Andrews & Andrews

[2007] FamCA 562

FAMILY COURT OF AUSTRALIA

ANDREWS & ANDREWS [2007] FamCA 562

FAMILY LAW - APPEAL – SPOUSAL MAINTENANCE – APPLICATION FOR LEAVE – SECTION 44(3) - Whether trial Judge erred in finding appellant failed to adduce any evidence which satisfied s 44(4)(b) - No error by trial Judge in determining appellant did not place admissible evidence before Court or conduct his case on basis that he satisfied requirements of s 44(4)(b) for the granting of leave – Trial Judge correct to focus on question of hardship, that is, s 44(4)(a) - Whether trial Judge erred in exercise of discretion in refusing appellant’s application for leave on hardship grounds - No error by trial Judge in exercise of discretion in taking into account history of appellant’s conduct in s 79 proceedings – Trial Judge carefully analysed evidence relevant to issue of hardship to the appellant and matters relevant to the exercise of discretion should hardship be established - No error by trial Judge in relation to this matter - Trial Judge’s finding appellant had failed to give acceptable reason for long delay was a relevant matter to be taken into account in the exercise of discretion in refusing leave. Appeal dismissed.

FAMILY LAW - COSTS – COSTS OF APPEAL – Appellant wholly unsuccessful – Appropriate appellant pay respondent’s costs of appeal.

Family Law Act 1975 (Cth), ss 44(3) and (4), 72, 74, 75(1), (2) and (3) and 118

Cawthorn v Cawthorn (1998) FLC 92- 805
Cory v Gertcken (1816) 2 Madd 40; 56 ER 250
Gronow v Gronow(1979) 144 CLR 513; (1979) FLC 90-716
House v The King (1936) 55 CLR 499
Whitford v Whitford (1979) FLC 90-612

Meagher RP, Heydon JD and Leeming MJ, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (Sydney: Butterworths, 4^th ed, 2002)

APPELLANT: Mr Andrews

RESPONDENT: Mrs Andrews

FILE NUMBER: PAF 4046 of 1994

APPEAL NUMBER: EA 04 of 2006

DATE DELIVERED: 8 June 2007  

PLACE DELIVERED: Sydney

JUDGMENT OF: Finn, Coleman & Boland JJ

HEARING DATE: 7 November 2006

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 22 December 2005

REPRESENTATION

ADVOCATE FOR THE APPELLANT: Mr Andrews appeared in person

COUNSEL FOR THE RESPONDENT: Mr Schonell

SOLICITOR FOR THE RESPONDENT: Pearson Family Lawyers

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Andrews v Andrews.

Orders

1. That the appeal is dismissed.

2. That the husband within 21 days of the date of this order pay the wife costs in the sum of $2,800.00.

3. That Order 3 of the orders made by the Honourable Justice Waddy on 3 April 2006 be varied by the addition of the following words “and the costs order made by the Full Court on 8 June 2007”.

FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 04  of 2006
File Number: PAF 4046  of 1994

Mr Andrews

Appellant

And

Mrs Andrews

Respondent

REASONS FOR JUDGMENT

Introduction

1. The husband by Notice of Appeal filed on 9 January 2006 appeals against orders made by Waddy J on 22 December 2005. The husband contends that the trial Judge was in error in dismissing his application for leave to commence proceedings for spousal maintenance out of time under s 44(3) of the Family Law Act1975 (Cth) (“the Act”). In his Notice of Appeal the husband also appeals against an order made by the trial Judge under s 118 of the Act which prohibits him from instituting proceedings for alteration of property rights, payment of spousal maintenance or any other relief under the Act, without first having obtained leave of the Court. The wife sought the appeal be dismissed. The husband was not legally represented before the trial Judge or before us on this appeal.

2. The husband’s application for leave to commence proceedings for spousal maintenance was heard initially by Judicial Registrar Halligan (as he then was) in July 2005.  The Judicial Registrar dismissed the husband’s application in which he sought orders that the wife pay to him lump sum spousal maintenance of $700,000.00, and he made orders that the husband pay the wife’s costs. The husband sought review of the Judicial Registrar’s decision. That review was heard by Waddy J on 11 November 2005, and dismissed by his Honour in his orders of 22 December 2005, which are the orders the subject of the appeal.

3. Although the husband in his Notice of Appeal refers to the appeal being an “all grounds appeal” no ground of appeal expressly addressed the order made under s 118. Although in his oral submissions the husband made some reference to certain of the paragraphs in Waddy J’s reasons for judgment which related to making the s 118 order, nothing put to us by the husband has persuaded us that his Honour erred in making that order.

4. Subsequent to the making of the orders the subject of this appeal, the trial Judge made costs orders on 3 April 2006.  The husband has not appealed against the costs orders. 

5. Before us the husband, without objection, sought leave to amend the Notice of Appeal so that if the appeal succeeded he be granted leave to file an application for lump sum rather than periodic spousal maintenance.

6. After we reserved our decision, the husband filed a document which he described as “Submission (1A) prepared 5^th February 2007”. Although we had not made any directions for the filing of any further written submissions, we accepted the husband’s submission, and afforded the wife the opportunity to respond to that submission.  We did not find anything relevant to the issues  raised in the husband’s appeal in the additional submission.

7. On 21 March 2007 the husband filed a further document headed “Submission (2A) Prepared 19 March 2007”. On the same day the solicitors for the wife wrote to the Regional Appeals Registrar advising that they had received the same documents and that they did not wish to file submissions in response. On 26 March 2007 the Regional Appeals Registrar received further correspondence from the husband dated 22 March 2007 (which he had copied to the wife’s solicitors) making certain corrections to his submissions (2A) prepared on 19 March 2007. Again we did not find anything relevant to the issues raised in the husband’s appeal in the second set of additional submissions from the husband (as corrected by his letter of 22 March 2007).

8. On 28 March 2007 the Regional Appeals Registrar received from the husband a copy of a letter dated 26 March 2007, which he had written to the Commissioner of Taxation. The husband had noted on that letter that it was copied to the wife’s solicitors and to each member of this Full Court. Again the letter appears to have no relevance to issues raised on this appeal.

Background 

1. The husband has been involved in extensive litigation in this Court, and in other Australian and overseas courts.  In order to better understand the contentions of the husband it is necessary we set out a brief chronology of relevant litigation which led up to the proceedings before the trial Judge.  The chronology is found in his Honour’s reasons for judgment, and we did not understand it to be challenged before us.   

2. The husband was born in 1925 and was aged 80 years at the time of the hearing before the trial Judge. The husband’s income was asserted to be derived from a war veteran’s pension of $11,923.00 per annum.

3. The wife was born in 1939 and was aged 65 years at the time of the hearing before the trial Judge. At the date of the hearing the wife deposed to owning assets of a total value of $1,340,000.00 comprising her home unit (approximately $600,000.00) and investments ($635,153.00). She also deposed to having a weekly income of $719.00 per week.  Her weekly expenditure exceeded her income which “was derived from an allocated pension, dividends and interests in shares”.

4. The parties married in December 1970 in the United Kingdom, and their marriage was dissolved by decree nisi of dissolution of marriage, which decree became absolute on 13 November 1995. Therefore any application for spousal maintenance, unless leave was granted, was required to be filed by 13 November 1996 pursuant to the provisions of s 44(3) of the Act.

5. In June 1995 the parties’ competing applications for property settlement were heard by Purdy J and reasons for judgment were delivered on 12 February 1996.  The husband appealed the orders made by Purdy J. The husband’s appeal was allowed by the Full Court on 16 January 1997 and orders made that the matter be remitted for retrial.

6. In May 1997 the husband unsuccessfully sought an order for interim costs.

7. On 16 June 1997 the matter was listed for rehearing before Purvis J.  The parties reached agreement and consent orders were made (“the first consent orders”).

8. Some 11 days after the making of the first consent orders, the husband filed a Notice of Appeal in respect of those orders.  In August 1997 the husband filed further applications for final orders in respect of the first consent orders, and sought a stay of the first consent orders.  The application to vacate the first consent orders and the application seeking a stay of the orders were dismissed.

9. On 16 December 1997 the parties entered into further consent orders (“the second consent orders”) varying the first consent orders.

10. It appears there were no further proceedings in this Court between the parties until 2002 when the husband filed an application.  That application sought to set aside parts of the second consent orders which dealt with a property in the Hunter region of New South Wales (“the Hunter property”) which had been acquired in the name of a corporate entity, AI Pty Ltd shortly prior to the parties’ separation.  That application was amended in January 2003 when the husband sought the wife pay to him $106,304.38 being the sum ordered by Purdy J, and set aside by the Full Court when the husband’s appeal was successful.

11. In February 2004 the husband filed two further applications in which he sought

    ·payment to him by the wife of $700,000.00 by way of property settlement or $750.00 per week by way of maintenance; or

    ·lump sum spousal maintenance of $700,000.00 or periodic spousal maintenance of $750.00 per week.

12. These applications were summarily dismissed by Coleman J on 6 February 2004.  At the time of the dismissal of the husband’s applications Coleman J noted “[the husband] cannot, on the material before this Court, be prevented from seeking to pursue a grant of leave to seek spousal maintenance, periodic and/or lump sum”.

13. On 4 March 2004 the husband filed his application for leave to bring proceedings for lump sum spousal maintenance out of time.

14. Concurrently with the proceedings in this Court, the husband engaged in litigation in the Supreme Court of Vanuatu, and subsequently in the Supreme Court of New South Wales (“the commercial litigation”).

15. The genesis of the commercial litigation was a transaction entered into by the husband shortly after the parties’ separation. The husband asserted the transaction was entered into on the advice of a then partner of an accounting firm in Vanuatu and a Brisbane solicitor.

16. AI Pty Ltd had acquired land in the Hunter region of New South Wales in 1994. The Hunter property was valued by an expert valuer as having a value of $950,000.00 in 1995.  Shares in AI Pty Ltd were held by another corporate entity as trustee for the husband.  The funds to acquire the shares were provided by the husband.  The husband asserted in the proceedings before Purdy J that the shares in AI Pty Ltd had at 14 July 1994, been disposed of to an unknown identity. Subsequently the husband claimed the shares were acquired by a Mr N in satisfaction of a gambling debt “to [an organisation in] Vanuatu”. The trial Judge in discussing the husband’s affidavit sworn on 19 August 2005 recorded the husband’s evidence about the transactions relevant to the AI Pty Ltd shares as follows:

    108.He then recounts travelling through New South Wales inspecting property and entering into a contract on 22 June 1994 to purchase the [Hunter] property having assessed its potential.

    109.Having “no intentions to stay his activities” (paragraph 21), the husband  went to [ ] Vanuatu and discussed his domestic situation and through his accountants arranged to take legal advice.  The lawyer he consulted, Mr [G], had sought advice from a Brisbane solicitor and the husband’s affidavit states:

    “briefly the advice was as follows…

    25.Under the Family Law Act, all property owned by either spouse, or jointly by them both, is considered for the property settlement. Property in companies or trusts is treated as the property of one spouse for the purposes of the settlement, if it appears that that spouse enjoys the benefits of ownership of the company or trust property.

    26.[Mr G] further advised me to place the [AI Pty Ltd] shares in a trust, of which he informed me, he had a shelf trust “[S] Trust”.

    27.He advised me to nominate someone as beneficiary some entity who does not reside in Australia or New Zealand.

    28.Following a telephone call to a [Mr N], an Australian expatriate resident of [ ], Turkey, who agreed to cooperate,
    [Mr G] documented [Mr N] as beneficiary of the [S] Trust.

    29.I gave authority to [Mr G], to take this action, following
    [Mr G]’s guarantee that I had complete control of the trust as “nominator” and “protector” and could remove the Trustee or Beneficiary if or when it suited me.”

17. The husband instituted proceedings in the Supreme Court of Vanuatu, but was not successful in those proceedings.  He also commenced proceedings in the Supreme Court of New South Wales.

18. The proceedings in the Supreme Court of New South Wales were settled and orders made in accordance with Short Minutes of Order by Mason P on 1 June 2004.  The orders provided for the sum of $20,000.00, which had been paid into the Court by way of security, to be returned to the husband, and notations recorded the agreement of the parties that the husband be released from liability for costs incurred in various court proceedings in Vanuatu and in the Equity Division of the Supreme Court of New South Wales.  The Short Minutes of Order also contained a notation in the following terms:

    4.        Notes the agreement of the parties and [Mr N] that:

    …

    b)The opponent ([AI Pty] Ltd) and [Mr N] will pay $150,000.00 to the claimant ([Mr Andrews]) by delivering to the solicitor for the claimant a bank cheque payable in that amount to [GM] & Co by 4pm on 21 June 2004 (time being of the essence);

19. The husband asserted that the orders and notations were entered into by lawyers then retained by him without his instructions.

20. The trial Judge recorded the wife deposed in her affidavit sworn 11 July 2005 that an application by the husband to set aside the Supreme Court consent orders was dismissed by Ipp J on 19 July 2004 and that the husband was ordered to pay costs, and “[a]n application to review the order of Justice Ipp on 19 July 2004 was dismissed on 23 September 2004, with an order that the husband pay the costs”.

21. Before the Judicial Registrar, the trial Judge, and before us, the husband asserted he was not entitled to the balance of the $150,000.00 less costs paid to his former lawyers in the commercial litigation.

The grounds of appeal

1. The grounds of appeal on which the husband seeks to rely are not readily comprehensible, contain extracts from the Act, and are more in the nature of submissions. The husband’s Notice of Appeal sets out the following:

   1.        All grounds appeal,

   2.The Orders made by Waddy J., (copy attached) went beyond moderation, the judge exepted [sic] the fact that my endeavours had created a wealthy women [sic] in the shape of my ex-wife

   3.The judge failed to take into account my needs

   4.The right to claim spousal maintenance under the Act is granted by Section 72 (1) It reads:-

   A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himselfadequately [sic] whether:-

   (a)n/a

   (b)by reason of age or physical or mental incapacity for appropriate gainful employment, or

   (c)for any other adequate reason.

2. As best we are able to discern from the husband’s written and oral submissions, his essential challenge to the trial Judge’s orders is that his Honour erred in the exercise of his discretion, and gave inappropriate weight to the husband’s course of conduct in property proceedings in this Court by reason of the AI Pty Ltd transactions, and gave insufficient weight to the husband’s asserted parlous financial circumstances and his ill health.

Appellate Principles

1. This is an appeal against a discretionary judgment. The circumstances in which the Full Court should interfere with a discretionary judgment are well known.  In Gronow v Gronow(1979) 144 CLR 513; (1979) FLC 90-716 Stephen J said at 519:

   The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight.

2. In House v The King (1936) 55 CLR 499 Dixon, Evatt and McTiernan JJ said at 504-5:

   The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.  In such a case, although the nature of the error may not be discoverable, the exercise of discretion is reviewed on the ground that a substantial wrong has in fact occurred. 

Relevant law – Application for leave to commence proceedings out of time for spousal maintenance

1. The hearing before the trial Judge, being a review of a Judicial Registrar’s decision, was a hearing de novo. The trial Judge therefore was dealing with an application under s 44(3) of the Act. That section provides as follows:

   44(3)Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983 :

   (a)a divorce order has taken effect; or

   (b)a decree of nullity of marriage has been made;

   proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, 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 12 months after:

   (c)in a case referred to in paragraph (a)--the date on which the divorce order took effect; or

   (d)in a case referred to in paragraph (b)--the date of the making of the decree.

   The court may grant such leave at any time, even if the proceedings have already been instituted.

1. Also relevant is s 44(4) which provides as follows:

   (4)The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:

   (a)that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or

   (b)in the case of proceedings in relation to the maintenance of a party to a marriage that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.

2. “Matrimonial cause” is defined in s 4(1) of the Act and includes “proceedings between the parties to a marriage with respect to the maintenance of one of the parties to the marriage” (s 4(1)(c)).

3. The relevant statutory provisions in respect of spousal maintenance are ss 72, 74, 75(1), (2) and (3). For convenience and to facilitate understanding of our reasons, we set out those relevant provisions hereunder:

   72(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

   (a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

   (b)by reason of age or physical or mental incapacity for appropriate gainful employment; or

   (c)for any other adequate reason;

   having regard to any relevant matter referred to in subsection 75(2).

   …

   74(1)In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.

   …

   75(1)In exercising jurisdiction under section 74, the court shall take into account only the matters referred to in subsection (2).

   (2)  The matters to be so taken into account are:

   (a)      the age and state of health of each of the parties;

   (b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

   (c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

   (d)commitments of each of the parties that are necessary to enable the party to support:

   (i)himself or herself; and

   (ii)a child or another person that the party has a duty to         maintain;

   (e)the responsibilities of either party to support any other person;

   (f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

   (i)any law of the Commonwealth, of a State or Territory or of another country; or

   (ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party;

   (g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;

   (h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;

   (ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and

   (j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;

   (k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

   (l)the need to protect a party who wishes to continue that party's role as a parent;

   (m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation;

   (n)the terms of any order made or proposed to be made under section 79 in relation to:

   (i)       the property of the parties; or

   (ii)vested bankruptcy property in relation to a bankrupt        party;

   (na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

   (o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   (p)the terms of any financial agreement that is binding on the parties.

   (3)In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.

Parties’ Submissions

1. In his written submissions, counsel for the wife set out the basis of the wife’s opposition to the husband’s appeal in respect of the leave question on two principal bases:

   (a)the husband failed to adduce any evidence which satisfied s 44(4)(b) (that is, that in November 1996 he was unable to support himself without the benefit of an income tested benefit or allowance); and

   (b)that the trial Judge did not err in the exercise of his discretion in refusing the husband’s application for leave on hardship grounds because:

   ·the husband did not come to the Court “with clean hands”;

   ·prospects of success if leave was granted were poor;

   ·the failure of the husband to offer explanation for delay (other than the husband’s own misconduct); and

   ·the wife would suffer hardship if leave was granted.

2. By contrast, in his written submissions and before us, the husband offered what we would describe as a generalised critique of his Honour’s reasons. We have taken into account the husband’s difficulties as a self represented litigant, and have not taken a “technical” or strict approach to the grounds as set out in the Notice of Appeal.

3. It appears to us that we can conveniently deal with the husband’s grounds of appeal in these reasons by adopting the structure of the wife’s submissions in our examination of the asserted errors in the exercise of discretion by the trial Judge.

Section 44(4)(b)

1. At the commencement of his reasons, the trial Judge identified the nature of the husband’s application (filed in Court by leave on 10 November 2005) namely that Orders 2, 3, 4 and 5 of the husband’s application were “clearly applications for maintenance”.  His Honour set out the relevant statutory provisions, including s 44(4)(b) and said:

   15.[Counsel for the wife] argued persuasively that no attempt had been made by the applicant to advance evidence or argument under Section 44(3B)4(b) [sic; semble s 44(4)(b)], that is, that, at the expiry of 12 months from 13 November 1995, the criteria set out in that subsection had been satisfied.

   16.The matter was thus argued by both parties as falling to be determined in the first instance under Section 44(3B)(a) [sic; semble s 44(4)(a)], and later by the exercise of a judicial discretion, if the conditions of that subsection had been met.  The issue first posed was thus: “Has the applicant established hardship to himself, if leave were not to be granted?”

2. In relation to the need for the husband to have established pursuant to

   
   

   s 44(4)(b) that as at November 1996 he was unable to support himself without the benefit of an income tested benefit or allowance, the Judicial Registrar said at paragraph 24 of his reasons dated 21 July 2005:

   The evidence of the husband would seem to show that as at 14 November 1996, he still retained control of significant assets managed through various entities through Vanuatu.  In those circumstances, in my view, he would not have been entitled to an income tested pension, allowance or benefit as at 14 November 1996, whatever his financial circumstances might otherwise have been, and whether or not he was in fact receiving such a pension at that time.  In my view therefore he fails to establish that ground for an extension. 

3. In an affidavit sworn on 16 September 2005 which was before the trial Judge, the husband commented on the findings of the Judicial Registrar. In relation to paragraph 24 of the Judicial Registrar’s reasons the husband said:

   44.      para 24/page 8

   As I recall rent money’s [sic] were accruing but were held by the lessee pending instructions from the Family Court

   The husband did not have significant assets managed through various entities in Vanuatu.

   I was entitled to an income tested pension as at the 14 November 1996., and was receiving a pension at that time.

   It’s clearly obvious that Halligan does not care for the ‘Cut Of My Jib’

4. An income tested pension, allowance or benefit is defined in s 4(1) of the Act as follows:

   “income tested pension, allowance or benefit” means a pension, allowance or benefit prescribed, or included in a class of pensions, allowances or benefits prescribed, for the purposes of this definition.

5. Regulation 12A of the Family Law Regulations 1984 defines a prescribed pension, allowance or benefit and provides:

   For the purposes of the definition of income tested pension, allowance or benefit in subsection 4 (1) of the Act, each of the following pensions, allowances or benefits is prescribed:

   (a) the following entitlements under the Veterans' Entitlements Act 1986 :

   (i) a service pension within the meaning given by subsection 5Q (1) of that Act;

   (ii) a Defence Force Income Support Allowance (DFISA) within the meaning given by subsection 5Q (1) of that Act;

   (iii)       income support supplement under Part IIIA of that Act;

   (b) a social security pension or a social security benefit within the meaning given by subsection 23 (1) of the Social Security Act 1991 ;

   (c) a family tax benefit within the meaning given by subsection 3 (1) of the A New Tax System (Family Assistance) Act 1999 , the Part A rate of which is higher than the base rate under clause 4 of Schedule 1 to that Act;

   (ca) so much of an allowance under the Aboriginal study assistance scheme, within the meaning given by subsection 23 (1) of the Social Security Act 1991 , as is means tested;

   (d) the amount of a boarding allowance under the Assistance for Isolated Children Scheme, referred to in paragraph (a) of the definition of current special educational assistance scheme in subsection 3 (1) of the Student Assistance Act 1973 , that is greater than the non means tested amount of the allowance;

   (e) a payment under the scheme known as the New Enterprise Incentive Scheme;

   (f) an AUSTUDY benefit under Part 2 of the Student and Youth Assistance Act 1973 as in force immediately before 1 July 1998.

6. The husband’s evidence about his receipt of a pension in November 1996 was not corroborated, and was only referred to by the husband after the findings of the Judicial Registrar on the topic.  The husband provided no evidence of the type of pension he asserted he was entitled to in November 1996, and in particular whether it was an income tested pension falling within the definition in Regulation 12A.  The husband’s assertion was in conflict with the husband’s earlier sworn evidence that he had control of funds of AI Pty Ltd being rents from the Hunter property.

7. We are satisfied that there was no error by the trial Judge in determining the husband did not place admissible evidence before the Court or conduct his case on the basis that he satisfied the requirements of s 44(4)(b) for the granting of leave, and the trial Judge was correct to focus his attention on s 44(4)(a), that is, the question of whether hardship would be caused to the husband if he did not grant leave.

Section 44(4)(a)

1. Before considering the matters raised by counsel for the wife in connection with his Honour’s determination under s 44(4)(a), we propose to outline briefly his Honour’s approach to that provision.

2. It will be seen from paragraph 16 of his reasons which we set out above, that at an early stage in his judgment his Honour posed for himself the question of whether the husband had established that he would suffer hardship, if leave to institute maintenance proceedings was not granted to him. Then after setting out in detail the history of the case and also the contents of the husband’s affidavits, his Honour again (at paragraph 179) posed for himself the question concerning hardship to the husband. His Honour then looked in detail at the husband’s evidence concerning his financial position and also the position in relation to the Hunter property.

3. His Honour then referred, correctly in our view, to the law and the relevant authorities (notably Whitford v Whitford (1979) FLC 90-612), including the need for the exercise of discretion once hardship to the applicant has been established. His Honour then referred (in paragraphs 195 to 200) to various matters which would be relevant to the exercise of the discretion should hardship be established.

4. His Honour then concluded at paragraph 201 that he was not satisfied that hardship would be caused to the husband if leave was not granted. Importantly his Honour then went on in paragraph 210, and later in paragraph 217, to indicate that even if he was wrong, and the evidence did establish hardship for the husband if leave was not granted, he would not exercise the discretion to grant leave on account of the various discretionary matters which he had already canvassed.

5. We would say at this point that we see no error in his Honour’s approach such as would justify our interference with his exercise of discretion. However we now turn to the specific matters relied on by the wife in relation to s 44(4)(a) in opposing the appeal.

(a)     The equitable requirement of clean hands

1. We have earlier (at paragraph 24 of these reasons) set out paragraphs 108 and 109 of the trial Judge’s reasons for judgment. At paragraph 181 and following of the trial Judge’s reasons for judgment he set out his findings in relation to the husband’s financial disclosure, his denials that he had any interest in the funds held in his former solicitors’ trust account, and summarised the evidence about the Hunter property as follows:

   184.As to the [Hunter] property (‘the property”) it is clear that the applicant:

   (i)through [AI Pty Ltd], entered into a contract to purchase the property on 22 June 1994;

   (ii)was served with an application by his wife for alteration of property interests on 29 June 1994;

   (iii)shortly after sought and obtained advice from accountants and lawyers in Vanuatu as to how he might prevent the property being included in his matrimonial assets;

   (iv)provided the funds for [AI Pty Ltd] to complete the purchase of the property (according to his wife “from his income as a starting price bookmaker” – to which the applicant retorted (19.08.05): “The wife was willing to take solace in the comfort those earnings brought);

   (v)In June 1995 nominated “Mr [N] of [Turkey]” to be named as the ultimate beneficiary of a trust (or trusts) of which the property was an asset;

   (vi)In June 1995, in proceedings in this Court, contended that he had transferred his interests in the trust(s) holding the asset of the property “in satisfaction of a very substantial debt to [an organisation in] Vanuatu”, and as a result, it was not property over which he any longer had any control;

   (vii)Resisted the wife’s attempt to include it as his property;

   (viii)On 16 June 1995 declined to give evidence in relation to his sources of income and assets on the grounds he might incriminate himself (wife’s affidavit #22);

   (ix)Before me, acknowledged that [Mr N] had been best man at his wedding, but was now a “fraudster, trickster, conman” and so on;

   (x)Successfully appealed against orders made by Purdy J on 12 February 1996, and on 17 January 1997 secured an order from the Full Court for a new trial;

   (xi)Entered into (“the first”) consent orders before Purvis J on 19 June 1997, whereby:

   (a)the wife would receive $1,000,000 from the sale of the [eastern suburbs of Sydney] property, he would receive $240,000; and the husband and wife would share equally in any excess; and

   (b)[AI Pty Ltd] would sell the [Hunter] property and pay $700,000 to [AI Pty Ltd] (Mr [N]) and the balance to the wife, (wife’s affidavit #38);

   and subsequently appealed those orders.

   (xii)entered into (“the second”) consent orders on 16 December 1997 which, in summary, set aside orders 4, 5, 6 and 7 of the first consent orders (which related to the [Hunter] property) and provided that the net proceeds of the sale of the [eastern suburbs of Sydney] property be divided as to $412,895.26 to the wife and the balance divided equally between himself and the wife at the same time making certain concessions; (wife’s affidavit #43)

   (xiii)maintained extensive litigation in Vanuatu concerning the trusts and the [Hunter] property, disclosed his former intention to keep certain assets out of the pool of matrimonial property to be divided with his wife and the steps he took to effect his purpose, and yet claimed to be the beneficial owner of the property, apparently on the basis that he had provided the funds for its purchase;

   (xiv)sued in Vanuatu, [AI Pty Ltd], Mr [N] and his former solicitor Mr [G];

   (xv)was unsuccessful in the litigation in Vanuatu and became subject to costs orders;

   (xvi)commenced several proceedings in the Equity Division of the Supreme Court of NSW against, [AI Pty Ltd], Mr [N] and Mr [G], and later the Registrar General, which all ended without success;

   (xvii)instructed new solicitors, Messrs [GM] & Co, who compromised the proceedings on appeal on terms, on 1 June 2004, whereby he was to receive $20,198 and $150,000 and relief from a series of costs orders (despite his assertions that they acted without instructions so to do);

   (xviii)on 29 June 2004 received notice from his solicitors that they had sent a cheque to him for $20,198.22 to his residential address (and that they had held in their trust account the $150,000 paid on 21 June 2004, and would account to him for the balance after deducting fees and disbursements) which cheque he apparently redirected to his brother;

   (xix)received a cheque in his favour for the balance of approximately $100,000 and sent it back to his solicitors, who continue to hold the sum, together with interest, on trust for him;

   (xx)claims, indeed swears,  that the money is not his;

   (xxi)claims he has an action of a very substantial nature against his former solicitors, for acting without his instructions;

2. The trial Judge noted (at paragraph 195 of his reasons for judgment) submissions made on behalf of the wife about the husband’s financial position namely that “at it [sic] highest, to be one of ‘self-induced impoverishment’”.  The trial Judge accepted that submission and concluded “I also accept that to grant such an application against the wife would not, in my opinion, constitute an equitable exercise of my judicial discretion”.

3. His Honour also said:

   I also accept that in exercising the Court’s discretion to grant leave, a prime consideration, both as to the question of whether hardship is established, or whether the applicant has a meritorious claim at all, is that each must fail as each must be based and is based on the results of the applicant’s own unlawful conduct.  He does not approach the court with “clean hands” – to adopt the phrase well known in Equity.  He should not be permitted to profit from his own wrong doing, nor be granted any indulgence, the necessity for which can only be based on such conduct by him. (paragraph 196)

1. The maxim “he who comes into equity must come with clean hands” is discussed in Meagher RP, Heydon JD and Leeming MJ, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (Sydney: Butterworths, 4^th ed, 2002) at [3-110] as follows:

   It means that when a plaintiff whose conduct has been improper in a transaction seeks relief in equity that relief will be refused. … [i]t is an historical reflection of the fact that courts of equity began with courts of conscience.

   (See Cory v Gertcken (1816) 2 Madd 40; 56 ER 250; Cawthorn v Cawthorn (1998) FLC 92- 805 at 85,061).

2. We are satisfied there was no error by the trial Judge in the exercise of his discretion in taking into account the history of the husband’s conduct in the s 79 proceedings particularly as the husband conceded he had effectively engaged in conduct designed to impede the Court making a just and equitable order in those s 79 proceedings by reason of his failure to make a full, frank and complete disclosure of his financial affairs.

3. Further, we are satisfied that the trial Judge did not err in the exercise of his discretion in taking into account in these proceedings, the findings open to him on the evidence, that the husband had failed to explain “the disappearance of assets” including his St George bank account which had a balance as at 31 January 2004 of $30,088.97, the Patek Philippe watch valued at $30,000.00 and the Waterloo chess set valued at $10,000.00. We further consider the findings of the trial Judge that the husband had an entitlement to the funds of over $100,000.00 held in his former solicitors’ trust account was well open to his Honour on the evidence before him. 

(b)    Prospects of success of any spousal maintenance claim – hardship to the applicant – prejudice to the respondent

1. At paragraphs 187 to 190 of his reasons for judgment the trial Judge summarised the relevant case law applicable to an application for leave founded on hardship. Before we commence our discussion about this factor, which was the essential foundation of the husband’s claim, it is useful for us to refer to the relevant principles to be applied in considering “hardship”.

2. In Whitford and Whitford (supra) the Full Court extensively discussed the meaning of hardship, and circumstances in which hardship may be caused to an applicant.  For present purposes, we adopt their Honours’ remarks at 78,144 as particularly relevant:

   The hardship referred to in sec. 44(4) is the hardship which would be caused to the applicant or a child of the marriage if leave were not granted. The loss of the right to institute proceedings is not the hardship, to which the subsection refers. It is with the consequences of the loss of that right, with which the subsection is concerned. 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. Further, the matter with which the Court is concerned is not whether the applicant or a child is suffering hardship, but the question is whether the applicant or a child would suffer hardship 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.

3. Having set out the husband’s affidavit evidence in respect of his assets and income (paragraphs 145 to 153), the trial Judge recorded “the husband gave no details of items of expenditure”.

4. In the written submissions filed on behalf of the wife it was submitted that the husband:

   ·     failed to make any endeavour to establish by admissible evidence his present periodic needs; and

   ·    failed to advance any evidence that the lump sum sought was anything other than an arbitrary amount.

5. The wife’s counsel noted the husband carried the onus to establish his reasonable needs, or that he was unable to support himself adequately as required by s 72. Counsel further submitted that on the husband’s own evidence he had “significant resources in the form of the generosity of his friends”.

6. In paragraphs 180 to 186 of his reasons for judgment and later at paragraph 201 the trial Judge comprehensively summarised his factual findings, and concluded the husband had not established “hardship”.  His Honour subsequently in his reasons noted the husband sought “an order unrelated to his established needs”.  Significantly at paragraph 214 of his reasons the trial Judge said:  

   Again his quantification of such an order, at his age of 81, in a lump sum of $700,000 is indicative, I believe, of an attempt to reopen yet again the question of the alteration of property interests, settled once and for all by the second consent orders. Such a conclusion is the more compelling, when the husband seeks the novel order that he be allowed to claim 100% of the wife’s estate should she die.  The repeated assertion that everything she has is rightfully his because he supplied it, is breathtaking.

   In such circumstances severe doubt is thrown upon the genuiness of the claim for maintenance at all.  Indeed, it was framed when his attempt to get such a sum as property, was dismissed by my brother Coleman J.

7. The trial Judge also carefully dealt with the evidence of the wife, including her financial position.  He noted the wife claimed she did not have the capacity to pay maintenance to the husband. His Honour recorded the wife’s evidence concerning her assets and income, and assertions in respect of unpaid costs and stress associated with the ongoing proceedings.

8. In his conclusions in respect of the leave application, the trial Judge noted:

   The wife in this case was entitled to finality in her dealings of any kind with the husband at the expiry of 12 months from the decree nisi becoming absolute.  I accept and find that to grant leave in circumstances such as disclosed here would be highly prejudicial to her and in my opinion completely unjust. (paragraph 211)

9. His Honour further set out his conclusions both on the question of hardship, and of the exercise of the discretion should hardship be established as follows:  

   In summary, the husband has, in my opinion failed to establish hardship, has failed to give an acceptable reason for the gross delay in bringing his application, and has behaved in such a fashion towards a major asset of matrimonial property, and subsequent waste of such property, that, in my opinion his application fails on each relevant factor.  I do not believe that in the circumstances of this case, his claim, even if leave were granted has any reasonable chance of success.  That is a further ground on which he fails to establish “hardship” and a further ground upon which leave should be refused.  I also find that to allow it would be to impose unacceptable hardship on the wife. (paragraph 217)

10. We are satisfied that the trial Judge carefully analysed the evidence before him relevant to the issue of hardship to the husband and the matters relevant to the exercise of the discretion should hardship be established. We find no error on the part of the trial Judge in relation to this matter.

(c)      Delay

1. The husband’s evidence in support of his explanation for his delay in commencing proceedings was set out in his affidavit sworn 16 September 2005 wherein he commented on findings made by the Judicial Registrar.  The husband asserted he had not commenced proceedings because he understood on signing the second consent orders “that was the end of the matter” and that his spousal maintenance claim was delayed because “I wasted over 5 years in the Supreme Court of Vanuatu, where it is a long drawn out process because of legal complexities”.  Thereafter the husband made a number of assertions about various legal practitioners, and the judiciary.

2. We are satisfied that the trial Judge’s finding that the husband failed “to give an acceptable reason for the gross delay” (paragraph 217, our emphasis) was a finding well open to him on the evidence, and that long delay, absent an acceptable reason, was a relevant matter to be taken into account by the trial Judge in the exercise of his discretion in refusing leave.

Conclusion

1. As we noted at the commencement of our reasons, this was an appeal against a discretionary judgment.  The husband has not established error by the trial Judge in the appellate sense, and accordingly the appeal must be dismissed.

Costs

1. At the conclusion of the appeal, we sought submissions from each party in respect of costs of the appeal.  The wife’s counsel sought an order for costs in the sum of $2,800.00. He pointed out that pursuant to orders made by Waddy J on 3 April 2006 the husband was restrained from dealing with the sum of $50,000.00 payable pursuant to the orders of the Supreme Court of New South Wales, and the wife sought that her costs should be paid from those funds within 21 days. That order became Exhibit 1 in the appeal.   The wife’s counsel further submitted in the alternate to an order in the sum of $2,800.00, the wife should have an order for costs as agreed, and failing agreement as assessed.

2. The husband continued to assert he had no entitlement to the funds the subject of Waddy J’s order, and therefore there was no prejudice to him (if the funds were so applied).

3. The husband has been wholly unsuccessful in the appeal.  Notwithstanding the wife’s financial circumstances appear superior to those of the husband, on balance we are satisfied it is appropriate that the husband should pay the wife’s costs of the appeal.

4. The parties have been involved in ongoing litigation for many years.  We are satisfied the quantum claimed by the wife is in the circumstances modest, and that ordering a sum certain will avoid further proceedings and delays. 

I certify that the preceding seventy five (75) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate: 

Date: 8 June 2007