Garrett and Dickinson

[2016] FCCA 1653

FEDERAL CIRCUIT COURT OF AUSTRALIA

GARRETT & DICKINSON [2016] FCCA 1653

Catchwords:
FAMILY LAW – Practice And Procedure – Application by the
de facto Husband for a property settlement out of time pursuant to s.44(6) of the Family Law Act 1975 (Cth) – the application is filed more than two years after the expiration of the standard application period – given there is no satisfactory explanation for the delay in bringing the application – the behaviour of the Applicant after separation – the hardship to the Respondent if leave is granted and the current divisions of assets between the parties is just to both parties – leave to apply out of time not granted.

Legislation:

Family Law Act 1975, ss.44(5), (6), 90SM

Cases cited:

Whitford & Whitford (1979) FLC 90-612

Kennon & Kennon [1997] FamCA 27
Montano & Kinross [2004] FamCAFC 231

Hedley & Hedley [2009] FamCAFC 179
Tamaniego & Tamanieago [2010] FamCAFC 254
Sharp & Sharp [2011] FamCAFC 150
Stanford & Stanford [2012] HCA 52

Applicant: MR GARRETT

Respondent: MS DICKINSON

File Number: MLC 9896 of 2015

Judgment of: Judge Bender

Hearing date: 5 May 2016

Date of Last Submission: 5 May 2016

Delivered at: Melbourne

Delivered on: 5 July 2016

REPRESENTATION

Counsel for the Applicant: Ms Swann

Solicitors for the Applicant: Nevett Ford

Counsel for the Respondent: Mr Dudderidge

Solicitors for the Respondent: Nevile & Co

ORDERS

1. The application by the Applicant pursuant to section 44(6) of the

   
   Family Law Act 1975

   (Cth) for leave to issue an application out of time for alteration of the parties property interests is dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 9896 of 2015

MR GARRETT

Applicant

And

MS DICKINSON

Respondent

REASONS FOR JUDGMENT

Introduction

1. The threshold issue for determination in this matter is whether the Applicant should be granted leave pursuant to section 44(6) of the Family Law Act 1975 (Cth) (“the Act”) to issue an application out of time for alteration of the parties’ property interests pursuant to section 90SM of the Act.

Background

1. It is the Applicant’s evidence the parties commenced a de facto relationship in May 2004 and separated on 30 January 2012.

2. It is the Respondent’s evidence the parties commenced a de facto relationship in early 2003 and separated under the one roof in November 2010. It is the Respondent’s evidence she and the Applicant physically separated on 31 January 2012 when she moved out.

1. At the commencement of the relationship (whether it be 2003 or 2004) the Applicant owned the property at Property T (“Property T”) which was then valued at approximately $250,000 and subject to a mortgage of $83,000. The Applicant also had superannuation of $31,000 and a motor vehicle. The Respondent had savings of $50,000, and a motor vehicle valued at approximately $12,000.

2. The Applicant, who is now aged 43, was employed as an (occupation omitted) and the Respondent who is now aged 60 was employed as a (occupation omitted).

3. In 2007 the Respondent established her own (omitted) business with a business partner being (omitted business).

4. The parties paid off the mortgage on Property T in 2007. It is the Respondent’s evidence she paid $122,000 into the Applicant’s bank account between 2003 and 2006 which was used to pay and discharge the mortgage on Property T.

5. In January 2008 the property at Property L (“Property L”) was purchased for $587,500 utilising $58,750 of the Respondent’s savings and a mortgage of $560,000. Property T was used as security for the Property L purchase. Property L was registered in the Respondent’s sole name.

6. The mortgage on Property L was paid out by October 2009. It is common ground that the Respondent paid $491,009.29 towards the mortgage on Property L from her savings and profit from her business.

7. In November 2010 the property at Property D (“Property D”) was purchased for $706,000. A mortgage of $760,000 was obtained to enable the purchase. Property D is registered in the Respondent’s sole name. At the time of the filing of her Response, the Respondent deposes there remained $681,500 outstanding on the mortgage on Property D.

8. On 14 February 2012 the parties met to discuss finalising financial matters between themselves. Each of the parties attest it was at the behest of the other. Agreement was reached that the Applicant would retain Property T and the Respondent would retain Property L and Property D and continue to be responsible for the mortgage on Property D.

9. On 21 February 2012 the parties signed a document typed by the Respondent that reflected the agreement reached between them. The document concludes:

   “we both acknowledge by signing this agreement that (sic) are satisfied with this agreement between us and will make no further claims on each other.”

10. Both parties agreed not to seek legal advice before signing this document.

11. Between October 2012 and July 2013 the Applicant deposited payments totalling $40,000 into the Property D offset account. The Applicant’s evidence is the Respondent knew he was making the payment. The Respondent deposes she knew nothing of these payments being made by the Applicant. It is the Respondent’s evidence that she only realised the Applicant had made the payments in October 2013. As soon as she realised that the Applicant had made these payments she refunded the $40,000 to his account and asked him to stop transferring money to the Property D account.

12. In early 2014 the Applicant contacted the Respondent indicating he wanted to discuss financial matters. The Applicant produced bank statements and receipts for renovations and payments the Applicant said he had made relating to Property D between 26 November 2010 and 16 July 2013 which totalled $98,500. This figure included the $40,000 referred to in paragraph 12 of the judgment.

13. The Applicant alleged the Respondent owed him this money. The Respondent denied she owed him any money given the significant payments made by her towards Property T.

14. Despite disputing she owed the Applicant any money, the Respondent paid the Applicant $60,000 as she felt if she did not pay the Applicant he would not leave her alone. It is the Respondent’s evidence the Applicant told her that this payment would be “the final settlement”.

15. In September 2014 the Respondent and her business partner sold (omitted business) for $1,165,000. After payment of sale costs of $25,000 the Respondent received $570,000 being one half of the balance of the proceeds of sale.

16. On 23 October 2015 the Respondent sold Property L for $1,225,000. After payment of sale costs the Respondent received $1,186,100.

17. The Respondent estimates she has a Capital Gains Tax liability of $128,625 from the sale of Property L.

18. In November 2015 the Respondent purchased her current residence, address undisclosed. The purchase price was $1,485,000 plus stamp duty of $82,000. The property is unencumbered.

19. The Applicant first sought legal advice in relation to his application in September 2015. On 22 October 2015 the Applicant filed an Initiating Application seeking he be given leave pursuant to section 44(6) of the Act to institute property proceedings out of time and if successful orders be made pursuant to section 90SM of the Act that he receive
    60 per cent of the parties assets.

20. The Respondent filed a Response on 22 January 2016 seeking that the Applicant’s Initiating Application filed 22 October 2016 be dismissed.

The Law

1. Sections 44(5) and 44(6) of the Act provide as follows:

   (5)  Subject to subsection (6), a party to a de facto relationship may apply for:

   (a)  an order under section 90SE, 90SG or 90SM; or

   (b)  a declaration under section 90SL;

   only if the application is made within the period of 2 years after the end of the de facto relationship (the standard application period ).

   (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; or

   (b)  in the case of an application for an order for the maintenance of the party--the party's circumstances were, at the end of the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.

2. The law as to whether leave should be granted to initiate proceedings outside the standard application period is well settled.

3. The leading case which has been cited with approval in most section 44 leave applications since it was decided, is the matter of Whitford & Whitford (1979) FLC 90-612. The Full Court held at 78,144:

   on 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.

4. Thus, when determining an application for leave out of time two questions arise:

   a)firstly, is the Court satisfied hardship would be caused if leave were not granted?

   If the answer to this question is yes;

   b)should the Court in the exercise of its discretion grant or refuse leave to institute the proceedings?

Hardship

1. When discussing what constitutes hardship for the purposes of section 44 of the Act, Justices May and Ainslie-Wallace in the matter of Sharp & Sharp [2011] FamCAFC 150 held at paragraphs 17-21 as follows:

   17.    It is well accepted that hardship for these purposes is more than the loss of a right to commence proceedings.  It is the consequences attending the loss of the right to commence proceedings that constitutes hardship.  That is a matter to be determined by the circumstances of the particular case.

   18.    In assessing hardship in this context the well established test is that the applicant must have a prima facie claim worth pursuing or a “real” probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship. However, whether or not hardship exists is not to be assessed only by reason of the monetary value of the probable order to be made if leave were granted.

   19.    In considering the meaning of hardship, in Whitford at 78,144 the Court said:

   ... 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 … If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.

   20.    Further at page 78,145 the Court said:

   … As a general proposition it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship.  Similarly, where the costs which the applicant will have to bear himself or herself are about as much or more than what the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted.  But otherwise we find no warrant in either subsec. 44(3) or 44(4) for saying that the right or entitlement lost must be a substantial one. (emphasis in original)

   21.    At the same page the Court continued:

   In an appropriate case, and depending on the circumstances of the applicant or the children, hardship may be caused by the loss or deprivation of something which is of comparatively small money value … 

2. In Sharp (supra) at paragraphs 128-135 Young J considered the meaning of hardship in section 44 of the Act. His Honour held at paragraphs 128 – 135:

   128.  In Whitford (supra) the Full Court at 78,144 to 78,145, in addition to the passages cited in the reasons of May and Ainslie-Wallace JJ above, specifically considered the meaning of hardship as stated in s 44(4)(a). The Full Court observed that:

   In our view the meaning of “hardship” in subsec. 44(4) is akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment. Cf. the meanings assigned to “hardship” in the Shorter Oxford Dictionary and in Webster’s New International Dictionary. See also In the Marriage of Mackenzie (1978) FLC 90-496…

   …

   In ordinary parlance, hardship means something more burdensome than “any appreciable detriment”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations. It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense.

   129.  Similarly, in Hall (supra) at 78,627 the Full Court stated that the authorities:

   …have considered what is meant by the term “hardship” in this context, and the term “substantial detriment” seems to be the generally accepted interpretation of that word.

   130. It follows from the discussion in Whitford (supra) at 78,144, and Hall (supra) at 78, 627, that in the context of s 44(4)(a) hardship has a broad meaning and, as identified by the majority, although the mere loss of a prospective entitlement to pursue a substantive claim may not of itself constitute hardship it is the consequences attending the loss of the right “with which the subsection is concerned”. However, in Whitford (supra) it is important to note that the Court observed at 78, 145 that:

   Hardship may be caused to an applicant if leave were not granted to institute proceedings, although the applicant is not in necessitous circumstances. Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved, may constitute hardship. In some cases, where a resolution of the property or financial relationships of the parties is desired, it might be, that the applicant would receive no more or even less, than he or she already owns at law or in equity. Nevertheless, hardship might be caused to the applicant if leave were not granted so as to facilitate such resolution…

   131.  From the observations in Whitford (supra) and Hall (supra), and in view of the recent authorities of the Full Court on the subject of hardship, it is apparent that an assessment of hardship requires the Court to consider whether the applicant would suffer a substantial detriment as a consequence of the loss of the right to institute the proceedings, although that detriment, in the circumstances of a particular matter, may not be entirely related to financial considerations. In my opinion, it is not possible nor desirable to define exhaustively what will, in all the circumstances of a particular application, constitute hardship for the purposes of s 44(4)(a). However, in undertaking the exercise the Court should have regard to the nature of the jurisdiction exercised by the Family Court and the power 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 decree nisi” per Whitford (supra) at 78,146.  

   132.  In undertaking an assessment of hardship the Court is required to consider whether the applicant has established a prima facie claim and in Hall (supra), at 78,627, the Full Court stated that:

   Fundamental to [a finding of hardship] is a determination of the quality or character of the potential claim. In relation to that different cases have used somewhat different phrases to describe it so that it has become something of a matter of semantics to describe in different ways what is really the same basic concept. For example in Swallow’s case (unreported Emery J, 16 September 1977; referred to in McDonald’s case) it was said to be “a prima facie case which is in the circumstances substantial”; the Full Court in McDonald’s case  differed from that by stating that it ought to be “a reasonable prima facie case”. In Mackenzie’s case it was described as being “a probability of success”, and in Whitford’s case the distinction was said to be that the applicant would need to show that she would “probably succeed” to be contrasted with a situation where she had “no real probability of success”. In Perkins’ case (1979) FLC 90-600 Lindenmayer J described it as “a reasonable probability of the claim being successful in some measure”. 

   These varying phrases may tend to suggest different shades of meaning whereas in reality they are directed to the same fundamental inquiry which basically is in the context whether on the applicant’s material he or she has a reasonable claim to be heard by the court…

   133.  In Althaus (supra) at 77,267 the Full Court similarly observed that “[t]he exercise is to determine whether there is a reasonable claim to be heard. That is the essence of the inquiry into whether hardship will be suffered by denying the applicant the right to litigate that claim.”

   134.  More recently in Hedley (supra) at paragraph 215, Cronin J cited the Full Court decision of Richardson (supra) at paragraph 14, in which Finn, Warnick and Boland JJ stated and affirmed the principles set out by the primary judge who observed that “it is not a decision about whether the claim will succeed but whether there is a reasonable claim to be heard”. 

   135. In my opinion, in undertaking a determination of whether the requisite hardship will be occasioned to the applicant under s 44(4)(a) what is required by the Court is an assessment of the asserted hardship, and in view of that hardship, a determination of whether the applicant has demonstrated that there is a reasonable claim to be heard. If the applicant has established that there is a reasonable claim to be heard and has demonstrated that she or he would suffer hardship in the form of a substantial detriment as a consequence of the loss of the right to institute the proceedings, then the statutory precondition in s 44(4)(a) will be satisfied and the Court may then consider whether in all the circumstances leave should be granted to allow the application under s 44(3) of the Act.

3. It is submitted on behalf of the Applicant that whilst he is not currently in employment he has an earning capacity and is not otherwise in necessitous circumstances.

4. It is submitted that the hardship to the Applicant if leave is not granted is the loss of his right to pursue his claim which, if his evidence is accepted at trial as having merit would result in a significant payment to him by the Respondent. It is argued the loss of that right constitutes a substantial detriment to the Applicant.

5. It is further submitted on behalf of the Applicant that he has a prima facie claim worth pursuing. It is argued that the Respondent came into the relationship with $100,000 and now has assets in excess of $2,500,000 which were mostly accumulated during the parties’ relationship. The Applicant came into the relationship with assets of over $200,000 and now has assets of $1,352,000.

6. Whilst the Applicant is seeking 60% of the “pool”, it is submitted the Court does not have to be satisfied that he will be successful in obtaining orders at trial for the percentage claimed by him or that his application will be wholly successful in order to grant leave.

1. It is submitted the Court only needs to be satisfied the Applicant has a reasonable claim to be tried and that this is clearly the case in this matter.

2. Accordingly, the Applicant argues he will suffer hardship if leave is not granted.

3. It is submitted on behalf of the Respondent that the Applicant is only 43, is a qualified (occupation omitted), is in good health and capable of working and has a significant earning capacity. In contrast the Respondent is 60 years of age, has sold her business and therefore has limited earning capacity.

4. It is submitted on behalf of the Respondent that at the time of the filing of the Initiating Application, the Applicant was the sole title holder of an unencumbered real property with a value of between $1,100,000 and $1,300,000 as well as savings of $120,000 and superannuation.

5. It was submitted on behalf of the Respondent that the authorities confirm that when considering section 44(6) of the Act there is a need for the Applicant to be suffering some financial hardship at the time of commencing proceedings which would be alleviated by a successful outcome in the substantive claim for hardship to be established.

6. It is further submitted on behalf of the Respondent that had the Applicant not been in a de facto relationship with the Respondent, his net financial position would have been worse than it currently is. This is because of the significant contributions made by the Respondent during the relationship and in particular the contributions made by her to the mortgage on Property T, the improvements she paid for on that property as well as the payments she made to the Applicant’s clothing, holidays and entertainment.

7. In relation to the Applicant’s alleged financial contributions as set out in the Affidavits filed by him in support of his application, it is submitted on behalf of the Respondent that his claims in that regard are implausible given that during cohabitation the Applicant’s net income was measurably less than the financial contributions he alleges to have made.

8. It is submitted on behalf of the Respondent that the Applicant does not have a real chance of success nor will he succeed on his substantive claim.

9. In particular the Respondent argues that the Applicant has no chance of obtaining the orders sought, being 60% of the net asset pool given the Applicant already has more than 30% of the parties’ net assets, which percentage is significantly greater than the contributions made by him to the asset pool during the course of the relationship.

10. It is further submitted on behalf of the Respondent that in the circumstances of this case the High Court decision of Stanford & Stanford [2012] HCA 52 in which the High Court held in paragraph 42 that there is no “assumption that one or other party has a right to have the property … divided” is applicable.

11. It is the submission made on behalf of the Respondent that taking into account all the circumstances in this case including the respective ages of the parties, that there was no children of the relationship, the nature and extent of the relationship, the inconsistent and contradictory evidence of the Applicant as opposed to the supported and corroborated evidence of the Respondent and the disparity in the contributions made by the parties during the relationship there would be no orders made for the division of property in the Applicant’s substantive claim. In those circumstances it is submitted that the Court cannot be satisfied that hardship would be caused to the Applicant if leave were not granted.

12. Whilst the parties’ evidence as to the contributions made by them during the course of the relationship is quite disparate, this is a matter that would be determined after the testing of evidence in the event leave is given.

13. Whilst it was submitted on behalf of the Respondent that the authorities require that there is some need for the Applicant to be suffering from some form of financial hardship at the commencement of the proceedings that is not an accurate reflection of the authorities.

14. In Whitford (supra) the Full Court observed at 48.145:

    Hardship may be caused to an applicant if leave were not granted to institute proceedings, although the applicant is not in necessitous circumstances. Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved, may constitute hardship.

15. The decision of the Full Court in Whitford as set out above was cited with approval by Young J in the matter of Sharp (supra).

16. The Respondent’s submission that as the Applicant is unlikely to be successful in obtaining orders that there be a division of the parties’ net assets such that he receives 60% of same then hardship is not established is also rejected.

17. As was properly submitted on behalf of the Applicant, that the Applicant may be unsuccessful in his application for 60% of the net asset pool is not the basis on which to make a finding that he would not suffer hardship in the event that he is unable to pursue his application. Again in the matter of Whitford at 78.145 the Full Court held as follows:

    In some cases, where a resolution of the property or financial relationships of the parties is desired, it might be that the applicant would receive no more, or even less, than he or she already owns at law or in equity. Nevertheless, hardship might be caused to the applicant if leave were not granted so as to facilitate such resolution.

18. In this matter, I am of the view that the Applicant has demonstrated that he has a reasonable claim to be heard. I am also satisfied he would suffer hardship in the form of substantial detriment as a consequence of the loss of the right to institute the proceedings.

19. I am therefore of the view that hardship would be caused to the Applicant if leave were not granted.

The Exercise of Discretion

1. Having determined the Applicant would suffer hardship if leave were not granted, I must now determine whether in the exercise of my discretion I should grant or refuse leave to institute the proceedings.

2. In Whitford (supra) the Full Court at 18.176 stated:

   The determination how this discretion should be exercised must depend on the facts of the particular case. Due weight must be given to the expressed legislative intendment that ordinarily proceedings should be commenced within a year from a date of the decree nisi and the general policy of the Act which appears from s. 44 (3) and s. 81 that financial relationships between the spouses should, wherever possible, be brought to finality within a reasonable time after the dissolution of the marriage. Hence, such matters as the length of the delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay, and the strength on the merits of the applicant's case, and the degree of the hardship which would be suffered unless leave were granted, are matters affecting the exercise of the discretion. These matters are not necessarily the only ones.

3. In the matter of Sharp (supra) the Full Court cited with approval the decision of O’Ryan J in Tamaniego & Tamanieago [2010] FamCAFC 254 where his Honour stated at paragraph 162:

   As to the second part of the exercise, the fundamental issue in any application for extension of time is whether this will enable the court to do justice between the parties:  see Gallo v Dawson (1990) 93 ALR 479.  In Gallo v Dawson McHugh J referred to the need to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences to the parties of the grant or refusal of the extension of time … In summary, in considering the second question the court may have regard to a number of factors that include whether the applicant has an adequate explanation for the delay in bringing the proceedings and whether to grant leave would prejudice or impose hardship on the respondent to the application for leave or other persons.

Delay

1. On the Applicant’s evidence he is some 21 months out of time in the issuing of his Initiating Application. On the Respondent’s evidence the Applicant is just under four years out of time in issuing his Initiating Application.

2. In paragraphs 28 and 29 of his Affidavit sworn 15 March 2016 the Applicant explains his delay in issuing the proceedings in the following terms:

   28. I was unaware of the requirement to issue Court proceedings within two years of separation. I first obtained legal advice in September 2015 when I attended at Nevett Ford Lawyers.

   29. I believe I was depressed at the separation date and post separation also. When I realised in about October 2013 that the Respondent and I would never reconcile, I felt shattered, like I had no future. I experienced listlessness. I was going to work, but just doing what I had to do to get by. I could not get out of bed sometimes and did not want to leave the house. Despite the fact that I was not coping well physically and emotionally, I thought that I should be able to sort myself out, without medical or psychological assistance. I have always considered myself a strong person who could fix problems myself. However, I did consult a hypnotherapist/counsellor, Ms H, in March 2014. I only had one session with her, but it helped me enormously to adjust to the fact that the Respondent had a new partner and to accept that our relationship was really over. I did inform the Respondent that I had seen a hypnotherapist.

3. The Applicant’s evidence in paragraph 29 referred to above is at odds with paragraph 42 of the Applicant’s Affidavit sworn 21 October 2015 in that he deposes as follows:

   I believe in retrospect I was suffering from depression however I did not seek comprehensive treatment for my state of mind as I considered I should be able to handle the matter myself. I did go see a Counsellor in (omitted) at her rooms at around May 2013.

4. The Applicant offers no explanation as to why either after May 2013 or March 2014 when he had accepted that the relationship with the Respondent was at an end he did not seek legal advice or actively pursue a formal resolution of property proceedings with the Respondent.

5. It is submitted on behalf of the Respondent that little weight ought be given to the Applicant’s evidence as to the reasons for his delay in instituting proceedings as that evidence is both contradictory and implausible.

6. It is further submitted on behalf of the Respondent that the Applicant’s reasons do not provide an adequate explanation as to the reasons for delay as they do not explain adequately or at all the reasons that the Respondent did not pursue legal proceedings for some nearly four years outside the time limit. It is argued that the Applicant’s alleged depression is not supported by any form of corroborative evidence.

7. In early 2014 the Applicant was able to pore over bank statements and receipts to calculate a specific amount which he alleged was owed to him by the Respondent. It is argued by the Respondent that this clearly shows that any alleged stress or depression on the part of the Applicant was not present in early 2014 and the Applicant was in a position to seek legal advice at least at that time.

8. It is the Respondent’s submission that the real reason for the Applicant instituting proceedings in October 2015 is that he became aware that the Respondent had listed the Property L property for sale and the likely price such property would obtain. It is therefore argued that the timing of the Applicant’s Initiating Application is purely opportunistic.

9. It is submitted on behalf of the Respondent that there is no suggestion that the delay was caused by any ongoing negotiations in respect of property settlement between the parties.

10. It is submitted by the Respondent that the parties met in 2012 to discuss and finalise all property matters between them and one week later signed a document recording their agreement.

11. Further, it is submitted that notwithstanding the agreement reached in 2012, to the surprise of the Respondent, in early 2014 the Applicant sought a specific amount reflecting what he considered were his contributions to Property D and in order to appease the Applicant the Respondent paid him a further amount of $60,000. It is the Respondent’s evidence that at that time the Applicant told her that payment would see an end to all matters between them.

12. Between the payment to the Applicant in 2014 and the receipt by the Respondent of correspondence from his now solicitors in September 2015 the Applicant at no time attempted to negotiate or raise with the Respondent his claim that there should be any further or ongoing negotiations between them to finally resolve property matters between them.

13. For all these reasons the Respondent argues that the Applicant has failed to provide either an adequate or reasonable explanation for his delay in seeking to institute these proceedings and therefore the Court should not exercise its discretion in granting him leave to institute proceedings out of time.

Hardship/Merits of Claim

1. It is submitted on behalf of the Applicant that the degree of hardship to the Applicant if leave is not granted to institute proceedings out of time will be significant.

2. It is submitted on behalf of the Applicant that whilst there is a seventeen year age gap between the parties, the Respondent is a (occupation omitted) with a higher income and earning capacity than that of the Applicant. It is further argued that there is a $1,300,000 disparity in the assets and financial resources in the parties’ respective names.

3. Whilst it is argued on behalf of the Applicant that whilst the parties give different accounts of the contributions they each made to the assets during the course of the relationship, there is no doubt they accumulated substantial assets during their time together and that at this time there has been an unequal sharing of those assets.

4. It is argued that as the total asset pool is in excess of $4,000,000 (inclusive of superannuation), the Applicant’s claim has the requisite degree of merit to be heard.

5. It is submitted on behalf of the Respondent that the Applicant is 43 years of age, a qualified (occupation omitted), in good health and capable of working, with an adequate if not significant earning capacity. In contrast the Respondent is 60 years of age has sold her business and has significant health problems. She therefore has limited earning capacity.

6. It is further submitted on behalf of the Respondent that the Applicant retains assets of $1,500,000 consisting of real estate, cash and superannuation and on any view cannot be considered to be suffering from financial hardship.

7. It is further submitted on behalf of the Respondent that had the Applicant not been in a de facto relationship with the Respondent his net financial position at this time would be considerably worse than it would have been but for the Respondent given the significant contributions made by the Respondent to the Applicant’s existing assets.

8. The Respondent takes real issue with the Applicant’s alleged contributions to the assets accumulated by the parties during the relationship, particularly given his own evidence as to the comparable earnings of the parties during their period together and his concession that the Respondent paid $491,009.29 towards the mortgage on the Property L property from her own savings and the income and profit earned by her in her (omitted) business.

9. It is therefore submitted on behalf of the Respondent that the Applicant will not suffer serious hardship in the event that leave is not granted for him to institute proceedings out of time.

10. It is also submitted on behalf of the Respondent in all the circumstances of this case there is little merit in the Application being brought by the Applicant and in particular his application that he should receive 60% of the asset pool.

Prejudice to the Respondent

1. The Applicant concedes that there will be prejudice to the Respondent in the event leave is granted to him to institute proceedings out of time.

2. The Applicant concedes that the Applicant signed an informal agreement on 28 February 2012 and received payments from the Respondent of $60,000 in early 2014.

3. The Applicant notes that on the Respondent’s evidence she believed the relationship was over and financial matters between herself and the Applicant had been settled, at least from early 2014. It is noted that on that basis the Respondent has moved on with her life in that she has disposed of her business, Property L and has bought a new home.

4. It is conceded that the current proceedings will be stressful for the Respondent and require her to incur legal costs.

5. It is submitted on behalf of the Applicant however that the issue for the Court is not merely whether there has been prejudice to the Respondent but what the degree of that prejudice is and whether it can be cured by other means.

6. Counsel for the Applicant made particular reference to the Full Court decision of Hedley & Hedley [2009] FamCAFC 179 where Justice Cronin at paragraph 221 held as follows:

   221. If a respondent claims to have been prejudiced by the applicant’s delay, in many cases, that can be ameliorated by the court in the substantive property proceedings making assessments and giving weight to contributions and the various factors under s 75(2) of the Act. Any prejudice to the respondent can be factored into the ultimate deliberation.

7. It is submitted on behalf of the Applicant that any post-separation contributions made by the Respondent can be taken into account at trial to cure any prejudice to her.

8. It is further submitted that the lapse of time has not meant there have been any lapses of memory or that any relevant evidence will not be available. The proceeds of sale from the assets disposed of by the Respondent since separation can be easily traced and without great expense to the parties.

9. It is submitted that the Applicant is not impecunious and can meet an order for costs in the event that his claim is wholly unsuccessful and the Court exercises its discretion to award costs.

10. It is further submitted the Respondent is also not impecunious and is able to run her case.

11. Finally, it is submitted that neither party has incurred legal costs to date in protracted settlement negotiations that would now be thrown away because of the institution of these proceedings.

12. In the comprehensive written submissions prepared on behalf of the Respondent, the prejudice to the Respondent by these proceedings is set out in the following terms at pages 19 and 20:

    b. It is submitted that there can be no doubt that there is prejudice to the Respondent by these proceedings, including but not limited to:

    i.The costs incurred in responding to the s.44(6) threshold issue.

    ii.The likely significant costs of a defended hearing on the substantive claim if leave is granted, in particular, the need for subpoenas, extensive discovery, and numerous valuations of all the assets at various points in time.

    iii.The likely significant period of time until a final hearing on the substantive claim if  leave is granted.

    iv.The likely inability to deal with her assets until the end of the substantive matter if leave is granted.

    v.The likely inability of retiring in the near future.

    vi.The effect on her mental and physical health.

    c. Further, since the end of the de facto relationship, and certainly since the informal Agreements between the parties, the Respondent has moved on with her life (as has the Applicant) and arranged her life on the basis that all matters between the parties were settled and at an end, for example:

    ·Both parties have re-partnered.

    ·The Applicant has undertaken improvements to his property.

    ·The Respondent has undertaken improvements to her properties, bought and sold assets, and incurred debt.

    ·The Respondent has arranged her finances in preparation for retirement.

    d. Further, as per Nygh J in Frost & Nicholson (1981) FLC 91-051 at 76,425 (referred to in Sharp at 153), prejudice to the Respondent includes being faced with litigation which she had no reason to expect, and was led to believe would not be brought.

    e. It is submitted that the prejudice to the Respondent is unlikely to be wholly relieved, or at all, by costs orders or by giving weight to ss. 79(4) or 75(2) of the Act at final hearing, if leave is granted.

Other matters

1. It is submitted on behalf of the Respondent that in the event leave were granted to the Applicant to institute proceedings, the Respondent will rely on the principles set out in Kennon & Kennon [1997] FamCA 27 in respect to the impact and effect on the Respondent of the ongoing and continued domestic violence to which she was subjected at the hands of the Applicant throughout the entirety of the relationship.

2. The Respondent sets out in considerable details the allegations of violence in paragraphs 35 to 39 and 97 of her affidavit filed 22 January 2016. Those allegations are further supported by the affidavits filed on her behalf by Mr K, Ms C and her daughter, Ms J.

3. It is submitted on behalf of the Respondent that if the allegations made by her in relation to domestic violence are substantiated then it is possible that this factor together with all the other circumstances of the relationship would have a further negative effect on the Applicant’s substantive claim.

4. The Applicant is adamant in his denial that he was violent in any way towards the Respondent during the relationship.

Conclusion

1. In this matter it is very apparent that the Applicant offers no reasonable or adequate explanation as to why he did not bring his application within the standard application period allowed under Section 44(5) of the Act or for the delay in instituting proceedings for well in excess of two years after the expiration of that standard period.

2. Whilst it is the Applicant’s evidence that he was not aware that there was a time limit in which to pursue an application for property settlement, he offers no explanation for not seeking any legal advice until September 2015.

3. It is submitted on behalf of the Respondent that it is open for the Court to be satisfied that the only reason the Applicant sought legal advice in September 2015 was it had come to his attention that the Property L property had been placed on the market for sale by the Respondent and accordingly his application should be considered nothing more than opportunistic and a belated grab by the Applicant for financial advantage arising from the increase in property values in the (omitted) area over the period since separation.

4. As was properly submitted on behalf of the Applicant, the failure of the Applicant to satisfactorily explain the reasons for his delay is not fatal to his application.

5. In the matter of Montano & Kinross [2004] FamCAFC 231, Murphy J at paragraph 15 having made reference to the matters to be considered by the Court when determining whether to exercise its discretion to grant leave to institute proceedings as set out by the Full Court in Whitford (supra) made the following observation:

   “Yet, this Court was at pains there to point out that those considerations were not exclusive of the matters to be considered in the exercise of the broad discretion; an overall requirement to do justice between the parties is the ultimate criterion. The strength or weakness of, or the relative weight to be attached to, those various matters in the exercise of the discretion must necessarily depend on the facts of the particular case.”

6. In Slocomb & Hedgewood [2015] FamCAFC 219,  a matter in which there had been an eighteen year delay in proceedings being commenced by the Applicant, the Full Court held at paragraph 42 that:

   “In appropriate cases the interests of Justice might overcome long delay and on occasions an inadequate explanation for the delay, which is only one factor to be considered in determining an application for leave…”

7. Whilst the parties dispute the date of separation, there is no issue between them that shortly after their physical separation they sat down together and reached an agreement for the division of their assets.

8. The parties agreed that they would each retain those assets that were registered in their names which meant the Applicant would retain the property owned by him at the commencement of cohabitation at Property T which was by then unencumbered and the Respondent would retain Property L which was by then unencumbered and Property D which at the time of separation had a mortgage in excess of $700,000.

9. This agreement was reflected in a written document signed by both parties.

10. The Respondent also retained her half interest in a (omitted) business owned and operated by her in partnership with another person. The business was not referred to in the document signed by the parties in February 2012.

11. In October 2013 it came to the Respondent’s attention that the Applicant had been unilaterally making payments into the offset mortgage account in respect to the Property D property. It is the Respondent’s evidence that when she became aware of these payments she immediately reimbursed the Applicant the funds and made a specific request of him to not make any payments in the future.

12. In early 2014 the Applicant contacted the Respondent to further discuss financial matters with her. He produced a document in which he set out what he claimed were contributions made by him to the Property D property between 26 November 2010 and 16 July 2013.

13. It is the Respondent’s evidence that the Applicant provided receipts and bank statements which he said supported his claim that she owed him money in relation to his contributions to that property.

14. What is of interest is that the payments the Application allege were made by him are for the period from 26 November 2010 to 8 February 2014. If the Applicant’s evidence as to the date of separation were to be accepted some of these payments were whilst the parties were cohabiting. The Applicant made no claim for any contribution or monies paid by him during the parties’ cohabitation.

15. If, however, one accepts the Respondent’s date of separation, all payments claimed by the Applicant post-date the date of separation as alleged by the Respondent.

16. It is the Respondent’s evidence that when the Applicant contacted her in early 2014, she refuted that she owed the Applicant any money for the contributions he alleged were made by him to Property L. It is her evidence she agreed to pay him the sum of $60,000 on the basis that the Respondent would then “leave her alone” and also on the basis that he had insisted that the payment would effect “the final settlement.”

17. Since early 2014 it is apparent that both parties have moved on with their lives. The parties have both re-partnered.

18. The Respondent in the belief that all matters between the parties were resolved and in the absence of any application filed by the Applicant has proceeded to deal with her financial affairs on that basis. She has sold her business in anticipation of moving into retirement. She has sold the house that she was residing in and bought herself a new home.

19. As has been set out in this judgment it would appear the Applicant only sought legal advice and instituted these proceedings when he became aware the Respondent had listed Property L for sale.  

20. Whilst there is considerable dispute between the parties as to the contributions that have been made by the Applicant during the course of the relationship, there are some matters that are not in dispute.  

21. Firstly, at the commencement of cohabitation the Applicant was the registered proprietor of Property T. It had an approximate value of $250,000.00 and a mortgage of $83,000. The Respondent had savings of approximately $50,000 and an Audi motor vehicle.

22. The mortgage on Property T property was paid off by 2007 and during that period the Respondent contributed in excess of $122,000.00 towards the mortgage and other costs of Property T from the income earned by her as a (occupation omitted).

23. In 2007, the Respondent established her own (omitted) business with a partner being (omitted business). The Applicant made no contribution either financially or otherwise to this business.

24. (omitted business) was sold by the Respondent and her business partner in 2014 and she received $570,000.00 for her half interest in the business.

25. In 2008, the property at Property L was purchased for $587,500.00. A mortgage of $560,000 was taken out to purchase this property and Property T was used as security for the loan.

26. The mortgage on Property L was paid out by October 2009. It is agreed that the Respondent paid $491,000.00 towards the discharge of that mortgage from her own savings and from the profit of her business.

27. In November 2010, Property D was purchased for $706,000.00. An amount of $760,000.00 was borrowed to purchase the property and the mortgage was secured over both Property D and Property L. The Respondent has been fully responsible for the payment of that mortgage. The Applicant paid $40,000 into the Property D offset account between October 2012 and October 2013 but this amount was repaid to the Applicant by the Respondent upon her becoming aware the Applicant had made these payments.

28. Accordingly, when the current assets of the parties are considered there is clear evidence that at least $1,500,000 of those assets are as a direct result of contributions made solely or primarily by the Respondent.

29. Whilst the failure to provide a reasonable or adequate explanation for the delay in bringing an application is but one factor in determining an application for leave, the explanation offered by the Applicant is unreasonable, inconsistent and implausible.

30. It is apparent from the document signed by the parties in February 2012 the Applicant was aware of his right to seek legal advice in relation to the resolution of financial matters between himself and the Respondent but chose not to do so either at that time or any time in the next three and a half years.

31. Having considered the evidence of the parties I am satisfied the Applicant’s application was made when he realised the Respondent had listed Property L for sale and can be considered to be opportunistic.

32. In February 2012 the Applicant and Respondent signed an informal agreement which purported to finalise property matters between them. In 2014, the Applicant approached the Respondent seeking a payment from her for what he alleged were payments made by him towards Property L for the period after the date the Respondent asserts the parties separated.

33. The Respondent paid the Applicant the amount sought by the Applicant being $60,000. The Applicant does not dispute the Respondent’s evidence the Applicant referred to this payment as “the final settlement.”

34. Whilst there is considerable dispute between the parties as to their respective contributions to the assets acquired by them during the relationship there is clear undisputed evidence between the parties that the Respondent made by far the greater contribution to the assets during and after their relationship.

35. In the belief that all financial matters between herself and the Applicant were resolved by the signed agreement and the additional payment by her to the Applicant in early 2014, the Respondent proceeded thereafter to manage her financial affairs and plan for her future on the basis the property retained by her was hers to deal with. In these circumstances, the Respondent would suffer considerable prejudice if the Applicant was given leave to institute proceedings.

36. I am satisfied that the assets retained by the Applicant at the breakdown of the parties’ relationship are such that justice would be done to him if leave were not granted from his to institute proceedings out of time.

37. Accordingly, having considered all the factors relevant to the appropriate exercise of the discretion of the Court as to whether leave should be granted to the Applicant to institute proceedings out of time, I am of the view that to do justice between the parties the Applicant should not be granted leave to proceed out of time and his Application to do so shall be dismissed.

I certify that the preceding one hundred and thirty one (131) paragraphs are a true copy of the reasons for judgment of Judge Bender

Date: 5 July 2016