GONG & YEE
[2020] FCCA 400
•28 February 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| GONG & YEE | [2020] FCCA 400 |
| Catchwords: FAMILY LAW – Application to proceed out of time – flaws in application – 5 years out of time – short relationship. |
| Legislation: Family Law Act 1975 (Cth) ss.44, 44(3), 44(4) |
| Cases cited: In the Marriage of Whitford (1979) 4 Fam LR 754 |
| Applicant: | MS GONG |
| Respondent: | MR YEE |
| File Number: | MLC 8666 of 2019 |
| Judgment of: | Judge Harland |
| Hearing date: | 5 December 2019 |
| Date of Last Submission: | 5 December 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 28 February 2020 |
REPRESENTATION
| Solicitors for the Applicant: | Mr Guo of GR Lawyers |
| Counsel for the Respondent: | Mr Schmidt |
| Solicitors for the Respondent: | Blackwood Family Lawyers |
ORDERS
That the application filed on 4 August 2019 be dismissed.
That the applicant file any submissions in response to the respondent’s application for costs within 14 days.
IT IS NOTED that publication of this judgment under the pseudonym Gong & Yee is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 8666 of 2019
| MS GONG |
Applicant
And
| MR YEE |
Respondent
REASONS FOR JUDGMENT
The applicant seeks leave to proceed out of time with her application for an adjustment of property. The respondent opposes her application and seeks costs. In her application she seeks final orders as follows:
1. That the Husband pay the Wife $100,000.00.
2. That the Husband pay the Wife 25% of the capital gains on the property known as A Street, Suburb B from July 2013.
The parties married in 2011. According to the applicant they separated in January 2012 when she returned home from visiting her family and discovered that the respondent had moved out. According to the respondent they separated in November 2011. They were divorced on 23 July 2013. The applicant filed her application on 4 August 2019. On either view they were married for less than a year. Neither suggested that they lived together prior to getting married.
She brings her application over five years out of time with respect to a very short relationship.
Conduct of the proceedings
At the first return date on 7 October 2019 the respondent sought to have the application summarily dismissed. As the respondent’s documents were only served that morning I adjourned the application for an interlocutory hearing on 5 December 2019. I ordered the applicant to file an affidavit in response on or before 4 November 2019. Both parties filed written submissions on or before 28 November 2019. The applicant’s further affidavit was filed late.
After reserving judgment the applicant’s solicitor filed further written submissions. No order was made for this and he did not seek to do this in Court. It was entirely inappropriate. I did not see those submissions and after communicating with the parties I ordered those submissions to be uplifted.
Commonly these applications are determined by reference to affidavits and submissions. Neither party sought to cross-examine.
The parties prepared written submissions and spoke to them at the hearing.
Legal principles
Section 44(3) of the Family Law Act 1975 (“Family Law Act”) provides that property and maintenance applications must be brought within 12 months of a final divorce order. The Court has a discretion to grant leave to a party to proceed with an application out of time pursuant to s.44(4) if the Court is satisfied that hardship would be caused to a party to the marriage or a child if leave were not granted.
In the Marriage of Whitford (1979) 4 Fam LR 754 the Full Court discusses the nature of the hardship referred to in s.44.
The Full Court commented that there are two questions arising in these types of applications being:
a)whether the Court is satisfied that the applicant or child of the marriage would be caused hardship if leave were not granted;
b)if the Court is satisfied that hardship would be caused, then whether or not the Court should exercise its discretion to grant or refuse leave to institute proceedings out of time.
The Full Court said at [78,146]:
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 legislation 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.
On the other hand, ss 44(3) and 44(4) point to the conclusion that the legislature intended to confer power on the Court to grant leave to institute proceedings in order to avoid hardship. Having regard to the nature of the jurisdiction which this Court exercises, this 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.
The Full Court also stated that the inability to pursue a claim is not in itself hardship. It is the consequence of that loss. This is because if there is no real prospect of success then it cannot be found that the applicant would suffer hardship if leave were not granted. Hardship is not necessarily tied to a monetary value: see Sharp & Sharp [2011] FamCAFC 150.
In Gallo & Dawson (1990) 93 ALR 479 McHugh J of the High Court held that the purpose of the rules to allow for an extension of time (in this case, an application to extend the time within which to lodge an appeal) is solely to enable the Court to do justice between the parties. In order to determine whether or not there would be an injustice to the parties were it not granted, it is necessary to consider the history of the proceedings, the conduct of the parties, the nature of litigation and the consequences for the parties of the grant or refusal of the application to grant an extension of time. It is necessary to consider the applicant’s prospects of success in the substantive proceedings. It is necessary to be mindful of the purpose of such time limits.
The applicant’s claim
In her supporting affidavit filed on 4 August 2019 the applicant says that during the marriage she transferred $100,000 to the respondent to purchase a property. She says they had many discussions about purchasing a property. She says she transferred $100,000 to the respondent’s account in November 2011 that she had received from her parents. She says both parties only just finished their degrees and had not earned anything of significance themselves. She says they agreed that his family would also contribute $100,000 towards the purchase. Initially she wanted to reconcile and made several approaches to him over the next several months. She says in early to mid-2013 she asked him to return the money to her family. She claims that he told her he needed that money as he purchased the property and that he told her that he would pay her compound interest of 20%. He presented her with a divorce application. She signed the divorce application hoping he would return her money earlier but after that he did not answer her phone calls.
She conducted title searches and discovered that the respondent bought the property at A Street, Suburb B in 2013 for $746,000. She believes he used the $100,000 she gave him for this purchase. He refinanced the property in 2015 and bought another property at C Street, Suburb D. He bought a third property at E Street, Suburb F in 2017.
According to her calculations, the interest would be $429,981 as at November 2019. She either seeks the payment of $100,000 plus compound interest, or part of the capital gains from the A Street, Suburb B property.
The applicant talks about the financial position of her parents, their desire to live in Australia and her obligations as an only child to support them financially. She married in 2019 and is pregnant with her first child. Her husband is a university student. She concedes that she had a unit in Suburb G and an apartment in the city and says both are mortgaged and were purchased with funds from her parents. She says that her parents also assist with the mortgage repayments.
Respondent’s position
The respondent says they mutually agreed to separate in November 2011 and he moved out. They did not have children together and do not own property together. He denies the applicant transferred funds to him for them to buy a property. He says she transferred between $50,000 and $70,000 to him to enable him to start a business. He has been unable to obtain the bank statements from his bank as they only keep them for seven years. He says shortly after he started the business it made losses. He used some of the money from the applicant for the business and some for his living expenses post separation. He denies that they ever talked about buying a property together and denies that there were ever conversations about their families contributing towards such a purchase.
In 2012 he had discussions with his family about purchasing a property. He annexes bank statements showing 17 transfers from family members totalling $789,160.88. He annexes bank statements showing the transfers and copies of cheques he provided at settlement. He used these funds for the purchase and associated costs including stamp duty.
The respondent says the only contact he has had from the applicant since they divorced was an exchange of emails in July and August 2013 where the applicant asked for assistance with university assignments. He also received an email from the applicant in April 2019 asking him to call her urgently. He says he attempted to call her several times and that she did not answer.
The applicant’s reply to the respondent’s position
The applicant did not file a further affidavit until 23 November 2019. In that affidavit she accuses the respondent of lying.
She denies that the respondent ever started a business and that he lost money. She says she never heard him mention such a business. She also refers to correspondence sent to his lawyer asking for further details which was not responded to. She says either the respondent is lying about the business or had a business in secret and is not being transparent with her or the Court.
She says that her contribution was always towards the purchase of the property the respondent bought regardless of what transfers the respondent later received from his family.
With respect to her parents she clarifies that she did not tell her parents about their marriage at the time. When she told them later they rebuked her but then accepted it. They were willing to write a reference in September 2011. When she told them she was divorced they initially rebuked her but later were supportive of her. The declaration contradicts this.
Submissions with respect to whether or not the applicant has established a prima facie case
The applicant refers to several established authorities addressing out of time applications. What the applicant fails to grapple with is the nature of the relief sought.
At paragraphs 16 to 19 of his submissions, the applicant’s solicitor says that the applicant’s claim is “simple, clear, limited and specific”. That is true but it misses the point with respect to the nature of the relief sought. Of course it is all too common to see applications and responses that do not give the court or the other party any idea as to the nature of the relief sought. Whilst the application is for specific relief, the claim and evidence in her affidavit is more like enforcing some sort of commercial transaction and not relief under Part VIII of the Family Law Act. The principles the Court must apply when determining property applications are well known.
The applicant does not produce any document supporting the existence of any loan and nothing with respect to her claim for interest.
I accept the submissions that the applicant only needs to establish an arguable case and that the Court should not engage in a preliminary trial. It is not a detailed examination of the merits.
The applicant does not need to establish that she made contributions to a particular property. Assets acquired by parties post separation are not excluded from consideration although the court may apply an asset by asset approach.
The applicant’s written submissions at paragraphs 16 to 19 shows a lack of understanding as to how the Court determines property claims. Indeed at paragraph 24 the applicant says the proceedings are “purely property and does have a commercial nature but arising from the matrimonial relationship.” The respondent points out in his written submissions that the applicant does not seek orders for property adjustment but seeks a very specific remedy with respect to a specific alleged transaction and a specific piece of real property. He makes no reference to the sections of the Family Law Act he relies on for that remedy.
The applicant then complains that the respondent has refused to assist the Court in being transparent in his affidavits. However, the onus is on the applicant to establish a case. The respondent has no obligation to fix any gaps in the applicant’s case. It is of some significance that the applicant made no attempt to put the respondent on notice of her intention to file a claim.
The written submissions continue to make complaints about the respondent’s vague assertions and states that he is making things up and his failure to provide particulars weakens his assertions and credibility. That is straying into submissions that are made after a contested hearing where evidence is tested and is contrary to the authorities the applicant has quoted.
The applicant argues that the respondent used $100,000 from her family to buy the property bought after the relationship.
In his written submissions the respondent points to the applicant’s late filed second affidavit. In her second affidavit the applicant refers to transferring to the husband $30,000 on 15 April 2011 and $70,000 on 11 October 2011. Whilst she annexes his bank statements to her second affidavit for a joint account held with the respondent she does not give any evidence as to the source of funds. The respondent concedes that the transfer of $30,000 on 15 April 2011 to an account ending in …20 is an account in his sole name.
The statements for their joint account shows three deposits on 11 October 2011 coming from three different accounts ending in …61, …00 and …85, but the applicant does not provide any evidence as to the ownership of those accounts. That is a significant omission. The respondent’s Counsel also points to the lack of there being any narration in the statements that indicate a purpose of those transactions.
There is no evidence as to whether or not those funds or part of those funds, existed at the time the parties separated. Indeed the applicant does not provide any evidence as to the parties’ legal and equitable interests at the end of their relationship.
The respondent argues that the applicant’s explanations for her delay are inadequate. Initially she referred to being ashamed about telling her parents about their marriage until after they divorced. When the husband contradicted this by annexing a copy of a statutory declaration signed by the applicant’s parents on 22 September 2011, the applicant changed her evidence to say she did not tell her parents about the marriage at the time and told them afterwards and was rebuked by them. The statutory declaration is inconsistent with that as well as it refers to her parents agreeing to the marriage.
The applicant also refers to receiving mixed messages from the respondent after the end of the relationship as to whether or not he would repay that sum. She finally refers to her mother receiving a leukaemia diagnosis in 2015. By the time of that diagnosis the applicant was well out of time.
Applicant’s reasons for delay
The applicant said she did not commence proceedings earlier for several reasons:
a)She says when she married she did not initially tell her parents as they were trying to introduce suitors to her in China but she wanted to choose her own partner. She says at paragraph 15 that she eventually told them that she had been married and divorced and initially they rebuked her but then were supportive. She said she did not tell them that she gave $100,000 to the respondent as she was afraid they would withdraw their support. She did not want to escalate matters by taking to it court and she was fearful that if she did her parents would find out.
b)The respondent was sending her messages both about returning the money and also reconciling. She says that after they divorced he “emphatically promised and reassured” her that he would repay the money with compound interest. This is inconsistent with her earlier paragraph where she says after the divorce he did not return her calls.
c)She did not know how to tell her boyfriend and was worried about being seen as a failure at marriage.
d)The applicant’s mother was unwell and was diagnosed with leukaemia 2015.
e)She did not want to face failure. She said she needed time to heal and she was worried that going to court would exacerbate the shame and depression. Eventually she told her parents and her then boyfriend, who is now her husband, and they were supportive of her commencing proceedings.
The respondent also annexes a copy of the declaration the applicant’s parents provided for immigration purposes in 2011 which contradicts the applicant’s evidence. In that declaration her parents say that they knew their daughter and the respondent became very good friends studying the same course at university and that in their third year at university in 2009 they established a “formal relationship”. In 2011 they told the applicant’s parents that they wanted to marry and her parents agreed.
The applicant gives several reasons for the delay and further points to the authorities that state the Court may grant leave where satisfied that the applicant has not provided an adequate explanation for the delay but where the Court is satisfied the applicant has a prima facie case.
The respondent points to the fact that the time limit for bringing the application filed on 23 July 2014 means that the application was brought five years and 12 days out of time. He also points to the fact that the delay in bringing the application was almost eight times the length of the relationship itself. That is a significant matter looking at the proportionality of the dispute. Given the short length of the relationship, the lengthy delay in bringing the application, (observing again that applicant did not bring her intention to bring the application to the respondent’s attention prior to filing) and the brevity of the relationship, the respondent was entitled to move on with his life and to make whatever financial arrangements he saw fit. There is considerable force in that submission.
The applicant’s explanations for her delay are inadequate. This would not be fatal if she were able to establish a prima facie case.
Conclusion
In seeking leave to make an application out of time the applicant is asking the Court for an indulgence. I am mindful that the applicant does not need to establish her final case. In considering whether or not to grant leave I must consider justice being done for both parties. Assessing hardship is a balancing exercise as it is not simply a matter of hardship to the applicant if leave is not granted, but prejudice to the respondent if leave is granted. If leave were granted both parties are likely to incur significant legal costs. Neither party addressed this. The relationship of the parties was very short. There are no children of the relationship. There are significant factual issues in dispute that would likely require witnesses other than the parties to be called. The applicant’s parents would need to be called as the applicant asserts they loaned the funds to the parties. The delay is significantly longer than the relationship. Whilst the applicant can show some financial contribution, the extent of it and what it was used for is a matter of real controversy. It is also necessary to consider the nature of the relief she seeks as I have discussed above.
Considering all of these factors I am not satisfied that the applicant has made out a prima facie case. Consequently, she has failed to satisfy the Court that she would suffer hardship if she were not granted leave to proceed out of time.
Costs
In his written submissions the respondent seeks an order for costs and refers to the applicable law with respect to costs. He seeks that the applicant pay his costs of $9,669 on a party-party basis, being $4,669 for the solicitor costs in accordance with the Federal Circuit Court Rules2001, and the balance being Counsel’s fees in accordance with the costs agreement annexed to the submissions.
He points to the applicant being on notice that the respondent would seek costs. He also refers to the additional costs the respondent incurred because of the late filing of the applicant’s second affidavit which required the respondent’s submissions to be amended to address that affidavit.
The applicant did not inform the respondent of her intention to make her claim before she filed her application. There was no attempt by the applicant to negotiate before both parties incurred the expense of filing court documents.
The applicant does not address the issue of costs. I will give her the opportunity to file submissions responding to the applicant’s submissions on costs within 14 days. Thereafter I will determine the costs issue in chambers saving the parties the expense of another court appearance.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Judge Harland
Date: 28 February 2020
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