Hardy and Vella

[2013] FCCA 1350

FEDERAL CIRCUIT COURT OF AUSTRALIA

HARDY & VELLA [2013] FCCA 1350

Catchwords:
FAMILY LAW – Application pursuant to s. 44(3) of the Family Law Act 1975 to bring proceedings out of time.

Legislation:

Family Law Act 1975

Federal Magistrates Act 1999

Federal Magistrates Court Rules 2001

Whitford v Whitford (1979) FLC 90-612
Frost v Nicholson (1981) FLC 91-051

Applicant: MS HARDY

Respondent: MR VELLA

File Number: MLC 4612 of 2013

Judgment of: Judge McGuire

Hearing date: 23 September 2013

Date of Last Submission: 23 September 2013

Delivered at: Melbourne

Delivered on: 10 October 2013

REPRESENTATION

Counsel for the Applicant: Mr Puckey

Solicitors for the Applicant: Slater & Gordon

Counsel for the Respondent: Mr Goddard

Solicitors for the Respondent: Haines & Polites

ORDERS

1. Pursuant to Section 44(3) of the Family Law Act 1975, the wife be granted leave to commence property and spousal maintenance proceedings out of time.

IT IS NOTED that publication of this judgment under the pseudonym Hardy & Vella is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 4612 of 2013

MS HARDY

Applicant

And

MR VELLA

Respondent

REASONS FOR JUDGMENT

1. In this matter I am asked to determine a preliminary issue as to whether the applicant wife should have leave pursuant to Section 44(3) of the Family Law Act 1975 (“the Act”) to institute proceedings outside of the 12 month limitation period for filing after the granting of a final order for divorce.  The application is opposed by the respondent husband.

2. The wife is 39 years of age.  The husband is 40 years old.  They married on (omitted) 1994.  Separation took place in about 2001 and an order for divorce was made on 26 June 2002.  There are three children of the marriage, being: X, born on (omitted) 1996 (aged 17 years); Y, born (omitted) 2004 (aged 8 years) and Z born (omitted) 2006 (aged 7 years). 

3. It is quite clear, therefore, that the two younger children of these parties were born a while after the divorce.  The parties agree that their relationship, including their sexual relationship, continued on a regular basis after the divorce.  The evidence suggests that the wife puts the relationship at a higher and more committed one than does the husband.  The parties agree that their relationship on any level ended in August 2011.  The husband has remained in the former matrimonial home with the oldest child.  The wife and the two younger children live with a friend. 

4. The parties were originally the joint registered proprietors of the former matrimonial home.  The title was transferred into the name of the husband in about 2003 after the wife accrued gambling debts.  The husband assisted and supported the repayment of her debt.  He insisted, however, that the title to the home be registered solely in his name.  The mortgage remained in joint names. 

5. The wife relied on her two affidavits filed 11 June and 8 August 2013.  The husband filed a responsive affidavit on 29 August 2013. 

6. This matter proceeded by way of submissions on the face of the documents and without cross-examination. 

Relevant Law

1. Section 44(3) of the Act provides time restrictions on property and spousal maintenance proceedings in that leave of the Court is required to commence such proceedings if more than 12 months has elapsed since the granting of a final divorce.

2. Section 44(4) sets out the requirements for leave to be granted as follows:

   The Court shall not grant leave under subsection (3) or (3A) unless it is satisfied:  

   (a)    that hardship will be caused to a party to the relevant marriage or a child if leave were not granted;  

   (b)    or in the case of proceedings in relation to the maintenance of a party to a marriage – that, at the end of the period within 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.

3. The Court must be satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted.  If the answer to this question is in the negative then the matter is at an end.  If, however, the answer is in the affirmative then a discretion is enlivened in the Court to grant or refuse the application for leave.

4. It is generally accepted that the loss of the simple right to institute proceedings is not in itself hardship.  There is an onus on an applicant to show that there is a prima facie substantive case to be litigated.  As the Full Court in Whitford v Whitford[1] noted:

   The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits.  If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted.

   [1](1979) FLC 90-612 at page 78,144

5. The Court in Whitford continued (at page 78,145):

   Hardship may be caused to an applicant if leave were not granted to institute proceedings, although the applicant is not in necessitous circumstances.  Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved may constitute hardship.  In some cases where a resolution of the property or financial relationships of the parties is desired, it might be, that the applicant would receive no more or even less, than he or she, already owns at law or in equity.  Nevertheless, hardship might be caused to the applicant if leave were not granted so as to facilitate such a resolution.

6. If hardship is proven then the exercise of the discretion depends on the particular facts before the Court.  The Court in Whitford observed at page 78,146:

   Due weight must be given to the expressed legislation intendment that ordinarily, proceedings should be commenced within a year from the date of the decree nisi, and the general policy of the Act which appears from sec 44(3) and sec 81 that financial relationships between the spouses should, wherever possible be brought to finality within a reasonable time after the dissolution of the marriage. Hence, such matters as the length of the delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay, and the strength on the merits of the applicant’s case, and the degree of the hardship which would be suffered unless leave were granted, are matters effecting the exercise of the discretion...

   Having regard to the nature of the jurisdiction which this Court exercises, this power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.

Hardship

1. The wife argues that there is a property pool of at least $380,000, there being equity in the home of $300,000 and superannuation entitlement of the husband of $80,000.  She argues that that relationship continued between 1994 and 2011, being a duration of some 17 years.  Certainly, the effect of the divorce on that relationship is mitigated somewhat by the birth of two children some four or five years later.  The wife is the carer of the younger two children.  She claims that she receives no child support.  The husband retains the use of and title to the major asset, being the home.  The wife legally remains responsible for the mortgage.

2. Whilst matters concerning the wife’s alleged wastage of assets due to gambling are of real relevance, I’m satisfied that the wife presents an arguable and prima facie case for property settlement in that there be an alteration of the current legal and equitable interests of the parties in their property.

3. The wife receives a Centrelink benefit to supplement her earnings as an unskilled casual worker of approximately $240 per week. In all of these circumstances, I am satisfied that there would be a hardship to the wife and to the two younger children of the marriage if leave were not granted to her under section 79 of the Act to proceed out of time.

The Discretion

1. Firstly, I have already found that the wife has a reasonable claim, prima facie, for a property settlement.

2. The wife explains her delay from 2003 to 2011 by reason of the relationship continuing and she remaining in occupation of the former matrimonial home.  She says that the relationship was on a more committed level than is conceded by the husband, who nevertheless does concede a relationship continuing.  I repeat that two children were born of this relationship after the divorce.  She says that she did not, therefore, see the need to institute proceedings and claims to have been unaware of the time limits (although I note that such timings are set out clearly on a divorce order).

3. The wife did seek legal advice in 2011.  She did not bring this application until June 2013.  She must, therefore, in my view, explain that period of delay.  She says that she did seek legal advice and, in fact, had a caveat lodged against the title to the former matrimonial home.  At paragraph 15 of her affidavit sworn 7 August 2013, the wife appears to concede that she was aware of the need to make an application prudently when she says:

   In late 2011 I sought legal advice from ADN Lawyers in (omitted) because I wanted to effect a property settlement and I was considering leaving the home.  ADN Lawyers lodged a caveat on the title of the (omitted) property on my behalf and wrote to the husband on 14 September 2011.  It became evident that I would need to commence court proceedings however I did not have access to any money at the time and could not afford to do so.

4. The wife claims the not unusual situation of her solicitors requiring a deposit on her costs and in the sum of $2,000.  The wife says that she could not make such a payment.  No blame can be attributed to the solicitors in my view.  She says that she has only now been able to enlist the financial assistance of her friend to bring an application.  Whilst I am aware of the wife’s precarious financial situation, no explanation was given to the Court as to why she did not file or attempt to file proceedings herself. 

5. The wife argues that the husband has always been aware of the potential claim of the wife given the caveat lodged in 2011 and his Supreme Court action to have it removed in late 2012.  The wife says that this, therefore, addresses the situation raised by Nygh J in Frost v Nicholson[2] where his Honour considered:

   This leads me to the final question as to the exercise of my discretion, that is to say, whether in the circumstances the husband would suffer prejudice if leave to institute proceedings were granted to the wife.  A 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 brought. 

   [2][2] (1981) FLC 91-051 at page 76,425

6. This cannot be a situation where the wife’s application of June 2013 came as a complete surprise to the husband.  The wife had instructed solicitors as long ago as 2011 and they have corresponded with the husband. 

7. The husband raises an issue of prejudice to him if leave was granted.  Specifically, he will allege that the wife’s gambling debts were of greater significance and her losses of a greater quantum than she now concedes.  This assertion will require a forensic exercise by the husband and his solicitors and delay will obviously impact on the availability of the documents and witnesses.  I find some merit in this argument.

Conclusion

1. I am satisfied that the wife makes out a prima facie case for a property settlement and that she would therefore suffer hardship or potential hardship should leave not be given. 

2. I accept generally the wife’s explanation for not bringing an application between 2003 and 2011.  It is clear that a relationship continued between the parties and that the wife was resident in the matrimonial home, albeit it with her name removed from the title in the latter years.  Her explanation for not bringing an application between 2011 and 2013 is more problematic.  I accept generally, her evidence as to her financial position. 

3. I also give some weight to the husband’s claim that the forensic preparation of his case would be impacted by the wife’s delay.  Nevertheless, the wife makes a concession to accrued gambling debts, albeit not necessarily in the quantum alleged by the husband.

4. I am of the view on balance that leave should be granted to the wife to bring her application out of time.  The hardship is a significant and real one.  Whilst the husband might experience some forensic difficulties in arguing his case, I am not of the view that the delay is necessarily prohibitive of him doing so.  With some reservations, I am satisfied as to the explanations given by the wife for the delay.  In that sense, the delay in bringing proceedings between 2003 and 2011 is a strong and understandable one.  It follows that the delay from 2011 until 2013 is not a relatively long one and she has provided an explanation.

5. There will be an order that the wife have leave to file an application for property settlement and spousal maintenance.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 10 October 2013