Meyer and Smit
[2009] FMCAfam 784
•29 July 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MEYER & SMIT | [2009] FMCAfam 784 |
| FAMILY LAW – Property settlement – leave to file application out of time – husband’s application nearly thirteen years after expiry of time limit – threshold test of “hardship” – husband’s dyslexia – transfer of property to the wife in 1996 – husband doubts authenticity of transfer document – evidence of wife’s solicitor unchallenged – agreement in 1996 – threshold test not met – application dismissed. |
| Family Law Act (Cth) ss.44(3), 44(4), 90 Federal Magistrates Act 1999 (Cth) s.68 Federal Magistrates Court Rules 2001 (Cth) rr.13.10, 21.02 |
| Whitford v Whitford (1979) FLC 90-612 P & P [2002] FMCAfam 341 Frost and Nicholson (1981) FLC 91-051 Hall and Hall (1979) FLC 90-679 Mackenzie and Mackenzie (1978) FLC 90-496 Walker and Walker (1984) FLC 91-564 |
| Applicant: | MR MEYER |
| Respondent: | MS SMIT |
| File Number: | DGC 1101 of 2009 |
| Judgment of: | Roberts FM |
| Hearing date: | 24 July 2009 |
| Date of Last Submission: | 24 July 2009 |
| Delivered at: | Launceston |
| Delivered on: | 29 July 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Marchetti |
| Solicitors for the Applicant: | Belleli King & Associates |
| Counsel for the Respondent: | Ms Benjamin |
| Solicitors for the Respondent: | Robert Wood & Associates |
ORDERS
That the application filed 15 April 2009 on behalf of MR MEYER is dismissed.
That the listing of this matter for hearing on 4 November 2009 is vacated.
IT IS NOTED that publication of this judgment under the pseudonym Meyer & Smit is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DANDENONG |
DGC 1101 of 2009
| MR MEYER |
Applicant
And
| MS SMIT |
Respondent
REASONS FOR JUDGMENT
Applications
The Applicant, MR MEYER, seeks orders to enable him to pursue a property settlement application out of time. The Respondent, MS SMIT, opposes his application. However, if he is successful, she seeks orders requiring him to pay $40,000 as security for her costs.
Although the parties are long since divorced, they were married and that is what gives the court jurisdiction to deal with the matter. Consequently, for convenience I will refer to the parties as “the husband” and “the wife”.
The husband’s application was filed on 15 April 2009, which was very nearly thirteen years after the expiry of the time limit for filing a property settlement application.
The husband relied upon his affidavit and financial statement filed
15 April 2009, together with a second affidavit, filed in Court on the day of the hearing, which annexed a report about his dyslexia.
The wife relied upon her affidavit and financial statement filed 15 July 2009, together with an affidavit by her solicitor filed on the same day.
None of the deponents were cross-examined.
Relevant Law
Subsection 44(3) of the Family Law Act 1975 (“the Act”) provides that property and spouse maintenance proceedings “shall not be instituted, except by leave of the court … or with the consent of both of the parties to the marriage” more than twelve months after the parties’ divorce takes effect.
Subsection 44(4) provides that, in relation to property proceedings, the court shall not grant such leave unless it is satisfied that hardship will be caused to a party to the relevant marriage or a child if leave were not granted.
In Whitford v. Whitford, [1] the Full Court of the Family Court said: [2]
Thus, on 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.
[1] (1979) FLC 90-612
[2] At page 78,144
Ryan FM (as she then was) summarised the law well in P & P,[3] when she said:
Hardship to the applicant or a child of the parties is thus an essential pre-condition of the exercise of discretion. The nature of hardship is also discussed in Whitford (supra). It is a comparative concept that is concerned with the consequences of the loss of the right to litigate the claim. An applicant must demonstrate that they have a reasonable claim to be heard. See Jacenko (1986) FLC 91–776. Otherwise the applicant carries the onus of additionally explaining the delay in bringing the application. The absence of an adequate explanation, despite what was said by the Full Court in Kercher (1981) 7 FLR 216, is no more than a factor to be considered in the circumstances of the case. See Althaus (1982) FLC 91–233. It alone is not determinative of the application.
Finally, if all the above elements point to leave being given the court must balance the hardship to the respondent with the applicant’s hardship. Hardship to the respondent can result in the respondent’s inability to prepare and present their case; also because the respondent has ordered his or her financial affairs assuming that no s.79 claim was to be commenced. This list is not exhaustive.
[3] [2002] FMCAfam 341
Simply losing the right to institute proceedings is not in itself a “hardship” in the context of subsection 44(4).[4] In the main, “hardship” has been said to mean “substantial detriment”.[5]
[4] See Whitford at p 78,144 and Frost and Nicholson (1981) FLC 91-051 at p 76,423
[5] Also see Hall and Hall (1979) FLC 90-679 at p 78,627, Mackenzie and Mackenzie (1978) FLC 90-496 at p 77,581 and Walker and Walker (1984) FLC 91-564
It is therefore clear that the applicant must satisfy the initial threshold test of “hardship”. However, it is equally clear that satisfying that test alone will not necessarily guarantee success. If the applicant is able to satisfy the test of hardship, then the court should also give some consideration to the length of the delay and the reason given for that delay. Further, the applicant’s hardship must be balanced against any prejudice to the respondent.
Factual background
In compiling the factual background facts set out below, I have generally relied upon agreed facts and, where necessary, upon unchallenged statements made in affidavits. In this regard, I note that neither party sought to cross-examine in relation to the affidavits that were relied upon.
Both parties were born in Holland. The husband is 64 years old and the wife is 59 years old.
The husband had learning difficulties as a child and he left school in Holland when he was only 12 years old. The report attached to his second affidavit makes it clear that he suffers from dyslexia and has difficulties in reading and writing.
The parties married in Australia in 1971 and subsequently had four children. Those children are now all adults aged between nearly 23 years and 35 years.
In 1972 the parties bought a home in [N] (“the former matrimonial home”) with the assistance of a mortgage loan.
In 1978 or 1979, together with the wife’s siblings, the parties purchased a property in [C] (“the [C] property”). The wife’s parents lived in that property and the husband and wife each owned a one sixth share in that property. It was sold in 2001.
The parties separated for the first time in 1989. At that time, the husband purchased a property a property in [B] (“the [B] property”) with the assistance of a loan from his parents.[6] The wife also paid the husband $5,000 by bank cheque and the husband signed an acknowledgement that he received that sum “on departure” from the former matrimonial home.[7]
[6] Paragraph 11 of the wife’s affidavit.
[7] Paragraph 12 and Annexure “PS1” of the wife’s affidavit
The parties reconciled in 1990 and then finally separated again in 1990. (Although the wife says that final separation was in 1991, I find that it is more likely that they finally separated in 1990. The divorce application filed by the husband in February 1995 states that the separation date was 21 August 1990.[8] However, not much turns on whether it was 1990 or 1991.) On each occasion that the parties separated, the husband moved out of the former matrimonial home and the wife remained living there with the children. She continues to reside in the former matrimonial home.
[8] A copy of the divorce application was made available during the hearing and is now Exhibit “W1”.
In 1990 the husband sold his [B] property and purchased land at [H] (“the [H] property”). He subsequently built a house on that land with the assistance of a bank loan.[9] It appears that the house that he built was a relatively substantial two storey “Tudor style” dwelling.[10]
[9] Paragraph 11 of the husband’s affidavit.
[10] See Annexure “PS8” to the wife’s affidavit.
In October 1994 the wife discharged the mortgage over the former matrimonial home by paying the mortgagee $4,523.59.
On 27 February 1995 that the husband applied for a divorce. That divorce was granted and became absolute on 12 May 1995.
In 1996 the husband wrote to the wife.[11] His letter is difficult to read because of his dyslexia. However, it appears to suggest that the wife will not get any more money from him. At about that time he also wrote a letter to the wife’s solicitor in which he appears to say that his “claim of 25% of today's price is very reasonable”.[12]
[11] Annexure “PS4” to the wife’s affidavit.
[12] See Annexure “PS5” to the wife’s affidavit
The wife's solicitor says that in 1996 his firm acted for the wife in relation to the settlement between her and the husband. He says that his original file has been archived and destroyed. However, it is his recollection that the husband had written and that he was seeking 25% of the value of the former matrimonial home. At paragraph 5 of his affidavit, the wife’s solicitor goes on to say:
… My strong recollection is that the Husband then agreed to sign the Transfer of Land transferring the former matrimonial home to the Wife absolutely. It was during this period that the Husband had a property in [H] and that because of this property he was to retain the [H] property and the Wife was to retain the former matrimonial home. The Husband was told to seek independent legal advice from a Solicitor but the Husband refused.
The husband’s version of events at that time is very different. Indeed, the husband clearly suggests that the transfer document could be a forgery. At paragraph 14 of his affidavit he says:
On or about 29 November 1996, following our divorce, a Transfer of Land was executed, purportedly signed by myself and the Respondent. The Transfer of Land provides that the signatures were witnessed at the police station. The Transfer also provides that I gave the [N] property to the Respondent of which the Respondent and I were registered proprietors. The Respondent alleges that I transferred the entirety of my interest in the [N] property to the Respondent. I do not recall ever attending any police station to sign transfer of land documents and vehemently deny that I did ever sign documents to transfer my interest in the [N] property to the Respondent. I have grave doubts as to the authenticity of the document. In any event, I would not have signed over the house to her without receiving a half share.
Both parties attach copies of the Transfer of Land to their documents (“the Transfer of Land”). The transferors were the husband and the wife, and the transferee was the wife. While it appears to suggest that it was signed by the husband in the presence of a police officer, it does not state that he signed it at a police station.
The consideration for the transfer was expressed to be “Pursuant to an agreement between the parties” and the document is stamped “Not chargeable with Stamp Duty”. I make the assumption that the transfer was not liable to duty as a result of the provisions of section 90 of the Act and the corresponding Victorian legislation prevailing in 1996.
In 1998 the husband travelled to Holland, after having sold the [H] property. He says that it sold for approximately $175,950 (which is $3,000 less than he was asking for the property as evidenced by Annexure “PS8” to the wife’s affidavit). In paragraph 12 of his affidavit the husband says:
From the proceeds I gave the Respondent $10,000.00 towards the mortgage over the [N] property, paid out the mortgage over the [H] property and took the balance of approximately $100,000.00 to $120,000.00 overseas with me. Whilst I was in Holland I repaid my parents the $55,000.00 they lent me and I purchased a small flat with the balance of proceeds together with a small mortgage. I had no contact with the Respondent whilst I was overseas.
The wife appears to deny that the husband gave her the sum of $10,000 referred to in that paragraph of his affidavit. She says that she asked him for money for the youngest child’s schooling, but he refused.
The wife says that the husband “received a substantial inheritance” from his parents while he was in Holland and, further, that he returned to Australia with “substantial monies”. The husband makes no reference to either matter in his affidavit material.
The husband returned to Australia in 2001. During that year the [C] property was sold and the parties each received some of the proceeds. The wife says that she received $8,210.96 and the husband received $13,000. She says that he then gave her $4,000 at that time to help with the youngest child’s education. The husband makes no reference to that in his affidavits.
The wife is employed as a [omitted]. She declares her income to be $775 per week. The husband is a self-employed [omitted]. He says that he earns $300 per week.
The former matrimonial home is said by the wife to be worth $300,000. The husband owns an unencumbered property in [R] in his sole name, as evidenced by a title search.[13] He incorrectly stated in his financial statement that he is a 50% owner with his current wife and that his 50% interest is worth $115,000. I therefore conclude that its full value is approximately $230,000.
[13] See Annexure “PS9” to the wife’s affidavit.
Discussion
I should say at the outset that I am satisfied on the balance of probabilities that the husband did sign the Transfer of Land. I say that because:
·The signature on the Transfer of Land lodged in 1996 is very similar to his signatures that appear on his Divorce Application filed in 1995 and on the documents filed in this Court in 2009.
·The husband has alleged that he did not sign the Transfer of Land so the onus was on him to produce evidence from a handwriting expert. He has not done that.
·No application was made to cross-examine the wife’s solicitor and I accept his unchallenged evidence that is referred to at paragraph 25 above. I also note that the Transfer of Land was lodged with the Office of Titles by that solicitor.
In my view, I must therefore conclude on the balance of probabilities that the Transfer of Land was properly executed by both parties pursuant to an agreement reached between them. I also conclude on the balance of probabilities that the husband was advised to seek legal advice before he agreed to transfer the former matrimonial home to the wife, but he chose not to take any legal advice.
The fact that the husband may not be able to recall the events of 1996 does not lessen my conclusion on the balance of probabilities that those events occurred in the way that the wife and her solicitor say they occurred.
The husband says in paragraph 10 of his first Affidavit that he and the wife agreed “that she would stay in the house with the children until the youngest turned twenty-one years old and we would then sell the house and the proceeds would be divided equally.” Although that clearly conflicts with the wife’s evidence, it also appears to conflict with the letters that the husband sent to the wife and to her solicitor in 1996.[14] The former suggests that he believed that there was some agreement that the children could remain in the home until they were eighteen years of age (i.e. not twenty-one years) and the latter refers to a claim of twenty five per cent (i.e. not fifty percent). That reinforces my conclusion that the husband’s recollection of events is probably faulty.
[14] See Annexures “PS4” and “PS5” to the wife’s affidavit.
In any event, it is my view that it matters little what the terms of any agreements between them were, either when they separated for the first time in 1989 or when they separated for the second time in 1990. There is no evidence that any such agreement was properly documented and approved under section 87 of the Family Law Act 1975 (as that section then existed). Consequently, the Court would not be bound by any such agreement. In any event, I am satisfied on the balance of probabilities that the parties came to a subsequent agreement in 1996, which resulted in the transfer of the former matrimonial home to the wife.
However, that agreement does not appear to have been sanctioned or approved by the Court either. Consequently, the Court still has jurisdiction to consider whether the husband should be permitted to file a property application out of time.
As mentioned above, the husband must persuade me that if he is not permitted to proceed with his application he will suffer “hardship” or “substantial detriment”. It is therefore clear that the onus was upon him to put evidence of any claimed hardship before the Court.
I am also of the view that I must consider the husband’s chances of success in property settlement proceedings in order to establish whether or not it will cause him hardship if his application is refused. Clearly, the Court must assess what the husband stands to lose in order to decide whether such a loss amounts to a “substantial detriment” or not.
I am of the opinion that the husband’s chances of succeeding in property settlement proceedings are rather poor, especially when I consider the following:
a)When the parties separated the wife was living in the former matrimonial home that was subject to a mortgage and she was looking after four children aged between 3 and 17 years;
b)Over a substantial period of time, the husband paid very little by way of Child Support;
c)I have already found on the balance of probabilities that the husband agreed to transfer the former matrimonial home to the wife in 1996;
d)Since separation the husband has had the ability to buy and sell three properties (two in Victoria and one in Holland) and to acquire a further property in Victoria that he now owns debt free; and
e)By his own admission, the husband traveled to Holland in 1998 and took between $100,000 and $200,000 with him. That was clearly a substantial sum of money at that time.
It logically follows that if I conclude that the husband’s chances of succeeding with a property settlement application are rather poor (as I have done), I must conclude that the husband’s loss of any right to proceed with such an application will not cause him any substantial detriment. (Indeed, it will probably save him significant legal costs.) Consequently, the husband cannot meet the hardship threshold test that I have referred to above.
I would also add that even if the husband had not been divorced until more recently and had filed an application within the relevant time period, on the facts before me, I would have not found it difficult to conclude that the application should be summarily dismissed pursuant to Rule 13.10 of the Federal Magistrates Court Rules 2001. That is because the husband would have “no reasonable prospect of successfully prosecuting the proceeding or claim”.[15]
[15] See Rule 13.10(a)
I also add that I am not persuaded that the husband’s dyslexia is any reason to permit him to proceed with a property application. That dyslexia may well have caused him difficulties over the years but the clear evidence is that he has been able to purchase at least four properties since separation (both here and overseas) and he has been able to negotiate with at least one bank to acquire sufficient funds to build a substantial home. I therefore conclude that his dyslexia has not prevented him from performing well in society and accessing help when he needed it.
Given what I have said above, I conclude that I must dismiss the husband’s application and vacate the hearing date on 4 November 2009.
In view of my conclusion in the preceding paragraph, it is not necessary for me to consider the wife’s application for security for costs.
Procedure
I heard this matter in Dandenong but I will be delivering this decision in Launceston. My Associate will provide copies of these Reasons and the Orders to the parties’ legal representatives by electronic means.
If any costs application is to be made, it should be made within 28 days in accordance with rule 21.02(1)(b) of the Federal Magistrates Court Rules 2001. That can be done by contacting my Associate to arrange for a listing of the matter, to be heard by telephone or video link in accordance with section 68 of the Federal Magistrates Act 1999.
I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date: