McIntyre, J.D. and Malezer, A.F.J.

[1986] FamCA 28

In the marriage of MCINTYRE, J.D. and MALEZER, A.F.J.

(1987) FLC ¶91-816

In the Full Court of the Family Court of Australia at Brisbane.

Judgment delivered 10 December 1986.

Before: Evatt C.J., Lindenmayer and Nygh JJ.

Evatt C.J., Lindenmayer and Nygh JJ.: This is an appeal from a judgment of Mr Justice Underhill given on 22 May 1986 whereby he refused leave to the wife to institute proceedings for property settlement under sec. 44(3).

The parties were married on 22 June 1969 having previously cohabited from the beginning of that year. They separated in March 1979. A decree nisi of dissolution of marriage was pronounced on 7 July 1980 becoming absolute on 8 August 1980. The wife filed her application under sec. 44(3) on 3 April 1986, about five years after the time for filing an application under sec. 79 had expired.

There were four children in the household. The oldest, E, was a child born to the wife of a previous relationship on 12 October 1968. The wife alleged that the husband had adopted the child. The husband neither denied nor admitted this but it is clear that the child was treated throughout cohabitation as a child of the marriage. Two other children, To born 6 January 1970 and Ta born 14 January 1971 are undisputedly children of the parties. A fourth child, F, was born on 13 May 1977. The husband alleges that the wife told him he was not the father. Nevertheless, he admits that he has always treated the child as one of his own.

After the parties separated in 1979 the four children initially lived with the wife but in early 1980 all four came to live with the husband. On 7 August 1981 the parties entered into an agreement whereby the wife, in consideration of the sum of $1 and the husband taking over the full obligation under the mortgage, agreed to convey to the husband her right, title and interest in the former matrimonial home. The agreement, in its original form, contained a recital commonly found in sec. 87 agreements, stating the agreement of the parties to settle their financial claims but this had been crossed out. The agreement was finally registered under sec. 86 of the Act.

There was some dispute between the parties as to any collateral agreement between them. It was common ground that there was some collateral agreement between them. The husband asserted that the wife had agreed to let him have the property provided he looked after the children and would leave the house to the children, including any property which he might buy in the future to replace it. The wife alleged an agreement that if he sold the house she had transferred to him, he would pay her $10,000 out of the proceeds. The learned trial Judge accepted the husband's version.

In early 1981 Ta and F went to live with the wife for about 12 months when Ta then returned to the husband. In January 1983 E went to live with wife. At present each of the parties have two children living with them. E has by now turned 18 and will shortly leave the wife's household to live in a flat. The wife has remarried and has a child aged two from her present marriage.

In about 1984 the husband retired from his employment because of an injury received at work. He is now an invalid pensioner but has a claim for compensation pending. He received $80,000 from his former employers by way of superannuation from a fund which he had joined in 1969. He used the money to buy a rural property near Gympie for $21,600. He sold the former matrimonial home for $57,000 from which he received after payment of the mortgage and other expenses the sum of $38,000. This money, together with the balance of the superannuation fund, was used to build a house on the Gympie land on which, as his Honour found, he spent between $100,000 to $110,000 in all.

He owes $5,000 in respect of the property on which he lives with two of the children. His Honour found at p. 14 of the Appeal Book that ``he has made his disposition of his finances in reliance on the arrangement made many years ago with his wife''.

The wife found out at about Christmas 1985 that he had sold the former matrimonial home but did not bring her application until April 1986. She gave as her reason for the delay that she understood that as a result of the 1981 agreement she would be unable to do so. She finally brought the proceedings, as his Honour found, on the basis that ``everybody told her that as she had nothing to lose she might as well have a go at it''.

As his Honour found, the wife's present husband has an income of $240 per week and she earns an additional $80 per week. They are living in rented accommodation and have three children to care for. The wife had approached the husband for financial support in September 1985 and he had promised to help her if and when he received his compensation for the accident. His Honour found, and it seems rightly so, that if leave were not granted to the wife under sec. 44(3) she would suffer hardship.

Nevertheless he denied her leave. He referred for his reason to the decision of the majority of the Full Court in Schokker and Edwards (1986) FLC ¶91-723, and in particular to the passage where Gun and Elliott JJ., who formed the majority in that case, said at p. 75,263:

``But in our view of sec. 79(2), the wife having twice unequivocally declared that she would not seek a further property settlement, it was unjust and inequitable for her to make a claim and for an order to be made in her favour.''

His Honour commented on that statement in the following words at p. 16 of the Appeal Book:

``Quite clearly, the facts of that case differ from these, but the principle involved appears to be somewhat the same: basically that the wife twice said she was not making a property settlement claim, and therefore she should not have been allowed to bring one later. In this case the wife has set out in deeds what she was prepared to accept by way of property settlement, and it appears to me that that should have the same effect.''

The wife has appealed basically on two grounds: the first ground is that his Honour was wrong in finding in favour of the husband's version of the agreement. This is primarily an issue of fact depending on the evidence before his Honour. There was no doubt, as his Honour pointed out, that the husband in cross-examination at transcript pp. 16 and 17 appeared to be confused about the exact terms of the alleged agreement and gave several versions of it. But the wife at p. 7 of the transcript was also uncertain of the exact terms. His Honour having had the benefit of hearing and seeing the witnesses found in favour of the husband. An appellate tribunal, lacking that direct contact, is not in a position to determine that his Honour was wrong in that regard.

The second ground was that his Honour erred in allowing the fact of the 1981 agreement to outweigh the hardship to the wife. Basically the reason given by his Honour for refusal appears to be that the husband was entitled to rely on the 1981 agreement to assume that the financial relationship between the parties was settled in making his new financial arrangements in 1985. The husband had not received any notice of any claim by the wife until the rearrangement had been completed. He saw in this a parallel with the situation in Schokker and Edwards where the majority of the Full Court held that it was unjust and inequitable for the wife to make a claim and for an order to be made in her favour after she had twice stated in writing that she did not wish to pursue a property settlement, on the last occasion through her solicitors confirming her intention at the request of the husband who wished to reinvest his assets in a new venture.

As his Honour pointed out, the decision in Schokker and Edwards is not directly germane to the present case. That decision does not establish a general principle that a claim under sec. 79 can be barred or estopped other than by agreement approved under sec. 87. The dissenting view of Strauss J. that the only bar to an application under sec. 79 is a maintenance agreement approved under sec. 87 commends itself as a statement of principle. While the considerations which influenced Gun and Elliott JJ. would have been a relevant consideration under sec. 75(2)(o), in our view it would be dangerous to extend the majority view in Schokker and Edwards beyond the very special circumstances of that case.

In our view his Honour was in error in giving as his reason for the refusal of leave the fact that the wife had entered into a sec. 86 agreement and that she was in some way debarred by this and by the reliance by the husband upon the agreement. This leaves it open for this Court to exercise its discretion afresh.

There is no doubt that prima facie the wife would be entitled to a share of the former matrimonial home and the superannuation payment now represented by the Gympie property on the basis of her contribution both during cohabitation and to the children in her care after separation. If she had received a substantial settlement under the sec. 86 agreement, it could have been argued that having regard to sec. 75(2)(o) her chances of receiving more now would be remote. But in a situation where at most she received the payment of $1 that can hardly be argued.

As regards delay, the wife gave as her explanation that she thought the 1981 agreement was binding. Of course it was not, but in determining the validity of an excuse one should look at it from the point of view of a lay person rather than that of a lawyer: Frost and Nicholson (1981) FLC ¶91-051. On that point of view the wife's delay can be understood although five years is a very long time.

As the Full Court pointed out in Althaus and Althaus (1982) FLC ¶91-233 absence of an acceptable explanation for delay is not by itself a disabling factor. It may be outweighed by the degree of hardship which the applicant would suffer if leave was refused.

His Honour found, in our view correctly, that the wife would suffer hardship if leave was refused. She has no assets other than a motor car of an estimated value of $100 and she has debts of approximately $7,000. She has the care and control of F who is presently aged 9 and who, at least prima facie, is a child of the marriage.

On the other hand the husband owns a property of an approximate value of $100,000 to $110,000. He has the care of two children of the marriage and is in receipt of an invalid pension. His Honour accepted that he would have to sell the property at Gympie if he were obliged to pay out the wife.

No doubt each party would suffer hardship: the husband if leave were granted, the wife if it were refused. However, having regard to the extreme disparity in financial resources of the parties, it is clear that the hardship which the wife would suffer if she were denied leave by far outweighs any hardship to the husband if as a result of her being granted leave he would have to sell the property at Gympie and move into smaller accommodation. Having regard to the length of the cohabitation and his continued responsibility for two of the children, it is likely that he would retain the bulk of his present assets.

In our view the appeal should be allowed, his Honour's order dismissing the wife's application under sec. 44(3) should be set aside and an order made granting the wife leave to institute proceedings pursuant to sec. 79 as set out in para. (b) and (c) of the wife's application filed on 3 April 1986. The matter should be remitted to a single judge or registrar of the Brisbane Registry for the giving of directions in respect of that application.