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Property – leave to proceed sought – costs could equal or exceed claim – hardship

In Lacy & Cloett [2020] FCCA 791 (9 April 2020) Judge Boyle dismissed an application by a de facto partner (Ms Lacy) for leave pursuant to s44(6) of the Family Law Act to commence property proceedings out of time.

The respondent (Mr Cloett) opposed the application.

The parties lived together for five years. There were no children. A property was bought by the respondent for $399,000 with a mortgage of $364,930. The applicant alleged that she paid $24,000 towards the deposit and $1000 per month towards repayments. The respondent’s case was that those payments were rent; that he had given the applicant money and that her loans to him were repaid.

After separation the respondent’s property lost value from $575,000 in 2018 to $499,000 in 2019 (its mortgage at trial being $376,000) and the applicant bought her own home for $500,000 with a mortgage of $385,000. She argued that she would suffer hardship within the meaning of s44(4) if leave were not granted.

The court (at [16]) cited Whitford [1979] FamCA 3 in which the Full Court said that “where the costs which the applicant will have to bear…are about as much [as] or more than what the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted”.

The court said (from [30]):

“ …[T]here is no adequate explanation advanced by the applicant with respect to delay in filing proceedings. (…)

[35] The applicant should have filed an application for property settlement by October 2016. Despite having spoken with a solicitor shortly after separation in September 2014, and receiving advice in March 2018 from her current solicitors, no application was filed until the current application on 4 April 2019.

[36] The parties are currently in a similar financial situation in terms of assets and liabilities. Life has moved on for both of them, as one would expect, in the years following separation. The respondent has refinanced the property, as he was entitled to do.

[37] There is a modest pool of assets. The parties have been separated for five years at the date of filing. The costs of the litigation would at best limit any amount received, and there is a real possibly could equal or exceed it.”

Robert Glade-Wright is the founder and senior editor of The Family Law Book, a one-volume loose-leaf and online family law service (thefamilylawbook.com.au). He is assisted by Queensland lawyer Craig Nicol, who is a QLS Accredited Specialist (family law).

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