Gilford & Cavaco
[2023] FedCFamC1F 398
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Gilford & Cavaco [2023] FedCFamC1F 398
File number(s): BRC 15584 of 2021 Judgment of: BAUMANN J Date of judgment: 21 September 2023 Catchwords: FAMILY LAW – SPOUSE MAINTENANCE – Where final property adjustment orders were by consent in April 2022 – Where the Applicant introduced a claim for spouse maintenance pursuant to s 90E nine months out of time – Application for leave to proceed out of time dismissed Legislation: Family Law Act 1975 (Cth) ss 90SE, 90SG, 90SI, 90SM, 44(6) Cases cited: Dimmick & Harrison [2023] FedCFamC1A 81
Edmunds & Edmunds (2018) FLC 93-847
Gadzen & Simkin (2018) FLC 93-871
Irvine& Irvine [2021] FamCA 541
Sharp & Sharp (2011) 50 Fam LR 567
Division: Division 1 First Instance Number of paragraphs: 20 Date of last submission/s: 5 May 2023 Date of hearing: 29 March 2023 Place: Brisbane Solicitor for the Applicant: Litigant in person Solicitor for the Respondent: Queensland Family Law Practice ORDERS
BRC 15584 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GILFORD
Applicant
AND: MR CAVACO
Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
22 SEPTEMBER 2023
THE COURT ORDERS:
1.That the Applicant’s Application for leave to commence spouse maintenance proceedings be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Gilford & Cavaco has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
On 28 April 2022, the parties resolved their de facto property dispute when consent Orders were made in the following terms:
1.A declaration be made under section 90RD that a de facto relationship existed between the parties between:
a. 1 June 2007 and 10 February 2009; and
b. 10 May 2018 and 24 November 2019.
2.In accordance with the Family Law Act 1975 (Cth) ss 90SF, an amount of SIXTY THOUSAND ($60,000.00) be transferred out of the Respondent’s Superannuation Account into the Applicant’s nominated Superannuation Fund as required by section 90XT(4) of the Family Law Act 1975 (Cth).
3.In accordance with paragraph 90XT(1)(a) of the Family Law Act 1975 (Cth):
a.the Applicant be entitled to $60,000 from the Respondent’s [Superannuation Fund 1] plan under [Superannuation Fund 1] (member number …);
b.that the Trustee of [Superannuation Fund 1] ([B Pty Ltd]) shall do all acts and things and sign all such documents as may be necessary to pay the full entitlement out of the Respondent’s interest in the Super Fund into the Applicant’s nominated [Superannuation Fund 2] (member number …);
c.that this Order have effect from the operative time and the operative time is fourteen (14) business days after the date of these Orders.
4.No later than 4.00pm on 29 May 2022 the Respondent pay the sum of ONE HUNDRED AND TWENTY THOUSAND DOLLARS ($120,000.00) to the Applicant, and failing that payment, the property of [1 C Street, Suburb D] (“the property”) shall be sold and the following provisions shall apply:
a.The children’s belongings of the property are to be relocated to the paternal grandmother’s home of [2 C Street].
b.The property shall be listed for sale by private treaty with such real estate agent as is agreed between the parties and failing agreement within 30 days of the date of these orders, the real estate agent will be as nominated by the then CEO of the REIQ at the request of the parties or either of them.
c.The list price shall be as agreed and failing agreement within 14 days of the date of the appointment of the real estate agent, the list price will be as nominated by the real estate agent.
d.The sale price shall be such amount as is agreed between the parties and failing agreement, the highest offer to buy the property that is at least 95% of the list price shall be accepted by the parties as the sale price.
e.The parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer.
f.That upon agreement being reached for sale of the property the parties shall execute the contract of sale of the property including the transfer documentation forthwith upon its submission to them by the agent or their solicitor.
g.The contract of sale shall provide for completion within 30 days after the date of the contract.
h.The proceeds of sale of the property shall be paid in the following manner and priority:
i. To discharge the mortgage.
ii.Payment of the agent’s commission, advertising and other expenses payable on the sale.
iii. Payment of outlays relating to the sale.
iv.The balance to be divided so as to effect an overall property settlement:
A. $120,000 to the Applicant;
B. The balance to the Respondent.
i.In the event the sum of ONE HUNDREND AND TWENTY THOUSAND DOLLARS ($120,000.00) payable to the Applicant is not fully realised or obtained from the sale of the property then the Respondent shall pay the balance outstanding from this amount owed to the Applicant within sixty (60) days from the initial payment made to the Applicant as outlined in these orders.
5.The Respondent is restrained and an injunction shall issue prohibiting him from further encumbering the mortgage on the property of [1 C Street, Suburb D] in the State of Queensland from the date of these Orders
6.Unless otherwise specified in these Orders:
a.Each party shall be solely entitled to the exclusion of the other to all other property, financial resources and chattels of whatsoever nature or kind in the possession of such party as at the date of these Orders and for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements.
b.Each party shall be solely responsible for and shall indemnify the other against any liability encumbering any item of property which that party is entitled to pursuant to these Orders.
7.The Applicant and the Respondent shall do all necessary acts and things and sign all necessary documents to give effect to these Orders. If either party refuses or neglects to sign (within seven (7) days of a written request to do so) any document necessary to effect the terms of these Orders, the Registrar of the Federal Circuit and Family Court of Australia at Brisbane is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act 1975 (as amended) to execute such documents on behalf of such party.
8.These orders are made by way of alteration of property interests pursuant to Section 90sm of the Family Law Act 1975.
9.All previous property orders be discharged.
Ms Gilford (who in these reasons I shall call “the Applicant”), by way of an amended Initiating Application filed 18 August 2022 and amended further on 29 May 2023 sought, inter alia. an order:
That pursuant to section 44(5) and 44(6) of the Family Law Act 1975 the Applicant mother be granted leave to progress with her application for spousal maintenance as set out in her Amended Initiating Application of 18 August 2022.
The amended Application filed 18 August 2022, after the final property Orders had been made and put into effect, introduced a claim for spouse maintenance on a final basis, for the first time. As a result, when the matter first came before me on 22 February 2023 (after the parenting and spouse maintenance proceedings had been transferred to Division 1 on 5 October 2022), I observed that the Applicant required leave to proceed out of time, and she then filed her amended Application.
Mr Cavaco (who in these reasons I shall call “the Respondent”) opposes the granting of leave. As directed by the Court, the parties have filed written submissions, which I have considered, namely:
(a)by the Applicant on 21 April 2023; and
(b)by the Respondent on 5 May 2023.
On 29 March 2023, the Court ordered that the issue of leave be considered in chambers on the written submissions (papers) unless otherwise ordered.
THE LAW
The Court, having ordered that a de facto relationship existed between the parties for the periods 1 June 2006 to 10 February 2009 and 10 May 2018 to 24 November 2019 (Orders of 10 February 2022), either party was entitled to commence proceedings under s 90SE (maintenance), s 90SG (urgent maintenance) or s 90SM (alteration of property interests) within two years of the end of the de facto relationship (s 44(5) of the Family Law Act 1975 (Cth) (“the Act”)).
Although the Applicant did seek orders seeking relief pursuant to s 90SM in her Application filed 22 November 2021, within the two-year period, she did not commence final order relief under s 90SE until 18 August 2022 – some nine months out of time.
As a result of the late application, s 44(6) applies, which provides:
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.
Hardship will ordinarily be established by an Applicant if they can establish they have a prima facie case of some consequence (Gadzen & Simkin (2018) FLC 93-871); whether there is a real probability of success involves a consideration, but not a final determination, of the nature of the Applicant’s claim (Edmunds & Edmunds (2018) FLC 93-847), with such application usually determined on the papers and are therefore summary in nature (Dimmick & Harrison [2023] FedCFamC1A 81 at [22]).
If hardship is established, then the Court will consider in the exercise of its discretion to grant leave, matters including whether there is an explanation for the delay and the question of any prejudice to the Respondent. As was identified in Sharp & Sharp (2011) 50 Fam LR 567:
[t]he law presumes prejudice to flow to a person sought to be joined in litigation after the effluxion of the relevant time limits. Even if the Court came to the view that there was no significant prejudice to the respondent, the Court may consider whether in all of the circumstances of the case, it is just and reasonable to grant the extension sought.
The claim which the Applicant wishes to pursue is pleaded as follows:
37.Pursuant to Section 83 subsection (2)(ba), Consent Orders of 28 April, 2022 be varied;
a.From the date of these Orders until the date at which the youngest child of the de facto relationship, turns 6 years of age, being […] 2024, the Respondent shall pay into ANZ bank account […06], as nominated by the Applicant Mother, the amount of $551 each Wednesday.
i.The Mother is to re-enrol in the [E Institute course] originally funded by the Mother in July of 2021 and complete this course;
ii.The Mother is to further enrol into [an E Institute course], or similar, within 12 months of the completion of the […] course referenced above.
iii.The Mother is to secure counselling on behalf of herself and the eldest child, X, to attend as a family and complete no less than 12 sessions together.
iv.The Mother is to remain liable for the Child Care Subsidy for long daycare for Y
(as per the original)
Section 83 of the Act has no application as it only relates to married couples, and in any event, no order for maintenance (even under s 90SE) was in force – so as to enliven s 90SI. I accept the Applicant wife is not legally represented.
THE APPLICANT’S CASE IN SUMMARY
The Applicant submits that:
(a)much of the Applicant’s submissions assert errors in the consent property Orders – however such submissions cannot relate to the spouse maintenance claim. If the Applicant seeks to set aside or vary the final property Orders, she will need to file an application under s 90SN. She would need to ultimately establish a miscarriage of justice or one of the other matters set out in s 90SN(a) to (e);
(b)her interim application for maintenance (see proposed order 20) was referred (along with the property application) to a Conciliation Conference;
(c)any delay in filing her new Application for maintenance on 18 August 2022 was as a result of incorrect legal advice and arose also from the Respondent delaying the filing of his personal income tax return;
(d)she was “under significant financial and emotional distress at the time of filing…ill‑able to afford adequate legal representation due to increasing rent liability, long daycare fees and within the limited means of her income tested parenting payment single subsidised budget (paragraph 11);
(e)while she says she has attempted “numerous times to improve the employment prospects for herself, including… her enrolment in a [tertiary course] in June of 2021, she has been unable to attain promotion beyond her current level due to significant existing care responsibilities for both children, and lack of professional development qualifications”;
(f)the father renegotiated his employment contract in March 2022 affirming a reduction in income to $180,000 per annum retrospectively from October 2020, and causing a reduction in child support payable;
(g)“upon legal advice, the Applicant mother negotiated at Order 2 a 90SF order for spousal maintenance in the superannuation super splitting orders contained within the Orders by consent of 18 April 2022”. This concession by the Applicant is highly relevant to the current Application;
(h)her 2020/21 income tax return identifies her sources of taxable income for that tax year as:
(i)gross wages - $39,319; and
(ii)income tested Centrelink payments - $14,729,
which after allowable deductions resulted in a taxable income of approximately $50,000.
(i)she received $120,000 in August 2022 by way of the consent Orders but has been required to use these funds to meet the living expenses of the children and herself including school and education expenses, with the father only making a modest child support payment. The Applicant submits “there is hardship occasioned to me and both children in not adjusting the parties’ significantly different financial circumstances”;
(j)the Applicant seeks to rely on some authorities which are directed to an application for leave to bring property proceedings out of time, which this Application is not;
(k)there is no prejudice to the Respondent where he was on notice, since the Application filed 24 November 2021, that the Applicant was seeking spouse maintenance. Further, the Applicant submits that:
(i)the Respondent’s financial position as set out in his Financial Statement filed 9 February 2022 demonstrates he has the capacity to pay some spouse maintenance; and
(ii)the Respondent well knows that “property matters remained unresolved following his non-adherence to the post separation promises made by him to purchase a two bedroom unit for the Applicant mother and her two children to reside”.
THE RESPONDENT’S CASE IN SUMMARY
The Respondent submits that:
(a)the Applicant sought interlocutory orders only in respect of spouse maintenance and was aware of the limitation period and “demonstrated awareness that spousal maintenance was part of the proceedings”, and as a result the Applicant is unable to demonstrate a “reasonable excuse” for not filing the application for spouse maintenance in time;
(b)the Applicant has not satisfied the onus that her reasonable ongoing expenses exceed her income nor proven the Respondent has the ability to pay further. The Applicant has a right to pursue, and did pursue, her property settlement application. As a result, the Applicant has not demonstrated a prima facie case;
(c)when a “costs versus benefit” analysis is made, the costs of the Applicant pursuing her claim for spouse maintenance are likely to be disproportionate to the benefits;
(d)the Applicant prepared the final consent Orders and even if the Applicant’s claim is that (on advice) she drafted the superannuation split as a s 90SF order because that would allow her to reopen the matter of spouse maintenance is correct, the Respondent should not be “financially negatively impacted due to the Applicant’s apparent incorrect legal advice… or her lack of raising at the time of property settlement”;
(e)the Applicant’s admission in her submissions of the reason for the superannuation splitting order “were to reflect a spousal maintenance payment” is relevant to the discretion the Court is now asked to exercise;
(f)I was directed to a decision of mine in Irvine& Irvine [2021] FamCA 541, but the facts of that case are quite different to this case, and there the Court was required to consider whether the wife should be able to vary (under s 83) a maintenance order that was no longer in force. I was not “evincing the finality principle under section 81 of the Act” in applications of this nature, as the Respondent asserts. The Respondent says he was “entitled to expect that any maintenance payable would have been encompassed in the lump sum payment of superannuation”.
DISCUSSION
I find that:
(a)no real explanation is offered by the Applicant as to why, when she sought an order for interim spouse maintenance of $551 per week, she sought no final order for maintenance, save for lack of legal advice (or inadequate legal advice);
(b)where there is no application on a final basis for spouse maintenance, it is hardly surprising that, at Order 8 of the final consent Orders, it is recorded that “[t]hese orders are made by way of alteration of property interests pursuant to Section 90sm of the Family Law Act 1975”;
(c)the Applicant’s admission in her submissions that the superannuation splitting order was negotiated as “a s 90SF order for spouse maintenance” is not inviting the Court to consider confidential discussions that took place during the Conciliation Conference, but rather, in my view, a concession by the mother from her perspective that the superannuation split was for lump sum spouse maintenance;
(d)it appears that at around the time the Applicant received her cash payment of $120,000 in August 2022 (later than the date set out in Order 4), she then decided to pursue her current spouse maintenance claim – but in a form that seeks, confusingly, to provide a connection between payment of spouse maintenance (originally only to 25 April 2025) with the Applicant undertaking further study and also engaging in some family counselling with X;
(e)much of the submissions made by the Applicant raise concerns about whether the final property orders were “just and equitable”; the lack of timely disclosure made by the Respondent before those Orders were made; whether a “collateral” agreement existed at the time of the Orders for the Respondent to buy the Applicant a two bedroom unit and even, it seems, a suggestion she was either under duress or at least significant financial pressure when she entered into the final property Orders. These matters may be relevant if the Applicant pursues an application to set aside the property Orders, but they are not relevant to the issue of granting leave to pursue spouse maintenance orders;
(f)it is noted that the wife’s subsequent amended Initiating Application filed 29 May 2023 now seeks for the maintenance payment Order to be for $520 per week and to extend to 25 April 2028;
(g)in considering the Applicant’s financial position at the time the standard application period ended in November 2021, the Applicant’s Financial Statement sworn 22 November 2021 is highly relevant. It speaks for itself, however in summary the Applicant deposes to:
(i)a gross salary of $1,089 a week attracting tax of $271 per week;
(ii)a rent obligation at that time of $500 (now said to be $600 per week);
(iii)a personal HECS/HELP debt of $31,505;
(iv)at Part N, her weekly personal expenses (not including rent) are claimed to be $566 and the children’s expenses being $436;
(v)receiving, at that time:
(A)Centrelink benefits by way of a single parent payment ($40.33 per week) and family tax benefit ($142.73 per week); and
(B)child support paid by the Respondent of $426 per week (which of course is not taxed in the hands of the Applicant).
CONCLUSION
I am not satisfied that the Applicant will suffer “hardship” if her spouse maintenance claim brought out of time cannot be pursued. It appears that to some extent the Applicant seeks the Respondent support her desire for further education.
At this stage, it is not relevant as to whether the Applicant has a maintainable claim to support an application to set aside the final property Orders, on the limited grounds set out in the Act.
If I am wrong about the finding as to hardship, in the exercise of my discretion, I would not grant leave where:
(a)the Applicant’s explanation for the short nine-month gap in launching fresh proceedings is explained, but I find was made by her after agreeing to a superannuation split, and waiting until she had received her payment of $120,000;
(b)the Respondent would suffer some prejudice but that, more likely, the additional claims now made by the Applicant are more properly dealt with through the child support review process. The Applicant seems to see no difference between the obligation parents have to meet the financial obligations of their children “equitably” and her expressed need for further financial support to pursue at least further study;
(c)at the time of the limitation period, I am not satisfied that the Applicant was unable to support herself (as opposed to the family unit) without the benefit of the modest Centrelink benefits;
(d)I would accept that the Respondent may have some residual capacity (after paying child support and expenses to maintain himself) to pay spouse maintenance but not necessarily at the rate sought now of $520 per week; and
(e)although the costs of pursuing the spouse maintenance claim (in the context of contested parenting proceedings) would likely be modest – set against the initial claim that was to cease in April 2024 (just seven months away), even those modest likely costs could have been disproportionate. I am not aware of the basis the Applicant now seeks to extend the Order until April 2028.
On the basis of these findings, in the exercise of my discretion, the Application by the Applicant for leave to commence spouse maintenance proceedings will be dismissed.
COSTS
The Respondent, in his submissions, seeks an order for costs against the Applicant. When the parenting proceedings and other applications return to my list at 11.30am on 26 September 2023, I will consider making directions to deal with that costs application, if still pursued.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 22 September 2023
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