MELVIN and MELVIN

[2016] FCWAM 10

JURISDICTION : MAGISTRATES COURT OF WESTERN AUSTRALIA – 150 TERRACE ROAD

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: MELVIN and MELVIN [2016] FCWAM 10

CORAM: KAESER M

HEARD: 10 SEPTEMBER 2015

DELIVERED : 14 JANUARY 2016

FILE NO/S: PTW 6460 of 2012

BETWEEN: MS MELVIN

Applicant

AND

MR MELVIN
Respondent

Catchwords:

Leave to institute property settlement proceedings out of time; hardship to wife established; adequate explanation for delay; leave granted pursuant to s 44(3) of the Family Law Act 1975.

Legislation:

Family Law Act 1975 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant: Mr S Jones

Respondent: Ms I Milne

Solicitors:

Applicant: Slater & Gordon

Respondent: Avon Legal

Case(s) referred to in judgment(s):

Althaus and Althaus (1982) FLC 91-233

Coombs and More (1990) FLC 92-175

Frost & Nicholson (1981) FLC 91-051

Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479

Hall & Hall (1979) FLC 90‑679

Jacenko and Jacenko (1986) FLC 91-776

Mackenzie & Mackenzie (1978) FLC 90-496

McDonald & McDonald (1977) FLC 90-317

McMahon and McMahon (1976) FLC 90-038

Oxenham & Oxenham [2009] FamCAFC 167

Tormsen and Tormsen (1993) FLC 92-392

Van der Kreek and Van der Kreek (1978) FLC 90-421

Walker & Walker (1984) FLC 91-564

Whitford & Whitford (1979) FLC 90-612

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1[Ms Melvin] and [Mr Melvin] lived together for 18 years (and the marriage lasted for 15 years). They have one child, [C], who was aged 15 at the date of the hearing before me and predominantly lives with the wife and has done so since separation.

2The wife filed her Form 1 application commencing these proceedings on 19 May 2015.

Issues for determination

3The wife seeks leave under s 44(3) of the Family Law Act 1975 to institute property settlement proceedings against the husband. Leave is required as the application is out of time. Section 44(3) provides:

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.

4The parties were divorced in this matter on 1 March 2013 and therefore the time to commence property settlement proceedings expired on 1 March 2014. The application is therefore approximately 14 months out of time. Section 44(4) provides that:

The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:

(a)that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or

(b)in the case of proceedings in relation to the maintenance of a party to a marriage...

5The parties concede that the Court should determine the leave issue “on the papers” based on the affidavit evidence filed by the parties and taking into account submissions made at the hearing before me and the relevant principles of law.

Principles of law

6The preliminary hurdle for the granting of leave is that hardship must be proved. Proof of hardship is necessary for an application for leave to succeed, but upon proof of hardship the Court must then consider whether leave should or should not be granted. The Full Court of the Family Court of Australia dealt with this issue in Whitford & Whitford (1979) FLC 90-612 at 78,144:

[O]n an application for leave under sec. 44(3), two broad questions may arise for determination. The first of these is whether the Court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted. If the Court is not so satisfied, that is the end of the matter. If the Court is so satisfied, the second question arises. That is whether in the exercise of its discretion the Court should grant or refuse leave to institute proceedings....

7The Full Court in McDonald & McDonald (1977) FLC 90-317 grouped the various factors to be considered in such an application as follows:

(a)that to deny the right to litigate that claim would cause hardship to a party or a child of the marriage;

(b)that a prima facie case which is reasonable would have to be shown;

(c)that there is an adequate explanation as to delay;

(d)that consideration should be given to the question of prejudice to the respondent. The period of the delay may be particularly relevant here.

8A number of decisions have provided that the generally accepted interpretation of “hardship” in this context is “substantial detriment” (see Hall & Hall (1979) FLC 90‑679 at 78,627; Whitford & Whitford (supra); Mackenzie & Mackenzie (1978) FLC 90-496 at 77,581; Frost & Nicholson (1981) FLC 91-051 at 76,423; and Walker & Walker (1984) FLC 91‑564). It is clear that the loss of a mere right to institute proceedings itself is not a “hardship”: (see Whitford & Whitford (supra) at 78,144 and Frost & Nicholson (supra) at 76,423).

9The determination of an application for leave under s 44(3) is not intended to be a detailed hearing of the merits of the proposed claim itself. The Full Court considered the procedure involved in Whitford & Whitford (supra) where it said at 78,143:

We do not consider it necessary or desirable to lay down any definitive procedural rules for the conduct of such an application. Generally, the applicant should file adequate affidavit evidence from which the facts appertaining to the relevant issues appear. The respondent should have an opportunity to file an affidavit to answer the applicant's allegations and to adduce material showing why leave to institute the proceedings should not be granted. In appropriate cases, the applicant should have an opportunity to file an affidavit in reply. Cross-examination of either party on his or her affidavit material should be permitted, and there may be occasions, when some oral evidence supplementing the affidavit evidence might be received. If the Court considers it necessary, it may allow an applicant to conduct some investigation into the financial position of the respondent. The parties and the judge hearing the matter will no doubt bear in mind that the only question to be determined is, whether leave should be granted enabling the applicant to institute proceedings, and the extent of the proceedings and any investigation should be regulated accordingly.

10Nygh J took a different view in Frost & Nicholson (supra) at 76,422‑76,423:

I take the view that the existence of a prima facie case should be judged on the evidence put forward by the applicant in her affidavit evidence available at the time of the hearing of the application for leave. The respondent may demur that the evidence which the applicant seeks to rely upon is not sufficient to justify the costs involved. I did not permit the respondent to test the applicant on the veracity of her evidence as to the merits of the case, and I stopped any cross-examination on that issue.

11Nygh J went further in Jacenko and Jacenko (1986) FLC 91-776 where his Honour said at 75,643 that:

The general principle is that on the issue of the establishment of a prima facie case the Court proceeds on the basis that the evidence of the applicant, unless it is inherently unbelievable or contradictory, should be accepted, and the Court should therefore decide whether or not on that basis a prima facie case has been made out. If leave is granted, then it is for the Court conducting the ultimate hearing to determine whether that prima facie case can be established.

12These views were consistent with those of the Full Court in Althaus and Althaus (1982) FLC 91-233 where Evatt CJ (with whom Marshall SJ agreed) said at 77,267:

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.

13In a number of the authorities referred to above, the reason for delay in commencing proceedings is consistently held to be a factor to be considered when deciding whether to grant leave. Once the Court has found that hardship is proved and has found that the applicant has a prima facie case and has provided a satisfactory explanation of delay, the final exercise of discretion is dependent upon the consideration of the hardship to be suffered by the respondent and balancing that with the hardship to be suffered by the applicant if leave were not granted.

14Counsel for the wife referred to the further decision of O’Ryan J in Oxenham & Oxenham [2009] FamCAFC 167. O’Ryan J referred to many of the above authorities (see [97] to [101]). His Honour’s conclusions were summarised at [102] and [103]:

[102] In summary, in order to establish hardship in the relevant sense the applicant for leave must have a prima facie case to be heard by the court on the merits. This does not require a detailed hearing of the merits of the substantive application, but a consideration of whether there exists a prima facie case on the strength of the applicant's material.

[103] As to the second part of the exercise the fundamental issue in any application for extension of time is whether this will enable the court to do justice between the parties: Gallo v Dawson[1990] HCA 30; (1990) 93 ALR 479. In Gallo v Dawson McHugh J referred to the need to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences to the parties of the grant or the refusal of the extension of time. The authorities and principles were discussed in Tormsen and Tormsen (1993) FLC 92-392: see also McMahon and McMahon (1976) FLC 90-038; Van der Kreek and Van der Kreek (1978) FLC 90-421, and Coombs and More (1990) FLC 92-175. In summary in considering the second question the court may have regard to a number of factors that include whether the applicant has an adequate explanation for the delay in bringing the proceedings and whether to grant leave would prejudice or impose hardship on the respondent to the application for leave or other persons.

Wife’s case

15In her initial affidavit the wife stated:

(a)that after separation the parties informally agreed to a division of property;

(b)that division of property did not include “either my own or the respondent’s superannuation”;

(c)she did not seek independent legal advice at the time of the informal agreement;

(d)she was not aware of the 12-month time limit following the parties’ divorce in March 2013;

(e)she first sought legal advice in May 2014 (after the period had expired;

(f)at the time of the informal agreement, the husband did not disclose his superannuation to her;

(g)negotiations commenced in November 2014;

(h)she asserts hardship [but it is not clear what hardship is asserted because at that stage she had no knowledge of the value of the husband’s superannuation and therefore including it may have made a minimal difference to the overall outcome].

16In her further affidavit filed 19 August 2015 the wife acknowledged that she had asked the husband about his superannuation (not that she knew of its value) and that the husband told her:

You’re not getting your fucking hands on my money.

17The wife provided calculations that showed that by adding the husband’s superannuation (at 1 July 2011) and the wife’s superannuation (at the same date) into the asset schedule the parties used for their informal agreement, this resulted in the wife receiving 7% of the overall assets including the superannuation. The husband did not dispute that calculation. She further asserted that hardship would be caused if she were not to receive some of the husband’s superannuation given the significant imbalance between the value of the husband’s interest compared to the wife’s interest.

18I note the wife was born [in] 1972 and was 43 years of age at the date of hearing. There are many years left before she would be able to access any superannuation – with the usual requirements to reach vesting age and to retire from the workforce. Her amended Form 1 application filed 7 September 2015 seeks orders in relation to a superannuation split. Otherwise she asserts that each party should retain their own assets and debts. The only difference between the orders sought now and the informal agreement reached therefore is the issue of a superannuation splitting order. Given that superannuation cannot be accessed for many years to come, an issue arises as to the timing of any hardship. Is that hardship experienced now if proceedings are not allowed to continue and a superannuation splitting order is not made or is hardship suffered in years to come when the wife retires and has much less superannuation to utilise than she would have had if a superannuation splitting order was made?

19In the end, hardship is hardship whether experienced now or in the future. It is at least arguable that the hardship, if any, begins immediately as the wife will have significantly less superannuation to her name if a splitting order is not made. She may have to work longer in order to secure her long-term future. She has made a number of contributions, not the least of which being to the welfare of the family which the Court may take into account, when determining their respective property settlement entitlements and considering a superannuation splitting order.

Husband’s case

20The husband filed a Form 13 financial statement on 28 July 2015 which indicated that he had a current superannuation interest of approximately $190,000. This is a significant amount in the context of the parties’ respective financial circumstances.

21The husband’s affidavit filed 28 July 2015 notes the wife was “aware of my superannuation” given that she “was aware of the superannuation statements I received during our marriage” and he states his belief that “she was aware of the existence and value of my superannuation balance”. The husband does not explain the basis of that asserted belief. He also asserts that he had a superannuation balance at separation of about $115,000.

Conclusions

22I acknowledge that there are some gaps in the wife’s chronology; firstly of a period of around six months from when she first sought legal advice to when her solicitors first wrote to the husband. In my view, the lack of explanation in relation to this period is not fatal to the leave application. The amount of time is inconsequential in the overall circumstances. The second period was from November 2014 to May 2015 when the wife attempted to resolve these issues by negotiation. That delay in commencing proceedings is understandable and is explained by the husband’s failure to properly reply to correspondence.

23I accept that:

(a)the wife has a bona fide claim in relation to property settlement and has reasonable prospects of achieving a superannuation splitting order of some amount. This is particularly so given the period of the marriage and the contributions made by her throughout the marriage and the fact that the informal agreement did not appear to take into account the parties’ respective superannuation entitlements. With those entitlements included in the approximate pool, the wife appears to have received less than she otherwise might be entitled to;

(b)the wife would suffer hardship if leave were not granted to allow these proceedings to continue;

(c)the wife has provided adequate explanation for the delay in commencing these proceedings;

(d)the delay was not of an extraordinary amount of time;

(e)the only potential prejudice to the husband is having to face an application in which he may lose some of his superannuation. Again, he will also not access his superannuation for many years to come and given his age and earning capacity he has some ability to rebuild any amount that may be lost pursuant to an order;.

24Had the parties both taken advice at the time of their informal agreement then these issues may well have been resolved and had they sought consent orders at that time these issues may have been brought to their respective attention.

25In balancing the prejudice to the husband in allowing these proceedings to continue and the prejudice to the wife in refusing to grant leave, the prejudice to the wife, in my view, is greater. I propose therefore to grant leave to institute proceedings out of time.

26I will hear from counsel now as to the appropriate directions to be made to progress these proceedings.

Orders

1.Leave be and is hereby granted to the applicant under s 44(3) of the Family Law Act 1975 to institute proceedings against the respondent for orders under s 79 of the Act.

2.The extant interim application before the Court are otherwise dismissed.

I certify that the preceding [26] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Secretary
Delivered 14 January 2016