FULWOOD & FULWOOD

[2010] FamCA 519

FAMILY COURT OF AUSTRALIA

FULWOOD & FULWOOD [2010] FamCA 519

FAMILY LAW – PROPERTY – Application to commence proceedings out of time

APPLICANT: Ms Fulwood

RESPONDENT: Mr Fulwood

FILE NUMBER: SYC 7642 of 2009

DATE DELIVERED: 7 June 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: The Hon. Justice Cohen

HEARING DATE: 7 June 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Millar

SOLICITOR FOR THE APPLICANT: Anthony Ziade & Associates

COUNSEL FOR THE RESPONDENT: Mr Gilbert

SOLICITOR FOR THE RESPONDENT: Manion Mccosker

Orders

1. That the application of the wife for leave to commence property proceedings is hereby dismissed.

2. That the oral application for costs by the husband is hereby dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Fulwood & Fulwood is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  SYC 7642 of 2009

MS FULWOOD

Applicant

And

MR FULWOOD

Respondent

REASONS FOR JUDGMENT  

1. In these proceedings, the wife seeks to extend the time limited to commence an application under section 79 against the husband. The husband is approximately 62 years old, and the wife is about four years younger.  The husband is a resident of England and has been since 1994 or a little earlier.  The wife lives in Sydney. She is a shop assistant.  The husband has some businesses and investments.  The wife's assets are very small.  Her property is worth approximately $12,000 net, but that includes $18,600 which comes from her superannuation.  She earns $720 per week, but only a little more than half comes from her employment as a shop assistant, because $300 a week comes from board from her two adult children, the children of the parties.

2. The husband's circumstances are not well known but are known sufficiently to permit the Court to make a determination in these proceedings.  The reason why they are not clearly known is largely because a deputy registrar in this Court specifically exempted the husband from filing a statement of financial circumstances, believing that such would be irrelevant, when it clearly is the opposite.  However, there is some evidence before me which allows me to come to a conclusion that the husband has substantial property, probably considerably in excess of $800,000 worth.

3. I shall not bother detailing the evidence, except to say that his father died in late 2007 and left the husband a significant proportion of his estate.  That proportion is believed to have exceeded $800,000.  Probate of the will was granted on 24 April 2008.  From the husband's affidavit, it is perfectly clear that rather than that money being diminished after its receipt, it has probably been increased by fortuitous or intelligent investment or both.  Some of that money, or if not most of it, is still in Australia.

4. The husband has intermingled funds that he had previously earned while in England. He has, together with his current wife, purchased the property in England in which they live; his current wife, having sold her previous home, used the proceeds of sale together with moneys provided by the husband to purchase their home. The husband had done renovations on the wife's prior property using his own efforts and funds.

5. The parties were married in 1980.  They had two children;  the first born in 1983, the second in 1986.  In 1984 they purchased a home for $135,000, using a deposit of $60,000 which had been saved. The balance was borrowed.  The parties separated in February 1992.  At the time, the husband had already suffered significant business failures and was in financial difficulties.  The H property was sold for $295,000. After some debts were paid from that, there was approximately $150,000 remaining. 

6. There is some dispute, and certainly lack of clarity, about what happened to that $150,000. On my calculations, it is likely that only about $110,000 or less remained after payment of other debts that were left with one or other of the parties.  Some of these debts were paid well after the parties purported to divide their property, but divide it they purported to do, with the husband receiving approximately $45,000 and the wife receiving approximately $105,000.  However, from the moneys he had received, the husband paid further debts, as did the wife. In my estimation, it is likely that there were only net assets of about $100,000 to $110,000. Of those, they were probably divided, in effect, when the parties divided the proceeds of sale, if one takes into account the continuing debts after that division, to the extent of about 15 per cent to the husband and 85 per cent to the wife, give or take 5 per cent.

7. In 1992, the wife approached a solicitor for the purpose of bringing financial proceedings against the husband.  She was advised to wait until he had assets.  It was clear, of course, that the respondent had so few assets at that stage it was not worth bringing proceedings.  He had gone to England to make contact with a woman who he knew when he was younger and before he was married to the wife. He commenced to live with her then married her in 1994.  He is still married to her.  It can be assumed that when he went to England, he had little more than the price of the ticket.

8. On 12 December 1993, the parties’ divorce – which was obtained by joint application – became absolute. Accordingly, pursuant to section 44(3) of the Family Law Act, the wife had 12 months to bring section 79 proceedings, unless she was to obtain leave from the Court to extend the time for bringing those proceedings. 

9. She says that when she was divorced, she never looked at the decree and had not been told by any lawyer that she needed to bring proceedings within a year of divorce without obtaining leave. She claims that she did not know of the time limit.

10. When she was told to wait until the respondent had assets, she may not have been advised of the time limit on bringing proceedings because she was not yet divorced. It may be that the solicitor who advised her had no knowledge that she was going to bring divorce proceedings. I am not aware whether or not, in seeking her divorce, the wife was represented.

11. Although 12 December 1994 was the final date for property proceedings to be brought without leave, the wife did nothing until the husband's father died in late 2007.  She then approached the organisation which provides legal aid for a grant of legal aid but was refused.  She then approached a number of solicitors, each of whom advised the wife that she could not commence property proceedings against the respondent because she was out of time.

12. She did not approach her current solicitor until some time later.  On 17 October 2008, the wife's current solicitor filed a notice of address for service, but no other application. 

13. The law is clear. It was determined in one of the cases which deals with the issue of section 44(3) leave. Until a proper application together with affidavits is filed, there is no application. The wife's application for leave to bring property proceedings was brought on 15 December 2009, 15 years after the date set by section 44(3) to enable persons to bring section 79 proceedings without leave. It is this application that I am now dealing with.

14. There is no High Court authority that I know of or have been referred to specifically on the principles to be applied in determining whether or not pursuant to section 44(4) leave shall be granted. Section 44(4) of the Family Law Act simply provides that leave shall not be granted by the Court unless it is satisfied that hardship shall be caused to the party or a child if it is not granted.  Here one can presume the reference to "child" is a reference to a person who is a child; that is, who is a child to which one of the relevant individuals is in loco parentis to it who has not reached the age of 18.  Thus, here, I only need to consider whether there will be hardship to the wife.  In any event, there is no evidence to suggest hardship to either of the parties' children.

15. There is some Full Court authority on the issue of how one determines whether or not to grant leave.  The cases seem to me to clearly say that one should consider the question of whether or not there is hardship, and if there is a finding of no hardship, leave cannot be granted.  If there is a finding of hardship to the applicant, the Court must exercise its discretion by considering other matters which might be relevant to the grant of leave.  Hardship is not necessarily the sole determinant.  It can be, if there are no other matters which warrant a refusal of leave, but if there are, they must be considered and weighed against the hardship which will be suffered by the applicant if leave is not granted and any other matters which appear to support a grant of leave.

16. In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, which is a decision of the High Court, McHugh J had something to say about the general law relating to the grant of leave. One ought to comment, with great respect to his Honour, that what he had to say is what one hopefully should always see in every judgment. That is, in accordance with the law, the application of common sense.

17. In the particular instance with which the Court was dealing, there were two conditions laid down by an Act.  However, the principle is not altered by the fact that in the proceedings before me there is only one condition.  His Honour had this to say at p.551:

    “An applicant for an extension of time who satisfies those conditions is entitled to ask the court to exercise its discretion in his or her favour, but the applicant still bears the onus of showing that the justice of the case requires the exercise of the discretion in his or her favour.”

18. His Honour was talking about the two conditions.  Here this would apply to the one condition of hardship.  His Honour went on to say in the next paragraph of his judgment:

    “For nearly 400 years, the policy of the law has been to fix definite time limits (usually six, but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that “[w]here there is delay, the whole quality of justice deteriorates.” [R v Lawrence [1982] AC 510 per Lord Hailsham of St Marylebone LC.]

19. Here the legislature has thought a much shorter time limit should be applied.  The reason why it might have done so ought not be the subject of any uncertainty or dispute.  It is the general benefit to the community and the parties of finalising and terminating the continuation of the economic relationships involved in a marriage which has ended.  His Honour then said:

    “The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.”

20. In Family Law, the longer the delay, there is also a greater likelihood of factors emerging which will tend to interfere with the Court's ability to divide the parties’ property in a just fashion. People ought to be able to get on with their lives and not be bound by the continuing threat and fear that it will be too difficult to untangle newly created arrangements from old or too harmful to do so. They should not be left in a position where they are inhibited from getting on with their lives. It seems to me that one of the reasons why this short limitation period is imposed by section 44(3) relates to this concept. As his Honour said at p.552:

    “Thus, for many centuries the law has recognised the need to commence actions promptly and to prosecute them promptly once commenced.”   

21. His Honour a little later also said:

    “The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions, but it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost (Jones v Bellgrove Properties Ltd [1949] 2 KB 700 at 704). Second, it is oppressive, even “cruel”, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed (R B Policies at Lloyd’s v Butler [1950] 1 KB 76 at 81-82). Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them.”

22. His Honour then at p.553 offered as the forth justification for limitation periods:

    “The final rationale for limitation periods is the public interest requires that disputes be settled as quickly as possible.” 

23. He then continued:

    “In enacting limitation periods, legislators have regard to all these rationales.  A limitation period should not be seen, therefore, as an arbitrary cut-off point unrelated to the demands of justice or the general welfare of society.”

24. Later, his Honour said:

    “The discretion to extend should, therefore, be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the state is best served by the limitation period in question.  Accordingly, when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires that extension.”

25. Mr Millar, on behalf of the applicant, argued in effect that in this case, the only relevant matter is hardship.  He says that because the wife got virtually nothing when the parties separated, and now the husband has $800,000 or more, and she has spent all of those years raising the children alone with little help by way of child support – all of those things which I accept to be very substantially true – she has suffered hardship and that that hardship should be all that I should consider to be of importance.

26. If that were the case, of course, there would be no purpose in any limitation period imposed by section 44(4). In every case where somebody, with legal advice, brings an application for extension of time, it goes without saying that they think that they will profit financially from it. If failure to profit by refusal of leave is considered to be hardship alone, and hardship alone is enough, then in every case, leave should be granted, thereby defeating the purpose of the legislature in creating a limitation period. This has been clearly explained by McHugh J.

27. It is with these matters in mind that I look at the decision of the Full Court of this Court in Neocleous, which is at (1992-93) 16 FamLR 557. The Court, in my view, did not hold that hardship is the only issue. It held, by majority at least, that “[h]ardship is 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.” If that simply means the inability to pursue a claim will be of financial disadvantage of a significant nature to the applicant, as I have said, that would mean that the leave should be granted in every instance unless there are other reasons for refusing to exercise a discretion in favour of the applicant.  It may well be that it is a proper view of what was said by the Full Court that this really means that if there is hardship, as defined by the majority in Neocleous and there are reasons that outweigh the hardship imposed by losing the financial advantage of bringing a claim, that will be sufficient to exercise discretion to refuse the claim despite hardship.

28. However, it seems to me that one must look at the issue of hardship on another basis.  It is not merely the loss of a financial advantage.  Really, what is lost is the ability to bring a claim rather than the financial advantage.  If one looks at hardship from that point of view, one can see what a claim within time would have provided the wife with and compare it with what she might lose by now not being permitted to bring that claim.  That comparison would involve, in those circumstances, the ability, in my view, of the husband too to call evidence about what would happen if the time was extended even further to permit him to wait until the wife received any possible financial gains, such as inheritances from her family.

29. I do not need to determine what the real meaning of hardship is or how one must look at it in this case. It is my view that if there is hardship – and there is a strong argument for saying that there is here – that is within the definition of hardship as stated by the majority in Neocleous which binds me, there are other considerations which determine whether or not I should exercise my discretion in favour of the applicant, including other aspects of hardship itself.

30. It is clear from Neocleous, as well as from Brisbane South Regional Health Authority v Taylor that delay and other matters – in fact, any matter which can be said to be relevant – ought to be considered in deciding whether to refuse or grant leave for an extension of time.  It may be that delay could be regarded in some cases as an insignificant factor.  Here I regard it as an extremely significant factor.  A delay of 15 years is significant.  One could not avoid the conclusion that the parties have changed their way of living and that their lives have evolved in further separation from one another over that 15 years.  In the circumstances, the husband, even on the flimsy evidence before me that he has provided, can be said to have lived his life on the understanding that the wife was not going to bring proceedings, and, therefore, he could plan his life without the prospect of those proceedings in mind. I do not need anything more than the delay to create that inference. 

31. Another thing, of course, is the wife's excuse for the delay.  She relies upon ignorance.  The ignorance lasted 15 years or a little less on her evidence.  However, the real reason for the delay was not so much ignorance about the limitation period but knowledge that the husband had no money, and that to bring proceedings within time – or at any time that was reasonable – would have provided her with no benefit. On that view, refusal of leave will cause no hardship.

32. I do not regard ignorance as a valid excuse.  The ignorance in fact was irrelevant – that is, the ignorance of the limitation period – because one could not argue, and I certainly would reject the submission, that she would have brought proceedings within a reasonable time had she not been ignorant.  Had she known of the limitation period and known that she should bring proceedings within a reasonable time she, I find, would not have brought them, because they would have provided her with nothing.

33. It goes without saying that on that view of the matter, if loss financially is not the only measure of hardship, she has really suffered no hardship, because had she brought the proceedings, she would have got nothing, and if leave is not granted, she still will get nothing.  Considering the degree of delay which I regard as at the very extreme of delay, and considering the paucity of her excuse, I think that there are very strong reasons, especially the change in the husband’s life, even if she is to have to continue her life in relative penury by comparison to the husband's now relative wealth, to reject her application for leave to extend time for commencing proceedings beyond one year from the date that they could have been commenced without leave in the exercise of my discretion, and I shall, and do, refuse leave. She has not satisfied me that I should exercise my discretion in her favour.

34. The husband has now sought costs pursuant to section 117.  That section provides that there ordinarily ought be no orders as to costs in Family Law proceedings, the exception being when there are circumstances justifying an order for costs.  In considering whether or not to make such an order, the Court must have regard pursuant to section 117(2A) to certain particular matters.  The first is the financial circumstances of each of the parties of the proceedings.  The husband is in a strong financial position. The wife is in poor circumstances.  I have already set them out, as far as I can tell.

1. There is no Legal Aid, presumably, for either party.  In relation to conduct, I think the wife's conduct in these proceedings tends to warrant an order for costs being made against her.  She simply waited for 15 years to bring these proceedings.  She waited because she knew that to bring them within a reasonable time, irrespective of her knowledge of the time limitation, would lead her to obtaining nothing or next to nothing, and certainly no significant funds, on the evidence before me.

2. There has been no failure by a party to comply with previous orders of the Court.  However, as this has been an application for leave and the wife has failed to obtain leave, it can be fairly said that the wife has been wholly unsuccessful in the proceedings.  There has been no offer in writing that I have been informed of, and there are no other matters to consider except that the husband's behaviour over many years was to simply leave the wife stranded with two children to care for and avoid, to a very large degree, his responsibility for that care, either by way of providing any parenting to the children and providing to a substantial degree any child support, or as it was, child maintenance, because he was living in England.

3. In those circumstances, on weighing all of the matters, I am not prepared to order costs against the wife, particularly because of her current poor financial situation, and I refuse the application.

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen

Associate:     

Date:              29 June 2010