $15,000, furniture worth $10,000 and a car worth $12,000. When the parties separated the Wife took the car. In 1994 the Wife’s solicitor wrote a letter to the husband proposing terms of settlement and arrangements for the children. This letter stipulated that the Wife would take the car and some items of furniture and in return the Wife would transfer her interest in the family home to the Husband. In addition, it stated that the Wife would have sole care (then referred to as custody) of the parties’ children. The Husband did not agree with the care arrangements for the children and settlement did not occur.

Out of Time Application

When asked why her Application was brought 18 years out of time, the Wife stated she was not aware of the time limit. The Primary Judge considered the parties’ circumstances including that the Wife had taken the children into her care after separation, she had made no contribution to the mortgage on the home, she received the car at separation and some items of furniture. The Husband had paid child support for the children and he had paid the mortgage on the parties’ home and improved the property.

In considering if leave should be granted for property settlement outside of the statutory time limit, the Primary Judge referred to section 44 of the Act. Section 44(3) stops proceedings being brought outside 12 months from the date of divorce. However, leave can be granted under section 44(4) to bring an application for settlement outside of the time limit where hardship can be established. The Primary Judge found that hardship could be established. This was because while the Wife could pursue her property rights through State courts, her post-separation contribution would not be considered by State courts.

Despite hardship being found, the Primary Judge concluded that leave should not be granted. The grounds of refusal being that the Wife did not have an adequate explanation for bringing her Application 18 years out of time and allowing her to proceed would prejudice the husband.

Principles for Out of Time Applications

The Wife submitted an Application to the FCA for leave to appeal the FCC’s decision. In considering the Wife’s application for leave to Appeals the Court considered the case of McDonald and McDonald (1977) FLC 90-317. This case determined that in order to bring an out of time application an applicant must establish:

1. that a case for relief exists;

2. that denial of the claim would cause hardship; and

3. an adequate explanation for the delay.

In considering these principles, the Court established that the first two principles had been met. The Wife had a case for property settlement and she would be in hardship if her Application was denied.

The Court considered the Wife’s explanation for bringing her Application out of time. The Wife’s stated she was not aware of the time limit. The Court took into account that the Wife engaged a lawyer after a separation and the time limit was stated on paperwork for her divorce.

The Court referred to the case of Althaus and Althaus (1982) FLC 91-233; (1979) 8 Fam L R 196 where it was found that the degree of hardship experienced by an applicant may outweigh an inadequate explanation for bringing an out of time application.

The Court then stated that while considering the three principles in McDonald and McDonald, it also had to consider any prejudice to the other party. The Court considered the case of Sharp and Sharp [2011] FamCAFC 150; (2011) 50 Fam LR 567 where that Court stated there is a presumption of prejudice to a party where an application is brought out of time. However, the Court determined the Husband had not pursued his settlement rights until 2012 and this should be taken into account.

The Court using the principles above decided that the Primary Judge had made an error of law in the original finding. The Court granted the Wife’s leave for appeal and determined that the matter should be reheard. The primary reason was that it would be unjust to both the Husband and Wife if their legal position with regard to their property were to remain as is. While the parties could pursue their property rights in State court this would not ameliorate the Wife’s hardship and this outweighed the Wife’s inadequate reason for bringing her Application out of time and any prejudice caused to the Husband.

Conclusion

In this case, the Wife brought an Application for property settlement 18 years after the expiration of the statutory time limit found under section 44 of the Act. However, section 44(3) allows the court to accept an application outside of the statutory time limit but only where a case for the relief sought exists, denying the claim would cause hardship and an adequate reason for the delay has been provided. Other factors a court will take into account include prejudice to the other party for allowing an out-of-time application.

In this case, the Court decided that it would be unjust to both parties to leave property matters between them unsettled. The Court granted leave to appeal and determined the matter was to be reheard.