Adler and Adler

FEDERAL CIRCUIT COURT OF AUSTRALIA

ADLER & ADLER

[2017] FCCA 821

Catchwords:
FAMILY LAW – Leave to apply for property settlement out of time.

Legislation:
Family Law Act 1975 (as amended), ss.44(3), 44(4) & 44(6)

Cases cited:

Sharp & Sharp [2011] FamCAFC 150

Applicant:

MS ADLER

Respondent:

MR ADLER

File Number:

ADC 2948 of 2008

Judgment of:

Judge Mead

Hearing date:

23 December 2015

Date of Last Submission:

23 December 2015

Delivered at:

Adelaide

Delivered on:

26 April 2017

REPRESENTATION

Counsel for the Applicant:

Ms Read

Solicitors for the Applicant:

The Family Law Project

Counsel for the Respondent:

Ms Dickson

Solicitors for the Respondent:

David Burrell & Co

ORDERS

That the wife’s application for leave to institute proceedings for settlement of property out of time pursuant to Section 44(6) of the Family Law Act 1975 (as amended) be refused.
That the application filed herein on 19 January 2015 be otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Adler & Adler is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADC 2948 of 2008

MS ADLER

Applicant

And

MR ADLER

Respondent

REASONS FOR JUDGMENT

Background

On 19 January 2015 the wife filed an application wherein she sought both interim and final orders relating to property settlement, as well as an order that she be granted leave to file her initiating application out of time.
The parties married on (omitted) 1987. They had two children, Ms J born on (omitted) 1987 and Mr G born on (omitted) 1991. On 24 July 2008 the husband applied for divorce. In that application he deposed to the parties separating on 4 April 2005. The parties were divorced on 16 September 2008, with the divorce becoming final on 17 October 2008.
In the husband’s response to the wife’s property settlement application he sought by way of interim orders summary dismissal of the application and an order by way of security for costs in the sum of $20,000. The husband sought as final orders that the wife’s application be dismissed by way of summary dismissal and that she pay his costs.

The Law

Section 44(3)(a) of the Family Law Act 1975 (as amended) precludes the institution of an application for settlement of property except by leave of the Court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage after the expiration of twelve months after the date on which the divorce order took effect. That same section provides that the Court may grant such leave at any time even if the proceedings have already been instituted.
Section 44(4) of the Act provides that the Court will not grant leave for the institution of the proceedings unless it is satisfied that hardship would be caused to a party to the marriage or a child if leave were not granted.
The Courts powers with respect to summary dismissal rest in Section 17A of the Federal Circuit Court of Australia Act 1999 (as amended) and Rule 13.10 of the Federal Circuit Court Rules.
The relevant parts of Section 17A for the purposes of these proceedings are Subsections (2) and (3) which provide as follows:
“(2)The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of proceedings if:
a)    the first party is defending the proceeding or that part of the proceeding; and
b)    the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3)For the purposes of this Section, a defence or a proceeding or part of a proceeding need not be:
a)    hopeless; or
b)    bound to fail.”
Rule 13.10 of the Federal Circuit Court Rules is in the following terms:
“The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
a)    the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
b)    the proceeding or claim for relief is frivolous or vexatious; or
c)    the proceeding or claim for relief is an abuse of the process of the Court.”
Parliament determined, in enacting the provisions of Section 44(3) of the Family Law Act 1975 (as amended) that a time limit should be placed on the time in which parties to a marriage who have divorced are able to institute proceedings for settlement of property.
The Full Court of the Family Court of Australia considered in some detail the meaning of “hardship” in the context of Sections 44(3) and (4) of the Family Law Act 1975 (as amended) in the case of Sharp & Sharp [2011] FamCAFC 150.
In the course of that judgment Their Honours reviewed an extensive list of authorities relating to issues of limitation periods generally but also in particular as they relate to Section 44(3)[1], as well as authorities relating to the issue of “hardship” in the context of those applications.
[1] s.44(3) Family Law Act 1975 (as amended)
In the joint judgment of May and Ainslie-Wallace JJ Their Honours said under the heading “Relevant Law” in paragraphs 12 to 16 inclusive:
“12. It is important to bear in mind the purpose of s 44 in the context of the Act, which is that time limits are to be observed as the wording of that section makes clear. The principles concerning applications for leave to commence an action out of time are well known. In Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 551 McHugh J said:
“The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that “[w]here there is delay the whole quality of justice deteriorates”.
13.At 553 his Honour continued:
“A limitation period should not be seen therefore as an arbitrary cut-off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated...
A limitation provision is the general rule; an extension provision is the exception to it ...”
14.There is nothing to suggest that this expression of the law in general is not entirely applicable to a consideration of s 44 of the Act. Indeed so much is seen from the opening words of the s 44(4), “[t]he Court shall not grant leave under subsection (3) unless ...”.
15.In Whitford & Whitford (1979) FLC 90-612 the Full Court noted at 78,146 that while the section intends to confer power to grant leave to avoid hardship, the “... power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.”
16.We accept that s 44(4) provides the criteria by which we must be satisfied prior to exercising our discretion to grant leave pursuant to an application brought under s 44(3). In accordance with s 44(4)(a) it must be established in this case that hardship would be caused to the husband if leave were not granted. If hardship is established, the Court must nevertheless be persuaded that the discretion should be exercised in favour of the applicant to grant leave to allow the application: Whitford & Whitford (1979) FLC 90-612.”
Their Honours went on to discuss the issue of hardship in paragraphs 17 to 22 of their judgment in which Their Honours said as follows:
Hardship
“17. It is well accepted that hardship for these purposes is more than the loss of a right to commence proceedings. It is the consequences attending the loss of the right to commence proceedings that constitutes hardship. That is a matter to be determined by the circumstances of the particular case.
18.In assessing hardship in this context the well established test is that the applicant must have a prima facie claim worth pursuing or a “real” probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship. However, whether or not hardship exists is not to be assessed only by reason of the monetary value of the probable order to be made if leave were granted.
19.In considering the meaning of hardship, in Whitford at 78,144 the Court said:
“... The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits. If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted ... If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.”
20.Further at page 78,145 the Court said:
“... As a general proposition it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship. Similarly, where the costs which the applicant will have to bear himself or herself are about as much 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. But otherwise we find no warrant in either subsec. 44(3) or 44(4) for saying that the right or entitlement lost must be a substantial one. (emphasis in original)”
21.At the same page the Court continued:
“In an appropriate case, and depending on the circumstances of the applicant or the children, hardship may be caused by the loss or deprivation of something which is of comparatively small money value ... “
22.If an applicant demonstrates hardship of the type discussed, then the applicant must then persuade the Court that in the exercise of its discretion leave should be granted.”

Summary Dismissal

It is of course the position of the respondent husband that the entirety of the proceedings instituted by the wife should be summarily dismissed, not just her application to apply for leave to institute the proceedings out of time.
If the Court finds that the applicant wife should not be granted leave to institute the proceedings pursuant to Section 44(6)[2], then the substantive application for settlement of property cannot proceed.
[2] s.44(6) Family Law Act 1975 (supra)
If however leave was granted to the wife, then the Court would have to consider the question of summary dismissal of the wife’s substantive application.

Application for Leave to Institute Proceedings Out of Time

The applicant wife is aged 53 years and the respondent husband is aged 55 years. Their two children achieved adulthood in 2005 and 2009 respectively. In circumstances where the parties were divorced on 16 September 2008, each of the parties had until 17 September 2009 to institute proceedings for settlement of property to comply with the terms of Section 44(3) of the Act. Neither party did so.
By the time the parties separated in April 2005 they had been in a relationship for approximately 20 years and had been married for just over 18 years.
It was common ground between them that at the commencement of their relationship they both had assets of minimal value. Throughout at least almost all of the period of the marriage, the parties (and subsequently the children) resided in a cottage known as Property W” which was situated on land owned by the husband’s parents.
The husband’s parents were farmers and lived in another home on the farm. It was common ground that when the parties moved into the cottage the accommodation could best be described as “basic”, but they were not required to pay rent and over the years various improvements were made to the property.
Eventually the property went from being a two bedroom very basic cottage to a six room cottage with running hot water. The main renovation, including the addition of four rooms, was commenced in or about 1990.
At the time the parties commenced their relationship in 1985 the wife was working as a (occupation omitted) at (employer omitted). She continued in that employment until shortly prior to the birth of the parties child Ms J in (omitted) 1987, at which time she took nine months maternity leave. She then returned to her employment at (employer omitted) on a part-time basis working as a (occupation omitted) until the birth of the parties son Mr G in 1991.
It was the wife’s evidence that she undertook some (omitted) work outside of the home between 1994 and 1996, working approximately four days per week and that she worked part-time at a (employer omitted) at the (omitted) between 1997 and 2000. She commenced employment in 2001 at (employer omitted).
It was her case that the extensions to the property were carried out in the main by the parties themselves without tradesmen, although with assistance from her brother over the years. She deposed to the husband never being employed on a full-time basis throughout the entirety of the relationship and to the parties Centrelink monies being spent on renovating the property.
It is the husband’s case that he was employed at the time the relationship commenced, but he says little about his employment between the commencement of the relationship and working at the (employer omitted) in 1992 and then studying (omitted) at university in 1993, later working as a (occupation omitted).
He said because of the nature of his work it was common for him to work varied hours and that he also assisted his father on the farm from time to time with odd jobs, although he was not involved in running the farm.
It was the husband’s case that his parents funded the majority of the improvements to the cottage in the amount of $22,000 and that the major renovations, which were commenced around the time the wife became pregnant with their second child, were undertaken by him with the wife’s assistance being minimal.
He deposed to the wife’s brother being paid for all of the work he undertook in cash so as not to affect his Centrelink benefits. It was the husband’s case that his father also assisted with the renovations.
In circumstances where the wife had the major responsibility for the care of the children and also was, for a significant period of the relationship, working outside of the home, he deposed to undertaking the majority of the day to day upkeep of the property including maintenance, grass cutting, fencing, building a shed and constructing the vegetable garden.
It was the husband’s case that other than the work on the renovations which were funded by his parents and the general maintenance work associated with residing in the cottage, together with involvement in a re-vegetation project on the property, he and the wife made no further improvements to either the cottage or the farm.
Annexure “A1” to the wife’s affidavit filed 19 January 2015 was a copy of correspondence from the husband’s father to the Department of Veterans Affairs dated 15 August 2002. In that correspondence he tells the Department that the husband and wife funded the cottage renovations with their own money and that he considered the property to be theirs. The husband disputed the validity of this document in his responding affidavit.
Whether the parties used their own funds for the renovation or the husband’s father paid, the cottage could not be “theirs”, at least legally, as it was on the same title as the farm. That is not to say however that the parties may not have had an equitable interest.
It was the wife’s case that the re-vegetation project undertaken in the 1990’s and 2000’s involved the parties planting 21,000 native trees on the property at their own expense, adding value to the property. The husband said that the majority of the improvements were completely destroyed by the (omitted) bushfires in January 2015.
The wife said that as well as the matters referred to by the husband, she arranged for gutters on the cottage to be installed at her cost and also purchased many second hand items and fittings for the cottage including carpet, curtains, blinds and plants.
She said many of the improvements came from her deceased father’s shed as he had been a (occupation omitted). The wife said she painted the bathroom and toilet and hand stained every interior board of walls and ceilings as well as repairing floors and fitting leadlight windows and paying for repairs.
It was her case that the insurance policy in respect of the cottage was in her sole name between 1999 and September 2014 when on her case she was forced by the husband to leave the cottage.
The wife deposed that she and the husband built up breeding stock of (omitted) with the husband saying that the parties adjisted (omitted) for a Mr M. It was his case that he had his father’s permission to adjist the (omitted) on his father’s property, and that eventually Mr M gave the husband eight (omitted) in lieu of any adjistment fees, which were used for breading starting in or about 2002.
He said at that time there were 10 (omitted), in 2006 (omitted) (omitted) and when the parties separated in 2005 there were 31 (omitted). He stated no significant monies were made from the sale of the (omitted) and any monies that were received were used by he and the wife for their mutual benefit.
Upon separation in April 2005, the applicant wife secured full-time employment at the (employer omitted). The husband was at that time employed as a (occupation omitted) on an hourly basis.
At separation, at which time the parties children were aged 17 and 14 years respectively, the wife and the children remained living in the cottage. Their residence continued to be on a rent free basis. The husband moved to reside in what he described as a “(omitted) house” on the farm.
The wife said that at the time of separation the husband gave her his verbal assurance that she would be able to remain living in the cottage, but that sometime in the latter part of 2005 or early 2006 he offered to pay her $60,000 to effect a matrimonial property settlement, resulting in her expressing interest in two properties at (omitted).
She deposed to the expressions of interest being given by her to land agents in anticipation of receiving property settlement monies from the husband.
She further deposed however to the husband changing his mind and telling her that she could stay at Property W, that he would never sell the property and that it would belong to the children one day. She also said that he told her she would be able to continue living rent free at the cottage.
It was the husband’s case that the total asset pool at the time of separation was approximately $15,700 exclusive of the wife’s superannuation. It was his case that for 19 years he and the wife had resided in the cottage on his father’s property rent free and that during that time they had only made a minimal financial contribution to the renovations.
He deposed to the parties mutually dividing their modest assets between them by agreement at separation, such that he kept a motor vehicle and some 31 (omitted), with the wife retaining her Toyota (omitted) motor vehicle (which he said had a value of $2,000 but in respect of which she owed his father $2,000) as well as the furniture and effects in the cottage and her superannuation the value of which was not stated in his affidavit sworn 23 April 2015.

The husband said that in early 2006 the wife approached him requesting a payment of $60,000 by way of property settlement, but that he told her not only did he not consider she was entitled to any further monies but that he didn’t have any further monies to pay to her in any event.
He said that at about the time of separation he and the wife had informal discussions in respect of property settlement issues and it was the wife’s position that it was too costly and stressful to have their agreement formalised by way of Court order.
The parties agreed that in February 2008 the wife wrote to the husband and his father (annexure “A2” to wife’s affidavit filed 19 January 2015) thanking them for agreeing to let her stay in the cottage as long as she wanted to but suggesting that she purchase it from them. In the letter the wife said that in the alternative she would like to stay in the cottage until she found a suitable house that she could afford and then use the “settlement money” as a deposit.
It is the husband’s case that both he and his father informed the wife that it was not possible to sub-divide the cottage given the zone restrictions applying to the property, which comprises one title. The matter went no further save that it is the husband’s case that his father was becoming increasingly annoyed that the wife was not paying rent. There was no evidence adduced of any demand for same.
It is the wife’s case that in 2009 the husband suggested reconciliation but then recommenced his relationship with his partner Ms S. It is the husband’s case that whenever he raised the issue of the wife paying rent to his father she became angry and/or avoided communicating with him about that issue.
The husband’s father died in (omitted) 2009. The wife attended the funeral. Subsequent to the husband’s father’s death, the husband inherited the property and moved into the main house on the farm. The wife remained living in the (omitted) Cottage.
The time to institute proceedings for settlement of property had expired on 17 September 2009, shortly prior to the husband’s father’s death. It was the husbands case that at the time the parties divorced the wife had not raised with him issues of formal property settlement, nor had she taken any steps either formal or informal which indicated to him that she intended on pursuing any form of settlement. It was his evidence that meetings that he tried to organise to discuss the issue were cancelled by the wife.
It was the husband’s case that he obtained advice from the Legal Services Commission with respect to issues of time limits on property settlement applications and thereafter organised his affairs reliant on such advice.
It was the husband’s case that some three or four months after the expiration of the relevant time period the wife raised with him the issue of settlement of property and became angry when he informed her that in his view a property settlement had been completed and that the time to apply had expired in any event. The wife continued to live in the cottage rent free.
It was the wife’s case that in 2012 the husband again suggested reconciliation, and when she declined his suggestion the husband told her that she had to leave the property. Nevertheless, the wife remained in the property.
By early 2014 the husband, having formed the view that he was not in a position to run the farm himself whilst continuing to (employment omitted), determined to sell the property. It was the husband’s case that he first informed the wife in or about April 2013 that he was seriously considering selling the property. It was his case that when he told the wife in or about March 2014 that he was intending to proceed to sell the property and to place it on the market for sale in approximately September 2014, the wife informed him that she had been looking at houses to buy anyway.
The husband said that on 28 April 2014 he emailed the wife as to his intentions of selling the property. Annexure “D” to his affidavit filed 23 April 2015 is a copy of that email and the wife’s email response dated 30 April 2014 in the following terms:
“Hi Mr Adler,
Thank you for letting me know I will ramp up the house hunting. I have told Ms J and Mr G. We would like to meet with you and discuss things – we are all free this Sunday afternoon or evening. Does that suit you? Ms L is welcome to come too. I can cook dinner if that suits. Cheers Ms Adler”
It was the wife’s case that subsequent to the death of the husband’s father in 2009 she had continued to add value to the (omitted) property and maintained the cottage because of her understanding that she was able to remain in the property, and that as late as October 2013 she had a satellite dish installed on the roof and the gas hot water service serviced.
She said that she also took the leadlight windows to be restored at the cost of a few hundred dollars for each window and that she had also maintained the house and garden and done other work in and about the home. It was her case that the husband was aware of all of the maintenance and home improvements she had effected on the cottage both during the marriage and post-separation.
The wife deposed to being shocked that the husband would consider selling the farm and thereby the cottage.
Annexure “E” to the husband’s affidavit filed 23 April 2015 is an email from the wife to the husband dated 3 June 2014 wherein she advises the husband that a house has come on the market that she could buy and start moving straight away if he could pay $30,000 towards the deposit.
It was the husband’s case that he had come to the conclusion that the wife would not leave the property unless he paid her some money.
Annexure “A4” to the wife’s affidavit filed 19 January 2015 is a letter she deposed to having received from the husband wherein he offered to her the sum of $20,000 conditional upon her vacating the property by 13 September 2014. It is clear in the letter that the husband did not consider that he owed the wife any more money by way of property settlement. It appears from the date on the attached draft deed that the letter was sent on approximately 16 June 2014.
It was the wife’s case that accompanying the letter being annexure “A4” to her affidavit was an agreement drawn by the husband or on his behalf wherein it stated that at the request of the parties children and subject to the wife vacating the cottage and leaving it in a saleable state on or before 3 September 2014, the husband would provide the wife with $20,000 to permit her to settle on the purchase of a property.
The deed set out the various requirements of the husband in terms of the wife adequately attending to maintenance of the cottage before vacation.
It was the wife’s case that she signed the agreement in desperation as she needed the money to purchase her own property. The wife confirmed to the husband that she would accept the sum of $20,000 in an email to him on 30 June 2014 (annexure “F” to the husband’s affidavit filed 23 April 2015).
There were then further negotiations between the parties some of which are evidenced in the email of the wife to the husband dated 6 July 2014 (annexure “F” to the husband’s affidavit filed 23 April 2015) with the wife signing the final draft of the deed on 7 July 2014 and the husband on 12 July 2014.
On 8 July 2014 the husband paid the wife $17,000 by way of bank cheque.
The deed provided, at the wife’s suggestion, that she vacate the cottage on or before 3 September 2014. She did not vacate same until 13 September 2014.
It was the husband’s case that he declined to pay the further $3,000 to the wife as provided for in the deed because of the uninhabitable state in which he said the wife left the cottage, thereby on his case failing to comply with conditions 2 and 3 of the said deed.
The husband placed the property on the market for sale. In November 2014 the wife lodged a caveat over the property. The husband warned the caveat in December 2014. On 16 March 2015 the husband instructed his legal representative in these proceedings, and it was noted on the file, that the property was no longer on the market for sale and that he would not dispose of the property. This was without prejudice to his position. The property was, according to the husband, severely damaged in the (omitted) fire.
The wife conceded in paragraph 89 of her affidavit filed 19 January 2015 that she had sought legal advice on two occasions from Mr I family lawyer and subsequently from the Legal Services Commission around the time of separation and had not pursued any application because of the very modest assets of the parties at that time. She deposed to being informed that she had matrimonial property rights in July 2014.
The wife sought final orders in her application filed 19 January 2015 the following:
1.That the husband shall pay to the wife settlement monies as determined appropriate by this Honourable Court.
2.That each party shall hereafter pay or cause to be paid and indemnify the other from any debts on their sole name including but not limited to any bank or personal loans, credit card debts or monies owing to the Australian Taxation Office.
3.That other than is specifically provided for, the parties are solely entitled to the exclusion of the other party to all property and chattels in the possession of each of the parties as at the date of the making of orders including but not limited to:
a)Any monies in any bank or building society;
b)Superannuations;
c)Shareholdings and other investments;
d)Motor vehicles;
e)Any life insurance or life assurance; and
f)Furniture and effects
4.That each party shall do all such acts and things and sign all such necessary documents to give effect to the terms of the order.
The applicant wife filed two affidavits prior to the hearing in December 2015, namely her affidavit in support of her application filed 19 January 2015 and an affidavit in reply filed 11 June 2015 with respect to the affidavit of the respondent husband filed 23 April 2015.
In her first affidavit she set out from her perspective the history of the relationship including allegations of physical and verbal violence towards her by the husband on a number of occasions.
She deposed to the parties work histories both prior to separation in April 2005 and subsequent to separation.
She deposed to the parties living arrangements with their children at “(omitted) Cottage” from mid-1987 to the date of separation in April 2005 and to her continued residence in that property from separation in April 2005 until her vacation of same in September 2014.
She deposed to the property being owned by the husband’s parents and to the husband inheriting the property following the death of his father in (omitted) 2009, with the property being transferred to the husband’s sole name in February 2011.
She deposed to the husband receiving a substantial cash inheritance from his father and in paragraph 65 said “the main asset of the marriage is the property located at Property H in Property H (herein after referred to as “the matrimonial property”).”
She deposed to there being no mortgage attached to the property, to being in receipt of superannuation but not aware of the husbands superannuation entitlements and to the husband receiving a substantial cash in heritance from his father but not being aware otherwise of any savings or investments of the husband.
She deposed to the asset pool otherwise being minimal.
The wife deposed to the parties various discussions and negotiations regarding her residence in “(omitted) Cottage” post-separation and in paragraph 87 said “the husband has always assured me that I could remain living at the matrimonial property.”
In paragraph 88 she deposed that “the husband has always told me over the years that I have no other entitlement.”
The wife deposed to seeking legal advice prior to the death of the husband’s father and at the time of separation. She said she sought further advice in July 2014 when she was advised not to sign the agreement prepared by the husband and that she had matrimonial property rights.
She deposed to a taxable income for the year ending 30 June 2014 of $20,514 and to the husband having a two month holiday in (country omitted) with his new partner as well as holidays in (country omitted) and (country omitted) when she looked after his animals.
There was no reference whatsoever in the wife’s affidavit to the issue of hardship in circumstances where in the interim orders sought by her she sought that leave be granted for the Court to accept the application out of time.
The wife’s application was filed some six years and three months post the date of the parties divorce and accordingly some five years and three months out of time.
The wife’s second affidavit was filed on 11 June 2015. Again the applicant wife does not depose to any hardship that would be caused to her if leave was not granted. She again referred to the contributions she said she made to the cottage on the property now owned by the husband pursuant to his inheritance and she repeated her earlier evidence as to her understanding that the husband agreed she could stay in the cottage as long as she wished.
In Sharp & Sharp (supra) Their Honours said, in the passages that I have already quoted“it is the consequences attending the loss of the right to commence proceedings that constitutes hardship. That is a matter to be determined by the circumstances of the particular case.”[3]
[3] Sharp & Sharp [2011] FamCAFC 150, paragraph 17
Their Honours went on to say in paragraph 18 of the Sharp & Sharp judgment “in assessing hardship in this context the well established test is that the applicant must have a prima facie claim worth pursuing or a “real” probability of success.”
They stress however in the same paragraph 18 that “whether or not hardship exists is not to be assessed only by reason of the monetary value of the probable order to be made if leave were granted.”
The question then for the Court is whether if leave was granted to the applicant wife to pursue her claim for settlement of property, she would have a real possibility of success on the merits which in turn would result in a positive outcome to the applicant that would alleviate any hardship she may suffer if she was not able to pursue her claim.

Conclusion

The relevant facts for the purposes for these reasons are as follows:
·The parties commenced a relationship in 1985, cohabitation some time in 1986 and commenced living at “(omitted) Cottage” in mid-1987.
·“(omitted) Cottage” was a building on a property owned by the husband’s parents.
·The parties resided in the property rent free from approximately mid-1987 to the date of separation on 1 April 2005, the period of approximately 18 years.
·At no time during that 18 year period did the parties pay rent, nor was it requested of them by the husband’s parents.
·In mid-1987 the cottage was of a very “basic nature”, there was no hot water supply and an outside toilet.
·Various improvements were made to the cottage during the period of cohabitation.
·In or about 1990 the cottage was extended by the addition of four rooms. The husband’s parents provided some $22,000 towards renovations, the majority of which was utilised in the addition of the four rooms.
·Over the period of cohabitation the parties also improved the property and expended some of their own money on renovations and maintenance and also undertook physical labour to assist in renovations and maintenance.
·The parties separated on 1 April 2005. The wife and the children remained living in the cottage, rent free. The property continued to be owned by the husband’s father. The husband’s father did not seek any rent from the wife during his lifetime.
·The children were aged 17 ½ and 14 ½.
·The children remained in the primary care of the wife upon separation.
·At separation the parties had, notwithstanding having had no rental or mortgage commitments for the 18 year period of their cohabitation, only acquired assets of a minimal amount (wife’s affidavit) or $15,700 (husband’s affidavit).
·The husband paid child support for the child Mr G post-separation. The husband’s income was limited and therefore child support was minimal.
·The husband paid some other expenses for the children post-separation, the extent of which contribution is disputed by the wife.
·The wife continued to undertake maintenance on the cottage post-separation including restoring of windows, painting, servicing of the hot water system and installing security screens and air-conditioning. The wife deposed to the husband at all times post-separation until late 2013 telling her that she could remain in the cottage for the rest of her life.
·The husband did not press with the wife post-separation either the question of rent or her vacating the property in circumstances where he said she was amenable to discussions about same.
·The wife said the husband offered to pay her $60,000 to effect a property settlement post-separation such that in February 2006 she expressed interest in two properties at (omitted) in anticipation of receiving the settlement monies.
·It was the husband’s case that in or about early 2006, the wife sought $60,000 to enable her to purchase a property, his response to the wife was that their property owned at separation (excluding her superannuation) had been divided, he did not consider she was entitled to any further monies and in any event he had no capacity to pay those funds to the wife.
·The husband disputes he made the offer alleged by the wife.
·It was the wife’s case the husband changed his mind and told her she could stay at Property W, that he would never sell the property and that it would belong to the children one day. The husband concedes that he may have indicated that if the children took an interest in and worked the land the property may pass to their generation.
·In February 2008 the wife sent correspondence to the husband and his father thanking them for allowing her to continue to live at the cottage as long as she wants to and expressing an interest in buying the cottage from the husband’s father.
·She proposed that the amount be determined by a valuation of the property overall, a valuation of the property without the cottage and trees the parties had planted, and then an equal division of the difference between those two amounts.
·By that time the wife had sought legal advice with respect to settlement of property from a private solicitor and from the Legal Services Commission.
·The husband deposed to the wife being unwilling to formalise the division of property the parties had effected between themselves upon separation;
·The husband filed an application for divorce on 24 July 2008.
·He obtained legal advice from the Legal Services Commission as to time limits applying to property settlement applications.
·The parties were divorced on 16 September 2008.
·By then the wife had remained living in the (omitted) Cottage for some three and a half years post-separation, rent free.
·The time for the filing of an application for settlement of property expired on 17 September 2009.
·The husband’s father died in (omitted) 2009.
·The husband deposed to the wife approaching him some three to four months after the expiration of the time period to raise the issue of settlement of property.
·He advised her that the time had expired and the property settlement had been effected. The conversation ended.
·The wife did not dispute that allegation in her response affidavit filed 10 June 2015.
·Upon the father’s death the husband and his partner moved into the main house on the property on which (omitted) Cottage was situated.
·The wife remained living in the cottage debt free.
The children had turned 18 years of age in 2005 and 2009 respectively. The wife deposed to the husband telling her “in 2012” that if she was not prepared to decide to reconcile with him by the following day she had to leave the property.
·The husband denied that allegation.
·In or about April 2013, the husband deposed to telling the wife that he was serious about selling the property and would likely do so shortly.
·The wife said the husband first told her about his intention only a short time before March 2014 and said he would give her the deposit for a house.
·In March 2014 the husband confirmed his intention of selling the property later that year.
·By email dated 30 April 2014 the wife thanked the husband for advising her of his intentions and saying she and the children would like to discuss the matter with him. She invited him for dinner.
·Shortly thereafter the wife agrees that she asked the husband for $50,000 towards the purchase of a house.
·Following upon the unsuccessful discussion, the husband formed the view that without some payment the wife would refuse to leave the cottage.
·On 3 June 2014 the wife sent an email to the husband requesting that he pay $30,000 deposit towards a home for her.
·Shortly thereafter the parties negotiated a $20,000 payment.
·A deed was prepared by or on behalf of the husband and forwarded to the wife by email in early July 2014.
·The ultimate agreement was that the husband would pay $20,000 by way of $17,000 within 48 hours of the wife signing the deed with the balance of $3,000 to be paid within ten days of the wife vacating the cottage, provided she met conditions in paragraphs 2 and 3 of the deed to leave the property in good condition.
·The wife sought legal advice about the deed. The wife deposes to being advised not to sign the deed and advised the husband of that advice in an email to him sent at 5:11pm on 30 June 2014. The wife signed the deed.
·The husband paid the wife the $17,000 as agreed.
·The wife moved out of the premises.
·The husband considered that the wife had left the premises in a shocking state, requiring much remedy.
·The husband declined to pay the balance of $3,000.

Has the wife established hardship as required by Section 44(3)

The wife’s application was simply in terms of “That leave be granted for the Court to accept this initiating application out of time.” The Court must assume that the applicant was relying on the provisions of ss. 44(3), 44(4) and 44(6) of the Act[4].
[4] Family Law Act 1975 (as amended)
The wife filed two affidavits in support of her application, one with respect to leave to apply out of time and the other with respect to settlement of property. In neither affidavit did the wife set out her evidence as to hardship that might be caused to her if leave to institute proceedings out of time were not granted by the Court.
The applicant’s Counsel spoke to written submissions as to the question of hardship. It was submitted in paragraph A3 on page 3 of Counsels written submissions that the affidavits filed by the applicant on each of 19 January 2015 and 11 June 2015:
“set out the hardship that would be caused to the applicant if leave were not to be granted and set out sufficient detail for the granting of the leave by virtue of the history contained in those affidavits in particular as to the arguable strength of her case as to her just and equitable entitlement compared to the $17,000 the respondent paid to get her to vacate the Property H property.”
As the cases to which I have referred make clear, the Act[5] is clear that an application for settlement of property shall not be instituted other than by leave of the Court or with the consent of both parties if the application is filed more 12 months after the date on which a divorce order takes effect.
[5] Family Law Act (supra)
In this case the application was filed five years and almost three months after that date. I have referred earlier herein to the purpose behind the time limitation as referred to in the authorities to which I have referred.
The Parliament has determined, by the use of the words “the Court shall not grant leave” in Section 44(4) of the Act that the granting of leave should be the exception rather than the rule, otherwise of course, as referred to in numerous authorities, the point of the legislative limitation would be lost. The Parliament has determined that leave to apply out of time shall not be granted unless hardship would be caused to a party to the marriage[6].
[6] s.44(4) (supra)
The Court of course still has a discretion to grant the leave even if hardship would be caused to a party if the leave was not granted[7].
[7] Sharp & Sharp (supra)
If the wife in these proceedings were denied leave to proceed with her application out of time would she suffer hardship and if so, would the nature of the hardship be such to enliven the Courts discretion to grant the leave.
Although hardship is not necessarily defined in monetary value, Their Honours May and Ainslie-Wallace JJ said in paragraph 18 of the judgment in Sharp & Sharp[8]: “…the well established test is that the applicant must have a prima facie claim worth pursuing or a real probability of success…”
[8] Sharp & Sharp (supra)
They went on to say in paragraph 19 of the same case “…If there is not real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted…if the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.”
The parties in this case separated in April 2005. At that time they had lived rent free in a cottage on the father’s family property for some 18 to 20 years. They had made some improvements to the property with the financial assistance of the husband’s father, maintained the property and planted a significant number of trees on the larger farm property.
Notwithstanding no rental or mortgage commitments during that entire period, it was common ground that at most their matrimonial assets at the time of separation consisted of $17,500 (husband’s case) or modest assets (wife’s case) and an entitlement to superannuation of the wife not quantified by either party.
The wife retained her superannuation. She retained a motor vehicle worth approximately $2,000 in respect of which the husband deposed to her owing $2,000 to his father. That was not disputed by the wife in paragraph 24 of her affidavit filed 11 June 2015, wherein she said that she did not agree with the list of assets deposed to by the husband in paragraph 47 of his affidavit filed 23 April 2015 but did not dispute the sum allegedly owed to the husband’s father on account of the car.
The husband assessed the net pool at $15,700 excluding the wife’s superannuation, the value of which he deposed to not knowing. In paragraph 48 of his same affidavit he deposed to the asset pool being very modest and to how the assets were divided between the parties. The wife did not, in her affidavit in response filed on 11 June 2015, dispute that evidence.
At the time of the parties separation their oldest child Ms J was not quite 18 years of age. The younger child Mr G was not quite 14 years of age. The husband paid child support for Mr G post-separation albeit at a very minimal rate.
The wife remained living in the cottage initially with the children and apparently at least with Mr G until 2014 on a rent free basis, a period of some nine and a half years. The wife claims to have made improvements to the cottage during her period of occupation. She did not depose to any financial details of such improvements. The husband disputes the level of improvements and deposes to the unsatisfactory state of the premises when vacated by the wife in September 2014.
On the wife’s own evidence she sought advice regarding property settlement on three occasions, being two occasions prior to the death of the husband’s father and finally, in or about June and July of 2014, in respect of the deed presented to her by the husband when they had reached an agreement for payment to her of $20,000.
The deed stated clearly that the husband did not consider payment to the wife of $20,000 as a payment to which the wife was entitled but rather to enable her to settle on the purchase of a home at the request of the parties children.

Conclusion

I am not satisfied that the wife has made out a case for hardship to be occasioned to her if leave is not granted to her to apply for settlement of property out of time.
I am satisfied that at the time of separation the parties assets were negligible and that the only superannuation that existed was that of the wife’s, which was no doubt very modest.
The parties owned no real estate either during the course of their relationship and marriage or at the time of their separation.
Neither party contributed to the acquisition of any joint assets post-separation.
The wife claims to have contributed to the preservation and maintenance of an asset that ultimately devolved to the husband by virtue of an inheritance from his father.
During the nine and a half years post-separation residence in the cottage during which time the wife claims to have made the contribution she was not required to pay any rent, firstly to the husband’s father and thereafter to the husband upon his inheritance of the property.
The parties are in dispute as to any positive contribution to the preservation of the cottage by the wife, which the husband says if it occurred at all was negated by the state in which she left the property.
The wife agreed to accept $20,000 by way of two payments of $17,000 and $3,000 respectively from the husband in 2014 and signed a deed on 7 July 2014 acknowledging the specific terms of the payment to her. She did so, on her own evidence, against legal advice.
The husband inherited his father’s property upon his death in November 2009, some four and a half years after the parties separation. The husband deposed to listing the property for sale in August of 2014 at an asking price of $795,000 to $850,000 but deposed to having few interested parties and to the property being then significantly damaged in the January 2015 (omitted) bushfire.
The husband deposed to significant damage to the property in paragraph 105 of his affidavit filed 23 April 2015 and in paragraph 107 of the said affidavit to not all of the damage being covered by insurance and needing to utilise some inherited funds to assist in redeeming the damaged property.
The question of costs was referred to in paragraph 20 of the judgement in Sharp & Sharp[9] where Their Honours said:
“…Similarly where the costs to which the applicant will have to bear himself or herself are about as much 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…”
[9] Sharp & Sharp (supra)
The applicant deposed to an income of slightly in excess of $20,500 for the year ending 30 June 2014. In the husband’s affidavit filed 22 April 2015 he deposed to earning approximately $15,000 per annum. The applicant has very modest assets indeed and very limited income.
Litigation in a matter such as this would be expensive and the evidence relied on by the applicant is very general in nature. Valuations would need to be obtained and such valuations would require a retrospective element in order to be able to assess the parties contributions.
The husband deposed to a modest monetary inheritance, the inheritance of the property, the work and expense needed to remediate the property after the bushfires and the responsibility to provide care, including financial care to his mentally disabled brother in circumstances where his father left all of the property to him with an expectation that he also care for his brother.
It is the wife’s case that she did nothing to prosecute an application for settlement of property because of advice that she received while the husband’s father was alive to the effect that there was no property to claim. Thereafter she did not do so immediately upon receiving advice in 2014 that she had a claim for settlement of property, but rather accepted money from the husband, having signed an acknowledgement that she had no claim against him, in circumstances where from her perspective “time was of the essence.” Thereafter without further notice to him she filed a claim for settlement of property.
I find that taking into account all of the circumstances in this case, the wife’s claim for settlement of property is tenuous, that the costs of pursuing same will be significant both for her and for the husband, and that if she is unsuccessful the husband, who is entitled to have assumed he could conduct his financial affairs as he saw fit after taking into account his own legal advice, is at risk of expensive legal fees that may not be recoverable from the wife.
I am not satisfied that the wife will suffer hardship, but if she is at risk of any hardship, it is not likely to be alleviated by the Court granting leave for her to apply for property settlement out of time.
For those reasons I decline to give leave to the wife to apply for settlement of property out of time pursuant to Section 44(6) of the Family Law Act 1975 (as amended).
In those circumstances it is not necessary for me to address the issue of summary dismissal. Accordingly I make the following order.

I certify that the preceding one hundred and thirty (130) paragraphs are a true copy of the reasons for judgment of Judge Mead

Date: 26 April 2017

[2017] FCCA 821

26 April 2017

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Limitation Periods

Procedural Fairness

Remedies