Kerry & Calloway
[2023] FedCFamC2F 1497
•24 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kerry & Calloway [2023] FedCFamC2F 1497
File number(s): ADC 1068 of 2023 Judgment of: JUDGE DICKSON Date of judgment: 24 November 2023 Catchwords: FAMILY LAW – PROPERTY – out of time application – de facto relationship – de facto wife’s application for leave to issue property settlement proceedings out of time pursuant to section 44(6) of the Family Law Act 1975 – Application filed two years and seven months out of time – exercise of Court’s discretion to grant leave for the Application to proceed out of time. Legislation: Family Law Act 1975 (Cth) ss 44, 90SM, 90SF.
Real Property Act 1988 (SA) s 191.
Cases cited: Althaus & Althaus (1982) FLC 91-233,
Arcand & Boen [2021] FamCAFC 155,
Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541,
Candlish & Pratt (1980) FLC 90-819,
Carlon & Carlon [1982] FamCA 60,
Edmunds & Edmunds [2018] FamCAFC 121,
Gallo v Dawson (1990) 93 ALR 479,
Hall & Hall [1979] FamCA 50,
Hines & Easton [2023] FedCFamC2F 311,
Jacenko & Jacenko (1986) FLC 91-776,
Lambertson & Lambertson [2021] FamCAFC 48,
Milas v GM Holden Limited [2015] FCCA 1311,
Montano & Kinross [2014] FamCAFC 231,
Sharp & Sharp [2011] 50 FamCAFC 150,
Slocomb & Hedgewood (2015) FLC 93-678,
Tamaniego& Tamaniego [2010] FamCAFC 254,
Whitford & Whitford (1979) FLC 90-612.Division: Division 2 Family Law Number of paragraphs: 67 Date of last submissions: 25 October 2023 Date of hearing: 23 May 2023 and 29 August 2023 Place: Adelaide Counsel for the Applicant: Mr Lindsay Solicitor for the Applicant: Randle & Taylor Counsel for the Respondent: Mr McQuade Solicitor for the Respondent: Nicholas Boswell & Co Lawyers ORDERS
ADC 1068 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS KERRY
Applicant
AND: MR CALLOWAY
Respondent
ORDER MADE BY:
JUDGE DICKSON
DATE OF ORDER:
24 NOVEMBER 2023
UPON NOTING THAT:
A.All issues as to valuation and any outstanding disclosure will be attended prior to the Conciliation Conference. The parties are hereby advised that costs orders may be made in the event the matter is not able to proceed on the date allocated for this conference in these Orders.
B.Prior to the Conciliation Conference, the lawyer for each represented party must provide to his or her client, and to each other party, a notice indicating whether the party is in receipt of legal aid funding and, if not, providing particulars of:
a.the total costs and disbursements incurred by the party in the proceeding to date;
b.an estimate of the anticipated costs expected to be incurred in each remaining stage of the proceeding; and
c.an estimate of the likely duration of the final hearing and the total anticipated costs and disbursements expected to be incurred for the remainder of the proceeding.
C.The Confidential Outline of Case (Dispute Resolution) is a confidential without prejudice document prepared for the purpose of the Conciliation Conference only. It is not to be filed or kept with the Court file after the conclusion of the conference.
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 her application for settlement of de facto property out of time and time is extended to 10 March 2023.
2.Within twenty-one (21) days the applicant do file and serve any Amended Initiating Application as to final orders sought.
3.Within forty-two (42) days the respondent do file and serve any Response to Initiating Application as to final orders sought.
4.The parties and any lawyers on the record shall personally attend a Conciliation Conference with a Judicial Registrar on 1 March 2024 a 9:00am.
5.The parties and any lawyers on the record shall follow any directions from the Registrar convening the conference in relation to attendance in person, by Microsoft Teams or by telephone.
6.The applicant pay the Conciliation Conference fee in accordance with the Family Law (Fees) Regulation 2012 no less that fourteen (14) days prior to the Conciliation Conference unless otherwise exempted from payment.
7.With respect to any asset the value of which is not agreed, the parties do obtain a joint written valuation at their joint equal expense to be obtained and made available fourteen (14) days before the Conciliation Conference.
8.Not later than 23 February 2024, each party must:
(a)ensure that all documents required to be exchanged between parties pursuant to Chapter 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) have been exchanged;
(b)ensure that any private expert report that is relevant to the proceedings has been filed;
(c)provide to the Court (by email to …@...) and to the other party a single collated bundle of documents comprising:
(i)a Confidential Outline of Case (Dispute Resolution)
(ii)a detailed minute of Orders Sought;
(iii)details of any previous or current family violence orders;
(iv)a copy of any document exchanged between the parties which is directly relevant to an issue remaining in dispute (with relevant passages highlighted);
(v)particulars of any financial resource;
(vi)a valuation or market appraisal of any real estate or other asset the value of which is in dispute;
(vii)statements for, and where applicable, valuations of any superannuation interest; and
(viii)written confirmation that the trustee of any fund that may be the subject of a splitting order has been afforded procedural fairness.
9.Within twenty-eight (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 twelve (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 twelve (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 twelve (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.
10.All interim applications are dismissed.
11.The applicant’s costs of and incidental to the application for leave to proceed out of time are hereby reserved.
12.Liberty to reinstate the question costs as set out in paragraph 11 herein by way of joint correspondence to the Chambers of Judge Dickson.
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 DICKSON:
INTRODUCTION
These reasons concern an Application in a Proceeding filed by the applicant de facto wife (‘Ms Kerry’) on 10 March 2023 for an extension of time for property settlement pursuant to section 44(6) of the Family Law Act 1975 (Cth) (‘the Act’).
For the reasons set out herein, I propose to grant the application as sought by Ms Kerry and to refer the parties to a Conciliation Conference.
BACKGROUND
Ms Kerry and the respondent de facto husband (‘Mr Calloway’) were each 52 years of age at the time of hearing.
Ms Kerry contends the parties commenced a de facto relationship in 2011. Mr Calloway contends the parties met in 2012 and commenced cohabitation in 2013.
There are no children of the parties’ relationship.
The parties agree that final separation occurred in August 2018.[1] On this agreed position, the relevant time limit for Ms Kerry to bring an application for property settlement expired in August 2020.[2]
[1] The agreed date of separation is August 2018. Ms Kerry’s Initiating Application filed 10 March 2023 at ‘Part C’ in paragraph 27, however, deposes to a final separation date at November 2018.
[2] Family Law Act 1975 (Cth) s 44(5).
At the commencement of the relationship, Ms Kerry asserts that she had significantly greater assets than Mr Calloway totalling $222,410. Mr Calloway denies this assertion and identifies the assets and liabilities of the parties at the date of cohabitation at paragraphs 21 and 22 respectively of his Affidavit filed 13 April 2023.
One of the most significant assets acquired during the relationship is the parties’ former home situate at B Street, Suburb C in South Australia (‘the Suburb C home’). The Suburb C home was purchased in 2014 for the sum of $400,000 with a deposit of $40,222 and a mortgage in the sole name of Mr Calloway with Westpac Bank.
The parties agree that the Suburb C home was registered in Mr Calloway’s sole name as a form of “asset protection” in the event that Ms Kerry’s business, D Company, experienced financial hardship. Mr Calloway also alleges that “the main reason” the property went into his name arose because Ms Kerry “did not have an income.”[3] In relation to the Suburb C home, Ms Kerry contends having contributed the sum of $15,706.55 towards the deposit and having made payments totalling $100,563.33 into the parties joint ANZ account from which the mortgage to Westpac was paid. These financial contributions are disputed by Mr Calloway despite him conceding under cross-examination that he had not “answered in detail” Ms Kerry’s analysis of her financial contributions and describing her evidence on this topic as “self-serving”.
[3] See the Affidavit of Ms Kerry filed 10 March 2023 at ‘Annexure MKFP-3’.
Negotiations to resolve the issue of property settlement between the parties were unsuccessful.
In late 2018, Ms Kerry registered a caveat over the Suburb C home to secure her interest in the property.
In late 2022, Mr Calloway applied to remove the caveat pursuant to section 191(1)(e) of the Real Property Act 1988 (SA).
In early 2023, Ms Kerry was successful in obtaining an order from the Supreme Court of South Australia extending the caveat to prevent the property from being sold and to enable her the opportunity to file an application in this Court to proceed ‘out of time’ with an application for property settlement pursuant to the Family Law Act 1975 (Cth) (‘the Act’).[4]
[4] See the Affidavit of Ms Kerry filed 10 March 2023 at paragraph 36.
DOCUMENTS RELIED UPON
Ms Kerry filed an Outline of Case Document on 18 May 2023 and relied upon the following documents:
(1)Application in a Proceeding sealed 24 March 2023;
(2)Two Affidavits filed 10 March 2023;
(3)Costs Notice filed 21 April 2023; and
(4)Exhibits A1 to A5 inclusive.
Ms Kerry’s case was further supported by Written Submissions filed 11 September 2023 and Written Submissions in Reply filed 25 October 2023 respectively.
Mr Calloway filed an Outline of Case Document on 20 May 2023 and relied upon the following documents:
(1)Response to Application in a Proceeding filed 18 May 2023;
(2)Affidavits filed 13 April 2023 and 18 May 2023;[5]
(3)Costs Notice filed 18 May 2023; and
(4)List of Authorities filed 22 May 2023.
[5] The Affidavit of Mr Calloway filed on 13 April 2023 was re-filed on 18 May 2023 in support of his Response filed that day.
Mr Calloway’s case was further supported by Written Submissions filed 10 October 2023.
Each of the parties gave evidence and were cross examined at the hearing before me on 23 May 2023. At the conclusion of the hearing, the parties agreed to attend a Conciliation Conference on a without prejudice basis to try and resolve the current litigation. As evidenced by the fact that these Reasons are required, the parties were unable to reach an agreement satisfactory to each of them at the Conciliation Conference.
LEGAL PRINCIPLES
It is agreed that Ms Kerry requires an extension of time to proceed with her application for property settlement pursuant to section 44(6) of the Act. Mr Calloway strongly opposes any extension of time being granted to Ms Kerry in the circumstances of this case.
Section 44(6) states as follows:
(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.
As the applicant, the onus is on Ms Kerry to establish two things:
(1)First, would she suffer hardship if leave were not granted? If the answer to this question is answered in the negative, then that is the end of the matter.
(2)If hardship is established, then the Court must next consider whether to exercise its discretion to grant or to refuse leave to commence the proceedings.
In Whitford & Whitford (1979) FLC 90-612 (‘Whitford’),[6] the Full Court held:
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 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.
[6] Whitford & Whitford (1979) FLC 90-612, 78,139.
The Full Court described “hardship” in the following terms:
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 meanings assigned to ‘hardship’ in the Shorter Oxford Dictionary and in Webster’s New International Dictionary …
…
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. 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 claim, 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 lose must be a substantial one.[7]
(Emphasis in original)
[7] Whitford & Whitford (1979) FLC 90-612, 78,140–78,145.
Hardship in the context of this application has been described as meaning “substantial detriment”.[8] The loss of a right to commence proceedings does not of itself constitute hardship.[9] The consequences that follow from the loss of that right may establish hardship which is to be determined on the facts of each case.[10]
[8] Hall & Hall [1979] FamCA 50.
[9] Sharp & Sharp [2011] 50 FamCAFC 150.
[10] Sharp & Sharp [2011] 50 FamCAFC 150, [17].
Ms Kerry must satisfy me that she has “a reasonable claim to be heard”[11] or has “a prima facie claim worth pursuing or a ‘real’ probability of success.”[12]
[11] Althaus & Althaus (1982) FLC 91-233, 77,267.
[12] Sharp & Sharp [2011] 50 FamCAFC 150.
At this stage of the proceedings, the Court’s enquiry is a limited one. The Court is not to consider the merits of the applicant’s claim, but rather if there is one.[13]
[13] Jacenko & Jacenko (1986) FLC 91-776.
Consideration of whether or not the applicant has a real probability of success involves:
… 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.[14]
[14] Edmunds & Edmunds [2018] FamCAFC 121, [48].
If hardship is established, the Court must then consider the next step namely, whether or not leave should be granted to the applicant to proceed. This requires the Court to exercise its discretion in a manner that, ultimately, is consistent with justice being done to both parties. The potential injustice to Ms Kerry being unable to pursue an application must be compared to the prejudice to Mr Calloway in granting such leave.[15]
[15] Montano & Kinross [2014] FamCAFC 231.
Legitimate reasons for not bringing an application within the requisite time period is to be compared with “wilful blindness or recalcitrance.”[16] Equally a desire to bring an application out of time is to be balanced against the need for parties to ‘get on with life’ free from the prospect of future litigation.
[16] Montano & Kinross [2014] FamCAFC 231, [14].
It is has been determined that a limitation period should not be seen as some an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. Rather, a limitation period:
… 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, 547.
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] Milas v GM Holden Limited [2015] FCCA 1311.
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 has been described as an idiosyncratic decision.[19]
[19] Hines & Easton [2023] FedCFamC2F 311.
Relevant matters for consideration include:
(1)the length of the delay;
(2)the reasons for the delay;
(3)any prejudice occasioned to the respondent by reason of the delay;
(4)the strengths, on the merits, of the applicant’s case; and
(5)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, 78,146.
In Hall & Hall,[21] 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.
[21] Hall & Hall [1979] FamCA 50.
Consideration must be given as to the reasons why there has been a delay in the institution of proceedings.[22]
[22] Slocomb & Hedgewood (2015) FLC 93-678.
The relevant principles for an application to proceed out of time were condensed into a useful dot point summary by His Honour Judge Brown in the decision of Hines & Easton as follows:
102.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.[23]
[23] [2023] FedCFamC2F 311, [102].
PRIMA FACIE CLAIM
Ms Kerry contends that no serious challenge has been mounted by Mr Calloway to her claim that she has a prima facie case.[24]
[24] See the Written Submissions of Ms Kerry filed 11 September 2023 at paragraph 5.
The specifics of her claim are identified in paragraph 6 of the Written Submissions and can be summarised as:
(1)Bona fide domestic relationship including joint bank account, sharing of expenses and a sexual relationship;
(2)Length of the relationship from 2011 to 2018;
(3)The asset pool. Specifically, the Suburb C home (registered in the sole name of Mr Calloway) and placed on the market for sale by him in in mid-2023 and with the Sales Agency Agreement dated mid-2023 listing a sale price of $900,000. The parties acknowledge, however, that the ultimate sale price will be determined by the market. Ms Kerry estimates an equity in the former home of between an estimated $350,000 to $400,000;
(4)Contributions by her in terms of Section 90SM(4)(a) and (b) of the Act;
(5)Contributions by her in terms of Section 90SF(3) of the Act including contributions towards the deposit for the purchase of the parties former home and payment of salary into an account from which the mortgage was paid; and
(6)The use and enjoyment of the parties’ former home by Mr Calloway in the period post‑separation.
Mr Calloway deposed that the parties did not purchase the Suburb C home together and made a deliberate decision not to do so. He alleges that at the date of purchase, Ms Kerry did not have an income and her business was running at a loss. He asserts that Ms Kerry was unable to obtain finance.[25]
[25] See the Affidavit of Ms Kerry filed 10 March 2023 at ‘Annexure MKFP-3’.
Mr Calloway argues that absent any evidence of Ms Kerry’s business, D Company, at the time immediately prior to expiration of the requisite period, Ms Kerry cannot demonstrate a prima facie case at the relevant time. He argues, therefore, that the claim fails at the first hurdle relying upon the decision of Jacenko & Jacenko (1986) FLC 91-776 (‘Jacenko’).
To the contrary, in Jacenko the Court observed that an emphasis on what the parties had at separation and what their assets were and how they should be distributed on the basis of contribution was a “misconception” in the context of an application for leave out of time. In Jacenko, the Court held that, on the issue of the establishment of a prima facie case, the Court is to proceed 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.[26]
[26] Jacenko & Jacenko (1986) FLC 91-776, 75-642.
Accordingly, I am satisfied on the available evidence that Ms Kerry has a prima facie case and that hardship could arise if Ms Kerry is unable to pursue her claim for property settlement.
DISCRETIONARY CONSIDERATIONS
Having determined that hardship is established for the reasons stated above, the Court must now consider whether to exercise its discretion to grant leave to Ms Kerry to proceed with her application.
The exercise of this discretion is a broad one, with reference to the facts and circumstances of each particular case.[27] My decision must consider whether the granting of leave will do justice between the parties.[28]
[27] Carlon & Carlon [1982] FamCA 60.
[28] Tamaniego& Tamaniego [2010] FamCAFC 254, [162] citing Gallo v Dawson (1990) 93 ALR 479.
In this case, I accept Ms Kerry’s evidence that she received no legal advice as to the time limit required to bring her application for property settlement until late 2022, when the parties became involved in proceedings in the Supreme Court after Mr Calloway warned a caveat secured over the parties’ former home by Ms Kerry in 2018. Ms Kerry conceded in evidence to prior appointments with solicitors, the first in 2018 when she was advised to negotiate away from a Court process and for the parties to enter into a Binding Financial Agreement. The second appointment occurred in 2020 when Ms Kerry consulted a solicitor at E Lawyers.
At the hearing before me, Ms Kerry waived privilege over a file held by the firm E Lawyers arising from an appointment with a solicitor of that firm in March 2020. It was Ms Kerry’s evidence under cross-examination that she had not received legal advice about time limits at that appointment. I am entitled to infer that the produced E Lawyers file supported her contention as Mr Calloway has not sought to put evidence before the Court refuting her assertion.
Further, Ms Kerry has attached to her Affidavits copies of email and SMS communication between the parties during the period between 2018 and 2021 wherein she sought negotiate with Mr Calloway some form of property settlement. It cannot be said that Ms Kerry did nothing post-separation to advance her cause. The communications between the parties clearly set out attempts made by Ms Kerry to raise the spectre of property division with Mr Calloway and his replies. These include:
(1)An emailed offer from Mr Calloway on 25 November 2019 that he was offering a sum of money and hoped to obtain the funds from a self-managed super fund; [29]
(2)An emailed offer to make a payment on 29 April 2020 once Mr Calloway found another job;[30]
(3)Advice emailed from Mr Calloway in 2021 that he had money coming from his father’s estate and that he would “do the right thing”;[31]
(4)Advice from Mr Calloway that he would receive money from his later father’s estate and asking her “to wait” until the quantum of the funds were known. At Trial, Mr Calloway conceded that he had received the sum of $164,000 from his late father’s estate in mid-2022 which he had used to pay living expenses due to being unemployed for a period of 18 months;[32]
(5)Advice from Mr Calloway that he would work on a figure (to pay to her) and would “come back” to her with the offer;[33] and
(6)Communication from Ms Kerry dated 6 December 2022 observing that three years had passed, and no payment had been made. Ms Kerry noted that Mr Calloway had “lodged to have the caveat removed” and queried if Mr Calloway was “planning on paying me out or just trying to rip me off completely?”.[34]
[29] See the Affidavit of Ms Kerry filed 10 March 2023 at paragraph 29.6.
[30] See the Affidavit of Ms Kerry filed 10 March 2023 at paragraph 29.11.
[31] See the Affidavit of Ms Kerry filed 10 March 2023 at paragraph 29.12.
[32] See the Affidavit of Ms Kerry filed 10 March 2023 at paragraph 29.14.
[33] See the Affidavit of Ms Kerry filed 10 March 2023 at paragraph 29.16.
[34] See the Affidavit of Ms Kerry filed 10 March 2023 at paragraph 29.17.
There is no dispute that between late 2021 or thereabouts and late 2022 negotiations between the parties over property settlement stalled. Ms Kerry says that this was a deliberate decision on her behalf for the reasons identified in her evidence and in particular, because she could not afford to pay a solicitor privately and was ineligible for legal aid. Further, I accept (in Ms Kerry’s words) that she considered that Mr Calloway would “come good on what he offered.”
Ms Kerry’s inaction must be seen in the context of her having secured her interest by way of a caveat and her not having received legal advice as to the need for her to advance her claim. For his part, Mr Calloway remained mute on the topic until his application to remove the caveat was filed in the Supreme Court culminating in an order made in early 2023. At Trial, Mr Calloway gave evidence that he had received no advice as to the time limits for the filing of property settlement applications until consulting with his current solicitor in 2023.
In addition to the above matters, Ms Kerry has put before the Court evidence of her psychological difficulties compounded by the downturn in her D Company business, COVID‑19 and her own mother’s health.[35] A report from her medical practitioner, Dr G, dated 17 May 2023 confirming treatment for mood and anxiety medication in February 2022 is also before the Court.[36] Whilst acknowledging that he is not medically qualified, Mr Calloway accepted that Dr G had diagnosed Ms Kerry with depression and gave evidence suggesting an awareness of the issues relating to Ms Kerry’s mother.
[35] See the Affidavit of Ms Kerry filed 10 March 2023 at paragraph 32.
[36] See ‘Exhibit A5’.
PREJUDICE
Commencing an action outside of a time limit has been said to be prima facie prejudicial to a respondent such as Mr Calloway.[37] ‘Prejudice’ in these circumstances is said to arise when a party is “faced with an action which he or she had no reason to expect or had been lead to believe would not be brought.”[38] The law presumes a prejudice to Mr Calloway as a consequence of the end of the limitation period.[39]
[37] Arcand & Boen [2021] FamCAFC 155, [44] – [46].
[38] Lambertson & Lambertson [2021] FamCAFC 48 citing Brisbane South Regional Health Authority v Taylor (1996) HCA 25.
[39] Sharp & Sharp [2011] 50 FamCAFC 150, [97].
The final Written Submissions filed by Mr Calloway do not identify any prejudice which may flow to him if leave is granted. The Outline of Case Document filed on 20 May 2023 (in particular paragraphs 13 to 16 inclusive) do set out arguments as to potential prejudice.
Mr Calloway deposes that he would suffer financial hardship as any application for property settlement would “almost certainly” result in him “losing my property”.[40]
[40] See the Affidavit of Mr Calloway filed 13 April 2023 at paragraph 141.
The Court notes, however, that in mid-2023, Mr Calloway signed a Residential Sales Agency Agreement for the sale of the Suburb C home before the Court had determined the issue of leave out of time.
Further, I do not consider that the matters set out in paragraph 142 of Mr Calloway’s Affidavit filed 13 April 2023 meet the threshold so as to constitute a prejudice to him if Ms Kerry’s application is granted.
Mr Calloway may assert that a prejudice may be occasioned as a consequence of an increase in the value of the Suburb C property since the time limit expired, and the outgoings for the property paid by him since August 2018. I am satisfied that any such factors can be brought to account in an ultimate consideration of the parties’ respective contributions.
There is an allegation made by Mr Calloway that the parties implemented an informal property settlement at separation.[41] However, any agreement between the parties does not oust the jurisdiction of the Court to determine such matters.[42]
[41] See the Affidavit of Mr Calloway filed 13 April 2023 at paragraph 103.
[42] Candlish & Pratt (1980) FLC 90-819.
I am satisfied in this case that any prejudice to Mr Calloway is outweighed by the hardship to be suffered by Ms Kerry if leave were refused. On the basis of the material before the Court, I consider that there is a real possibility that Ms Kerry will obtain some form of property settlement in excess of the property currently standing to her possession.
If Ms Kerry’s claim is dismissed it will result in Mr Calloway retaining all of the net proceeds of the Suburb C home. In my view, such an outcome would constitute a hardship to Ms Kerry on the facts of this case.
CONCLUSION
I propose to extend the time to make an application for de facto property settlement to 10 March 2023 being the date when Ms Kerry filed her application.
The evidence suggests that the parties’ assets are relatively modest.[43] Further, under cross‑examination Ms Kerry revealed that D Company has outstanding tax liabilities of approximately $78,000, such sum not being evident from the pleadings. Further, the business returns for the past two years have not been prepared due to Ms Kerry allegedly having insufficient funds to pay her accountants.
[43] See the Affidavit of Ms Kerry filed 10 March 2023 at paragraphs 54, 66 and 67, and Affidavit of Mr Calloway filed 13 April 2023 at ‘Annexure MC-1’.
I accept that there will be ongoing costs for the parties if the substantive proceedings proceed. The parties have already engaged in two significant interlocutory applications in two different Courts. Neither party presented as persons having unlimited resources at their disposal to litigate with impunity. If the parties’ former home has sold (as it appeared to be contemplated) and with the assistance of a Judicial Registrar of the Court, the parties may see their way through to resolving the matter without the further incursion of legal fees.
In the event that the parties do not resolve the matter at a Conciliation Conference then their respective applications should be referred to a compliance and readiness hearing.
Costs
If successful, Ms Kerry’s counsel foreshadowed an application for costs. This is despite an acknowledgement that his client’s application was by its nature an application for an “indulgence” by the Court.
No submissions have been made in relation to costs. I will give the parties liberty to seek to have this issue relisted before me in the event that they are unable to achieve a final resolution by consent at the conciliation conference.
For all of the above Reasons, the Court makes the orders as set out at the commencement of this Judgment.
I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Dickson. Associate:
Dated: 24 November 2023
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