Maybry and McLaughlin

[2019] FCCA 1347

FEDERAL CIRCUIT COURT OF AUSTRALIA

MAYBRY & MCLAUGHLIN [2019] FCCA 1347

Catchwords:

FAMILY LAW – De facto property settlement proceedings – Applicant has filed proceedings outside standard application period – requires leave of court to proceed – consideration of hardship – exercise of discretion – leave refused – application dismissed.

Legislation:

Family Law Act 1975 (Cth), ss.44, 44(3), 44(6), 90SF(3), 90SM

Cases cited:

Whitford v Whitford (1979) FLC90-612

Sharp v Sharp (2011) 50 FamLR 567

Edmunds v Edmunds (2018) FLC93-847

Graetz v Stanley [2018] FamCAFC 218

Althaus v Althaus (1982) FLC91-233

Gadzen & Simkin [2018] FamCAFC 218

Applicant: MR MAYBRY

Respondent: MS MCLAUGHLIN

File Number: NCC 995 of 2018

Judgment of: Judge Betts

Hearing dates: 14 & 26 February 2019

Date of Last Submission: 18 April 2019

Delivered at: Newcastle

Delivered on: 12 June 2019

REPRESENTATION

Counsel for the Applicant: Mr Graham

Solicitors for the Applicant: Tony Cox lawyers

Counsel for the Respondent: Mr Duane

Solicitors for the Respondent: East Coast Family Lawyers

ORDERS

1. The application for leave to apply out of time pursuant to s.44(6) of the Family Law Act 1975 is dismissed.

2. The Initiating Application filed 29 March 2018 is dismissed.

3. The court will hear the parties on the question of costs.

IT IS NOTED that publication of this judgment under the pseudonym Maybry & McLaughlin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT NEWCASTLE

NCC 995 of 2018

MR MAYBRY

Applicant

And

MS MCLAUGHLIN

Respondent

REASONS FOR JUDGMENT

Background:

1. These are property settlement proceedings brought pursuant to the provisions of Part VIIIAB of the Family Law Act1975 (“the Act”).  They arise as a result of the breakdown of the de facto relationship between the Applicant and the Respondent on 5 January 2016.

2. The de facto relationship between the parties subsisted for around ten (10) years.  It produced three (3) children, all of whom live with the Respondent and presently spend very limited time with the Applicant who has since moved to a location some four (4) hours drive away.

3. Pursuant to s.44(5) of the Act, the Applicant was obliged to bring his property settlement application within two (2) years after the end of the de facto relationship (“the standard application period”).

4. The Applicant in fact filed his Initiating Application on 29 March 2018, some eighty-two (82) days or so after the end of the standard application period.

5. Because his application was filed late, the Applicant requires leave to apply.  The Respondent opposes a grant of leave and this is the issue that I am presently asked to determine.

Leave to apply out of time – the law:

1. Section 44(6) of the Act provides that the court may grant a party to a former de facto relationship leave to apply after the end of the standard application period if the court is satisfied that hardship would be caused to that party if leave were not granted.

   (my emphasis)

2. This is relevantly the same test as that which applies in respect of parties who were formerly married: see s.44(3) & s.44(4) of the Act. Accordingly, the authorities dealing with s.44(3) and s.44(4) apply equally to s.44(6).

3. In the early decision of Whitford v Whitford (1979) FLC 90-612, the Full Court held that an application for leave pursuant to s.44 involves consideration of two (2) broad questions:

   (a)The threshold question of whether the court is satisfied that “hardship” would be caused to the Applicant if leave were not granted.  If the court is not so satisfied, that is the end of the matter;

   (b)If the court is so satisfied, then the second question is whether, in the exercise of its discretion, the court should grant or refuse leave.

The “hardship” threshold:

1. In Whitford, the Full Court held that hardship cannot be established merely by pointing to the Applicant’s loss of the right to institute proceedings per se.  Nor is hardship established merely by looking at the present financial circumstances of the Applicant per se. 

2. The Full Court held that hardship requires a consideration of the consequences to the Applicant of losing the right to institute proceedings.  Hardship in that context is akin to such concepts as hardness, severity, privation, that which is hard to bear, or a substantial detriment. 

3. The Full Court said that in order for an Applicant to show hardship, it must appear to the court that the Applicant would “probably succeed” if leave was granted and the application heard on the merits.  The Full Court observed however that if the Applicant is likely to succeed but that the quantum of the applicant’s likely award is only going to be about equal to the costs that the Applicant will incur to pursue the claim, then ordinarily the court could not be satisfied that the Applicant would suffer hardship if leave was not granted. 

4. Subsequent authorities have “watered down” the Whitford requirement that an Applicant prove that he/she would “probably succeed” if the application was heard on the merits.  In its recent unreported decision of Gadzen & Simkin [2018] FamCAFC 218, handed down on 16 November 2018, the Full Court (Murphy, Aldridge & Kent JJ), helpfully reviewed subsequent authorities on point. In paragraphs 33 - 37 (inclusive) of the joint judgment, their Honours said as follows:[1]

   [1] Footnotes have been left in, but renumbered

   33.In Althaus and Althaus[2] Evatt CJ (with whom Marshall SJ and Strauss J agreed) observed of earlier cases:

   [2] (1982) FLC 91-233 at pp.77,266 – 77,267

   ...Now to some extent there may be an exercise of semantics involved here. The case of … referred to a reasonable prima facie case as the test. Other cases such as McKenzie and Whitford suggest that the Applicant needs to show that she would probably succeed. In the case of Perkins and Perkins [1979] FamCA 4; (1979) FLC 90-600, Lindenmayer J. suggested that the test was that there was a reasonable probability of the claim being successful...

   In my opinion, sec. 44(3) and (4) are not intended to require a detailed hearing on the merits to determine whether the Applicant’s claim will succeed. The exercise is to determine whether there is a reasonable claim to be heard. That is the essence of the inquiry into whether hardship will be suffered by denying the Applicant the right to litigate that claim.

   34.    In Hall and Hall [3] the Full Court said:

   [3] (1979) FLC 90-679; the Full Court also referred to McCoy & Chancellor [2014] FamCAFC 62; Sharp v. Sharp (2011) 50 Fam LR 567 (“Sharp”) and Edmunds & Edmunds (2018) FLC 93-847 (“Edmunds”)

   Fundamental to that [a finding of hardship] is a determination of the quality or character of the potential claim. In relation to that different cases have used somewhat different phrases to describe it so that it has become something of a matter of semantics to describe in different ways what is really the same basic concept...

   35.In Sharp the plurality of the Full Court observed:

   17.It is well-accepted that hardship for these purposes is more than the loss of a right to commence proceedings. It is the consequences attending the loss of the right to commence proceedings that constitutes hardship. That is a matter to be determined by the circumstances of the particular case.

   18.In assessing hardship in this context the well-established test is that the Applicant must have a prima facie claim worth pursuing or a “real” probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship. However, whether or not hardship exists is not to be assessed only by reason of the monetary value of the probable order to be made if leave were granted.

   36.In Edmunds the Full Court recently cited with approval the judgment in Sharp and said:

   47.As the Full Court pointed out in Sharp at [18], “the well-established test is that the Applicant must have a prima facie claim worth pursuing or a ‘real’ probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship”.

   48.That involves a consideration, but not a final determination, of the nature of the Applicant’s claim. In doing so, the Court must weigh the Applicant’s case against that of the Respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.

   37.It follows from these authorities that the starting point in determining an application for leave is to consider the question of hardship which requires for its existence a conclusion that an Applicant has a prima facie or arguable case of substance having regard to all of the circumstances of the case. That must take into account the costs or likely costs to be incurred in pursuing the claim.

   (my emphasis)

The second question – exercising the discretion:

1. Assuming that hardship is established, the Full Court in Whitford made clear that the ultimate question of whether to grant or refuse leave always remains a discretionary exercise.  Hardship may be the touchstone, but proof of hardship is not enough of itself.  There is still a discretion to be exercised.

2. In the exercise of discretion, relevant factors to consider are:

   (a)the length of the delay;

   (b)whether the delay is explained;

   (c)whether a grant of leave would result in prejudice to the Respondent;

   (d)whether the Respondent would suffer hardship if leave were granted.

3. The exercise of the discretion one way or the other is not a pro forma exercise.  Each case presents its own facts and must be carefully considered.  It follows that the above is not an exhaustive list of potentially relevant factors.

4. Prejudice to a Respondent may be quite specific – for instance the delay may mean that a critical witness or document may no longer be available, thus justice is less able to be done.  But prejudice can also be of a more general nature, as was explained by the Full Court in Sharp v. Sharp(2011) 50 Fam LR 567:

   Merely because the Respondent to an application for leave does not point to particular prejudice that might arise if leave were granted, does not dispose of the question. The law presumes prejudice to flow to a person sought to be joined in the litigation after the effluxion of the relevant time limits...[4]

   [4] Per May and Ainslie-Wallace JJ at paragraph 97 of their Honours’ joint judgment.  The other member of the court (Young J) concurred.

5. In the unreported Full Court decision of Montano & Kinross [2014] FamCAFC 231, Murphy J said:

   Like many applications for indulgence, an application for leave to apply after the end of the standard application period requires the Court to exercise its discretion in a manner that, ultimately, is consistent with justice being done to both parties. The potential for injustice to the applicant being unable to pursue the remedy precluded by the refusal to grant leave must be compared to the prejudice to the respondent in the granting of leave. So, too, good or legitimate reasons for failing to do that which the Act requires must be compared with wilful blindness or recalcitrance. Equally, a desire to pursue a remedy out of time must be compared to the necessity of the parties to proceed with their post-separation lives free of the spectre of prospective litigation.[5]

   [5] At paragraph 14 of his Honour’s judgment.  The other members of the Full Court (Ainslie-Wallace and Tree JJ) concurred.

The hearing before me:

1. This matter proceeded to hearing on 14 February 2019.  Mr Graham of counsel appeared for the Applicant and Mr Duane of counsel appeared for the Respondent.

2. At the hearing, I was taken to the following material (in order of filing):

   (a)Initiating Application filed 29 March 2018;

   (b)Applicant’s Affidavit filed 29 March 2018;

   (c)Applicant’s Financial Statement filed 29 March 2018;

   (d)Response filed 21 June 2018;

   (e)Respondent’s Affidavit filed 21 June 2018;

   (f)Respondent’s Financial Statement filed 25 June 2018;

   (g)Applicant’s further Affidavit in reply filed 26 October 2018;

   (h)Schedule of Direct Financial Contributions allegedly made by the Applicant in the period between 13 July 2011 and 8 October 2015.  This document was tendered by the Applicant and became exhibit “A1” in the proceedings.

   (i)Written submissions of each party.

3. Neither of the parties was cross-examined.  The matter proceeded on the papers only and judgment was reserved.

4. After judgment had been reserved, I subsequently decided to re-list the matter so that the court could be provided with evidence as to the parties’ likely legal costs of proceeding to hearing, together with proper evidence as to the value of the major asset, the former matrimonial home.[6]

   [6] The Applicant estimated its value at $750,000 and the Respondent at $600,000.  Neither was qualified to value the home and the court considered it prudent to have expert evidence on point

5. The matter came back on before me on 26 February 2019.  On that date the parties:

   (a)consented to further orders for the appointment of a single expert valuer for the former matrimonial home; and

   (b)at my request, specifically estimated their respective legal costs up to the conclusion of a trial.  The Applicant’s estimate was $30,000 and the Respondent’s was $40,000. 

6. The single expert valuation was subsequently provided to the court as an annexure to the Applicant’s further Affidavit filed 18 April 2019.  The valuation came in at $640,000 and I proceed on that basis.

The “hardship” threshold:

1. In his Initiating Application, the Applicant seeks a cash payment from the Respondent equal to one half of the net equity in the former matrimonial home.  The home is subject to a mortgage of around $272,000, so that the net equity is $368,000 of which the Applicant is therefore seeking $184,000.

2. The Respondent argues that her contributions significantly outweigh those of the Applicant, and that the s.90SF(3) factors also favour her particularly given that she is a stay-at-home mother to the parties’ three (3) children whereas the Applicant earns a reasonably high income as a tradesman.

3. On this basis, the Respondent contends that the Applicant may not ultimately receive any of the net equity in the home.  Alternatively, any amount he receives may only be about equal to the costs he will incur to pursue the claim.  In either scenario, the Applicant fails on the hardship threshold.

4. It therefore falls upon me to assess whether the Applicant’s evidence makes out a prima facie or arguable case of substance having regard to all of the circumstances of the case, including the likely costs to be incurred in pursuing the claim: Gadzen & Simkin.

5. Neither party sought to cross-examine the other.  Given the competing factual allegations, I intend to proceed on the basis of the Applicant’s realistic “best case” scenario. 

6. In doing so, I would record however that the Applicant’s first Affidavit was noticeably “thin” and provided limited evidence in support of his case.  The Respondent then filed an Affidavit which gave the court much more comprehensive evidence and directly contradicted the Applicant’s Affidavit as to various details; the Respondent also annexed some contemporaneous objective documents which added weight to her evidence.  Faced with that Affidavit, the Applicant then filed an Affidavit in reply in which he not only made some concessions, but positively changed his earlier evidence in some respects.  

7. Even on the Applicant’s version of events, it is clear that both contributions and the s.90SF(3) factors favour the Respondent. The latter must carry particular weight given the modest amount of property involved and the Respondent’s ongoing care of the parties’ three (3) children.

8. At the hearing, the Applicant’s counsel properly conceded that the Applicant’s likely entitlement was not fifty percent (50%) of the net equity in the home as originally claimed, but closer to thirty percent (30%) of the net equity, which in dollar terms amounts to $110,400.

Is it “just and equitable” to make a property settlement order at all?

1. In my view the Applicant has an arguable case of substance on the question as to whether it would be just and equitable to make an order. 

2. That said, on the Respondent’s evidence this will be a live issue if the matter proceeds to a trial.  I particularly refer here to the Respondent’s evidence surrounding the purchase of the home.

Assessment of contributions:

1. The parties commenced a relationship around 2006, initially living together in various rental properties.  The Applicant’s first Affidavit glossed over the early stages of the relationship, but in her much more comprehensive Affidavit the Respondent deposed that she had financially supported the Applicant in those early days, including in a failed business. 

2. In his Affidavit in reply, the Applicant does not specifically address those allegations but he does concede that in that timeframe he “had periods of unemployment and was receiving government assistance.”

3. It is common ground that in 2009 the Respondent purchased the home in her sole name for $325,000.  The parties disagree as to why that was so.

4. In his first Affidavit, the Applicant asserted that: “The property was purchased just in Ms McLaughlin’s name due to pending civil action against myself as a result of being charged of two criminal assaults.” [7]

   [7] Affidavit filed 29/03/18, paragraph 9

5. The Respondent deposed that she was aware the Applicant had been in prison for an assault prior to their relationship, but was unaware of the civil action against him which he referred to.  Her evidence is that the home was purchased in her name because she was the only one working at the time – and the bank based the loan solely on her income.  Further, she says the Applicant was not interested either in buying a home or in being liable under a mortgage.

6. Whatever the true reason for the purchase in the Respondent’s sole name, the reality is that this is how the parties acquired the home.  As a matter of law, the Respondent was the sole mortgagor and the loan can only logically have been based upon her income alone.  Significantly, only the Respondent bore legal liability in the event of mortgage default. 

7. As to the deposit moneys, the Applicant’s original version of events was that “Ms McLaughlin and I had saved approximately $30,000 for the deposit to purchase the property.  The balance of the purchase price approximately $290,000 was achieved through a mortgage with the …  Credit Union…” [8]

   [8] Affidavit filed 29/03/18, paragraph 9

8. The Respondent’s Affidavit vigorously disputes that “they” saved the deposit moneys.   She asserts that the deposit was entirely made up of her savings totalling $15,450 together with the first home buyers’ grant of $14,000.

9. The Respondent, who was employed as a public servant at the time, explains that she had always been frugal with spending and had been saving for a deposit for eight (8) years, at times working three (3) jobs to do so.  In contrast she paints the Applicant as having been a “spender” who in the early days of the relationship was largely unemployed. 

10. The Respondent helpfully annexed to her Affidavit some contemporaneous documentary evidence from Centrelink.  These documents reveal that the Applicant received the following Centrelink payments:

    (a)in the period 01/07/07 to 23/10/07 – payments totalling $3,524;

    (b)in the period 25/05/09 to 07/05/10 – payments totalling $10,544.

11. This documentary evidence generally supports the contention that the Respondent at the relevant time had a “patchy” work history.

12. Faced with this evidence, the Applicant’s Affidavit in reply then made a concession: “The Respondent was working as a public servant whilst I had periods of unemployment and was receiving government assistance.  I say it was from our combined monies we were able to save a deposit.  I accept that a greater contribution for the deposit would have come from the Respondent, but she was not solely responsible for the deposit…” [9]

    (my emphasis)

    [9] Affidavit filed 26/10/18, paragraph 14

1. On any analysis, there can be no question that it was the Respondent as sole purchaser who received the first home buyers’ grant of $14,000.00.  This constituted approximately half the deposit.  It was a contribution entirely on her behalf.

2. As to the other half of the deposit, the Applicant either paid less than half of it (his case) or nothing at all (Respondent’s case).  Notwithstanding my reservations about the Applicant’s changed evidence, I will nonetheless proceed on the basis of his version of events, namely that he contributed something less than half.

3. The Respondent also deposes that she applied an additional $5,000 from her own savings towards conveyancing fees, pest and building inspections and mortgage fees.  The Applicant did not reply to that allegation.

4. In summary, as to these initial contributions I proceed on the basis that the Applicant contributed less than 25% of the deposit, and that the Respondent paid more than 75%, together with additional $5,000.

5. The parties subsequently moved into the property together.  The Respondent continued to work as a public servant and her income was applied to the mortgage.

6. In … 2011, the Respondent gave birth to the parties’ first child [X].  From that point in time, the Respondent ceased work and became a full-time mother and homemaker.

7. Some time around then, the Applicant obtained work as a tradesman.  He took on the role of primary breadwinner for the family, earning a reasonably lucrative income, but was required to work away from home for four (4) out of every five (5) weeks.

8. The Applicant significantly relies upon the financial contributions that he made after taking up that employment. 

9. In his first Affidavit, the Applicant deposed in general terms that he was paying the Respondent the sum of $1,000 per week “prior to separation”.[10]

   [10] Affidavit filed 29/03/18, paragraph 10

10. The Respondent’s Affidavit disputes this.

11. She deposes that she was on paid maternity leave until … 2012, and that right up until that time she continued to pay the mortgage, bills and general living costs.  She says that it was only after … 2012 when her maternity leave ran out that the Applicant then became the breadwinner for the family – she says that from that time she “became financially dependent” upon him.[11] 

    [11] Affidavit filed 21/06/18, paragraphs 39-41

12. The Respondent also deposes that the Applicant would send her $4,000 in each five (5) week period – in fact averaging out at $800 per week rather than the $1,000 per week that he asserted.

13. In his Affidavit in reply, the Applicant attempted to be more precise as to his contributions.  He said he had by then calculated from his bank statements that he had paid a total of $172,000 to the Respondent in the period from 1 July 2011 until 15 March 2016 (the latter date being a couple of months after separation).  He deposed that this figure did not include child support, repair costs, food, maintenance etc.[12]

    [12] Affidavit filed /10/18, paragraphs 11-13

14. Ultimately at the hearing before me, that figure was superseded by an updated schedule which the Applicant tendered as exhibit “A1”.  That schedule itemises each and every financial contribution allegedly made by the Applicant to the Respondent from 13 July 2011 until 8 October 2015 in the total amount of $194,367. 

15. The above lump sum equates to $883 per week over that period – which is about halfway between what the Applicant originally estimated and what the Respondent originally estimated.  From that figure, the Respondent had to make the mortgage repayments - which at that time would have exceeded $328 per week.[13] She also had to buy food and meet other household expenses.  By February 2014 the family included their second child [Y]. 

    [13] This is the current mortgage repayment figure according to the Respondent’s Financial Statement; by inference as the mortgage debt was higher back then, the repayments must have been higher as well

16. Logically it would seem that finances would have been quite “tight” for the Respondent as she asserts.  She had to live on the money the Applicant sent her but having regard to his Notices of Assessment I do not think that the Applicant was overly indulgent in terms of spending his income on himself.  He probably could have been somewhat more generous to the Respondent in terms of his disposable income but that is about as far as this point goes.  The Respondent cannot in my view show “waste” in a Kowaliw sense.[14] 

    [14] Kowaliw & Kowaliw (1981) FLC 91-802

17. After [X]’s birth, the Respondent’s parenting and homemaking contributions probably equalled (but possibly exceeded) the corresponding breadwinner contributions of the Applicant.  For present purposes I will however proceed on the basis that the respective contributions of the parties after the birth of [X] and up to separation were about equal.

18. Post-separation contributions significantly favour the Respondent.  She has throughout been the overwhelming primary carer of all three (3) children, including [Z] born after separation. The Applicant has hardly spent any time with the children and does not presently have a relationship with [Z].  Caring for all three (3) children on her own, who suffer health difficulties, would have been no easy task for her.  She has also maintained and cared for the home.

19. The Respondent has had sole use of the home and has made the mortgage repayments - using child support, Centrelink and Family Tax benefits to do so.  She has also repaid to the Commonwealth some $8,000 worth of overpayments of Family Tax Benefits she received, such liability arising as a result of the Applicant’s income turning out to be higher than the relevant income threshold.

20. The Applicant has paid child support as assessed by the Child Support Agency.

21. Overall, the contributions assessment favours the Respondent.  On the Applicant’s realistic best case, my view is that his contributions towards the net equity in the home may be assessed in the order of thirty-five percent (35%). 

22. Though neither party seeks a superannuation splitting order, I should add here that the Respondent would likely have some modest contributions-based entitlement to the Applicant’s current superannuation balance.  This arises because the Respondent ceased work in 2011 and at that time her employer contributions stopped whereas the Applicant has been working and receiving the benefit of employer contributions.

Section 90SF(3) factors:

1. These undoubtedly favour the Respondent.

2. The Applicant is 36 years old and the Respondent is 38.

3. Though a qualified public servant, the Respondent has not worked since … 2011 when she took up the primary care role.  She relies for her income upon a Centrelink sole parent pension, child support from the Applicant and Family Tax Benefits.  Having been out of the workforce for 8 years, and faced with childcare costs if she does return to work, the Respondent’s income-earning capacity is on any view markedly lower than the Applicant’s.

4. In FY 2018 the Applicant earned a taxable income of $140,692.  He will be earning a similar amount in the current financial year. 

5. While the Applicant does pay fairly significant child support to the Respondent of $426 per week, it is the Respondent who has the overwhelming primary care of the three (3) children.  The children have some health issues.  They all suffer from asthma. The Respondent is also has a complicated respiratory condition and is suffering from stress and anxiety, which is perhaps unsurprising given that she is effectively parenting the children alone.[15] 

   [15] See Affidavit filed 14/06/18, annexure “D”, being the report of her GP Dr A dated 18/04/18

6. The Respondent’s role as primary parent was mutually recognised during the relationship and the need to protect her in that role remains a relevant s.90SF(3) consideration.

7. The Applicant blames the nature of his employment for the breakdown of his subsequent relationship with Ms B, with whom he has had another, younger, child.   He pays rent to Ms B of $430 per week in lieu of formal child support for that child who he obviously has a legal obligation to support.

8. The Applicant deposes that he intends to cease tradesman work in order to obtain local work in New South Wales.  He accepts that his will mean a reduced income.

9. If the Applicant takes up a lower paying job, then this is something of a two-edged sword in terms of s.90SF(3). While his income will likely be less, so too will his child support payments to the Respondent upon which she relies to make ends meet week-to-week.

10. In my view, the s.90SF(3) factors would likely reduce the Applicant’s contributions-based entitlements to the net equity in the home by at least fifteen percent (15%) and probably more. The difficulty for the Applicant here is that the asset base is modest; percentages are a useful tool but fundamentally the court must consider the underlying dollar figures that percentages represent. In this case, fifteen percent (15%) amounts to $55,200. In circumstances where the Respondent has the care of the parties’ three (3) young children, where she has not worked outside the home since 2011, and where the Applicant works in a highly-remunerative job, my view is that fifteen percent (15%) in the Respondent’s favour is a relatively modest adjustment.

11. It follows that, on the Applicant’s realistic best case, his claim has a value of around twenty percent (20%) of the net equity in the home - or $73,600.

12. The Applicant’s current financial position is as follows:

    (a)He presently has non-superannuation assets of $21,000 - $23,000 including $12,000 in the bank.  His debts are $28,000 which includes a debt owed to State Debt Recovery of $20,000.  Thus his liabilities outweigh his non-superannuation assets by some $5,000 to $7,000; 

    (b)He has super of $63,302;

    (c)Although his Financial Statement discloses income of $2,642 and expenses of $1,420 it is inaccurate insofar as expenses are concerned.  In particular, he additionally pays rent of $430 per week for Ms B.  Moreover there is no allowance in the Financial Statement for his usual week-to-week expenses.  Nonetheless I am satisfied that his income comfortably exceeds his expenditure each week, as evidenced by his current bank balance. 

13. Working on the Applicant’s realistic best case ($73,600) and deducting his anticipated legal costs ($30,000) results in a net payment to him of $43,600. 

14. Instead of his debts outweighing his assets by some $5,000 - $7,000 he would have net assets of $36,600 - $38,600.

15. On this basis I am satisfied that the Applicant would suffer hardship if leave was refused.  Though his claim is not a large one in monetary terms, he would suffer a “substantial detriment” if leave was refused having regard to his current deficiency of assets over liabilities.

16. The Applicant satisfies the threshold issue.

The second question – should leave be granted?

Length of the delay:

1. The length of the delay in this case is only slight, some 82 days or so. 

Explanation for the delay:

1. The Applicant has attempted to explain the delay in his Affidavit material but his explanations are inconsistent.

2. In his first Affidavit he deposed that he had been unaware of the relevant limitation period.  His evidence was:

   “Through discussions with my partner, Ms B, I became aware that as I was not married I should have brought an application for property division before the expiration of 2 years from the date of separation.  As a result of becoming aware of the time restraint I then made an appointment with Tony Cox Lawyers so as to understand my position in relation to the property and the children.”[16]

   [16] Paragraphs 13 and 14 of the Applicant’s Affidavit filed 27 March 2018.

3. But in answer to that assertion, the Respondent’s Affidavit annexes various text messages exchanged by the parties just after separation in January 2016.  Those text messages reveal that the Applicant was at that time (unsuccessfully) attempting to negotiate a property settlement with the Respondent whereby his “share” of the home equity would be credited against his ongoing child support liability. 

4. Having gotten nowhere with that suggestion, and at a time when emotions seem to have become heated, the Applicant told the Respondent in a text:

   “Nothing is your problem thanks for being understanding.  I’ve got 2 years too [sic] decide what to do with my share of the house.  You are going too [sic] need every cent of what I have to pay good luck with it.” 

5. In a later text he went on to tell the Respondent that:

   “I’m not giving you everything just so you can make my life hard.  I’ve already contacted a solicitor.” [17]

   [17] Annexure “A” to the Respondent’s Affidavit filed 21 June 2018.

6. The point made by the Respondent is that the Applicant’s texts reveal that he was in fact well aware of the limitation period, contrary to what his initial Affidavit asserts. Moreover he had already contacted a solicitor.

7. In his Affidavit in reply, the Applicant explained that he was merely “bluffing” when he told the Respondent at that time that he had obtained legal advice; all that he had in fact done was undertake a search on “Google”.  He maintains that the first legal advice he obtained was from his now solicitors Tony Cox Lawyers in February 2018 – by which time the application he was about to bring was already out of time by a little over a month. 

8. He goes on to explain that he always thought he would have been able to work out a settlement with the Respondent but that “time just got away” and that the relationship between them broke down worse than he could ever have imagined.  He said that the parenting issues were initially the major concern for him and were more important at the time than sorting out property issues.

9. Having weighed the competing evidence of the parties, I am not persuaded that the Applicant has adequately explained the delay. 

10. The Applicant in fact did know the standard application period from a very early stage after separation.  At the very least he was on notice that he should have seen a solicitor within two (2) years of separation.

11. As for parenting issues, these seem to have been strained and difficult ever since separation.  Yet the Applicant has never brought any parenting proceedings - even now he only brings a property application. 

12. In my view, the Respondent is guilty of (at least) wilful blindness as to the limitation period.  

13. As to “time getting away” it is not the case that there were ongoing property negotiations.  Any negotiations between the parties – such as they were – broke down in 2016.

Prejudice to the Respondent:

1. The delay in these proceedings is slight.  The Respondent has not re-entered the workforce since the birth of [X] in 2011, so it cannot be said that she has materially changed her position in the period between the expiry of the standard application period and the filing of the Initiating Application 82 days later.  There is no specific prejudice to the Respondent occasioned by that delay.

2. However, if leave is granted the Respondent will find herself caught up in litigation which is inherently expensive and which she can ill-afford given her lack of income.

3. Litigation inevitably also exposes the home to the risk of sale which she has been most anxious to avoid.

4. Thus there is a general prejudice to the Respondent if leave is granted.

5. In August 2016 the Applicant sent the Respondent a text message stating/implying that he would not be seeking to sell the home:

   “The house i never said it like that at all, alls [sic] i said was I left my share to the kids as it wouldn’t be good upsetting there [sic] life over it!” [18]

   [18] Affidavit filed 21/06/18, paragraph 14

6. The Respondent says she relied upon that text in that she did not seek out work during the standard application period.  Instead she remained home with the children. 

7. The Applicant concedes in his Affidavit in reply that he sent this text message but says it has been misrepresented.  In his words: “At no time did I ever want my children to be without a home and it would be ideal for them to stay in the same home but that the Respondent pay me for my share of the home.” [19] 

   [19] Affidavit filed 26/10/18, paragraph 7

8. The Applicant explains that after separation his preference was to find out how much he was entitled to and then offset that figure against his child support liability.[20]

   [20] See annexure “A” to Affidavit filed 26/10/18

9. I accept that had the Respondent been aware that the Applicant was intending to pursue his share of the home as “cash” she could potentially have sought to return to the workforce at an earlier time.

10. The Applicant’s text to the Respondent in March/April 2018 – just before he served her with his Initiating Application – acknowledged the prejudice (and shock) that his late claim would cause.  In the Applicant’s own words:

    “To be honest there’s a big shock coming to you all.  Not the kids just you and your parents.  You think you always get the last laugh well guess what no-one will be laughing soon.”[21]

    [21] Annexure “E” to Affidavit filed 21/06/18

Hardship to the Respondent:  

1. If leave is granted, the Respondent would find litigation stressful given her somewhat vulnerable housing situation and her ongoing role as overwhelming primary carer of three (3) young children with some health issues. 

2. In dollar terms, the Respondent’s anticipated costs of defending the proceedings are estimated at $40,000 in circumstances where she does not work outside the home and where her borrowing capacity would seem to be limited. 

3. If the Applicant’s realistic best case succeeds, then the total cost to her of the proceedings will be around $112,600.  In that event it is at least likely, if not probable, that the home would have to be sold and that the Respondent and the children would have to move away from the area, including from their family and friends.[22]

   [22] Respondent’s Affidavit filed 21/06/18, paragraph 18

4. If the Respondent’s case succeeds as she claims it will, then the likely award to the Applicant would in fact be only modest, probably about equal to the costs he will incur – in which case the Applicant’s hardship will not in fact be alleviated in the end result.

5. Whatever the likely outcome, given her circumstances there will be a “substantial detriment” to the Respondent if the litigation proceeds; she will suffer hardship. 

6. The Respondent’s current asset position is certainly much stronger than the Applicant’s:

   (a)She has the home, with a net equity of $368,000.  Her other non-superannuation assets consist of just under $5,000 in the bank, $5,000 worth of household contents and a $12,000 motor vehicle.  The Respondent has a HELP debt and a credit card debt with a combined balance of a little over $8,000.

   (b)She has super of $41,588.

7. If leave is refused, the Applicant will be left in a net negative asset position.  He will suffer hardship.  The Respondent will not.

8. If leave is granted, the Respondent will suffer hardship.  The Applicant’s hardship will be alleviated if his case succeeds but will not be alleviated if the Respondent’s case succeeds.

9. The hardship to the Applicant if leave is refused is arguably greater than the hardship the Respondent would suffer if leave is granted.  I say that because if needs be, the Respondent could always downsize to a smaller home or move to a less favourable area than she would like to.   But in saying this, there would still be a real hardship to the Respondent in this situation.

Other potentially relevant considerations:

1. The Respondent’s counsel submits that the Applicant has been unreliable in his first Affidavit, as evidenced by the changes in position in his second Affidavit. 

2. The Respondent’s counsel also submits that the Applicant does not have “clean hands” in that the civil claim against him for assault explains why the Applicant did not want his name on title. 

3. Both submissions are open on the evidence before me – but I do not, with respect, regard either as significant matters.

Conclusion:

1. This has not been an easy matter to decide.

2. I am conscious that I have descended into particularity in terms of analysing the strength of the respective claims.  However this was done in order to weigh up whether the Applicant has a prima facie case of substance having regard to all the circumstances of the case.  Imperfect as they may be, percentages are a useful tool in this exercise.

3. In short, the Applicant’s delay is relatively minor and the Applicant will suffer hardship if leave is refused.  Ordinarily such matters should weigh heavily in favour of granting leave.

4. However, the Respondent will suffer hardship and general prejudice if leave is granted.  The Applicant knows this, or ought to know this, given the Respondent’s circumstances.

5. The Applicant has not adequately explained the delay; moreover his original explanation for the delay was at best unreliable and possibly dishonest.

6. Though his Initiating Application makes an ambit claim, the reality is that if leave is granted to him the Applicant’s best case results in a modest award in both percentage and dollar terms.

7. If leave is granted and the Respondent’s case succeeds, the Applicant is not likely to receive an award that is any greater than his likely costs of litigation.  In that scenario the litigation will not have been worthwhile for either party. 

8. In what is a finely balanced case, I consider that leave should ultimately be refused. 

9. The court will make orders accordingly.

10. The court will hear the parties on the question of costs.  That said, the court’s strong inclination is that each party should bear their own costs given that it was a finely balanced case and noting the Applicant’s financial position.

I certify that the preceding one hundred and twenty-nine (129) paragraphs are a true copy of the reasons for judgment of Judge Betts

Date: 12 June 2019