Jie & Ting
[2024] FedCFamC2F 311
•14 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Jie & Ting [2024] FedCFamC2F 311
File number: MLC 14478 of 2022 Judgment of: JUDGE RILEY Date of judgment: 14 March 2024 Catchwords: FAMILY LAW – application under s.44(6) of the Family Law Act 1975 to bring a de facto property proceeding out of time – applicant being held in remand – hardship – exercise of discretion. Legislation: Criminal Code Act 1995 (Cth), ss 11.5(1), 307.1(1), 474.22A
Family Law Act 1975, ss.44(6), 90SM
Cases cited: Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; (1996) 186 CLR 541; (1996) 139 ALR 1; (1996) 70 ALJR 866; [1996] 15 Leg Rep 2; (1996) Aust Torts Reports 81-402; [1996] HCA 25
Hall & Hall (1979) 5 Fam LR 411; (1979) FLC 90-679
Hardwick & Hardwick (No 2) [2022] FedCFamC1A 216
Jacenko & Jacenko (1986) 11 Fam LR 341; (1986) FLC 91-776
Whitford & Whitford (1979) 35 FLR 445; (1979) 4 Fam LR 754; (1979) FLC 90-612; (1979) 24 ALR 424
Number of paragraphs: 63 Date of last submission/s: 16 February 2024 Dates of hearing: 15 & 16 February 2024 Place: Melbourne Counsel for the Applicant: John Goussis Solicitor for the Applicant: Fumens Lawyers Counsel for the Respondent: Janine Wald Solicitor for the Respondent: United Associates Barristers & Solicitors ORDERS
MLC 14478 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR JIE
Applicant
AND: MS TING
Respondent
ORDER MADE BY:
JUDGE RILEY
DATE OF ORDER:
14 MARCH 2024
THE COURT ORDERS THAT:
1.Paragraph 19 of the affidavit sworn by Mr B on 25 May 2023 be struck out.
2.Pursuant to s.44(6) of the Family Law Act 1975, leave be granted for the applicant to proceed with his application for property orders filed on 20 December 2022.
THE COURT ORDERS UNTIL FURTHER ORDER THAT:
3.The net proceeds of the sale of C Street, Suburb D, be kept in an interest earning controlled monies account by the respondent’s solicitors.
THE COURT FURTHER ORDERS THAT:
4.The matter be adjourned for directions before a Judicial Registrar on a date to be advised.
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 has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE RILEY:
INTRODUCTION
This is an application under s.44(6) of the Family Law Act 1975 (“the Act”) for an extension of time to apply for a de facto property settlement. The applicant is the husband and the respondent is the wife.
BACKGROUND
The husband is 32 years old and the wife is 31 years old. They commenced a de facto relationship in 2014 and separated under one roof in March 2020. The separation under one roof continued until the husband was taken into custody in 2022.
The parties have one child, X, who is nine years old.
The wife is an Australian citizen. The husband is not an Australian citizen and does not now have a visa enabling him to remain legally in Australia.
The husband is currently held in prison. He has been indicted on multiple charges.
The first set of offences carries a maximum penalty of imprisonment for life.
The second set of charges each carry a maximum penalty of 15 years imprisonment.
The husband said during the hearing in this court that he intends to plead not guilty to the charges and that he is due to stand trial on the charges beginning in early 2024.
The court asked the husband during the hearing in this court whether he wanted an adjournment of the present matter to enable the criminal proceedings against him to be finalised. Obviously, if the husband is in prison for the next twenty years, it could have an impact on his future needs, which are a relevant consideration in the extension of time application. However, the husband, with the benefit of legal advice, said that he did not want an adjournment.
Since the husband was taken into custody in 2022, X has lived solely with the wife.
MATERIAL RELIED UPON
At the hearing before this court, the husband relied upon:
(a)his amended initiating application filed on 29 May 2023;
(b)the affidavit sworn by his father, Mr B, on 25 May 2023;
(c)the husband’s affidavit affirmed on 27 May 2023;
(d)his financial statement sworn or affirmed on 27 May 2023; and
(e)his case outline filed on 13 February 2024.
The wife relied on:
(a)her amended response filed on 6 June 2023; and
(b)her written submissions filed on 15 February 2024.
The wife did not rely on any affidavit evidence of her own, as she accepted that the appropriate course in an extension of time application is to take the applicant’s affidavit evidence at its highest, “unless it is inherently unbelievable or contradictory”: Jacenko & Jacenko [1986] FamCA 25; (1986) FLC 91-776 at paragraph 14. For the same reason, there was no cross‑examination of the husband or his father.
EXTENSION OF TIME PROVISIONS
Section 44 of the Act relevantly provides that:
…
(5)Subject to subsection (6), a party to a de facto relationship may apply for an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, only if:
(a)the application is made within the period (the standard application period) of:
(i) 2 years after the end of the de facto relationship; or
…
(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
…
The parties agreed that they had been in a de facto relationship, that it ended in March 2020 and that the husband did not initiate proceedings under s.90SM of the Act until 20 December 2022. Consequently, the proceedings were about nine months out of time.
THE TWO STEP PROCESS
In Whitford & Whitford (1979) 35 FLR 445; (1979) 4 Fam LR 754; (1979) FLC 90-612, (1979) 24 ALR 424, the Full Court of the Family Court said at page 452 of (1979) 35 FLR 445 that:
… on an application for leave under s 44(3), two broad questions may arise for determination. The first of these is whether the court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted. If the court is not so satisfied, that is the end of the matter. If the court is so satisfied, the second question arises. That is whether in the exercise of its discretion the court should grant or refuse leave to institute proceedings.
In other words, there are two steps in considering an application for an extension of time:
(a)firstly, would hardship be caused to the applicant or a child of the relationship if leave were not granted?
(b)secondly, if so, should the court then exercise its discretion to grant leave for the property application to be heard out of time?
THE TEST OF HARDSHIP
To establish hardship, an applicant does not need to prove that he or she would be in necessitous circumstances if leave were not granted. In Whitford, the Full Court said at page 453 of (1979) 35 FLR 445:
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 Whitford, it was also explained that hardship in the present context is not merely the loss of the right to bring proceedings. At page 454 of (1979) 35 FLR 445 the court said:
The loss of the right to institute proceedings is not the hardship, to which the sub-section refers. It is with the consequences of the loss of that right, with which the sub-section is concerned.
In Hardwick & Hardwick (No 2) [2022] FedCFamC1A 216, McClelland DCJ and Strum J, with whom Riethmuller J agreed, addressed the meaning of hardship as follows:
25.In Whitford & Whitford [1979] FamCA 3; (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. ...
26.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.
In Whitford at page 454 of (1979) 35 FLR 445 it was also noted that:
… where the costs which the applicant will have to bear himself or herself are about as much or more than what the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted…
Also in Whitford, the court explained that, in assessing hardship, it is necessary to consider the strength of the applicant’s substantive claim. The court said at page 454 of (1979) 35 FLR 445:
…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.
Finally, in Whitford, the court said at page 455 of (1979) 35 FLR 445:
On the other hand, s 44(3) and s 44(4) point to the conclusion that the legislature intended to confer power on the court to grant leave to institute proceedings in order to avoid hardship. Having regard to the nature of the jurisdiction which this court exercises, this power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within [two years from separation].
In Hall & Hall (1979) 5 Fam LR 411; (1979) FLC 90-679, the Full Court of the Family Court discussed the approach in Whitford and concluded at page 417 that:
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.
THE APPLICATION OF THE TEST OF HARDSHIP
Central to the hardship test is whether the husband has a prima facie, or reasonably arguable, case in any substantive property application. In other words, is there a reasonable chance that, if the substantive property application is allowed to proceed, he will receive a substantial settlement, after taking into account costs?
To answer that question, the court needs to consider, without finally determining:
(a)the parties’ assets and liabilities;
(b)their contributions; and
(c)their future needs.
In terms of assets and liabilities, the undisputed assets include $361,011.92 in a solicitor’s trust account, representing the proceeds of sale of 2 C Street, Suburb D. That property had been registered in the wife’s sole name, because it would have been complicated for the husband to own property in Australia, he not having Australian citizenship. The wife sold that property without the husband’s knowledge while he was in prison. When he learned of the sale, the husband put a caveat on the property. To enable settlement to occur, the wife undertook that the proceeds of sale would be held on trust pending the final resolution of this matter.
The assets also include $187,598 which is held in a Commonwealth bank account in the wife’s sole name.
There are no other known assets or liabilities or superannuation.
Consequently, the total known assets amount to about $548,000.
In terms of initial contributions, the husband had nothing. At the commencement of cohabitation, in mid-2014, the wife was the sole registered owner of C Street. That property was bought by the wife’s parents for her in 2013 for about $535,000. At the commencement of cohabitation, it had a mortgage of an unknown amount.
During the relationship, the husband and wife both worked and studied. The husband was X’s primary carer. (This is according to the husband’s evidence, which, for present purposes, I accept.)
In 2014, the wife entered into an agreement with the husband’s father to fund the subdivision and redevelopment of C Street. The plan was that, following the redevelopment, 1 C Street would be registered in the husband’s father’s name, 2 C Street would be registered in the wife’s name, and E Street would be registered in the wife’s parents’ names.
Pursuant to that agreement, the husband’s father gave the husband $420,000, from late 2014 to late 2015, which he used to pay out the mortgage on C Street. The husband’s father also borrowed $610,000 from Westpac to fund the subdivision and redevelopment. That borrowing was registered against a new mortgage on C Street in the names of the wife, the husband’s father, and the wife’s parents.
The husband’s father also transferred $375,250.54 to the wife for living expenses and for the repayments on the new mortgage between mid-2016 and mid-2018. In about 2018, when the wife said she could not afford the repayments on the new mortgage, the husband’s father transferred the new mortgage into his sole name and met all the repayments on it. It presently has $413,500 outstanding.
In his affidavit, the husband’s father said at paragraph 19 that:
In the circumstances, the Respondent and the Respondent’s parents have obtained [2 C Street] and [E Street], unencumbered, having only contributed about $150,000 towards the original purchase of [C Street].
The wife objected to that paragraph, saying it was a conclusion unsupported by evidence, and it was inherently improbable. At the hearing, I said that I would determine that objection in these reasons for judgment.
There is some evidence in support of the claim that the wife and her parents only contributed $150,000. C Street cost about $530,000 in 2013, and the mortgage on it was discharged between late 2014 and late 2015 with $400,000 from the husband’s father. The wife would have made mortgage repayments before that, probably in the vicinity of about $20,000. Therefore, on the evidence, the wife and her parents would have paid about $150,000 for their two properties: $530,000 plus $20,000 minus $400,000 equals $150,000.
There is also some evidence about the husband’s claim that E Street was unencumbered. The historical title search at CB60 to CB62 in respect of E Street indicates that it was transferred to the ownership of wife’s father in mid-2018 unencumbered (CB61). It was then subject to a mortgage from early 2020 until it was sold to a third party in early 2021 (bottom of CB61 to top of CB62).
In respect of 2 C Street, the historical search at CB58-60 shows that the mortgage to Westpac created in late 2015 was discharged in late 2017, and the mortgage to the ANZ Bank created in early 2020 was discharged in late 2022, when the property was sold. So the position is that, at the time of separation in March 2020, 2 C Street was unencumbered. The wife then remortgaged 2 C Street about one month after separation.
Nevertheless, paragraph 19 of the husband’s father’s affidavit should be struck out. The evidence in support of that paragraph speaks for itself.
The funding for E Street and 1 C Street is not strictly relevant. It was not suggested that E Street or 1 C Street form part of the pool, or that there should be an addback because of funds that the husband’s father provided for the benefit of the wife’s parents.
What remains is that the wife or her parents contributed about $150,000 to the pool and the husband or his father contributed at least $400,000 to the pool (being the $400,000 used to discharge the original mortgage on C Street). The pool, as it is currently understood, is about $548,000. Therefore, the husband contributed at least 73% of the pool.
The husband’s father might have contributed more to the pool, being the $375,250.54 he paid to the wife for living expenses and the repayments on the new mortgage. However, the court was not told how the $375,250.54 was divided between living expenses and repayments on the new mortgage. Consequently, the court cannot determine how much of the $375,250.54 went into the pool as a contribution, and how much went to the husband’s father for 1 C Street and how much went to the wife’s parents.
The husband conceded, and the wife did not dispute, that apart from the property development issues, the contributions of the parties were equal. That included the post-separation contributions, which favoured the wife, because she has had the sole care of X since the husband was taken into custody.
In terms of future needs, the husband is presently in prison. He does not have any financial needs at present, as his food, accommodation, clothing and other basic living expenses are all covered by the prison. It is not known whether he will be released from prison in a couple of months, or spend many years in prison. Either way, upon release, he will need money to re‑establish himself. That is so whether he lives in Australia, or, more likely, in another country. He does not have a visa to remain in Australia. It is almost certain that he would be deported upon release from prison if he is convicted of any of the charges he faces, and fairly likely that he would be deported in any event.
Because the husband may face a long time in prison and is likely to be deported upon release, it is very likely that X will remain in the sole care of the wife until adulthood. X is presently nine years old. This is a substantial factor in the wife’s favour.
It appears that the wife is well able to support herself. She has post graduate studies from university and ran her own business. The husband graduated from university. Subsequently, he worked in business and in the transport industry, earning about $800 to $1,000 per week. He could also support himself. Neither party has any health issues that would impact on their earning capacity.
Whether the husband spends many years in prison or not, it is unlikely that he will pay any child support. While he remains in prison, he will not have any earnings. When he is released from prison, he is likely to be overseas, where his child support obligations will be almost impossible to enforce.
The other factors mentioned in s.90SM(4) of the Act are not particularly relevant.
The wife conceded at paragraph 22 of her written submissions that the husband had “a prima facie case for a money claim.” However, the wife submitted that there was no evidence of hardship, in the sense of the husband needing the money. However, that is to take an unduly restrictive view of the meaning of hardship. The authorities do not require that an applicant for an extension of time be in necessitous circumstances. As accepted in Hardwick at paragraph 26:
the substantial detriment is the inability of a spouse to pursue … an alteration of property interests where the resulting loss is significant in the light of his or her financial circumstances.
In the present case, the husband’s financial circumstances were addressed in his financial statement. That shows that he had an average weekly income of $40, and assets of $10,000, consisting of household chattels. According to the husband’s financial statement, which, for present purposes I accept, the loss of the chance to pursue a property settlement is very significant in the light of his financial circumstances.
Taking into account all of the parties’ contributions and future needs, it would seem reasonably arguable that the husband might be entitled to about 60% of the pool. That would work out to be about $328,000. That is sufficient to mean that, even after allowing for the costs of a fully contested dispute, it would be a substantial detriment for the husband to not be granted leave to procced with his substantive property claim.
That is, the husband satisfies the hardship requirement.
THE PRINCIPLES RELATING TO DISCRETION
In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; (1996) 139 ALR 1; (1996) 70 ALJR 866; [1996] 15 Leg Rep 2; (1996) Aust Torts Reports 81-402; [1996] HCA 25, McHugh J said at pages 551 and 553 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.” Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo, “what has been forgotten can rarely be shown". So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now “knowing” that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.
…
In enacting limitation periods, legislatures have regard to all these rationales. 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. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. 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. The purpose of a provision such as s 31 is “to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced.” But whether injustice has occurred must be evaluated by reference to the rationales of the limitation period that has barred the action. The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question. Accordingly, when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires that extension.
(footnotes omitted)
In Hardwick, McClelland DCJ and Strum J said at paragraph 29:
In V and S1, 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] FamCA 60; (1982) FLC 91-272; and
•The extent of the prejudice that would be caused to the respondent if leave were granted.
FN 1: [2006] FCWA 2 (footnote added)
THE APPLICATION OF THE PRINCIPLES RELATING TO DISCRETION
As noted above, the extent of the delay was about nine months. The husband’s explanation for the delay was that he hoped to reconcile with the wife. It will be recalled that the parties were separated under one roof from March 2020 until 2022, when the husband was arrested. Consequently, during the whole of the standard two year period to commence proceedings, the parties were separated under one roof.
The husband said that his sister told him in early to mid-October 2022 that the former family home was listed for sale on a website. The husband’s solicitor for his criminal matters told the husband in about early to mid-October 2022 that he had two years to commence proceedings. The husband’s solicitor lodged a caveat over the former family home. He wrote to the wife’s solicitors on 27 October 2022 saying that he had lodged the caveat, and saying that the husband did not oppose settlement provided that the proceeds of sale were held on trust pending resolution of the present proceedings. The wife agreed by 27 October 2022 to put the proceeds of sale in trust. The husband filed the present proceeding on 20 December 2022. Settlement of the sale of the former family home occurred on 30 December 2022.
The wife criticised the husband for not explaining the gap between October 2022 and December 2022. However, I do not consider it to be particularly significant. The wife also submitted that the husband had offered no explanation for the delay between March 2022 and October 2022. However, that was explained by the husband saying he hoped to reconcile. It also seems to me that the husband was probably distracted by being arrested, charged with very serious criminal offences and being held in custody.
Overall, I consider that the husband has a reasonable explanation for his delay.
There was no evidence of any particular prejudice that the wife might suffer if the extension of time were granted.
As noted above, on the evidence as it presently stands, the husband has a reasonably arguable case that he might get a property alteration of about 60% of the known pool, which would be worth about $328,000. Even after legal costs, that would still be claim well worth pursuing.
In all of these circumstances, it is appropriate to exercise the discretion in favour of the husband. There will be an order accordingly. In addition, the husband sought an order that the proceeds of sale of C2 Street be held on trust by the wife’s solicitors pending further order of the court. That is entirely appropriate, and there will also be an order to that effect.
I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Riley. Associate:
Dated: 14 March 2024
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