Callahan & Eddy
[2023] FedCFamC2F 1704
•13 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Callahan & Eddy [2023] FedCFamC2F 1704
File number(s): MLC 8254 of 2023 Judgment of: JUDGE STEWART Date of judgment: 13 December 2023 Catchwords: FAMILY LAW – PROPERTY – De facto relationship – Leave to proceed out of time Legislation: Family Law Act 1975 (Cth) ss 44(6), 44(6)(a), 90SF(3), 102NA, and Part VIIIAB
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 Part 10.2
Cases cited: Arcand & Boen [2021] FamCAFC 155; (2021) FLC 94-046
In the Marriage of Whitford [1979] FamCA 3; (1979) 35 FLR 445; 24 ALR 424; 4 Fam LR 754
Stanford v Stanford [2012] HCA 52
Welland & Hawthorn [2021] FCCA 1232
Division: Division 2 Family Law Number of paragraphs: 20 Date of hearing: 13 December 2023 Place: City D Counsel for the Applicant: Mr McKenna Solicitor for the Applicant: City D Lawyers Counsel for the Respondent: Mr Dean Solicitor for the Respondent: Heinz Law ORDERS
MLC 8254 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS CALLAHAN
Applicant
AND: MR EDDY
Respondent
ORDER MADE BY:
JUDGE STEWART
DATE OF ORDER:
13 DECEMBER 2023
THE COURT ORDERS THAT:
1.By consent and pursuant to Part 10.2 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, interim orders are made in accordance with the Minute of Order dated 13 December 2023, marked with the letter “A” and annexed hereto.
2.Pursuant to section 44(6) of Family Law Act 1975 (Cth) (“the Act”), the Wife be granted leave to proceed on her application for property adjustment under Part VIIIAB of the Act.
3.Each parties’ costs of today be reserved.
4.The requirement for a conciliation conference in this matter be dispensed with.
5.The proceedings are listed for Final Hearing commencing 29 May 2024 at 10.00 am in the City D sittings of this Court.
6.Any party requiring subpoenaed material to be available for inspection in City D, advise the Chambers of Judge Stewart by no later than 4.00 pm on the Tuesday of the week preceding the Final Hearing.
7.The Applicant file and serve any Amended Application, all affidavits and, if relevant, an updated Financial Statement upon which they seek to rely by no later than 28 days prior to the Final Hearing.
8.The Respondent file and serve any Amended Response, all affidavits and, if relevant, an updated Financial Statement upon which they seek to rely by no later than 14 days prior to the Final Hearing.
9.The Applicant file and serve any material in reply no later than 7 days prior to the Final Hearing.
10.Each party file and serve a case outline by no later than 2 days prior to trial and provide a copy in Word format to …@….
11.These reasons be transcribed, settled, and placed on the Court file.
AND THE COURT NOTES THAT:
A.If in any proceedings there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 (Cth) apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
B.Affected unrepresented parties may apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (“the Scheme”) for representation but any such application must be made at least 12 weeks prior to the final hearing.
C.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
D.If s102NA applies and a party becomes unrepresented after trial directions have been made, that party is required to promptly advise the Court.
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 has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
(REASONS SETTLED FROM TRANSCRIPT)JUDGE STEWART
In this matter, I deliver the following reasons and make the following orders. I shall make short-hand references to the parties as ‘Husband’ and ‘Wife’, noting that the parties were only ever in a de facto relationship.
By her application, filed 23 July 2023, the de facto Wife sought an adjustment of property interests between the parties following the breakdown of their de facto relationship. In order to bring that application, the Wife requires leave, pursuant to section 44(6) of the Family Law Act 1975 (Cth) (“the Act”). The Wife states that the date of separation between the parties was July 2020. The Wife is therefore approximately one year out of time to issue proceedings. The Husband places the date of separation as April 2020, and he would say the Wife is therefore 15 months out of time to bring the proceedings. Unsurprisingly, given the parties’ respective ages during their relationship, there are no children of the relationship. The Husband has children of a prior relationship, whom he raised as a single father. Those children are now grown.
The parties, each of whom were represented by Counsel, agreed that this application should proceed on submissions. In an application of this nature, I consider hardship and the reasons for the delay in the application. On any view, the relationship between the parties was relatively short. Their respective property holding at present is modest, and each of them have ongoing needs. The parties are in a relatively mature stage of their lives, as the de facto Wife is 62 years old, and the de facto Husband is 64 years old. The Wife was born in Country B and English is her second language. There is a dispute between the parties as to the Wife’s competency in English, which becomes relevant as the Wife transferred the former matrimonial home in Town C from the parties’ joint names into the husband’s sole name following separation.
There seems to be a dispute as to whether that occurred in 2020 or 2021, asserted by the Husband and the Wife, respectively. The Wife asserts that she was told by the Husband to sign some documents. She said, “Mr Eddy told me to sign some documents, which I now understand to have been documents which removed my name from the title of the Town C property”. The Husband asserts that the parties were in effect making an informal property settlement, as at around about the same time (though the details are contested), the Wife was allegedly given some money to vacate the home, which funded the purchase of a car and some accommodation costs.
There is no dispute that the parties resided together in a de facto relationship between 2017 and some point in 2020 (though the exact date of separation is, as noted, in dispute). There is a dispute as to whether the parties resided in the same residence for the whole of the relationship. The Husband asserts that between 2017 and 2019 the parties lived separately. There is no dispute that the parties remained living in the former matrimonial home, for lack of a better term, for approximately a further 12 months following the date of separation.
There is little doubt that the Husband has made superior financial contributions to the known assets now in existence, and that he received a post-separation inheritance of around $150,000. The Husband came into the relationship with a home in Suburb E, which was subsequently sold, reaping about $270,000 from the proceeds of sale. Following that sale, the parties purchased the former matrimonial home at Town C in joint names for $185,000 using the proceeds of the Suburb E property sale.
The Wife came into the relationship with a business, which was ultimately sold in 2019. The proceeds of the sale of that business exclusively paid off debt and there was no net reward from the sale. There is a dispute between the parties as to whether the Wife also came into the relationship with property in Country B. The Husband contends that the Wife purchased that property between 2011 and 2016 for $140,000. The Husband also contends that the Wife continues to own the property and does not disclose that property holding by her in her financial statement. It is true that the Wife does not disclose any property holding in the Country B. However, I need to assess this application on the basis that the Wife makes a full and frank financial disclosure of her property holding in her financial statement, even though that may turn out not to be the case. It is properly conceded by Counsel for the Husband that I should consider this case by assessing the Wife’s application and case at its highest. I shall do so. In doing that, I note that the Husband disputes many of the facts asserted by the Wife. I stress that this is an initial consideration of the Wife’s application for leave, and the statements that I make in these reasons should not be construed as findings of fact on the ultimate substantive application. Findings at a final hearing may be quite different to the Wife’s position now. I also stress that a decision to grant leave does not preclude the Husband from later putting a case that there should be no further adjustment of property between the parties (and I refer on that point to the decision in Stanford v Stanford [2012] HCA 52).
I turn now to issues of hardship and delay. Section 44(6)(a) of the Act provides that the Court may grant a party leave to apply for a property settlement after the end of the standard application period (which in this case is 2 years) if I am satisfied that hardship would be caused to the party if leave were not granted. In Welland & Hawthorn [2021] FCCA 1232, a recent and informative decision of the Full Court, a number of propositions arise. Namely:
(a)an Applicant for leave must demonstrate hardship, and if able to convince a Court that hardship is established, must then convince the Court to exercise the discretion in her favour, in this case, to extend time;
(b)the onus is on the applicant to demonstrate hardship;
(c)the Court needs to be satisfied that the prospective property claim is reasonable or arguable, but I am not required to undertake a detailed hearing on the merits;
(d)if hardship is demonstrated, the onus is on the Applicant to demonstrate why the discretion to grant leave should be demonstrated in her favour; and
(e)if hardship is demonstrated, a range of other factors can be considered when considering whether to exercise the discretion in the Applicant’s favour. These factors can include the length of delay, the adequacy of the reasons for delay, and the prejudice that the Respondent would suffer if the application for an extension of time is granted.
Turning first to the hardship issue, it is undeniable that the known assets of the parties are modest. The asset pool is constructed by the following items of property:
(a)the former matrimonial home, valued at $275,000 (which appears to be an agreed value);
(b)the Husband’s first car, valued at $800;
(c)the Husband’s second car, valued at $8,000;
(d)The Wife’s car, net of loan, which appears to have a value of $14,000 and a loan attached to it of $11,000, bringing its net equity to approximately $3,000; and
(e)some modest savings held by each of the parties.
Overall, the non-superannuation asset pool appears to be around $286,800, of which the Wife holds $3,000, or approximately 1 per cent.
The wife does hold approximately $40,000 of superannuation entitlement. However, the Husband has been unable to put his superannuation position before the Court, which is surprising, as such details are reasonably straightforwardly ascertained. It is contended by the Husband that the Wife received sums of money from him post-separation, being $10,000 (which she received as a gift), and $14,900 (which she received as a loan, which has not been repaid). The Wife agrees that she received some sums of money from the Husband post-separation, which she puts at $15,000. The Wife appears to have expended those monies on a modest car and day-to-day living expenses. The characterisation of any sums received from the Husband by the Wife is plainly a matter to be considered at trial. In considering this application, even taking the Husband’s position at its highest (i.e.: that the sum of $24,900 should be considered as an add-back to the asset pool), the Wife would have received $37,900 out of a notionally comprised asset pool of $310,900, or around 12 per cent.
Although acknowledging the relationship was short, and the Husband’s direct financial contributions were superior to those of the Wife, the Wife points to many contributions she did make during the relationship and beyond, both financial and non-financial. Those contributions are set out in detail in the Wife’s affidavit and include (noting that the husband disputes the nature and extent of some of the asserted contributions): superior homemaking contributions; homemaking duty contributions to the husband; applying the Wife’s income to the benefit of the parties, with a short period as the sole income earner; working in the Suburb E property to assist in its preparation for sale; caring for the Husband after he sustained a workplace injury; financing the erection of a shed at the former matrimonial home; and planning for renovations on that modest property. There may be other contributions that the Wife will allege at trial.
The Wife correctly also notes that there will need to be a detailed assessment of the factors contained in section 90SF(3) of the Act. There was an appropriate concession that those factors would go both ways. The Wife is employed earning a modest $750 gross per week, and is unlikely to improve her employment position. Having regard to her age, the Wife is likely to be in the sunset years of her capacity for employment. The Husband is not employed, and receives a Centrelink benefit, but he holds (and will likely continue to hold) more non-superannuation property than the Wife. As I have said earlier, I cannot say what the entire property available for division between the parties is, as the Husband has been unable to disclose his superannuation entitlements. Nevertheless, it is put by the Wife that she could receive a 30 per cent adjustment on property. On the known assets of $286,800, 30 per cent would have the Wife receiving a payment of around $83,000.
Even if the Wife received only 20 per cent, that would have the Wife receiving a payment of around $54,500. A 10 per cent adjustment would have the Wife receiving a payment of around $25,000. At this early stage, and again with the caveat that the Husband’s superannuation is unknown, 30 per cent would seem to me to be at the higher end of the range. While I do not discount completely that no property adjustment is a possible outcome, even if the Wife achieves a 20 per cent adjustment or a 10 per cent adjustment, or an outcome in that range, that would provide her with significant benefit for a woman of the Wife’s means. I note that hardship may be caused by loss or deprivation of something that is of comparatively small monetary value.
I am satisfied that the wife has an arguable case in respect to a property adjustment, and her claim is not fanciful or improbable. I also note that, due to the way the parties are funded (pursuant to the pilot property scheme in Victoria), it seems unlikely that the parties will be required to fund their own legal expenses, although I cannot be fully certain of that. Although the Wife’s claim is modest, it must be assessed relative to her current financial position and resources. I am of the view that, whilst it is easy to dismiss a claim as trifling and unworthy, even small amounts of money may make a discernible difference to the Wife as she moves forward in her life. I am satisfied, therefore, that the Wife will suffer hardship if leave is not granted. In reaching that conclusion, I consider the statements of the Full Court in In the Marriage of Whitford [1979] FamCA 3; (1979) 35 FLR 445; 24 ALR 424; 4 Fam LR 754. Although that is a very old case, it is often cited. Their Honours May and Ainsley-Wallace JJ said that, in their view, the meaning of “hardship” in subsection 44(4) of the Act is akin to concepts such as hardness, adversity, privation, and that which is hard to bear, or a substantial detriment. For a woman in the Wife’s position, even the deprivation of the sum of $25,000, in my view, would be a substantial detriment.
Turning now to whether I should exercise my discretion to grant leave in the Wife’s favour, I consider the issue of delay as needing to be viewed in the context of the fact that the parties did continue to live with each other for a period of 12 months post-separation, which encompassed COVID-19 lockdowns. I note that the Wife is a person for whom English is her second language and who was born in Country B. The sorts of legal concepts that might be readily understandable to those of us without those vulnerabilities may not be readily understandable by the Wife. I take into account the Wife’s contention that she was subjected to abuse and family violence in the relationship (noting that it is the Husband’s position that the abuse went both ways). I therefore also take into account the fact that there could be an element of reluctance on the Wife’s part to issue proceedings, at least during the period when the parties were living together. I note that my assessment of the reasons for delay both takes the Wife’s case at its highest, and is made on the basis of the Wife’s subjective considerations, regardless of whether her views turn out to have been objectively correct. I take into account that the Wife was only able to move when she was placed in funds by the Husband. Finally, I take into account that the Wife ultimately did seek legal advice and appears to have acted relatively quickly to put herself in a position to issue proceedings and seek mediation at the time she obtained that legal advice.
In a case of Arcand & Boen [2021] FamCAFC 155; (2021) FLC 94-046, the Full Court said of the question of delay that “the applicant only needs to be satisfactorily explained why the claim was brought late, not sooner”. In my view, the delay in this case is relatively modest, in circumstances where the parties have remained living together, and in circumstances where, when the Wife became aware of what the problem was, she did attempt to negotiate a settlement, and did move relatively quickly to issue proceedings.
I wish to make a brief aside at this point. I consider that the Wife, and perhaps the Husband, too, are very fortunate that this pilot has been set up by Victoria Legal Aid. I wonder, without this pilot, whether the wife would have had the wherewithal and the personal capacity to be able to issue the proceedings. I congratulate Victoria Legal Aid on being able to introduce this pilot. Parenting cases are, of course, important, but so are property cases in certain instances. These reasons will be transcribed and will be anonymised, and the Court will ensure that a copy of the reasons is given to Victoria Legal Aid so that the Court can advise Victoria Legal Aid how valuable, at least in my view, the pilot is. I note that it would have been nigh on impossible for the Wife to run this application as a self-represented litigant, who requires a Country B interpreter.
Returning to whether I should exercise my discretion to grant the Wife leave to proceed out of time, I also have regard to the nature of hardship on the Respondent. I note the dispute as to whether there was an informal property settlement negotiated between the parties, but the only way to get to the bottom of that will be at trial, rather than at this early stage, and I take the Wife’s case at its highest at this point. I have regard to the fact that the Husband has said that, especially in light of him having the inheritance monies, that he might have organised his finances differently had he apprehended the possibility of further litigation, and I accept that that might very well have been the case. The Husband may well have had regard to whether there was a possibility of further obligations moving forward. However, there is very little detail in the Husband’s affidavit material about how he might have organised his position differently, and what he has actually spent that money on. That said, I do note that each of the parties is in relatively modest circumstances, and I accept (as a general proposition), that both parties may have needed to dig into financial resources for day-to-day living expenses.
I have also taken into account that I have looked at the photographs of the property that was the former matrimonial home. It is quite apparent to me, even with a lay person’s eye, that the property needs a significant amount of work to bring it up to what I would regard as a habitable condition. I take into account that granting leave will mean that the Husband may find himself in a position where he cannot make any future payment, and that will be the source of some consternation and distress to him. However, in an overall sense, where the Husband currently holds the vast majority of the assets, and the Wife is in the position that she is in, I consider that my discretion should be exercised in favour of the Wife.
Finally, because of the nature of this dispute and its ambit, I will reserve each party’s costs of today. I will also dispense with the usual requirement for a conciliation conference. Each of the parties are represented by experienced Counsel today, and presumably will be represented, if not by the same Counsel, then by Counsel who have experience in family law matters at trial. This is a modest dispute. I am conscious that every dollar is a dollar that the parties need to find (with the caveat that I do not know whether the parties are personally expending that money, and whether there are repayment obligations to Victoria Legal Aid on the conclusion of the proceeding). I therefore will not require the parties to have a formal conciliation conference, though I would expect the parties to have negotiations once financial disclosure is complete. I shall list the matter for hearing in the May Circuit, with the caveat that I note an accredited Country B interpreter could not be located for today’s hearing. If it proves likewise impossible to locate an accredited interpreter for the May Circuit, I will consider moving the hearing to Melbourne, but my Chambers will advise the parties’ solicitors if that occurs.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Stewart. Associate:
Dated: 9 January 2024
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