MALVARD & CAUDLE
[2020] FCCA 364
•27 February 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MALVARD & CAUDLE | [2020] FCCA 364 |
| Catchwords: FAMILY LAW – Property – Application for leave to apply for a property settlement out of time – relationship of 34 years – parties reached informal property settlement – Applicant Husband received significantly larger sum in the informal settlement – Applicant Husband made representations he would not pursue a formal settlement in light of parties’ informal agreement – where the Respondent Wife made significant financial decisions post-separation in reliance of the informal agreement – where the Applicant Husband does not establish any hardship – where allowing the Application to proceed would likely cause hardship to the Respondent – Application dismissed with costs. |
| Legislation: Family Law Act 1975 (Cth), ss.44(3) & (4). |
| Cases cited: MacKenzie v MacKenzie (1978) 4 Fam LR 374 McDonald v McDonald (1977) FLC 90-317 In the Marriage of Whitford (1979) 4 Fam LR 754; (1979) 24 ALR 424 Sharp v Sharp (2014) 50 Fam LR 567 |
| Applicant: | MR MALVARD |
| Respondent: | MS CAUDLE |
| File Number: | CAC 727 of 2019 |
| Judgment of: | Judge Neville |
| Hearing date: | 22 August 2019 |
| Date of Last Submission: | 27 September 2019 |
| Delivered at: | Canberra |
| Delivered on: | 27 February 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms M Davis |
| Solicitors for the Applicant: | Farrell Lusher Solicitors, Town A |
| Counsel for the Respondent: | Mr M Hassall |
| Solicitors for the Respondent: | Meade Robson Steele, Adelaide |
ORDERS
The Applicant’s Initiating Application filed on 23rd April 2019 be dismissed.
The Applicant is to pay the Respondent’s costs of and incidental to these proceedings as agreed or taxed.
All extant Applications be dismissed, the matter finalised and removed immediately from the docket.
IT IS NOTED that publication of this judgment under the pseudonym Malvard & Caudle is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAC 727 of 2019
| MR MALVARD |
Applicant
And
| MS CAUDLE |
Respondent
REASONS FOR JUDGMENT
Introduction
By an Initiating Application, filed 23rd April 2019, pursuant to s.44(3) of the Family Law Act 1975 (“the Act”), the Applicant seeks to bring property proceedings out of time. If leave is granted, he further seeks that there be a 50% split to him of the Wife’s superannuation. In general terms this may amount to approximately $200,000.
The parties married in 1982. They separated in mid-2016. A divorce Order was made on 29th August 2017. There are two adult children of the relationship.
When the parties separated, they divided their non-superannuation assets informally on a 50/50 basis.
The Applicant Husband is now in his late 60s, while the Respondent Wife is in her early 60s.
The Wife resists the Application and seeks that it be dismissed with costs. She does so primarily because she says that (a) in fact the informal property settlement between the parties was weighted in the Applicant’s favour, (b) she agreed to the informal settlement because it allowed her to keep her superannuation intact, and (c) she has relied upon the informal settlement with the Applicant in mid-2016 and has since made decisions (including financial commitments) based upon the terms of that informal agreement. Further, as noted below, the Wife submitted that no relevant “hardship” has been made out by the Husband.
For the reasons that follow, the Respondent Wife’s Orders should be made and the Application dismissed with costs.
The Applicant Husband’s evidence
Given that the matter necessarily proceeded on the basis of Affidavit evidence only, I note the following matters as summarily as possible.
The Husband’s Affidavit (filed 23rd April 2019) was modest in its detail; it ran to 3½ pages with 5 pages of annexures. By contrast, the Wife’s Affidavit (filed 12th July 2019), ran to just over 8 pages with 85 pages of annexures.
In his Affidavit material, the Husband first dealt with the leave to proceed Application (pars.7 – 12). Here, at times somewhat generally, he outlined that after the divorce Order in September 2017, on some unspecified date, he sought legal advice “about property matters including a super splitting order.” He annexed correspondence, dated 27th March 2018 from his lawyers to the Wife. Copies of Responses from the Wife’s lawyers, dated 10th and 18th April 2018 are also attached to his Affidavit. I will come back to this correspondence.
The Husband stated that he was aware that the Wife had drawn down her superannuation, which he estimated to be approximately $500,000. The Wife’s use of her superannuation was confirmed by her lawyers to the Husband’s lawyers in the letter dated 18th April 2019. He also stated that in 2018 the Wife received an inheritance from her Mother’s estate of some $300,000 or thereabouts.
The Husband said that he was reliant upon social security benefits.
The Husband then moved to an outline of the assets and liabilities of the parties during the relationship.
For example, the Husband noted that in about 1988 the Wife’s Father paid out the paternal Grandfather for his share in a property in Town A. The parties became the owners of that property.
In any event, that property was sold in 1990. The net proceeds of sale (approximately $80,000) were used to purchase a property in B Street, Town A. This property was sold and another purchased (dates not specified). At a later unspecified point of time this further property was sold and, in “2000/2001” the parties purchased a property at Town C for “about $120,000.”
The Husband confirmed that the Wife’s Father gifted the parties $25,000 towards the purchase of the Town C property. The Wife moved to Town C to work as a public servant. The Husband said that he drew down on his superannuation (about $36,000) and used it for some renovations on the Town C property, day-to-day expenses and general living expenses. He confirmed that after leaving his job at Employer D in Town A he was unemployed for a while until he got a job at an employer in Town C as a labourer. More on these matters, briefly recounted here, are set out later in these reasons courtesy of the more detailed account by the Wife.
The Husband recounted (pars.17 – 22) what he said were the assets and liabilities at the time of separation. Thus, their Town C property sold for $650,000 from which he said he received $324,622 and the Wife $300,000. They each kept a car, which he said the Wife’s was worth about $20,000 and his about $2000.
The Husband deposed, without further comment (par.19): “We otherwise did nothing in relation to our superannuation assets.” He confirmed that the Wife had superannuation of approximately $500,000, while his more modest superannuation, of $51,000, was/is used to support him drawing a “modest pension.”
At par.21 the Husband confirmed that when the parties separated he “wasn’t really interested in pursuing [the Respondent Wife] in relation to her substantial superannuation because to [his] mind, [he] really thought she had earnt that during the course of our relationship. [He] also knew that our children would receive the benefit of that superannuation later on.”
In the final paragraph of the Affidavit (par.22) the Husband relevantly said:
Things however post our separation did not go ahead as I had planned. Ms Caudle [the Respondent] moved across to Adelaide and lived with one of our daughters for a 12 month period. … It suddenly became apparent to me that it was unlikely that my daughters would receive any benefit of Ms Caudle’s assets at all. As such it was my view that I needed to pursue a property settlement as against Ms Caudle, and it is for this reason I now commence these proceedings before the Court.
The basis for the Husband’s conclusion regarding the likely benefit of their daughters receiving anything from their Mother’s superannuation was, and remains, unexplained. As the declared reason for bringing his Application, in my view it is totally opaque.
I might note that there was conveniently or curiously no discussion in the Husband’s Affidavit of the informal property settlement with the Wife. That is referred to briefly in the correspondence from the Husband’s lawyers to the Wife, dated 27th March 2018 (part of Annexure M2 to the Husband’s Affidavit). As noted further below, there is no dispute that there was an informal property settlement; the only (or primary) dispute relates to the extent of the greater cash payment to the Husband and the detail surrounding it. Such details include, for example, the fact that the Husband did not refer to the mortgage still over the property of some $75,000, plus legal and other fees of about $20,000. Contrary to what is set out in the Husband’s lawyer’s letter, which contends that the Wife received $300,000 and the Husband $324,622 from the proceeds of sale, the Wife said in her material that she received only $255,000.
Annexure 3 to the Husband’s Affidavit is the letter from the Wife’s lawyers, dated 18th April 2019. It was in response to the initial letter from the Husband’s lawyers dated 27th March.
In that letter, the Wife’s lawyers advised that:
a)The Wife was retired; she had already accessed her superannuation which was used to build a house, and the balance was drawn down to complete the construction and to provide her with a pension;
b)Documents would be provided regarding the Wife’s use of her superannuation, they said, over the next week or so; and
c)There was no need to institute proceedings. They cautioned that, if the litigious path was pursued, “we will have something to say about the issue of costs.”
The further evidence on the Husband’s behalf came from his lawyer per an Affidavit, filed in Court on 22nd August 2019. In that Affidavit, it was deposed that:
a)there was a failure to diarise the expiration of the limitation period in September 2018;
b)there was earlier correspondence with the Wife’s lawyers on 27th March 2018, as well as with other lawyers who were then suspected of acting for the Husband but who ultimately did not come onto the record for him;
c)correspondence was received from the Wife’s solicitors on 10th and 18th April, but they did not receive a further letter dated 24th April 2018, which the Wife alleges was sent; and
d)the “missing letter” of 24th April 2018 was subsequently found on the Husband’s lawyers email system (which was at the time transitioning to a new system). However, although it was received by the firm, it was not forwarded to the firm’s principal solicitor who had the carriage of the current matter.
The Respondent Wife’s evidence
In her Affidavit, filed 12th July 2019, the Wife confirmed that the parties were in a relationship for 34 years, from early 1982 until mid-2016.
She said (par.4) that she opposed the Husband’s Application because she had moved on from the divorce and had made financial decisions which she would likely not have made if the Husband had pursued a formal property settlement earlier. She also confirmed that the “informal settlement of property we reached between us was weighted in favour of [the Applicant Husband], and I was prepared to accept that on the basis that I would retain my superannuation.”
The Wife’s current financial position was outlined at pars.5 – 9 of her Affidavit. I have recounted earlier in these reasons generally what she purchased with the draw-down from her superannuation. It was set out in her lawyers’ letter of 18th April 2018, and need not be recounted further here.
The Wife said that during the relationship:
a)She moved to Town C in 1999 with the two children of the marriage with a work transfer. The Husband stayed in Town A for approximately 18 months to two years so that he could acquire his long service leave. He visited most weekends, she said;
b)When the Husband did move to the Region E of New South Wales, the Wife said that he did not use any of his funds to renovate the house. He started a business but later sold it;
c)She found the Husband work as a labourer at her employer. It was a 3 day per week job. He kept this job for approximately 10 years until retirement;
d)The Husband supplemented his income by doing some cooking for a friend’s business, and by performing in a band;
e)She worked full-time, except when she temporarily reduced her hours to part-time following the birth of their second child. She maintained that she was the principal income-earner during the relationship and earned more than double the Husband’s income. Both parties agreed that the Wife had qualifications; she worked as a public servant but the Husband never did although the Wife said that he had similar qualifications to her;
f)She confirmed that during the relationship the parties kept their finances separate; they never had a joint bank account. When the Applicant eventually moved to Town C, she said that he would put $100 on the table each week and say: “here’s your rent money.” Some bills, she said, were equally split. Otherwise the Wife said that she paid the CBA mortgage. This remained the situation for the last 15 years of the marriage (2001 until 2016).
The Wife said (par.23ff) that, after the relationship ended, she moved to Adelaide at the encouragement of one of her daughters who had twins, one of whom was diagnosed with autism. When making the decision to move to Adelaide the Wife resigned from her position.
The Wife also said that before separation she had suggested to the Husband that they “down-size” their 2-acre property, which had a large garden. The Husband did not agree with such a course.
At par.28 the Wife recounted her discussion with the Husband about how she would survive financially if she resigned from her employment. She confirmed that the Husband said that he wanted more than 50% of the sale proceeds of the house if he was not going to “touch” her superannuation. She stated further that the initial agreement between the parties was that the Husband would receive $40,000 more than the Wife. In the result, she said that in fact he received “far more”.
She suggested to the Husband that the informal agreement between them should be formalised with “consent Orders.” To this proposition, the Wife deposed (par.31) that the Husband said that this would be a waste of money, and that she knew that he would not change his mind. The Wife said that the Husband confirmed again that she could keep her superannuation and that she should save the $2000 or so that she would likely spend on legal fees. Because of this conversation the Wife did not pursue with an Application to seek Consent Orders.
At par.32, the Wife set out the detail (earlier stated in these reasons) of the Husband’s receipt of approximately $355,000 from the net proceeds of sale, and the Wife approximately $255,000. She also confirmed that for the reasons set out in this paragraph she remained the sole guarantor for their daughter. She remains a guarantor for her daughter and does not know when she will be released from this legal responsibility.
Of particular moment is a letter (not apparently dated but from sometime in mid-2016) from the Commonwealth Bank in Town C which confirmed that the proceeds of sale (totally $497,587.23) were distributed at that time to the parties. According to this record, the Husband received $324,622.11 and the Wife, $172,965.12.[1]
[1] This document, in the somewhat amorphous and ill-described annexure 2 to the Wife’s Affidavit, is at p.24 of 95.
The Wife said (pars.34 – 36) that in around mid-2017 the Husband visited her in South Australia. At the time she was renting a residence for $310 per week. She said that in the course of this visit the Husband said that he wanted $50,000 from her superannuation because he “deserved it” and that it would be less than he could have got through a formal property settlement. The Wife said that she agreed at the time, but that she could not access her superannuation until 2018 when she turned 60. She said that she agreed to this figure because she simply wanted to get on with her life and be rid of the Husband.
Regarding the Husband’s Application to proceed out of time, the Wife deposed (pars.37 – 48) that:
a)Following the discussion with the Husband in mid-2017 the next time she heard anything was the letter from the Husband’s lawyer in March 2018, from which it seemed to the Wife that the Husband was seeking more than the $50,000 he had previously sought;
b)She sought legal advice and deposed further that 3 letters were sent to the Husband’s lawyer, including a lengthy letter dated 24th April 2018. A copy of that letter is part of the blancmange of documents that is Annexure MC 2 (p.21-23 of 95). Not insignificantly, on its face it was sent both by email and to the Post Office Box of the Husband’s lawyers. I will come back to this letter later in these reasons;
c)The Wife understood that the Husband had superannuation of about $75,000 from his part-time job at the employer at Town C and some $36,000 from his earlier employment at Employer D. She deposed that she has seen nothing of these funds;
d)She was aware that the Husband had done some renovations to his residence and has also bought a newer car;
e)The Wife confirmed that the Husband told her before she left Town C for South Australia that no claim on her superannuation would be made. On that basis, she confirmed her decision to move, to buy land and to build a house. These decisions were based also on what she could afford in the absence of employment, on what superannuation she had, and in the light of the agreement reached with the Applicant. She said that she was no longer prepared to resolve the matter on the basis of paying the Husband the $50,000 he asked for in 2017;
f)She said that the initial distribution ($173,000) she received from the net proceeds of sale was supplemented by a later payment from those proceeds of $81,000, which brought her settlement figure to $254,000. She said that she remained a guarantor for her daughter Ms F’s (and Ms F’s Husband’s) loan, which amounts to 20% of their home loan. This amounts to a potential liability of $80,000.
The Wife refuted the Husband’s claims regarding his doubts about testamentary benefits to the children of the relationship. She confirmed that she made a new Will in 2018, naming her daughters as her sole beneficiaries. They are also the sole nominated beneficiaries of her superannuation.
The Wife confirmed that she is in a new relationship but she lives alone. She and her male companion are “financially independent.” She confirmed that the Husband is in a new relationship. Unfortunately, this was not disclosed in the Husband’s material and there are no details of it otherwise. The Husband has two children from an earlier relationship. To the best of the Wife’s knowledge, the Husband’s Will divides his estate between 3 of his 4 children.
From the inheritance the Wife received, post the parties’ divorce, she has provided funds to her daughters ($10,000 each) and other financial assistance (e.g. braces for one of the grandchildren). I need not detail the other expenditure by the Wife from her superannuation on her property, which are otherwise set out in pars.57 – 68.
The Wife surmised in her Affidavit that the only reason for the Husband’s Application was because of her inheritance. She again confirmed that she intends that her assets will go to her children and that if the Application was permitted to proceed, she would seek to re-open the entire property proceedings.
The Wife’s lawyer’s letter to the Husband’s lawyers, dated 24th April 2018 is of some significance. Relevantly, it may be summarised as follows:
a)it confirms the amounts received by the parties from the net proceeds of sale and seeks to correct the amounts averred to by the Husband;
b)it sets out the property division between the parties as 43.9% to the Wife and 56.1% to the Husband. In this regard, the lawyers for the Wife set out (with bank statements and tax returns annexed) the mortgage payments made by the Wife, as well as a sum of $34,500 which was paid by the Wife to the Husband in 2015 for “top quality robotic medical treatment” in relation to a prostate operation;
c)the Wife’s lawyers confirmed that she had drawn down her superannuation. Documents were provided that confirmed what had been taken from her superannuation. The Wife’s lawyers also set out the matters on which funds had been expended, notably a block of land and the construction of a residence;
d)the Wife’s lawyers set out that, in their view, if the property proceeding was permitted to proceed and the entirety of the property issue re-visited, there would very likely be a significant contribution assessment in the Wife’s favour, which would put the Husband at some risk of having to re-pay funds to the Wife. Other factors they said that would need to be re-considered would be the Wife’s health having recently undergone a hip operation for osteoporosis. For these reasons, the Wife’s lawyers confirmed that she would resist the Husband’s Application. I have already outlined the Husband’s lawyer’s evidence regarding the “non-receipt” of the letter.
Post-hearing inquiries by the Court
Following the completion, of the hearing a series of issues/questions was put to the parties by email dated 30th August 2019. Those questions were as follows. The responses from the parties’ lawyers are set out in the next section following each of their formal submissions. The email from the Court was as follows:
Dear practitioners,
RE: MALVARD & CAUDLE – CAC727/2019
Following the somewhat abbreviated hearing on 22nd August, and notwithstanding the detailed submissions of the parties, as a matter of procedural fairness and otherwise, HH would appreciate both parties addressing and/or clarifying the following matters:
1) It is not immediately clear if the Husband addressed the contentions of the Wife regarding:
a) the Wife having earned twice the income of the Husband during the relationship;
b) the Wife’s Father’s contribution, in the sum of $25,000, to the purchase of the parties’ Town C property;
c) the parties kept their finances separate during the relationship (including no joint bank account); and
d) the Wife paid the mortgage over the Region E property for the last 15 years of the marriage.
2) The Wife’s contention that the parties agreed that the Husband would take from the proceeds of sale of the property $40,000 more than the Wife, conditional on the Husband not making any claim on her superannuation. The Wife contended that the actual division of funds on the sale of the Region E property was $325k to the Husband and $255k to the Wife. For discussion, this may be called ‘representation 1’.
3) At par.31 of the Wife’s affidavit, she says that she offered to have the agreement reduced to writing and made into consent orders, but the Husband advised her that such a course was not necessary and to “save her money and not spend it on legal fees.” This may be called ‘representation 2’.
4) The Wife became, and remains, the sole guarantor of one daughter’s loan;
5) Counsel for the Husband submitted that the Wife’s use of her post-separation inheritance to replenish her superannuation account meant that that superannuation was [now still] available. Given that there is Full Court authority to the effect that a post-separation inheritance may be excluded from the asset pool (e.g. Bishop (2013) FLC 93-553), and/or that the inheritance was later “mixed” with superannuation and therefore, relying perhaps on authorities regarding the equitable process of “tracing”, it cannot be treated as “superannuation” because it was the Wife simply depositing later funds, which could equally have been used to buy (for example) antiques, shares or anything else. She simply chose to deposit it into her superannuation account. If the post-separation funds from the inheritance had been used for something else, would they (on the Husband’s case) be “available” to him to pursue?
6) Similarly, subject to clarification, the Husband does not depose that he would have pursued his current Application if the inheritance funds had been put into some other form of asset (e.g. shares, antiques). Moreover, would he have made any claim if there had not been the Wife’s inheritance?
7) The issue of “estoppel” was addressed briefly in submissions. However, no one addressed the import, if any, of the High Court’s comments in Sidhu v Van Dyke (2014) 251 CLR 505 (and the cases therein cited such a Grundt v Great Boulder) in relation to the facts of this case, especially regarding the Wife’s “reliance” (she says) on the Husband’s comments and conduct.
8) Finally, while the issue of “hardship” was also addressed briefly in submissions, HH would be grateful to have any comments on the cost of litigation (current and future) as a consideration that goes to the issue of “hardship”.
HH would appreciate a response from the Applicant Husband within 14 days, being by 13 September 2019, and from the Respondent Wife 14 days thereafter, being by 27 September 2019.
Of course, if the parties reach agreement in the interim, in light of the above points or otherwise, HH is content to receive an agreed minute and consider same in Chambers.
Yours sincerely,
Chambers of Judge WJ Neville
Submissions on behalf of the Applicant
The Applicant’s written submissions, filed 19th August 2019, were as follows:
SUBMISSIONS OF APPLICANT HUSBAND
1) These submissions are made in accordance with the Orders made 3 June 2019. I apologise for the delay in providing submissions.
2) The parties married in 1982, and separated in mid-2016, some 34 years later. They have two now adult children who live independently and the husband has two adult children from a relationship prior to meeting the wife. The parties were divorced on 30 September 2017.
3) Asset pool at separation:
Husband Value
Wife Value
Asset
H
W
H
W
proceeds of sale of home
$324,622
$300,000
$325,000
$255,000
Motor Vehicle 1
$20,000
Excluded
Motor Vehicle 2
$2,000
$2,000
Superannuation (H)
$51,000
E$110,000
Superannuation (W)
$500,000
E$500,000
Total Net Pool
$1,197,622
$1,192,000
Percentage
31.5%
68.5%
36.6%
63.3%
4) By his application filed 23 April 2019, the Husband seeks leave to proceed out of time. For leave to be granted, the husband must satisfy the Court that he will otherwise suffer ‘hardship’ within the meaning of s44(4).
5) The considerations of the Court in addition to hardship to the applicant, include reasons for the delay, prejudice to the respondent and reasonableness of the claim. Overall, the interests of justice must favour the granting of leave.
Hardship/Reasonableness of Claim
6) The parties both say that on separation, their non-superannuation assets were divided by agreement and that no formal settlement took place.
7) At paragraph 4 of her affidavit, the Wife deposes to the decision at separation being weighted in favour of [sic - the] husband. Of the assets divided at that time, on husband’s figures (set out above) he received 50.5% and on the wife’s figures, he received 56.2%.
8) The parties accumulated their superannuation interests over the course of a long marriage, each making indirect contributions to other’s interest. The wife also deposes to making additional voluntary contributions to her superannuation interest over the course of the marriage, such funds contributed would have otherwise been available to the parties.
9) On either set of figures, once superannuation is added to the pool, this is a matter where the court is likely to determine that it is just and equitable to alter the parties existing rights with respect to their interests in superannuation.
10) The Husband retired on 15 June 2018 and receives an aged pension from Centrelink and a small pension from his superannuation. He deposes to at paragraph 12 to the likely benefit to him of even a modest split of the wife’s superannuation.
11) The nature of the benefit claimed is relevant to the analysis of the overall benefit of the claim when compared with costs of the claim.
Delay
12) The wife was on notice that the husband was not satisfied with the division of assets from mid-2017 (Wife affidavit at 34). This position was confirmed in correspondence through solicitors in March and April 2018.
13) Importantly, the husband sets out at Annexure M3 correspondence that gives rise to a reasonable expectation that the matter would progress to settlement without recourse to litigation.
14) In any event, the husband deposes at paragraph 8 that the unavailability of his solicitor was the cause of about 7 months delay between time expiring and filing.
Prejudice
15) In her financial statement dated 11 July 2019, the wife deposes to a home worth $450,000 and superannuation worth $443,344.
16) The husband seeks a split of superannuation and there are superannuation assets available. There is no prejudice to the wife.
In correspondence dated 13th September 2019, the Applicant made further submissions which clarified some points that were raised in the email from Chambers to the parties, dated 30th August 2019. Those further submissions were as follows:
Dear Associate
RE: MALVARD & CAUDLE – CAC727/2019
We refer to the email of the court dated 30 August 2019 and respond to the enquiries of the court as follows:
The Husband's response to some of the claims made by the wife (paragraphs 1, 2 and 4 of the email of the court dated 30 August 2019)
1. The Husband did not have the benefit of the Wife's material prior to the filing of his application and affidavit on the 23 April 2019. If leave is granted and the matter proceeds, there will be a number of facts in dispute. As to the specific matters raised;
a. The wife did earn a greater income during the course of the relationship. It is not uncommon in most relationships for one of the parties to earn a higher income than the other. In the context of a 34 year marriage, the differing incomes of the parties during the course of a lengthy relationship would not respectfully, necessarily lead to an adjustment in favour of the wife for her greater income. To do so would elevate her contribution in terms of income to that of "special" contribution. Cases such as Fields v Smith [2015] FamCAFC 571 indicate that in a long marriage, where both parties have worked to the benefit of the family in whatever capacity they have, the higher financial contribution by one party does not necessarily result in a greater adjustment on contributions. The circumstances will need to be assessed as a whole.
b. It is acknowledged by the Husband that the Wife's father gifted $25,000 toward the purchase of the home in Town C in or around 2000/2001 (paragraph 16 of the Husband's affidavit filed 23 April 2019).
c. The Husband and Wife maintained separate bank accounts throughout the relationship. If leave is granted, the husband will argue in the substantive matter that their finances were otherwise not kept separate but intermingled as follows:
i. The Husband owned a half share in a property in G Street, Town A with his father when the parties commenced cohabitation.
ii. Just prior to sale of that property, the mother's father paid the husband's father accepted a much reduced amount of $10,000 for his share in the G Street property which was soon thereafter sold for $80,000, arguably a contribution made by the Husband's father.
iii. B Street, Town A was purchased for approximately $85,000 -$90,000 12 months prior to the sale of G Street. The income from renting G Street paid the mortgage on B Street.
iv. G Street was then sold and the proceeds were paid towards the B Street mortgage. B Streetwas owned for two years and sold for $120,000 or thereabouts. The funds from the sale of this property were then used to purchase a property at Town H.
v. There was small mortgage taken over the Town H property of estimated $40,000 to $50,000 to conduct renovations to the Town H property. These renovations were undertaken by the husband. The Husband made all mortgage repayments.
vi. In addition, the parties whilst living at Town H, purchased an investment property in Town J. They purchased the property via mortgage for $80,000 using the Town H property as security, and the mortgage repayments were made using the rental income and any shortfall was met by the Husband.
vii. The Husband renovated the Town J property at his own expense including taking a personal loan for renovation costs which he repaid, in addition to the mortgage costs.
viii. Both the Town J property and Town H properties were sold and the proceeds used to purchase the property in Town C.
ix. Whilst the wife did make mortgage repayments on the Town C property, the Husband made contribution of $100 per week cash each Friday to the Wife for his share of the mortgage costs, for approximately 11 years, in addition to paying his share of the utility and everyday living costs.
2. There is a factual dispute about the exact distribution of the proceeds of the sale of the Town C house and evidence from the conveyancer may be required to resolve that issue. Otherwise, the parties competing positions as to contributions are a matter for evidence.
3. Offer to do consent orders - when in the timeline did this occur? Broadly refer to the response as to estopple.
4. As to the loan in the daughter's name for which the wife is the guarantor, there is no evidence before the court as to that liability if it ever crystallises as such. We know the bank released the funds to the wife that were held as security [wife affidavit]. It will be a matter for evidence as to whether this contingent liability forms part of the distribution of the parties' assets and liabilities.
The Inclusion of the Wife's Inheritance in the pool of assets (paragraphs 5 and 6 of the email of the court dated 30 August 2019)
5. In reliance of cases such as Calvin v McTier [2017] FamCAFC 125 and Bishop v Bishop [2013] FamCAFC 138, the wife's post separation property- the inheritance and her house - will form part of the property pool. Without an order of the court made pursuant to s 79 of the Family Law Act or a Binding Financial Agreement under s 90C, all of the property of the parties whether accumulated post separation, via windfall, inheritance or in whatever manner, are available to form the pool. This is so no matter how the assets have been used, be it superannuation, antiques, shares or anything else.
5.2 It is at the contribution stage (Stage 2 of the 4 stage process) that adjustments are to be made to the asset pool because of contributions made pre cohabitation, during the relationship and post separation by the wife or husband. All contributions are to be considered and it is acknowledged, the contribution of the wife's inheritance will be a relevant contribution to be taken into account.
6. When the Husband commenced proceedings in April 2019, he did not know anything about the quantum of the Wife's inheritance or how she had expended same. He only became aware of her replenishing her superannuation using inheritance monies with the filing of her material in July 2019, after he had commenced proceedings. As detailed in the affidavit of K Law Firm dated 22 August 2019, the letter of the Wife's solicitors 27 April 2018 was not received or seen by the Husband or his representation until the filing of the Wife's material and upon seeing Annexure C:2 to her affidavit. Further, the early correspondence of the Wife's solicitors dated 18 April 2018 and annexed the Husband's affidavit (Annexure M3 page 14) indicated that the wife had accessed some of her superannuation to purchase land in South Australia and the balance of her superannuation had been drawn down on to complete construction of the house. The Husband was therefore of the understanding that there was no superannuation left and available. It follows that the Husband would have pursued his case in any event, inheritance or otherwise, and irrespective of how funds had been expended. At the time of commencing proceedings he had no disclosure from the wife or any clue as to what her asset situation was.
7. As it currently stands with the current evidence before the court the asset pool and the distribution of those assets is as follows:
Asset
Ownership
Value
L Street, Suburb M
Husband
$350,000
CBA account
Husband
$20,000
Motor Vehicle 3
Husband
$7,000
Super Fund N
Husband
$52,659
Total
$429,659
O Street, Town P
Wife
$450,000
Motor Vehicle 4
Wife
$10,000
Super Fund Q
Wife
$443,344
Total
$903,344
Total Pool (Without the daughter’s contingent liability)
$1,333,003
Husband’s Proportion is 32.34%
Wife’s Proportion is 37.76%
On the wife's best case, the Husband should receive 40% of the total asset pool which is an amount of$533,201.20. He has a received a shortfall of $103,542.20. Even if the wife's inheritance of$270,000 is excluded from the pool of assets, the balance of the pool of assets becomes $1,063,003.00. There would then no longer be a contribution based adjustment to the wife. The balance should then arguably be split equally which is $531,501.50 leaving an adjustment to the Husband of $101,842.50.
Estoppel (paragraphs 3 and 7 of the email of the court dated 30 August 2019)
8. The case of Sidhu v Van Dyke (2014) 251 CLR 505 is interesting as to the law of equitable estoppel but has little relevance to the issue before the Court. Where the law of equitable estoppel arises in the Family Law jurisdiction, it does so in two areas:
a. Third party claims where the court needs to determine the property of the parties available for distribution and will consider, for example, a claim on one parties' parents' property;2 and
b. Assessments of Binding Financial Agreements
The Husband relies upon the principle that parties to a marriage cannot by contract, oust the court's jurisdiction under Section 79.
9. As the case of Fevia & Carmel-Fevia (2009) Fam CA 816 states:
"291. A parallel exists, in my view1 in the distinction sought to be drawn by me. Parties may by agreement seek to exclude the provisions of Part VIII of the Act. But the Act ides not allow the parties to do so by any agreement which (although enforceable as a contract) they choose to adopt. The Act prescribes one manner alone in which that may occur and that is by compliance with s90G"
If estoppel were to be argued by the wife, she bares the onus to show that she has suffered a detriment that has arisen from reliance on the promise/representation. That detriment is assessed at the point where the alleged representor seeks to resile form the alleged representation. In this case, that date is mid 2017 (see affidavit of the wife filed 12 July 2019 at paragraph 35) when the husband made clear he would seek a share of the wife's substantial superannuation.5 On the facts before the court, no action had at that point been taken by the wife in reliance on the representation that the husband would not seek a share of superannuation.
Costs (paragraph 8 of the email of the court dated 30 August 2019)a
10. The costs of the Husband to date are minimal as given the mistake made by the Husband's solicitor in failing to diarise the time limitation, costs to date are being borne by his representation.
11. If leave is granted by the court it is estimated that costs of the Husband would be as follows:
Up to and appearing at mediation/conciliation conference
$8000 -$10,000
Up to the pre hearing conference
$10,000 - $15,000
Further material to be done after the pre hearing conference
$3000 - $4000
Counsel's fees for preparation for estimated on day hearing
$3500
Counsel's fees for one day hearing
$3500
Solicitor instruction on one day hearing
$3500
TOTAL
$31,500 - $39,500
It is not anticipated that this matter if it went to final hearing would take any more than one day of hearing time. It is also submitted that this matter has real prospects of settlement at mediation/conciliation conference if leave is granted to commence.
Submissions on behalf of the Respondent
The Respondent filed an Amended Outline of Submissions on 22nd August 2019 in the following terms:
RESPONDENT WIFE’S AMENDED OUTLINE OF SUBMISSIONS REGARDING SECTION 44(3) APPLICATION
FACTS
1) The parties aged 68 and 61 respectively were married in 1982, separated in mid-2016, and were divorced on 29 August 2017. There are two adult children of the relationship. Initially, the parties reached an agreement regarding property division involving the husband receiving a larger proportion of the proceeds of sale of the former matrimonial home and the wife being able to retain her superannuation savings. The husband later “re-thought” the issue but proceedings were not commenced until 23 April 2019 (approximately 20 months after divorce). In the course of the separation the wife moved to and has since re-established herself in South Australia.
PRINCIPLES
2) The factors relevant on an application for leave under s 44(3) include: hardship to the applicant; whether the applicant has a prima facie claim worth pursuing; the explanation for the delay in commencing proceedings; and prejudice to the respondent. Hardship is a necessary but not sufficient consideration, and the hardship must involve substantial detriment. Only a claim which is likely to succeed in a measurable way will give rise to the necessary hardship if leave is not granted.
3) The hearing of an application for leave under s 44(3) is summary in nature and the applicant need not establish a final case. Nevertheless, the applicant must establish a prima facie or arguable case of substance having regard to all the circumstances, which may include consideration of the legal costs to be incurred if leave is granted. Further, if the evidence of the applicant is shown to be self-contradictory in important respects, or is clearly shown by other evidence to be false, the applicant may be held to have failed to establish a prima facie case notwithstanding that if his evidence were accepted there would be a reasonable probability of success.
APPLICATION
4) The wife submits that the Court should dismiss the application on the basis that: the husband has failed to establish a prima facie case worth pursuing; the husband has therefore failed to establish hardship; the husband’s explanation for the delay in commencing proceedings is erroneous; and because of the clear evidence of prejudice which will be suffered by the wife if leave is granted.
5) Prima facie case/hardship. The applicant’s evidence is incorrect, most significantly in relation to the amount of money received by the wife from the sale of the former matrimonial home. The received by the wife was significantly and demonstrably less than the amount asserted by the husband, receipt of part of it was delayed, and following settlement the wife still has a contingent liability as sole guarantor of the parties’ daughter’s bank loan. The amount of the wife’s remaining superannuation is now less than half the amount she held at the time of separation. Considering the superior financial contributions made by the wife during the relationship, the husband has failed to show an arguable case that, even if leave was granted, he would receive any further amount. This is particularly so in the case of a small pool, once the parties’ likely legal expenses of reopening property issues are taken into account.
6) Unlike the wife, the husband is already eligible for and receiving an aged pension. The husband’s decision to seek leave to commence proceedings appears to be based on a perception (misconceived) about whether the parties’ two daughters “would receive the benefit of [the wife’s] superannuation”, and other events that have occurred since separation. These matters are not relevant to hardship.
7) Explanation for delay. The husband asserts, incorrectly, that after some initial correspondence between the parties’ solicitors, the wife’s solicitors ceased communication. In fact, the wife’s solicitors responded, in detail, to the husband’s request for financial disclosure, and it was the husband’s solicitors who then did not take the matter any further.
8) More significantly, the husband does not proffer, as his explanation for the delay, any asserted breach of agreement between the parties about property division, except on his own part. He concedes that, after initially agreeing that the wife should be permitted to retain the superannuation which “she had earnt during the relationship”, he “re-thought” the matter. In short, the husband has asserted a change of mind, not an explanation for delay.
9) Prejudice to the wife. In reliance on assurances from the husband, the wife discontinued arrangements to have the agreement with the husband formalised by way of consent orders. Shen then relocated to and bought a property in South Australia and commenced construction of a residence. The wife’s evidence is that, by the time construction is finished, she will have only $170,000 of her superannuation remaining (not including an inheritance of $270,000 which she received post-separation and deposited into her superannuation account).
10) The wife has acted in reliance on the assumption that the husband would honour the oral agreement reached between them (and not disputed by him). In addition to the distress and expense of, potentially, having to attempt to run property proceedings remotely from South Australia, the wife relies on her remaining superannuation savings, together with Newstart Allowance, in order to meet her day-to-day expenses. She would be significantly prejudiced by a granting of leave permitting the husband to reagitate property issues.
CONCLUSION
11) The husband has failed to establish that, even if leave were granted, he has a prima facie case which could result in a different outcome. No adequate explanation for delay has been advanced, and the wife will be significantly prejudiced if leave is granted. The husband’s application for leave under s 44(3) should be dismissed with costs.
In correspondence dated 27th September 2019, the Respondent made further submissions which clarified points that were raised in an email from Chambers to the parties dated 30th August 2019. Those further submissions were as follows:
Dear Associate
RE: MALVARD & CAUDLE
We refer to the email of the court dated 30 August 2019 and the wife's submissions by way of letter dated 13 September 2019. We respond to the inquiries of the court as follows.
I. Husband's response to contentions of Wife:
(a) Wife having earned twice the income of the Husband during the relationship. The Wife notes the Husband's concession that she earned a greater income during the relationship (and, specifically, that he does not seek to dispute her assertion that she earned on average twice his income). The Wife concedes that, as a matter of principle, her contributions should not necessarily therefore be regarded as superior, but says that in this particular case, that is appropriate. The cases referred to by the Husband each involved very significant homemaker contributions by the "lower-earning" party, and situations where both parties were using their full endeavours to "work to the benefit of the family in whatever capacity they have". The Wife says that is not the case in the present matter, particularly in respect of the parties' relationship after they moved to Town C, following which the husband's employment was irregular and he did not otherwise contribute. In Sardi v Sardi [2018] FCCA 2394 (relied on by the Husband), it was the parties' agreed position that contributions during the relationship should be regarded as being equal.
(b) Wife's Father's contribution of $25,000 to purchase of Town C property.
The Wife notes the husband's concession of this contribution.
(c) Separate finances during relationship (including no bank account)
The Husband has sought, via correspondence, to embellish his affidavit evidence as to the financial relationship between the parties. The submissions made via the Husband's solicitor's letter, in some respects, seek to contradict the Husband's affidavit evidence. 2 The Wife objects to the attempted introduction of additional evidence.
If the court is minded to have regard to the Husband's various assertions, the Wife responds as follows:
i. The Wife's Father's payment of $10,000 to the Husband's Father was in fact generous, and occurred well before the sale of G Street property in circumstances where the Wife's Father did not want to see the Husband's Father face potential bankruptcy (for a second time), and which would have impacted on the Husband.
ii. The Wife's financial contribution to the family exceeded that of the Husband at all times. The reason that the Husband solely made mortgage payments at one time is because that the parties had an agreement that, in exchange for him doing so, the Wife would pay for all other bills, the running costs of the house, and all of the children's costs. The Wife also paid out of her finances the costs to renovate the two bathrooms and the kitchen of the Town C property.
iii. The Wife contributed to the cost of renovations of both the Town H and investment properties, and the Wife's Father assisted in carrying out the renovations of the Town H property.
iv. The Wife notes the Husband's agreement that, throughout the period when the parties were living in Town C, the Husband contributed only $100 per week cash to the family finances, aside from paying 50% of some bills. This was a trivial financial contribution compared to that of the Wife, given that the mortgage on the Town C property was reduced from about $200,000 when purchased to about $75,000 at the time of sale (and would have been $40,000 less if not for the re-draw of those funds for the purposes of the Husband's prostate operation about twelve months before the sale).
2. Wife 's contention regarding division of proceeds of sale of Town C property
The Wife's contention about the actual division of the proceeds of sale ("Representation 1 ") is corroborated by the correspondence from the Commonwealth Bank which appears at p 24 of her affidavit, showing that the initial amount she received was (as she said) only $172,965.12 (the Wife explains she received a further $81,000 once she was able to substitute the South Australian property for the Town C as security for her daughter's loan). The Wife's evidence as to this issue is corroborated; the Husband's is not. The Wife's evidence should be preferred.
3. "Representation 2"
The Wife notes that the Husband does not seek to dispute that the Husband made the representation referred to.
4. Wife as sole guarantor of daughter's loan
The Wife notes that the Husband does not seek to dispute that the Wife became the sole guarantor of the parties' daughter's loan in the manner in which she deposes at [31] of her affidavit.
5. Relevance of post-separation inheritance
Contrary to the submission made on behalf of the Husband, Bishop (2013) FLC 93-553 and other cases (such as Elgabri & Elgabri [2009] FamCA 227, Mistie & Mistie [201 O] FamCA 29 and Hewitt & Corbett [2016] FCCA 776), as well as Calvin v McTier [2017] FamCAFC (esp. at [51]) clearly support the proposition that the Court has a discretion to exclude a post-separation inheritance from the pool of assets available for distribution. Hewitt & Corbett provides a clear example of the appropriateness of doing so. The Wife submits, in the present case, that the present case is an appropriate one for the court to exercise the relevant discretion, and further that this proposition is not altered in any way by the fact that the funds happen to have been added to the Wife's superannuation savings.
If the court does exercise its discretion to exclude the Wife's post-separation inheritance from the pool, the calculation regarding division of the remaining assets looks very different, as follows:
Asset
Ownership
Value
L Street, Suburb M
Husband
$350,000
CBA account
Husband
$20,000
Motor Vehicle 3
Husband
$7,000
Super Fund N
Husband
$52,569
Subtotal
$429,659
O Street, Town P
Wife
E$450,000
Motor Vehicle 4
Wife
$10,000
Super Fund Q
Wife
$173,344
Subtotal
$633,344
Addback – extra $70,000 received by husband from sale of Town C property
$70,000
TOTAL
$1,133,003
Using the above figures, if the assets are divided 56% to the Wife (taking into account the Wife's superior contributions), the Husband would be entitled to a figure of $498,521.32. He has already received $70,000 (the extra amount received from sale of the Town C), which when added to his existing asset figure makes $499,659. In addition, the wife has retained sole liability as guarantor for the parties' daughter's loan. This demonstrates that, = even if leave were granted to the Husband, he may well not achieve any different outcome to what has already occurred.
6. Husband's attitude regarding superannuation
The Wife agrees that there is no evidence that the Husband would have pursued his claim but for his knowledge of her inheritance. The Husband's submissions falsely state that the Husband had no knowledge of the inheritance when he commenced his proceedings, whereas [11] of the affidavit which accompanied his Initiating Application states "In addition, Ms Caudle inherited approximately $300,000 from her mother's estate at the beginning of November 2018." This is in the context where he also concedes (at [21])
"Initially when we first separated, I wasn't really interested in pursuing Ms Caudle in relation to her substantial superannuation". Clearly, the Husband's knowledge of the Wife's receipt of further funds was material to his decision to commence proceedings. The Wife submits that the Husband's evidence and submissions as to these matters are disingenuous and should be treated with scepticism.
7. Estoppel and reliance
Having regard to authorities such as Plut & Plut (1987) FLC 91-834, the Wife respectfully agrees that the existence of the regime for property distribution created by the Act effectively precludes her from arguing that the Husband's representations gave rise to an estoppel. Nevertheless, the Wife submits that the issue of reliance is directly relevant to the fourth factor required to be considered by the court in an application for leave for an extension of time, namely prejudice to the respondent. Here, there is no factual dispute about the representations that were made, and the wife has relied upon them in connection with her relocation to South Australia and reestablishment of herself there.
8. Hardship
The Wife's legal costs up to the point of judgment on the leave application are estimated at $15,000. The Wife expects to incur a similar amount to that estimated by the Husband for the balance of the proceedings, save that she notes that the matter has the potential to exceed one day of hearing, and also that she will incur travel and accommodation costs in connection with the proceedings. Mediation, if ordered, would also add to those costs.
Outline of principle
Section 44(3) of the Act is in the following terms:[2]
[2] See also s.44(4).
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 following general propositions may be taken from the authorities to which I refer.
In relatively early jurisprudence, which still has currency, it has been said (again in general terms) that the purpose of s.44(3) is to alleviate or to avoid “hardship”. The power conferred on a Court under this section should be exercised “liberally” subject always to the Court being satisfied that not to do so would result in relevant “hardship.”[3]
[3] See, for example, the decisions in MacKenzie v MacKenzie (1978) 4 Fam LR 374, and Marriage of Whitford (1979) 4 Fam LR 754.
“Hardship” is said, according to the authorities mentioned, to be akin to “hardness, severity or substantial detriment”, and something more burdensome than “any appreciable detriment.”[4]
[4] See Whitford at 759 - 760
Factors to be considered in the exercise of discretion regarding “hardship” include the length of and the reasons for any delay in bringing the Application (including errors on the part of legal advisers), the prejudice to the Respondent arising from any delay, together with the strength of the Applicant’s case and the hardship that may be suffered unless leave was granted.[5]
[5] Ibid.
Of more than passing relevance are the following comments by the Full Court in Whitford:[6]
… 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.
[6] Whitford at 760.
More recently, the Full Court in Sharp v Sharp provided a detailed examination of principle, including the exercise of discretion, in cases of this kind even where hardship had relevantly been established. It is as well to set out the Full Court’s statement of the relevant law.[7] Thus, at [12] – [16], May and Ainslie-Wallace JJ said (emphasis added):
[12] It is important to bear in mind the purpose of s.44 in the context of the Act, which is that time limits are to be observed as the wording of that section makes clear. The principles concerning applications for leave to commence an action out of time are well known. In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551 McHugh J said:
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”. [footnotes omitted]
[7] Sharp v Sharp (2014) 50 Fam LR 567.
[13] At 553 his Honour continued:
A limitation period should not be seen therefore as an arbitrary cut-off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated...
A limitation provision is the general rule; an extension provision is the exception to it ...
[14] There is nothing to suggest that this expression of the law in general is not entirely applicable to a consideration of s.44 of the Act. Indeed so much is seen from the opening words of the s.44(4), “[t]he court shall not grant leave under subsection (3) unless ...”.
[15] In Whitford & Whitford (1979) FLC 90-612 the Full Court noted at 78,146 that while the section intends to confer power to grant leave to avoid hardship, the “... 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.”
[16] We accept that s.44(4) provides the criteria by which we must be satisfied prior to exercising our discretion to grant leave pursuant to an application brought under s.44(3). In accordance with s.44(4)(a) it must be established in this case that hardship would be caused to the husband if leave were not granted. If hardship is established, the Court must nevertheless be persuaded that the discretion should be exercised in favour of the applicant to grant leave to allow the application: Whitford & Whitford (1979) FLC 90-612.
Then at [17] – [22], by reference to the earlier Full Court decision in Whitford their Honours set out what constituted “hardship” for the purposes of s.44(3) and (4). I need here only note what their Honours said at [22], which primarily emphasised what they had said at [16]:
If an applicant demonstrates hardship of the type discussed, then the applicant must then persuade the court that in the exercise of its discretion leave should be granted.
Finally, at [23], their Honours highlighted, again from Whitford, relevant considerations regarding the exercise of discretion. The Court said, at [23]:
In Whitford the Full Court continued at 78,145 to 78,146 to consider the exercise of discretion:
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 ... 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 s.44(3) and s.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.
In the result, the Full Court in Sharp allowed the Wife’s appeal and refused the Husband’s Application to seek leave to proceed out of time with his property Application.
As earlier indicated, a further consideration is the potential hardship to the Respondent, particularly where he or she has organised their financial affairs on the reasonable expectation that the Applicant would not bring proceedings. This is especially true in cases such as the present matter where the Applicant had led the Respondent to believe that no Application would be made and that any financial relationship between them had been finalised, albeit informally.[8]
[8] McDonald v McDonald (1977) FLC 90-317 at 76,688 (Evatt CJ; Ellis & McGovern JJ agreeing).
Finally, at [27] in Sharp, the Full Court said:
We observe that subsequent Full Court decisions have indicated that the appropriate approach to a determination under this section necessitates a clear distinction to be made between the proof of hardship and a consideration of the consequential exercise of the discretion…
Consideration and disposition
In the circumstances, and given the way in which Applications of this kind are conducted, necessarily, absent clear independent evidence, I cannot make any formal findings. That said, I note the following matters.
First, the delay in bring the Application by the Husband has been relevantly explained, namely, difficulties in communication between the parties’ lawyers, and oversight of time-tabling of the expiration of the statutory time period.
Secondly, as far as matters of evidence go, the claims made by the Husband were often in the form of assertions or conclusions, and not usually supported by independent evidence. By contrast, the Wife’s position was regularly supported by documentary evidence. For example, she attached the 2016 letter from the CBA regarding the significantly greater amount of funds received by the Husband from the net proceeds of sale of the Town C property. In my view, this was and remains a very significant factor regarding both the cogency and accuracy of the Wife’s evidence: the Husband’s evidence was in very much more general terms; the Wife’s was much more precise and supported by contemporaneous documents.
Thirdly, having regard to the principles outlined above – especially in the Full Court decision of Sharp – the following matters are relevant to the Court’s general consideration of the prospects of success of the Husband’s wider property Application:
a)There is no dispute between the parties of their ages (late and early 60s), or the length of the marriage (34 years);
b)The Wife claims that she has some health issues; none were raised by the Husband;
c)The parties are retired. Both have re-partnered. Little information of those relationships is available. The Husband did not disclose his relationship;
d)Both parties have no earned income now, although the Wife asserts that the Husband is able to work and that he has done some renovations to his residence and bought a newer car. It is not immediately discernible or otherwise disclosed by the Husband where funds for such work and purchase originated;
e)There seems little dispute that the Wife worked full-time for large parts (if not most) of the relationship, save for maternity leave, while the Husband worked regularly but not always full-time;
f)The care of the parties’ children was not addressed in great detail save that when the Wife moved to Town C she lived with and cared for the children effectively on a full-time basis for the better part of 2 years while the Husband remained living in Town A (accepting that he visited his family regularly);
g)I have already remarked on the greater reliability of the Wife’s claim that the Husband received an appreciably greater share of the net proceeds of sale from the Town C property compared to the Wife. The circumstance and reasons for this, notably that it was in lieu of the Husband making any claim on the Wife’s superannuation, are somewhat disputed. I simply note again the importance of the documentation provided by the Wife that supports her claims regarding the distribution of funds. The weight of the accounts, such as they are, seem to favour the Wife’s version of events;
h)A not insignificant factor also, in my view, relates to the reliance on the informal property settlement. This led to her making significant financial decisions such as moving to South Australia and drawing down on her superannuation for the purchase of land and the building of a residence. She did so, consistent with her account of events and to a degree not disputed by the Husband, of the property settlement agreed between the parties. In my view, it would likely bring not insignificant hardship on the Wife to seek to now make her funds available to the Husband. It must be somewhat conjectural, but certainly not implausible, that the real reason the Husband now seeks to secure funds from the Wife’s superannuation is his knowledge of the inheritance the Wife received in more recent times;
i)Further, the Husband’s assertion (which is all it can properly be: there is no evidence proffered to support it) that the real reason for seeking a further property adjustment is his “fear” that the adult children of the relationship will not benefit from their Mother’s estate borders on the fanciful. As the Wife declared in her Affidavit, (i) she moved to Adelaide at the request of one of the daughters to aid her with one of the Grandchildren who has medical issues, and (ii) her new Will confirms that the beneficiaries of her estate are the two children of the relationship;
j)Moreover, for the assertion by the Husband of the claim just noted to be given any sort of weight would likely require that any funds received in a further property settlement be quarantined for the benefit of the daughters of the relationship. No such suggestion was ever floated by the Husband. In its absence, the likely inference is that he wants the money from the Wife’s superannuation for himself and his own unspecified needs, notwithstanding the earlier agreed “trade-off” which involved him getting a much larger percentage of the net proceeds of sale;
k)These latter aspects may more properly be considered under the aspect of the exercise of the Court’s discretion.
More generally, on the Applicant’s own evidence, notably his Affidavit filed 23rd April 2019, and accepting the two detailed sets of submissions on his behalf at their highest, in my view it is difficult to see that any relevant “hardship” has actually been made out by the Husband. He has simply changed his mind regarding his “entitlement”, some time after he and his then Wife agreed on a property distribution. His averred reason for now wanting access to the Wife’s now drawn-down superannuation (a) is nothing more than an assertion, which is denied by the Wife (“the estate benefit for the children of the relationship”), and (b) of itself and otherwise does not constitute “hardship” according to any relevant test.
Further, even if leave were to be granted to the Husband, given (a) what was agreed between the parties regarding the distribution of funds, (b) absent any other documentation being discovered to refute the CBA letter of mid-June 2016 confirming that the Husband received considerably greater funds from the sale of the former marital residence, (c) the length of the relationship and other matters referred to earlier in these reasons, (d) the relative paucity of evidence provided by the Husband, and (e) the decisions and action taken by the Wife in reliance upon the earlier informal agreement between the parties, I have the greatest difficulty in seeing that the Husband would likely be any better off financially were the matter to proceed to a hearing. Given the vagaries of evidence, and the wide discretion involved, there has to be some real likelihood that if the matter was permitted to proceed to a final hearing the Husband could very well be rather worse off.
When one also takes into account the likely costs of further litigation, in my view the current Application becomes even more problematic. In the exercise of the Court’s discretion (and otherwise), given the ages and financial circumstances of the parties, pursuing and allowing such an Application would be an exercise in financial futility bordering on irresponsibility (not to mention the immense psychological and other toll on the parties and their families). In my view, for the reasons already given, there is a significant risk that allowing the matter to proceed, could/would be disadvantageous (perhaps significantly so) to the Husband. In any event, such a course would ultimately cause extra stress, financial and otherwise, to both parties who are now – respectfully - in their more senior years.
For the reasons given, the Initiating Application filed on 23rd April 2019 must be dismissed. The Husband is to pay the Wife’s costs, either as agreed or taxed.
I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of Judge Neville
Date: 27 February 2020
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