Gadzen & Simkin

Case [2018] FamCAFC 218

FAMILY COURT OF AUSTRALIA

GADZEN & SIMKIN [2018] FamCAFC 218

FAMILY LAW – APPEAL – HARDSHIP – where the trial judge made orders allowing the de facto wife to bring property settlement and maintenance proceedings against the de facto husband seven years out of time pursuant to s 44(6) of the Family Law Act 1975 (Cth) – where the trial judge found that the de facto wife would suffer hardship within the meaning of s 44(6)(a) if leave were not granted – where the trial judge correctly identified the authorities relevant to the question of hardship but failed to undertake any analysis of the de facto wife’s potential claim and the likely costs of pursuing that claim – where the trial judge applied the wrong legal test to determining the question of hardship – where leave to appeal is granted and the appeal is allowed.

FAMILY LAW – APPEAL – RE-EXERCISE OF DISCRETION – where counsel for the de facto wife provided an estimate of prospective legal costs likely to be incurred by the de facto wife in pursuing her claim – where no further evidence was sought to be adduced by the de facto wife – where it was therefore appropriate for the Full Court to re-exercise the discretion rather than remit the proceedings for rehearing – where the Court is not satisfied that the de facto wife established hardship within the meaning of s 44(6) – de facto wife’s Initiating Application was dismissed.
Family Law Act 1975 (Cth) ss 44(3), 44(5), 44(6), 90SF, 90SM, s 94AAA(6), 117
Federal Proceedings (Costs) Act 1981 (Cth)
Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Althaus and Althaus (1982) FLC 91-233; [1979] FamCA 47
Calder & Calder (2016) FLC 93-691; [2016] FamCAFC 36
Edmunds & Edmunds (2018) FLC 93-847; [2018] FamCAFC 121
Hall and Hall (1979) FLC 90-679; [1979] FamCA 50
Sharp v Sharp (2011) 50 Fam LR 567; [2011] FamCAFC 150
Whitford and Whitford (1979) FLC 90-612; [1979] FamCA 3
APPELLANT: Mr Gadzen
RESPONDENT: Ms Simkin
FILE NUMBER: BRC 815 of 2018
APPEAL NUMBER: NOA 40 of 2018
DATE DELIVERED: 16 November 2018
PLACE DELIVERED: Melbourne
PLACE HEARD: Brisbane
JUDGMENT OF: Murphy, Aldridge & Kent JJ
HEARING DATE: 27 September 2018
LOWER COURT JURISDICTION: Federal Circuit Court of Australia
LOWER COURT JUDGMENT DATE: 3 May 2018
LOWER COURT MNC: [2018] FCCA 1092

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Looney QC
SOLICITOR FOR THE APPELLANT: Parry Coates Family Law
COUNSEL FOR THE RESPONDENT: Ms Cullen
SOLICITOR FOR THE RESPONDENT: Gold Law Hervey Bay

Orders

  1. Leave to appeal the orders made in the Federal Circuit Court of Australia on 3 May 2018 be granted to the appellant.

  2. The appeal be allowed and the orders made on 3 May 2018 be set aside.

  3. The Initiating Application filed by the respondent in the Federal Circuit Court of Australia on 25 January 2018 be dismissed.

  4. There be no order as to costs of the appeal pursuant to s 117 of the

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AGLC
Gadzen & Simkin [2018] FamCAFC 218
Case
[2018] FamCAFC 218
Decision Date

CaseChat Overview and Summary

In Gadzen & Simkin, the appellant, Gadzen, appealed against orders made by the Federal Circuit Court allowing the respondent, Simkin, to bring property settlement and maintenance proceedings seven years out of time. The trial judge concluded that Simkin would suffer hardship within the meaning of s 44(6) of the Family Law Act 1975 (Cth) if leave were not granted. Gadzen contended that the trial judge erred in law by failing to undertake any analysis of Simkin's potential claim and the likely costs of pursuing that claim and by applying the wrong legal test to determining the question of hardship.

The Full Court found that the trial judge correctly identified the authorities relevant to the question of hardship but failed to undertake any analysis of Simkin's potential claim and the likely costs of pursuing that claim. The Full Court held that an analysis of the potential claim of Simkin was necessary to determine whether or not hardship would be occasioned to Simkin if she were not granted leave to pursue that claim. The Full Court further held that the trial judge gave no consideration to the prospective legal costs of pursuing Simkin's claim, which is an essential element in determining hardship. The Full Court concluded that the trial judge applied the wrong legal test to determining the question of hardship and failed to consider and determine whether or not Simkin had a prima facie or arguable claim that was substantial having regard to all the circumstances of the case, including her potential costs in pursuing that claim.

The Full Court granted leave to appeal, allowed the appeal and set aside the orders made on 3 May 2018. The Full Court held that it was appropriate to re-exercise the discretion in relation to Simkin's application and dismiss it. The Full Court held that it was not satisfied that Simkin established hardship within the meaning of s 44(6) and dismissed Simkin's Initiating Application. The Full Court also made orders as to costs of the appeal and granted costs certificates to both parties pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth).

Orders

Orders of the court

1.

Leave to appeal the orders made in the Federal Circuit Court of Australia on 3 May 2018 be granted to the appellant.

2.

The appeal be allowed and the orders made on 3 May 2018 be set aside.

3.

The Initiating Application filed by the respondent in the Federal Circuit Court of Australia on 25 January 2018 be dismissed.

4.

There be no order as to costs of the appeal pursuant to s 117 of the Family Law Act 1975 (Cth).

5.

The Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

6.

The Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.

Note: The form of the order is subject to the entry of the order in the Court’s records.

Background

Background to the litigation

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Evidence

Evidence Before The Court

In then addressing the topic “[h]ardship” under that heading commencing at [30] of the reasons her Honour simply quoted paragraphs 23 to 25 of the de facto wife’s affidavit in full which are directed only to the de facto wife’s current income and expenses and the fact that the de facto husband ceased paying the mortgage payments on her Suburb B property. Immediately after referring only to those paragraphs of the de facto wife’s affidavit the trial judge concluded:31. I consider this evidence is sufficient to demonstrate hardship…(Emphasis added) It would appear to be unavoidable to conclude that by “this evidence” the trial judge was referring solely to the current financial circumstances of the de facto wife as deposed to in the three paragraphs of her affidavit the trial judge quoted in full. However, that could not “demonstrate hardship”. An analysis of the potential claim of the de facto wife was necessary to determine whether or not hardship would be occasioned to the de facto wife if she were not granted leave to pursue that claim. Further, as the authorities to which reference has been made demonstrate, an essential element is to consider the prospective legal costs of pursuing the identified or identifiable claim. Obviously, the prospective costs may render the conclusion that no hardship would be occasioned to an applicant to pursue an uncommercial claim. The trial judge gave no consideration to this essential element and was therefore in error. We accept the submissions of the de facto husband that having recited the evidence of the de facto wife as to her current financial circumstances the trial judge wrongly found that such evidence was “sufficient to demonstrate hardship” without addressing or otherwise referring to the nature or quality of the de facto wife’s potential claim. All the trial judge expressed as one of her conclusions (at [32(c)]) is:The applicant has prima facie a claim under the Family Law Act.That conclusion is unsupported by any analysis of the de facto wife’s claim. The trial judge thus applied the wrong legal test to determining the question of hardship and failed to consider and determine whether or not the de facto wife had a prima facie or arguable claim that was substantial having regard to all the circumstances of the case, including her potential costs in pursuing that claim. It is for these reasons that we consider leave to appeal ought be granted, the appeal allowed and the orders made on 3 May 2018 set aside. In the event the appeal was to be allowed and the orders made on 3 May 2018 set aside, the de facto husband sought that this Court re-exercise the discretion in relation to the de facto wife’s application and dismiss it. That is, the de facto husband contended that the proceedings ought not be remitted to the Federal Circuit Court for rehearing. Counsel for the de facto wife submitted that the proceedings ought be remitted to the Federal Circuit Court for rehearing so that the de facto wife might adduce further evidence.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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