Morphett and Surnam
[2019] FamCA 50
•8 February 2019
FAMILY COURT OF AUSTRALIA
| MORPHETT & SURNAM | [2019] FamCA 50 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Leave to commence out of time – Where applicant wife seeks leave to commence property proceedings out of time – Where consideration of applicable principles – Where leave granted. |
| Family Law Act 1975 (Cth) ss 44(3), 44(4), 79 |
| Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Edmunds & Edmunds [2018] FamCAFC 121 Jacenko and Jacenko (1986) FLC 91-776 McDonald and McDonald (1977) FLC 90-317 Sharp & Sharp [2011] FamCAFC 150 |
| APPLICANT: | Ms Morphett |
| RESPONDENT: | Mr Surnam |
| FILE NUMBER: | PAC | 1805 | of | 2018 |
| DATE DELIVERED: | 8 February 2019 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 16 November 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Gardiner |
| SOLICITOR FOR THE APPLICANT: | Robertson Saxton Osborne |
| RESPONDENT – SELF-REPRESENTED LITIGANT: | Mr Surnam in person |
Orders
That the applicant wife be granted leave to commence section 79 proceedings out of time pursuant to section 44(3) of the Act.
That the wife’s application initiating proceedings filed 27 April 2018 (as amended) be deemed to be her Initiating Application pursuant to such leave.
That the husband file and serve a Response setting out with particularity orders sought by him as to property adjustment or otherwise, together with a Financial Statement within 14 days from the date of these orders.
That proceedings be listed before a Registrar on a date to be fixed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Morphett & Surnam has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 1805 of 2018
| Ms Morphett |
Applicant
And
| Mr Surnam |
Respondent
REASONS FOR JUDGMENT
By Further Amended Initiating Application filed 10 July 2018 the applicant wife seeks leave to commence property proceedings although out of time: s 44(3) of the Family Law Act 1975 (Cth) (“the Act”).
In support of her application the wife relies on:
a)her Affidavit filed 19 October 2018;
b)her Financial Statement filed 19 October 2018.
The husband filed a Response on 4 November 2018 and relies on his affidavit filed 9 November 2018.
The Law
Section 44(3) provides:
44 Institution of proceedings
…
(3)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.
Leave is not to be granted unless the Court is satisfied that hardship would be caused to a party to the marriage or a child if leave was not granted: s 44(4) of the Act.
Applicable principles are well settled and the applicant must establish:
a)A reasonable prima facie case for relief had proceedings been instituted in time;
b)That denial of the claim would cause the applicant hardship; and
c)An adequate explanation as to the delay.
In appropriate cases the degree of hardship to be suffered by the applicant may well outweigh an inadequate explanation of delay.
Once the three elements are satisfied, in determining whether to exercise its discretion to grant relief, the question of prejudice which the respondent would suffer by reason of the delay in bringing the application ought be considered.
This approach was recently affirmed by the Full Court in Edmunds & Edmunds [2018] FamCAFC 121 being consistent with the authorities: Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 553 per McHugh J; McDonald and McDonald (1977) FLC 90-317 at 76,688; Jacenko and Jacenko (1986) FLC 91-776 at 75,644; Sharp & Sharp [2011] FamCAFC 150.
The wife’s evidence
The wife relied upon her affidavit in support of her application filed 19 October 2018, together with her financial statement filed 27 April 2018.
The wife at the time of hearing was 44 years of age.
The parties commenced cohabitation in about 1991 and married in 1994. There are three children of the parties’ marriage presently aged 24, 23 and 16.
The youngest child has been diagnosed within the autism spectrum disorder. The wife is the primary carer of the youngest child and the husband spends no time with the child. The child presently attends high school in a special education unit for children with high needs.
The parties appear to have separated under the one roof in 2013 and were divorced in September 2014 with the Divorce Order taking effect on 16 October 2014.
As at April 2015 the wife asserts there was an Apprehended Domestic Violence Order (“ADVO”) in place as against the husband protecting herself and the children from the husband who was restrained by the order from attending at the Suburb B property. In August 2016 the husband was charged with stalking, harassment and intimidation including the placing of a covert electronic tracking device in the wife’s car. In December 2017 the husband was found guilty and was bound over on a suspended sentence and a good behaviour bond. A further ADVO was made on 11 December 2017 for a period of two years expiring 10 December 2019 for the protection of the wife and the younger two children of the parties’ relationship including a restraint from attending places of residence or work. On Appeal to the District Court of New South Wales the convictions and the ADVO order were set aside.
The wife asserts that in April 2017 the husband was, otherwise, charged with causing malicious damage to property. She gives no evidence as to the outcome of these proceedings.
Thus the time for the wife to commence proceedings for property adjustment was prior to 15 September 2015.
The wife is presently engaged to a Mr C who resides with her in the former matrimonial home at H Street, Suburb B (“the Suburb B property”).
In July 2006 (the husband asserts 1999) the husband and wife as joint tenants purchased property at Suburb B facilitated in part by a mortgage advance from the T Bank.
At about the same time as the purchase of the Suburb B property the parties purchased as joint tenants a property at D Street, Suburb E (“the Suburb E property”) with the purchase also being facilitated by a mortgage advance from the T Bank.
The wife asserts that financial matters were left to the husband and that certain “investment activities” were undertaken on the Suburb E property.
In October 2008 the parties defaulted on mortgage payments in respect to the Suburb E property and the mortgagee exercised its power of sale to sell the property. By reason of the default on the Suburb E property, the parties as a consequence of the loans being cross collateralised were in default of the mortgage on the matrimonial home.
The proceeds of sale of the Suburb E property were insufficient to discharge the then outstanding mortgage debt of about $45,000.00. There was subsequently a lengthy history of litigation between the T Bank and the husband, the wife taking no active role in the proceedings since about 2012/2013. The wife in her affidavit makes reference to 16 separate judgments up until 2018.
In April 2015 an order was made in the Supreme Court of New South Wales entering judgment against the husband and wife for the sum of $700,000.00 together with interest from … April 2015 and an order that the T Bank be entitled to possession of the property being the former matrimonial home at Suburb B.
It is the wife’s understanding that the T Bank has thus far refrained from enforcing its judgment by taking possession of and selling the property by reason of the husband’s cross-claim against the Bank. The husband’s cross-claim to the wife’s understanding asserts that the T Bank failed in its duties to properly handle the sale of the Suburb E property as mortgagee. At present it appears that interest continues to accumulate under the orders made 16 April 2015.
The husband obtained a valuation of the former matrimonial home in April 2018 and the property was valued at $1.275 million.
The wife asserts that the ongoing litigation was the subject of significant conflict between herself and the husband who, to her observation, seemed somewhat obsessed with the proceedings and did not keep her appropriately informed of the proceedings. Various judgments in the Supreme Court of New South Wales referred to by the wife in the context of the husband’s cross-claim against the T Bank indicate that the husband has made numerous interlocutory and other applications all of which have been unsuccessful and resulted in costs orders against him. Indeed, in the context of the proceedings, the husband has been restrained from filing any other documents without leave of the docketed judge.
On 8 February 2018 the T Bank offered to compromise the ongoing proceedings in the Supreme Court of New South Wales with the Bank offering:
a)To provide to the parties a discharge of the Bank’s mortgage secured over the former matrimonial home together with a delivery of the relevant certificate of title as jointly directed by the husband and wife.
b)That the Bank would agree not to enforce the 2015 judgment and the writ of possession.
c)That the Bank would write off all remaining joint debts of the parties to the Bank including the outstanding debt of $92,503.00 relating to the Suburb E property, the outstanding debt of $664,832.00 relating to the matrimonial home and the outstanding debt relating to an overdrawn account of $6,315.00.
The T Bank’s offer of settlement was subject to appropriate deeds of settlement and mutual releases being signed by the parties and the Bank. It is noted that the Banks offer was, of course, in the context of the husband’s then continuing cross-claim against the Bank.
Subsequent to the offer of settlement the wife, through her solicitors, communicated her acceptance of the offer on 9 March 2018. Subsequently on 13 March 2018, the wife’s solicitors communicated with the T Bank expressing concern that the Bank and the husband may compromise the husband’s cross-claim resulting in a payment to the husband that would not be known to the wife and requesting that the T Bank inform the wife’s solicitors of any compromise reached with the husband in respect of his cross-claim. In response and by letter 16 March 2018 the Bank, through its solicitors, informed the wife’s solicitors that the husband had not authorised the Bank to disclose such information. Concerns arise as a consequence of the husband refusing to make appropriate disclosure of any compromise reached by him with the Bank
Other proceedings
Otherwise, the husband has commenced and sought to maintain proceedings in the Local Court of New South Wales and the New South Wales District Court variously as against the wife, her present fiancée and an adult child of the marriage. Two of the husband’s Statements of Claim against the wife have been dismissed with orders for costs in favour of the wife and in one set of the proceedings the wife recovered a judgment on her cross-claim of $10,000.00 together with costs of $3,229.00 against the husband.
In proceedings commenced by the husband against the adult child, the husband obtained a default judgment that was set aside on 18 January 2018. These proceedings were for hearing on 4 July 2018.
Otherwise, in January 2018 the husband commenced proceedings in the District Court of New South Wales against the wife, her fiancé and an adult child of the marriage. Various portions of the husband’s statement of claim were struck out as disclosing no reasonable cause of action or as pleadings otherwise tending to cause prejudice, embarrassment or delay. The husband was ordered to pay 80 per cent of the defendant’s costs on the motion. It appears these proceedings are ongoing.
Contributions and other matters
The wife asserts that during the period of cohabitation she was the sole homemaker and primary carer for the parties’ three children. Her role was particularly onerous by reason of the difficulties experienced by the youngest child referred to above. The wife would, otherwise, assist the husband in his business F Pty Ltd undertaking some secretarial work and driving the husband to and from work.
The wife says that during the cohabitation there was no joint Bank accounts and all finances were controlled by the husband save for one Bank account into which was received by the wife the youngest child’s disability support payments.
As at 28 March 2018 the husband was in arrears of child support in the sum of $31,114.00.
The Asset Pool
As best as can be determined the likely asset pool for consideration comprises the following:
Assets
Joint Home at Suburb B $ 1,275,000.00
(April 2018)
Wife Funds at Bank $ 2,450.00
Wife Contents $ 10,000.00
Wife Jewellery $ 10,000.00
Wife Superannuation $ 7,724.00
Husband Cross Claim v T Bank $ NK
Husband Business at G Street, Suburb B $ NK
Liabilities
Joint T Bank debt $ NK
The husband’s evidence
The husband relied upon his affidavit filed 9 November 2018. He had not filed a Financial Statement.
The husband makes complaint that the wife has purported to make application for property adjustment out of time. Whether leave should be granted to make that application is the subject of the present determination.
He makes various allegations as to the wife including assertions as to violence perpetrated by her during the relationship, psychotic mental issues suffered by her, her aggression, her alcoholism and her addiction to prescribed drugs. None of such allegations are relevant to the present determination.
The husband asserts that there were various efforts to resolve the question of property settlement but no agreement was reached. The absence of agreement is not surprising having regard to the ongoing proceedings in the Supreme Court of New South Wales as between the T Bank and the parties and then later as between the T Bank and the husband. The husband asserts various efforts to resolve the question of property settlement as between himself and the wife in 2016 and 2017. These efforts, of course, occurred after the statutory period for commencing proceedings had expired.
As there had been no resolution to the question of property settlement, the husband asserts that he then filed separate civil proceedings against the wife. Notwithstanding that, it appears he would have been able to make an application to properly commence proceedings for property settlement upon obtaining leave to commence out of time.
The husband asserts that the former matrimonial property was purchased as vacant land in about 1999 for the sum of $186,000.00. Subsequently, a five bedroom dwelling was erected on the property funded, the husband asserts, by various borrowings.
The husband says that the Suburb E property was a development property and in mid-2008 he obtained development approval from the local authority for a 13 dwelling subdivision. He later made application to the T Bank for further funding to commence construction and was unable to obtain finance. The mortgage loan went into default and in May 2009 the Bank took possession of the property and sold the property in April 2010. There was a shortfall, the husband says, of about $50,000.00 on the mortgage.
The father’s affidavit sets out a detailed history of proceedings in the Supreme Court and, in summary, his actions reflect a pattern of procrastination and delay in the judicial process. He estimates that he has had over 100 court appearances in the past six years and collected over 30 archive boxes of evidence and documents and has incurred significant debt in pursuing the proceedings.
The husband complains that he has been unable to remove the wife from the matrimonial home as a consequence of the ADVO orders. Such complaint appears hollow where the T Bank has an existing order for possession.
Notwithstanding that the cross-claim proceedings appear to have been listed for hearing in mid-2018, in the husband’s affidavit sworn 8 November 2018 he gives no evidence as to the future conduct of those proceedings or as to whether, indeed, the proceedings have been compromised by him. He anticipates that he could be liable for T Bank legal costs of about $800,000.00 should his cross-claim be unsuccessful.
Discussion
It is readily apparent that there are significant issues for determination. There is, it appears, equity in the home notwithstanding the T Bank judgment and interest accruing. The wife has the ongoing care of the youngest child of the marriage with that child having intellectual difficulties.
The wife is in part-time employment only and has little by way of savings for superannuation. Clearly and subject to any outstanding debt to the T Bank (which if released would see the home have significant value), if any, the wife would seek orders realising her interest in the matrimonial home by reason of an assessment of the contributions and relevant section 75(2) factors.
Otherwise, whilst the ultimate asset pool is not known by reason of the husband not disclosing his assets, if any, there appears some prospect of a compromise at least on the part of the wife and the T Bank in respect to the ongoing Supreme Court proceedings. In that event, the asset pool may be not insignificant should the result be a release of debt or indeed an additional payment on the husband’s cross claim.
It is clear that the parties, as it were, remain locked together by reason of the joint ownership of the former matrimonial home. It is also readily apparent that the ongoing proceedings being prosecuted by the husband in the Supreme Court of New South Wales are close to resolution by reason of hearing dates that were previously allocated in mid-2018. Otherwise, this Court can exercise in the context of section 79 proceedings its injunctive powers as against the husband forcing a resolution of those proceedings.
On balance, the wife has a reasonable prima facie case for relief under section 79 of the Act.
In Edmunds (supra) the Full Court recently cited with approval the judgment in Sharp (supra) and said:
47.As the Full Court pointed out in Sharp … “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.
It is also clear that in the absence of being able to seek that relief, the wife would suffer hardship by reason of the loss of her claim under section 79 particularly in the context of her present financial circumstances. Regrettably, there is no evidence as to the likely cost of her proposed proceedings.
The wife’s delay in seeking to commence proceedings is not inordinate and explicable having regard to, indeed, ongoing discussions as to settlement between the husband and herself in 2016 to 2017 notwithstanding that the statutory period had expired and the existence of ongoing Supreme Court proceedings that went to the very nature and extent of what may well be the remaining matrimonial assets.
As to prejudice to the respondent husband, it is clear that he has been conscious of the need to resolve property issues between himself and the wife, he engaging in ongoing discussions as to settlement well after the statutory time limit the commencement of proceedings had expired. It seems a curious course that he chose to commence various civil proceedings against the wife, a child of the marriage and the wife’s fiancé notwithstanding he had the ability and right to seek to commence property proceedings out of time. He has engaged unnecessarily in litigation with various applications dismissed with orders for costs.
He offers no evidence as to his current financial circumstances such that the granting of leave would cause him hardship.
It appears that his current position is that he has no objection to the matrimonial home being sold by the Bank with the Bank debt being paid and it is inferred any balance then remaining simply divided between he and the wife. Such a course belies the issues currently pending in the Supreme Court of New South Wales, clearly the T Bank’s willingness to compromise the proceedings in early 2018 and a determination of the wife’s entitlement by reason of contribution needs determinations under section 79. Clearly, any resolution of the husband’s proceedings against the T Bank may at best result in a payment by the Bank and a release of the parties’ debt to the Bank or in the event of the proceedings being unsuccessful an order for costs as against the husband or any circumstance in between those two outcomes.
The husband has proffered no evidence as to the nature of any proposals he may have made to the Bank to compromise the proceedings and has refused to permit the Bank to disclose any such proposals to the wife. Such conduct is not to be contemplated in the context of prospective proceedings in this Court.
In all of the circumstances, there is no prejudice to the husband granting leave and in the circumstances of this matter it is appropriate that the wife be granted leave to commence proceedings for property adjustment out of time.
Orders will be made accordingly.
I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 8 February 2019.
Associate:
Date: 8 February 2019
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