Gim & Conway (No 2)
[2025] FedCFamC1F 230
•9 April 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Gim & Conway (No 2) [2025] FedCFamC1F 230
File number: SYC 2170 of 2023 Judgment of: SCHONELL J Date of judgment: 9 April 2025 Catchwords: FAMILY LAW – DE FACTO – Hearing as to whether the Court has jurisdiction – Respondent concedes that a de facto relationship had existed albeit contending less than two years – Consideration of s 90SB(c) of the Family Law Act 1975 (Cth) – Consideration of what constitutes substantial contributions and whether failure to make an order under section 90SM would result in serious injustice to the applicant –– Where the applicant seeks leave pursuant to s 44(6) of the Family Law Act 1975 (Cth) to commence proceedings out of time for financial adjustment – Leave granted to the applicant to commence proceedings out of time. Legislation: Family Law Act 1975 (Cth) ss 44(6), 90SB(s), 90RD(2), 90SB, 90SM, 90SM(4) Cases cited: Edmunds & Edmunds (2018) FLC 93-847; [2018] FamCAFC 121
Emerald & Emerald (2018) FLC 93-870; [2018] FamCAFC 217
Gadzen & Simpkin (2018) FLC 93-871; [2018] FamCAFC 218
Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30
Harriott & Arena (2016) FLC 93-702; [2016] FamCAFC 69
Lee & Hutton (2014) 50 Fam LR 322; [2013] FamCA 745
Neocleous and Neocleous (1993) FLC 92-377
Sharp v Sharp (2011) 50 Fam LR 567; [2011] FamCAFC 150
Walker and Walker (1984) FLC 91-564
Whitford and Whitford (1979) FLC 90-612
Division: Division 1 First Instance Number of paragraphs: 50 Date of hearing: 31 March 2025 Place: Sydney Counsel for the Applicant: Ms Clarke Solicitor for the Applicant: Alton Legal Counsel for the Respondent: Ms Care Solicitor for the Respondent: Franzese & Associates ORDERS
SYC 2170 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GIM
Applicant
AND: MR CONWAY
Respondent
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
9 APRIL 2025
THE COURT ORDERS THAT:
1.A declaration is made that the applicant has met the jurisdictional requirement set out in s 90SB(c) of the Family Law Act 1975 (Cth) (“the Act”).
2.Leave is granted to the applicant pursuant to s 44(6) of the Act to commence proceedings out of time.
3.The parties are directed to attend a Conciliation Conference with a Registrar on a date to be allocated.
4.Each party must, within 14 days, make a genuine offer to settle consistent with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Gim & Conway has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
By Initiating Application filed 6 April 2023 the applicant de facto wife seeks leave pursuant to s 44(6) of the Family Law Act 1975 (Cth) (“the Act”) to commence proceedings out of time for financial adjustment. The respondent de facto husband by way of Response filed 19 July 2023 seeks orders for a declaration pursuant to s 90RD(2) of the Act that the parties were not in a relationship of more than two years and in the alternative an order that the application for leave to proceed out of time be dismissed.
The proceedings initially commenced in the Federal Circuit and Family Court of Australia (Division 2) and were transferred to Division 1 on 13 November 2024 on the basis that the threshold hearing could not be contained to two days. On 10 December 2024 I listed the matter for hearing before myself for four days commencing 31 March 2025.
On the first day of the hearing in circumstances where there was no issue the parties had been in a de facto relationship (albeit not for two years as contended by the respondent) and in light of the relief each sought, the parties agreed the Court should first determine whether it had jurisdiction pursuant to s 90SB(c) of the Act and in the event that it did, whether leave should be granted pursuant to s 44(6) of the Act.
In circumstances where there was an issue as to whether the applicant had made substantial contributions of the kind identified in s 90SB(c) I permitted cross-examination. During the course of submissions, counsel for the respondent quite properly conceded the applicant had made a substantial contribution. In those circumstances the issue for determination became whether s 90SB(c)(ii) was engaged and, if so, then whether leave pursuant to s 44(6) should be granted.
For reasons that will become apparent, I am satisfied that the applicant has established the jurisdictional requirement and I am also satisfied that leave should be granted.
DOCUMENTS RELIED UPON
The applicant relied upon the following documents:
(1)Initiating Application filed 6 April 2023;
(2)Affidavit of applicant filed 23 October 2024;
(3)Affidavit of Ms C filed 22 October 2024;
(4)Points of Claim;
(5)Case Outline document.
The respondent relied upon the following documents:
(1)Response to Initiating Application filed 19 July 2023;
(2)Affidavit of respondent filed 31 October 2024;
(3)Case Outline document.
OBSERVATIONS AS TO EVIDENCE
Albeit that there was some truncated cross-examination of the parties, given the way in which the applications proceeded, it is impossible to make findings on all of the disputed facts.
BACKGROUND
The applicant’s counsel contended that the parties commenced cohabiting in a de facto relationship in March 2015 (albeit that the wife’s affidavit contends it was January 2015) and contends that the de facto relationship ended in July 2018. Thus, the period of the relationship as contended by the applicant was some three years and four months.
The respondent contends that the parties commenced cohabiting in a de facto relationship on 14 January 2016 and they separated on 18 October 2017. He contends a de facto relationship existed for approximately 19 months.
There are no children of the de facto relationship.
The parties do not seem to be in issue that they met online in about July 2014 but are at issue as to when they commenced a romantic relationship. The applicant contends they commenced a romantic relationship from the time they met in in July 2014 with the respondent contending December 2014.
The applicant contends that in early and mid-2015 she and the respondent travelled to Country D together and stayed in her apartment, while in early 2015 they travelled to the respondent’s home in Country D. The applicant contends that in early 2015 she and the respondent had a conversation where the respondent asked her to work as his personal assistant. She says she quit her job and between early 2015 and mid-2018 she worked for the respondent as a personal assistant and accompanied him on various business trips to Country D.
The applicant contends that mid-2015 she and the respondent had a conversation about the purchase of a property. She says that at this time the respondent made her an additional card holder on his Westpac credit card.
She said that in mid-2015 she attended at an auction and purchased a property at Suburb E, signing a contract to purchase the property and paying a ten per cent deposit using the respondent’s personal cheque. She says that this was undertaken by way of agreement. To complete the purchase, the applicant borrowed from the NAB in her sole name $1,200,000.
The respondent denies any such agreement and says that when he discovered the applicant had purchased the Suburb E property using a cheque of his without his authorisation and knowledge, he and the applicant had a discussion where it was agreed she would complete the purchase and hold the property on trust for him.
In late 2015 she says that she signed a construction contract with a builder for re-development of the Suburb E property in the sum of $652,864.
In mid-2015 the applicant says that she and the respondent purchased a property at Suburb F in the sum of $3,120,000. She contends that they signed the sales contract initially as joint tenants, and that the respondent paid the deposit and stamp duty. She contends that she thereafter filled out a FIRB application in relation to the property and that following conversations between herself, the respondent and a lawyer, he withdrew the FIRB application. The applicant contends that she informed the lawyer that the respondent would no longer be proceeding with a joint home loan application, and that the Suburb F property would be purchased in her sole name. The applicant completed the purchase borrowing from CBA $2,496,000. She says that in late 2015 she and the respondent moved into the Suburb F property.
The respondent contends that he purchased the Suburb F property and asked the respondent’s sister to oversee the purchase. He says that he understood that he would be the sole purchaser of the Suburb F property. In his affidavit, he says that he later found out from various subpoenaed documents that the applicant had:
44.…forged my signature in the costs agreement signed with her conveyancing solicitor, [G Lawyers], by using a fake digital signature pasted to the costs agreement…
And later:
45.I planned to purchase the [Suburb F] Property by myself with the contract price of $3,120,000. Later, I discovered that [Ms Gim’s] name was also on the original contract of the [Suburb F] Property.
46.I had no knowledge of the joint names for the purchasing of the [Suburb F] Property because [Ms Gim] told me that her name was not on the original signed contract. I do not know why [Ms Gim] became one of two purchasers with me together as joint tenants on the original contract.
He further says:
48.I remember that only my name was on the contract when I signed the front page. Then I scanned and emailed it back to [Ms Gim].
49.I say that I would not have signed the contract at all then if l had known that the purchasers were listed as both [Ms Gim] and me together.
Whilst there is significant controversy as to how the applicant came to be the purchaser of the properties, it is not in issue that the applicant in the case of the Suburb E property obtained a mortgage in her sole name for $1,200,000 and in relation to the Suburb F property obtained a mortgage for $2,496,000. Nor is it in issue that in mid-2016 (at a time when on either party’s version of events they were in a de facto relationship) the applicant re-financed the Suburb E property with Westpac obtaining of a loan of $1,759,000.
The applicant also contends that she applied her own savings of in excess of $184,000 to meet mortgage payments (applicant’s affidavit filed 23 October 2024, paragraph 120) on the properties. The applicant provides a series of tables setting out payments made by her to the properties which she asserts demonstrates that the mortgage payments exceeded the rental income. The respondent in his affidavit contends that the rental income was more than the mortgage payments and there was a surplus available to the applicant. The applicant did not accept this when put to her in cross-examination. The respondent contends that she has failed to make disclosure which was denied by the applicant. I am not satisfied on the limited cross-examination that took place that the respondent has established that the applicant did not make the payments she said she made from her savings.
The applicant also contends that in January 2016 the respondent’s son from a previous relationship came to live with the parties in the Suburb F property. She contends that she thereafter was responsible for picking up the child from school, assisting him in his homework, teaching him English, cooking, cleaning, doing laundry, gardening, and grocery shopping. The respondent agrees that his son commenced cohabiting with him and the applicant in the Suburb F property in January 2016 because the applicant offered to take care of the child. He says that his son returned to Country D in mid-2017.
The parties are at issue in relation to the date of separation; the applicant contending July 2018 and the respondent contending October 2017.
It is not in issue that in mid-2020 proceedings were commenced in the Supreme Court of New South Wales by a third party against the applicant and the respondent in relation to the Suburb E property. As part of those proceedings the respondent contended the applicant held the Suburb E and Suburb F properties on trust for him. Following judgement, orders were made in late 2022 that the applicant held the Suburb E property on trust for the respondent, for it to be sold and the proceeds divided equally between the third party and the respondent. A declaration was also made that the applicant held the Suburb F property on trust for the respondent. The applicant appealed the orders made in late 2022 which appeal was unsuccessful.
As a consequence of the applicant’s failure in the Supreme Court and the Court of Appeal, the respondent contends that she is subject to a costs order in his favour of in excess of $600,000. The applicant concedes that it is between $500,000 and $600,000.
Given the way the hearing was conducted it is not entirely clear whether the competing contentions advanced by each of the applicant and respondent as to how the properties came to be in the name of the applicant were articulated in the Supreme Court. It is clear, however, from the orders that were tendered (Exhibit 2) that the applicant was unsuccessful in her contention that she was the beneficial owner of each of the properties.
Again, given the way the hearing was run and the paucity of evidence in each party’s case, a clear picture of who paid the mortgages during the relationship and after separation is not revealed. It would appear, however, that subsequent to the parties’ separation, the applicant continued to receive the benefit of the rental income from the Suburb E property and remained in occupation of the Suburb F property until further orders were made by the Supreme Court in mid-2024.
In late 2023 the Suburb E property was sold for $3,470,000 and the respondent received the sum of $738,000 being his half share of the net proceeds of sale. The respondent remains the sole owner of the Suburb F property and in his affidavit asserts that it has a value of $4,500,000 subject to a mortgage debt of approximately $3,000,000.
SECTION 90SB
As referred to earlier, it is not in issue that the parties were at one time in a de facto relationship, its length was controversial. However, the jurisdictional requirement for the court to make an order is engaged pursuant to s 90SB(c) where the applicant establishes that she made substantial contributions of a kind mentioned in 90SM(4)(a), (b) or (c) and that a failure to make an order would result in a serious injustice to her. The requirement is conjunctive.
In Harriott & Arena (2016) FLC 93-702; the Full Court observed in the following terms:
63.To the best of our knowledge, the meaning of “substantial contributions” has not been the subject of careful consideration by this Full Court, although the matter was touched on in Redmond & Mullins [2015] FamCAFC 69, where V and K was cited. However, the meaning of “substantial” has been the subject of much discussion by other courts. Our review of those authorities indicates support for these observations of Deane J in Tillmans Butcheries Pty Ltd v The Australasian Meat Industry Employees’ Union (1979) 27 ALR 367 at 382:
The word “substantial” is not only susceptible of ambiguity: it is a word calculated to conceal a lack of precision. In the phrase “substantial loss or damage”, it can, in an appropriate context, mean real or of substance as distinct from ephemeral or nominal. It can also mean large, weighty or big. It can be used in a relative sense or can indicate an absolute significance, quantity or size. The difficulties and uncertainties which the use of the word is liable to cause are well illustrated by the guidance given by Viscount Simon in Palser v Grinling ( … [1948] AC 291 at 317) where, after holding that, in the context there under consideration, the meaning of the word was equivalent to “considerable, solid or big”, he said: “Applying the word in this sense, it must be left to the discretion of the judge of fact to decide as best he can according to the circumstances of each case…
64.Clearly the “substantial contributions” test is a subjective one. Any effort to elucidate its meaning by use of other words or phrases will simply replace one subjective test with another. It will remain a matter of impression whether the contributions are considered to be “substantial”. While recognising that the test is subjective, we are nevertheless inclined to agree with Thackray J, who said in Thorburn and Oswald [2007] FCWA 43 at [54] that a trial judge
would need to interpret the word “substantial” in the context of the financial position of the parties. What might appear to be a “substantial contribution” for people of limited financial resources, might not be substantial in a case involving very wealthy parties.
The respondent properly conceded that entering into mortgages to enable the completion of the purchase of the Suburb E and Suburb F property constituted a substantial contribution by the applicant. In that respect I note that the mortgages did not simply complete the purchase but one was refinanced in the case of the Suburb E property to permit the construction of a home. In each case the properties subsequently increased in value.
The applicant’s evidence is also that she applied rental income to meet the mortgage payments as well as her own savings in excess of $184,000 to meet mortgage payments (applicant’s affidavit filed 23 October 2024, paragraph 120). I am satisfied that in the context of this short de facto relationship (irrespective of whose version as to length is accepted) the purchase by the applicant of these properties accompanied by her obtaining mortgages and meeting mortgage payments from her savings was a substantial contribution in the terms of s 90SM (4)(a).
I am not satisfied that the other contributions of the applicant whether as homemaker, parent or supervision of the construction have the necessary character of a substantial contribution.
As the test is conjunctive, the applicant must also establish that a failure to make an order or declaration would result in a serious injustice. Justice Watts in Lee & Hutton (2014) 50 Fam LR 322 observed as follows:
302…The gateway test which requires the court to find that failure to make an order would result in serious injustice is one which necessitates that the court takes a “broad brush approach”. This is so because a precise result cannot be known until there is a full testing of the evidence at a final hearing.
(Footnotes omitted)
I am satisfied that the applicant has established that there would be a serious injustice if an order were not made pursuant to s 90SM of the Act. The only arena in which her contributions can be recognised is by application under s 90SM. It was not submitted that she had alternative remedies available to her at law. Further in circumstances where she is liable to the respondent under a cost order of in excess of $600,000 (as asserted by him) then there would be a serious injustice if an order were not made under s 90SM of the Act that would permit her to in some way defray those costs no matter how modest the ultimate 90SM order may be.
For these reasons I am satisfied the applicant has established the jurisdictional requirements to the making of an order under s 90SM of the Act.
SECTION 44(6)
To obtain a grant of leave pursuant to s 44(6) of the Act, the applicant must demonstrate that hardship would be occasioned if leave were not granted. A grant of leave is not automatic but exists to ensure that time limits do not cause an injustice (Gallo v Dawson (1990) 93 ALR 479).
Hardship will ordinarily be established by the applicant demonstrating that they have a prima facie case of some consequence (Gadzen & Simpkin (2018) FLC 93-871). In Edmunds & Edmunds (2018) FLC 93-847, the Full Court observed:
48.That involves a consideration, but not a final determination, of the nature of the applicant’s claim. In doing so, the Court must weigh the applicant’s case against that of the respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.
The likely costs of the litigation is but a factor to be considered in determining whether or not hardship would be alleviated (Whitford and Whitford (1979) FLC 90-612; Walker and Walker (1984) FLC 91-564).
In applications of this type, the applicant’s evidence is accepted at its highest unless it is inherently unbelievable (Neocleous and Neocleous (1993) FLC 92-377).
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 (albeit the absence of an explanation is not necessarily determinative (Emerald & Emerald (2018) FLC 93-870) and the question of any prejudice to the respondent. In that respect, as the Full Court observed in Sharp v Sharp (2011) 50 Fam LR 567:
97 Merely because the respondent to an application for leave does not point to particular prejudice that might arise if leave were granted, does not dispose of the question. The 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 New South Wales court of Appeal in McLean v Sydney Water Corporation [2001] NSWCA 122, per Giles JA (Hodgson and Stein JA agreeing) said at [22] that:
22 … Prejudice engendered by delay and unlikelihood of a fair trial will be highly material, and if there is prejudice and unlikelihood of a fair trial that will tell strongly, often conclusively, against the grant of an extension of time. It does not follow that in the absence of prejudice (other than general prejudice) and unlikelihood of a fair trial it will be just and reasonable to grant an extension of time.
It is axiomatic that if the applicant does not have a prima facie case, then there could be no hardship occasioned by the refusal to grant leave.
I am satisfied taking the applicant’s evidence at its highest that the applicant has established a prima facie case. She has made substantial contributions in this short relationship (whoever’s version is ultimately accepted). The completion of the purchase of the properties by the signing of the mortgages has resulted in part in the respondent receiving a gain on the sale of Suburb E over the purchase cost and an increase in value in Suburb F. Her evidence is that she applied her own savings of in excess of $184,000 to meet mortgage payments (applicant’s affidavit filed 23 October 2024, paragraph 120).
She thus has made significant contributions and has a prima facie case for relief pursuant to s 90SM of the Act. I am satisfied she would, in light of that prima facie case, suffer hardship if leave were not granted where she has no other remedy available to her to meet the costs order made in the Supreme Court and her evidence is that the only real estate she owns has dropped in value and is worth less than the mortgage, where she has no stable income, and is unable to support herself other than by borrowing from family and friends.
I am not satisfied that the applicant has advanced a satisfactory explanation for the delay. Her affidavit reveals that she obtained legal advice in August 2020 that she “may or may not be out of time” (applicant’s affidavit filed 23 October 2024, paragraph 143). Her evidence that she was not advised of a limitation period of two years sits somewhat inconsistency with her statement that she may be out of time as at August 2020. She also says that she was not advised that she could commence proceedings in the Supreme Court. She then says that she obtained legal advice in January 2023 as to the time limit and commenced proceedings in early 2023.
That said, the period of delay is, even on the respondent’s case, not so long so to prevent him obtaining documents such that his position is prejudiced from a forensic point of view. While I accept that being involved in further litigation with the applicant may by its very nature be prejudicial, the prejudice is not so high that when balancing the competing positions, it weights in favour of refusing leave.
On balance taking all of the relevant considerations into account, I am satisfied that the applicant would suffer hardship if she was prevented from instigating proceedings pursuant to s 90SM of the Act given her financial contributions. I am not satisfied that she has provided an adequate explanation for the delay but note, consistent with the authorities, that is not necessarily fatal to her application for leave. I accept that there is a prejudice to the respondent, but that prejudice is not such as to militate against the grant of leave.
I propose to grant leave but will direct the parties to attend a Conciliation conference and make offers of settlement.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 9 April 2025
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