GORMAN & GORMAN (No.2)
[2019] FCCA 263
•12 February 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| GORMAN & GORMAN (No.2) | [2019] FCCA 263 |
| Catchwords: FAMILY LAW – Application to commence proceedings out of time – leave refused. |
| Legislation: Family Law Act 1975 (Cth), ss.44, 79 |
| Cases cited: Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 |
| Applicant: | MS GORMAN |
| Respondent: | MR GORMAN |
| File Number: | PAC 2009 of 2010 |
| Judgment of: | Judge Obradovic |
| Hearing dates: | 21 July 2017, 22 November 2017, 11 May 2018 |
| Date of Last Submission: | 11 May 2018 |
| Delivered at: | Parramatta |
| Delivered on: | 12 February 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Byrne |
| Solicitors for the Applicant: | Thurlows Family Lawyers |
| Counsel for the Respondent: | Mr Campton SC |
| Solicitors for the Respondent: | York Law Family Law Specialists |
ORDERS
The Initiating Application filed on 18 November 2015 seeking leave to commence proceedings out of time pursuant to section 44(3) of the Act is dismissed.
Remove all outstanding issues from the list of cases awaiting finalisation.
IT IS NOTED that publication of this judgment under the pseudonym Gorman & Gorman (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 2009 of 2010
| MS GORMAN |
Applicant
And
| MR GORMAN |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for leave pursuant to section 44(3) of the Family Law Act1975 (Cth) to commence property adjustment proceedings out of time. The respondent opposes the granting of such leave.
The parties were husband and wife years ago.
They were divorced on 22 July 2010.
Under the Act they each had the right to seek an alteration of property interests within 12 months of their divorce[1]. The limitation period expired in July 2011. Neither of them commenced such proceedings within that time period.
[1] See sections 79 and 44(3) generally
Rather, the applicant sought to commence such proceedings on 26 August 2015, 4 years and 1 month after the expiration of the limitation period.
The leave proceedings took up an inordinate amount of Court time. The matter was heard over the course of three days spanning over 10 months.
In its deliberations, the Court has considered all of the evidence before it. The general principle being that on the issue of the establishment of a prima facie case the Court proceeds on the basis that the evidence of the applicant is taken at its highest.[2]
[2] Jacenko & Jacenko (1986) FLC 91-776 at 75,643
Relevant Law
It is important to reflect on the rationales for the existence of limitation periods.
As stated by Justice McHugh:
A limitation period should not be seen … as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature's judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. … A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case.[3]
[3] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 553 - albeit in the context of civil proceedings.
The above passage has been cited with approval by the Full Court of the Family Court in respect of applications for leave to commence proceedings out of time, both on appeal but also, importantly for present purposes, with respect to leave pursuant to s44(3).[4] It is an expression of law which is respectfully adopted here.
[4] See Sharp & Sharp (2011) 50 FamLR 567; [2011] FamCAFC 150 at 14 where the majority said “There is nothing to suggest that this expression of law in general is not entirely applicable to a consideration of s44 of the Act. Indeed so much is seen from the opening words of the s44(4), “[t]he court shall not grant leave under subs(3) unless..”. See also Casano & Antipov [2017] FamCAFC 50; Oaks & Udall [2016] FamCAFC 96 in the context of appeals which have been commenced out of time.
Section 44 (3) provides relevantly, that proceedings pursuant to section 79 shall not be instituted except by leave of the Court, more than 12 months after the date on which the divorce order took effect. As noted earlier in the circumstances of this case, the time to commence proceedings expired in July 2011.
Section 44(4) provides that leave under sub-section (3), shall not be granted unless the court is satisfied that “hardship would be caused to a party to the marriage or a child if leave was not granted”. The applicant argued before this Court that hardship would be caused to her, rather than to any child of the parties, if leave was not granted.
Even after it is satisfied that hardship in the requisite sense would be caused, the Court is not obliged to grant leave, rather it may grant such leave. Sections 44(3) cannot be read as giving the applicant a presumptive right to an order for leave once she has satisfied the conditions in s44(4). Rather, an applicant for an extension of time who satisfies those conditions is entitled to ask the court to exercise its discretion in his or her favour.
The discretion to grant leave to commence proceedings outside of the 12 month limitation period, is a discretion to grant, not a discretion to refuse.[5] The applicant bears the onus of showing that the justice of the case requires the exercise of the discretion in her favour.[6]
[5] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 547 per Toohey & Gummow JJ
[6] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551 per McHugh J, with Dawson J agreeing
Whilst the Full Court in Whitford & Whitford[7] considered that the power to extend time ought be exercised “liberally in order to avoid hardship” the Court also stated that it should be done
… in a manner, which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.
[7] (1979) FLC 90-612 at 78,146
The authorities on the issue of an application pursuant to s44(3) are numerous. The Court must consider whether the applicant has established[8]:
a)A reasonable prima facie case for relief had proceedings been instituted in time;
b)That denial of the claim would cause the applicant hardship; and
c)An adequate explanation as to the delay.
[8] Jacenko & Jacenko (1986) FLC 91-776 at 75,644; referred to in Slocomb & Hedgewood [2015] FamCAFC 219 at [43]
In appropriate cases the degree of hardship to be suffered by the applicant may well outweigh an inadequate explanation of delay.[9]
[9] ibid
Once the three elements are satisfied, in determining whether to exercise its discretion to grant relief, the question of prejudice which the respondent would suffer by reason of the delay in bringing the application ought be considered.[10]
[10] Slocomb at [43] Jacenko
Once the legislature has selected a limitation period, to allow the commencement of an action outside that period is prima facie prejudicial to the respondent who would otherwise have the benefit of the limitation.[11]
[11] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 544 per Dawson J
The Full Court[12] has endorsed in proceedings for leave pursuant to s44(3) the principles applicable to the question of leave to appeal out of time as enunciated by the High Court in Gallo v Dawson[13]. There Justice McHugh referred, inter alia, to the need to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequence to the parties of the grant or refusal of the extension of time.
[12] See Sharp & Sharp at [75] where the Full Court cited with approval the relevant High Court authority by reference to another decision of the Full Court of Tamaniego v Tamaniego [2010] FamCAFC 254
[13] [1990] HCA 30; (1990) 93 ALR 479
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, it is just and reasonable to grant the extension sought.[14] It might be said that the fundamental issue to be considered in any application for extension of time is whether this will enable the court to do justice between the parties by reference to the relevant discretionary considerations.[15]
[14] Sharp & Sharp at [57]
[15] Gallo v Dawson (1990) HCA 30
Finally, the appropriate approach to a determination under section 44(3) necessitates a clear distinction to be made between the proof of hardship and a consideration of the consequential exercise of discretion.[16]
[16] Sharp & Sharp at [27]
Hardship?
In one obvious sense the hardship or prejudice to the applicant is absolute if her application is refused[17]. She can never litigate her claim. But that cannot be enough of itself to warrant an extension of time; because in truth there would then be no discretion to be exercised.[18]
[17] Save for a successful appeal
[18] See for example the discussion by Toohey & Gummow JJ in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 549
Hardship for these purposes is more than the loss of the 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[19].
[19] Sharp & Sharp at [17]
Whether a denial of the applicant’s claim would cause her hardship, is an issue which relates to the situation of the applicant as at the date of the hearing.[20]
[20] Jacenko at 75,645
The story as told by the applicant
The applicant was born on … 1966, in Country A. She migrated to Australia in 1975.
The respondent was born on … 1968, in Australia.
The parties were married on … 1993, and divorced on 22 July 2010. The applicant in these proceedings was also the applicant in the Application for Divorce.
The parties have two children together, both of whom are now adults. They have a daughter who was born in … 1994 and a son who was born in … 1997.
The applicant asserts that the respondent was abusive towards her throughout their marriage, and that the abuse began about seven months into the parties’ marriage. The applicant details some of the abuse she says she suffered at the hands of the respondent in her affidavit. For example, she states that the respondent would make threats that he could take her to his cousin’s farm and kill her. This was on the back of the respondent and his cousins visiting a farm in Town B “regularly” to shoot pigs, kangaroos and rabbits. The applicant also asserts that the respondent would often punch walls and doors, kick furniture and kick doors in. She asserts that he had frequent outbursts usually about his feelings of jealousy.
The applicant asserts that the violence escalated in about 1998, when the respondent became so angry that he slapped her across the face, shook her vigorously and then slammed her against the wall.
The applicant asserts that “throughout the marriage” she and the respondent frequently separated, sometimes under the same roof. She asserts that the respondent was very violent towards her and that she was scared of him.
The applicant asserts that the respondent’s mental health state steadily deteriorated over the years, that he became paranoid, angry at the world and more unpredictable in his outbursts.
The applicant asserts periods of frequent reconciliation, it seems until 2009 when she says “she left the matrimonial home”.
The applicant asserts that in 2009, the respondent made the first attempt on his life,[21] but that he “returned home” unharmed. About a week later, the applicant decided she “was going to finally leave… With no family support and little money, the only accommodation I could find was a granny flat… The children were 15 and 13 years old.”
[21] This is in part corroborated by Exhibit 11 which records “?Overdose – Self Harm”, it also further records “that Mr Gorman has had very low mood of late and feels that he has hit ‘rock bottom’. He denied plans for suicide and felt that his family were reasons for him not to commit suicide”
The children “returned home” for a short while but then approximately two weeks later, with the help of Centrelink the applicant rented a small apartment in Suburb C.
The applicant then details other allegations of violence, including that after a second suicide attempt by the respondent in early 2010, the respondent made death threats towards her and her new partner, the result of which was a complaint to the police and a subsequent apprehended violence order being made[22]. The applicant alleges other violent incidents at around that time, where she asserts the respondent banged and jumped up and down on her car.
[22] The applicant only annexes an interim apprehended violence order to her affidavit.
In about March 2010, the applicant sought the assistance of her friend Ms D, to fill out and file her divorce application. Apparently the friend filled out the divorce application in the applicant’s presence. The applicant conceded in cross-examination that she signed the Application for Divorce.
Since 2009, the applicant has resided at various rental properties.
The applicant has re-partnered. She asserts that the respondent has continued to threaten and verbally abuse her “right up until the present”.
The respondent has continued to “live in the former matrimonial home and has continued to pay the mortgage there.”
The applicant says that she would not have left the matrimonial home, to which she had made significant financial and non-financial contributions, had it not been for the respondent’s ongoing violence and abusive behaviour.
On 7 June 2010, with the help of a friend (who once worked for a lawyer), the applicant lodged a caveat “on the marital home”. The caveat is in respect of a property located at Property E, and the interest claimed is “Pursuant to Family Court matter number: PAC2009/10” being the divorce proceedings.
The applicant asserts that she did not receive any legal advice about the effects a divorce would have on her property rights. She asserts she did not read the notes on the reverse side of the divorce order. She did not know there was time limit to apply for a property order and only found out after she consulted her present lawyers “recently”.
The applicant deposes that “there may have been inadvertent mistakes in respect to the dates listed in my application, due to my inexperience in these matters and the complexity of my situation.” She says she believed a caveat was sufficient to protect her interests until she could seek her share of the property.
The former “marital home” is said to be the main asset of the marriage.
The applicant says that in about early March 2015 she went to the former matrimonial home where she spoke to the respondent. Both of the children were present. The children started expressing their views to the effect that they wanted the parties to leave the house to them. There were discussions about the house being put in the children’s names. Subsequently, the parties met again to discuss what was to happen with the property. At this subsequent meeting the respondent said that if the applicant was going to fight about the house he would burn it down or demolish it before he let the applicant have the house.
The applicant states:
It would cause significant hardship to me should I not be permitted to bring my property application, because it is our only valuable asset. I put all my savings into it when we bought it and I looked after it and renovated it. I had to leave it because of [the respondent’s]… violent conduct.
The applicant asserts the following with respect to contributions:
a)In 1993, the applicant had no real assets and no liabilities;
b)She worked as a clerk for three years with time off during her first pregnancy and then she stopped working when she fell pregnant with the parties’ son;
c)She had savings of $50,000 – comprising $15,000 from her work and $35,000 from an NRMA insurance payout for a stolen car;
d)In 1998, the parties purchased a townhouse located at Property F for $190,000. The builder/developer was a cousin of the respondent;
e)She put all of her savings of about $50,000 towards the purchase if the Property F property;
f)She didn’t think that she had the option of putting her name on the title as she felt the respondent had full control over the marriage and finances;
g)The applicant attended the offices of the lawyers to prepare the contract for purchase.[23] During this meeting, upon the applicant insisting that she wanted “something from the Property to be in my name” the respondent then said he would ask the solicitor to draft a separate document saying that the applicant owned half the property. Consequently, a “Declaration of Trust” was drafted and executed by the parties. The applicant’s understanding was that the document meant that the parties owned the property equally. She did not have any independent legal advice;
h)Between 1998 and 2002, the applicant lived in the Property F property with the children. She paid rent to the respondent. She declared to Centrelink that the parties were separated. The respondent signed Centrelink paperwork confirming the payment of rent by the applicant. The respondent usually slept in the lounge and he spent a lot of time at his parent’s home;
i)In 2001, the parties sold the Property F property, and applied the net sale proceeds to the purchase of the home at Property E for $386,000;
j)The applicant attended the auction at which the Property E property was purchased;
k)The applicant did not put her name on title because she believed the respondent that if she did so she would lose her Centrelink benefits. She says “I obliged since these payments were my only independence from him”;
l)While living at the Property E property, the applicant paid the electricity, phone bill, Foxtel account, food and clothing for herself and the children. The applicant paid the children’s school fees. The respondent paid the mortgage. The applicant paid the respondent rent and half the rates. The utilities were in the applicant’s name so she paid them. This went on for about 8 years;
m)At some stage, the applicant’s brother gifted her $40,000 which was used to pay for renovations to the outside kitchen and a pergola.
n)The applicant was the primary homemaker and primary carer for the parties’ two children;
o)The applicant worked “alongside” the bricklayers when the Property E property was renovated; and
p)From mid-2010 the parties’ son lived primarily with the respondent while the parties’ daughter continued living with the applicant until 2016.
[23] It is not explained why the solicitors acting on the purchase are preparing the contract for sale.
The applicant summarises her contributions to have comprised of the following:
a)An initial contribution of $50,000 towards the Property F property;
b)Cleaning and general maintenance of the Property F property whilst living there;
c)Net proceeds from sale of the Property F property were then applied towards the purchase of the Property E property;
d)Cleaning and general maintenance of the Property E property, as well as helping with the renovations and paying $40,000 for the kitchen and pergola by way of gift from her brother; and
e)Paying for the utilities whilst living at the Property E property.
At time of filing her affidavit, the applicant was 48 years old. She deposed to working as a “clerk” but did not want to disclose the details of her workplace. The applicant earns $1213 after tax per fortnight. She has no other income and no other debts.
At the time of filing her affidavit, the applicant lived in a unit with her fiancé, where she did not pay any rent but paid for household expenses.
Difficulties with the applicant’s case
There are a number of difficulties with the applicant’s evidence, which ultimately means that her evidence at its highest is difficult to ascertain.
The terms of the “Declaration of Trust” on their face appear to be at odds with the assertions of the applicant as to her contributions towards the purchase of the Property F property and the arrangements between the parties at the time. These matters are not explained in the applicant’s evidence. That document contains the following recitals:
AND WHEREAS the said trustee [respondent] signed the said contract merely for the purpose of obtaining finance with the intention of completing the purchase of one half share of the property as trustee for Ms Gorman of Suburb G AND WHEREAS the trustee [respondent] has paid only one half of the purchase monies aforesaid, legal expenses, stamp duty and outgoings AND WHEREAS the trustee [respondent] has acquired a loan as aforesaid of which loan one half will be repaid by the said Ms Gorman from her own separate monies…
On 2 May 2010, the applicant filed an Application for Divorce[24]. The date of separation nominated by the applicant was 20 March 1998. In answer to the question “Since separation, have you and your spouse lived together as husband and wife?” the applicant answered “No.” At the back of the Application for Divorce is the applicant’s affidavit, where she deposed that she had read the application and that the facts of which she has personal knowledge are true.
[24] Exhibit 1
The applicant’s affidavit is confusing in respect of the applicant’s evidence as to the date of the parties’ separation:
a)11. The police removed guns from the home at separation in late 2009.
b)22. The years from when we were married in 1993 until I left the marital home in 2009…
c)27. … it has been difficult for me to determine the exact date of separation. I say I regarded the marriage as over in 1998 although we remained living together under the same roof.
d)120. In about mid 2010, when we separated…
Furthermore, at paragraphs 127 to 131 of her affidavit, the applicant deposes as follows:
127. During the times that the Property F Property and the Property E Property were attained, I perceived myself to be stuck in an abusive marriage due to my Family’s disapproval of divorce, as well as my fear of Mr Gorman.
128. Mr Gorman and I did live together for periods of time after 1998. We also did in fact, go on family outings together, celebrate birthdays and Christmas together and Mr Gorman was frequently in and out of the house.
129. I have photos of us together, celebrating these events which I will tender at the hearing.
130. We also continued to visit my parents during this time.
131. Whilst a series of separations took place between us, we continued to live together for periods of time and I continued to contribute to the financial and non-financial maintenance of both the Property F and Property E properties.
Such sworn evidence is in direct contradiction to the applicant’s sworn evidence in the divorce proceedings.
Furthermore, as a matter of fact, the date of separation as determined by the Registrar who pronounced the divorce order was 20 March 1998, being the date asserted by the applicant on oath in her Divorce Application. There is no application in respect of such a finding.
Prior to divorcing the respondent, the applicant had been previously married. In a letter dated 5 July 2017, the applicant’s solicitors wrote to the respondent’s solicitors. The letter read:
We confirm that our client was previously married and divorced in 1991. However, we note that our client’s previous marriage is irrelevant to these proceedings.”
Soon after, on 18 July 2017 a further letter was sent, which read:
By way of clarification, we confirm our client’s instructions that she was not married and divorced under Australian law. The only Application for Divorce she has ever filed in the Federal Circuit Court of Australia or Family Court of Australia is between herself and Mr Gorman.
The applicant was in fact divorced under Australian law. On 28 October 1992, the Family Court of Australia heard and granted the applicant’s application for dissolution of marriage between herself and her previous husband. The Decree Nisi became absolute on 28 November 1992. The applicant attended the Family Court of Australia on the day that divorce application was heard.
A review of the documents produced by the Department of Human Services in answer to a Freedom of Information Application discloses, inter alia, as follows:
a)In a claim for family payment dated 19 April 1998, the applicant declared that she was separated from the respondent;
b)In a claim for carer allowance dated 1 September 2006, the applicant declared that she is separated and that separation occurred in the 1990s;
c)In a letter to Centrelink dated 6 December 2006, the applicant asserted that “I do not own any real estate”;
d)Centrelink conducted a review of entitlement as to the legitimacy of the applicant’s claim for parenting payment single in 2009 and 2006. It was noted that the applicant was paying rent to the respondent.[25]
[25] Consistently throughout the documents produced by the Department, the applicant claims to have been paying “rent” to the respondent
In cross-examination, the applicant conceded she understood the importance of telling the truth, and that she had been truthful to the representations she made to Centrelink.
In cross-examination, the applicant said that she has been living with her current partner since 2011-2012. However, the applicant, in her financial statement filed in these proceedings, does not declare the financial resource that she has of her partner or the properties the partner owns. The respondent asserts that she has filed to provide full and frank disclosure of her financial circumstances.
The applicant’s partner, who was a witness in the applicant’s case, has refused to comply with a subpoena seeking certain financial documents.
The applicant’s other witness, Ms H, was shown in cross-examination not to have personal knowledge of some matters to which she deposed in her affidavit.
The Respondent’s evidence
Many of the matters which are asserted by the applicant are disputed by the respondent and his evidence goes into a significant amount of detail as to the parties’ relationship, acquisition of assets and contributions. The respondent denies the applicant’s assertions as to violence and threats.
In summary, the respondent’s evidence is as follows:[26]
a)The respondent asserts the parties separated in March 1998 and never reconciled;
b)The respondent asserts that the applicant did not make any lump sum financial contributions towards the Property F property, but that the deposit and moneys to purchase the property came from his savings, a loan from his parents and a loan from a financial institution;
c)The respondent asserts that the purchase of the Property E property was funded by way of net proceeds of sale of the Property F property in the amount of $111,000 and a mortgage of$265,000;
d)The renovations of the Property E property were funded by way of increase in the mortgage of $60,000;
e)The respondent asserts that the “Declaration of Trust” was a document prepared by the applicant’s solicitor which he signed without reading and without understanding. He did not obtain any legal advice prior to it. He asserts that he understood the document was for the purpose of him holding the property on trust for the parties’ children and not the applicant;
f)The parties’ son moved in with the respondent in 2010, and their daughter in 2014 where she lived until about mid 2015; and
g)The respondent paid the children’s school fees at all times.
[26] The respondent’s evidence is much more detailed than the summary. He goes into significant detail to answer each and every one assertion contained in the applicant’s affidavit.
The respondent has re-married. He has been in a relationship with his current wife since 2010.
The respondent has lived in the Property E property since 2010 and since 2016 has lived there with his wife and her child.
A certain number of alleged inconsistencies between the respondent’s evidence and documents produced under subpoena were put to the respondent during cross-examination. In particular, a number of medical records dated 2009 appear to refer to the applicant as the respondent’s then wife[27] and list her as the next of kin[28]. The documents have the applicant and the respondent living at the same address as at 13 October 2009. The purpose of the cross-examination was supposedly, to discredit the respondent’s evidence.
[27] Which she was as the parties were not divorced
[28] The same medical records note the religion of the respondent as “Roman Catholic”. Given that the parties were married in a … religious ceremony, this would on the face of it appear to be an anomaly.
The author(s) of the document(s) are not witnesses in the proceedings. Whether the representations contained in the documents reflects the representations as made to the author(s) on the day the document(s) were generated is not a matter that is likely to be capable of being tested and indeed such matters were not put to the respondent in cross examination. It is at best, second hand hearsay evidence. To suggest that the respondent is not a credible witness, as the applicant in essence does, and rely on hearsay documents to attempt to prove the issue is quite extraordinary.
Is there a prima facie case?
It was submitted on behalf of the applicant, that there was an irresistible inference that the savings used towards the purchase of the Property F property had been saved entirely during the parties’ marriage. It was further submitted that on the respondent’s evidence, at least $20,000 came from the parties’ shared savings following 3-4 years of the parties’ relationship. During this period, the applicant was said to be the primary carer of the parties’ children. During part of that period however, the parties lived in the home of the respondent’s parents.
It was submitted that even on the respondent’s evidence, the $20,000 used towards the purchase of the Property F property, gives rise to a prima facie case.
One of the difficulties with the applicant’s submissions (in the sense of relying on the respondent’s case) is that the respondent’s case is that the Property F property was purchased after the parties’ separation.
The precise purchase date of the Property F property is not known. However, the document titled “Declaration of Trust” is dated 28 January 1998, and refers to the Property F property. The date of contract is left blank. The parties separated on 20 March 1998. It was submitted on behalf of the respondent that it is implicit that the settlement of the purchase was completed after the date of separation. The mortgage was registered in May 1999.
On the applicant’s case at its highest, the financial contributions by her towards the Property F property were $50,000, which was close to half the purchase price. There are significant difficulties with the applicant’s credit, given the discrepancies and contradictions in her evidence, and the assertions in her evidence when compared to the representations she had from time to time made to the Department of Human Services in support of her Centrelink applications.
Problematic for the applicant is that she never disclosed the $50,000 she asserts she had to Centrelink, nor did she assert any interest in real property to Centrelink at the time she represented to that government agency that she was separated, and that there was a commercial arrangement between her and the respondent in respect of the payment of rent.
Putting aside those difficulties, at its highest, the applicant contributed almost equally to the purchase of the Property F property. On the respondent’s case there was at least indirect contribution by the applicant towards the purchase of the Property F property.
The applicant asserts that she was the primary home maker and carer for the children. As such, on the applicant’s case at its highest the applicant’s non-financial contributions, including contributions as homemaker and parent, throughout the parties’ relationship were greater than those of the respondent.
On the applicant’s case, she continued to contribute financially towards the Property F property, albeit it was by payment of “rent”. After the Property F property was sold and the Property E property purchased by the respondent, on the applicant’ case at its highest, her initial contributions towards the Property F property were a significant factor in the purchase of the Property E property.
There are significant unknowns in the applicant’s case. The applicant has not been open and honest about her current financial circumstances, particularly the circumstances of her de facto relationship.
The purpose of property adjustment orders is not social engineering, it is not to put the parties in a position of equality. It is to do justice and equity between the parties.
Notwithstanding, on the Court’s assessment, the applicant has established that had proceedings been instituted in time she would have had a prima facie case, albeit a weak one.
It must be kept in mind that prima facie even an applicant with a weak case has a right to be heard.[29] However, a prima facie case is not of itself the determining factor.
[29] Hedley & Hedley (2009) FLC 93-413 at [220] per Cronin J
Delay
The applicant was previously divorced.
Whilst she asserts she was not aware of the limitation period, at the time of the parties’ divorce, the parties had been separated for a number of years. The applicant had lodged a caveat over the property based on “Family Court matter”[30]. Her evidence is that she believed her interest was protected.
[30] Not a prima facie caveatable interest
She sought advice from two other solicitors prior to engaging her current solicitors, such advice being sought in 2012 or 2013. The reason she sought advice from those solicitors is not known, presumably it was to do with the breakdown of her marriage.
The submission was made that the applicant believed her ‘interest’ was protected upon the lodging of the caveat. What the caveatable interest the applicant claimed she had is not clear. An interest pursuant to a divorce application is not a caveatable interest.
The applicant claims continued harassment and abuse by the respondent post separation and post the parties’ divorce. She does not say however that she did not commence proceedings earlier because of such matters.
Submissions were made on behalf of the wife that the Court can infer from the terms of the “Declaration of Trust” deed that the applicant had security and that she understood her interest was protected. Such a submission cannot stand in light of the applicant’s evidence that she signed the document without understanding what she was signing. She does not say that she obtained legal advice about the document afterwards and that based on that advice she then formed the view that her interest was protected. There is no explanation to why this purported “Declaration of Trust” did not form part of the interest she claimed she had when she lodged the caveat. The submission is not made out.
The explanation for the delay in filing the application seeking property adjustment orders is inadequate.
Notwithstanding such finding, the lack of adequate explanation does not itself mean that the extension of time is refused. It is a factor which the Court has taken into account.
Prejudice to Respondent
The law presumes prejudice to flow to a person sought to be joined in litigation after the effluxion of the relevant time limits.[31]
[31] Sharp at [97]
The respondent asserts that he will be prejudiced if leave to commence proceedings out of time is granted. It is said to be “self-evident”.
The respondent lives at the Property E property with his wife and step-child. He has lived in that property since shortly before the parties’ divorce.
The Court accepts that the respondent will suffer prejudice.
Conclusion as to Hardship
While there is an inadequate explanation for delay and prejudice to the respondent, given there is a weak prima facie case the Court finds that hardship in the requisite sense has been established.
Discretionary Considerations
The Full Court in Sharp & Sharp[32] said that
“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”.
[32] [2011] FamCAFC 150 at [97]
In considering the question of prejudice, the Court does not merely look at the time which has elapsed since the expiration of the limitation period, which in this case is significant.
The limitation period for property adjustment proceedings is much shorter than some other limitation periods, such as for example for breaches of contract. The legislature must have had a reason for such a short limitation period. The length of the limitation period when compared to the delay is a significant matter – that is, the limitation period had expired 4 times over before the applicant sought to commence proceedings.
It has been held that where hardship to the applicant is established and there is no question of prejudice to the respondent, the court should not seek to raise artificial barriers if the applicant has behaved in a reasonably diligent manner in prosecuting her claim.[33] Here the Court does not find that the applicant behaved in a reasonably diligent manner in prosecuting her claim.
[33] In the Marriage of Althaus (1982) FLC 91-233 at 77,268 cited with approval and with emphasis added by the Full Court in Sharp & Sharp at [77]
The applicant is of the view that she has a case on the “Declaration of Trust” deed dated 28 January 1998 to bring a successful action in the Supreme Court of New South Wales.
An applicant seeking equitable or discretionary relief, must come to Court with clean hands.
The Court is not satisfied that the applicant has clean hands. Her evidence to this Court is in direct contradiction to the many representations she has made to Centrelink for the purposes of obtaining a financial benefit. Her evidence to this Court is in direct contradiction to the matters she swore an oath about in the Application for Divorce.
The applicant had the benefit of legal advice for a number of years before the leave application was heard. The discrepancies with the applicant’s evidence were never adequate explained.
In all of the circumstances, the Court considers that it is not just and reasonable[34] to grant the extension of time sought.
[34] Sharp at [97]
For all of the reasons above, the application for leave to commence proceedings out of time is refused.
I certify that the preceding one hundred and eight (108) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Date: 12 February 2019
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Limitation Periods
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Procedural Fairness
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