Luong v Tran
[2005] VSC 431
•9 November 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6141 of 2005
| HAO CAN LUONG | Plaintiff |
| v | |
| PHUOC THUAN TRAN | Defendant |
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JUDGE: | Hansen J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16 September 2005 | |
DATE OF JUDGMENT: | 9 November 2005 | |
CASE MAY BE CITED AS: | Luong v Tran | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 431 | |
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De facto relationship – Jointly owned property – Application for leave to apply for an order for the adjustment of the parties’ interests in property – Relationship of 17 years – Application made seven years after separation – Agreement dealing with property matters – Long delay before execution by respondent – Whether agreement operative – Hardship – Property Law Act 1958 (Vic), Part IX, Division 2, s 282.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G W Robertson | Hicks & Oakley |
| For the Defendant | Mr B Guzzo | Francis Lhanh |
HIS HONOUR:
This is an application for leave to apply for an order under Part IX, Division 2, of the Property Law Act 1958 (Vic) (“the Act”) for the adjustment of interests with respect to a house property at 91 Darnley Street, Braybrook, being the land more particularly described in certificate of title volume 9112 folio 816 (“the property”) of which the plaintiff and defendant are registered as joint proprietors.
The plaintiff, who is now aged 45 years, and the defendant, who is now aged 43 years, lived together as man and wife between about January 1981 and March 1998. Their relationship was a domestic relationship within the meaning of s 275(1) of the Act. Two children, being female twins, now aged 19 years, were born of the relationship on 27 June 1986.
The time within which the plaintiff should have commenced an application for an order under Division 2 of Part IX of the Act for an adjustment of interests in the property was within two years after the day when the domestic relationship ended. That is provided in s 282(1) of the Act. For present purposes it may be taken that the parties’ domestic relationship ended on 31 March 1998. Hence the plaintiff is now five years and some months out of time. The time to apply having thus passed, the plaintiff must obtain leave to apply out of time to be able to make a claim under Division 2. Provision for such leave is contained in s 282(2) which provides that a court may grant leave to a domestic partner to apply for an order after the end of the two year period “if the court is satisfied that greater hardship would be caused to the partner applying if that leave were not granted than would be caused to the other partner if that leave were granted”.
Originating Motion: the proceeding
In the originating motion, which was filed on 20 May 2005, the plaintiff sought only an order for a sale of the property pursuant to s 223 of the Act. That is, it was a mere partition proceeding between joint owners under Part IV of the Act. The proceeds of sale were to be paid to the plaintiff as to one half and the defendant as to the other half less the plaintiff’s costs of the proceeding.
The usual summons on originating motion came before Smith J on 16 June 2005. Smith J ordered by consent that the proceeding continue as if commenced by writ, that a statement of claim be filed by 29 July 2005 with provision that within 30 days thereafter the plaintiff at her discretion seek leave to proceed pursuant to s 285 of the Act, and that until the hearing and determination of the proceeding the defendant be restrained from treating the separation agreement as valid and of legal effect. The parties were also restrained from dealing with the land. I refer to the separation agreement below.
The plaintiff filed her statement of claim on 1 August 2005. A defence and counterclaim was filed on 29 August 2005.
On 29 August the plaintiff filed the present summons for leave pursuant to s 282 to apply for an order under s 279 and s 285 of the Act. These sections are contained in Division 2 of Part IX of the Act.
Evidence
The parties have each sworn several affidavits. Neither was cross-examined. There are disputed issues of fact and law. I cannot determine the disputed questions on the present application. That is the province of the trial judge and I must avoid statements and observations that might only serve to embarrass the fair trial of the proceeding. Nevertheless, for present purposes, sufficient is clear enough to enable an assessment of the facts and the issue of hardship for the purpose of s 282(2).
Background
The parties purchased the property in 1989 for approximately $88,000 (or, as the plaintiff states, approximately $86,000) with the assistance of a loan of approximately $70,000 from the Director of Housing. They were registered as joint proprietors on 24 July 1989. A three bedroom timber dwelling is erected on the property.
The plaintiff states in an affidavit that the purchase was financed by her as follows: $5,000 from her savings, $3,000 from the defendant’s sister which the plaintiff repaid by working for her for no wages, and $2,000 lent by her mother. There was also a first home owner’s grant of about $6,000. The plaintiff further states that she spent $3,000 lent to her by her brother on items for the house. I note that the defendant did not dispute these matters in an affidavit but has in his defence and counterclaim.
At present approximately $72,000 is outstanding on the mortgage. The defendant believes, and the plaintiff does not contradict, that the property is worth approximately $250,000.
The defendant states that from about 1979/1980 until about 1986/1987 he worked with various car manufacturers such as Toyota and Holden. He did not work after that.
The plaintiff states that she worked throughout the relationship and contributed her income, and that from after the time the defendant stopped working until the separation she solely paid the mortgage instalments. The defendant disputes this, stating that until approximately June 1997 the plaintiff was not in paid employment, and that on 19 June 1997 she established a company called Unifos Clothing Pty Ltd as a clothing manufacturer. The defendant said that at separation the plaintiff advised him that the business was worth approximately $200,000. The company went into liquidation on 11 May 2005.
After the parties separated the defendant continued to reside at the property with the children. The defendant states that he has made all mortgage payments since the separation. He continues to reside at the property. The arrangements with the children have changed. The children now attend university and work part-time. The defendant states that for more than a year now the children have spent the day with him and the evenings with the plaintiff. The plaintiff denies this saying that the children have lived with her on a full time basis since early 2000.
The defendant married in 2000 and lives at the property with his wife. There are no children of the marriage.
A property agreement?
Following the separation the plaintiff consulted solicitors Messrs Graham Sievers & Lee who on 1 October 1998 wrote to the defendant setting out the plaintiff’s proposal to settle all matters. The proposal was for joint responsibility of the children who were to live with the plaintiff with regular contact for the defendant, and that the house be sold and the net proceeds divided equally. The defendant was asked to see his solicitor and reply within 14 days. The defendant did not respond to this letter.
It seems that the parties discussed the matter following which, on 8 February 1999, Messrs Graham Sievers & Lee wrote to the defendant noting agreement that the property and furniture be transferred to the defendant subject to him assuming responsibility for the mortgage, the plaintiff to retain the benefit of her superannuation, life insurance and interest in the clothing business, and the plaintiff would pay maintenance for the children of $100 per week which payments would be made directly towards the home loan. Again, the defendant was asked to take the letter to his solicitor and reply within 14 days. As before, the defendant did not respond to the letter.
On 26 March 1999 Messrs Graham Sievers & Lee wrote to the Director of Housing asking that arrangements be made to enable the defendant to complete documentation and take over the mortgage. On 17 May 1999 the Director wrote advising that prior to consenting to the transfer the defendant would need to provide current income details. Then a signed transfer and deed of release would be required.
On 22 June 1999 Messrs Graham Sievers & Lee sent to the Director of Housing copies of the defendant’s current income details as supplied by Centrelink and requested that the plaintiff be removed from the certificate of title and the mortgage.
On 14 July 1999 the Director of Housing replied setting out the terms on which that request would be consented to. Those terms included payment of costs and execution of a deed of release. The parties were requested to sign a letter signifying their agreement to the conditions. The plaintiff signed a copy of the letter but the defendant did not act on the letter.
A further substantial period of time elapsed.
On 20 July 2000 Messrs Graham Sievers & Lee wrote to the defendant enclosing a separation agreement and transfer of land. The letter noted that he did not have a solicitor acting for him. It was stated that the agreement was drawn on the plaintiff’s instructions, that she had signed it, and that it was sent to him for his approval and signing if it was to his satisfaction. The defendant was also requested to sign the transfer of land, if he agreed to the terms of settlement, and return it with the agreement. It was suggested that if he required advice he contact the Law Institute’s Legal Referral Service to obtain a referral to a family law solicitor.
In essence the separation agreement provided that the plaintiff would transfer her interest in the property to the defendant and that the parties would sign documents necessary to release the plaintiff from the mortgage. There were other provisions in relation to personal property that are not necessary to refer to. The agreement provided (in cl 1) that insofar as it related to property matters the agreement was binding upon the parties. It was further provided (in cl 20) that the agreement operated in relation to financial matters in substitution for any rights of either party to seek orders under Part IX of the Act. In the transfer of land the consideration for the transfer was stated to be “The Agreement between the parties dated the day of 2000”. As to the children, the agreement provided for joint responsibility for long term care and that the children live with the defendant. There was provision for contact with the plaintiff.
In his affidavit sworn on 14 June 2005 the defendant deposed that the agreement reflected the discussions he and the plaintiff had to the effect that he retain the property with encumbrances and she retain the clothing business and her superannuation entitlements, and that the children stay with him. He further stated that “at all times after separation both the plaintiff and I have conducted ourselves on that basis”. However, he said, he “never” executed the agreement nor the transfer of land “until recently”. He said that he did not seek legal advice because he could not afford the fee. He was receiving a pension and caring for the girls. In any event, he said, he acted on the faith of the plaintiff’s representations that they had finally resolved the division of their assets.
The reason for, and significance of, this evidence of the defendant is seen in the following. On 3 August 2000 Messrs Graham Sievers & Lee wrote to the defendant suggesting that if he required assistance he contact the Law Institute’s referral service. The defendant did not respond. The solicitors wrote again on 17 November 2000 noting his failure to answer letters and stating that in the circumstances the plaintiff assumes “that you refuse to sign the documents”.
The defendant did not respond. The plaintiff states that accordingly on 4 April 2002 on her instructions Messrs Graham Sievers & Lee wrote to the Director of Housing advising that the proposed transfer of her interest in the property had not taken place and that her present intention was to retain her interest in the property.
It is to be noted that the defendant states that in or about “early late 2004” he received in his mail box a letter dated 3 April 2002 from Messrs Graham Sievers & Lee to the Director of Housing. The letter was stamped “Draft” and was unsigned. The letter referred to the solicitor’s letter dated 14 July 1999 and stated:
“We are instructed to advise that the proposed transfer of our client’s interest in this property to Mr Tran has not taken place. Moreover, it is our client’s present intention to retain her interest in this property.”
Having referred to this letter the defendant said that he had not received an English education in Australia, was unable to write or read English and that he understood little spoken English. I note that the plaintiff did not respond to these statements.
In or about December 2003 the plaintiff consulted solicitors, Messrs Luat Tran & Associates, and instructed them to apply for a division of the parties’ jointly owned property including the land. On 26 December 2003 they wrote to the defendant seeking consent orders for a division of the matrimonial property. The defendant did not respond.
On 20 April 2004, acting on advice of Messrs Luat Tran & Associates, the plaintiff lodged a caveat forbidding dealings in the land.
On 26 April 2004 Messrs Luat Tran & Associates wrote to the defendant referring to their letter of 26 December 2003 and noting that he had not responded. The letter stated that if they did not hear from the defendant in two weeks they would apply to the Federal Magistrates’ Court “for the division of properties and custody of the children”.
Again, it is clear, the defendant did nothing.
In January 2005 the plaintiff engaged her present lawyers, Messrs Hicks & Oakley. They wrote to the defendant on 2 February 2005. Among other things, the letter stated that for the plaintiff to have transferred her interest in the property to the defendant would have been “entirely inappropriate and unfair” to her in view of her contribution to the property. The letter stated that the plaintiff now required a property settlement on the basis of an equal provision.
On 5 April 2005 a caveat was lodged on the title to the property by a third party who, it would seem, had lent money to the plaintiff.
The defendant said that on 13 April 2005 he made an appointment to see his current solicitor as he was “becoming concerned about the letters referred to above” as he always believed that he and the plaintiff had reached agreement on the division of assets. He said that he requested his solicitor “to formalise and transfer the plaintiff’s interest in the property to me pursuant to the separation agreement”. And, on or about 12 May 2005 he executed the agreement and transfer of land. The only amendment was to change the consideration in the transfer to “Breakdown of a de facto relationship”.
On 15 April 2005 the defendant’s solicitor, Francis Lhanh, wrote to Messrs Hicks & Oakley denying the contents of the letter dated 2 February 2005.
On 13 May 2005 the transfer was stamped with duty on the application of the defendant’s solicitor. On 17 May 2005 the defendant’s solicitor sent a copy of the transfer to the Director of Housing and requested his consent to the transfer and his requirement to make the title available to enable the transfer to be registered.
As mentioned earlier, the originating motion was filed on 20 May 2005.
On 8 June 2005 the Director of Housing wrote to the defendant’s solicitor confirming that the Director would not waive the requirement of consent and release and requiring information from the defendant as to his financial capacity.
The defendant added to the above that after separation he had no real contact with the plaintiff except in 2000 when they had discussions relating to division of assets. After that he had no real contact with her until October 2004 when he was visited by a real estate agent who the plaintiff had engaged to sell the property. A week or two later the plaintiff contacted him requesting he sign documents to enable her to borrow $90,000. He refused to do so and did not hear from her again until recently through her solicitors.
I note that the plaintiff says that she arranged for the estate agent to visit the property after she heard through her daughters that the defendant had agreed to a sale.
Plaintiff’s explanation for delay and defendant’s responses
Further to what may appear from the above, in an affidavit sworn on 29 August 2005 the plaintiff sought to explain her failure to commence an application under Division 2 of Part IX within the period of two years after separation. Stated as summarily as possible the points she made are these. In the first instance, negotiations to resolve all issues commenced in or about October 1998, as a consequence of which in July 2000 her solicitor sent the defendant the separation agreement. Under that agreement the defendant was to procure her release from the mortgage. But, the defendant did not respond.
To this the defendant replied that he did not respond because he did not have the funds to see a solicitor, and that he did not sign the documents because he did not understand them.
In the circumstances the plaintiff came to determine not to transfer her interest in the land as provided in the agreement, but to retain it. Accordingly her solicitors so advised the Director of Housing and sent a copy of a letter containing that advice, marked “Draft”, to the defendant. To this the defendant replied that he believed he received the copy letter “in or about early late 2004”. He also gives hearsay evidence that solicitors who act for the Housing Commission do not have a record on their file of the Commission having received the “Draft” letter or the letter dated 4 April 2002.
The plaintiff states that at no time after April 2002 did her solicitors tell her that she should seek to commence a proceeding pursuant to Part IX of the Act for an adjustment of property interests. Nor did they advise her to take any other action to recover her interest in the land.
The next step is that in or about December 2003 she instructed Messrs Luat Tran & Associates to apply for a division of the jointly owned property including the land. Those solicitors wrote in December 2003 and April 2004 but the defendant did not respond. The plaintiff states that Messrs Luat Tran & Associates did not tell her to make an application pursuant to Part IX of the Act. Again, the defendant’s reply to not responding to these letters is a lack of funds to see a solicitor and not understanding the documents because of his poor English.
The final step was that on 17 January 2005 the plaintiff consulted her present solicitor who told her of Part IX of the Act, that she was out of time for an application, and that in the circumstances the most straightforward course was to pursue a half interest in the land. Accordingly, counsel was briefed to advise and draw the papers for a partition proceeding under s 223 of the Act. On 2 February 2005 her solicitor sent a letter of demand which led the defendant to take the separation agreement and transfer to Francis Lhanh and, on 12 May, to sign the agreement and transfer.
Then, on 11 April 2005 the plaintiff was advised by counsel that she had three choices, namely to apply for a partition, to apply for a court ordered sale and an equitable accounting between the parties, and to apply for leave to commence an application under Part IX. Initially the plaintiff opted for the first course but upon further advice and on considering the defendant’s affidavit sworn 14 June 2005 she decided to seek leave to apply under Part IX.
The parties’ circumstances
The plaintiff’s current business is Unifos Promotions Pty Ltd. It is her only source to generate income. It commenced trading in or around May 2005 and has not done well. She has not drawn wages since it commenced trading. She has also been overseas for seven weeks which contributed to the situation. In her affidavit sworn on 12 September 2005 she said that she had $1,500 cash in hand and that she had no savings.
The plaintiff lives at Braybrook with her elder sister and her daughters. The property is owned by her brother and the rent is $650 per month. The property has three bedrooms. The plaintiff and her sister have a room each while her daughters share the third. I note that the defendant states that the daughters only go to the plaintiff ‘s home from about 9 pm to sleep.
The plaintiff relies on her sister for financial support. Her sister pays for the plaintiff’s share of the living expenses including rates, taxes and services on the property, food and necessities, and does the household chores as the plaintiff works seven days a week.
The plaintiff married on 27 June 2005. Her husband resides in Vietnam and will migrate to Australia shortly. He is aged 41 years. He runs a small business in Vietnam. He will be studying full-time when he arrives in Australia and thus not be able to support the plaintiff financially.
The parties’ daughters are mostly self supporting, each having part-time employment. The plaintiff provides them with housing and meals.
Finally, the plaintiff states that she is suffering great hardship in not being able to acquire a house for herself, her children and her husband unless and until she obtains her interest in the property. In the meantime she is obliged to live on the charity and support of her sister.
As to the defendant, the plaintiff states that he and his wife have been working “for the past few years” but only started declaring their incomes when this proceeding commenced. She further states that she believes the defendant was entitled to a share of his late father’s estate. Finally, she states that the defendant never provided financial support for the daughters and that when they were under 18 he collected the single-parent grant for his own use. He continued to collect the grant after they commenced living with the plaintiff.
As to these allegations concerning himself, the defendant denies having received any benefit from his father’s estate, denies the allegations about his employment and not disclosing his earnings and the allegations about receiving the single-parent support. He states that he has been in part-time employment from the end of 2004 and has advised Centrelink. He describes himself as being a factory worker.
Statement of claim and defence
The statement of claim commences with allegations concerning the relationship between the parties and the matter of financial contributions to the purchase of the property and payment of the mortgage. The defence responds with a mixture of non-admissions, denials and allegations to the contrary. It is clear that there is a range of disputed facts.
The statement of claim then deals with the separation agreement. It is first referred to as an executory agreement made in or about February 1999. Then it is alleged that in or about May 2000 the parties “made a Separation Agreement”. The agreement was written and oral constituted by the written agreement drawn by Messrs Graham Sievers & Lee and by conversations between the parties. Then, after referring to the defendant’s failure to sign and return the agreement and transfer, the statement of claim refers to Messrs Graham Sievers and Lee’s letter to the Director of Housing on 4 April 2002. That letter is relied on as a signification by the plaintiff of her decision to retain her interest in the property.
The statement of claim then proceeds to contend that the agreement and transfer of land were sent to the defendant “as an escrow to be held by him and was [sic] not to become effective” until the conditions in the agreement had been fulfilled. Those conditions were that the defendant sign and return the agreement and transfer and all such further documents necessary to release and discharge the plaintiff from further liability under the mortgage. It is alleged that the plaintiff renounced the escrow and gave notice to the defendant of that renunciation by the “Draft” letter dated 3 April 2002 in early 2004 and by the letter from Messrs Hicks & Oakley dated 2 February 2005. These events occurred prior to the defendant signing the agreement and transfer.
There is then an alternative plea that the defendant by his conduct between 20 July 2000 and early 2004 evinced an intention to repudiate the agreement which repudiation was accepted by the plaintiff in early 2004 when the “Draft” letter was delivered to the defendant or alternatively upon Messrs Hicks & Oakley sending their letter dated 2 February 2005 to the defendant.
The statement of claim then makes a claim for partition under s 223 of the Act, followed by a claim under Part IX which claim depends on leave being given on the present application. The latter plea is supported by a pleading of financial and non-financial contributions to the parties’ property and the welfare of the family.
The defence, and the defendant’s submissions before me, indicates that the defendant’s position is that at all times after February 1999 the parties substantially conducted themselves pursuant to the oral and written separation agreement and that when the defendant signed the agreement, and the transfer, he acted pursuant to and in furtherance of it. It is denied that the agreement and transfer were delivered as an escrow. It is alleged that the defendant has either performed the conditions required of him by the agreement or that he is ready, willing and able to do so. Accordingly the agreement is valid and enforceable. It is further alleged that based upon the agreement the defendant since separation has paid the mortgage and outgoings on the property, that the plaintiff retained her company and income from it, and that the defendant retained the day to day care of the children. In the circumstances it would be unconscionable for the plaintiff to assert the agreement is unenforceable, and she is estopped from doing so.
The counterclaim seeks a raft of relief concerning the separation agreement, namely a declaration that the plaintiff is estopped from denying the existence of the oral and written separation agreements, a declaration that the separation agreement is enforceable, a declaration that the separation agreement took effect as a Deed or as a simple contract, a declaration that the parties’ disputes have been compromised, and an order that the plaintiff perform the agreement. Other orders are sought including the removal of the third party caveat, and costs.
Decision
I mentioned earlier that the parties are in dispute on a range of factual and legal matters. This is evident from the affidavits and the pleadings. Overall, the disputes are extensive. And, even though the defendant’s central point of reliance against leave being granted is the separation agreement, because it releases the defendant from claims under Part IX, there are yet a range of disputed issues as to and concerning that agreement.
The issues concern the defendant’s inaction in relation to signing the agreement and the transfer and his reasons for that inaction over a period of years. Although the plaintiff did not dispute the defendant’s statements as to his lack of skill with the English language, the case is yet one that requires a hearing and adjudication on the facts to be able to resolve the various issues. On what basis did the parties act from time to time? Why did the defendant not respond to letters and, in particular, sign the agreement and transfer and do all things necessary to complete the agreement? Were the plaintiff’s actions sufficient to renounce the escrow, assuming that the separation agreement was delivered as an escrow? Did the defendant fail to act in a reasonable time thus leaving it open to the plaintiff, in combination with any other relevant circumstances, to withdraw from the arrangement? That question would seem to arise whether or not the agreement was delivered as an escrow. Further, did the defendant repudiate the agreement and, if so, did the plaintiff accept such repudiation and thereby bring the agreement to an end? Is the plaintiff estopped from denying the agreement is enforceable? Doubtless there may be other or related issues. Then there are the issues concerning contributions to the acquisition and maintenance of the property, the parties and the welfare of the family. These issues cannot be determined on the present application. But the reference to them is sufficient to indicate the nature of the case sought to be brought and the breadth of the issues that would arise.
It is in this context that I turn to the question of hardship.
In the argument before me counsel concentrated on the separation agreement and the question whether the plaintiff was bound by it. If the plaintiff is bound to the separation agreement the terms thereof preclude her from applying under Part IX. Doubtless that is why the defendant’s counsel placed such emphasis upon the agreement and why the defendant asserted that the parties had acted under it. Prima facie, if the plaintiff is bound by the agreement she is restricted to her partition application under s 223 under which, at best, she would receive a net one-half share of the value of the land. But that claim too is met by the separation agreement and the transfer of land given pursuant to it. What follows from this is that unless the plaintiff abandons the claim under s 223, and thereby her case, the validity and enforceability of the separation agreement, and the transfer, will in any event be an issue for determination at the trial. That will bring in all of the disputed issues of fact and law referred to above. So the parties will have to litigate those issues whether or not the plaintiff has leave to apply under Part IX. This is a relevant factor to be considered in assessing the matter of hardship.
From the point of view of the plaintiff the loss of the right to apply under Part IX is a substantial hardship in itself[1]. And that is her present position as a result of the effluxion of the period of two years. The defendant, on the other hand, does not suffer the loss of a right to make a claim.
[1]McCarron v Unsworth (1978) FLC 90-444; McGibbon v Marriott (1999) DFC 95-221.
In Harris v Harris[2] Gillard J held that an applicant for leave should not be subject to a requirement to adequately explain delay in making the application. His Honour repeated that view in Moore v Clarke[3] where he said (at 77, 856) that what is important is the length of the delay and what flows from the failure to bring the application in time. In particular, what prejudice has the defendant suffered as a result of the delay. However, in McGibbon v Marriott[4] Warren J held that an applicant should provide at least a reasonable explanation for the delay. I find it unnecessary to consider the difference in these views. Whatever view be correct as to the need to explain the delay, in the absence of cross-examination and any external indicator to the contrary I accept the evidence of the plaintiff that she was ignorant of the time limitation until advised of it earlier this year. The delay may be considerable but I accept the explanation. It is difficult to know how the plaintiff would have acted in relation to varying the interests in the property if she had been aware of the right to claim under Part IX at an earlier time, although it is reasonable to infer that at least from early 2002 if not before the plaintiff would have acted on the basis of that right. Beyond this it is difficult to assess how or when the plaintiff might have acted, and to seek to do so would take one into the area of speculation without the benefit of having heard the parties give evidence.
[2](1997) DFC 95-192.
[3](1998) DFC 92-208.
[4](1999) DFC 95-221.
As I have said, the loss of the right to apply constitutes a substantial hardship. The defendant denies the existence of hardship, submitting that as the agreement is an enforceable contract the plaintiff’s loss of the right to apply under Part IX is properly to be characterised as resulting from the agreement and not the effluxion of time. It is, however, important to consider the submission in the overall context. It is seen that what happened was that there were discussions in which time passed and at the end of which the agreement was put to the defendant for his approval and signature by which time the period of two years had passed without the plaintiff being aware of the ability to claim under Part IX.
Next it is necessary to make an assessment of the likely outcome of the claim under Part IX, if leave to apply is granted. As to this, while I can not resolve the many disputed issues of fact it is apparent that the plaintiff’s evidence of financial and non-financial contributions, could, if accepted, well warrant an adjustment of interests in the property in her favour. As to the non-financial contributions, it is accepted that contributions of a welfare nature for the family are to be recognised in a substantial way[5]. At the very least the plaintiff has a reasonable or arguable claim of a substantial and not trifling nature. The inability to pursue the claim would be a hardship to the plaintiff.
[5]Mallet v Mallet (1984) 156 CLR 605.
As against this, what is the position of the defendant? His hardship nowhere approaches that of the plaintiff. Whether or not leave is granted his defence will rely on the separation agreement and transfer. He suffers no loss of right if leave is granted beyond the loss of the present benefit of the claim being barred by the effluxion of time. He does not otherwise suffer prejudice. Further, if leave is granted the plaintiff will only succeed on a claim under Part IX if she is held entitled to do so as a matter of law in the circumstances including that the defendant fails in his reliance on the separation agreement and transfer. However, and this is important, the granting of leave does not affect the ability of the defendant to set up the separation agreement in defence of the claim. If that defence is successful the plaintiff’s claim under Part IX will fail. If the defence is not successful the plaintiff’s claim under Part IX will be determined on its merits. And, in the final analysis, costs will be ordered as the justice of the case requires in light of all the relevant circumstances.
Regarding the matter overall I am of the view that greater hardship would be suffered by the plaintiff if leave were not granted than would be caused to the defendant if leave were granted. I am further of the view, having considered all of the relevant circumstances and counsel’s submissions, that there is no reason why the discretion under s 282(2) should be exercised adversely to the plaintiff. Leave should be granted to the plaintiff to apply under Part IX.
Orders
I will make the following orders subject to hearing counsel. The first order is for the avoidance of any doubt as to the efficacy of the application due to the form in which it was commenced. The orders I propose are:
(a)The summons filed on 29 August 2005 be deemed to have been filed in the form of an originating motion in Form 5C for the relief sought therein and the requirement to file a summons on that originating motion and to comply with any procedural requirements pertaining to a proceeding commenced by such an originating motion be dispensed with.
(b)Leave be granted to the plaintiff to apply for an order against the defendant pursuant to Division 2 of Part IX of the Property Law Act 1958 (“the Act”).
(c)The plaintiff, on or before 16 November 2005, file and serve an amended originating motion, such amendment to include a claim for an order under Division 2 of Part IX of the Act.
(d)The statement of claim filed on 1 August 2005 be deemed to have been filed and served in respect of the claims in the said originating motion amended as aforesaid.
(e)The plaintiff file and serve a reply and defence to counterclaim on or before 23 November 2005.
(f) There be mutual discovery without notice on or before 14 December 2005.
(g) Costs be reserved.
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