Hertwig and Hertwig
[2018] FamCA 591
•7 August 2018
FAMILY COURT OF AUSTRALIA
| HERTWIG & HERTWIG | [2018] FamCA 591 |
| FAMILY LAW – PROPERTY SETTLEMENT – Application to commence property settlement proceedings out of time pursuant to s 44(3) of the Act – where the Applicant Husband has discharged the onus of establishing he would suffer hardship if leave were not granted – where affording the Applicant Husband leave to commence proceedings is the manner by which the Court can best be enabled to do justice between the parties – where the Application is granted provided that such application is filed within 28 days of the order. |
| Family Law Act 1975 (Cth) s 44(3) |
| Coombs & More (1990) FLC 92-175 Gallo v Dawson (1990) 93 ALR 479 Hall & Hall (1979) FLC 90-679 McMahon & McMahon (1976) FLC 90-038 Montano & Kinross (2014) FLC 93-623 Tamaniego & Tamaniego [2010] FamCAFC 254 Tormsen & Tormsen (1993) FLC 92-392 Van der Kreek & Van der Kreek (1978) FLC 90-421 Whitford & Whitford (1979) FLC 90-612 |
| APPLICANT: | Mr Hertwig |
| RESPONDENT: | Ms Hertwig |
| FILE NUMBER: | BRC | 2437 | of | 2016 |
| DATE DELIVERED: | 7 August 2018 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Hogan J |
| HEARING DATE: | 21 June 2018 |
REPRESENTATION
| APPLICANT: | In person |
| COUNSEL FOR THE RESPONDENT: | Mr Selfridge |
| SOLICITOR FOR THE RESPONDENT: | Berck Solicitors |
Orders
IT IS ORDERED THAT
Mr Hertwig has leave, pursuant to s 44(3) of the Family Law Act1975 (Cth) to institute property settlement proceedings pursuant to s 79 of the Act provided that such application is filed within 28 days of the date of this Order.
In the event that any party seeks an order that the other party pay his or her costs:
(a)if thought necessary by a party, that party has leave to file a further affidavit by that party containing any evidence relevant to the issue of costs and one other affidavit in support of the same, provided that such affidavits are filed within twenty-eight (28) days of the date of this order; and
(b)any such party shall file and serve any written submissions in support of such application for costs within twenty-eight (28) days of today; and
(c)the party against whom an order for costs is sought shall, within a further fourteen (14) days thereafter, file and serve any written submissions in answer to the submissions filed and served by the party seeking costs; and
(d)the party seeking an order for costs shall file and serve any brief further written submissions within seven (7) days of its service, strictly in reply to the submissions served by the party against whom an order for costs is sought,
and any such application for costs shall be considered in Chambers.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hertwig & Hertwig has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 2437 of 2016
| Mr Hertwig |
Applicant
And
| Ms Hertwig |
Respondent
REASONS FOR JUDGMENT
By Application in a Case filed 7 May 2018, the Applicant seeks an order pursuant to s 44(3) of the Family Law Act 1975 (Cth) (the Act) that he be granted leave to institute property settlement proceedings pursuant to s 79 of the Act. Leave is required because the parties’ divorce order (which was made on 13 December 2016) took effect on 14 January 2017. That is, his Application was filed some four months after the time mandated by s 44(3) of the Act for the institution of property settlement proceedings.
The Respondent opposes the grant of leave.
Applicable principles
In summary, s 44(3) of the Act provides that proceedings for property settlement shall not be instituted – except by leave of the Court or with the consent of both the parties to the marriage – after the expiration of 12 months after the date on which the divorce order took effect. Relevantly, s 44(4) of the Act provides that the Court shall not grant leave unless it is satisfied that hardship would be caused to a party to the relevant marriage (or to a child) if leave were not granted.
An application under s 44 is not intended to be a detailed hearing of the merits of the proposed claim itself, nor is it a proceeding to determine whether, and to what extent, the proposed application will ultimately be successful: rather, it is a procedure to determine whether the Applicant would suffer hardship if leave were not granted and whether, otherwise, it is appropriate to grant leave.
It has been said that the fact that an Applicant demonstrates that he or she has a reasonable claim to present to the Court is not necessarily the same thing as establishing that such person will suffer hardship if leave is not granted: although that is an important aspect of the matter and a circumstance which must be considered in the light of all of the facts in determining whether, at this particular stage, the Applicant would suffer hardship by the Application being refused.
It has also been said that the stronger an Applicant's prima facie claim, the greater the likelihood of hardship to that person if leave were refused. Thus, the Court must determine whether the Applicant for leave has a prima facie case to be heard by the Court on the merits, on the strength of the Applicant’s material.
On the material before me, I am satisfied that the Applicant has a prima facie case for property settlement proceedings.
Authority[1] also establishes that, in determining applications for leave to institute proceedings for property settlement orders, “two broad questions” arise:
a)given that the discretion to grant leave is subject to the requirement that the Applicant (who bears the onus) must satisfy the Court that “hardship” would be caused to the Applicant or a child of the marriage if leave were not granted, a failure to persuade of the existence of hardship will mean that the application for leave must be dismissed; and
b)if the Court is satisfied that hardship would be caused, it should proceed to consider whether, in all of the circumstances of the particular case, to exercise the discretion to grant the leave which is sought.
[1]Whitford & Whitford (1979) FLC 90-612 at 78,144.
Has the Applicant established “hardship”?
The following principles seem to me to apply to the determination of whether, in a particular case, an applicant has established the existence of “hardship”:[2]
a)the hardship referred to in s 44(4) is not the loss of the right to institute proceedings – it is the hardship caused to the Applicant or a child of the marriage; the section is concerned with the consequences of the loss of the right to institute proceedings; and
b)an Applicant for leave must demonstrate not merely an appreciable detriment but a “substantial detriment”; and
c)it must be made to appear to the Court that the Applicant would probably succeed if the substantive application was heard on the merits: this is because, if there is no real probability of success, the Court cannot be satisfied that hardship would be caused if leave was refused; and
d)the question is not whether an Applicant or child is suffering hardship but, rather, whether the Applicant or child would suffer hardship if leave were not granted: thus, if the probable results of a hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the Applicant or a child would suffer hardship if leave were not granted; and
e)“hardship” is not established by showing that the Applicant would be marginally better off if leave were granted; and
f)it is fundamental to the determination of whether there is hardship to consider the quality or character of the potential claim: that is, whether, on the Applicant's material, he or she has a reasonable or arguable claim to be heard by the Court;[3] further, the prospect of success need not relate to the whole of the proposed claim and it is sufficient if it relates to some part or aspect of it which, in the context of the facts of the individual case, is of significance.
[2]Whitford & Whitford (1979) FLC 90-612 at 78,144 - 78,145.
[3]Hall & Hall (1979) FLC 90-679 at 78,627-78,628.
Given that it is clear that it is only if “hardship” is established that the Court’s discretion to grant leave is enlivened,[4] I turn to consider whether, on the evidence before me, the Applicant has discharged the onus of establishing this necessary prerequisite.
[4] See Hedley & Hedley (2009) FLC 93-413 and Sharp & Sharp (2011) 50 Fam LR 567, cited in Montano & Kinross (2014) FLC 93-623 at 79,712.
Factual matrix
The Applicant was born in 1972. The Respondent was born in 1975. They commenced cohabitation on 1 August 1999 (according to the Applicant) or in October 1999 (according to the Respondent) and married in 2003. They have three children together:
a)X, born in 2006; and
b)Y, born in 2008; and
c)Z, born in 2011.
According to the Applicant, they separated in February 2015; according to the Respondent, their separation occurred in December 2014. Resolution of this dispute is unnecessary to resolve the current Application and it is sufficient in my view that I proceed on the basis that the parties’ relationship was one of about 15 years’ duration.[5]
[5] On the Applicant’s case their relationship was of a length of 15½ years whereas, on the Respondent’s case, the relationship persisted for 15 years and two months.
The Respondent commenced proceedings in which she sought only parenting orders on 18 March 2016. In his Response, filed 26 April 2016, the Applicant – who was then self-represented – sought an order in the following terms: “that the issue of the financial settlement be joined, and expedited”.[6] Subsequent formal Responses did not pursue this relief and it was only in January of this year – in fact, about two days before the expiration of 12 months after the parties’ divorce became final – that he attempted to institute property settlement proceedings.
[6] Paragraph 14 of the orders sought in the Response filed 26 April 2016.
As I made clear to the Applicant during the course of the hearing, the fact that his attempt to commence proceedings only occurred so close to the relevant date meant that he afforded himself no opportunity to correct any issues associated with this attempt within time. In this context, I do not accept the submissions by which he sought to cast responsibility for the difficulties he subsequently encountered on persons other than himself.
However, in arriving at my conclusion that the Applicant has discharged the onus of establishing that he would suffer hardship if he was not granted the leave to institute property settlement proceedings, I have taken into account the written and oral submissions made on behalf of each of the parties. Given the nature of this hearing, it is not possible to make any of the factual findings about contested matters that either party sought be made. What is possible, though, is to conclude that, included within the dispute is the accepted reality that there remains one piece of real property in respect of which both parties have an interest (by virtue of them each being a beneficiary of various discretionary trusts through which the property is owned).
Whilst Mr Selfridge for the Respondent submitted that this issue is currently the subject of discussion between the parties and the legal representatives of, I think, receivers, I consider that the consequence for the Applicant if leave is not granted is that he will be prevented from asserting any right, based on a consideration of the various contributions he made during the relatively lengthy relationship, to an interest in that property other than by way of the exercise of discretion by the trustee of the relevant trust: this, to me, is a significant consequence of the loss of the right to institute proceedings, particularly given that, on the Respondent’s case at least, this property is all that remains available to the parties: that is, it is all that now incontrovertibly constitutes the “property of the parties to the marriage or either of them”.
I should also record that the Applicant contends that, after the parental separation, the Respondent, in essence, diverted assets which previously provided the source of the funds used to support the family unit, as it was constituted before separation, to an entity under the control of her parents. He asserts – without supporting expert evidence – that the value of such assets is very significant; he also contends that the failure to obtain supporting evidence is as a result of the Respondent taking documents at or around the separation and failing to disclose them to him: a contention refuted by the Respondent, who advances that it is the Applicant who has retained possession of documents and who has refused to disclose them to her. Whilst such contentions cannot be resolved at this juncture, the fact remains that the Applicant asserts that the Respondent has taken the benefit of a significant asset which financially supported the parties and their children before separation and that, if leave to institute property settlement proceedings is not granted he will lose the opportunity to contend for orders in relation to these assets.
Should the discretion be exercised to grant leave?
Authority seems to me to establish that, in considering the exercise of the discretion to grant or refuse leave, the Court should note and take into account the following relevant matters:[7]
[7] Gallo v Dawson (1990) 93 ALR 479; Tormsen & Tormsen (1993) FLC 92-392; McMahon & McMahon (1976) FLC 90-038; Van der Kreek & Van der Kreek (1978) FLC 90-421; Coombs & More (1990) FLC 92-175.
a)that the fundamental issue in any application for extension of time is whether this will enable the Court to do justice between the parties;[8] and
b)the history of the proceedings; and
c)the conduct of the parties; and
d)the nature of the litigation; and
e)the consequences to the parties of the grant or the refusal of the extension of time: that is, consider and compare the potential for injustice to the Applicant being unable to pursue the remedy precluded by the refusal to grant leave to the prejudice to the Respondent in the granting of leave; and
f)whether the Applicant has an adequate explanation for the delay in bringing the proceedings; and
g)whether there were good or legitimate reasons for failing to do that which the Act requires or whether the reason for failing to comply with the mandated limitation period arose because of wilful blindness or recalcitrance; and
h)whether to grant leave would prejudice or impose hardship on the Respondent to the Application for leave or other persons; and
i)the desire to pursue a remedy out of time vis-à-vis the capacity for parties to proceed with their post-separation lives “free of the spectre of prospective litigation”;[9] and
j)any other relevant matters, such as whether any prior order or provision has been made.
[8] Gallo v Dawson (1990) 93 ALR 479; Tamaniego & Tamaniego [2010] FamCAFC 254.
[9] Montano & Kinross (2014) FLC 93-623 at 79,713 wherein reference was also made to Gallo v Dawson (1990) 93 ALR 479, and the statutory requirement in s 81 of the Act.
The Respondent argues, in essence, that the property of the parties, or either of them, is of a “negative value” or of such insignificant value that no substantial injustice to the Applicant could occur. It was also advanced, in conjunction with this submission, that, given this, the cost of litigating the issue is far out of proportion to the likely value of the nett property of the parties.
In refuting this argument, the Applicant contends – at least as I understand the essence of his submissions – that any reference to “the property of the parties” is in fact a reference to property the value/s of which have not been agreed or otherwise the subject of findings such that it is impossible to reach a definitive conclusion about the relationship between the value of the property of the parties and the costs associated with embarking on litigation about it.
I am not persuaded by the proportionality submission advanced by Counsel for the Respondent.
In the circumstances of this case and taking into account:
a)the incontrovertible history of the proceedings; and
b)the fact that the Applicant initially sought to enjoin the Respondent in property settlement proceedings when he responded to the relief she sought about parenting matters; and
c)that the parties are yet to resolve their parenting dispute on a final basis; and
d)that, in my view, the potential for injustice to the Applicant of being unable to pursue the remedy he advances, if leave to commence proceedings is refused, is more significant than any prejudice to the Respondent of having to engage in property settlement proceedings at the same time as the parties are engaged in finalising their ongoing parenting dispute; and
e)my assessment that the self-represented Applicant has provided an adequate explanation for the relatively minor delay in his attempts to bring the proceedings and my acceptance, on a prima facie basis, that his failure to allow sufficient time to deal with any unexpected difficulties in his attempt to commence proceedings did not arise because of wilful blindness or particular recalcitrance; and
f)that, whilst granting the Applicant leave to commence proceedings now impinges upon the parties’ capacity to proceed with their post-separation lives “free of the spectre of prospective litigation”, they remain locked in the reality of existing litigation,
I have concluded that, affording the Applicant leave to commence proceedings is the manner by which the Court can best be enabled to do justice between the parties.
For these reasons, I am persuaded to exercise the discretion to grant the Applicant leave to commence proceedings out of time, provided that he does so within a specified time. In this way, the potential that the late commencement of property settlement proceedings might impact upon the resolution of the outstanding parenting dispute may be minimised.
I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 7 August 2018.
Associate:
Date: 7 August 2018
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