Filing an application out of time in the Federal Circuit & Family Court of Australia: Skelton & Lindop [2022] FedCFamC1A 47

Following the breakdown of a de-facto relationship, parties who wish to file a Court Application should be conscious of the timeframes for filing an Application.  In most cases for de facto couples, parties are required to file within two years of separating.  Parties who seek to file outside of the two-year limitation period are required to seek leave (permission) under section 44(6) of the Family Law Act 1975.

The bring the application out of time, the party bringing the application must:

1. Demonstrate that they have a prima facie case. This means that the applicant must show their application for a property settlement has a sufficient likelihood of success;

2. That if permission if not granted, the applicant will suffer hardship. Hardship is an assessment based on the applicant’s circumstances and the deprivation of the claim.

The recent decision of Skelton involved the Full Court being asked to consider whether the Trial Judge had erred in dismissing an Application seeking to belatedly being an Application for a de facto property settlement.

For ease of reference, the two main provisions are:

1. Section 44(5) provides that (which provides for the ‘limitation’ period):

(5)        Subject to subsection (6), a party to a de facto relationship may apply for an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, only if:

(a)  the application is made within the period (the standard application period ) of:

(i)  2 years after the end of the de facto relationship; or

(ii)  12 months after a financial agreement between the parties to the de facto relationship was set aside, or found to be invalid, as the case may be; or

(b)  both parties to the de facto relationship consent to the application.

2. Section 44(6) provides that (which provides the ground for extending time for filing):

(6)        The court may grant the party leave to apply after the end of the standard application period if the court is satisfied that:

(a)  hardship would be caused to the party or a child if leave were not granted; or

(b)  in the case of an application for an order for the maintenance of the party–the party‘s circumstances were, at the end of the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.

In Skelton, the parties where in a de facto relationship from about 2009 or 2010 (not yet determined) and separated on a date which was in dispute (whether in 2014 as asserted by the respondent or March 2016 as asserted by the appellant).  The appellant filed her Application for a property settlement in November 2018.

With respect to the findings at first instance:

1. The Full Court found that the Trial Judge correctly recognised that, for the purpose of determining the interlocutory dispute under s 44(6) of the Act, the untested evidence of the appellant should be accepted at its highest, and therefore, correctly accepted separation occurred in March 2016 and so the appellant’s application was about eight months late;

2. The Trial Judge correctly referred to the legal principles relating to the making of interlocutory decisions, namely that:

2.1 The appellant must first demonstrate hardship if deprived of the chance to bring her claim,

2.2 That the alleged hardship depends upon the prima facie strength of her claim, and

2.3 That the decision to extend time still requires an exercise of discretion in the appellant’s favour even if she first establishes hardship.

3. In relation to the question of ‘hardship’, the Trial Judge:

3.1 Accepted the parties’ de facto relationship lasted nearly nine years;

3.2 The net value of the property at the time of separation in March 2016 fell in the range between $1.079 million and $2.436 million. This included an item of real property valued in the range of about $850,000.  The appellant sought final orders that the property be sold and that she retain 20% of the sale proceeds.

3.3 The primary judge concluded the appellant’s financial and non-financial contributions, on the strength of her own evidence, were “minimal” and so she was unable to establish on the balance of probabilities (which was the focus of the appeal) that the deprivation of the opportunity to bring a substantive property settlement claim out of time would cause her hardship.

In relation to the Appeal:

1. The Full Court discussed the authority in relation to interlocutory applications under s 44 and what is meant by having to establish a ‘prima facie case’ as the necessary ingredient to establishing ‘hardship’:

1.1 The Court relied on the authority relied on in Edmunds & Edmunds [2018] FamCAFC 121 at [19] to [20], which says:

18        In Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618 at 622–623, the High Court of Australia said that, for the purposes of an interlocutory application in which it is necessary for an applicant to demonstrate a prima facie case:

The first [inquiry] is whether the [applicant] has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the [applicant] will be held entitled to relief.

How strong the probability needs to be depends, no doubt, upon the nature of the rights the [applicant] asserts and the practical consequences likely to flow from the order the [applicant] seeks.

1.2 The Court also cited the decision in Australian Broadcasting Commission v O’Neill[2006] HCA 46; (2006) 227 CLR 57 (at [65] and [69]), which it said explicated the test established in Beecham:

1. 1. 65. … By using the phrase “prima facie case”, their Honours did not mean that the [applicant] must show that it is more probable than not that at trial the [applicant] will succeed; it is sufficient that the [applicant] show a sufficient likelihood of successto justify [the interlocutory relief].
          …69. …it [is] not necessary for the [applicant] to showthat is [is] more probable than not that the [applicant] [will] succeed at trial.

2. The Full Court noted that the Trial Judge demanded more than was necessary of the appellant by demanding that he was not satisfied ‘on the balance of probabilities’ nor had ‘a real probability of success’. The Full Court said that the appellant ‘certainly did not have to prove it was more probable than not that her claim for property settlement relief would succeed if allowed to proceed’ (at 21).

3. In finding that the Trial Judge should have granted leave for the appellant to proceed out of time, thus that the appellant had established a prima facie case and that hardship would occur if leave was not granted:

3.1 The appellant was 60 years of age and was unemployed;

3.2 The appellant’s unemployment was due to her physical disability, which was verified by medical evidence. She was effectively destitute. The appellant had no assets and was reliant upon welfare payments to survive;

3.3 The appellant had a reasonably arguable case on the evidence before the primary judge for a proportional share of the respondent’s property, given her contributions over eight years and her comparatively superior future needs;

3.4 The appellant’s claim of 20% of the value of the real property (unencumbered and valued at about $850,000) was described as ‘not disproportionately audacious’ given the value of the property pool. The Respondent valued the property pool at about $1.079 million and, therefore, the appellant’s claim of $170,000 was about 16% of the respondent’s assessment of the overall pool;

3.5 The Full Court said that given the appellant’s ‘relative penury’, a deprivation of any claim would occasion hardship in this case. 

Conclusion

If you have queries about filing a Court application in your family law property settlement, please contact Family & Relationship Law team for a 30 minute no cost consultation to provide you with tailored advice in relation to you and your individual circumstances.  Our lawyers continue to work remotely and are available for telephone and Skype/ Zoom appointments.  Our Family & Relationship Law team is here to help you navigate difficult issues during these difficult and unprecedented times.