How Long Do You Have to Finalise a Property Settlement After Separation?

Divorce is a major turning point in life, bringing the division of assets and property to the forefront. Dividing assets becomes a vital aspect, considering the numerous factors involved in the process of separation.

For most people, completing a property settlement quickly is preferable as it enables them to move on with their lives.

But is there a time limit that this has to be completed by? The answer is yes - Defacto couples have two (2) years from separation in order to complete a property settlement, whereas married couples have one year from divorce. There are circumstances where a property settlement is permitted outside these time stipulations.

This article takes a look at a case which deals with property settlement considerations being made 26 years after divorce.

The case for the property settlement

In the case of Ordway [2012] FMCAfam 624 (13 July 2012), property settlement did not take place after their divorce. The wife made a request to settle the marital home that her ex-husband owned, even though they had divorced many years earlier.

The initial arrangement

Initially, the husband had agreed to give financial support to the wife and allow her to live in the house. He contributed to the household expenses and supported the family in the early years, but his contributions gradually decreased over time.

The husband continued to use the house as collateral for loans, which helped improve his own financial situation.

The wife said that due to the husband’s short temper during their marriage, she had a limited understanding of their assets as he was reluctant to discuss them.

She also thought the house belonged to her until it became clear the husband saw it as an investment property.

Why was there a delay in settlement?

The husband raised doubts about the wife's reasons for postponing her application for the settlement.

The wife clarified that her decision was influenced by her concerns about her future residency in the house. She also shared that she had reservations about making the request earlier, as she was working for the husband during that period.

When should property settlement take place?

To be granted permission to initiate a property settlement more than one year after a decree nisi is issued, it needs to be shown that not doing so would cause hardship for the partner or child(ren). This ensures that fairness and the well-being of all parties involved are taken into consideration.

The judge commented on the noticeable power imbalance between the couple which helped explain her reluctance to disturb the arrangements made during the divorce proceedings.

The decision

It was recognised that if the property settlement did not move forward, it would result in hardship for the wife, and the husband did not dispute this.

The judge expressed his belief that the husband should have been aware of the ongoing matter regarding the division of property, indicating that the subsequent settlement should not have caught him by surprise.

Consequently, the wife was granted leave (or permission) to move forward with her application for property settlement following a comprehensive assessment of the couple's financial situation.

It's important to note that each case is evaluated on its own merits, and the Court exercises discretion accordingly. This case emphasises that the passage of time does not always play a determining role in property settlement arrangements.