What Can You Do if Your Ex-Partner Is Delaying a Financial Settlement?
If you find that your ex-partner is intentionally delaying the property settlement process after separation or divorce, it can be a frustrating and stressful experience. Fortunately, there are proactive steps you can take to keep the process moving and protect your financial interests. Here’s what you can do:
Request Full Financial Disclosure: Under Australian family law, both parties are required to provide full and frank disclosure of their financial situation. If your ex is withholding documents or not providing accurate information, you can formally request disclosure through your solicitor. If your ex refuses, you can apply to the court for an order compelling them to provide the necessary financial documents.
Engage in Mediation or Negotiation: If your ex is refusing to negotiate, consider applying for family dispute resolution (FDR). Mediation can provide a structured environment in which both parties can attempt to resolve financial disputes. If your ex still refuses to engage, this can be used to show the court that you have made every effort to resolve matters outside of court.
Initiate Court Proceedings: If informal negotiations and mediation are unsuccessful, you can file an application for property settlement in the Family Court or Federal Circuit Court. Once court proceedings begin, strict timelines and rules come into play, meaning your ex can no longer delay the process without facing consequences.
Apply for Interim Orders: If your ex’s delays are causing immediate financial strain, such as missing mortgage payments or withholding money from joint accounts, you can apply to the court for interim orders. These temporary orders can require your ex to make financial contributions or prevent them from disposing of assets until the final settlement is reached.
Seek a Costs Order: If your ex is deliberately delaying the process without valid reasons, you can request a costs order. The court may order your ex to pay your legal fees if their delay tactics are unreasonable, adding financial pressure to their continued stalling.
Why Do Ex-Partners Delay Financial Settlements?
There are many reasons why an ex-partner might delay a financial settlement after separation. While some delays are due to genuine misunderstandings or confusion about the process, many are strategic or emotional. Here are some common reasons why ex-partners may stall a settlement:
Control Over Assets: An ex-partner may want to maintain control over assets like the family home, business interests, or high-value investments. By delaying the settlement, they can continue benefiting from these assets, such as living in the family home rent-free or using business income for personal expenses.
Not Ready to Move On: Sometimes, emotional factors play a significant role in delaying a financial settlement. An ex-partner may not be emotionally ready to finalise the separation and use delays as a way to maintain some control or connection with the other party.
Anticipating Financial Gains: Delays might be a financial strategy, with the ex-partner hoping that certain assets, like real estate or investments, will appreciate in value, thus increasing their share in the final settlement. Alternatively, they may be expecting an inheritance or other financial windfall that they do not want included in the asset pool.
Manipulating Time Limits: In some cases, an ex-partner may try to delay proceedings to push the settlement closer to the time limits. Under Section 44(3) of the Family Law Act 1975 (Cth), married couples have 12 months from the date of divorce to file a property settlement application, while de facto couples have two years from the date of separation. If these limits are missed, it can be challenging to bring a claim without court approval.
How Ex-Partners Delay Financial Settlements
Delays in property settlements can take various forms, and understanding the tactics an ex-partner may use can help you respond effectively:
1. Refusing to Provide Full Disclosure
In family law matters, both parties are required to provide full and frank financial disclosure. This includes all assets, liabilities, income sources, and financial resources. An ex-partner may try to delay the settlement by failing to disclose critical financial information, such as bank account details, business interests, or property holdings.
Case Example: Weir v Weir [1993] FamCA 100
In Weir v Weir, the husband concealed the existence of a significant overseas bank account. The court discovered this during proceedings, penalising the husband by reopening the case and awarding the wife a larger share of the asset pool. This case serves as a reminder that courts take non-disclosure seriously and will punish deliberate delays​.
2. Avoiding Negotiation or Mediation
Another common tactic is to refuse to engage in negotiation or mediation. The ex-partner may avoid attending mediation sessions or ignore settlement offers, prolonging the process unnecessarily.
Case Example: Black & Kellner [2017] FamCA 474
In Black & Kellner, the husband repeatedly refused to engage in mediation or respond to reasonable settlement offers. As a result, the court penalised him by ordering him to pay costs for dragging out the proceedings. This case demonstrates that courts will not tolerate stalling tactics and may impose financial consequences​.
3. Missing Mortgage Payments
Some ex-partners may deliberately miss mortgage or loan payments, causing financial difficulties for the other party. This tactic not only increases the financial burden on the other party but can also delay attempts to refinance or sell the property.
Case Example: Bateman & Gaffney [2010] FMCAfam 103
In Bateman & Gaffney, the husband deliberately stopped making mortgage payments, complicating the wife’s efforts to refinance the property. The court intervened, ordering him to resume payments and awarding the wife a greater share of the property pool as compensation for the financial stress he caused​.
4. Ignoring Correspondence
Some ex-partners may try to delay the process by ignoring correspondence from solicitors or refusing to respond to court filings. This tactic can lead to unnecessary delays and additional legal costs for the other party.
5. Disposing of Assets
Delaying the settlement can give an ex-partner time to dispose of or transfer assets, effectively reducing the asset pool. This might include selling property, withdrawing funds from accounts, or gifting assets to friends or family members.
Case Example: Kennon v Spry [2008] HCA 56
In Kennon v Spry, the husband transferred assets into a trust to prevent them from being included in the property pool. The High Court ruled that the assets should be considered part of the property settlement, demonstrating that the court can set aside attempts to hide or dispose of assets during proceedings​.
What Are the Risks of Delaying a Financial Settlement?
While an ex-partner may perceive some benefits in delaying a settlement, there are significant risks and disadvantages to this approach:
1. Assets Are Valued at the Time of Settlement, Not Separation
Under Australian family law, assets and liabilities are valued at the time of settlement, not the time of separation. This means that any increase in the value of assets or additional debts accrued during the delay will be included in the final property pool. This can backfire on the delaying party if the other party’s assets appreciate over time.
Case Example: Farmer & Bramley [2000] FamCA 1615
In Farmer & Bramley, the husband’s business significantly increased in value between the time of separation and the final settlement. The court included this increased value in the asset pool, resulting in a larger settlement for the wife. Delaying the settlement ultimately worked against the husband’s interests​.
2. Increased Legal Costs
The longer a financial settlement is delayed, the higher the legal costs for both parties. Court appearances, solicitor fees, and mediation costs can quickly add up, placing additional financial strain on both parties.
3. Penalties for Non-Disclosure
Failing to disclose financial information or deliberately delaying proceedings can result in penalties. Courts may issue costs orders against the delaying party or adjust the settlement to reflect the non-compliance.
Court-Imposed Consequences for Delays
The courts have made it clear in several cases that deliberate attempts to delay property settlements will not be tolerated. In Weir v Weir, Black & Kellner, and Kennon v Spry, the courts issued severe consequences for non-disclosure, refusal to engage in settlement discussions, and attempts to hide or dispose of assets. These cases illustrate the courts’ commitment to ensuring fairness and transparency in family law proceedings.
Conclusion: Moving Forward with Your Property Settlement
Delays in property settlements can be frustrating, but there are steps you can take to move the process forward and protect your financial interests. Whether through requesting full disclosure, engaging in mediation, or initiating court proceedings, it’s important to remain proactive and vigilant. Courts have demonstrated a firm stance against stalling tactics and are willing to impose financial penalties and adjust settlements to address deliberate delays. If your ex is delaying a financial settlement, seek legal advice promptly to ensure your rights are protected and to work towards a fair resolution.
