Arcand & Boen
[2021] FamCAFC 155
•20 August 2021
FAMILY COURT OF AUSTRALIA
Arcand & Boen [2021] FamCAFC 155
Appeal from: Arcand & Boen [2021] FCCA 372 Appeal number(s): SOA 13 of 2021 File number(s): DGC 3235 of 2020 Judgment of: WATTS, AUSTIN & BENNETT JJ Date of judgment: 20 August 2021 Catchwords: FAMILY LAW – APPEAL – LEAVE TO APPEAL – DE FACTO RELATIONSHIPS – Limitation period – Where the primary judge dismissed an application pursuant to s 44(6) of the Family Law Act 1975 (Cth) (“The Act”) – Where leave to appeal is required – Where at least one of the grounds of appeal appeared to have merit – Leave to appeal granted – Hardship – Where the Court may grant an extension of time if the applicant demonstrates hardship through the deprivation of the chance to bring proceedings for substantive relief – Whether the primary judge erred by evaluating the prima facie merit of the prospective property settlement claim, rather than by considering whether the appellant had an arguable case – Where the primary judge erred by unduly elevating the importance of the appellant’s inactivity during the limitation period – Where the error is immaterial as the appellant was unable to demonstrate his hardship – Appeal dismissed – No order as to costs.
FAMILY LAW – APPLICATION IN AN APPEAL – Where the respondent seeks to adduce further evidence pursuant to s 93A(2) of the Act – Where the evidence shows the primary judge was correct to accept that the appellant will not bear any future liability under an existing bank loan – Application granted.
Legislation: Family Law Act 1975 (Cth), Pt VIIIAB, ss 44, 90SM(3), 93A(2), 117(1) Cases cited: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Althaus and Althaus (1982) FLC 91-233; [1979] FamCA 47
Bienstein v Bienstein (2003) 195 ALR 225; [2003] HCA 7
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Coghlan and Coghlan (2005) FLC 93-220; [2005] FamCA 429
Conway v The Queen (2002) 209 CLR 203; [2002] HCA 2
Edmunds & Edmunds (2018) FLC 93-847; [2018] FamCAFC 121
Gadzen & Simkin (2018) FLC 93-871; [2018] FamCAFC 218
Jackamarra v Krakouer and Anor (1998) 195 CLR 516; [1998] HCA 27
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Montano & Kinross (2014) FLC 93-623; [2014] FamCAFC 231
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Slocomb & Hedgewood (2015) FLC 93-678; [2015] FamCAFC 219
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7
Division: Appeal Division Number of paragraphs: 53 Date of hearing: 10 August 2021 Place: Heard in Melbourne (via video-link), delivered in Newcastle Counsel for the Appellant: Dr Smith Solicitor for the Appellant: Davison Family Lawyers Counsel for the Respondent: Ms Renwick Solicitor for the Respondent: Lander & Rogers ORDERS
SOA 13 of 2021
DGC 3235 of 2020APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MR ARCAND
Appellant
AND: MS BOEN
Respondent
ORDER MADE BY:
WATTS, AUSTIN & BENNETT JJ
DATE OF ORDER:
20 AUGUST 2021
THE COURT ORDERS THAT:
1.Leave to appeal is granted.
2.The Application in an Appeal filed on 21 July 2021 is granted and the respondent has leave to adduce as evidence in the appeal the affidavit of Craig Douglas Henderson filed on 21 July 2021.
3.The appeal is dismissed.
4.The respondent’s application for costs is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Arcand & Boen has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WATTS, AUSTIN & BENNETT JJ:
On 5 March 2021, a judge of the Federal Circuit Court of Australia dismissed the appellant’s application for leave to commence property settlement proceedings against the respondent under s 44 of the Family Law Act 1975 (Cth) (“the Act”), from which dismissal order the appellant appeals, subject to the grant of leave to do so.
For the reasons which follow, leave to appeal is granted, but the appeal is dismissed.
BACKGROUND
The parties were in a de facto relationship for in excess of five years, commencing in April 2013 and ending in August 2018 (at [1] and [12]).
Pursuant to the provisions of s 44(5) of the Act, the appellant had until 29 August 2020 to commence proceedings for property settlement relief under Pt VIIIAB of the Act.
The appellant instituted proceedings before the Federal Circuit Court on 23 September 2020 (not 20 December 2020 as the appealed orders initially wrongly recorded), being some 25 days late. Realising the application was filed late, the appellant sought an interim order granting him leave nunc pro tunc under s 44(6) of the Act to prosecute his claim for substantive relief.
Even though the Initiating Application did not expressly say so, the application for such leave was posited exclusively on the basis of s 44(6)(a) of the Act, requiring the appellant to satisfy the primary judge that he would suffer hardship if leave were not granted. The statutory conditions provide:
44Institution of proceedings
…
(6)The court may grant the party leave to apply after the end of the standard application period if the court is satisfied that:
(a)hardship would be caused to the party or a child if leave were not granted; or
(b)in the case of an application for an order for the maintenance of the party—the party’s circumstances were, at the end of the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.
The application for leave was listed for discrete hearing before the primary judge on 18 February 2021 and the hearing proceeded by the parties’ counsel making submissions on the foundation of the untested evidence they each filed. The dismissal order was made and reasons were delivered on 5 March 2021.
LEAVE TO APPEAL
The appellant requires leave to appeal from the order dismissing his application under s 44 of the Act (Montano & Kinross (2014) FLC 93-623; Slocomb & Hedgewood (2015) FLC 93-678).
The grant of leave ordinarily requires an applicant to show the decision at first instance is attended by sufficient doubt to warrant appellate interference and, furthermore, that substantial injustice would result if leave were refused, supposing the decision at first instance to be wrong (Medlow & Medlow (2016) FLC 93-692 at [44]–[57]). However, that guideline does not fetter the wide statutory discretion.
The respondent sought leave to adduce further evidence in the appeal, but was unable to adduce it unless leave was first granted to the appellant to bring the appeal. The respondent asked for the question of leave to appeal to be determined without reference to the further evidence she wished to adduce, but we reject the artificiality of that approach. The answer to the question of whether or not leave to appeal should be granted may be influenced by the perceived merit of the proposed grounds of the appeal and, here, at least one of the appellant’s proposed grounds appeared meritorious. We are consequently inclined to grant the appellant leave to appeal because it suits both parties. Despite the respondent’s opposition to the grant of leave, the evidence she seeks to lead in the appeal addresses the merit of the grounds of appeal.
THE APPEAL
Grounds 2 and 6 were abandoned by the appellant. The remaining grounds are addressed in the context of the issues to which they pertain.
Hardship
The appellant bore the onus of demonstrating to the primary judge’s satisfaction that, supposing leave to bring the property settlement claim out of time was denied, the deprivation of his reasonable chance of success in those prospective proceedings would occasion him hardship (Gadzen & Simkin (2018) FLC 93-871 (“Gadzen”) at [29]–[31]).
In assessing whether the appellant discharged the onus, the primary judge merely needed to be satisfied the prospective property settlement claim was reasonable or arguable, with such assessment made summarily without a detailed hearing on the merits (Gadzen at [33]–[37]; Edmunds & Edmunds (2018) FLC 93-847 (“Edmunds”) at [16]–[17]; Althaus and Althaus (1982) FLC 91-233 (“Althaus”) at 77,267).
The primary judge found the appellant had not discharged the onus of demonstrating such hardship, which finding was expressed in these terms:
41.I do not think, in these circumstances, that it could be said that the [appellant] has demonstrated a prima facie or arguable case of substance, having regard to all the circumstances of the case.
The premise for the finding was the primary judge’s conclusion that the appellant’s overall entitlement to property and superannuation would not rise above 15 per cent (at [40]) and, since he was already seized of 18 per cent of the available property and superannuation (at [40] and [43]), he would not suffer hardship if deprived of the right to litigate the claim out of time.
Allowing for some inconsequential discrepancies between the parties’ contentions about the value of their assets, the overall value approximated $1.1 million. The appellant had superannuation of $180,000 and the respondent had superannuation of about $120,000 (at [13]–[14]). In aggregation, therefore, the property and superannuation was worth about $1.4 million, meaning a 15 per cent share of it would amount to about $210,000.
The appellant conducted the proceedings on the basis of his expectation of an entitlement to a maximum overall share of 25 per cent in assets, but an equalisation of their superannuation entitlements by splitting his superannuation interest, which would compute to an overall share of about 30 per cent, valued at $425,000.
The appellant’s property and superannuation, on his own estimation, approximated $234,000 – being in excess of $210,000, but well short of $425,000 in value.
However, that calculation does not take account of his joint and several liability for a bank loan of $250,000 secured by mortgage over the former family home owned solely by the respondent. The appellant contended he still bears joint and several liability under the loan which, at the very least, affects the overall value of the assets retained by him and the issue which would arise under s 90SM(3) of the Act about the justice and equity of making any adjustment order, which the primary judge failed to realise and thereby erred (Ground 4). His point was that the primary judge was obliged to assume his notional attribution with one-half liability for the loan, meaning the value of his property was actually $125,000 less. It was therefore contended the primary judge fell into error by assuming his property and superannuation had an aggregate value of about $234,000 instead of only $109,000, which in turn vitiated the primary judge’s assessment of the chances of improving his financial position in the prospective property settlement proceedings. The point, however, is more imaginary than real.
First, although the appellant could theoretically be sued by the bank for recovery of the entire balance of the loan, it is virtually certain that would never occur. The loan of $250,000 is secured by mortgage over real property owned exclusively by the respondent, worth not less than $1.3 million, and it is almost inconceivable the bank would do anything other than call in the security and exercise mortgagee’s power of sale over the property to recover the loan if it was ever in default. The respondent has met the totality of the loan repayments since the time of the parties’ separation (at [35]) and intends to continue doing so, in which case the primary judge presumed the entire liability would run with the asset it encumbered.
Secondly, without the need for any litigation or attendant cost, the respondent openly offered to re-finance the mortgaged loan and remove altogether the appellant’s contingent liability under the existing loan, which offer the appellant rejected due to dissatisfaction with the methodology proposed by the respondent.
In submissions made to the primary judge, the appellant’s counsel contended there was no evidence to establish the respondent’s willingness to re-finance the loan, as this excerpt of the transcript demonstrates:
[COUNSEL FOR THE APPELLANT]: The only other thing I would say is as to the discharge of mortgage. The assertions made by the [respondent] at – in the later paragraphs of her affidavit – paragraphs 33(a), (b), (c) and (d) – those matters are matters of assertion only. There is no documentary or corroborative proof of any of the matters that are contained in paragraph 33. And, in particular, the assertion by the [respondent] that she is going to refinance and so on, that is not supported by any evidence at all.
(Transcript 18 February 2021, p.18 lines 26–31)
In the reasons for judgment, the primary judge remarked upon the evidentiary dispute over the proposed loan re-finance and, without attempting to resolve it, simply accepted the loan had not yet been re-financed (at [22]).
To cure the lacuna, the respondent filed an Application in an Appeal on 21 July 2021 seeking to adduce further evidence in the appeal to prove both the bank’s willingness and her desire to re-finance the loan at no cost to the appellant, if he co-operates by giving his consent.
The application to adduce further evidence was initially posited as one only made if appealable error was first demonstrated and discretion was to be re-exercised (Allesch v Maunz (2000) 203 CLR 172 at 183, 191–192), but was belatedly converted to an application under s 93A(2) of the Act to help resist the appeal.
Such evidence should be admitted because, even though the documents were prepared after the hearing and could have been procured beforehand, they nevertheless tend to prove the correctness of the primary judge deciding the application by accepting the appellant need not bear any future liability at all under the existing loan (CDJ v VAJ (1998) 197 CLR 172 at [103], [107] and [109]). The further evidence permits a strong inference to be drawn that the bank will permit the respondent’s re-finance of the loan to remove the appellant’s liability if he consents, whereas such an inference was not so strongly available from the evidence presented to the primary judge.
Given the appellant could easily and immediately escape any liability under the existing loan without the need to prosecute a claim for property settlement relief under Pt VIIIAB of the Act, the primary judge was not in error to decide the application for leave under s 44(6) of the Act on the basis that the value of his existing assets was not depreciated by his joint and several liability under the loan secured over the respondent’s home.
As things stand, the appellant remains hypothetically liable under the joint bank loan and, upon the conclusion of this appeal, could continue to remain so. But that cannot work to his practical disadvantage. The respondent’s representations in these proceedings – that she will willingly bear exclusive liability for the bank loan in the future and not look to recover from the appellant any contribution towards it, thereby militating against his application to bring property settlement proceedings against her – would set up an estoppel precluding her from later suing the appellant in a state court for contribution to the debt (Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 399–406 and 416). Alternatively, any later contractual claim made by the respondent against the appellant would afford him a fresh opportunity to make another application for leave under s 44(6) of the Act to belatedly bring his claim for property settlement relief because the appealed order is characterised as only an interlocutory and not final order (Bienstein v Bienstein (2003) 195 ALR 225 at [25]).
Returning then to the proposition of the appellant’s existing assets and superannuation being worth $234,000, the primary judge correctly observed such assets and superannuation already exceeded the 15 per cent adjustment result which his Honour estimated could eventuate from the prosecution of the contested property settlement claim.
The appellant did not contend in the appeal that the primary judge’s assessment of his overall entitlement to 15 per cent of the property and superannuation was vitiated by error. It would have been a difficult task to do so, given unchallenged findings that: the former family home is by far the most valuable asset (at [15] and [30]); it was purchased by the respondent using the significantly greater capital she brought into the marriage only five or six years before (at [14] and [22]); the parties brought broadly similar amounts of superannuation into the relationship but the respondent brought in capital of about $800,000 compared to the applicant’s capital of about $20,000 (at [13]–[14]); during the relationship the appellant made significant financial contributions but the respondent was the primary homemaker and caregiver to the children (at [32]); the appellant now earns well more than double the income of the respondent (at [16] and [20]); and the respondent will continue to shoulder the primary financial burden of maintaining the children (at [34]).
Since the appellant did not assert error in the primary judge’s summary assessment of his Pt VIIIAB claim being no more than 15 per cent and because there was no error demonstrated in finding the appellant already held assets and superannuation worth in excess of his prospective entitlement, it must follow that the finding he would not suffer hardship if denied leave to proceed out of time was open.
The appellant did, however, challenge the primary judge’s rigorous method of assessing his prospective entitlement, asserting it was more akin to a hearing on the merits than to a summary hearing (Ground 1), which is a different species of complaint.
In prosecuting this claim, the appellant contended the primary judge erred by evaluating the prima facie merit of his prospective property settlement claim on a global basis by aggregating the parties’ assets and superannuation entitlements, rather than by considering whether he had an arguable case for the separate assessment of the parties’ entitlements to assets and superannuation in two pools. In contending for that approach, the appellant was willing to split his larger superannuation interest to equalise the respondent’s superannuation interest, meaning he would then correspondingly increase his proportional share of the assets. His case was that it was unjust for him to be left with a larger superannuation interest, which he could not unlock for many years, but few assets with which to re-establish himself.
As the primary judge recognised (at [11]), in Edmunds, the Full Court said:
47.As the Full Court pointed out in Sharp at [18], “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”.
48.That involves a consideration, but not a final determination, of the nature of the applicant’s claim. In doing so, the Court must weigh the applicant’s case against that of the respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.
(Emphasis added)
The primary judge was therefore obliged to weigh the appellant’s case against the respondent’s case to test it for the ostensible merit which the appellant asserted. As the respondent submitted in the appeal, in order to determine whether the appellant had an arguable case to mount under Pt VIIIAB of the Act, the primary judge was obliged to evaluate the strengths and weaknesses of the appellant’s case and assess the overall chances of his claim for relief, for only then would it be known what he would forego if leave to proceed out of time was denied. If he foregoes little or nothing from the denial of leave to proceed out of time, then it was correspondingly difficult for him to demonstrate hardship.
In undertaking that task, the primary judge’s assessment of the parties’ contributions on a global basis was orthodox and unexceptional (Norbis v Norbis (1986) 161 CLR 513 at 523, 532–533 and 541). Both parties’ superannuation interests were held in ordinary accumulation funds, with the appellant’s interest proportionately exceeding the respondent’s interest by about one-half at both the commencement of their relationship and at the time of hearing (at [13]–[14]), suggesting there was no demand upon the primary judge to treat the parties’ contributions to superannuation interests separately from their other contributions (Coghlan and Coghlan (2005) FLC 93-220 at 79,645–79,646). Ground 1 therefore fails.
In later deciding to refuse the respondent’s subsequent application for costs against the appellant, the primary judge remarked it was not unreasonable for him to have sought leave to bring his claim out of time (at [50]), which the appellant contended in the appeal was incongruent and tended to demonstrate the dismissal order was unreasonable or plainly unjust (Ground 5). The appellant’s point was that, if on the one hand it was found reasonable for him to bring his application, why on the other hand was it found he failed to demonstrate a “prima facie or arguable case of substance” (at [41])? That rhetorical argument has some rudimentary attraction, but the alleged incongruity can be satisfactorily explained in this way. The relatively short period by which the proceedings were late made the application for the grant of leave “sufficiently arguable” or “not unreasonable” to bring but, upon the appellant being put to proof on the demonstration of hardship if denied the right of action under Pt VIIIAB of the Act, he could not establish to the primary judge’s satisfaction an “arguable case of substance” taking into account “all the circumstances of the case”.
Residual discretion
Section 44(6) of the Act stipulates that the court may grant an extension of time if the applicant demonstrates hardship through deprivation of the chance to bring proceedings for substantive relief, meaning the application to extend time might still not be granted. The onus rests with the applicant to demonstrate why discretion should be exercised to grant the extension of time; not with the respondent to demonstrate why the application should be refused (Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 (“Brisbane South”)).
The demonstration of hardship, if deprived of the right to pursue remedy under Pt VIIIAB of the Act, was a threshold issue before the primary judge (Gadzen at [29]). Having decided it against the appellant, there was no need for the primary judge to go further, but his Honour nevertheless did so by proceeding to canvas another issue pertaining to the exercise of discretion: the delay in bringing the proceedings.
Supposing hardship is demonstrated, numerous factors can influence the exercise of residual discretion, including the length of the delay, the adequacy of reasons for the delay, and the prejudice the respondent would suffer if the application for extension of time was granted. Here, the primary judge focussed on the length of the delay and the reasons given for it. Relevantly, the primary judge found:
44.This brings us finally to the question of delay, and I repeat, it is the whole of the delay that is relevant.
45.I accept that the [appellant] contemplated taking steps in August to September of 2019, when he was, of course, well within time, and the [respondent] knew this. Nonetheless, for reasons wholly unexplained, the [appellant] did nothing until July of the following year. That is a period of nine months, getting on for half of the standard limitation period. This, in my view, is a relevant consideration.
46.I am prepared to assume, in the [appellant’s] favour, that the delay from July until September was caused by a combination of dilatory conduct on the part of his solicitor and COVID-related and work-related difficulties. I would not regard that delay, of itself, as being significant. I also have regard to the fact that the claim is only some 25 days or thereabouts out of time. Nonetheless, the fact is that the [appellant] has delayed, in circumstances where he was well aware of his entitlement to bring a claim, for nine months out of the two-year standard limitation period, and this is a further factor that militates against the grant of leave.
…
49.The respondent has sought costs on an indemnity basis in the event that the claim is dismissed. I would infer that the applicant would resist it. While the applicant has, in fact, been ultimately entirely unsuccessful, there are a number of points to be made. First of all, in truth, he was only 25 days out of time, and it would also seem that it is at least possible that those 25 days were engendered by the incomplete way in which his solicitor handled the matter, and I accept that the solicitor’s dilatory conduct should not be held against the [appellant] himself.
(Emphasis added)
In respect of those findings, the appellant submitted the primary judge erred by giving too much weight to his delay in the period between September 2019 and July 2020 (Ground 3), which complaint was amply established.
In Althaus, which authority has been repeatedly adopted, Evatt CJ said (at 77,267) with agreement by Marshall SJ and Strauss J (at 77,269):
The requirement that the applicant under sec. 44(3) give an explanation of the delay in bringing proceedings in my view requires a consideration of the whole period from the date of the decree nisi [dissolving the marriage] to the lodging of the application. It requires the Court to consider whether the [applicant] took all reasonable steps to pursue her claim or whether, on the other hand, she acted at any time as if she had no intention of proceeding or pursuing any claim at all against the [respondent]. It requires the Court to consider whether it can reach conclusions as to why the proceedings were started beyond the time lodged and whether those proceedings are attributable to default on the part of the applicant.
(Emphasis added)
The Full Court was there dealing with an application by a spouse for leave under s 44(3) of the Act but an application for leave by a de facto spouse under s 44(6) of the Act, as here, operates on the same principle (Gadzen at [29]).
As has been recognised (Brisbane South at 21–22 per Kirby J):
A controversy has arisen in the authorities, and in this case, as to whether, in the exercise of the residual discretion, regard should be had to the period of time which has elapsed between the expiry of the limitation period and the date of the application. Or whether the entire time from the accrual of the cause of action to the date of the application must be considered. Some decisions favour the view that the only time relevant is that after the limitation period has expired. This opinion is often explained on the footing that limitation periods are arbitrary; that they involve acceptance that some interval of time (however prejudicial to a defendant) must be tolerated; and that, accordingly, the attention of the Court should be focussed only upon the marginal increase in prejudice occasioned once the normal limitation period has elapsed. This view of the legislation is also supported by reference to the argument that what is under consideration is an extension of the ordinary limitation period so that the decision maker should consider only the time of the extension, not the initial time during which no extension was required. The contrary argument is that, a broad discretion being invoked, without relevant words of limitation, the generality should not be glossed by excluding the earlier interval which has elapsed. Its expiry also involved elements of prejudice which could, and should, be taken into account in judging where the justice of the case lies. To some extent the resolution of this controversy depends upon the language of the Act in question. Thus, where an Act refers to "the delay" it may be taken to mean “the delay after the primary limitation period expired”.
(Citations omitted)
Althaus, and the authorities in this jurisdiction which have followed it, are devotees of the approach which involves attention to the “whole period” elapsed from the accrual of the cause of action.
Applying that principle, the primary judge was required to consider the “whole period” from the commencement of the limitation period until the claim was lodged to see whether or not the applicant took reasonable steps to pursue his/her claim or whether he/she acted at any time as if to evince an intention not to pursue the claim, but that is not necessarily the same thing as examining the evidence for a reasonable explanation as to why the claim was not brought sooner during that “whole period”.
The limitation period under s 44(5) of the Act did not expire until 29 August 2020. The primary judge was critical of the appellant for failing to explain why he sat on his hands for a period of about nine months during the two-year limitation period, but it was important for the primary judge to have appreciated that such unexplained inactivity did not cause or materially contribute to the expiration of the limitation period, at least in the circumstances of this case. The appellant was entitled to file his application on the very last day of the limitation period without any need to explain his inactivity over the preceding two years. The most salient consideration was the explanation given for why the proceedings were filed 25 days late on 23 September 2020, for which he had an incontrovertible and compelling reason: he gave his lawyers instructions to commence the proceedings in July 2020, well before the limitation period expired, but the suit was not filed within time due entirely to their default.
While there might have been an element of inattention on the lawyers’ part, their fulfilment of the appellant’s instructions was at least partly frustrated by what the primary judge described innocuously as “COVID-related and work-related difficulties” (at [46]). The primary judge expressly acknowledged that such delay caused by the lawyers between July 2020 and September 2020 was not significant (at [46]). Besides, the prejudice which may arise from relatively benign errors of that sort made by lawyers should not usually be visited upon their innocent clients (Allesch v Maunz at 186; Jackamarra v Krakouer and Anor (1998) 195 CLR 516 at [14], [33], [68] and [70]).
The primary judge erred by unduly elevating the importance of the appellant’s inactivity for a period which amounted to only about 40 per cent of the duration of the limitation period and by appearing to expect the appellant to afford a satisfactory explanation for why proceedings were not instituted earlier than they were. While the overall passage of time from the point at which a cause of action accrues is relevant to the broader question of whether or not the residual discretion should be exercised in the applicant’s favour, due to the prejudice it may occasion to the respondent, on the question of delay the applicant only needs to satisfactorily explain why the claim was brought late – not sooner.
In this instance, the parties unsuccessfully tried to negotiate a settlement of their dispute during the limitation period and, while the appellant did allow the dispute to drift unresolved for about nine months, the evidence did not suggest, nor did the respondent contend, she was ever led to believe by the appellant’s conduct or omission that he had abandoned plans to pursue his claim.
Although the exercise of discretion miscarried when considering the appellant’s delay and the explanation advanced for it, the error was not material because, once the appellant was unable to demonstrate his hardship through deprivation of the opportunity to press his late claim for property settlement, the significance of the delay in commencing the proceedings fell away. Errors of law will not sustain an appeal if they do not affect the result and cause no miscarriage of justice (Conway v The Queen (2002) 209 CLR 203 at 207–208, 217, 219–220, 232, and 244).
DISPOSITION
The appeal is dismissed.
The respondent’s application for costs should be dismissed. The appeal was unsuccessful but the appellant was able to demonstrate an error of law which the respondent refuted and, had the respondent not been given leave to adduce further evidence in the appeal, another ground may well have been sustained and the appeal upheld. In our view, the ordinary rule prescribed within s 117(1) of the Act should prevail.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Watts, Austin & Bennett. Associate:
Dated: 20 August 2021
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