Cela & Houghton
[2021] FedCFamC2F 668
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Cela & Houghton [2021] FedCFamC2F 668
File number(s): PAC 2930 of 2021 Judgment of: JUDGE STREET Date of judgment: 3 December 2021 Catchwords: FAMILY LAW- Application for an extension of time under s 44 of the Family Law Act 1975 (Cth) – whether the applicant has a prima facie case – whether a refusal to extend time would cause hardship to the applicant – whether there is a satisfactory explanation for the delay – whether the granting of leave to the applicant would cause prejudice to the respondent – time extended and leave granted Legislation: Family Law Act 1975 (Cth) ss 44, 44(6), 44(6)(a), 75(2), 79 Cases cited: Whitford & Whitford (1979) FLC 90-612
Sharp v Sharp [2011] FamCAFC 150
Stanford v Stanford [2012] HCA 52
Division: Division 2 Family Law Number of paragraphs: 25 Date of hearing: 3 December 2021 Place: Parramatta Solicitor for the applicant: Mr Duncombe Solicitor for the respondent: Ms Charlton ORDERS
PAC 2930 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR CELA
ApplicantAND: MS HOUGHTON
Respondent
ORDER MADE BY:
JUDGE STREET
DATE OF ORDER:
3 DECEMBER 2021
THE COURT ORDERS THAT:
1.Time is extended and leave is granted for the commencing of these proceedings up to and including 31 May 2021, pursuant to s 44(6) of the Family Law Act 1975 (Cth).
2.Unless appropriate consent orders are provided, the proceedings are stood over for a directions hearing at 9:30am on 7 February 2022 via video and audio link pursuant to Part 6 Division 6 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), unless the parties/representatives are fully vaccinated in which they may attend the hearing in person.
3.Costs are reserved.
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 Cela & Houghton has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE STREET:
Background
This is an application for an extension of time under s 44(6) of the Family Law Act 1975 (Cth) (“the Act”) in respect of de facto property proceedings that were filed approximately a year out of time. The Court will have set out the chronology of events as identified in the respondent’s case outline.
Date
Event
1967
Date of birth of Applicant , Mr Cela
1977
Date of birth of Respondent, Ms Houghton
1996
Commencement of cohabitation
2003
Applicant purchases property at B Street, Suburb C
2005
Birth of first child- X
2005-2006
Applicant incarcerated
2008
Birth of second child- Y
2011
Birth of third child- Z
2012-2015
Parties separate
2015
Respondent receives inheritance of $30,000 after her father’s death. Proceeds applied to mortgage.
2016
B Street, Suburb C Property Sold
2016
Applicant purchases Suburb D Property
February 2016- May 2018
Parties reconcile on/off basis
May 2018
Parties separate on a final basis
17 October 2019
Final parenting Orders made in relation to children - Sole parental Responsibility to Respondent Mother.
31 May 2021
Commencement of proceedings by applicant.
The respondent opposes the extension of time, contending that there is an inadequate explanation for the delay. The respondent asserts both prejudice and hardship to the respondent and the children of the relationship if time is extended. The respondent also takes issue with the alleged prima facie case and alleged hardship advanced in the applicant’s case outline and evidence. The respondent has provided a balance sheet which identifies the property is in the name of the respondent, being E Street, Suburb D, which was purchased in December 2016, and is identified as having a value of $815,000 and being the subject of a mortgage to the ANZ Bank in the sum of $350,000.
The balance sheet identifies net assets of $780,000 and identifies an uncertain position in respect of the superannuation of the parties, namely the applicant.
The respondent identifies in her Case Outline, filed 1 December 2021 (“the Respondents Case Outline”) at [4] that the parties were in an “on and off” relationship for several years. The respondent identified at [5] that at the commencement of the relationship, the respondent was working full-time for Employer F as a customer service officer, and that the applicant was unemployed. The respondent identified the purchase of another property, B Street, Suburb C, in her sole name in 2003 and the obtaining of a mortgage from H Bank in respect to that property. The respondent contends that the applicant refused to be financially or legally responsible for any assets or loans throughout the relationship.
At [9], the respondent referred to the applicant having served a custodial sentence in 2005 to 2006 and that the respondent was solely responsible for the mortgage payments and expenses of the B Street, Suburb C property at that time. Reference is made at [12] to the applicant living out of the house in an alternative lifestyle and it is contended at [13] that he left the respondent responsible for household expenses, including the mortgage payments, council rates and maintenance of the property . The respondent at [14] also maintains that she was the carer of the parties’ three children, born in 2005, 2008 and 2011.
Reference was made at [15 - 17] to a period of separation between 2012 and 2015 and the selling of the B Street, Suburb C property in 2016, using part of the proceeds of the B Street, Suburb C property, and an inheritance from her father, to buy the property, E Street, Suburb D, which the Court was informed was an amount of $30,000. The respondent identified at [18] that the mortgage on the E Street, Suburb D property was the sole responsibility of the respondent and contends that the respondent was responsible for all the financial payments for the mortgage, council rates and maintenance of the property. The respondent acknowledged at [19] that the applicant contributed by providing food and limited child support payments and some payment towards school fees over the years. The respondent identified at [20] that the child support ceased in May 2018, at the time the parties separated.
Before the Court
The respondent placed weight at [20] on the fact that there was an agreement originally for the applicant to pay the children’s school fees, which the applicant ceased paying in 2020. The respondent contended at [22] that she has been solely responsible for the care of the children and their financial needs, including food, clothing, school fees and medical expenses. The respondent referred to at [23] that to the parties had informally divided their assets at separation and had had an agreement in May 2018 for the respondent to keep the home at E Street, Suburb D for herself and the children. The respondent contends at [24] that the applicant received at the time of that settlement cash in the amount of $120,000, a motorbike, two quad bikes, a Motor Vehicle 1, a Motor Vehicle 2 and the business known as J.
The respondent at [25] alleged that she received the sum of $70,000 cash and the E Street, Suburb D home and that she has maintained the mortgage and the property since that time.
There were final parenting orders made on 17 October 2019 by Judge Myers (“ Final Parenting Orders”) , in which as per Order 3, the respondent mother was granted sole parenting responsibility in respect of the three children of the relationship. Order 18 of the Final Parenting Orders required the father pay for 50% of all legal costs incurred in relation to the recovering proceedings and the parenting proceedings, which the respondent at [27] of the Case Outline, contends has not been complied with by the Applicant. Order 19 of the Final Parenting Orders also ordered the father to pay 50% of all expenses incurred relating to the children including medical, dental, education and extra-curricular activities, which the respondent contends has also not been complied with by the applicant.
The respondent at [29 – 33] of the Case Outline also makes reference to family violence. Family violence is an issue, taking into account the statutory definition that can, consistent with the Kennon principles, if it has a discernible impact, be taken into account in the making of orders under s 79 of the Act.
It is not appropriate at this stage to make any findings in relation to the alleged contentions in respect of family violence, beyond identifying that the Court is not satisfied this is a factor that prevents there being hardship to the applicant if time is not extended under s 44(6) (a) of the Act.
The kernel of the opposition, to the application for an extension in time, is the alleged absence of a reasonable explanation for the delay. The respondent at [36] of the Case Outline, identified that the parties separated in 2018, and that in May 2018 the respondent told the applicant the relationship was over and to leave the matrimonial home and that there was a refusal by the applicant to do so until September 2018. The respondent at [37] refers to the explanations of the applicant in relation to the delay referring to his mental health issues and ‘supporting his children’s mental health issues’ and contends at [38] that there are aspects of the evidence provided by the respondent that undermines the applicant’s explanation for the delay, which the respondent contends is unsatisfactory.
Determination
There is force in the respondent’s submission that the explanation for the delay is not entirely compelling, and given that applicant had legal representation, it can be understood why the respondent has focused on this factor as being one in which the explanation could be described as wanting, and that his medical condition was not such as would have debilitated him from being able to commence proceedings, or that he was not aware of the time limit under s 44 of the Act). While the Court does accept that the explanation is not entirely satisfactory, it is only one of the matters to be taken into account in terms of the principles for exercising the power under s 44(6) of the Act.
The express statutory power in s 44(6)(a) of the Act refers to the hardship and is as follows:
FAMILY LAW ACT 1975 - SECT 44
Institution 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;
While the less than satisfactory explanation for the delay is a factor, it is not of itself a decisive factor, and the period of the delay in the present case, while substantial, is not of such an inordinate kind, of itself, to prevent the potential exercise of the power under section 44(6) of the Act.
The respondent at [65-62] of their Case Outline does allege that there would be hardship and prejudice caused to the respondent and her children. That hardship and prejudice referred to by the respondent appears to be the stress, anxiety, and conflict that proceedings may give rise to, and the apprehension in that regard has no doubt been, in part, based on the family history which included an Apprehended Domestic Violence Order (“ADVO”).
The Court is not satisfied that the stress and disruption caused by the extension of time itself is a sufficient prejudice, to give rise to the Court not exercising its power under s 44(6) of Act in the present case, if it satisfied that there is, on the evidence before the Court, a prima facie case in respect of the potential for an order that might be made if time were extended given the assets that have been identified in the competing balance sheets, by reason of which it could be said that there is a hardship that would be caused to the applicant if time were not extended.
The respondent contends that the applicant has failed to establish any hardship in his evidence as required under s 44(6)(a) of Act. The evidence of the assets, the duration of the relationship, and the number of children, are contrary to that contention. Taking the applicant’s case at its highest, this is a case where hardship would be caused to the applicant if leave were not granted. The earlier resolution of the property division consensually between the parties is not determinative of the process that would be adopted by the Court in regard to these proceedings.
The Court is satisfied that there is hardship that will be caused to the applicant if leave is not granted, and the fact that the Court may need to make appropriate adjustments is not, of itself, a ground to find that there is not the necessary hardship made out to warrant an extension of time under section 44(6)(a) of the Act .The difficulty in identifying the dispute as to the alleged contributions advanced by the applicant does not mean that the applicant’s case has failed to identify that hardship would be caused if leave were not extended given the pool of assets, whether identified on the balance sheet of the applicant or the respondent. The difficulty determining what contributions the applicant may have made is not a matter of itself that defeats the existence of the necessary hardship that would be caused if leave were not granted. The applicant has made out a prima facie case to support a grant of leave and notwithstanding the respondent’s alleged prejudice the Court is satisfied as a matter of discretion that there should be a grant of leave to commence the proceedings under s44(6) of the Act.
It may well be that the s 75(2) of the Act factors in determining an appropriate order under s 79 of the Act will give considerable weight to the future needs and care of the parties’ three children, and it may be that the Kennon principles have application that may impact on the final determination of what is just and equitable between the parties. However, there is a probability on the evidence before the Court that the applicant would be the subject of hardship if leave were refuse. The financial evidence supports that the applicant may succeed in obtaining an order that could not be said to be negligible. Further, the monetary contributions by the applicant are not the only contributions that the Court will take into account in a final determination of the appropriate order in respect of the pool of assets or property of the parties.
The dispute as to whether the contributions by the applicant were substantial and the bringing to account of the contributions, will be considered in determining what appropriate orders should be made at a final hearing. The evidence before the Court, does not identify that there is no hardship, or the potential for hardship which may flow from a refusal of leave. The Court does not accept that the application of s79 of Act in itself, taking into account the s 75(2) of the Act) factors, would cause serious injustice to the respondent. On the contrary, they are factors that would be taken into account in determining the appropriate order. The failure of the applicant to comply with other orders and child support are also factors that may be taken into account in the final determination of appropriate orders, in respect of the property of the parties. These considerations are only discretionary and are not ones that identify an absence of hardship to the applicant if leave was not granted. The evidence, before the Court, does not persuade the Court that there was a deliberate decision by the applicant not to finalise the property matters with the respondent. However, the Court does accept that the explanation for the delay is not entirely satisfactory. But that, of itself, does not mean that an extension of time should not be granted where the Court is satisfied that there would be hardship to the applicant if time were not extended. The absence of contribution by the applicant since separation is also a factor that can be taken into account in a final hearing in determining the appropriate orders under s 79(4) of the Act. That does not mean as a matter of discretion that there should not be an extension of time. The assertion of difficulty in relation to cash payments is a matter that may impact on the ultimate determination and assessment of the credit of the parties. However, the need to make findings by the Court does not identify sufficient reason why an extension of time should not be granted given that in the present case the Court finds that there hardship would be caused to the applicant if time were not extended by the grant of leave.
The need for a potential further final financial disclosure by the applicant is also not a sufficient basis as to why an extension of time should not be granted. The Court has taken into account the observation in the Full Court, including in Whitford & Whitford (1979) FLC 90-612, that the power to extend time ought to be exercised liberally in order to avoid hardship. The Court has taken into account the observation in Sharp v Sharp [2011] FamCAFC 150 at [26]:
26. His Honour quoted (at paragraph 19 of the reasons) from McDonald &McDonald (1977) FLC 90-317 at 76,688 where Evatt CJ said:
The mere loss of the right is not in itself hardship. The right loss [sic] must be a right which in all circumstances is substantial … the applicant must establish:-
(a) a prima facie case which is in the circumstances substantial;
(b) that to deny the right to litigate that claim would cause hardship in the sense referred to above to a party or to a child of the marriage;
(c) that there is an adequate explanation as to why the claim was allowed to elapse.
The Court is satisfied that the applicant has established a prima facie case for relief had he instituted proceedings in time. The Court is also satisfied that the denial of the applicant’s claim for an extension of time would cause him hardship in the circumstances of this case. The Court has identified there is force in the proposition that the explanation for the delay is not entirely satisfactory. However, that is not determinative of the application. The Court has also taken into account the degree of hardship that would be suffered by the applicant and finds in the present case, given the pool of assets, that there is a sufficient degree of hardship that outweighs the inadequate explanation for the delay.
The Court has taken into account the observations that were made as a reminder in Stanford v Stanford [2012] HCA 52. The Court has also taken into account the observations in Whitford & Whitford (1979) FLC 90-612 that the loss of the right to institute proceedings is not the hardship to which the subsection refers, but the consequences of the loss of that right. The consequences of the loss of that right in the present case is that the applicant would effectively, on one view –receive assets to a total value of approximately $17,500, whereas the respondent would retain net assets to a value in excess of $630,000, which would result in the applicant receiving less than three per cent of the matrimonial pool of assets.
The Court accepts the proposition that the applicant has a prima facie case for an exercise of a judicial discretion, in respect of granting leave to commence proceedings out of time. The refusal of leave, in the present matter, would give rise to a significant hardship to the applicant. The Court accepts that there is, in the present case, a probability that the applicant would succeed in obtaining an order under s 79 of the Act and that the potential relief that might be granted in the present case could not be seen to be trifling. The Court accepts that there is a prejudice, in terms of any extension of time to the respondent but considers, in all the circumstances of this case, it is just and reasonable to grant leave under s44(6) of the Act to the applicant to apply for an order within s44(5) of the Act.
26 I certify that the preceding twenty-five (25) paragraphs are a true copy of the settled transcript of the published oral reasons for judgment of Judge Street delivered in open Court on 3 December 2021.
Associate:
Dated: 24 February 2022
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