Hammond and Hammond
[2009] FMCAfam 543
•16 July 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HAMMOND & HAMMOND | [2009] FMCAfam 543 |
| FAMILY LAW – Interim property – application for leave to re–instate property proceedings – out of time – whether denying leave would cause hardship – tests for leave. |
| Family Law Act 1975, ss.44(3), 44(4) |
| Whitford & Whitford (1979) FLC 90–612 McDonald and McDonald (1977) FLC 90–317 Dubios and Dubois [2007] FMCAfam 314 Perkins and Perkins (1979) FLC 960–600 Tormsen & Tormsen (1993) FLC 92–392 |
| Applicant: | MR HAMMOND |
| Respondent: | MS HAMMOND |
| File Number: | MLC 1091 of 2007 |
| Judgment of: | Turner FM |
| Hearing dates: | 21 April & 15 May 2009 |
| Date of Last Submission: | 15 May 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 16 July 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr. Mort |
| Solicitors for the Applicant: | Hartleys Lawyers |
| Counsel for the Respondent: | Ms. Dellidis |
| Solicitors for the Respondent: | Hughes Watson Marks Kennedy |
ORDERS
The application to institute proceedings out of time is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Hammond & Hammond is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 1091 of 2007
| MR HAMMOND |
Applicant
And
| MS HAMMOND |
Respondent
REASONS FOR JUDGMENT
Introduction
The application before the Court is for an extension of time to institute an application in relation to the division of property of the parties to the marriage.
Section 44(3) of the Family Law Act (the “Act”) provides as follows:
“(3) Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983 :
(a)a divorce order has taken effect; or
(b) a decree of nullity of marriage has been made;
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c) in a case referred to in paragraph (a)--the date on which the divorce order took effect; or
(d) in a case referred to in paragraph (b)--the date of the making of the decree.
The court may grant such leave at any time, even if the proceedings have already been instituted.”
Section 44(4) provides:
“(4)The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:
(a)that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
(b)in the case of proceedings in relation to the maintenance of a party to a marriage--that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.”
The parties were divorced by order which took effect on 16 April 2007. To be within time, the application should have been instituted on or before 16 April 2008. The application was presented for filing on
2 June 2008, some 47 days late.
The applicant submits in his Summary filed on 18 May 2009 that:
a)The principles relating to an application to proceed pursuant to s.44(3) are well settled and are summarised by the Full Court in Whitford & Whitford (1979) FLC 90–612 [at page 78,144] that on an application for leave under s.44(3) two broad questions arise – first whether hardship would be caused to the applicant or a child if leave were not granted. Secondly, if so, whether the Court should grant or refuse leave. The Court accepts that those principles apply.
b)Other considerations are:
i)A prima facie case that is reasonable must be shown;
ii)There must be an adequate explanation for delay (McDonald and McDonald (1977) FLC 90–317).
c)Considerable latitude arises as to what is “hardship” and very much depends on the circumstance of the case (Dubios and Dubois [2007] FMCAfam 314). In Dubios an agreement was acknowledged to exist to transfer property upon payment of moneys. The money was paid but a transfer was not executed.
d)The applicant’s reduced earning capacity is a matter for consideration in terms of any hardship that might be suffered by him if his application to proceed is refused. He sustained a back injury in 2007 – his income dropped by $400 per month. He now earns $720 per week and his total expenses are $805 per week.
e)A “reasonable prima facie case” means a case “with a reasonable probability of the claim being successful in some measure.” Perkins and Perkins (1979) FLC 960–600 per Lindemeyer J.
In the applicant’s affidavit sworn on 22 May 2008 he deposes [at 26–30]:
“26.As a consequence of that agreement the house was transferred and mortgage refinanced into the wife’s name in 2002. I also helped the wife re-finance the home because I did not want my children to be on the streets. However, the wife would has (sic; “has”) never paid to me any money.
27.Whenever I have asked the money owed to me the wife would continually promise that she would pay me soon.
28.I asked the wife to pay the money owed to me on many occasions. On one occasion I asked her for payment and the wife said that she did not have the money at the moment and started crying. I then gave the wife another chance. The wife continually said that she did not have the money at the moment and that she would need to sell the house if she was to pay me out.
29.Another occasion I asked for the money was when she was paid out by [T] (approximately 3 years ago). I spoke to the wife personally on this occasion and she informed me that the payout was $15,000. The wife worked at [T] for approximately 15 years and I believe that she would have received at least $30,000 to $40,000. When I spoke to the wife about this, she said that she did not get that much and she had to pay the bills and mortgage. The wife said that she had nothing left.
30.There have been other occasions when I have spoken to the wife regarding the payment and the wife always had excuses. The wife was not being co-operative and I then thought that we will try and sort this out through Relationships Australia.”
In the applicant’s affidavit sworn 17 April 2009 he deposes [at 33]:
“33.I also note that my solicitors have requested documentation in relation to the wife’s [T] payout. Attached and marked with the letters “JAH7” is a true copy of this correspondence dated 27th February 2009. I am informed that no documentation with respect to this [T] superannuation has been provided.”
In the applicant’s affidavit sworn 20 April 2009 he deposes [at 2–9]:
“2.The wife’s conduct since separation has caused me financial difficultly. Essentially the wife and I had reached an agreement with respect to how much she was to pay me out (as the home and the mortgage had both been transferred into her sole name). The wife continually refused to honour this agreement. (Bold added by the Court).
3.Since separation, I would continually ask the wife when
I would receive the payout that we had agreed to. The wife kept on saying when she would receive the [T] Redundancy payout, then she would pay me. The wife would always say that she had not received the payout at that time.
4.The wife made promises that she would pay me soon.
The wife also made continual excuses such as “I don’t have the money right now”, “I told you would get the money when I get the redundancy”. Then the wife would refuse to talk about this.
5.Since the wife and I had reached the above agreement,
I made alternate financial decisions that I would not have otherwise made but for the agreement. Some examples of these are that I certainly would not have agreed to transfer the home to the wife. I may have asked that the house instead be sold. Further, I would not have paid out the credit card that was in my name, which the wife derived benefit from. The wife had the home and mortage (sic: “mortgage”) transferred into her name, and the only reason I agreed to this was because the wife said she would pay me out.
6.Further, I would not have agreed to the wife keeping the car that she has. The wife agreed that she would pay off the car (as deposed to previously) – the wife defaulted and was in arrears. As deposed to previously this affected my credit card rating and has cost me anywhere in the range of $20,000 to $50,000 on the interest I have on the home I own jointly with [Ms N].
7.Further, as the wife and I had a shared care arrangement for the children, the children have also suffered due to the wife not honouring the agreement we had reached.
The children would have been able to participate in further extracurricular activities. I would have been able to take the children for a holiday. The children would have generally enjoyed a better life.
8.As deposed to previously, I made continual requests to attend mediation with the wife in relation to children’s and property matters. The wife again, always had excuses as to why she would not participate in the same. We attended approximately 3-4 mediation sessions, and there were a handful that the wife also cancelled. If the wife had participated in these sessions genuinally (sic: “genuinely”), then this matter may have been finalised there and then. Further, I would not have to pay legal fees.
9.I attempted to finalise our financial relationship. The wife did not want to. The wife gained a benefit from not honouring the agreement, and I and the children have suffered as a result of the same.”
The applicant submits that the delay in instituting proceedings was caused by his inability to negotiate the property settlement, and when the mediation failed he issued proceedings without delay.
The applicant submits that the respondent will not be prejudiced as she is unlikely to be able to retain the former matrimonial home in any event. The respondent denies this and states that she can retain the property.
It is submitted for the husband that he is entitled to a reasonable property settlement.
The respondent contends in her aid memoir as follows:
a)That between 10 October and 29 December 2001 the husband told his former partner that he was letting his wife have his share of the house and chattels except for the tools, and that “he was not going to bother getting his 30% settlement off the wife.”
b)In late 2001 – early 2002 the husband told the wife’s parents that he did not want any financial equity from the house, and if it was sold he wanted 5% to be invested for each of the children.
c)That the only agreement is that if the wife sells the former matrimonial home, each child will receive 5% of the proceeds.
The first issue is whether hardship would be caused to the applicant or a child if leave is not granted? In Whitford supra the Full Court said at 78,144:
“In our view the meaning of “hardship” in sub-s 44(4) is akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment … It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense (Ibid 78,145)…the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship…hardship may be caused to an applicant if leave were not granted to institute proceedings even though the applicant is not in necessitous circumstances … inability to have financial and property relations of the parties adjusted or resolved, may constitute hardship” (Ibid 78,145). “Section 44(4) inhibits the granting of leave unless the requisite case is made out, but it does not provide that leave must be granted if the court is satisfied that hardship would be caused”. (Ibid 78,145).
“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 (Ibid 78,145).
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 could not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.”(Ibid 78,146)
The parties were divorced on 16 April 2007, and the applicant alleges that an agreement to pay him out was reached with the respondent in 2002. The applicant was asked what the payout figure was, but the applicant was not able to tell the Court (Transcript 15 May 2009, page 52, lines 30–44; page 54 line 30). He gave evidence that it was 30% (Ibid, page 53 line 1) and that the agreement was made in 2002. (Ibid page 53 line 7). The applicant asserts also that it was agreed that the payout would be made from the redundancy package from [T].
The redundancy payout of $34,824.27 was paid by [T] in March 2006 (Exhibit “R3”). The respondent gave evidence that she was not aware until 2006 that her job was being made redundant (Transcript
15 May 2009, page 6 line 37). The Court considers it to be highly unlikely that the respondent was aware in 2002 that her job would be made redundant in 2006. That finding attacks the very existence of an agreement in 2002 to make a payout from the [T] redundancy package. Also the applicant states that an agreement was reached “with respect to how much she was to pay me” but he was unable to state a figure (Ibid, page 52 line 36). The Court finds that such an agreement was not reached.
Even if there was an agreement for a settlement of 30% to the applicant, on the wife’s figures he has already received the equivalent of 27% plus his superannuation (Aide Memoir tendered 15 May 2009). The Court has not examined whether the claim is trivial, as the application is dismissed for the other reasons set out herein.
The respondent gave evidence (Transcript 21 April 2009, page 23 line 16) as follows:
“He seems to go on to suggest that it may be something to do with your [T] redundancy payout?---No, he didn’t even know how much I received. He knew that I was made redundant from [T], but they’re all the details he knew. I didn’t discuss my redundancy, any money changing hands.
Why didn’t you discuss the redundancy, because he seems to suggest that it was part of your agreement and that you were avoiding honouring your agreement by not discussing your redundancy?---Because we were separated and my finances didn’t have anything to do with him at that time.
What do you say about him suggesting that you made promises that you would pay him “soon”, he says in paragraph 4, or that you made excuses about why you couldn’t pay him “the money”. I don’t know what amount, but “the money”?---There was never any conversation about the money. The first thing I knew that any money was being sought after was the actual court case last year.
You mean this court case?---This court case, yes.”
The Court is unable to accept that the alleged agreement was reached. It is inconceivable that an agreement to pay out a sum of money was reached, and the applicant is unable to say how much the agreed sum was. Further the Court cannot accept that an agreement was reached in 2002 for a payout to be made from a redundancy that did not occur until 2006.
The only agreement that has been established is that if the respondent sells the former matrimonial home, each of their children are to receive 5% of the proceeds. The respondent acknowledges that such an agreement was reached.
As the Court does not accept that the agreement alleged by the applicant was reached, the applicant was not justified in awaiting a payment from the respondent out of the [T] redundancy package.
The failure to make that payment, or the delays caused through efforts to obtain it through mediation, does not provide the applicant with a reasonable excuse for delaying instituting the subject proceedings. Those delays at mediation were from November 2007 until January 2008 (Transcript 15 May 2009, page 15 line 33). The proceedings could have been instituted between January and 16 April 2008.
The order for divorce was made on 16 April 2007. The Court does not find that there is an adequate explanation for the delay of 47 days after the expiration of the 12 month period. However the absence of an explanation is merely a factor to be taken into account Tormsen & Tormsen (1993) FLC 92–392.
The Court does not find that hardship will be caused if the applicant is not able to institute his proceedings out of time. His alleged hardship is based on an agreement that was not reached.
Any hardship now being suffered by the applicant appears to flow from the fact that his income has been reduced by $400 per month by reason of his back injury. That hardship does not flow from not being able to institute property proceedings. Further, the applicant is in a better financial position than disclosed in his financial statement as he received a redundancy payout of $40,450 on 15 March 2004 (Transcript 15 May 2009, page 42 line 3); much of that however seems to have been absorbed by the cost of a car crash.
The respondent contends that the applicant received an appropriate division of the pool, being $55,000 compared with her $148,500.
On the respondent wife’s figures the husband retained 27% of the pool plus $67,000 in superannuation, compared with her 73% plus $40,000 in superannuation. The applicant says that his superannuation payout as at 30 June 2008 is set out in Exhibit “A1” (Transcript
15 May 2009 page 21, line 30). The applicant’s financial statement filed on 2 June 2008 estimates his superannuation at $71,000.
The applicant gave evidence that his superannuation just prior to separation was about $23,000 (Ibid, page 22 line 43). Exhibit “JAH8” to the applicant’s affidavit sworn 17 August 2009 shows his superannuation to have been $66,704.07 as at 30 June 2008 with monthly contributions of $256.80.
By interim order of the Court on 28 August 2008 the two children of the marriage are to live with the respondent. The division 27/73% is within acceptable limits and is just and equitable.
If the Court had decided that hardship would be caused, the next consideration for the Court would have been whether the applicant has a reasonable prima facie case. On the respondents’ figures, the applicant retained 27% of the pool. He now seeks a payment based on a non-existent agreement. The respondent has made the mortgage repayments since separation in 2001 (Transcript 15 May 2009, page 62 line 19) and by order of the Court, the two children live with her. Having decided that no hardship will be caused it is not pivotal to decide whether the applicant has established that he has a reasonable prima facie case to adjust the division of property. If required to, the Court would decide that such a case has not been established.
The next consideration if there would be hardship, would be whether there is an adequate explanation for the delay?
Having reached a conclusion that hardship will not be caused to the applicant it is again not pivotal to decide whether there is an adequate explanation for the delay, as he does not satisfy the requirement in s.44(4)(a) supra. The explanation for the delay is that the applicant was trying to negotiate with the respondent for a payout to be made.
The applicant was trying to enforce an agreement that had not been reached. If the Court were required to make that decision it would decide that there is not an adequate explanation for the delay.
The Court is aware that it should exercise its discretion under s.44(3) liberally, but here the applicant does not satisfy the condition precedent in s.44(4)(a).
The Court is not satisfied that hardship would be caused to a party of the marriage or a child if leave is not granted s.44(4)(a). Therefore the exercise of the Court’s discretion does not arise.
The application to institute proceeding out of time is dismissed.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Turner FM
Deputy Associate: Eyal D'vier
Date: 16 July 2009
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