Bau & Algren
[2021] FCCA 365
•2 March 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Bau & Algren [2021] FCCA 365
File number(s): BRC 13384 of 2020 Judgment of: JUDGE MIDDLETON Date of judgment: 2 March 2021 Catchwords: FAMILY LAW – property – interlocutory application – where the applicant has filed property proceedings out of time - whether the applicant will suffer hardship if leave is not granted - if hardship is established whether the discretion should be exercised. Legislation: Family Law Act1975 (Cth) s 44 Cases cited: Althaus & Althaus (1982) FLC 91-233
Brisbane South Regional Health Authority v Taylor [1996] HCA 25
Sharp & Sharp [2011] FamCAFC
Stanford v Stanford [2012] HCA 52
Tamaniego & Tamaniego [2010] FamCAFC 254
Whitford & Whitford (1979) FLC 90-612
Number of paragraphs: 50 Date of last submission/s: 4 February 2021 Date of hearing: 29 January 2021 Place: Brisbane Counsel for the Applicant: Ms Gover Solicitor for the Applicant: Ae & Associates Counsel for the Respondent: Mr Campbell Solicitor for the Respondent: Simmons & McCartney Lawyers ORDERS
BRC 13384 of 2020 BETWEEN: MS BAU
Applicant
AND: MR ALGREN
Respondent
ORDER MADE BY:
JUDGE MIDDLETON
DATE OF ORDER:
2 MARCH 2021
THE COURT ORDERS:
1.That pursuant to s. 44(3) of the Family Law Act 1975 (Cth) the applicant be granted leave to institute proceedings out of time.
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.
REASONS FOR JUDGMENT
JUDGE MIDDLETON
BACKGROUND
The applicant wife commenced proceedings against the respondent husband on 25 September 2020, some four months out of time. (s. 44(3) Family Law Act 1975 (Cth) (the Act.)
By way of amended initiating application filed on 11 December 2020 the applicant seeks leave to commence out of time.
The respondent opposes the granting of such leave.
The parties’ commenced cohabitation in 2006, married in 2008 and divorced on 17 April 2019, with the divorce coming into effect on 18 May 2019. A relationship of approximately 13 years.
The parties are in dispute as to when they separated on a final basis. The wife says that they separated on 28 November 2015 and the husband says the parties separated shortly after their marriage.
It is not in dispute that the parties lived separately for the majority of their marriage, the wife lived in Queensland and the husband lived in a property in New South Wales… (the former matrimonial property).
The parties purchased the former matrimonial property in November 2007 and although the property is in the husband’s sole name the parties are jointly liable for the mortgage over the property. The property was purchased for the sum of $299,000 with each party contributing $40,000 towards the deposit and the remainder of the purchase price being by way of mortgage.[1]
[1] Affidavit of Ms Bau filed 25 September 2020,[16],[25]; affidavit of Mr Algren filed 30 November 2020,[11],[52].
It is also not in dispute that the former matrimonial home represents the major asset of the parties.
It is accepted by the husband that the wife has an interest in the former matrimonial property. He provides evidence that he wishes a relative to “take over the applicant’s share of the home loan” and “assist in paying out the [wife]”.[2]
[2] see also the written submissions of the respondent on page 5 under the heading rights and relief at law and in equity.
The applicant is not in paid employment at the current time due to an interruption in her businesses as a result of the Covid-19 pandemic.
The respondent is currently not in paid employment..[3]
[3] see paragraph 16 of the husband's affidavit filed 30 November 2020.
ISSUE
The issue for determination is as follows:
(a)whether the wife will suffer hardship if leave is not granted; and
(b)if hardship is established whether the discretion should be exercised.
THE LAW
Section 44 of the Act provides a discretion to grant leave to the applicant provided I am satisfied not to do so would cause hardship.
In Sharp & Sharp [2011] FamCAFC the Full Court considered the meaning of hardship in the context of section 44(3) and (4) of the Act. In a joint judgement of May and Ainslie-Wallace JJ at [12] their honours said:
“it is important to bear in mind the purpose of section 44 in the context of the Act, which is that time limits are to be observed as the wording of that section makes clear.”
Their Honours said the principles concerning applications for leave to commence an action out of time are well known, citing Brisbane South Regional Health Authority v Taylor [1996] HCA 25 where McHugh J said:
“the enactment of time limitations has been driven by the general proposition that “where there is delay the whole quality of justice deteriorate.”
At [553] His Honour said:
“a limitation period should not be seen therefore has an arbitrary cut-off point unrelated to the demands of justice or the general welfare of society. It represents the legislator’s judgement that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated.”
In Whitford & Whitford (1979) FLC 90-612 the Full Court noted at p 78,146 that while this section intends to confer power to grant leave to avoid hardship the:
“power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi”
In Sharp & Sharp at [18] the Full Court said:
“in assessing hardship in this context the well-established test is that the applicant must have a Prima facie claim worth pursuing or a real probability of success. Further leave will not be granted if to do so would not in the substantive result alleviate that hardship.”[4]
[4] Ibid [2011] FamCAFC 150
In Whitford & Whitford (1979) FLC 90-612 the Full Court said:
“as a general proposition that 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 sections 44 (3) and 44 (4) for saying that the right or entitlement lost must be a substantial one.”
At pp 78,145 to 78,146 the Full Court in Whitford & Whitford continued:
“such matters as the length of delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay and the strength and the merits of the applicant’s case and the degree of hardship which would be suffered unless leave granted are all matters affecting the exercise of the discretion.”
In relation to considerations regarding my discretion O’Ryan J in Tamaniego & Tamaniego [2010] FamCAFC 254 said:
“in summary, in considering the second question the court may have regard to a number of factors that include whether the applicant has an adequate explanation for the delay in bringing the proceedings and whether to grant leave would prejudice or impose hardship on the respondent to the application for leave or other persons.”
Furthermore in Althaus & Althaus (1982) FLC 91-233 Evatt CJ said:
“it requires the court to consider whether the wife 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 husband. 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.”
Finally at [97] in Sharp & Sharp the Full Court said:
“merely because the respondent…. Does not point to a particular prejudice that might arise if leave were granted, is does not dispose of the question. The law presumes prejudice to flow to a person sought to be joined to litigation after the affliction of the relevant time limits.”
In considering those authorities and distilling the relevant principles I am of the view that I must consider and determine the following matters:
(a)whether hardship would be caused to the wife if leave were not granted;
(b)whether I am persuaded that the discretion should be exercised and in that determination consider:
(i)whether the wife has a prima facie case a real probability of success;
(ii)whether the costs of litigation will be as much or more than the wife is likely to be awarded;
(iii)what is the length of delay;
(iv)what are the reasons for the delay;
(v)what is the prejudice to the respondent due to the delay;
(vi)a brief assessment of the probable outcome of the wife’s substantive claim;
(vii)whether the wife took all reasonable steps to pursue her claim; and
(viii)whether there is any evidence to suggest that the applicant at some stage abandon her case.
THE EVIDENCE AND DETERMINATION
The wife sets out the material she relies upon on page 1 of her written submissions filed on 29 January 2021. The husband sets out the material he relies upon on page 1 of his written submissions filed on 4 February 2021. Both parties also rely upon their respective written submissions.
It should be noted that although the wife filed an amended initiating application on 11 December 2020 she did not file a further affidavit, this is despite an order having been made on 8 December 2020 for her to do so. In the circumstances the wife simply relies upon her initial affidavit filed on 25 September 2020.
The wife in her evidence asserts that she is jointly liable for the mortgage over the former matrimonial property. Furthermore she provides evidence that as a result of the husband’s failure to meet the ongoing payments both she and the husband have a bad credit rating. (See paragraph 39 of the wife’s affidavit filed 25 September 2020.)
It is asserted by the respondent’s counsel that the wife has provided no evidence as to the hardship she will be caused if leave were not granted. He points to the fact that if leave were not granted she would have proprietary and/or equitable rights to pursue in a separate jurisdiction. With respect to the respondent’s counsel I do not accept that this is the test which I must apply.
The test was well set out in Sharp & Sharp [2011] FamCAFC 150 at paragraph 18 by the full court as I have previously set out. The test is that the applicant must have a “Prima facie claim worth pursuing or a real probability of success”.
The wife’s affidavit sets out evidence that she, prima facie, was the major contributor to the former matrimonial home. Her evidence is that she continued to meet some of the mortgage payments after the date of separation that she asserts. Indeed the husband seems to agree with that proposition where he says at paragraph 21 of his affidavit “since at least 2016 I have made all the payments on the mortgage”.
In Stanford v Stanford [2012] HCA 52 the High Court made it very clear that unless the court is satisfied that it would be just and equitable to make a property adjustment order then the court has no jurisdiction.[5]
[5] Stanford v Stanford at [2].
At [37] the plurality said:
“first, it is necessary to begin consideration of whether it is just and equitable to make a property settlement or of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property…..”
As I previously outlined it appears that the respondent takes no issue with the fact that the wife has at least an equitable interest in the former matrimonial home. Both parties assert that it is the former matrimonial home that is the major asset of the relationship.
The Plurality continued at [42] saying:
“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 a 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 in 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 the 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 affected 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).
During the course of the relationship, and indeed for some period after the end of the relationship the parties were content it seems for the respondent to predominantly live in the former matrimonial home and for the applicant to live in Queensland.
Clearly after the relationship ended the applicant sought to bring an end to the financial arrangements that were in place. Indeed the fact that she remains liable for the mortgage would seem in my view to be sufficient evidence to suggest that she no longer consents to the express or implicit assumptions that were in place during the relationship. I am therefore satisfied that it would be just and equitable to make a property settlement order.
In assessing whether the applicant has a prima facie claim worth pursuing I must have consideration to her entire affidavit not simply, as counsel for the respondent asserts paragraphs 6 to 9 of her affidavit.
At its highest the applicant’s evidence would support a finding that she has a prima facie claim worth pursuing or a real probability of success. The applicant has made significant contributions to the former matrimonial property, remains liable for the mortgage and it seems has had her credit rating affected as a result of that liability. In my view those are all matters which support a finding that she would suffer hardship if leave were not granted.
The wife asserts that the net property pool is approximately $415,726 worth of assets. The husband suggests that the net asset pool is slightly lower than that. There is no supporting evidence in terms of valuations or liabilities to assist me. I must make a preliminary assessment of the case and in doing so accept that the case has a net value of between $300,000 and $415,000.
If I were to grant leave I am satisfied that in doing so the substantive result will alleviate the applicant’s hardship.
Neither party provides any evidence as to the likely costs of litigation should the matter proceed. On a prima facie level it is hard to imagine that the applicant would receive less than or the same amount of any costs expended. Indeed if the costs amounted to as much as she is prima facie likely to receive a real question would be asked of her lawyers.
The applicant provides evidence as to the length of delay and the reasons for such delay. Her evidence is that she was primarily focused on her financial situation in circumstances where the Covid-19 pandemic caused her business to all but close and as a result her income declined accordingly.
Many people throughout the world were adversely affected during the pandemic and it is reasonable, in my view, to focus primarily on how one might feed themselves and survive during such pandemic. In those circumstances I accept the wife’s evidence.
The delay is a period of some four months. The respondent provides evidence that he will be prejudiced as a result of the delay. His evidence is that he is prejudiced as a result of his poor health and the circumstances in which he finds himself, namely incarcerated awaiting trial for criminal offences. The husband continues that as a result of his current living arrangements he has great difficulty in communicating with his legal team and also in accessing crucial documents. (See paragraph 13-16 of the respondent’s affidavit.)
The respondent provides evidence that there was correspondence passing between the parties’ respective lawyers between 27 November 2019 and 13 March 2020 relating to this property dispute. (See Annexure-1 of the husband’s affidavit). It is important to note that the Covid-19 pandemic closed down much of Australia in March 2020.
The matters that the respondent raises with regards to hardship are in my view more relatable to his incarceration then to the length of delay and in those circumstances I am not persuaded that he has been prejudiced as a result of the delay.
Having regard to the applicant’s evidence at prima facie level I am satisfied that she would achieve more than a 50% share of the matrimonial pool.
Furthermore having regard to the fact that it is conceded that the applicant was pursuing her claim up until the Covid-19 pandemic had a real effect on the citizens of Australia I am satisfied that she was taking all reasonable steps to pursue her claim.
I am satisfied that the applicant’s attention to her claim became distracted due to considerably important factors outside of her control and that she followed through with the filing of her application as she said she would once the Covid-19 pandemic had settled down somewhat. In those circumstances I am not satisfied that she had abandoned her claim.
For these reasons I am satisfied that there would be hardship afforded the applicant if leave commence were not granted and that I should exercise my discretion in granting her leave out of time.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Middleton. Associate:
Dated: 2 March 2021
Key Legal Topics
Areas of Law
-
Family Law
-
Civil Procedure
Legal Concepts
-
Appeal
-
Costs
-
Jurisdiction
-
Procedural Fairness
-
Standing
0
3
0