Dubois and Dubois
[2007] FMCAfam 314
•18 May 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DUBOIS & DUBOIS | [2007] FMCAfam 314 |
| FAMILY LAW – Property – property settlement – leave to file proceedings – appropriate to grant leave to extend time. |
| Family Law Act1975, s.44(3) Property Law Act1974 (Qld) s.11 |
| Commonwealth v Verweyen (1990) 170 CLR 394 Gallo v Dawson (1990) 93 ALR 479. In the Marriage of Hall and Hall (1979) FLC 90-679 McCarron and Unsworth (1978) FLC 90-444 In the Marriage of McDonald & McDonald (1977) FLC 90-317 In the Marriage of Perkins & Perkins (1979) FLC 90-600 In the Marriage of Tormsen & Tormsen (1993) FLC92-392 White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511 Whitford & Whitford (1979) FLC 90-612 |
| Applicant: | MR DUBOIS |
| Respondent: | MS DUBOIS |
| File number: | BRC 3246 of 2007 |
| Judgment of: | Burnett FM |
| Hearing date: | 27 April 2007 |
| Date of last submission: | 1 May 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 18 May 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jordan |
| Solicitors for the Applicant: | Dale & Fallu |
| Counsel for the Respondent: | Mr Page |
| Solicitors for the Respondent: | Hartley Healy |
ORDERS
That the Applicant be given leave pursuant to section 44(3) of the Family Law Act to institute property proceedings by application filed 15 March 2007.
Costs reserved.
IT IS NOTED that publication of this judgment under the pseudonym Dubois & Dubois is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 3246 of 2007
| MR DUBOIS |
Applicant
And
| MS DUBOIS |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr Dubois (the Applicant) makes application pursuant to section 44(3) of the Family Law Act for leave to file proceedings for property settlement against his former wife, Ms Dubois (the Respondent). The proceedings contemplated are of the kind referred to in paragraph (ca) of the definition of a matrimonial cause in section 4(1) of the Family Law Act1975.
Background
The Applicant is 71 years of age (born in 1936). His is in very poor health and presently suffers a terminal condition of cancer. The Respondent is 61 years of age (born in 1945). The Applicant and Respondent commenced to live together and were married in July 1976 and separated on 12 February 2001. A divorce was granted and the marriage was dissolved by decree absolute on 24 November 2003. There are no children to the marriage.
At the time of the divorce proceedings the Applicant was not legally represented.
Approximately three months before the divorce hearing the Applicant and the Respondent reached an agreement in relation to property settlement. The agreement was based on a calculation of assets owned at that time and premised on a 50/50 apportionment of all assets.
It appears that the parties tallied the assets and divided them by two.
In consideration of the agreement a sum of $182,000 was paid by the Applicant to the Respondent on 21 July 2003 and he in turn was to receive the transfer of a property. A very loosely drafted minute of agreement appears to have been drafted and signed by the Respondent on 2 July 2003.
The Applicant says that in accordance with the agreement he drew up transfer documents to arrange for the transfer of the Respondent’s interest in the former matrimonial home to himself and forwarded those transfer documents to the Respondent for her execution.
He swore that on or about 19 January 2007 the transfer documents and Statutory Declarations were caused to be forwarded to the Respondent and the Respondent now refuses to sign those documents.
The Applicant says that at about the time of the initial proceedings for divorce he sought some legal advice concerning the issue of property settlement but he did not proceed with that advice as he and the Respondent were prepared to come to some amicable agreement which he believed occurred.
It is common ground that there have been no orders made in respect of property settlement.
The Applicant says that he did not note the notation on the “divorce document” that he had a period of twelve months to file court proceedings for property settlement. He swore in effect that given he had reached an agreement with the Respondent and that he had fulfilled his obligations under the agreement by paying to her the sum of $182,000 and transferring to her shares he assumed that the Respondent would, in effect, perform her side of the bargain when requested. He swore that once it was apparent to him that the Respondent would not perform her bargain as agreed he instructed solicitors to institute these proceedings.
The Applicant maintains that in the event leave is not granted he will suffer significant financial hardship as he has already paid to the Respondent a sum of $182,000 in respect of property for which he has not received a transfer in return. Also he has transferred to the Respondent shares and has thereby lost his interest in those assets. Finally he says that by reason of his age and general circumstances he is in need of these assets.
In her affidavit in response the Respondent acknowledges she received a sum of $182,000 from the Applicant and noted the agreement being one as whereby each party would keep their own superannuation entitlements, the car that they had, their shares and that the Applicant would give to the Respondent one half of the value of the home. The Respondent acknowledged that after receiving the sum of $182,000 from the Applicant she printed out the land transfer form and forwarded it to the Applicant with a covering letter asking him to complete the document as he had the relevant certificate title in his possession. She said she did this because the Applicant had said to her he could not be bothered to get the form and that (he) could prepare it if (he) wanted to[1]. There is however dispute between the parties as to an assertion by the Respondent that the Applicant subsequently stated that he wanted the title to be kept in joint names. It is further disputed by the Applicant that he intended for the property to pass to the surviving party.
[1] Affidavit Ms Dubois filed 19 April 2007, para 24.
Application
Section 44(3) of the Family Law Act1975 provides that proceedings between the parties to a marriage with respect to the property of the parties to the marriage arising out of the marital relationship or in relation to the divorce of the parties to that marriage shall not be instituted except by leave of the Court after the expiration of twelve months after the date on which the divorce order took effect.
I accept the submissions made by Counsel for the Applicant that the principles relating to an application for leave to proceed pursuant to section 44(3) are well settled. They are summarised by the Full Court of the Family Court in Whitford & Whitford[2] where at p.78-144 the Court observed,
“On an application for leave under section 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.”
[2] (1979) FLC 90-612
In an earlier decision of the Full Court in McDonald & McDonald[3] the Court noted facts to be considered in the determination of an application pursuant to section 44(3) as including:
a)that to deny the right to litigate the claim would cause hardship to a party or child of the marriage;
b)that a prima facie case which is reasonable would have to be shown;
c)there is an adequate explanation for delay;
d)that consideration should be given to the question of prejudice to the Respondent in respect of which delay may be relevant.
[3] (1977) FLC 90-317
Hardship
Hardship has been interpreted to mean “substantial detriment”; Hall and Hall[4].
[4] (1979) FLC 90-679 at p.70,627
It has also been held to be “caused by the inability of a person to pursue a claim which in the circumstances of the case appears on the prima facie evidence to be substantive and not merely trifling”; Neocleous v Neocleous[5].
[5] (1993) FLC 92-377 at 79,915.
Those remarks appear to echo the Full Court’s observations in Whitford and Whitford[6] at 78,144 where the Court observed:
“The loss of the right to institute proceedings is not the hardship, to which the subsection refers. It is with the consequences of the loss of that right, with which the subsection is concerned. The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits. If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted.”
[6] (1979) FLC 90-612.
At 78,845 the Court continued to note that, for instance, an inability to pursue a trifling claim or one where the costs might equal or exceed the value of a claim would ordinarily not create hardship.
It is clear from the authorities that considerable latitude arises and very much depends upon the individual facts of the case.
In his submissions Senior Counsel for the Respondent also referred me to authority of the Privy Council and High Court of Australia directing courts to ensure that non-compliance with rules does not make an injustice. I particularly note the remarks of McHugh J in Gallo v Dawson[7] at 480 where His Honour stated:
“In order to determine whether the rules will work an injustice it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension if time.”[8]
[7] (1990) 93 ALR 479.
[8] It should not be overlooked that the application before McHugh J was for leave to extend time to appeal. In that case rights had already been concluded by judicial proceeding. A point of distinction arises between the application of the principles to leave on an appeal to a case such as the present where there has been no such primary determination but one party seeks an indulgence for that purpose.
These are the very kind of matters the Court is directed to consider by the Full Court in Neocleous and Neocleous (supra) when discussing generally the disposition of applications under section 44(3).
In this case there is in my view a clear case to be made for hardship. It appears an agreement was concluded between the parties in relation to the settlement of property matters between the parties. So much is conceded in the affidavit material. Furthermore there has been partial performance of the agreement by the Applicant. Again that matter is conceded on the material. However despite that concession the Respondent has refused to perform her part of the bargain. As matters stand the Applicant is presently no less than $182,000 out of pocket. When one has regard to his personal circumstances it is clear that a sum of $182,000 represents a significant sum to the Applicant and he should not be lightly deprived of his rights in respect of that matter.
In passing I note that the constituent elements of the contract appear and that it is arguable that perhaps the circumstances of the transaction constitute an accord and satisfaction[9]. Although no submission was made in respect of this issue some observations should be made about this potential remedy. Given the transaction was one negotiated by way of property settlement without the assistance of legal advice and that assertions are made of waiver, remedies under the Family Law Act should not be lightly excluded because it is possible to assert the Applicant may have remedies in contract.
[9] See generally discussion in Cheshire & Fifoots Law of Contract, 5th Ed Butterworths 1988, para 2007.
The decision of the Court in McCarron and Unsworth[10] considered an analogous factual situation. In that case Butler J noted at 77,266,
“…The mere prospective loss of a right in circumstances presenting themselves as a result of fraud, or as a result of a misrepresentation, or as a result of duress, or of undue influence, or of deceit, or apart from all of that, of an unfulfilled agreement between the parties which is unfulfilled by the Respondent is of itself hardship within the terms of section 44(3) “Agreement” is of course not used in any sense other than as might be understood between the spouses- “arrangement” would be a better word.”
[10] (1978) FLC 90-444
Given His Honour’s intimation it would appear that the facts before him clearly did not entail any enforceable agreement. Perhaps because of a failure to comply with some technical requirement as provided for by the equivalent of s.11 Property Law Act 1974 (Qld) (Statute of Fraud provisions). In this instance there does appear to be some prospect of successfully arguing there is indeed a concluded contract between the parties.
In any event if no contractual remedy were available the circumstances would suggest an entitlement on the part of the Applicant to claim an estoppel against the Respondent restraining the Respondent from actively resisting any application for leave; Commonwealth v Verweyen[11]. In the circumstances of this case the fact that there had been a misrepresentation which arguably could have misled the Applicant into not properly considering his position would enliven a claim of hardship. Again so much seems apparent from the decision in McCarron and Unsworth (supra) where Butler J noted that whilst “the mere loss of the right in itself is insufficient for the purposes of the subsection…one should add (that would be so) except where the loss is educed by the actions or omission of the respondent”[12]. In respect of that matter I note that the Applicant says he was not aware of the twelve month limitation because he did not read that matter on the divorce order. However notwithstanding that evidence it is also apparent that had the matter not been the subject of consensual agreement between the parties I expect the Applicant would have sought further advice. No doubt he would then have been informed of his rights and obligations. In that regard I am particularly cognizant of the fact that prior to there being a settlement or arrangement between the parties both the Applicant and the Respondent had consulted solicitors[13].
[11] (1990) 170 CLR 394
[12] at 77,266.
[13] Affidavit of Mr Dubois filed 15 March 2007 annexure F where it is noted that at the time of the agreement the Applicant was legally represented by Mulcahy Mendelson & Round.
Finally on this point the Respondent relied upon dicta by Mullane J in Richardson and Richardson[14] at paragraph 42. However that view is clearly distinguishable upon its own facts and is in any event apparently contrary to the view expressed by the Court in Whitford and Whitford (supra) as approved by the majority in Neocleous and Neoclaus (supra)[15].
[14] (2000) FLC 93-012.
[15] at 79,915.
A reasonable prima facie case
In Perkins & Perkins[16] Lindemeyer J observed that a reasonable prima facie case means a case “with a reasonable probability of the claim being successful in some measure”.
[16] (1979) FLC 960-600
In this case I do not consider it necessary for me to determine any more than the question of whether there is indeed a reasonable probability of the claim being successful in some measure. To that end I understand His Honour’s test to equate with the tests which would more commonly be associated with applications for the summary disposal of proceedings although he has expressed the test in the inverse[17].
So much can indeed be inferred from the observation of the majority in Neocleous and Neocleous[18].
[17] White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511.
[18] (1993) FLC 92-377 at 79,914.
In this case, as I have indicated above, there does appear to be a prima facie entitlement to a property settlement proceeding as defined in the definition for matrimonial cause. A further question arises however as to whether or not that proceeding has been compromised and is now subject to an accord and satisfaction leaving only the question of enforcement open for the Court.
At this stage that matter remains open. The parties in their submissions have not directed argument to that point although it is apparent from both the application made by both the Applicant and also from the response contained in correspondence addressed from solicitors for the Respondent that a question arises concerning underlying property settlement. For instance the Respondent by her solicitors, Wainwright Ryan EID Lawyers complains that “we do not believe that a fair and equitable property settlement took place between our respective clients in or about 2003.”[19]
[19] Affidavit of Mr Dubois filed 15 March 2007 annexure F.
Having regard to the circumstances surrounding the entering into the alleged agreement and also the agreement itself it is apparent to me that there is significant room for debate. Not only do questions arise concerning whether or not the agreement represented a proper settlement in all of the circumstances of the agreement itself is open to debate. Not only are there questions of misleading conduct/fraud but also questions may arise as to the certainty and if so the ultimate enforceability of the agreement alleged to have been conducted and thereby enlivening the Applicant’s rights. There are in my view serious issues to be agitated and determined at trial. It is not appropriate in my view to resolve the matters summarily as would be a consequence if leave were not granted. There is in my view a reasonable probability of the claim “being successful in some measure”. Alternatively it could not be said the application has no reasonable prospects of success.
Delay
It is submitted that in relation to delay it is well accepted that delay is a relevant factor although it is also acknowledged that the lack of explanation for delay is merely a factor to be taken into account; Tormsen & Tormsen[20].
[20] (1993) FLC92-392
Although the application was filed in March 2007 when time expired in November 2005 there is in my view an appropriate explanation.
The parties did not have solicitors at the time of the divorce and it would appear were not assisted or advised at the time they negotiated their settlement. It is further apparent that having resolved the matter amicably and ostensibly in good faith there was a bona fide decision made by each of the Applicant and the Respondent not to obtain further legal advice. No doubt had the Respondent fulfilled her side of the bargain the difficulties which are now apparent would not have given rise to the limitation issue which now concerns the Court.
Although it is axiomatic that the Applicant could have progressed the registration of the transfer of the property with greater speed his belief that the Respondent would execute the documents in accordance with their agreement was reasonably founded and accordingly his delay in presenting documents to her for execution should not in my view be held against him. Once he was alerted to the Respondent’s refusal to perform in accordance with the bargain he believed he had struck he acted promptly to bring this application. In my view there has been an appropriate explanation for the delay and the delay itself has a reasonable basis for explanation.
Prejudice
The Respondent has not directly addressed prejudice in her material. However in her material she discloses that since the agreement she has ceased full time employment and in view of her age does not intend to return to the workforce. She swears that since retirement she has utilised her superannuation entitlements and share dividends to financially support herself and that she receives no financial support from the Applicant or any third party. She notes that she has utilised her superannuation entitlements to assist in the acquisition of certain properties and that she has not received any windfall by way of inheritance, winnings or the like since separation.
In any event it is apparent that since separation there has essentially been nothing more than a transfer of assets between parties. It does not appear that any party has acted to significant detriment by reason of the belief that matters had been resolved between them or generally. In any event it would seem if prejudice was to be alleged it could only be in respect of that period following allegations of the Applicant not requiring a transfer. No evidence has been adduced to support that allegation. In the circumstances I am not satisfied that there would be any prejudice to the Respondent in granting leave to the Applicant.
Applicant’s Material
The point was taken by the Respondent that: “There is a positive onus on the Applicant to prove the asset pool at the first stage of the division process and then to assess the elements arising in section 79(4) that would probably lead a court to find that what the Applicant did in fact receive resulted in “hardship””.
Whilst I accept as axiomatic the submission that the Applicant bears the onus of proof I do, with respect, accept the onus as burdensome as is contended for. Undoubtedly in this case the Applicant is yet to set upon an established course for the proceeding. Whether it is to be simply a section 79 proceeding or whether there are other remedies to be pursued is to be determined. However on any view the material demonstrates that proceedings of the nature of “property settlement” proceedings are to be prosecuted.
It is apparent from the various single judge decisions referred to in argument that frequently applications for leave are made without more than a general regard to the underlying claim. In those cases the absence of particularisation and detailed supporting material of the underlying claim does not however appear to have been sufficient, of itself, to warrant a refusal of the relief claimed to grant leave.
Conclusion
In conclusion I am of the view that it is in this case appropriate to grant leave to extend time. In 2003 the parties entered into an agreement in respect of property settlement. They were self represented at the time although there is some suggestion that prior to that time one party had least had been in receipt of some legal advice. Notwithstanding that matter the parties purported to have concluded an agreement which resulted in the Applicant paying to the Respondent the sum of $182,000. The Applicant claims that in return for that payment he was to receive the transfer of the Respondent’s half interest in some real estate. The Respondent now claims that the settlement was induced by fraud. She refuses to transfer the property. Serious questions arise as to whether or not there was in fact a property settlement concluded between the parties. As a starting point that matter must be determined before matters can progress further. In any event if the agreement is set aside it is appropriate that the Applicant be granted leave to commence property settlement proceedings after twelve months following the final divorce orders. To refuse the Applicant leave would inflict significant hardship upon him. There is a reasonable prima facie case for a property settlement proceeding being successful as on the Respondent’s material the original agreement concluded between the parties should be set aside having been alleged induced by fraud. There is a reasonable explanation for the delay and in my view there is no prejudice demonstrated by the Respondent.
Costs
No submissions have been made by either party concerning costs. The Applicant was required to bring the application and in that regard seeks the Court’s indulgences. My inclination is to direct that the Applicant pay the Respondents costs of and incidental to this application to be assessed. However I will reserve the matter of costs pending formal submissions if the matter is not otherwise agreed between the parties.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Burnett FM
Associate: Bev Schmidt
Date: 21 May 2007
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