Hines & Easton
[2023] FedCFamC2F 311
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Hines & Easton [2023] FedCFamC2F 311
File number(s): ADC 5343 of 2022 Judgment of: JUDGE BROWN Date of judgment: 23 March 2023 Catchwords: FAMILY LAW – PRACTICE & PROCEDURE – de facto property proceedings – application for leave to proceed out of time – relationship of 22 years – relationship produced two children – prima facie case – consideration of hardship – matters to be considered – consideration of justice and equity Legislation: Family Law Act 1975 (Cth) Pt VIIIAB, ss 4, 4AA, 39A, 44, 48, 49, 55, 90RD, 90SF, 90SM Cases cited: Batty v Batty (1986) FLC 91-703
Bevan & Bevan [2013] FamCAFC 116
Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541
Edmunds & Edmunds [2018] FamCAFC 121
Falk v Falk (1977) FLC 90-247
Gadzen & Simkin [2018] FamCAFC 218
Hall, K A and Hall, J C (1979) FLC 90-679
Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Jacenko & Jacenko (1986) FLC 91-776
Milas v GM Holden Limited [2015] FCCA 1311
Pavey v Pavey (1976) FLC 90-051
Sharp & Sharp [2011] FamCAFC 150
Slocomb & Hedgewood (2015) FLC 93-678
Stanford v Stanford (2012) 247 CLR 108
Waters & Jurek (1995) FLC 92-635
Whitford & Whitford (1979) FLC 90-612
Division: Division 2 Family Law Number of paragraphs: 116 Date of hearing: 16 March 2023 Place: Adelaide Counsel for the Applicant: Ms Dichiera Solicitor for the Applicant: Adelta Legal Respondent: Appeared in person ORDERS
ADC 5343 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR HINES
Applicant
AND: MS EASTON
Respondent
order made by:
JUDGE BROWN
DATE OF ORDER:
23 March 2023
THE COURT ORDERS THAT:
1.Pursuant to section 44(6) of the Family Law Act 1975 (Cth) the applicant is granted leave to proceed with his application for settlement of de facto property out of time and time is extended to 23 November 2022.
2.The parties attend a Conciliation Conference with a Judicial Registrar of the Federal Circuit and Family Court of Australia on 12 May 2023 at 9:00am.
3.The applicant pay the Conciliation Conference fee in accordance with the Family Law (Fees) Regulation 2012 prior to the Conciliation Conference unless otherwise exempted from payment.
4.Within 28 days the parties jointly instruct a property valuer to provide a written valuation of the property situated at B Street, Suburb C and the cost of such written valuation to be borne equally between the parties.
5.Within 28 days of the date of these Orders, each party must exchange with each other party a copy of each of the following documents (to the extent such documents have not already been provided):
(a)the documents mentioned in Rule 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
(b)statements for all bank or credit union accounts (including loan, mortgage and credit card accounts) in which the party has an interest for the period from 12 months before the date of separation to the date of these Orders;
(c)any documents which:
(i)support the information contained in the party’s Financial Statement / Financial Summary;
(ii)estimate the value of any vehicle in the party’s possession;
(iii)confirm the date of receipt and amount of any inheritance, gift, redundancy or compensation payment received by the party from the date of cohabitation to the date of these Orders;
(iv)detail the party’s acquisition or disposal of property for the period from 12 months prior to the date of separation to the date of these Orders;
(v)evidence any increase or reduction in the liabilities of the party for the period from 12 months prior to the date of separation to the date of these Orders; and
(vi)confirm the value of any superannuation fund in which the party has an interest at the date of cohabitation, the date of separation and the date of these Orders.
6.Further consideration of the matter is adjourned to 18 May 2023 at 9:30am for directions NOTING the hearing will be conducted face to face in accordance with Court protocols.
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 a pseudonym Hines & Easton has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
The parties to the proceedings are Mr Hines and Ms Easton. They have never been married. They are the parents of X born in 2000 and Y born in 2002.
There appears to be no controversy between the parties that they were in a de facto relationship, as defined by section 4AA(1) of the Family Law Act 1975 (Cth)[1], when each of their children was born and that they and their children lived in their former family home at B Street, Suburb C thereafter, as a family, at least until May of 2020.
[1] Hereinafter referred to as ‘the Act’.
The relevant provisions of the Act conferring jurisdiction on Federal Courts, such as this one, to deal with de facto relationships arising in the state of South Australia came into effect in March of 2012.
The B Street, Suburb C property was purchased in 1998. It is registered in Ms Easton’s sole name. It is subject to a mortgage, in favour of the Bank D. The mortgage is in the parties’ joint names. It is Mr Hines’ evidence that he contributed $12,000.00 towards the purchase of the B Street, Suburb C property and he moved in with Ms Easton, shortly after its purchase.
There is no dispute that Mr Hines and Ms Easton were living together in the B Street, Suburb C property up until 14 May 2020. It seems likely, at least from Ms Easton’s perspective, that this was not a happy situation and had not been a satisfactory one for many years.
On 14 May 2020, Mr Hines left the B Street, Suburb C property and moved in with his elderly mother. He has not lived in the B Street, Suburb C home in the period since, which has continued to be occupied by Ms Easton and the two children concerned.
There is a significant controversy between the parties as to the specific date, if indeed any can be attributed, as to when exactly the de facto relationship between them ended. This dispute is at the centre of the current matter, which arises in the context of an application brought by Mr Hines, on 23 November 2022, in which he seeks a settlement of de facto property issues between him and Ms Easton.
If the end of the relationship is taken to be 14 May 2020, his application is out of time, as the relevant legal provisions require such applications to be brought within a period of 2 years after the end of any de facto relationship concerned. As such, he requires the Court’s leave to proceed.
As the parties will be aware, when individuals marry, there is a clear point of demarcation as to when the relevant marriage begins, in temporal and legal terms. In this country, a marriage is marked by the issue of a formal certificate to this effect and the date on which it was solemnised.
Similarly, it is also the case that the formal and legal end of a marriage can be temporally identified, as it requires the court’s order to legally end any marriage, so far as the parties to it are concerned. This is done by the issue of a divorce order, following the application of one or both of the spouses concerned, to the court, on the basis that the marriage between the parties has broken down irretrievably and the court accepts the factual truth of such assertion.[2]
[2] See Family Law Act 1975 (Cth) at s 48(1).
The proof that a marriage has broken down irretrievably is established by the parties concerned demonstrating that they have lived separately and apart for a continuous period of 12 months prior to the application for divorce.[3] If this proof is satisfactorily provided to the court, it can make a divorce order, which takes effect at the expiration of a period of one month following its making.[4] As will be detailed in due course, there is on occasion disagreement as to what constitutes separation for the purpose of divorce.
[3] See Family Law Act 1975 (Cth) at s 48(2).
[4] See Family Law Act 1975 (Cth) at s 55.
Thereafter, the Act provides a period of one year, for either or both of the divorced spouses concerned to bring an application to the court for the settlement of matrimonial property proceedings between, without the court’s leave. This timeframe is stipulated on the divorce order, which the court issues to the parties concerned.
In contrast, there are no such clear points of demarcation, so far as either when a de facto relationship formally begins or ends. As such, in many cases, there may be a lack of clarity concerning the specific period of time, in which an application for the settlement of de facto property proceedings must be brought, given the absence of a formal mechanism to delineate the legal ending of such a relationship.
In the context of attributing a date on which the parties’ de facto relationship ended, Mr Hines has deposed as follows:
On 14 May 2020 I left our family home situated at [B Street, Suburb C] at the request of the Respondent. She told me that she needed some time apart if our relationship was going to survive. I thought I would be gone for 3 to 4 weeks. I was never under the impression that we had separated on a final basis. I tried to communicate with the Respondent, asking her when I could come home. She would always tell me that she needed more time.
The Respondent never communicated to me that our relationship was officially over. I was left to read between the lines when the Respondent refused to return my calls or speak about our relationship. I made offers to try to reconcile with the Respondent. I proposed that we start to date again and take things slowly. She did not agree.
It was not until this year in about June 2022 that I accepted that the Respondent and I were not going to reconcile. I was holding onto hope that we would be able to make it work. I have been attempting to resolve our outstanding property settlement matters since this time.
I obtained legal advice from the Legal Services Commission in or about June/ July 2022. I was advised that I was out of time to apply for a property settlement.[5]
[5] See affidavit of Mr Hines filed 23 November 2022 at [7]-[10].
In these circumstances, it is the effect of Mr Hines’ evidence, that he believed the de facto relationship between him and Ms Easton had come to an end in mid-2022 and prior to this date he hoped to reconcile the relationship.
Accordingly, it was only in late-September of 2022 that he engaged his current solicitors, when he had come to accept that the de facto relationship between him and Ms Easton could not be reconciled. The solicitors concerned attempted to negotiate an appropriate settlement of matters, with Ms Easton, to end the financial relationship, between the parties, but to no avail.
In these circumstances Mr Hines was compelled to commence these proceedings, which seeks an order pursuant to section 44(6) of the Act that he be granted leave to proceed out of time. Necessarily, his application is posited on the not unreasonable assumption that the nature of the relationship between the parties fundamentally altered on 14 May 2020 and on this basis he seeks to the court’s leave to proceed.
Ms Easton’s perspective, regarding the date of final separation, is that the date concerned can only be 14 May 2020, from which date she and Mr Hines began to live separately and apart. She deposes that, on this date, she told Mr Hines in unequivocal terms, to get out of her life, following a heated discussion between the two of them.
She concedes that Mr Hines might have wished to reconcile the parties’ relationship, but in her words, the manner in which he did so was hardly admirable and was neither reciprocated nor encouraged by her. Accordingly, it is her position that there can be no doubt that the end of the parties’ de facto relationship occurred on 14 May 2020.
It is her position that, in the period approaching 3 years since Mr Hines left the B Street, Suburb C property, he has behaved in a reprehensible manner towards her, which is demonstrated by the fact that he left her with the sole financial responsibility of maintaining the property and did so only as a means to compel her to return to the relationship against her will. She contends that such a course of conduct is not congruent with any proper desire to reconcile and it is evident that she obviously rejected it.
In these circumstances, she has deposed as follows:
[Mr Hines] deliberately contributor nothing to the mortgage repayments, loan repayments for the solar system, council rates, house insurance premiums and costs for the maintenance of the house, as a means to exert financial hardship on me. This was done in order to achieve his goal of forcing me back into a relationship through his financial pressure.
These are the types of liabilities that a potential interested party should have been contributing to, in order to protect that interest after the breakdown of a relationship, especially if that party wished to re-establish that relationship, not through coercion, but through compassion and empathy.[6]
[6] See affidavit of Ms Easton filed 21 December 2022 at [17]-[18].
Ms Easton has acted on her own behalf in the proceedings to date. She vehemently opposes Mr Hines’ application and has argued that it would be grossly unfair to her, if Mr Hines’ application to proceed is granted. It is her position that the parties’ property should lie where it falls as at 14 May 2020. Necessarily, given that the B Street, Suburb C property is registered in her sole name, this would mean that she would retain this property.
As these brief introductory comments indicate, this is a case which is replete with emotion. Ms Easton has provided a medical report, from her treating general medical practitioner, indicating that she has suffered from major depression since 2004. For self-apparent reasons, she is greatly concerned at any suggestion that the B Street, Suburb C property should be sold to release its capital value, given that it has been her home for well over 20 years.
From Mr Hines’ position, it would represent a grave injustice to him, if he was not able to pursue an application for de facto property settlement, in the circumstances as he has delineated them, given the obvious length of the relationship between the parties and the fact that, on his case, he made many varied contributions, including financial ones, to the greater good of the family, during the period he and Ms Easton were living together in the B Street, Suburb C property.
BACKGROUND
Mr Hines was born in 1958. Currently, he is employed as a Manager, by the Employer F. He earns a weekly wage of $1,340.00 prior to tax. He pays his mother board of $150.00 per week and has other modest outgoings, including insurance and health cover.
Mr Hines deposes that he has savings of approximately $44,000.00 and owns a motor vehicle, which he values at $20,000.00. He has no significant debts. He also has a significant financial resource in the form of superannuation.
Documents produced by Mr Hines indicate that his eligible service date, so far as Super Fund G is concerned, is 1985. As at 30 June 2022, his superannuation balance is indicated as being $176,982.92.[7]
[7] See Annexure -4 to affidavit of Mr Hines filed 23 November 2022.
It appears to be the case that Mr Hines is accessing a pre-retirement allocated pension and will be eligible for a fixed income stream pension, upon his retirement, which he hopes will be later this current year. This income stream has not as yet been formally valued and it is uncertain to me whether it constitutes some form of defined benefit superannuation.
Ms Easton was born in 1966. She is employed currently as a health care worker by the Employer H. She earns a weekly wage before tax of around $1,250.00. X and Y live with her but are not completely financially independent. She estimates that she pays approximately $150.00 per week towards their upkeep. In these circumstances, Ms Easton has deposed that her weekly income is totally consumed by her weekly recurrent expenditure.
Ms Easton has estimated the value of the B Street, Suburb C property, which as previously indicated is registered in her sole name, as being approximately $415,000.00. The mortgage secured against the property currently stands in the modest amount of $918.00. In formal terms, Ms Easton borrowed a sum of money to install solar panels on the property, which she is currently paying off at the rate of $113.00 per week.
Ms Easton owns a motor vehicle, which she estimates is worth $2,600.00 and the contents of her home, which she values at $10,000.00. She has savings of a little over $2,000.00. Ms Easton also has some superannuation held with an industry fund and Super Fund G. She estimates the value of her superannuation to be a little over $92,000.00.
There is no dispute that Ms Easton was a stay at home parent, from the time when X was born until 2009, when she re-joined the workforce after training to become a health care worker between 2007 and 2009.
As this brief summary indicates, this is not a case in which the parties concerned have been able to accrue large amounts of wealth over the course of their relationship, which must be regarded as being one of significant length, being well over twenty years in duration. As such, the court has designated the case as one involving a small property pool.
At the time of filing, the relevant rules required the parties to complete a pro forma document headed Financial Questionnaire. In this document each was able to delineate the nature of their various contributions made during the course of their relationship.
In his questionnaire, Mr Hines had described himself as the primary income earner for our family whilst the children were young. He further indicated that he had maintained the home during the relationship and assisted with the care of X and Y although he conceded that Ms Easton had been their primary carer.
For her part, Ms Easton indicated that she had been employed between 1998 and 2000 and again between 2009 and the present. She further indicated that she had raised our children from 2000 and had been involved in domestic duties. She also pointed to an inheritance of $40,000.00 which she contributed to joint purposes.
Each party indicated some level of diffidence about their respective levels of financial security. Mr Hines pointing to his age and imminent retirement and Ms Easton to her compromised health and her on-going responsibility to assist the children, who continued to live with her. She considered that she might have to cease work in the next two to three years due to her medical conditions.
It is Mr Hines’ position that the parties’ assets should be divided equally and an equalisation occur in respect of their superannuation. Necessarily this would involve Ms Easton acquiring his interest in the B Street, Suburb C home or the property being sold to release its capital value.
On the other hand, Ms Easton wishes to retain the B Street, Suburb C home; her superannuation; and all the property currently in her possession. It is her position that Mr Hines is currently in a far more advantageous position than she is given his comparatively modest level of recurrent expenditure and apparently secure accommodation with his mother.
As previously indicated, she views any suggestion that the B Street, Suburb C home should be sold with trepidation. In addition, she refutes any suggestion that Mr Hines is under any impediment, in comparison to her, in respect of the issue of retirement.
Counsel for Mr Hines, Ms Dichiera has calculated that the outcome proposed by Ms Easton would result in her receiving 87% of the non-superannuation assets, which given the length of the relationship and the extent of her client’s contributions would be manifestly unfair to him.
APPLICABLE LEGAL PROVISIONS
Pursuant to section 39A of the Act, this court has jurisdiction conferred upon it in respect of what are termed de facto financial causes. This expression is defined by section 4, to include proceedings in respect of the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them.
Part VIIIAB of the Act deals with financial matters relating to de facto relationships. In particular, pursuant to section 90RD, the court has authority to make a declaration about the existence of a de facto relationship, including when that relationship ended and pursuant to section 90SM, the authority to alter the proprietary interests of the parties to a de facto relationship, after the breakdown of that relationship.
However, time limits are imposed in respect of such applications. Pursuant to section 44(5) subject to subsection (6), a party to a de facto relationship may apply for an order under section 90SM only if:
…the application is made within the period (the standard application period) of…2 years after the end of the de facto relationship.
However, pursuant to section 44(6):
(6)The court may grant the party leave to apply after the end of the standard application period if the court is satisfied that:
(a)hardship would be caused to the party or a child if leave were not granted; or
(b)in the case of an application for an order for the maintenance of the party—the party’s circumstances were, at the end of the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.
The definition of de facto relationship is defined in section 4AA(1) of the Act as follows:
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c)having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Section 4AA(2) is prefaced by the heading Working out if persons have a relationship as a couple. Thereafter the following circumstances are delineated, which may denote the existence of such a relationship. The list provided is not exhaustive and the factors in it are not specifically noted to be directive. They are as follows:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
Section 4AA(3) & (4) provide, in effect, that no particular finding is to be regarded as necessary or definitive before the court finds that a de facto relationship exists in the specific case with which it is concerned. Rather the court may have regard to the matters and attach weight to those matters as it considers appropriate to do so.
As such, the list of matters contained in section 4AA(2) is not to be regarded as some sort of checklist. Rather it is a guide. The court is required to apply individualised justice to the idiosyncratic circumstances of each particular case coming before.
Given the uncontroverted facts in this case, namely the fact that the parties lived together, for a number of years, at the B Street, Suburb C property and it was not only their home but the home of their two children, who were born during the period the parties occupied this property, there is no dispute that the parties were in a de facto relationship, for the purposes of the applicable legislation from late 1998 until mid-2020, which encompassed the period after Part VIIIAB of the Act came into effect.
In terms of the issue of whether Mr Hines should be granted an extension of time in which to bring his application for settlement of de facto property, it is necessary to outline briefly the legal processes which the court is required to engage. This is necessary in order to enable the court to determine whether Mr Hines has suffered any hardship as envisaged by section 44(6)(a).
Pursuant to section 90SM(1) the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a de facto relationship in relevant property.
The expression property is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning …property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.
Pursuant to section 90SM(3) the court is actively prevented from making an order altering proprietorial interests, unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitive words “must not” in the relevant section.
Section 90SM(4) provides the mechanics of how a court is to make an order altering de facto property interests. It provides seven matters [in paragraphs (a) – (g)] to be considered, as relevant.
Paragraphs (a); (b); and (c) categorise contributions made by de facto partners, which are relevant. Paragraph (d) directs the court to take into account the effect of any order upon the earning capacity of either party to the de facto relationship concerned.
Paragraph (e) directs the court to consider a list of matters contained in section 90SF(3), which are germane to maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs.
Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until recently, the position in respect of the process to be applied to the resolution of both de facto and matrimonial property cases was said to be well-settled, as it required the application of a preferred approach. This approach entailed a four step process, described by the Full Court as follows:
·identification and valuation of the property of the parties;
·identification and evaluation of contributions to the property (including property no longer owned by the parties) – the contribution phase – section 90SM(4) (a) to (c) or section 79(4) (a) to (c);
·identification and assessment of the various matters in section 90SM(4) (d) to (g) or 79(4)(d) to (g) including to the extent they are relevant, the matters in either section 90SF(3) or 75(2), as applicable – the prospective needs phase; and
·considerations of justice and equity.[8]
[8] See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60].
Contributions arising pursuant to section 90SM(4)(a)(b) & (c) (the so-called second step) can be broadly categorised under two headings. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the de facto relationship to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent.[9]
[9] See Family Law Act (Cth) s 90SM(4)(c).
Section 90SM(4)(e) mandates the court to have reference to the matters listed in section 90SF(3)(e) of the Family Law Act 1975. In the main the factors there listed deal with each of the parties’ prospective needs (the so-called third step).
Pursuant to section 90SF(3)(r), the court is entitled to take into account any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account. A number of Full Court authorities have utilised this provision to ensure that proper regard is had to a variety of considerations in order to ensure a just and equitable outcome in property proceedings.
The overriding requirement of section 90SM is that considerations of justice and equity should inform the process envisaged therein. The exercise I must undertake is not a process of social engineering[10] or of equalisation of assets or financial resources.
[10] See Waters & Jurek (1995) FLC 92-635.
Considerations of this type inform the so-called fourth step, as well as providing the determination as to how the court should approach issues such as notional property. The court must make the orders it considers just and equitable.
This application arises at an early stage of proceedings. So far as the first step is concerned, there has been no valuation obtained of the value of the B Street, Suburb C property. In addition, it may be the case that if Mr Hines’ superannuation is held in a defined benefit fund, its value may be different to that which has currently been provided.
I appreciate Ms Easton is not legally qualified. However, it does not appear to be her position that Mr Hines has made no contributions of the kind which are capable of recognition under the second step. However, it would seem to be her case that her contributions are generally superior to those of Mr Hines.
A greater degree of controversy arises in respect of the parties’ respective assessments of their individual prospective needs. Ms Easton asserts that the factors delineated in section 90SF(3) favour her. However, the greatest degree of controversy concerns whether it would be just and equitable to make any order altering proprietorial interests in the B Street, Suburb C property given the circumstances of the case.
Axiomatically Ms Easton asserts that it would not be fair to her to make any such order. In this context, I am aware of the principles outlined by the High Court in the case of Stanford in which the following was said:
The expression ‘just and equitable’ is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.[11]
[11] Stanford v Stanford (2012) 247 CLR 108, 120 [36] (French CJ, Hayne, Kiefel and Bell JJ).
Accordingly, considerations of what is just and equitable flavour all applications pertaining to property settlement. What is fair is impossible to define with certitude and must depend on the prevailing circumstances. Essentially, as I understand her case, Ms Easton submits that it would not be fair to her if Mr Hines is able to proceed, particularly since the outcome of such an application is likely to have major economic ramifications for her personally.
ISSUES RELATING TO TIME LIMITS
Prior to the court considering these matters definitively, it is necessary to determine whether it should give leave to Mr Hines to proceed with his application, given the time limit provided by section 44(5), in the circumstances of the current matter, which has seen the parties living distinct lives since May of 2020.
If their relationship is taken to have ended on this date, it is clear that the standard application period of two years began to run from 14 May 2020. In this context, it is Mr Hines’ contention that there was no clear consensus between him and Ms Easton that their de facto relationship had ended. It is also clear that both a marriage and a de facto relationship can continue to subsist although the parties to such relationships are not living together due to matters of personal choice or outside agency.
There is a significant amount of jurisprudence in respect of what are the considerations applicable for the court to determine when a marital relationship has come to an end in the context of section 48 & 49 of the Act and the period of separation required to authorise an application for divorce. It is clear that a marriage can be brought to the end by the actions of one spouse. It is a more nuanced issue as to whether such an intention needs to be conveyed to the other spouse concerned.[12]
[12] See Falk v Falk (1977) FLC 90-247 at 76,333.
Ordinarily separation, in the context of a marriage, and by extension in respect of when a de facto relationship comes to end, is an issue must be determined by reference to all relevant circumstances, but chiefly depends on the absence or otherwise of consortium vitae, which in broad terms is an expression which sums up the elements which exist in a marriage or marriage-type relationship.
In Pavey v Pavey[13] the Full Court said as follows:
Marriage involves many elements, some or all of which may be present in a particular marriage – elements such as dwelling under the same roof, sexual intercourse, mutual society and protection, recognition of the existence of the marriage by both spouses in public and private relationships and the nurture and support of the children of the marriage.
When it is asserted that a separation has taken place it may be necessary to examine and contrast the state of the marital relationship before and after the alleged separation. Whether there has been a separation will be a question of fact to be determined in each case.
[13] Pavey v Pavey (1976) FLC 90-051.
In Batty v Batty[14] Wilczek J provided a comprehensive list of the various elements that comprised a consortium vitae. These are:
[14] Batty v Batty (1986) FLC 91-703 at 75,087.
·sexual intercourse;
·dwelling under the same roof;
·giving society and protection to each other;
·economical or fiscal unity or cooperation;
·public recognition of each other as spouses;
·private acceptance of each other as spouses;
·communication between the parties sharing any separation;
·the nurture and support of the children of the marriage; and
·the extent of what marital services are still rendered by the parties to each other.
In the current matter, given these various considerations, on the basis of the evidence available to me, it seems incontestable that the de facto relationship, between Mr Hines and Ms Easton, came to an end on 14 May 2020. From this date, it is clear that there was no longer any public recognition that they were de facto spouses and they had ceased to commune together and share the elements of a common life. As such, I am satisfied that Mr Hines needs the court’s imprimatur to proceed with his application for de facto property settlement, the standard application period of two years, provided by section 44(5), began to run from 14 May 2020. Accordingly, Mr Hines is a little over six months out of time.
The authorities are clear that limitation periods, imposed by the legislature, are not empty shibboleths. Their rationale is that it is in the interests of society, as a whole, that litigation between individuals be commenced within fixed and well understood temporal parameters so that once those parameters have been reached, all concerned can carry on with their lives in the certitude that they will not be subject to litigation in respect of events which occurred in their past.
In Brisbane South Regional Health Authority v Taylor[15] McHugh J (with whom Dawson J agreed) pointed out that
The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that ‘[w]here there is delay the whole quality of justice deteriorates’.[16]
[15] Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541 at 551.
[16] Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541 at 553.
Later in the case, his Honour said as follows:
A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. ... A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case.[17]
[17] Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541 at 547.
In the same case, Toohey and Gummow JJ said as follows:
The discretion ... is to order an extension of the limitation period. It is a discretion to grant, not a discretion to refuse, and on well established principles an applicant must satisfy the court that grounds exist for exercising the discretion in his or her favour. There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the court that time should be extended remains on the applicant.
The Family Court has enumerated the individual considerations which inform the discretion to ameliorate the limitation period, in appropriate circumstances, where the interests of justice require that it be extended. Essentially, it is a discretion to be exercised judicially by identifying matters relevant to the discretion, in the particular case and weighing those matters against one another.[18] The discretion is to be exercised primarily within considerations of the hardship which would be occasioned to the relevant applicant.
[18] See Milas v GM Holden Limited [2015] FCCA 1311 per Judge O’Sullivan.
In Whitford & Whitford the Full Court of the Family Court, in a case concerned with the twelve month limitation period arising as a consequence of section 44(3) and the granting of a divorce order, stipulated that this power should be exercised liberally in order to avoid hardship, but nevertheless in a manner which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.[19]
[19] See Whitford & Whitford (1979) FLC 90-612 at 78,146.
Accordingly, this court is not in a position to overlook the legislature’s intention that, ordinarily, property proceedings arising in respect of a de facto relationship should be commenced within two years of the breakdown of the de facto relationship in question.
The chief rationale informing this intention being that former parties to a de facto relationship are entitled to a sense of finality in respect of issues arising from their previous relationships and that delay, of itself, has the potential to lead to injustice.
However, in order to temper any potential hardship, the legislature has also provided a discretion to the court to extend time. This discretion must be exercised judiciously and advisedly. In Whitford the Full Court determined that the manner in which this discretion is to be exercised must depend on the facts of the particular case. It is an idiosyncratic decision.
Relevant matters for consideration include the length of the delay; the reasons for the delay; any prejudice occasioned to the respondent by reason of the delay; the strengths, on the merits, of the applicant’s case; and the degree of the hardship, which would be suffered unless leave was granted. These are all matters relevant to the exercise of the discretion, but not necessarily the only ones.[20]
[20] Whitford & Whitford (1979) FLC 90-612 at 78,146.
In Jacenko & Jacenko [21] Nygh J referred to the relevant principles applicable to an application pursuant to section 44(3) [the equivalent of section 44(6) applicable to divorce orders] and said as follows:
The applicant must establish three principal matters: first, a reasonable prima facie case for relief, had she instituted proceedings in time; secondly, that denial of the wife’s claim would cause her hardship; and thirdly, an adequate explanation as to her delay.
…
If those three elements are satisfied, the Court should further, in determining whether to exercise its discretion to grant relief, consider the question of prejudice which the respondent would suffer by reason of the delay in bringing the application.
[21] See Jacenko & Jacenko (1986) FLC 91-776 at page 75,644.
Nygh J also considered that relevant binding authority also provided that, in appropriate cases the degree of hardship to be suffered by the applicant may well outweigh an inadequate explanation of delay. Accordingly, it seems apparent that one of these factors is not to be regarded as preeminent over the other nor must all be satisfied. Rather it is a question of them each being weighed and considered so that the interests of justice are served in the individual case concerned.
In Jacenko the court considered the matters in determining whether an applicant for leave to proceed out of time had or had not established a prima facie case for relief in respect of matrimonial property settlement orders.
These considerations are relevant given the leave issue must most usually be determined as a preliminary matter, as in the current case, at an interlocutory stage, prior to a more detailed examination of all relevant evidence by the court. The court held as follows:
… the general principle is that on the issue of the establishment of a prima facie case the Court proceeds on the basis that the evidence of the applicant, unless it is inherently unbelievable or contradictory, should be accepted, and the Court should therefore decide whether or not on that basis a prima facie case has been made out. If leave is granted, then it is for the Court conducting the ultimate hearing to determine whether the prima facie case can be established.
In Hall and Hall[22] the Full Court of the Family Court reviewed a number of earlier cases which had addressed the issue of the required strength of the prima facie case in section 44(3) applications. The Full Court said:
These varying phrases may tend to suggest different shades of meaning whereas in reality they are directed to the same fundamental enquiry which basically is in the context whether on the applicant’s material he or she has a reasonable claim to be heard by the Court.
[22] See Hall, K A and Hall, J C (1979) FLC 90-679.
In Sharp & Sharp [23] the Full Court considered that, in the context of section 44(4), hardship involved more than the loss of a right to commence proceedings. It was what followed from the loss of that right, which was central. This was the basis of the test that an applicant must have a prima facie claim worth pursuing or a real probability of success.
[23] See Sharp & Sharp [2011] FamCAFC 150.
In Sharp the Full Court summarised the relevant test in the following terms:
[T]he well-established test is that the applicant must have a prima facie claim worth pursuing or a ‘real’ probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship.[24]
[24] Sharp & Sharp [2011] FamCAFC 150 at [18].
In Edmunds & Edmunds[25] the Full Court indicated that the assessment of such a prima facie case involved:
… a consideration, but not a final determination, of the nature of the applicant’s claim. In doing so, the Court must weigh the applicant’s case against that of the respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.
[25] Edmunds & Edmunds [2018] FamCAFC 121 at [48].
A further gloss was placed more recently, on this statement of principle, by the Full Court in Gadzen & Simkin[26] which indicated that the assessment of prospective costs was a part of the exercise of assessing a prima facie case. The Full Court said as follows:
…the starting point in determining an application for leave is to consider the question of hardship which requires for its existence a conclusion that an applicant has a prima facie or arguable case of substance having regard to all of the circumstances of the case. That must take into account the costs or likely costs to be incurred in pursuing the claim.
…
An analysis of the potential claim of the de facto wife was necessary to determine whether or not hardship would be occasioned to the de facto wife if she were not granted leave to pursue that claim. Further, as the authorities to which reference has been made demonstrate, an essential element is to consider the prospective legal costs of pursuing the identified or identifiable claim. Obviously, the prospective costs may render the conclusion that no hardship would be occasioned to an applicant to pursue an uncommercial claim.
[26] Gadzen & Simkin [2018] FamCAFC 218 at [37] – [42].
For obvious reasons, the conduct of the parties in a section 44(6) application is relevant to the exercise of the discretion to extend time. The normal rule is that de facto property proceedings be brought within two years. An extension of time is exceptional. It is essentially an equitable decision.
Also highly relevant is any prejudice, which may be caused to the respondent to such an application, if leave is granted. This in turn is very often related to the length of the delay in question. All these various factors must be balanced against one another to achieve a proper outcome.
In this context, consideration must be given as to the reasons why there has been a delay in the institution of proceedings. In Slocomb & Hedgewood[27] the Full Court was dealing with an application for leave to proceed which was eighteen years out of time.
[27] Slocomb & Hedgewood (2015) FLC 93-678.
Slocomb involved a married couple, who had been divorced in 1995. At first instance, the trial judge refused leave to proceed and noted that attention was drawn to the applicable time limits in the Decree Nisi document which was forwarded to each party following divorce.
In the current case, as noted above, in my view, it should be noted that in distinction to the parties to a marriage, the parties in a de facto relationship are not always provided with clear points of demarcation as to when their relationship begins and ends as a matter of legal technicality.
In the case, the Full Court approved the passage of Nygh J from Jacenko to which I have already referred above and said as follows:
In appropriate cases the interests of justice might overcome long delay and on occasions an inadequate explanation for the delay, which is only one factor to be considered in determining an application for leave pursuant to s 44(3) of the Act.[28]
[28] Slocomb & Hedgewood (2015) FLC 93-678 at 80,548 [43].
From these various authorities, in my view, the following principles may be distilled in respect of the exercise of the discretion to extend time:
·limitation periods are significant as they are created by the legislature to safeguard legitimate public interests. As such, they should not be arbitrarily over-ruled;
·however, the discretion to extend time is to be liberally exercised in order to avoid hardship;
·hardship is more than the loss of an entitlement to bring proceedings. Rather the court must look at what are the consequences, for the applicant concerned, of not being able to institute proceedings;
·the applicant must establish a reasonable prima facie case for the relief sought, if the proceedings had been brought in time. What this means is whether, on the material available, the applicant has a reasonable claim;
·this process of assessment must involve the likely strengths and merits of the claim sought to be advanced, including prospective costs;
·there must be a real possibility of success. Hardship will not arise if leave is not granted to pursue a claim which is assessed as being uncommercial;
·in assessing what is a reasonable prima facie case, the court should accept the evidence of the applicant concerned, at its highest, unless it is patently absurd or contradictory;
·the applicant must establish that he or she would suffer hardship if an extension is not granted;
·the discretion to extend time must be exercised judicially;
·as such, a reasonable explanation for the delay must be provided;
·also relevant, in this context, are the following:
·the length of the delay;
·the prejudice to the respondent if leave is granted;
·any other relevant consideration;
·However, an explanation for delay is but one factor amongst several and the overall interests of justice may overcome what is to be regarded as an inadequate explanation.
DISCUSSION
Ms Easton has approached the case on the basis that the time limit imposed by the legislature is a significant matter and as such she vehemently opposes any extension being granted to Mr Hines. However, in my view, it is more significant that the major asset of the relationship is the B Street, Suburb C property and it is registered in her name alone and is, to all intents and purposes, unencumbered.
In these circumstances, she has an obvious tactical motivation for wanting Mr Hines’ claim to be dismissed, which centres on her perception that it would be unfair to her for the claim to proceed. Essentially, she points to the prejudice which will be accorded to her if the claim goes ahead.
In my view, such prejudice is but one element of the court’s deliberations. In addition, the concept of prejudice is different in nature to that of hardship. The delay in the application being brought will not present Ms Easton being in a position to oppose Mr Hines’ application on the basis that the effluxion of time has led to the disappearance of some essential aspect of the evidence.
In my view, given the comparatively modest extent of the delay, when the length of the relationship in question is considered, it is hard to see that Ms Easton will face any great prejudice in opposing Mr Hines’s claim. There have been no significant changes in the composition of the relevant asset pool.
The same stark difficulties occasioned by the case – the small extent of the asset pool and the invidious consequences relating to the potential realisation of the former family home – would and will remain applicable, whether the case had been commenced on 13 May 2022 as opposed to 23 November 2022.
Rather, Ms Easton approaches the case on the basis of the hardship which the ultimate outcome of the case may impose upon her. However, in my view, this is not a relevant consideration. I must consider the hardship to be occasion to Mr Hines of not being permitted to proceed with his application rather than the hardship to be occasioned to Ms Easton if Mr Hines obtains his due legal entitlements arising from the financial aspects of the de facto relationship between the parties.
In my view, Mr Hines has provided an explanation for the delay in bringing the application. As indicated above, I regard the delay as having no great moment given the length of the relationship between the parties. Perhaps Mr Hines was naïve to consider that there was a prospect of reconciliation. However, I am not in a position to reject his belief that he should hold off on bringing an application for property settlement until all avenues for reconciliation had been exhausted with Ms Easton.
Given the length of the de facto relationship and the fact that it appears incontrovertible that Mr Hines made many significant and diverse contributions in respect of the acquisition of assets during it, both in financial and non-financial terms, it is my view that he has established that he has a reasonable prima facie case for a settlement of de facto property, including receiving some portion of the capital represented in the former family home, which he occupied for over twenty years.
I am well aware that, if the parties are each legally represented, given the extent of the relevant asset pool, there is a grave risk that the parties’ current worth will be significantly eroded by legal fees. In addition, I do not discount the possibility that the court may ultimately consider that it is not just and equitable to require the sale of the property concerned as Ms Easton currently argues.
However, notwithstanding these considerations, in my view, on the basis of the material currently available to the court, there is a real possibility that Mr Hines will obtain some form of property settlement in excess of the property currently standing in his possession and the financial resources represented by his superannuation.
If Mr Hines’ claim is dismissed, it will mean that Ms Easton will retain the entirety of the parties’ most significant non-superannuation asset in dollar terms – the B Street, Suburb C property. This would be after a relationship in excess of twenty years, during which he made direct financial contributions towards the mortgage secured against the property. In my view, such an outcome would constitute a severe hardship to Mr Hines.
For all these reasons, I have reached the conclusion that the application for an extension of time should be granted. I will extend the time to make an application for settlement of de facto property to 23 November 2022 the date on which Mr Hines filed his application.
The next procedural step in the matter is that the matter be referred to a Conciliation Conference with a Judicial Registrar of the court. In this context, I will make the necessary procedural orders relating to disclosure and the valuation of property, particularly the B Street, Suburb C home and Mr Hines’ superannuation. It is likely to be central that the issue of whether this superannuation is represented by a defined benefit or an accumulation one be resolved expeditiously.
For all these reasons the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 23 March 2023
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