Kent and Brook
[2012] FMCAfam 413
•15 May 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KENT & BROOK | [2012] FMCAfam 413 |
| FAMILY LAW – Application for leave to institute proceedings for property orders more than 12 months after a divorce order has taken effect – whether hardship would be caused to the applicant or a child if leave not granted – loss of right to institute proceedings is not “hardship” – look at consequences of the loss of that right – whether the applicant would probably succeed on the merits – question is whether the applicant or child “would” suffer hardship, not whether one or the other “is” suffering hardship – hardship means more than appreciable detriment – where costs more likely to exceed what applicant would be awarded – if Court is satisfied that hardship would be caused, it may exercise its discretion to grant leave – factors relevant to discretion. |
| Family Law Act 1975, ss.44(3), 44(4) |
| Whitford & Whitford (1979) FLC 90-612 |
| Applicant: | MR KENT |
| Respondent: | MS BROOK |
| File Number: | MLC 6601 of 2009 |
| Judgment of: | F. Turner FM |
| Hearing date: | 30 March 2012 |
| Date of Last Submission: | 30 March 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 15 May 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Dunlop |
| Solicitors for the Applicant: | Altona Legal |
| Solicitors for the Respondent: | Armstrong Collins & DeLacy |
ORDERS
The application for an extension of time in the Initiating Application filed on 4 October 2011 is dismissed.
All applications in that Application are dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Kent & Brook is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 6601 of 2009
| MR KENT |
Applicant
And
| MS BROOK |
Respondent
REASONS FOR JUDGMENT
This is an application by the husband pursuant to s.44(3) of the Family Law Act 1975 (the “Act”) for leave to institute proceedings with respect to the property of the parties to the marriage more than 12 months from when the divorce order took effect.
Section 44(3) of the Act provides:
(3)Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983:
(a)a divorce order has taken effect; or
(b)a decree of nullity of marriage has been made;
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c)in a case referred to in paragraph (a)--the date on which the divorce order took effect; or
(d)in a case referred to in paragraph (b)--the date of the making of the decree.
The court may grant such leave at any time, even if the proceedings have already been instituted.
The divorce order of the parties took effect on 10 October 2009.
The husband filed his Initiating Application on 4 October 2011, which was 12 months outside the 12 month limit.
The principles relating to an application for leave to proceed pursuant to s.44(3) were summarised by the Full Court in Whitford & Whitford (1979) FLC 90-612 at 78,144 that:
“… on an application for leave under sec. 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.
The provision in subsec. 44(3) and 44(4) have been considered in various unreported decisions and in McDonald’s case (supra), In the Marriage of Mosaj (1978) FLC 90-431 and in McCarron and Unsworth (1978) FLC 90-444. In view of what appears to us to be a divergence of opinions, we deem it appropriate to state what our appreciation of these provisions is.
The hardship referred to in sec. 44(4) is the hardship which would be caused to the applicant or a child of the marriage if leave were not granted. The loss of the right to institute proceedings is not the hardship, to which the subsection refers. It is with the consequences of the loss of that right, with which the subsection is concerned. 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. Further, the matter with which the Court is concerned is not whether the applicant or a child is suffering hardship, but the question is whether the applicant or a child would suffer hardship if leave were not granted. If the probable result of the 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.
The next question which arises is what the word “hardship” in sec. 44(4) means.
In our view the meaning of “hardship” in subsec. 44(4) is akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment. Cf. the meaning assigned to “hardship” in the Shorter Oxford Dictionary and in Webster’s New International Dictionary. See also In the Marriage of MacKenzie (1978) FLC 90-496.
…
In ordinary parlance, hardship means something more burdensome that “any appreciable detriment”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations. It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense. As a general proposition it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship. Similarly, 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 claims, ordinarily hardship would not result if leave to institute proceedings were not granted. But otherwise we find no warrant in either subsec. 44(3) or 44(4) for saying that the right or entitlement lost must be a substantial one.
…
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 resolve, may constitute hardship.
…
If the Court is satisfied that hardship would be caused if leave were not granted, the Court may exercise the discretion which is conferred upon it by sec. 44(3) to grant leave or it may refuse such leave. Section 44(4) inhibits the granting of leave unless the requisite case is made out, but it does not provide that leave must be granted if the Court is satisfied that hardship would be caused.
…
The determination how this discretion should be exercised, must depend on the facts of the particular case. Due weight must be given to the expressed legislation intendment that ordinarily, proceedings should be commenced within a year from a date of the decree nisi, and the general policy of the Act which appears from sec. 44(3) and sec. 81 that financial relationships between the spouses should, wherever possible be brought to finality within a reasonable time after the dissolution of the marriage. Hence, such matters as the length of the delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay, and the strength on the merits of the applicant’s case, and the degree of the hardship which would be suffered unless leave were granted, are matters affecting the exercise of the discretion. These matters are not necessarily the only ones.
On the other hand, sec. 44(3) and 44(4) point to the conclusion that the legislature intended to confer power to 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 a year from the decree nisi”.
At the hearing on 30 March 2012, Mr Dunlop of Counsel appeared for the applicant husband and Ms Turner for the respondent wife.
The parties proceeded on the basis that there are four governing principles as to whether leave should be granted:
(1)The Court must be satisfied that hardship would be caused to the applicant or a child if leave were not granted.
(2)Whether the applicant has a prima facie case for relief from the substantive application.
(3)Whether the applicant has a satisfactory explanation for the delay.
(4)Whether the wife will be prejudiced if leave is granted.
The Court finds the relevant issues to be:
(1)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.
(2)If the Court is satisfied that such hardship would be caused, the next question is whether in the exercise of its discretion the Court should grant or refuse leave to institute proceedings? The determination of how this discretion should be exercised, depends on the facts of the particular case.
Such matters as:
·Length of delay;
·The reasons for the delay;
·The prejudice occasioned to the respondent by reason of the delay;
·The strength of the merits of the applicant’s case; and
·The degree of the hardship that would be suffered unless leave were granted.
are matters affecting the exercise of the discretion. Those matters are not necessarily the only ones (Ibid 78,146).
The principles enunciated by the parties are therefore relevant.
Whether hardship would be caused to the applicant or a child if leave was not granted.
It was not submitted that hardship would be caused to a child if leave is not granted. There is nothing in the material to establish that such hardship would be caused to a child.
Mr Dunlop submitted first that the loss of the ability to bring an action for distribution of property was not the hardship, but that that may result in a substantial loss of property to which the applicant would otherwise be entitled. As stated in Whitford it is the consequences of the loss of that right to bring proceedings that s.44(4) is concerned with.
It is submitted, and supported by the affidavit of the respondent filed on 29 March 2012, that the applicant did substantial renovations on, and made improvements to, the property at Property P (the “property”).
Mr Dunlop submits that the applicant has very limited assets and income. However, the test is not whether the applicant is suffering hardship, but whether he would suffer hardship if leave to institute proceedings were not granted (Ibid 78,144).
Ms Turner submits that the pool of property is small and that the recent value of the property was $102.850.00. Ms Turner submits that the respondent wife and her present husband put $50,000.00 into materials to renovate the property, and that her present husband contributed $30,000.00 of labour. She submits that the cost to the applicant husband of running a property case will be in excess of $30,000.00, and therefore if he were able to run a case and succeed, he would be unlikely to recover as much as his costs in running the case.
As decided in Whitford (Ibid 78,145):
“… 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”.
Ms Turner submits that since the parties separated the wife and her present husband have contributed $80,000.00 towards renovating the property which now has a value of $102,850.00. If that is proven to be so, the applicant husband is not likely to be awarded $30,000.00 or more of the pool, which is comprised largely of the property. If the cost to the husband of $30,000.00 to run the case is anywhere near accurate, and the Court finds no reason to disregard that estimate (it was put in submissions and not challenged), it is probable that the husband would not recover that amount in property proceedings. That would be so even if the cost was $20,000.00.
The Court rejects the submission by Mr Dunlop that the hardship to the applicant would be “a substantial loss of property to which the applicant would be otherwise entitled”.
Assuming the Court is wrong and the applicant has a chance of recovering more from a distribution of the pool of property than his legal costs in pursuing it, the Court will consider the matters relevant to the exercise of its discretion whether to grant leave.
The length of delay
The husband’s application was filed 12 months outside the time limit. That is a significant delay, particularly having regard to the value of renovations to the property by the wife and her husband after the parties were divorced.
The reasons for delay
Mr Dunlop submitted that the applicant husband lodged a caveat on the property and believed that to be sufficient protection of his interests. The husband’s evidence is that he never received legal advice to take property proceedings against the wife. Ms Turner pointed to the note on the Certificate of Divorce that was sent to the applicant, as follows:
NOTES:
1. If a party to the marriage proposes to make any application to the Court as to property or as to the maintenance of that party such application must be made within 12 months of the divorce order taking effect. After that time such an application cannot be made without first obtaining the leave of the Court to do so.
The Court finds it hard to accept that the applicant would not have read that note.
Mr Dunlop submits that the applicant husband had psychological problems that interfered with his ability to function, and referred to the husband’s affidavit filed on 15 October 2009. Exhibit “SAK-3” thereto is a report by Dr K dated 7 September 2009 that:
·“… he has since completely recovered from the acute crisis”. (Ibid 6)
·“Mr Kent currently does not have any mental health issues. His past history reveals that he has been an emotionally stable person…”. (Ibid 7)
·“Mr Kent does not need continual therapeutic or need to ingest any psychotropic medication”. (Ibid 7)
Exhibit “SAK-2” to the husband’s affidavit filed on 15 October 2009 is a letter from (omitted) dated 12 October 2009 stating that the applicant has suffered from “allergies, occasional respiratory infectious (sic “infections”) and occasional headaches”. The Court concludes from the above, that around the date the divorce became effective (10 October 2009), the applicant was suffering from no significant psychological or medical problems. There is no evidence that supports the contention that he was unable to function and deal with the issues involved in this case.
The fact that the husband thought that a caveat was sufficient protection does not provide a satisfactory explanation for the delay.
There is not a satisfactory explanation for the delay.
The prejudice occasioned by the respondent as a result of the delay
After the parties were divorced, the wife and her present husband put $80,000.00 into renovating the property. The wife deposed, in her affidavit filed on 2 November 2011 [at 28], that the cost of renovations to the property between November 2009 and June 2010 was $52,328.87 (mostly paid by her present husband) plus his labour, valued as “forewent earnings of $30,000.00”. There is nothing to refute that evidence. If she were to now lose that property, or part of it as a result of an application by the husband, the wife would be severely prejudiced.
The strength on the merits of the applicant’s case
By orders dated 3 June 2011 the two children of the marriage X, aged 5, and Y aged 3 live substantially with the wife. The parties had few assets at the time the relationship commenced and the purchase of the property was financed though borrowings; both contributed to mortgage repayments. There do not appear to be factors that would result in the applicant husband gaining a substantial distribution from the net value of the property, which is the main asset in the pool. The husband’s case has little merit and he would be unlikely to recover his legal costs in running it (supra).
The degree of hardship that will be suffered if leave is not granted
The Court does not find any likely hardship, (in the relevant sense), that will be suffered by the applicant should leave not be granted.
The application for an extension of time in the Initiating Application filed on 4 October 2011 is dismissed.
All applications in that Application are dismissed.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of F. Turner FM
Date: 15 May 2012
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