Could vs Would: The One Word That Won the Appeal !

In Hallett & Hallett [2025] FedCFamC1A 188, Justice Schonell of the Federal Circuit and Family Court of Australia (Division 1, Appellate Jurisdiction) overturned a decision that refused a wife leave to commence property proceedings out of time. The appeal succeeded because the primary judge mistakenly found that hardship “could” arise if leave were not granted — rather than determining, as required by law, that hardship “would” arise. This seemingly minor linguistic difference proved legally fatal, underscoring the precision demanded when assessing hardship under s 44(4) of the Family Law Act 1975 (Cth).

Facts and Issues

• Parties: Ms Hallett (Applicant/Wife) and Mr Hallett (Respondent/Husband).
• Relationship: Together since 2006, married in 2010, separated in 2021. One child, born 2020.
• Post-Separation Events:
• In 2021, the husband paid the wife $375,000. The husband said it was a final property settlement; the wife said it was only an interim payment.
• The wife received legal advice in 2022 but did not file an application for property adjustment until March 2025 — 17 months outside the 12-month limitation after divorce.
• Primary Judge’s Decision (May 2025):
• Found hardship “could arise” if leave were not granted (¶88).
• Still refused leave, citing delay, weak justification, and prejudice to the husband (¶98).
• Appeal: The wife sought leave to appeal, arguing the judge misapplied s 44(4) by using “could” instead of “would” when assessing hardship.

Key Issues:

1. Did the primary judge err in law by failing to make the required finding that hardship “would” be caused (not merely “could”)?
2. Should the appeal court grant leave and remit the case for rehearing?

Law

• Family Law Act 1975 (Cth):
• s 44(3) – proceedings for property settlement must be instituted within 12 months after divorce unless leave is granted.
• s 44(4) – the court must not grant leave unless satisfied that the applicant would suffer hardship if leave were refused.
• Precedents:
• Whitford & Whitford (1979) FLC 90-612 – hardship requires a finding that it would be caused; courts retain discretion even if hardship is proven.
• Jacenko & Jacenko (1986) FLC 91-776 – the applicant must establish (a) a prima facie case, (b) actual hardship, and (c) an explanation for delay.
• Hardwick & Hardwick (No 2) [2022] FedCFamC1A 216 – clarified that hardship must be real and substantial.
• House v The King (1936) 55 CLR 499 – appellate principles for review of discretion.
• Boensch v Pascoe (2019) 268 CLR 593 – appellate courts may intervene where an error of principle affects discretion.

Application

1. Error in Language and Legal Threshold (¶¶ 26–27)

Justice Schonell found the primary judge failed to apply the statutory threshold correctly. By stating hardship “could arise”, the judge addressed only the possibility of hardship rather than the fact of it.

“By adopting the language of ‘could,’ the primary judge addressed the mere possibility of hardship rather than the actuality of it.” (¶27)

This omission constituted an error of law because s 44(4) requires a finding that the applicant would suffer hardship.

2. Failure to Assess Degree of Hardship (¶25–27)

The appellate court emphasised that courts must consider not just the presence but also the degree of hardship. The primary judge never weighed whether the hardship outweighed the inadequate explanation for delay.

3. Application of House v The King

Because the judge failed to make the necessary finding and misapplied the statutory test, the appeal court was entitled to intervene. The exercise of discretion miscarried through legal error (¶21–22).

4. Substantial Injustice (¶29)

Justice Schonell found that refusing leave would cause substantial injustice — the wife would lose the right to seek potentially $2 million in property adjustment (¶13–14). This justified both granting leave to appeal and allowing the appeal outright.

Judgment and Reasoning

Justice Schonell:

• Granted leave to appeal.
• Allowed the appeal and set aside the earlier refusal of leave.
• Remitted the wife’s application for rehearing before a different judge (¶33).
• Granted costs certificates to both parties under the Federal Proceedings (Costs) Act 1981 (Cth) (¶34).

The Judge reasoned that the primary judge’s linguistic imprecision led to a fundamental legal error — an incorrect threshold test under s 44(4).

“Section 44(4) of the Act is expressed in mandatory terms directing a court not to grant leave unless it determines that the applicant for leave would suffer hardship if leave were not granted.” (¶22)

The Court reinforced that the difference between “could” and “would” was not semantic but substantive — it changed the entire legal standard.

Key Citations

• Definition of hardship and statutory threshold — ¶¶ 22–27
• Appeal principles — ¶21 (House v The King)
• Finding of error — ¶27
• Substantial injustice and leave granted — ¶29
• Remitter and rehearing — ¶33–34

Take-Home Lesson

This case is a masterclass in precision of legal language. One misplaced word—“could” instead of “would”—transformed a correct reasoning process into a reversible legal error. Hallett & Hallett reinforces that appellate courts will intervene where a trial judge misstates or misapplies the statutory threshold for hardship.

In practical terms, it reminds practitioners that hardship under s 44(4) must be proven as a real and probable consequence, not merely a possibility.