Hardwick & Hardwick (No 2)
[2022] FedCFamC1A 216
Federal Circuit and Family Court of Australia
(DIVISION 1) APPELLATE JURISDICTION
Hardwick & Hardwick (No 2) [2022] FedCFamC1A 216
Appeal from: Hardwick & Hardwick [2022] FedCFamC2F 834 Appeal number(s): NAA 138 of 2022 File number(s): ROC 104 of 2022 Judgment of: MCCLELLAND DCJ, RIETHMULLER & STRUM JJ Date of judgment: 19 December 2022 Catchwords: FAMILY LAW – APPEAL – Leave to appeal from interlocutory orders granting the respondent leave to commence proceedings pursuant to s 79(2) of the Family Law Act 1975 (Cth) (“the Act”) out of time under s 44(3) of the Act – Inadequacy of reasons – Primary judgment attended with sufficient doubt to warrant reconsideration – Appellant’s failure to establish substantial injustice if leave to appeal is denied – Respondent’s mental illness adequate explanation for delay in commencing proceedings – Application for leave to appeal dismissed – Each party to bear their own costs.
FAMILY LAW – APPLICATION IN AN APPEAL – COSTS – Appellant to pay respondent’s costs of the appellant’s Application in an Appeal on party/party basis.
Legislation: Family Law Act 1975 (Cth) Pt VII, ss 44(3), 44(4), 75(2), 79, 117(1)
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67
Cases cited: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Althaus & Althaus (1982) FLC 91-233; [1979] FamCA 47
Atwill & Atwill (1981) FLC 91-107; [1981] FamCA 72
Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30
Baini v The Queen (2012) 246 CLR 469; [2012] HCA 59
Carlon & Carlon (1982) FLC 91-272; [1982] FamCA 60
Frost & Nicholson (1981) FLC 91-051; [1981] FamCA 45
Hardwick & Hardwick [2022] FedCFamC1A 179
House v The King (1936) 55 CLR 499; [1936] HCA 40
Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378
I Pty Ltd and Phong [2019] FamCAFC 247
Jacenko & Jacenko (1986) FLC 91-776; [1986] FamCA 25
Jackamarra v Krakouer and Anor (1998) 195 CLR 516; [1998] HCA 27
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Mehmet & Mehmet (No 2) (1987) FLC 91-801; [1986] FamCA 24
Moy & Pao [2022] FedCFamC1A 17
Nimesh Watapaldeniya v Transport Accident Commission [2022] VSCA 50
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Robb & Robb (1995) FLC 92-555; [1994] FamCA 136
Sharp & Sharp (2011) 50 Fam LR 567; [2011] FamCAFC 150
Skelton and Lindop (2022) 64 Fam LR 617; [2022] FedCFamC1A 47
V and S [2006] FCWA 2
Welland & Hawthorn (2021) 64 Fam LR 520; [2021] FedCFamC1A 43
Whitford & Whitford (1979) FLC 90-612; [1979] FamCA 3
Riethmuller, Grant and Robin Smith, Family Law (Thomson Reuters, 7th edition, 2022)
Number of paragraphs: 88 Date of hearing: 1 November 2022 Place: Heard in Brisbane, delivered in Sydney The Appellant: Litigant in person Solicitor for the Respondent: Ms Smith of VAJ Byrne & Co Lawyers ORDERS
NAA 138 of 2022
ROC 104 of 2022FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR HARDWICK
Appellant
AND: MS HARDWICK
Respondent
order made by:
MCCLELLAND DCJ, RIETHMULLER & STRUM JJ
DATE OF ORDER:
19 December 2022
THE COURT ORDERS THAT:
1.The appellant’s Notice of Appeal filed 22 June 2022 is dismissed.
2.Each party is to bear their respective costs of the appeal.
3.The appellant is to pay the respondent’s costs of and incidental to the appellant’s Application in an Appeal filed 17 October 2022, on a party/party basis within 28 days of those costs being assessed or agreed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hardwick & Hardwick has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ & STRUM J:
introduction
By Notice of Appeal filed on 22 June 2022, the appellant, Mr Hardwick (“the husband”), seeks leave to appeal from orders made on 27 May 2022 by a judge of the Federal Circuit and Family Court of Australia (Division 2). Those orders granted the respondent, Ms Hardwick (“the wife”), leave to continue an application for property settlement under Part VIII of the Family Law Act 1975 (Cth) (“the Act”) filed approximately three years out of time on 4 February 2022. The application was filed in circumstances where the parties acknowledged that the date of filing was outside the 12 month time limit specified in s 44(3) of the Act, which expired on 24 January 2019.
For the following reasons, we dismiss the husband’s application for leave to appeal.
Preliminary issue
At the commencement of the hearing the husband raised, as a preliminary issue, an objection to the wife relying upon her Summary of Argument filed on 11 October 2022, four days out of time.
Despite the husband’s opposition, leave was granted to the wife to rely upon that Summary of Argument in circumstances where her solicitor, by way of notation at the conclusion of that document, noted that the delay had been as a result of illness impacting the solicitor. Such leave was granted because it is established that a relatively benign error, arising from circumstances impacting upon a party’s lawyer, should not usually be visited upon their innocent clients (Allesch v Maunz (2000) 203 CLR 172 at 186; Jackamarra v Krakouer and Anor (1998) 195 CLR 516 at [14], [33], [68] and [70]). Further, the husband was unable to identify any prejudice resulting from the relatively minor delay that had occurred in respect of the wife’s late filing of that document.
Background facts
The husband is currently 44 years of age and the wife is 41 years of age. The parties commenced their relationship in either 2001 or 2002, and were married in 2004. They subsequently separated in 2015. Accordingly, as noted by the primary judge, the parties’ relationship was approximately 13 or 14 years in duration (at [5]). There is one child of the relationship, who is now 18 years of age. The wife also has a child from a previous relationship who is now 21 years of age. There is no suggestion that the adult children are dependent on the parties, however the wife contends that the care she provided for both children will be a relevant consideration in the property settlement proceedings pursuant to Part VIII of the Act if the husband is not successful in this appeal.
The parties were divorced on 24 January 2018, with the divorce taking effect on 25 January 2018. The wife made an application for final property adjustment orders on 4 February 2022. As a period of three years had elapsed since the divorce, the wife required leave pursuant to s 44(3) of the Act in order to continue with her application.
The wife contends that during the course of 2018 and 2019, the parties were engaged in discussions relating to their financial affairs. The wife contends that those discussions included the prospect of the parties entering into a binding financial agreement to finalise their respective entitlements to the property of the parties’ marriage. The husband disputes that the parties were engaged in ongoing discussions regarding their financial affairs during 2018 and 2019, but contends that, in or about February 2017, the parties entered into an informal agreement whereby he would continue to provide financial support to the wife until 2020.
The wife contends that she has suffered significant mental health difficulties in the period subsequent to separation, which precluded her from focusing upon the continuing discussions she contends had been taking place between the parties’ respective legal advisers up to and including the wife’s admission to City A Hospital in August 2019.
The husband acknowledges the wife was admitted to City A Hospital in August 2019, but contends it was a result of substance misuse rather than mental illness.
The primary judge noted that there is a disagreement between the parties regarding the size of the parties’ property pool as at the date of separation (at [6]).
At paragraph 70 of the husband’s affidavit filed 30 March 2022, he contends that the total value of the property pool as at the date of separation was $526,564.
The parties acknowledged that the wife retained motor vehicle 1, which the husband contends was valued at $52,400. The wife, however, contended that she has since traded in that motor vehicle to acquire motor vehicle 2 valued at $22,000.[1]
[1] Wife’s Affidavit filed 4 February 2022, paragraph 30.
It did not appear to be disputed that the wife also retained her superannuation interests, which were valued at $68,320.
The wife agreed that the husband paid certain expenses in the period post separation, including in respect to approximately six months’ rent, private medical insurance and some cash assistance to the wife. She did not, however, quantify the amount.
The husband contends that the property that remained in the wife’s possession at the time of the parties’ separation represented 48 per cent of the parties’ property pool.
At paragraph 74 of the husband’s affidavit filed 30 March 2022, the husband also contended that, in the period subsequent to the parties’ separation, he paid additional funds to the wife in respect to rent, utility bills, private health and car insurance, hospital fees and a cash payment collectively totalling $57,054.
The wife says that she is suffering “significant mental health illness including depression, anxiety, post-traumatic stress disorder and borderline personality disorder.”[2] The husband acknowledges that the wife suffers mental illness, but argues she has failed to provide evidence establishing that this mental impairment has impacted upon her ability to consider matters relevant to the parties’ financial dispute so as to excuse her delay in commencing legal proceedings within the prescribed time limit.
[2] Wife’s Affidavit filed 4 February 2022, paragraph 41.
The wife contends that, after her admission to hospital in 2019, her then lawyers requested confirmation from a specialist regarding her capacity to provide instructions to them and, when she failed to respond to their request, they ceased acting for her in October 2019.
The wife stated, in her affidavit filed 4 February 2022, that she did not recall being served with an application for divorce or confirmation that it had been granted. The primary judge noted that the issue of whether the wife had been aware of the divorce was an issue in dispute between the parties and that she was not in a position to make findings of fact in the context of the procedural hearing (at [14]).
In terms of future needs, the wife contends that although she is now engaged in full-time employment as a salesperson earning approximately $50,000 per annum, her past and ongoing earning capacity has been impacted by her mental health challenges.
relevant legal principles
Leave to appeal is required
Section 44(3) of the Act empowers the Court to grant leave to a party to commence or to continue proceedings in circumstances where they have failed to seek orders for property adjustment pursuant to s 79 of the Act within 12 months of a divorce order taking effect. The husband appropriately acknowledged that leave to appeal is required in respect of the order made by the primary judge granting such leave to the wife (Welland & Hawthorn (2021) 64 Fam LR 520 at [13]).
The test adopted in this Court for leave to appeal is a conjunctive one, namely, whether the decision of the primary judge is attended by sufficient doubt so as to warrant its reconsideration by the Full Court and, if so, whether a substantial injustice would occur if leave were not granted: Medlow & Medlow (2016) FLC 93-692 at [57]; Moy & Pao [2022] FedCFamC1A 17 at [11].
Principles for granting an extension of time to commence or continue proceedings
The decision as to whether leave should be granted to commence or continue proceedings pursuant to Pt VIII of the Act essentially involves balancing two competing principles of public policy. The first is that the Commonwealth Parliament has stated that, ordinarily, such proceedings should be commenced within 12 months of the date of the divorce. The second is that relief from the operation of s 44 of the Act should nonetheless be granted out of time in order to avoid hardship to a spouse or a child of the relationship.
In respect to that second consideration, s 44(4)(a) of the Act provides that an extension of time should not be granted under s 44(3) of the Act unless the Court is satisfied “that hardship would be caused to a party to the relevant marriage… if leave were not granted”.
In Whitford & Whitford (1979) FLC 90-612 at 78,145, the Full Court said:
In ordinary parlance, hardship means something more burdensome than “any appreciable detriment”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations. It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense.
We observe that in Family Law (2022, 7th ed) at [36.120], Riethmuller and Smith note that what constitutes appreciable detriment necessarily depends upon the circumstances of each case, stating that:
In many cases the substantial detriment is the inability of a spouse to pursue a claim for maintenance or an alteration or property interests where the resulting loss is significant in the light of his or her financial circumstances.
The applicant for relief’s prospects of success in the proceedings, if leave is granted, is relevant to both the question of hardship and the second task undertaken by the Court, which is to consider matters going to the exercise of discretion generally. This is because “[if] the probable result of the hearing on the merits is that hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant would suffer hardship if leave were not granted”: V and S [2006] FCWA 2 (“V and S”), per Thackray J at [6].
As recently noted by Austin J in Skelton and Lindop (2022) 64 Fam LR 617 (“Skelton and Lindop”) at [16]–[21], there is differing authority as to the test to be applied in determining the prospects of success. Those tests range from the need to establish “prima facie claim” to the need to establish “a real probability of success.” We respectfully acknowledge and adopt the reasoning of Austin J that the appropriate test to apply is whether the applicant for relief had “sufficient likelihood of success” to prove hardship.
In the event of the trial judge finding that the applicant for relief would suffer hardship if an extension of time was not granted, it is then necessary for the trial judge to consider those matters going to the exercise of discretion. In V and S, Thackray J noted at [7] that, in addition to prospects of success, other potentially relevant considerations to the exercise of discretion may include the following:
·The extent of the delay and the reasons (or absence of reasons) for the delay: Althaus & Althaus (1982) FLC 91-233;
·The extent of the hardship the applicant would experience if leave were not granted: Carlon & Carlon (1982) FLC 91-272; and
·The extent of the prejudice that would be caused to the respondent if leave were granted.
In Frost & Nicholson (1981) FLC 91-051 (“Frost & Nicholson”) at 76,425, Nygh J said that prejudice, in this context, “means that a party is faced with an action which he or she had no reason to expect or had been led to believe would not be brought”. However, in Atwill & Atwill (1981) FLC 91-107 (“Atwill & Atwill”) at 76,794, Nygh J stated that the relevant prejudice would need to be “distinctly observable hardship, such as financial commitments made on the basis that no liability existed”. It appears to us that the extent of any prejudice is simply one of the relevant factors to consider and that Nygh J’s comments in these two cases should be read as descriptive of circumstances where prejudice is likely to be a weighty factor, not a test for the relevance of evidence of prejudice. Additionally, in Atwill & Atwill, his Honour also pointed out that the fact that the respondent will suffer prejudice does not necessarily mean that the discretion will be exercised in their favour.
approach
Applications seeking an interlocutory order under s 44(3) of the Act are generally dealt with on the basis that the applicant’s evidence is presumed to be correct “unless it is inherently unbelievable or contradictory” (Jacenko & Jacenko (1986) FLC 91-776 at [14]; Skelton & Lindop at [36]). It is important to appreciate that it is only in the event of leave being granted that the Court, at final hearing, will make a determination in respect to the accuracy or otherwise of the parties’ competing factual contentions.
Grounds of appeal
By Notice of Appeal filed on 22 June 2022, the husband relies upon the following four grounds of appeal:
1.Her Honour has not considered all evidence and has made a finding of facts on important issues which could not be supported with evidence; Her Honour has based her finding on the applicant not knowing that she was divorced [however] I have provided evidence that proves the applicant was aware of the divorce.
2.Her Honour has not considered the total pool and the cost of taking this court Her Honour has [exercised] her [discretion] making a decision which is clearly wrong.
3.Her Honour has made a finding of fact about further discussions post divorce about resolving their property there is no [evidence] in court to prove this as a fact.
4.Her Honour has exercised her discretion to arrive at a decision because I engaged lawyers up front that I must be at risk.
(As per the original)
At the appeal hearing, the husband confirmed that he did not press Ground 4.
It is apparent from the husband’s Summary of Argument filed 16 September 2022 that he has sought to expand his grounds of appeal beyond those identified in his Notice of Appeal filed 22 June 2022 to set out arguments that have no reference to the actual grounds of appeal. This includes, for instance, the husband’s contentions that the primary judge was biased and denied him procedural fairness. Whilst some latitude is to be given to self-represented litigants, the Court is mindful of the “overarching purpose” as set out in s 67 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), which requires the Court and parties to conduct proceedings as efficiently as possible, in the interests of not only the litigants before the Court, but also the effective functioning of the business of the Court and consequent impacts on other litigants more generally. In that context, a number of authorities confirm the importance of litigants properly particularising their grounds of appeal, which should be expressed as a “specific and concise statement of the points sought to be argued by the appellant” (Nimesh Watapaldeniya v Transport Accident Commission [2022] VSCA 50 at [2]). Accordingly, we have not considered those matters raised in the husband’s Summary of Argument filed 16 September 2022 that go beyond the issues raised in his Notice of Appeal.
Should leave to appeal Be granted?
As earlier noted, the test as to whether an appellant should be granted leave to appeal from an interlocutory order is twofold and conjunctive. That is, it is necessary for the appellant to establish both:
(1)That the decision of the primary judge is attended by sufficient doubt so as to warrant its reconsideration by the Full Court; and
(2)That he would suffer a substantial injustice if leave to appeal is not granted.
Has the decision of the primary judge being impacted by sufficient doubt, warranting reconsideration
We will firstly deal with Grounds 1 and 3, which we consider to be without merit for the following reasons.
Ground 1
Ground 1 is essentially divided into two parts.
The first part of Ground 1 sets out the contention that the primary judge failed to consider “all evidence and has made findings of fact on important issues which could not be supported with evidence”.
Expressed in those terms, this ground of appeal is unsatisfactorily ambiguous. It is not the Court’s function to rummage through the Notice of Appeal and the evidence in order to find an arguable ground of appeal (I Pty Ltd and Phong [2019] FamCAFC 247 at [32] referring to Bahonko v Sterjov (2008) 166 FCR 415 at [3]).
In respect of the second part of Ground 1, the husband sets out, in his Summary of Argument, various factors which he says support his contention that the wife was aware of the divorce, for example:
(a)That the divorce was made by joint application;
(b)That the wife was legally represented at the time of divorce;
(c)That the wife requested a copy of the parties’ divorce certificate from the husband on 4 June 2019;
(d)That the wife was aware the husband had remarried; and
(e)That from 2018 onwards, subpoena material indicates the wife completed medical declarations and ticked “divorce” as her marital status.
Whilst these examples, as set out in the husband’s Summary of Argument filed 16 September 2022, support his contention that the wife was aware of the parties’ divorce, the primary judge explicitly stated at [14] and [15] that she acknowledged this issue to be a fact in dispute between the parties and that she could not make a finding on that matter in the context of the interlocutory proceedings, where the evidence of the wife was untested.
In exercising her discretion to grant leave for the wife to continue with the proceedings pursuant to s 44(3) of the Act, the primary judge had regard to the evidence concerning the wife suffering periods of adverse mental health, which the primary judge found impacted upon her capacity to make decisions concerning the initiation of property proceedings. For reasons which we subsequently explain, those findings were reasonably open to the primary judge.
Accordingly, it is clear the primary judge did not grant leave to the wife simply on the basis of the wife’s contention that she was not aware of the parties’ divorce. For these reasons, the husband has failed to establish appellable error in respect to either part of what, in combination, constitutes Ground 1 of his Notice of Appeal.
Ground 3
This ground of appeal relates to the findings by the primary judge that the parties had, in the period subsequent to their separation, engaged in discussions, including through legal advisers, concerning the adjustment of their property.
It was open for the primary judge to find that the parties were engaged in ongoing discussions regarding the potential for a further property adjustment in the period subsequent to their separation, including at the time the wife was admitted to the City A Hospital. The wife’s evidence in this regard is corroborated by a letter from her former solicitors to the then solicitors for the husband dated 20 February 2018. That letter, being an annexure to the husband’s affidavit, sought information regarding the husband’s financial circumstances, with a view to the wife being in a position to “put forward a settlement proposal” to the husband.
The husband acknowledges responding to that correspondence and contends he contacted the wife directly with respect to settling the parties’ property dispute. The husband attests that, in lieu of the parties engaging lawyers with a view to entering into a binding financial agreement, the parties agreed that he would continue to “assist [the respondent] financially up to 2020 after which [they] were both then responsible for [their] own finances” (Notice of Appeal filed 22 June 2022).
In circumstances where the husband attests that the parties had remained in a financial relationship until 2020, the wife’s evidence that she continued to engage the services of solicitors in respect of property matters until her admission to hospital in August 2019 is plausible, and it was reasonably open to the primary judge to rely on that evidence.
Accordingly, the husband has not established appellable error in respect to this ground.
Ground 2
We are of the opinion that there is merit in Ground 2 of the appellant’s Notice of Appeal in so far as the primary judge did not adequately address the prospects of the wife succeeding with her substantive application for property adjustment orders. For reasons we explain, however, the husband has not otherwise established that the primary judge’s exercise of discretion miscarried.
In Ground 2 of the Notice of Appeal filed 22 June 2022, the husband argues the primary judge “has not considered the total pool of the parties” and the costs which would be incurred by the husband if the wife was granted leave to proceed. In his Summary of Argument filed 16 September 2022, the husband contends that he provided evidence in his affidavit at paragraphs 69 to 74 which sets out a “detailed breakdown of what the [wife] received at separation and for 5 years post separation”, which he argues has not been considered by the primary judge.
The primary judge was unable to make an order granting leave, pursuant to s 44(3) of the Act, unless she was first satisfied of the conditions set out in s 44(4) of the Act, namely, that rejection of the wife’s application would cause hardship to her. This necessarily required the primary judge to engage with the evidentiary material with a view to making an assessment of the wife’s prospects of succeeding in her substantive application for property adjustment orders, pursuant to s 79 of the Act, to determine if she had sufficient likelihood of success in establishing hardship if her application for leave to continue the proceedings was declined (V and S). The primary judge, with respect, failed to undertake that task. More was required than a mere statement of satisfaction that a prima facie case existed.
Relevantly, the primary judge stated at [17] and [18]:
I am satisfied that there is a reasonable prima facie case for relief. There has not been a complete understanding of the parties’ respective financial perspectives in all of the matters, which need to be taken into account in determining a property outcome.
I am satisfied that on balance a denial of the claim would cause hardship to the applicant. Her financial position is poorer than the husband’s and the relationship was a long relationship.
It can reasonably be inferred that the primary judge’s reasons for concluding that the wife had a “reasonable prima facie case for relief” took into consideration the matters referred to in [18], being that the parties had been in a long relationship and that the husband was in a superior financial position.
Aside from those two matters, the reasons provided by the primary judge for determining that the wife had a reasonable prima facie case for relief focused upon the absence of clarity concerning the size of the property pool and the property in the hands of each party, together with “all of the matters, which need to be taken into account in determining a property outcome” (at [17]).
In failing to engage with the evidence that was available, the primary judge did not provide adequate reasons nor identify, at least in broad terms, the potential range of the value of the parties’ combined property pool and the property that remained in their possession. This was necessary in order to make an assessment as to whether, at a final hearing, the wife had a sufficient likelihood of successfully obtaining an adjustment of property, pursuant to s 79(4) of the Act, which would result in her receiving a greater proportion of the parties’ property pool than that which is currently in her possession.
Accordingly, we are of the opinion that the decision of the primary judge is attended by some doubt, as a result of the inadequate reasons.
That conclusion does not, however, resolve the question as to whether leave to appeal should be granted. It is, therefore, necessary to consider whether the husband would suffer substantial injustice if leave to appeal is declined.
Whether the appellant will suffer substantial injustice if leave to appeal is declined
Establishment of hardship
We are of the opinion that the husband does not suffer a substantial injustice if leave to appeal is refused in this matter. This is because, having reviewed the record of the proceedings, we are satisfied that the result of the proceedings would not have been different if the primary judge had applied the correct test to determine the issue of hardship (Baini v The Queen (2012) 246 CLR 469 at [30] and [32]).
That is, for the following reasons, we are satisfied that the wife would have succeeded in her application for leave to continue with her application for final property settlement orders pursuant to s 44(3) of the Act. This is in circumstances where, even taking the husband’s admissible evidence at its highest, it can be determined that the wife would probably be successful in obtaining an order for property adjustment in her favour.
In that respect, at paragraph 69 of the husband’s affidavit filed on 30 March 2022, the husband contends that the combined property pool was as set out in the following table:
Description
Value
Liability
Name
Former Matrimonial Home
$1,250,000
$1,085,000
B Bank & husband’s parents
Motor vehicle 1
$52,400
$Nil
Wife
Motor vehicle 3
$150,000
$198,000
Motor vehicle 3 Finance
Motor vehicle 4
$12,000
$Nil
Husband
Motorcycle 1
$14,000
$Nil
Husband
Credit Cards
$32,000
$32,000
B Bank & NAB
Furniture
$50,000
$Nil
Joint
Tools of trade
$10,000
$Nil
Husband
Jewellery
$103,054
$Nil
Wife
Superannuation
$131,790
Husband
Superannuation
$68,320
Wife
At paragraph 71 of the husband’s affidavit filed 30 March 2022, he contends that the wife retained motor vehicle 1, “all of her possessions including the jewellery” and “all of the household contents”, save for two beds, a lounge suite and a washing machine.
On that basis, the husband contends that the wife retained property to the value of 48 per cent, while he received 52 per cent of the parties’ combined property, which the husband valued at $526,564.
The husband attested that, in addition to retaining the items to which he refers in paragraph 71, in the period subsequent to the parties’ separation he has provided benefits to the wife totalling $57,054, which are as follows:
74.1.6 month’s rent I paid for [the respondent’s] rental property (Real Estate Agent C - $13,500)
74.2. Her utility bills (Origin and Telstra - $6,587)
74.3. Cash payment of $22,367
74.4. Her private health insurance from October 2015 – May 2020 ($10,800)
74.5. Her car insurance (C Bank - $1,800)
74.6. Her hospital fees ( - $2,000)
(As per the original)
Leaving aside the cash payment of $22,367, those post separation financial contributions made by the husband to the wife are in the nature of spousal maintenance, rather than a property distribution. Further, the cash amount of $22,367 is offset by the fact that the husband’s figures did not include the total valuation of the former matrimonial home that the parties obtained shortly prior to separation. That valuation was $1,275,000, that is, $25,000 above the value included in paragraph 69 of the husband’s affidavit.
Moreover, the husband acknowledged, during the course of the appeal, that his assessment of the value of the items set out in paragraph 69 of his affidavit filed 30 March 2022 were based on the retail price paid, including the showroom price of motor vehicle 1. He accepted that the actual second-hand value of that motor vehicle, together with the personal effects of the wife including the jewellery, would be significantly less than the original retail value. Accordingly, it is likely that the value of the property that remained in the possession of the wife following the parties’ separation was significantly less than the value attributed to that property by the husband.
Moreover, for reasons which we explain, even accepting the inflated values of those items which the husband contends have remained in the wife’s possession, the evidence satisfies the Court that the wife has a reasonable likelihood of succeeding in her application for final property adjustment orders.
In that respect, we have observed that, in considering an application pursuant to s 44(3) of the Act, the Court generally accepts the evidence of the applicant for relief for the purposes of the application unless it is inherently unbelievable or inconsistent.
In assessing the appropriate adjustment of the parties’ property at final hearing, the Court is likely to have regard to the fact that both parties acknowledge that they had little by way of assets at the commencement of their relationship. It can be expected that the Court is therefore likely to focus upon the direct and indirect contributions that the parties made both during their relationship and subsequent to its conclusion. These would include the fact that the parties made contributions to the property of the marriage by way of contributing their earnings and undertaking building work associated with the construction of the former matrimonial home, as well as contributing to the care of the children and undertaking general home maintenance.
The evidence of the wife is that, aside from periods of maternity leave, she continued working and applied her income to her expenses, those of the children and also, in addition to the husband’s contributions, the expenses of the household. She also attests to having primary responsibility of caring for both children during the relationship and in the period subsequent to the parties’ separation. These matters, in the context of a relatively long relationship, suggest that, having regard to those matters set out in s 79(4) of the Act, an assessment of contributions in the order of 50 per cent to each party would be reasonably arguable. Additionally, as earlier noted, the wife attested that she suffers from significant mental health illness “including depression, anxiety, post-traumatic stress disorder and borderline personality disorder.” The wife’s evidence in that respect is corroborated, with the husband attaching to his affidavit a letter from his solicitors dated 11 March 2022 addressed to the wife’s solicitors stating that, after the wife’s mother passed away in January 2009, the wife’s “mental health declined and she began to abuse prescription medication”. Consistent with that evidence, at paragraph 24 of the husband’s affidavit filed 30 March 2022, the husband acknowledged that “[the wife] does have significant mental health problems.”
The wife’s evidence that her mental health has impacted upon her employability, past earnings and future earning capacity is plausible. In that context, it is the impact of the wife’s mental health challenges upon those matters that it is relevant, as opposed to the focus of the husband, which was upon the cause of her mental health challenges and, in particular, whether her mental impairment has been caused or exacerbated by substance misuse. This is relevant because s 75(2)(a) of the Act requires the Court to consider the parties’ respective states of health and s 75(2)(b) of the Act requires the Court to consider “the physical and mental capacity for of each of them for appropriate gainful employment” (emphasis added).
Significantly, for the purpose of considering the prospects of the wife succeeding in an application for property adjustment, it is reasonably arguable that the wife’s mental health challenges justify an adjustment in her favour, pursuant to s 79(4)(e) and s 75(2)(a) of the Act, over and above the contribution assessment to which we have referred in respect to s 79(4)(a)–(c) of the Act considerations. This is the case even having regard to the fact that the husband would be entitled to some recognition, pursuant to s 79(4)(e) and s 75(2)(a) of the Act, for the support he provided to the wife’s child from a previous relationship (Mehmet & Mehmet (No 2) (1987) FLC 91-801; Robb & Robb (1995) FLC 92-555).
Taking into consideration all of those matters, we are comfortably satisfied that the wife has a reasonably arguable case for obtaining orders for property adjustment in her favour greater than the 48 per cent referred to by the husband as representing the apportionment that the wife has retained from the former matrimonial property pool. If the wife did not receive the jewellery or furniture, the receipt of which she denies[3], she would have a strong case for an even larger property settlement.
[3] Written submissions of the wife filed 18 May 2022, paragraphs 13–14.
Having regard to the evidence of the wife regarding her current financial circumstances, we are satisfied that being denied the opportunity of pursuing a just and equitable adjustment of the parties’ matrimonial property, pursuant to s 79 of the Act, would result in hardship to the wife.
Having determined that the requirement of hardship referred to in s 44(4) of the Act is satisfied, we then move to consider those matters going to the general exercise of discretion.
Matters going to the exercise of discretion
We are satisfied that, on the basis of the evidence of the wife’s mental health challenges to which we have referred, there was no appellable error in terms of the principles of House v The King (1936) 55 CLR 499 at 505 and Norbis v Norbis (1986) 161 CLR 513 at 539–540. That is, in respect to the primary judge’s consideration of matters going to the proper exercise of discretion, the husband has failed to establish that the primary judge:
(a)Acted upon a wrong principle;
(b)Allowed extraneous or irrelevant matters to guide or affect the decision;
(c)Made a mistake of facts;
(d)Failed to take into account some material consideration; or
(e)Made a decision that, upon the particular facts, is unreasonable or plainly unjust.
It was reasonably open to the primary judge, on the basis of the evidence presented, to find that wife had an adequate explanation for the delay in commencing proceedings. This is in the context where it is acknowledged that, in August 2019, the wife was admitted to City A Hospital for therapy. It is accepted that the wife’s admission to that facility occurred after the expiration of the time limit set out in s 44(3) of the Act. Nevertheless, the evidence is consistent with the wife having ongoing mental health challenges and, once again, it matters little whether the wife’s diminished capacity to consider matters relating to commencing legal proceedings was as a result of mental illness or mental impairment caused, or exacerbated, by substance misuse.
We have earlier set out why it was reasonably open for the primary judge to find that the parties did engage in post separation discussions regarding the adjustment of the parties’ property. It is the case, however, that even on the wife’s evidence, settlement negotiations drifted off subsequent to the wife being admitted to hospital in August 2019 and, until she commenced proceedings. However, no evidence was presented to the primary judge of any representation that she made to the husband, in the period subsequent to her admission to hospital, that would lead him to believe that she had abandoned plans to pursue a claim for property adjustment.
The incapacity of the wife to provide instructions to her then lawyers as result of her admission to the City A Hospital in August 2019 was relevant to the findings of the primary judge when considering delay. It is also relevant to the consideration of potential prejudice that the husband would suffer in the event of leave being granted to the wife to proceed with her application for property adjustment orders.
In his Summary of Argument filed 16 September 2022, the husband also refers to contributions made by him, his current wife, and his parents towards his current property. The evidence in this regard is contained in his affidavit, where he sets out brief details of his earnings over the last three years (around $70,000 per annum) and states:
87.After we separated, I met my wife Ms D and together Ms D and I have been successful.
88.For the first few years of my relationship with Ms D, she assisted me financially including providing financial assistance to [the wife].
89.[Ms D] is the business manager of our company, Company E Pty Ltd. The name Company E was made using the first three letters of my name and the first three letters of hers.
…
101.I have worked very hard since separation to build my wealth, care for my daughter, raise a stepdaughter (X who is 13 years old), build a future with my wife, care for my parents and become successful in business. To have to go through this process will cause significant distress to me and my family, both emotionally and financially.
(Husband’s Affidavit filed 30 March 2022)
It is not necessary for a judge who is exercising a discretionary judgment to detail each factor that they have found to be relevant or irrelevant, nor is a judge required to make an explicit finding on each disputed piece of evidence (Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 Mahoney JA). In so far as the primary judge did not refer to the totality of evidence that was presented to her, we are satisfied that, had she done so, the evidence justifies the conclusion of the primary judge that the husband is not prejudiced by the granting of leave to the wife pursuant to s 44(3) of the Act. Relevantly, prejudice “here means that a party is faced with an action which he or she had no reason to expect or had been led to believe would not be bought” (Sharp & Sharp (2011) 50 Fam LR 567 at [153] referring to Nygh J in Frost & Nicholson at 76,425).
In that respect, the husband’s evidence that he anticipated providing ongoing financial support to the wife up until 2020 necessarily meant that the parties’ financial relationship extended beyond 24 January 2019, being the date which is 12 months after the divorce order was made on 24 January 2018. In those circumstances, the expiration of the 12-month time limit, specified in s 44(3) of the Act, on 24 January 2019 could not be said to justify an assumption on the part of the husband that the parties’ financial relationship had been severed and concluded. On his own acknowledgement, that financial relationship was continuing, with the husband agreeing to provide financial assistance to the wife up until 2020.
The husband provided a very broad and imprecise account of the effect of an unrecorded agreement purportedly entered into by the parties in or about February 2017[4], and an informal “in principle” agreement in 2018 that the husband would continue to assist the wife until 2020 rather than finalising their arrangements with a binding financial agreement. However, the husband has not referred to any other representation made by the wife, either before or after the expiration of the 12-month time limit, that lead him to conclude that their financial relationship had been severed and any outstanding claim in respect to property adjustment had been abandoned.
[4] Husband’s Notice of Appeal filed 22 June 2022, Part C paragraph 13; Husband’s Affidavit filed 30 March 2022, paragraph 79.
Additionally, although the husband has re-partnered and his current wife is said to have contributed to his current assets, he has not presented evidence that he has acted to his detriment as a result of any representation purportedly made by the wife or the expiration of the time limit itself. To the extent that he or his current partner have made contributions (as alleged in this case), those matters can be taken into account in determining appropriate property settlement orders (as can the post-separation contributions of the wife in caring for the child of the parties). The husband also relies upon the legal costs that he will be incurring in the event of leave being granted to the wife to continue with her claim for property adjustment. However, as noted by Austin J in Skelton and Lindrop, that is an expense that the husband would, in any event, incur if the application for property adjustment had been commenced by the wife within time. In substance, the potential prejudice that he will suffer as a result of leave being granted to the wife pursuant to s 44(3) of the Act to continue with her action for property adjustment orders, even though it was commenced outside the time limit specified in that subsection, is the further time that it will take for the property settlement proceedings to be finalised.
For those reasons, we are satisfied that failure of the primary judge to provide adequate reasons has not affected what we consider to have been the likely result of the proceeding. This is because we are satisfied that, in addition to the evidence establishing hardship, the evidence also adequately explains the delay on her part in not commencing proceedings within the required time limit. We are further satisfied that the husband has not suffered prejudice by the delay over and above legal costs which he would have, in any event, incurred had the proceedings been commenced within time.
Disposition
Accordingly, while the husband has, in our view, established that the decision of the primary judge is attended by sufficient doubt so as to warrant its reconsideration, the husband has failed to satisfy the Court that he would suffer a substantial injustice by leave being declined. This is in circumstances where we are comfortably satisfied that the result of the proceedings would not have been different if the error had not occurred.
Costs
Save in respect to the husband’s Application in an Appeal which was dismissed on 25 October 2022, we are satisfied that each party should bear their own costs of the appeal in accordance with the presumption set out in s 117(1) of the Act. This is because while his application for leave to appeal has been dismissed, that has occurred in circumstances where the husband has established apparent error on the part of the primary judge.
We are, however, satisfied that the husband should pay the costs of the wife in respect to his Application in an Appeal which, for reasons that we explained in a decision dated 25 October 2022,[5] was wholly unsuccessful. In circumstances where there has been no apportionment of costs associated with that specific part of the proceedings, the order will be that the husband is to pay the wife’s costs of and incidental to his Application in an Appeal filed on 17 October 2022 on a party/party basis within 28 days of the costs being agreed or assessed.
[5] Hardwick & Hardwick [2022] FedCFamC1A 179.
RIETHMULLER J:
I agree with the orders proposed by McClelland DCJ and Strum J for the reasons they have given.
I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland, and Justices Riethmuller & Strum. Associate:
Dated: 19 December 2022
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