DREWETT & GRIFFITH

[2014] FamCA 505

FAMILY COURT OF AUSTRALIA

DREWETT & GRIFFITH [2014] FamCA 505

FAMILY LAW – PROPERTY – Application for leave to commence property settlement proceedings out of time pursuant to section 44(3) of the Family Law Act 1975 (Cth) – Whether the husband has demonstrated “hardship” – Factors to be considered in respect of whether the Court should grant leave – Court’s discretion not exercised – Application dismissed

Family Law Act 1975 (Cth) ss 44(3), 81, 75(2)

Carlon & Carlon (1982) FLC 91-272
Hall & Hall (1979) FLC 90-679
Neocleous& Neocleous (1993) FLC 92-377
Whitford& Whitford (1979) FLC 90-612

APPLICANT: Mr Drewett

RESPONDENT: Ms Griffith

FILE NUMBER: PAC 3904 of 2012

DATE DELIVERED: 10 July 2014

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 16 June 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Dalzell

SOLICITOR FOR THE APPLICANT: Longman Hill Solicitors

SOLICITOR FOR THE RESPONDENT: Creagh & Creagh

Orders

1. The husband’s Application filed 6 September 2012 be dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Drewett & Griffith has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 3904  of 2012

Mr Drewett

Applicant

And

Ms Griffith

Respondent

REASONS FOR JUDGMENT

1. The husband and wife were married in February 1997. They separated in 2001/2002 and a divorce decree became absolute on … January 2003.

2. Now, years later, the Applicant husband seeks leave to commence proceedings as to property settlement out of time.

3. Section 44 (3) of the Family Law Act 1975 (Cth) (“the Act”) provides that such proceedings cannot be commenced without leave of the Court after the expiration of 12 months after a divorce order takes effect. Accordingly, the husband should have commenced proceedings for property settlement by no later than … January 2004.

4. The Court may grant leave at any time, even if proceedings have already been instituted, however, such leave shall not be granted unless the Court is satisfied that hardship would be caused to a party to the relevant marriage or a child if leave were not granted.

5. In Whitford& Whitford (1979) FLC 90-612 the Full Court held:

   [O]n an application for leave under s 44(3), two broad questions may arise for determination. The first of these is whether the Court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted. If the Court is not so satisfied, that is the end of the matter. If the Court is so satisfied, the second question arises. That is whether in the exercise of its discretion the Court should grant or refuse leave to institute proceedings…

6. Hardship in the context of the husband’s application means substantial detriment (Hall & Hall (1979) FLC 90-679) and the Court will consider a number of factors:

   a)whether on the evidence he has a reasonable case to be heard;

   b)the financial and other circumstances of both of the parties; and

   c)any other facts of the case relevant to the issue of hardship.

7. After considering the question of hardship, the question to be determined is whether the Court should, in the exercise of its discretion, grant or refuse leave to bring proceedings out of time. Pertinent considerations are:

   a)the length of the delay in bringing proceedings;

   b)whether there has been a reasonable explanation for the delay;

   c)the prejudice that may be caused to a respondent to the application if permission is granted; and

   d)any other facts of the case relevant to the exercise of the Court’s discretion.

8. The absence of any reasonable or other explanation for delay in commencing proceedings is just one of the relevant considerations. The absence of an explanation does not mean that leave will not be granted (Neocleous & Neocleous (1993) FLC 92-377; Carlon & Carlon (1982) FLC 91-272).

9. As the Full Court said in Whitford (supra), having regard to the nature of the jurisdiction which the Court exercises, the power to extend time 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 divorce decree.

10. Pursuant to s 81 of the Act the Court has a duty to end the financial relationship of parties to a marriage as far as practicable, and to therefore make such orders to finally determine the financial relationship between parties to a marriage and avoid further proceedings between them where possible. But this is to be balanced against the Court’s power to grant leave to institute proceedings out of time if it is satisfied that not to do so would cause a party to a marriage financial hardship, as referred to above.

11. The questions for determination in this case then are:

    a)Whether the husband has demonstrated hardship as contemplated by the statutory provision?

    b)If hardship is demonstrated then should leave be granted for the husband to commenced proceedings for property out of time?

Hardship?

1. There are no children of the relationship between the husband and wife.

2. The parties, the husband says, commenced cohabitation in about 1989 living in Town A, Western Australia. Both parties at that time were working in the mining industry. The wife asserts cohabitation commenced in 1990.

3. At the commencement of cohabitation the husband had a car and the wife about $3,000 in savings.

4. The parties, subsequent to the commencement of cohabitation, moved on a number of occasions relating to their respective employment.

5. In early 1996 the husband asserts that the parties purchased a home at I Street, Town B, NSW for the sum of $80,000. The property was purchased in the wife’s name. He says they paid a deposit of about $5,000 from their savings at that time and the balance of the purchase price comprised a mortgage advance from the St George Bank. The wife asserts that the property was purchased for $76,000 and in respect of the purchase the husband made no financial contribution whatsoever.

6. In July 1996 the husband obtained a management job near Town B earning about $76,000 per annum.

7. In February 1997 the parties married.

8. The wife asserts the parties separated in 1999/2000.

9. The husband contends that by about 2001 they had paid off the mortgage to the bank from their income, although it appears that as at June 2002 there remained a mortgage to the St George Bank secured over the home. He asserts that he provided to the wife about $675 a month, which was half of the mortgage payments. The wife asserts that the husband made no contribution to mortgage payments whatsoever.

10. In about 2000 the husband was diagnosed with bipolar disorder. At least by late 2001 the marriage was in difficulties.

11. Over the period between 2001 and 2010 the husband had four admissions to C Psychiatric Hospital in Town D.

12. On 20 June 2001 the wife’s then solicitors wrote to the husband asserting cohabitation from February 1990 until separation in July 2000. Property settlement was proposed on the basis that the wife retain the home in her sole name at Town B, her car and her other assets and the husband retain his house in Town D, NSW, his motor vehicle and his other assets, with each party being responsible for their separate debts.

13. In September 2001 the husband was removed from the parties’ home at Town B by the police and an Apprehended Violence Order was taken out for the protection of the wife that precluded the husband from attending at the home. The husband later served a period of imprisonment for breach of this Apprehended Violence Order.

14. The husband asserts that post separation he provided to the wife about $7,000 to assist her with the mortgage and household bills in the period immediately following separation.

15. It appears that family law proceedings were commenced by the husband in the Local Court in September 2001 with the husband seeking an order restraining the wife from disposing of or encumbering “matrimonial property”, but on 7 June 2002 those proceedings was struck out for want of prosecution.  An apprehended violence order application by the husband against the wife was also dismissed. It appears that at about that time the husband was under treatment for schizophrenia in a Brisbane hospital and residing with his sister and brother-in-law.

16. The wife says that at the time of separation she was left with significant debts of the husband, that she repaid. She further asserts that subsequent to separation she expended significant moneys on the home in paying down the mortgage and renovating the property.

17. The husband had health episodes necessitating his attendance at the Town D Hospital in January 2003 and February 2003.

18. In 2005 the husband recalls being served with the wife’s application for divorce. He says that at that time he was living in a caravan at Town A, Western Australia and did not seek legal advice, nor was he aware of any time limit on applying for property settlement.

19. In January 2006 the husband was diagnosed following a stroke with a brain aneurysm. The husband was transferred from Town D Hospital to E Hospital in Sydney where he was operated on by a neurosurgeon, remaining in hospital and was discharged on 10 February 2006 following clipping of the aneurysm.

20. The husband says that in about 2006 the home at Town B was sold by the wife for the sum of $172,000. It was his expectation that he would receive half of the proceeds of sale from the home. He complains he did not receive any money. The wife asserts that the property was sold for $155,000 with the net proceeds of sale being less than $24,000 and that, having regard to monies expended by her on renovations, the overall position was a loss to her.

21. The husband says he later spoke to the wife in relation to his share of the proceeds of sale. She responded “No, I’m not giving you any money” and “I am doing it legally and there is nothing you can do about it”.

22. The husband became homeless in 2007 and was unemployed for a period of time. However, he says that he eventually got back into the mining industry. He had numerous positions of this nature after returning to work.

23. The husband lost contact with the wife and in 2009 approached her parents in Town F, NSW. He wrote to the wife at a post office box address that was provided to him but received no response.

24. In November 2010 the husband was admitted to C Psychiatric Hospital where he was diagnosed with a schizo-affective disorder and prescribed medication. On admission, cognitive testing revealed an extremely low to borderline range on the adult intelligence scale and a long-standing history of confabulation about his personal life with the hospital noting “(i)t has been unclear how much of this has been intentional fabrication, delusional or related to his low IQ and limited coping style”.

25. The husband was discharged to the G Mental Health Centre where, after a short period of admission, was treated on an outpatient basis with ongoing medication. By June 2011 the Centre had lost contact with the husband and he was informed by correspondence that he would be discharged from the service.

26. On 6 September 2012 the husband commenced the present proceedings for property settlement, seeking leave to commence those proceedings out of time.

27. In September 2012 the husband was seen by a consultant neurologist for an assessment of tremor in his right hand. It was noted that the husband had previously been on lithium for management of his psychiatric illness and had previously been on fortnightly antipsychotic depot injections and was currently on an antipsychotic medication, olanzapine.

28. On 4 October 2012 an Order for substituted service on the wife was made, the whereabouts of the wife being unknown to the husband.

29. On 20 March 2013 the wife filed a response that opposed leave being granted to the husband to commence proceedings out of time.

30. In the context of the present application the onus is on the husband to establish hardship. In this context it is incumbent upon the husband to demonstrate that prima facie he has a reasonable case to be heard.

31. The husband is presently employed at a mine in Town H, NSW. In his financial statement the husband asserts that he has outgoings of $641 per week that include rental payments of $190 per week. His assets comprise $296 at bank, a motor vehicle of little value and some items of personalty, together with accumulated superannuation totalling $3,900. He has liabilities including bank loans and credit card debts totalling $54,000 as asserted in his affidavit.

32. The wife ceased salaried employment in November 2010 and now is self-employed as a consultant trading through J Pty Ltd.

33. She asserts income from the business of $195 a week in addition to which she receives rental income from two investment properties owned by her in Town B, NSW totalling $570 per week before outgoings. She asserts her outgoings to be $1,410 per week, including mortgage payments on the two Town B properties totalling $734 per week, and her own rent of $117 per week. The two Town B properties have a total value of $345,000 and are subject to loans that she asserts to be in the sum of $422,736. Otherwise, she asserts a credit card debt of $30,000. On the positive side, the wife has accumulated superannuation of $138,000 in her self-managed superannuation fund.

34. There are no children of the relationship between the husband and wife. The husband does not contend any contribution to the wife’s present assets, nor her accumulated superannuation entitlement. His only assertion is that she retained the net proceeds of sale of the original Town B property owned by her.

35. On the evidence adduced by the husband there is a significantly remote argument as to contribution relating to the present properties owned by the wife, yet there is no clear evidence of any nexus. Otherwise, any argument for property division may depend upon each of the parties personal circumstances and the relevant factors under section 75(2) of the Act.

36. The only asset available to meet any order on the evidence presently before the Court is the wife’s accrued superannuation entitlements in respect of which the husband seeks in his application a splitting order as to 50 per cent in his favour.

37. On the present evidence, that splitting order would be as to the sum of about $69,000 and would need to be rolled over by the husband into his own superannuation fund and, subject to his personal circumstances, be preserved until he can access those benefits under any relevant provision.

38. However, there is a significant prospect that any splitting order would be less than that sought by the husband.

39. In addition, both parties would incur legal fees in the conduct of property proceedings that would be expected to exceed or substantially consume the value of any splitting order that might accrue for the benefit of the husband.

40. There are evidentiary difficulties in tracing what the husband asserts to be his share of the net proceeds of sale of the original Town B property into the present property pool owned by the wife, a property pool that at present, leaving aside superannuation, has significant negative equity.

41. Having regard to the matters referred to above, it cannot be said that the husband has a reasonable case to be heard. It is also clear from the respective financial position of each of the parties that neither party is able to fund ongoing property proceedings from any assets available to either of them.

42. The Court is satisfied that there are some underlying circumstances that, to an extent, explain the reason for the husband’s delay. On his own evidence there have been periods since separation where he has been gainfully employed in the mining industry, yet sought to make no application to commence or seek leave to commence proceedings until almost 8 years out of time.

43. The husband’s application for leave will be dismissed.

I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 10 July 2014.

Legal Associate:       

Date:    10 July 2014