Arias & Grasso (No 2)
[2022] FedCFamC2F 1191
Federal Circuit and Family Court of Australia
(DIVISION 2)
Arias & Grasso (No 2) [2022] FedCFamC2F 1191
File number(s): NCC 4198 of 2021 Judgment of: JUDGE CARTY Date of judgment: 1 September 2022 Catchwords: FAMILY LAW – PROPERTY – INTERLOCUTORY- application for property orders filed out of time – application for leave to proceed out of time – consideration of prima facie case for relief – consideration of hardship – consideration of delay – consideration of prejudice to the respondent – leave granted Legislation: Family Law Act 1975 (Cth) ss.44, 90SM Cases cited: Australian Broadcasting Commission v O’Neill (2006) 227 CLR 57
Catlin & Kent (1987) FLC 91-815
Clauson & Clauson (1995) FLC 92-595
Edmunds & Edmunds (2018) FLC 93-847
Jacenko & Jacenko (1986) FLC91-766
Skelton & Lidop [2022] FedCFamC1A 47
Slocomb & Hedgewood (2015) FLC 93-678
Tormsen & Tormsen (1993) FLC 92-392
Whitford & Whitford (1979) FLC 90-612
Division: Division 2 Family Law Number of paragraphs: 83 Date of last submission/s: 14 April 2022 Date of hearing: 14 April 2022 Place: Newcastle Counsel for the Applicant: Mr Weightman Solicitor for the Applicant: Baker Love Lawyers Counsel for the Respondent: Mr Duane Solicitor for the Respondent: Tiyce & Lawyers ORDERS
NCC 4198 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS ARIAS
Applicant
AND: MR GRASSO
Respondent
order made by:
JUDGE CARTY
DATE OF ORDER:
1 Septemeber 2022
THE COURT ORDERS THAT:
1.Pursuant to s.44(6) of the Family Law Act1975, leave is granted to the applicant Ms Arias to apply for an order under s.90SM of the Family Law Act1975.
2.The matter is adjourned to 19 September 2022 at 9.30am for directions in the Federal Circuit and Family Court of Australia at Newcastle.
3.Each party and the legal representatives have leave to appear on 19 September 2022 by telephone by dialling in using the following details:
(a)Phone Number: …
(b)Conference ID: …#
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Arias & Grasso has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE CARTY
introduction
Pursuant to s.44 (6) Family Law Act 1975 (“the Act”) the applicant de facto wife, Ms Arias (“the applicant”) applies for leave to institute property proceedings under s.90SM of the Act. The applicant requires leave in order to proceed because her Initiating Application was filed on 17 December 2021, nine years and ten months outside of the time limit provided by s.44(5) of the Act.
The respondent de facto husband Mr Grasso (“the respondent”) opposes the granting of leave to the applicant.
background
The applicant was born in 1962 and is 59 years old.
The respondent was born in 1945 and is 76 years old.
The parties commenced living together in 1999. They were never married. Their de facto relationship ended finally in 2010. They cohabitated for about 11 years. There is one adult child of the relationship, Ms B born in 2000 who is now 22 years old.
The applicant had two children from an earlier marriage, Ms C currently about 31 years old, and Mr D, who sadly passed away in 2020 aged 27 years old.
The respondent has five children from his previous relationships.
The applicant filed her Initiating Application after she discovered that the respondent was preparing to sell the real property situate at E Street, Town F (“the E Street, Town F property”). In February 2016 the applicant caused a caveat to be lodged on the title to the E Street, Town F property, and on 30 November 2021 she received a Notice of Proposed Lapsing of Caveat.
In the event that the applicant is granted leave to proceed with her application out of time, she seeks final property orders which would require the respondent to pay her a sum of money and result in an overall distribution of the net property of the parties in the proportion of 65% to the applicant and 35% to the respondent.
On 11 January 2022 the respondent filed his Response to Initiating Application in which he seeks final orders that the proceeds of sale of the E Street, Town F property be distributed to him, and that the applicant pay his costs. He seeks an interlocutory order that leave not be granted to the applicant, that her application be dismissed and that the applicant pay his costs.
On 24 January 2022 following a contested interlocutory hearing, an application for an interlocutory injunction to restrain the respondent from disbursing the proceeds of sale of the E Street, Town F property was dismissed[1]. The respondent deposed at that time that he planned to use the proceeds of sale to purchase a unit for himself in Sydney and the funds leftover to make his life more comfortable. He has since purchased a unit at G Street, Suburb H, New South Wales (“the G Street, Suburb H property”) worth $600,000.
[1] Arias & Grasso [2022]FedCFamC2F 47
On 4 April 2022 the applicant filed an Amended Initiating Application seeking leave pursuant to s.44(6) of the Act, and final property orders which propose that the applicant receive property with a value equivalent to 65% of the net pool, and an order that the respondent pay her costs.
CONDUCT OF THE HEARING
The interlocutory hearing of the application for leave proceeded on the papers, without the evidence of either party being tested by way of cross-examination.
The applicant was represented by Mr Weightman of Counsel. In support of her case she relied upon:
(a)Her Outline of Case Document (Interim Hearing) filed 13 April 2022;
(b)Her Amended Initiating Application filed 4 April 2022;
(c)Her Affidavit filed 4 April 2022;
(d)Affidavit of Ms B filed 12 April 2022;
(e)Affidavit of Ms C filed 12 April 2022; and
(f)Her Financial Statement filed 4 April 2022.
The respondent was represented by Mr Duane of Counsel. In support of his case he relied upon:
(a)His Response filed 11 January 2022;
(b)His Affidavit filed 11 January 2022;
(c)His Amended Financial Statement filed 8 April 2022; and
(d)A bundle of documents produced on subpoena by Club J.[2]
[2] Exhibit A
legal principles
Section 44(5) of the Act provides that, subject to subsection (6), a party to a de facto relationship may apply for orders under s.90SM only if the application is made within the standard application period, in this case two years after the end of the de facto relationship, unless both parties to the de facto relationship consent to the application.
Section 44(6) of the Act provides that the court may grant leave to a party to apply after the end of the standard application period if the court is satisfied, relevantly, that hardship would be caused to the party or a child if leave were not granted.
The approach to be taken by the court when dealing with an application for leave is well settled. Learned Counsel for the applicant referred to the decision of the Full Court in Whitford & Whitford[3]. That case considered the provisions of s.44(4) of the Act, which applies in the case of married parties, and is apposite where there is an application for leave following the end of a de facto relationship. Whitford (supra) confirms that there are two broad questions which may arise to be determined[4]:
(a)Whether the court is satisfied that hardship would be caused to the applicant or a child if leave were not granted; and
(b)Whether in the exercise of discretion the court should grant or refuse leave.
[3] (1979) FLC 90-612
[4] Id at 78,144
Whitford (supra) is authority for the proposition that the “hardship” referred to in s.44(4) of the Act, is the consequences which flow from the loss of the right to institute proceedings, not the loss of the right per se. In considering the meaning of the word “hardship” the Full Court observed[5]:
“In ordinary parlance, hardship means something more burdensome than “any appreciable detriment”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations. It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense. 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…
Hardship may be caused to an applicant if leave were not granted to institute proceedings, although the applicant is not in necessitous circumstances. Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved may constitute hardship…”
[5] at 78,145
If the court is not satisfied that hardship would be caused to the applicant or a child if leave were not granted, then that is the end of the matter. If the court is so satisfied, then the court must exercise discretion whether to grant or refuse leave.
On the question of the exercise of discretion the Full Court in Whitford (supra) stated[6]:
“The determination how this discretion should be exercised, must depend on the facts of the particular case. Due weight must be given to the expressed legislation intendment that ordinarily, proceedings should be commenced within a year from a date of the decree nisi, and the general policy of the Act which appears from s.44(3) and s.81 that financial relationships between the spouses should, wherever possible be brought to finality within a reasonable time after the dissolution of marriage. Hence, such matters as the length of the delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay, and the strength on the merits of the applicant’s case, and the degree of the hardship which would be suffered unless leave were granted, are matters affecting the exercise of the discretion. These matters are not necessarily the only ones.
On the other hand, ss.44(3) and 44(4) point to the conclusion that the legislature intended to confer power on the Court to grant leave to institute proceedings in order to avoid hardship. Having regard to the nature of jurisdiction which this Court exercises, this 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.”
[6] at 78, 146
Has the application been filed out of time?
There is no dispute that the parties’ de facto relationship had finally broken down by February 2010. The application for property proceedings could have been brought without the leave of the court only if filed by no later than February 2012. The Initiating Application was filed on 17 December 2021 and is therefore filed 9 years and 10 months out of time.
Has the applicant demonstrated that she will suffer hardship if deprived of the chance to bring her property claim?
The question of whether the applicant will suffer hardship depends on whether she has a prima facie claim for relief which is not trifling, and where the costs of the applicant pursuing her claim will not be equivalent to, or exceed, the amount which is likely to be awarded to her if her claim is successful. Counsel for the applicant referred the court to the decision of Nygh J in Jacenko & Jacenko[7] where His Honour held that:
“… the general principle is that on the issue of the establishment of prima facie case the Court proceeds on the basis that the evidence of the applicant, unless it is inherently unbelievable or contradictory, should be accepted, and the Court should therefore decide whether or not on that basis a prima facie case has been made out. If leave is granted, then it is for the Court conducting the ultimate hearing to determine whether that prima facie case can be established.”
[7] (1986) FLC 91-776 at 75, 643
In a recent decision in Skelton & Lindop [2022] FedCFamC1A 47 Austin J referred to a number of authorities which deal with an interlocutory application where an applicant is required to demonstrate a prima facie case[8]. His Honour’s observations include the following:
[8] At paragraphs 18-20
“ 18. In Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622-623, the High Court of Australia said that, for the purposes of an interlocutory application in which it is necessary for an applicant to demonstrate a prima facie case:
The first [inquiry] is whether the [applicant] has made out of time a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the [applicant] will be held entitled to relief.
How strong the probability needs to be depends, no doubt, upon the nature of the rights the [applicant] asserts and the practical consequences likely to flow from the order the [applicant] seeks.”
19. The Full Court has previously affirmed that the principle binds the determination of interlocutory applications under s 44 of the Act (Edmunds & Edmunds at [19]-[20]).
20. In Australian Broadcasting Commission v O’Neill (2006) 227 CLR 57 (at [65] and [69]), the High Court of Australia said this to explicate the test established in Beecham:
65. … By using the phrase “prima facie case”, their Honours did not mean that the [applicant] must show that it is more probable than not that at trial the [applicant] will succeed; it is sufficient that the [applicant] show a sufficient likelihood of success to justify [the interlocutory relief].
…
69. … it [is] not necessary for the [applicant] to show that it [is] more probable than not that the [applicant] [will] succeed at trial.”
Does the applicant’s case show a sufficient likelihood of success
As previously noted, for the purpose of determining the interlocutory dispute under s.44(6) of the Act, the untested evidence of the applicant should be accepted at its highest.
Learned Counsel for the Respondent submitted that, in assessing the strength of the applicant’s claim for relief, the court would have regard to the decision of the High Court in Stanford & Stanford[9], that is the difficulty that the applicant may face at trial in persuading a court that it is just and equitable to make the property orders she seeks.
[9] (2012) FLC 93-495
In Stanford (supra) the High Court observed that when an application for property settlement is made the court must first identify the legal interests of the parties in the property and then consider whether it is just and equitable to make an order altering those legal interests. The question of whether it is just and equitable to make an order cannot be dealt with simply by considering whether a party has made contributions as set out in s.79(4) of the Act. The High Court stated[10]:
“ In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4)”.
[10] Ibid paragraph 42
The observations of the High Court in Stanford (supra), which are made in the context of a dispute between married parties, apply also when the court is called upon to consider what order is appropriate in property proceedings pursuant to s.90SM(3) of the Act, following the breakdown of a de facto relationship. The relevant enquiry with respect to the just and equitable requirement is made at the time when a court is called upon to make such order as it considers appropriate altering the interests of the parties in the property, pursuant to s.90SM of the Act.
In the present case the court’s task is to determine the leave application on the basis that the evidence of the applicant is taken at its highest. There is no opportunity to test the evidence of either party, and the court cannot make the findings necessary to determine whether the court is satisfied, or not, that “in all the circumstances” it is just and equitable to make an order altering the interests of the parties in property. Prima facie the applicant’s case arguably falls within circumstances referred to by the High Court in Stanford (supra) when observing that “In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied” and “there is not and will not thereafter be the common use of property by the husband and wife” and “any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship”.
It is common ground that the de facto relationship commenced in 1999 and broke down in 2010, and produced one child Ms B, born in 2000, now an adult.
At the commencement of cohabitation the applicant moved in with the respondent, who was renting premises in Suburb K. The only asset of significance which the applicant held at that time was a one third beneficial interest in a real property at L Street, Suburb M, New South Wales (“the L Street, Suburb M property”), the value of which has been retrospectively assessed by a joint single expert, as at December 1999, at $95,000[11]. The L Street, Suburb M property had previously been owned by the applicant’s late husband Mr Arias, who passed away in 1999. The remaining two-thirds share was held beneficially by the applicant’s children Ms C and Mr D. Following Mr D’s passing the applicant obtained a one half interest in the L Street, Suburb M property, which she retains currently.
[11] Applicant’s affidavit paragraph 23, and Annexure 1
The applicant’s evidence is that at the commencement of cohabitation the respondent did not hold any asset of significance[12].
[12] Applicant’s affidavit paragraph 23
Following the birth of Ms B in 2000 the applicant was engaged in home duties until 2005, when she commenced employment as a cleaner. She says that her income was applied for the benefit of the family. She deposes that throughout the relationship, including during the period when she was employed as a cleaner, she was the primary homemaker and parent. She deposes that she undertook the majority of the homemaker duties by cleaning, cooking and washing for the family, cleaning the property and attending to the upkeep of the property, as well as attending to the needs of Ms B.
In November 2000 the E Street, Town F property was purchased for $130,000. The respondent was registered as the sole proprietor. The respondent borrowed $104,000 from Bank N to assist in the purchase of the E Street, Town F property, and a mortgage was registered over the E Street, Town F property in favour of the Bank N. The parties jointly borrowed an additional $50,000, and a mortgage was registered over the L Street, Suburb M property. The applicant says that the $50,000 was used to assist with the purchase of the E Street, Town F property, and to pay out a personal loan in the sum of $7,739. The loan application, which appears to have been signed by each party, records that the purpose of the loan is “assisting the purchase of a home & pay out NAB p/loan” and “using this property to assist in the purchase of E Street, Town F”[13]. Notwithstanding that his signature appears on the loan application, the respondent deposes that “Ms Arias has not made any financial or non-financial contributions to the E Street, Town F property both during our relationship and post separation.”[14]
[13] Applicant’s affidavit paragraphs 39-40 and Annexure 3
[14] Respondent’s affidavit paragraph 60
It is common ground that renovations and additions were undertaken to the E Street, Town F property during the period of the de facto relationship[15]. The applicant’s evidence is that she contributed to the renovations by assisting the builder and the respondent.
[15] Applicant’s affidavit paragraph 47; Respondent’s affidavit paragraphs 24-25
The parties and Ms B lived together at the E Street, Town F property until the parties’ relationship broke down finally in February 2010.
The respondent worked as a hospitality worker, and in about 2006 he commenced to operate a business which he sold after he retired in 2016. He admits that the applicant “would occasionally work in the business”.[16] The applicant says that both parties established the business, and that post separation the respondent sold the business and retained the whole of the proceeds of sale for his own benefit. The respondent says that he sold the business for $60,000, and that he agreed to allow the purchaser to pay off that amount, but that the purchaser went bankrupt and was unable to make the repayments.[17]
[16] Respondent’s affidavit paragraph 37
[17] Respondent’s affidavit paragraph 38
Upon the breakdown of the de facto relationship the applicant moved out of the E Street, Town F property with Ms B, and into the L Street, Suburb M property. She says that she cared for Ms B post separation. The respondent deposes that “Ms B predominantly lived at the E Street, Town F property following separation because she had the upstairs to herself”[18]. Curiously the respondent does not say that he provided care for Ms B, and the court notes that she was not quite 10 years old when the parents separated. The controversy is not capable of being resolved at this interlocutory stage. The respondent agrees that since 2020 Ms B has had nothing to do with him.
[18] Respondent’s affidavit paragraph 50
The applicant says that the breakdown of the relationship occurred when the respondent assaulted her, that he was charged, and an Apprehended Domestic Violence Order (“ADVO”) was made against him for her protection[19]. The applicant provides a detailed account of two episodes of family violence, one on 11 February 2000 and another on 21 April 2010, and she alleges that the respondent perpetrated violence against her throughout the duration of the relationship from 2000 until 2010.
[19] Applicant’s affidavit paragraph 64
Post separation, the applicant says that she has continued to make repayments required in respect of the joint loan secured by mortgage over the L Street, Suburb M property, and that the respondent has not contributed, and he told the applicant “If you don’t pay it the bank will take your home”[20].
[20] Applicant’s affidavit paragraph 42-44; Annexure 4
It is common ground that the respondent remained living at the E Street, Town F property following the parties’ final separation, until it was sold for the sum of $848,000, with settlement occurring on or about 17 January 2022.
The respondent has since purchased a unit at G Street, Suburb H for the sum of $600,000 and has retained about $105,000 from the sale proceeds[21]. He has not yet explained how the balance of the proceeds of sale of the E Street, Town F property (approximately $148,000) have been applied by him, although the applicant concedes that some of the proceeds would have been taken up by agent’s commission on sale, stamp duty on the purchase of G Street, Suburb H, and his reasonable living expenses.
[21] Respondent’s Amended Financial Statement
The applicant is now 59 years old and deposes that she wishes to retire from her job as a cleaner. She claims to suffer from health issues, including post-traumatic stress disorder as a consequence of the family violence which she says she experienced at the hands of the respondent.
The parties have each filed an updated Financial Statement in the proceedings. The court accepts and allows for the possibility that the evidence adduced at a final hearing may lead to a different conclusion as to the assets, liabilities and financial resources of the parties, and the conclusion about the net asset pool available for division between them.
On the basis of the evidence which each party gives about their current financial circumstances, the known assets, liabilities and financial resources and the estimated values are as follows:
Assets One half share in L Street, Suburb M property (W) E $ 272,500 Bank N #...08 (W) 1,218 863 Company O Shares (W) 3,728 Motor Vehicle 1 (W) 20,000 Super Fund P (W) 106,028 G Street, Suburb H property (H) 600,000 Westpac Bank (H) 105,483 Motor Vehicle 2 (H) 20,000 Household contents (H) 2,000 E$1,130,957 Liabilities[22] Loan 8,106 [22] The applicant claims tax liability of $2,400 and visas card debt of $2,100 which are not included in Balance Sheet given the length of time since the parties separated
The evidence indicates that the net value of the property currently has an estimated value of $1,122,851.
The respective financial position of each party currently reflects that the net assets of the parties are held in the proportion of 35%:65% in favour of the respondent. He retains the sole benefit of the whole of the proceeds of sale of the E Street, Town F property, which is the only asset purchased during the course of the de facto relationship.
In the event that the applicant is granted leave, then she seeks an order which requires the respondent pay her a sum of money calculated in accordance with a formula set out in her Amended Initiating Application, reflecting her claim that she is entitled to receive property with a value equivalent to 65% of the net pool. On the current state of the evidence if the applicant succeeds in her substantive claim then she will be entitled to receive a cash payment from the respondent in the sum of $334,485, and will retain the property currently in her possession which has a net value of $395,368.
In the event that the applicant is unsuccessful in prosecuting her claim for 65% of the net pool and were instead to be assessed as entitled to 50% of the net pool, then that outcome would see her retain property with a net value estimated at $561,425, and would require the respondent to pay her around $166,000.
At this stage it is not the court’s task to undertake a detailed consideration of the s.90SM issues. The task is to consider whether the applicant has raised a prima facie case. The de facto relationship endured for 11 years and produced one child and to date there have been no prior final property orders or any enforceable agreement.
Although the applicant is 17 years younger than the respondent, and she continues to work and earn an income as a cleaner in the sum of $1,700 gross per week, she is almost 60 years old and she says that her work as a cleaner is physically demanding and that she will be unable to continue that work into the future. There is no evidence before the court that the applicant has any qualifications or experience in any line of work other than cleaning or manual labouring work.
The respondent is almost 77 years old and is well past retirement age. He is reliant on an age pension in the sum of $483 per week and discloses modest weekly expenses. It appears that his pension is adequate to meet his current needs.
Learned Counsel for the Respondent submitted that the matters which must be taken into account pursuant s.90SF(3) in favour of the respondent vastly outweigh those for the applicant. The general approach to the consideration of the relevant matters was set out in Collins[23] and endorsed in Clauson[24] , albeit in the context of s.75(2) of the Act, which applies in situations where the parties were married. The general approach is equally apt when the court is called upon to consider the matters in s.90SF of the Act, following the breakdown of a de facto relationship. It is clear from the authorities that the weight to be attached in a particular case to the diverse range of matters that the Court is obliged to take into consideration, where relevant, is very much a matter in the discretion of the court when undertaking an holistic assessment of what orders, if any, are appropriate.
[23] (1990) FLC 91-144 at pp 78,043
[24] (1995) FLC 92-595 at pp 81,911
The applicant deposes to her initial contribution of a one third share in the L Street, Suburb M property, to the contribution of her income for the benefit of the family, to her contribution to the welfare of the family including those made in the capacity of homemaker and parent, to her contributions to the renovations to the E Street, Town F property, to her post separation contribution to the care of the child, and to the repayments in respect of the loan secured over the L Street, Suburb M property, and to the family violence which she alleges was perpetrated by the respondent, and which she asserts resulted in her suffering post-traumatic stress disorder. The applicant is nearing retirement age and her future needs, along with those of the respondent, will be a matter for consideration in the event that the applicant is granted leave to bring her claim.
The respondent contends that the applicant gambled and wasted funds. He relies on documents produced by Club J[25]. Those documents relate to a three year period post separation, between January 2019 and 2022. The applicant denies that she has wasted funds. Prima facie the relevant documents show that the applicant has attended at the Club J, on average twice each week over the relevant three year period, and that she has spent around $150.00 per week, on average, playing the poker machines there. The dispute as to whether the applicant’s post separation expenditure over that period ought to be characterised as waste, or as reasonable entertainment, is a matter for determination at any final hearing and cannot be determined at an interlocutory stage of the proceedings.
[25] Exhibit A
The applicant has incurred costs to date in the vicinity of $20,603 and if the matter proceeds to a final hearing for 2 days then she will incur further legal costs which are estimated to be around $35,000[26].
[26] Costs Notice for Applicant filed 13 April 2022
I am satisfied that the applicant has a prima facie case for relief which is not trifling. Her evidence, taken at its highest, shows sufficient likelihood of her obtaining an order for property settlement which, while it may fall short of the outcome she seeks, will place her in a more favourable financial position than she is in currently, given her present legal entitlements to property. I consider that the applicant’s costs will not equal or exceed the award she will receive in the event that her prima facie case is ultimately accepted.
It follows that I am satisfied that the applicant would suffer hardship if denied the opportunity to prosecute her prima facie case, due to the financial consequences that may flow from the denial of that opportunity, including that she will be left with a relatively small amount of property, when she is close to retirement age and, as is the case with the respondent, where it is unlikely that she is in a position to accumulate further wealth into the future which is sufficient to meet her reasonable needs.
The decision whether to grant leave still requires the exercise of discretion in the applicant’s favour.
DISCRETION
The discretion which the court has under s.44 of the Act is for the sole purpose of enabling the court to do justice as between the parties. The court is required to balance the matters to be considered in the exercise of the discretion in order to avoid hardship, but nevertheless in a manner which gives due weight to the legislative intention that proceedings for alteration of property interests ought to be brought within the period of 2 years after the end of the de facto relationship.
Length of the delay
In this case there has been a significant delay in the applicant bringing her claim. The parties separated in February 2010 and therefore the time for bringing the application without leave expired in February 2012 and, as previously noted, the applicant is out of time by 9 years and 10 months.
As Counsel for the applicant submitted, the length of delay is not in and of itself sufficient to deny a grant of leave[27]. The applicant submits that, at least from February 2016 onwards, when the applicant lodged a caveat over the E Street, Town F property, the respondent was on notice of her claim.
[27]Catlin & Kent (1987) FLC 91-815: the delay was 35 years
Counsel for the respondent submits that there is presumptive prejudice to the respondent brought about by the length of the delay and that had the applicant brought the proceedings in time he would have been on notice that he needed to work for longer and save in order to increase the balance of his retirement savings.
Reasons for the delay
The significance of this factor will vary according to the circumstances of the case, and the absence of an adequate explanation for delay is merely one factor to be considered.[28]
[28] Tormsen & Tormsen (1993) FLC 92-392 at 80,017
The applicant’s allegations of family violence and her alleged fear of the respondent along with her assertion that she had neither the funds, nor the legal knowledge, to bring an application for property settlement, are the foundation of her case for leave to commence proceedings out of time.
As noted previously, the applicant deposes to family violence perpetrated upon her by the respondent throughout the course of the de facto relationship, including an assault when she was pregnant, which she says required her hospitalisation. She provides a copy of a Provisional Order (Ex Parte) ADVO made against the respondent on 29 April 2010, on application by Police for the applicant’s protection and the protection of the child Ms B.[29] The terms of the order include that the respondent is not to go within 100 metres of where the applicant and Ms B reside, work or attend school, and he is not to approach or contact the applicant or Ms B except through a legal representative or as authorised by a parenting order or agreed in writing, and not to destroy, damage or interfere with the property of the protected persons.
[29] Applicant’s affidavit Annexure 9
The grounds of the application record that “there is a recorded history of domestics between the two of them and numerous unreported incidents due to fears of the victim”. The allegations in support of the application include that the respondent, in the course of him trying to eject the applicant from the E Street, Town F property, attempted to drag her out of bed by her hair, punched her to the mouth, splitting the inside of her bottom lip and causing it to bleed, and then punched her to the left side of her chin with a closed fist, causing soreness and swelling. The police record that the applicant is “extremely fearful of the defendant and has finally got up the courage to report a domestic assault, of which she has been suffering similar incidents or verbal and physical abuse for the past ten years.” It is evident from the facts alleged in the grounds for the application that Ms B was present in the home during the incident.[30]
[30] Consistent with evidence in the Affidavit of Ms B at paragraphs 3.2-
The applicant says that the respondent verbally abused her post separation. She says that as a result of his conduct towards her she was too fearful to take action regarding a property settlement. She says that she attempted to negotiate a settlement in 2016, but the respondent did not respond to her request for financial disclosure and she says that he telephoned her and told her that he would never give her any money. She says that at that time she was “too scared” of the respondent to progress the matter further.
The respondent denies that he perpetrated family violence. He deposes that the parties engaged in verbal arguments only and that he has never physically touched or harmed the applicant. He admits that the police attended around the time of the parties’ final separation in 2010, and that an ADVO was made against him, which he says he did not contest, as he wanted to end the relationship and get on with his life.
The respondent says that the applicant regularly attended his home post separation to have dinner, attend parties and borrow items. He annexes to his affidavit photos of the parties together at Ms B’s 18th birthday party at the E Street, Town F property in 2018[31].
[31] Husband’s affidavit Annexure G
Taking into account the prima facie evidence of the applicant, including the application made by police on her behalf, in circumstances where the parties had a child together, I consider that it is not outside the bounds of possibility that the applicant, although extremely fearful of the respondent, was willing and able at times to interact with him, following the breakdown of their de facto relationship, including by attending at family gatherings where other people were present, but that she remained fearful for her safety if she incurred his wrath, including if she asserted her claim in respect of the property to which the respondent considers to this day that he is solely entitled.
I also take into account that the applicant was born in the Country Q, and that English is not her first language. I consider that it is possible that at times she did not have the funds, post separation, to seek legal advice, that it is more likely than not that she did not have the legal knowledge herself to bring a claim without legal representation, and that it was only when she became aware that the respondent intended to sell the E Street, Town F property that she was forced to initiate the current proceedings, and noting that by this time that Ms B was an adult.
The court is satisfied that the applicant’s delay has been adequately explained.
Prejudice to the respondent by reason of the delay
The court takes into consideration the observations of the Full Court in Sharp & Sharp[32] that:
“Merely because the respondent to an application for leave does not point to particular prejudice that might arise if leave were granted, does not dispose of the question. The law presumes prejudice to flow to a person sought to be joined in litigation after the effluxion of the relevant time limits. Even if the Court came to the view that there was no significant prejudice to the respondent, the Court may consider whether in all of the circumstances of the case, it is just and reasonable to grant the extension sought.”[33]
[32] (2011) 50 Fam LR 567 at [57]
[33] Slocomb & Hedgewood (2015) LC 93-678
There is no evidence before the court of any actual prejudice to the respondent in the sense that delay will negatively impact the preparation of his case, for example by reason of the availability of witnesses, or any difficulty valuing any item of property relevant to the dispute. The parties have recently obtained a joint single expert valuation of the L Street, Suburb M property, including its value at the commencement of cohabitation[34].
[34] Applicant’s affidavit Annexure 1
Until the respondent sold the E Street, Town F property earlier this year, and invested most of the proceeds of sale in the G Street, Suburb H property, he continued to reside in the E Street, Town F property with no change occurring in respect of the real property arrangements of the parties which were in place at the time of the breakdown of their relationship. Neither of the parties has re-partnered, and their daughter Ms B remains the youngest child of each of them.
Notwithstanding that the applicant lodged a caveat and commenced negotiations for property settlement in 2016, the respondent went ahead with his decision to sell the business and retire in 2016.
I consider that prejudice to the respondent may have been real if he had altered his position by selling the E Street, Town F property after separation, and moving on with his life, for example by making contributions from his post separation income towards the purchase of another real property.
Counsel for the respondent submitted that if the applicant had brought her claim within time then the respondent may have had the opportunity to plan for his future with more certainty, including perhaps choosing to work for longer in order to accumulate greater wealth for his retirement. The submission invites the court to infer or presume that the respondent has suffered prejudice by the applicant’s delay.
I consider that since at least February 2016, when the caveat was lodged on behalf of the applicant, it must have been within the respondent’s contemplation that if a settlement was not reached then the caveat would need to be lapsed or withdrawn if he wanted to sell the E Street, Town F property, and that he would likely need to reach an agreement with the applicant, or court action would likely be the next logical step that she would take. I consider that the respondent has been inactive in protecting his own rights[35]. He has enjoyed sole use and occupation of the E Street, Town F property, a property in respect of which arguably each party has made contributions and in respect of which he seeks to retain, to the exclusion of the applicant, the full value of its worth.
[35] Slocomb & Hedgewood (2015) FLC 93-678
I consider that the applicant’s delay has not lead the respondent to act to his prejudice on an assumption that no claim by the applicant would be made and that any prejudice to the respondent is limited to the prospect that he may be required to make a cash payment to the applicant if she is successful in her substantive application.
Although I certainly do have concerns about the length of delay in this matter, in considering the relative prejudice to the applicant if she is denied the opportunity to prosecute her prima facie claim, a claim which may result in her being awarded a monetary sum which, in her current circumstances, may be significant, against any prejudice to the respondent, which the court has identified is limited to the possibility that he may have to pay the wife any sum which she may be entitled to receive, I am satisfied that the prejudice to the respondent, when balanced against the prejudice to the applicant, is not sufficient to deny the exercise of discretion in favour of the applicant.
conclusion
In all of the circumstances of this case, I am satisfied that the court’s discretion ought to be exercised in favour of granting leave to the applicant to bring her application pursuant s.90SM of the Act. I make an order accordingly.
I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Carty. Dated: 1 September 2022
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