Moylan and Murchison

[2018] FCCA 1887

FEDERAL CIRCUIT COURT OF AUSTRALIA

MOYLAN & MURCHISON [2018] FCCA 1887

Catchwords:
FAMILY LAW – Property – Where the husband seeks leave pursuant to s.44(3) of the Family Law Act 1975 (Cth) to bring an application for property settlement some 25 months out of time – proper approach to evidence.

Legislation:

Family Law Act 1975, ss.44, 75, 79, 117

Cases cited:
Bevan & Bevan [2013] FamCAFC 116
Cox & Cox [1981] FamCA 58; (1981) FLC 91-068
Hall and Hall (1979) 5 FamLR 411; (1979) FLC 90-679
Hedley & Hedley [2009] FamCAFC 179; (2009) FLC 93-413
Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) FamCA 395; FLC 93-143
Marriage of Jacenko (1986) 11 Fam LR 341
Marriage of Perkins (1979) FLC 90-600; 4 FamLR 634
Oxenham & Oxenham [2009] FamCAFC 167
Randall & Pavot [2016] FCCA 1620
Sharp & Sharp [2011] FamCAFC 150
Stanford & Stanford [2012] HCA 52
Tamaniego & Tamaniego [2010] FamCAFC 254
Walker & Walker [1984] FamCA 55; (1984) FLC 91-564
Whitford & Whitford [1979] FamCA 3

Applicant: MR MOYLAN

Respondent: MS MURCHISON

File Number: SYC 3535 of 2017

Judgment of: Judge Harper

Hearing date: 16 March 2018

Date of Last Submission: 16 March 2018

Delivered at: Sydney

Delivered on: 11 July 2018

REPRESENTATION

Counsel for the Applicant: Mr Bennett

Solicitors for the Applicant: Trinity Legal Migration

Counsel for the Respondent: Mr Fowler

Solicitors for the Respondent: Watts McCray

ORDERS

1. The application for leave to institute these proceedings pursuant to s.44(3) of the Family Law Act1975 be dismissed.

2. The Initiating Application filed 8 June 2017 be dismissed.

3. If any party seeks an order for costs, an appropriate application to the Court may be made within 28 days of today’s date to be filed and served within that time period and a copy forwarded to my Chambers.  If no such application is made within the time period specified, no order will be made as to costs.

THE COURT NOTES THAT:

A.Any application as to costs will be dealt with by way of written submissions in chambers, unless the parties request to be heard orally.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 3535 of 2017

MR MOYLAN

Applicant

And

MS MURCHISON

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application brought by the Applicant husband, Mr Moylan (“the husband”) seeking leave pursuant to s 44(3) of the Family Law Act 1975 (Cth) (“the Act”) to institute proceedings for final property adjustment Orders under s 79 of the Act. A Divorce Order was granted on 15 April 2014 and became final on 16 May 2014. The husband filed his Initiating Application on 8 June 2017, some two years outside the time delimited in s.44(3)

2. The wife, Ms Murchison (“the wife”), resists the grant of leave and seeks that the husband’s Initiating Application be dismissed with costs.

Procedural history

1. The husband filed his Initiating Application on 8 June 2017. The wife filed her Response on 28 September 2017.

2. The matter first came before me on 3 October 2017 and I made Orders for the matter to be listed for Final Hearing limited to the question of the husband’s application to proceed out of time.

3. The matter came before me on 16 March 2018 for Final Hearing on this discrete issue.  

Background

1. The following background facts were uncontroversial.

2. The husband was born 1984 and at the time of trial was 34 years of age.

3. The wife was born 1985 and at the time of trial was 33 years of age.

4. The parties married and commenced cohabitation on 2009.

5. The husband operated a business known as “Business 1” from about six months into the marriage.

6. The parties purchased a time share property interest in (country omitted) on about 2009 (“the (country omitted) property”).

7. There are no children of the marriage.

8. In 2011, a block of land at Property A was purchased in the name of the wife.  A dwelling was subsequently constructed on the land (“the Property A property”).

9. The parties separated on 14 October 2012.  Therefore the parties lived together for about 3 and half years in total.

10. On 12 February 2014, the husband filed an Application for Divorce in this Court.

11. As noted above, a Divorce Order was granted on 15 April 2014 and became final on 16 May 2014.

Material relied upon

1. The husband relied upon:

   a)His Initiating Application filed 8 June 2017;

   b)His Affidavit affirmed 7 June 2017and filed 8 June 2017;

   c)His Affidavit affirmed 5 December 2017 and filed 13 December 2017;

   d)His Affidavit affirmed and filed 12 March 2018; and

   e)Case Outline filed 12 March 2018.

2. The wife relied upon:

   a)Her Response filed 28 September 2017;

   b)Her Affidavit sworn and filed 28 September 2017;

   c)Her Affidavit sworn and filed 7 February 2018;

   d)Affidavit of Mr W sworn and filed 7 February 2018;

   e)Affidavit of Mr G sworn 28 January 2018 and filed 7 February 2018;

   f)Her Amended Response filed 4 August 2017; and

   g)Case Outline, filed 13 March 2018.

3. There was no cross-examination.

4. The following documents were tendered and placed into evidence:

Exhibit Label	Document	Tendered by
A	Bank A statement of account (Acc Name Ms Murchison Acc No) for the periods 28 June 2011 to 16 August 2011 & 17 April 2012 to 15 June 2012	Applicant Husband
1	Application for Divorce filed with Federal Circuit Court of Australia, Sydney Registry on 12 February 2014	Respondent Wife

Issues

1. The husband seeks leave under s. 44(3) of the Family Law Act 1975 (“the Act”) to institute proceedings for final property adjustment Orders under s.79 of the Act. The husband contends that hardship would be suffered by him if leave were not granted as sought. The husband also contends that discretionary factors explaining his delay in instituting proceedings should be taken into consideration and support a grant of leave. If leave is granted, the husband seeks directions for the further conduct of the matter.

2. The wife resists a grant of leave under s. 44(3) of the Act. She seeks dismissal of Initiating Application filed 8 June 2017, with costs. Further, the wife submits that the husband has put forward no evidence that demonstrates that hardship would be suffered if leave to institute proceedings was refused.

Competing proposals

1. As set out in his case outline filed 12 March 2018, the husband sought the following orders:

   (1)That leave be granted under s 44(3) to bring proceedings for the Final Orders sought in his Initiating Application filed 8 June 2017.

   (2)The proceedings be listed for further Directions at a time suitable to the Court.

2. As set out in her case outline filed 13 March 2018, the wife sought the following orders:

   (1)That the husband’s application to proceed out of time be dismissed.

   (2)That the husband’s Initiating Application filed 8 June 2017 otherwise be dismissed.

   (3)That the husband pay the wife’s costs of and incidental to the Final Hearing required to determine whether the Applicant’s application should proceed out of time.

The Law

1. Section 44(3) of the Act provides:

   (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.

2. As set out above, the husband’s application was filed on 8 June 2017. As the parties divorced on 16 May 2014, the time for which to commence property settlement proceedings expired on 16 May 2015. The husband’s application is approximately 25 months out of time.  This was common ground.

3. The discretion to extend time for commencement of proceedings under s.44(3) is not wholly unfettered. Section 44(4) provides:

   (4)  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—that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.

The approach to be taken

1. The weight of authority is that an application for leave under s.44(3) is interlocutory: Oxenham & Oxenham [2009] FamCAFC 167 at [91]-[93].

2. The proper approach has been elucidated by numerous authorities. In Whitford & Whitford [1979] FamCA 3 at [23], the Full Court articulated the issues for determination as follows:

   “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.”

3. In Tamaniego & Tamaniego [2010] FamCAFC 254 Ryan J said the following at [153]:

   Although s 44 of the Act does not state what principles should guide the exercise of the discretion to grant or refuse leave to extend time, the discretion is not wholly unfettered. As the Full Court observed in Whitford and Whitford at 78,144 “two broad questions may arise for determination”. First, the discretion is subject to the requirement in s 44(4)(a) of the Act that the court must not grant leave unless it is satisfied that hardship would be caused to a party to the relevant marriage or a child if leave were not granted. Thus, if such hardship is not established then the application for leave must be dismissed. Second, if the court is satisfied that hardship would be caused, it should proceed to consider whether leave should be granted or refused: see also Hall and Hall and Cox and Cox [1981] FamCA 58; (1981) FLC 91-068.

4. In Sharp & Sharp [2011] FamCAFC 150 at [12]-[16] the Full Court discussed the nature of the limitation period in s.44 and the correct approach as follows:

   Relevant law

   [12]  It is important to bear in mind the purpose of s 44 in the context of the Act, which is that time limits are to be observed as the wording of that section makes clear. The principles concerning applications for leave to commence an action out of time are well known. In Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 551 McHugh J said:

   The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that “[w]here there is delay the whole quality of justice deteriorates”. [footnotes omitted]

   [13]  At 553 his Honour continued:

   A limitation period should not be seen therefore as an arbitrary cut-off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated...

   A limitation provision is the general rule; an extension provision is the exception to it ...

   [14] There is nothing to suggest that this expression of the law in general is not entirely applicable to a consideration of s 44 of the Act. Indeed so much is seen from the opening words of the s 44(4), “[t]he court shall not grant leave under subsection (3) unless ...”.

   [15]  In Whitford & Whitford [1979] FamCA 3; (1979) FLC 90-612 the Full Court noted at 78,146 that while the section intends to confer power to grant leave to avoid hardship, the “... power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.”

   [16]  We accept that s 44(4) provides the criteria by which we must be satisfied prior to exercising our discretion to grant leave pursuant to an application brought under   s 44(3).   In accordance with s 44(4)(a) it must be established in this case that hardship would be caused to the husband if leave were not granted. If hardship is established, the Court must nevertheless be persuaded that the discretion should be exercised in favour of the applicant to grant leave to allow the application: Whitford & Whitford [1979] FamCA 3; (1979) FLC 90-612.

5. The Full Court emphasised at [27] that “the appropriate approach to a determination under this section necessitates a clear distinction to be made between the proof of hardship and a consideration of the consequential exercise of the discretion (See in particular Whitford (supra) at 78,145; Cox & Cox [1981] FamCA 58; (1981) FLC 91-068; Walker & Walker [1984] FamCA 55; (1984) FLC 91-564. See also Hedley & Hedley [2009] FamCAFC 179; (2009) FLC 93-413 per Boland J at [132] and Cronin J at [218]).”

6. Consequently, it is necessary first to focus attention on the question of hardship.

7. In Hall and Hall (1979) 5 FamLR 411; (1979) FLC 90-679 at 78,627-78,628 the Full Court noted that “substantial detriment” seemed to be the generally accepted interpretation at that time.  However, on the question of hardship the Full Court in Sharp discussed the authorities at [17]-[22] and said:

   Hardship

   [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.

   [19]  In considering the meaning of hardship, in Whitford at 78,144 the Court said:

   ... The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits. If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted ... If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.

   [20]  Further at page 78,145 the Court said:

   ... As a general proposition it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship. Similarly, where the costs which the applicant will have to bear himself or herself are about as much or more than what the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted. But otherwise we find no warrant in either subsec. 44(3) or 44(4) for saying that the right or entitlement lost must be a substantial one. (emphasis in original)

   [21]  At the same page the Court continued:

   In an appropriate case, and depending on the circumstances of the applicant or the children, hardship may be caused by the loss or deprivation of something which is of comparatively small money value ...

   [22]  If an applicant demonstrates hardship of the type discussed, then the applicant must then persuade the court that in the exercise of its discretion leave should be granted.”

8. In Sharp at [132] Young J also said:

   “In undertaking an assessment of hardship the Court is required to consider whether the applicant has established a prima facie claim and in Hall (supra), at 78,627, the Full Court stated that:

   Fundamental to [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. For example in Swallow’s case (unreported Emery J, 16 September 1977; referred to in McDonald’s case) it was said to be “a prima facie case which is in the circumstances substantial”; the Full Court in McDonald’s case  differed from that by stating that it ought to be “a reasonable prima facie case”. In Mackenzie’s case it was described as being “a probability of success”, and in Whitford’s case the distinction was said to be that the applicant would need to show that she would “probably succeed” to be contrasted with a situation where she had “no real probability of success”. In Perkins’ case (1979) FLC 90-600 Lindenmayer J described it as “a reasonable probability of the claim being successful in some measure”.”

Prima Facie Claim and Hardship

1. The husband seeks on a final basis sale of the Property A property and 70% of the net proceeds of sale be paid to him, with all other assets remaining in their current ownership.  As discussed below, such an outcome would leave in the joint ownership of the parties a property owned jointly in the (country omitted).

2. The husband bears the onus of establishing a prima facie claim worth pursuing or “a real probability of success” in respect of a substantial claim if his application for property adjustment was heard on its merits.  In determining whether the onus is satisfied, the quality of his claim requires consideration: Hall and Hall, above; Oxenham at [158].

3. Account must be taken of the proper approach to applications for property adjustment under s.79 of the Act: see eg Randall & Pavot [2016] FCCA 1620 at [161].

4. Prior to the High Court of Australia’s decision of Stanford & Stanford [2012] HCA 52, parties generally relied upon the “4 step process” set forth in Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) FamCA 395; FLC 93-143 in the determination of an application under s.79 of the Act, as follows:

   1.   Identify and value the parties’ property, liabilities and financial resources at the date of the hearing;

   2. Identify and assess the contributions of the parties as referred to in s.79(4) of the Act and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties, whether examined on a global approach or an asset by asset approach;

   3. Identify and assess the other factors referred to in s.75 and determine the adjustment (if any) to be made to the contribution entitlements at step two; and

   4.   Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.

1. The Full Court of the Family Court of Australia in Bevan & Bevan [2013] FamCAFC 116 has held that the decision in Stanford serves as a reminder that the 4 step process “merely illuminates the path to the ultimate result” being “no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.”[1]   

   [1] Bevan & Bevan [2013] FamCAFC 116 at paragraphs 71 & 72.

2. The Full Court in Bevan (supra) at [73] also summarised three “fundamental propositions” laid down by the High Court of Australia to provide “useful guidance to trial judges in approaching the task under s79” as follows:

   a)Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);

   b)The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;

   c)A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4) and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.[2]

   [2] Bevan (supra) at paragraph 73.

3. The first step in the 4 step Hickey (supra) approach requires identification of parties’ property, liabilities and financial resources at the date of the hearing. The High Court of Australia made clear in Stanford (supra) at [39], the question whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights or interests in marital property are or should be different from those that then exist”.

4. In assessing the claim of the husband for property adjustment, I also bear in mind that an application under sec. 44 is not intended to be a detailed hearing of the merits of the proposed claim itself.

5. The correct approach to the evidence is a question which has been addressed a number of times.  In Whitford the Full Court made the following statements about procedure for preparation for and conduct of the hearing at 78,143:

   “The hearing of an application for leave to institute proceedings under sec. 44(3) is not intended to be the final hearing of a matter. 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.”

6. In Marriage of Perkins (1979) FLC 90-600; 4 FamLR 634 at 637, Lindenmayer said:

   “In my opinion, upon the hearing of a s 44(3) application, in order to satisfy [the reasonable prima facie case element], all the applicant need establish is that, if his or her evidence as to the merits of the proposed claim is accepted, there is a reasonable probability of that claim’s being successful in some measure”

7. It is often said that this means the applicant’s evidence should be taken at its highest. However, in my view that does not mean every factual assertion of the applicant, no matter how bald, must be accepted at face value for the purposes of determining whether leave should be granted.  There are some limitations. The applicant must discharge an evidentiary onus to a prima facie level.  In Perkins Lindenmayer J added the following qualification to his remarks cited above:

   “I would add only this qualification, that if the applicant's evidence as to merits of his or her proposed claim is in itself inherently improbable or self-contradictory in important respects, or if it is clearly shown by other impeachable evidence (such as undisputed documentary evidence or the testimony of independent witnesses) to be false, then the applicant may be held to have failed to establish a prima facie case notwithstanding that if his or her evidence were accepted there would be a reasonable probability of success.”

8. This qualification has been cited with approval a number of times: Hall and Hall (1979) 5 FamLR 411; (1979) FLC 90-679 at 78,627-78,628; Marriage of Jacenko (1986) 11 Fam LR 341 at 343; Oxenham & Oxenham [2009] FamCAFC 167 at [100].

9. I also note that in Hall, above, the Full Court took up the words of Lindenmayer J “successful in some measure” and said: “Similarly it needs to be borne in mind that the prospect of success need not relate to the whole of the proposed claim. It is sufficient if it relates to some part or aspect of it which in the context of the facts of the individual case is of significance.”

10. I accept, as did May and Ainslie-Wallace JJ in Sharp at [68] that “any such assessment may be somewhat circumscribed because of the limited nature of the evidence presented on an interlocutory application”.  In Sharp, the husband sought leave to commence out of time.  He was cross-examined and made a number of concessions. The trial judge had the benefit of extensive affidavit evidence as well.  The evidence was sufficient to allow a re-exercise of discretion by the Full Court: see Sharp [41]ff.

11. In the present matter the parties had the opportunity to file affidavit evidence. No limit was placed on this. The parties’ made objection to parts of the affidavits relied upon by the other party, as at a final hearing. Some parts were not read.  There was no cross-examination.

12. I take account of the husband’s evidence on this basis.  I note here that the wife in her affidavits gave denials of many of the husband’s factual assertions.  I do not take these into account in assessing the strength of the husband’s evidence in support of a prima facie claim, except to the extent they make clear the husband’s assertions are in issue.  I do take account of evidence of the wife which is either common ground or undisputed by the husband. This approach favours the husband.

13. I take account of the documentary evidence.

14. Accepting the approach to the husband’s substantive claim would be in accordance with the authorities set out above, an early problem is apparent because on the evidence it is not possible to identify with any clarity the parties’ property, liabilities and financial resources at the date of the hearing.  There was, for example, no draft balance sheet provided by the husband, nor any attempt in his affidavit evidence to identify comprehensively the assets of the parties or ascribe a current value to any of them.

15. The evidence did permit identification of two items of real estate: the Property A property, and the (country omitted) property which I discuss further below.  I will consider the evidence relating to these properties before turning to contributions.

Property A Property

1. It is clear that the Property A property is registered in the name of the wife. 

2. The land was purchased for $222,000 in about 2011. The evidence does not disclose the exact date of settlement.  It was however common ground that the wife established an offset account in conjunction with the purchase, ending the numbers (“the offset account”). The offset account was opened on 28 June 2011.

3. It seemed to be common ground that in the period 2011 to separation the husband managed to finances of the parties.  He had internet access to the offset account.

4. The wife received a first homebuyer’s grant of $22,600 which was paid into her offset account on 2012 (Annexure “F”, affidavit sworn 7 February 2018).  The purchase was financed by a mortgage from Bank A entered into by the wife.

5. There are three central areas of difficulty with the husband’s evidence and arguments relating to the Property A property: the alleged payment by the husband of a deposit of $20,000, the alleged purchase of the property in the wife’s name for “asset protection”, and the absence of any evidence of its current value.

6. The husband asserts that he paid $20,000 by way of deposit, because the wife did not have the deposit available. The husband’s evidence about this alleged payment is equivocal, if not elusive.  The husband makes no mention of paying a deposit of $20,000 in his affidavit affirmed 7 June 2017.  In his affidavit affirmed 5 December 2017, which replied to the wife’s affidavit filed 28 September 2017, at paragraph 10, the husband states “The letter provided to Bank A to support the loan application shows that deposits were paid by me.”  The letter in question was annexed to this affidavit as “M-10”.  The letter is on Business 1 letterhead, addressed to “Bank A”, with no address specified.  It is dated 17 June 2011.  The letter states, in part:

   “This letter is to confirm that I am happy to provide Ms Murchison a non-repayable gift in the amount of $20,000 for purchasing her property.”

7. The letter does not state the husband has paid, or will pay $20,000 as a deposit.  It only states that he is “happy” to provide the wife “a non-refundable gift”. 

8. The letter itself is curious.  As noted, it is addressed only to “Bank A”.  No person is named. The husband annexed as “M-11” to his affidavit affirmed 5 December 2017 the wife’s loan application to “homeside”, a lending arm of Bank A.  The husband himself is named as the broker on the first page, and he signed the application as the person verifying the application and supporting documentation on the “Customer Identity Check” form.  On the same form the broker is named as “Business 1 (sic)”. At paragraph 8 of his affidavit affirmed 5 December 2017 the husband confirms he was the mortgage broker who processed the loan. The reasons why the loan application was completed in this fashion is not addressed in the evidence of either party.  However, when “M-10” and “M-11” are considered together the letter appears to have been authored by the husband and addressed to himself as broker.  He gives no evidence that he sent the letter to anyone at Bank A or “homeside”.  Consequently, the letter is at best only equivocal evidence of any actual payment of $20,000 by the husband.

9. The husband gave no evidence of when or how he paid the alleged amount of $20,000.  He did not say, for example, that he paid it into the offset account.  He gave no evidence of where the $20,000 came from if he paid it.

10. There was a deposit of $20,000 on 19 July 2011 into the offset account.  On the bank statement it is described as “Moylan/Murchison Savings” and “Business 2” with the number.

11. In the period between June 2011 and May 2012 there were deposits into the offset account totalling $41,977.56 plus the first homeowners grant of $22,600 on 2 March 2012. On the bank statement entries these are described as “Moylan/Murchison Savings”, or just “Savings”. They appear on their face to be references to the parties’ savings. The remitter name in each case appears to be the husband himself or his company Business 1.

12. All deposits are given the same number, apparently from the same source or account.  It was common ground that the parties opened a joint account from the start of the marriage into which joint earnings were deposited, and from which household expenses, were paid. It was undisputed that the husband resigned from his employment at (employer omitted) and the wife’s salary alone was paid into the joint account from about September 2009 (paragraph 4, affidavit affirmed 5 December 2017). The evidence did not disclose the details of the joint account. The wife gave evidence that the references to “Moylan/Murchison Savings” were transfers from the joint account.  The husband did not dispute this and otherwise gave no evidence about what these references signified.

13. For the purpose of this application, I infer that the deposits of $41,977.56, just described, including the amount of $20,000 on 19 July 2011, into the offset account are likely to have come from the same source, on the probabilities a joint account or other savings account of the parties.

14. It is important to emphasise that the husband did not identify the payment of $20,000 on 19 July 2011 as the payment by him of a deposit for the purchase of the Property A property.  Moreover, a deposit for the purchase of real property is usually paid to a vendor.  There is no evidence that any money was paid to the vendor from the offset account, and such a payment would be unlikely, since an offset account is operated in conjunction with a mortgage loan account, to reduce interest costs.  There is no evidence the husband paid any money directly to the vendor of the Property A property.

15. I am not satisfied the husband has established even on a prima facie basis that he paid $20,000 as deposit for the purchase of the Property A property.  His evidence in this regard is inherently implausible.

16. The husband states that the Property A property was purchased in the wife’s name as a method of “asset protection”.  I will assume this is correct.

17. It is not clear what consequences the husband claims would flow from such a finding.  He gives no evidence of any conversations between the parties about the intended ownership of the property.  He points to documentary evidence which on one view is consistent with an intention that both parties were to own the property, such as, the initial contract of sale had both names on it: see paragraph 8 of his affidavit affirmed 5 December 2017.

18. This evidence might be said to support a prima facie case of joint ownership in that the parties may have initially intended to buy the property jointly, or, when that did not happen, that the wife would hold the property as to some proportion on trust for the husband. However, the husband does not say so explicitly anywhere in his affidavit evidence, nor did he make any submissions to that effect.  I am not satisfied the evidence establishes even on a prima facie basis the existence of such an intention.  In any event, the property was actually purchased in the wife’s name alone. 

19. But even if that was the intention, the consequence would be that the husband is a joint beneficial owner of the Property A property. If so, this may be a factor which may weigh equally against, as well as for, any property adjustment in his favour.  The observation simply underscores the level of ambiguity in the husband’s evidence.

20. Consequently, I am unable to conclude that the husband has demonstrated a prima facie claim to beneficial ownership of any of the Property A property by way contribution of the deposit or a common intention for the wife to hold the property beneficially for both parties.

21. Next, it was common ground that a dwelling was built on the land for a cost of $231,000 in 2012.  There was no evidence at the hearing of the current value of the Property A property or the size of the mortgage debt.  There was no dispute that the wife has been meeting all mortgage payments and other costs for the property since separation. The wife gave evidence that she makes loan payments of $4,147.31 each month and receives $550 per week, or about $2,200 per month, in rent for the property, so there is a shortfall of approximately $1,950 each month.

22. I am unable in the absence of any evidence of value to form a view that the quality of the husband’s claim is such that he has reasonable prospects of demonstrating any proprietary interest in the Property A property.

(country omitted) property

1. The parties also own together a time share property in (country omitted) (“the (country omitted) property”).  The property was purchased for $43,447.20 in 2009 with a cash deposit of $2,824.50 and using 100% debt funding for the balance.  The husband gave evidence that he has been and continues to pay the mortgage payments in respect of this property of approximately $532.32 per month, as well as $1,000 per annum for maintenance.

2. The husband makes no specific reference to the (country omitted) property in his application.  In submissions the wife stated clearly that she was happy for the husband to retain the property and have nothing more to do with it.  This would presumably require transfer by the wife to the husband of her share.

3. There is no evidence of the current value of the (country omitted) property.

4. On the evidence of the husband it is impossible to form a view even on a prima facie basis of the role which the (country omitted) property may play in the claim of the husband.  As already observed, his Initiating Application says nothing specific about this property and appears to propose that its ownership remains joint between the parties.

Liabilities and Financial Resources

1. The evidence of the parties’ liabilities and financial resources is limited.  The husband is paying for the (country omitted) property.  It is not clear whether this property receives income.  As discussed, the wife is paying for the shortfall on Property A property, which is rented.

Contributions

1. The husband supports his claim for a 70% division in his favour on the basis that he made contributions to a total of “at least” $163,911.90 during the relationship and after the marriage.  In submissions the husband handed up an aide memoire setting out the figures comprising this total.  The contributions to which he attributes a precise figure are as follows:

   a)Cash at bank at the start of the relationship - $2,000

   b)Wedding expenses - $80,000

   c)Payment of wife’s HECS debt - $25,116

   d)Balance of ‘beneficiary loans’ still outstanding - $38,477.56

   e)Improvements to the Property A property - $14,756.42

   f)Post separation expenses of the wife - $3,561.92

2. I will consider the evidence relating to each of these categories.

Wedding Expenses

1. At paragraph 9 of his affidavit affirmed 7 June 2017 the husband claims at cohabitation, he had some household furniture and spent the bulk of his savings on the wedding, leaving $2,000. In paragraph 11 he states “I spent about $35,000 of my savings, in preparing for cohabitation”.  In paragraph 19 he asserts “From around two years prior the wedding, the costs of preparation for our wedding amounted to approximately $80,000.  These costs were met entirely by me…” 

2. The husband gave evidence that he was unable to locate any supporting documentation, such as bank statements.  The husband gave evidence that “I have been unable to locate any bank records to evidence these payments, as much of it was paid cash progressively leading up to the wedding.” Both parties agreed a number of payments for the wedding were made in cash. 

3. In my view this evidence from the husband about wedding or pre-cohabitation expenses is difficult to follow. There is no evidence of where the cash payments came from. No detail at all is provided of the alleged $35,000 expenditure. The alleged $80,000 is made referrable to the wedding, but no further detail is given.  Since it was common ground that many payments were made in cash, the approximate figure of $80,000 seems to be little more than a guess.  It is not made clear whether the alleged expenditure of $35,000 was separate or part of the $80,000.  If it was separate, no evidence is given by the husband as to why there are no records for this expenditure, since he states that the money came from his savings.  The evidence is both unsupported by any detail and self-contradictory. Even taken at face value, it is difficult to determine what it proves. I am not satisfied that the husband’s evidence for these payments proves even on a prima facie basis that the payments were made.

Payment of HECS Debt

1. The husband asserted in paragraph 17 of his affidavit affirmed 7 June 2017 that on 16 May 2012 he paid $25,116 towards the outstanding HECS debt of the wife “which I caused to be transferred from an account of a corporate trustee (carrying a trust of which I am a beneficiary) to the offset account…as a ‘beneficiary loan’.  There is no dispute that $25,116 was paid from the wife’s offset account on 16 May 2012. 

2. However, there is no supporting evidence, or any detail, about the corporate trustee referred to, its name, bank account or transfers from any such bank account. These would be matters peculiarly within the knowledge of the husband.  The deposits into the offset account have already been discussed above.  In each case the remitter name was the husband himself or his business Business 1.  There is no evidence connecting Business 1 with a corporate trustee.

3. Furthermore, the wife annexed bank statements for her offset account to her affidavit sworn 7 February 2018.  These are incomplete, but provide a continuous record for the period 28 June 2011 to 15 June 2012, then from 17 October 2012 to 15 February 2013. 

4. As at 16 May 2012 the balance in the offset account was $54,605.72 before the transfer to the ATO of $25,116. 

5. The point is that there is no evidence of a transfer into the offset account of $25,116 at any time. The bank statements show the $25,116 was paid directly to the ATO from the offset account. There is no evidence supporting the husband’s assertion that up to 16 May 2012 there was any deposit from a corporate trustee into the offset account.  There was a deposit on 15 June 2012 into the offset account of $20,000.  Although it was not clear, it appears the husband identifies this deposit as referrable, in part, to the payment of $25,116.  Putting to one side the issue that the deposit was made one month after the payment of $25,116, it is described as “Business 2” but it has the same number as the other deposits which I have already inferred likely came from the joint account, ie, #.  There is also no evidence connecting this deposit to any corporate trustee.  

6. Consequently, the husband’s evidence about the payment of $25,116 towards the outstanding HECS debt of the wife from a corporate trustee is too lacking in supporting detail to satisfy the prima facie test.  I find it to be inherently implausible.

Beneficiary Loans

1. In paragraph 28 of his affidavit affirmed 7 June 2017 the husband also gives evidence that:

   “On or around 28 June 2011 onwards I caused to be deposited, by way of several separate deposits as further beneficiary loans in the same manner deposed to above, amounts into that offset account totalling $78,477.56, so that the effective interest as calculated was reduced under the loan.”

2. Further in paragraph 30 of his affidavit affirmed 7 June 2017 the husband gives evidence that:

   “Those beneficiary loans deposed above have not been repaid in total, and at present approximately $38,477.56 remains owing to the trustee, such amount comprising entirely of funds placed in the offset account, and applied to the benefit of the Respondent at present.”

3. I have already discussed the deposits into the offset account above in connection with the alleged payment of $20,000 as deposit for the Property A property and for the wife’s HECS debt.  As pointed out in that discussion, the husband’s evidence does not give any details of the alleged corporate trustee or when or how he is said to have been loaned the money as a beneficiary. The precise figure of $78,477.56 is not supported by any documentary evidence, and the husband gives no explanation of how it was reached.  There is no evidence in the offset account bank statements that deposits totalling $78,477.56 were ever made prior to 18 December 2012 when the husband withdrew the first of two payments of $20,000.

4. As already noted, the consistent references to Moylan/Murchison Savings”, or just “Savings” indicate the deposits into the offset account were from the parties’ savings.  Thus the bank records appear to contradict and impugn the husband’s evidence. The husband did not explain this apparent contradiction.

5. On 18 and 19 December 2012 there were two transfers out of the offset account of $20,000.  These are described on the bank statements as “Reimbursement”.  It is obvious that if $40,000 is deducted from $78,477.56, $38,477.56 remains.  The wife obtained a trace from Bank A on the destination of each withdrawal.  Both amounts of $20,000 were paid into an account in the name of Business 1.  However, the husband did not specifically identify those transfers as linked to his asserted beneficiary loans.  As already noted, he gave no evidence of a connection between a corporate trustee and Business 1.

6. I am unable to conclude that the husband has proved on a prima facie basis that he paid moneys lent to him as a beneficiary into the offset account.

Improvements to the Property A property

1. At paragraph 31 of his affidavit affirmed 7 June 2017 the husband gives evidence that he made payments totalling $14,756.42 towards the Property A property during the period after separation when he lived in the property until 15 May 2013, when he moved out.  These payments were for landscaping, blinds, a dishwasher, minor building works and council rates.  They are supported by documentation.

2. I accept these payment are proved on a prima facie basis.

Expense of the Wife after Separation.

1. At paragraph 39 of his affidavit affirmed 7 June 2017 the husband gives evidence that since separation he has paid a total of $3,561.92 on behalf of the wife for gym membership, mobile phone bills and health insurance.  The wife did not dispute these payments.  I accept they are proved on a prima facie basis.

2. Therefore, of the precisely quantified contributions relied upon by the husband, I accept on a prima facie basis that he contributed $14,756.42 and $3,561.92 for the purposes identified.  This is a total of $18,318.34.

3. The husband also points to unquantified contributions of household furniture and items at the start of cohabitation and shared household expenses when the parties lived at Suburb P.  For the purposes of this application I accept such contributions were made.

Liabilities

1. The husband gave evidence that he has current liabilities which are relevant to hardship if leave is not granted.

2. At paragraphs 70-72 of his affidavit affirmed 7 June 2017 the husband gives evidence of liabilities of himself and his business.  He points to the $38,477.56 said to be owing for the beneficiary loans referred to above, and $12,370 relating to the mortgage over the (country omitted) property.

3. He also gives evidence of tax debts owed by his business Business 1 of $121,948 and employee withholding tax of $60,000 as at December 2016; and Business 2 of $5,100 as well as creditors of $6,200 also as at 30 December 2016.  I note that the hearing took place in March 2018 and the husband filed his most recent affidavit in December 2017 but no updated figures were provided for these alleged liabilities.  For the purposes of this application, I will accept there are liabilities of this nature but the quantum is unclear. 

4. The wife is liable under the Property A property mortgage.

5. There was no evidence of superannuation.

Conclusion as to Prima Facie Case

1. On the evidence presented by the husband, I am not satisfied he has established a prima facie claim or “a real probability of success” in respect of 70% of the net proceeds of sale of the Property A property if his application for property adjustment was heard on its merits.  There is no dispute the wife has been liable for and paid the Property A mortgage from the start.  The husband’s prospect of receiving a 70% adjustment in his favour after a three and half year marriage seems fanciful on the evidence he has presented.

2. That is not the end of the matter however.  The further question, as the authorities cited above make clear, is whether nonetheless the husband may succeed “in some measure.” Even if unsuccessful in his application for 70%, it will be sufficient if the prospect of success “relates to some part or aspect of it which in the context of the facts of the individual case is of significance.”

3. I have found that the husband has established on a prima facie basis contributions to the value of $18,318.34.  The problem is that on the evidence it is not possible to conclude, even on a prima facie basis, that in the context of the facts of this case such part or aspect is “of significance”.  This is especially so when I have no evidence of the value of either the Property A property or the (country omitted) property, or the size of the mortgage secured against the Property A property. Furthermore, the relationship was short. 

4. In Whitford at 78,144 the Full Court said: “If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.” On the basis of the prima facie case established by the husband I cannot be satisfied that if leave was granted the result of a hearing on the merits would mean any hardship presently suffered by the husband because of his financial problems would be alleviated.

5. I have taken account of what was said in Whitford at 78.145:

   “In some cases, where a resolution of the property or financial relationships of the parties is desired, it might be, that the applicant would receive no more or even less, than he or she already owns at law or in equity. Nevertheless, hardship might be caused to the applicant if leave were not granted so as to facilitate such resolution.”

6. As already pointed out, I am unable to form a sensible view about what the husband currently owns at law or in equity.  In view of the modest prima facie case proved by the husband above, I am not satisfied that hardship would be caused to the husband if leave is not granted and he is denied the opportunity for the facilitation by the court of a resolution of this question.

7. This conclusion is sufficient to dispose of the husband’s application.  However, I will also express a view on the exercise of discretion.

The Exercise of Discretion

1. In Whitford (supra) the Full Court at 18.176 stated:

   “The determination how this discretion should be exercised, must depend on the facts of the particular case. Due weight must be given to the expressed legislative intendment that ordinarily, proceedings should be commenced within a year from a date of the decree nisi, and the general policy of the Act which appears from sec. 44(3) and sec. 81 that financial relationships between the spouses should, wherever possible be brought to finality within a reasonable time after the dissolution of the marriage. Hence, such matters as the length of the delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay, and the strength on the merits of the applicant's case, and the degree of the hardship which would be suffered unless leave were granted, are matters affecting the exercise of the discretion. These matters are not necessarily the only ones.”

2. In Sharp (supra) the Full Court cited with approval the decision of O’Ryan J in Tamaniego & Tamanieago [2010] FamCAFC 254 where his Honour stated at paragraph 162:

   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: see 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 refusal of the extension of time ... 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.

Delay

1. Nowhere in his evidence does the husband state explicitly that he was unaware of the time limits in s.44.

2. Rather the husband says in paragraph 40 of his affidavit affirmed 7 June 2017:

   “I have struggled with the breakdown of the marriage and the circumstances surrounding the breakdown in the marriage, and the impact this has had on me has prevented me from taking the necessary steps to finalise matters between the Respondent and I financially.”

3. The husband gave evidence that he struggled for the following reasons:  the wife formed a relationship with a third party; the wife and her family alienated him from the friendship group and community they both shared; his own parents separated in 2013 which “had a significantly compounding impact on me in my own divorce and separation, and caused me to severely struggle mentally and emotionally.”  The husband gave evidence that his communication with his own mother was compromised and was not rehabilitated until early 2016.  As a measure of emotional distress in which the husband found himself he gave evidence that between 2013 and 2017 he made numerous trips to a range of destinations including (countries omitted) in connection with the Church.

4. I accept that the husband may have been affected significantly by the circumstances in which his marriage failed.  That is not uncommon.  However there are aspects of the evidence which undermine his explanation for delay.

5. Exhibit 1 was a copy of the husband’s Application for Divorce which was filed on 12 February 2014.  Part G of that application is an affidavit by the applicant.  The husband’s signature on that affidavit is witnessed by Adriana Anne Youssef, a solicitor.  Attached to the application is a Notice of Application for Divorce addressed to the respondent.  This includes an entry at the end in the following terms “If you want to apply to the court about property or your own maintenance, you must file a separate application within 12 months of the date of the divorce becomes final.  Otherwise, you will need the court’s permission to apply.”

6. The wife annexed to her affidavit sworn 28 September 2017 a copy of the divorce order dated 15 April 2014.  The order makes clear that it took effect to terminate the marriage on 16 May 2014.  Appended to the end of the order are a series of notes. The first note makes clear that an application for property adjustment or maintenance must be made within 12 months from the date upon which the divorce order takes effect, and after that time such an application cannot be made without first obtaining the leave of the court to do so.

7. I infer from this evidence that the husband was assisted by a solicitor in preparing papers for and applying for a divorce order.

8. The husband gave evidence that he first contacted his solicitors in relation to this matter on 14 June 2016.

9. However, Annexure “M-8” to the husband’s affidavit affirmed 5 December 2017 is a copy email which he sent to the wife on 26 November 2013.  The email states:

   “Now it’s time to apply for the court divorce and come to a financial settlement.

   Couple of quick questions:

   1.  Do you want to be co-applicants on the divorce paperwork?

   2.  Are you willing to come to the table regarding a financial settlement or do we need to get solicitors involved?”

10. This email was sent during the period in which the husband states that he was struggling emotionally with his own marital breakdown and the separation and divorce of his parents.  The email makes clear that the husband turned his mind to a financial settlement during this time despite the distractions he said he suffered from other areas of his life. He clearly turned his mind to a financial settlement in connection with an Application for Divorce. He was the party pressing for financial settlement even before the divorce order took effect. 

11. When these factors are combined with the evidence that the husband had the assistance of a solicitor in applying for a divorce, there is a prima facie inference that he is likely to have known of the time limit on applications for property adjustment.  As already pointed out, he nowhere in his evidence states that he did not know.

12. He gives no explanation of why he only contacted his solicitors for the present application on 14 June 2016, some three years after he had already raised property settlement with the wife.  As noted, in the period between 2013 and 2017 he engaged in extensive travel.  Even if it is accepted he suffered from a period of emotional disarray, by November 2016 this had become sufficiently ameliorated for him to email the wife about a property settlement.  There is no explanation of why the email could not have been followed by a timely application in the absence of agreement with the wife.

13. On balance, I am not satisfied that the husband has provided a satisfactory explanation for his delay.

Prejudice to the Wife

1. The wife gave some evidence of prejudice to her if leave to proceed was granted to the husband.  The nature of the prejudice alleged seems to be that, having moved on with her life, and recovered from anxiety, she will be dragged back into litigation and confrontation with her ex-husband.  I accept these submissions.

2. I am not satisfied that in the circumstances of this case the discretion, even if enlivened, should exercised in favour of a grant of leave.  It would not do justice between the parties.

3. Accordingly the husband’s application should be dismissed.

Costs

1. Section 117 of the Act sets out that each party shall bear his or her own costs, subject to the considerations in s.117(2) of the Act.

2. Any order for costs must also be determined in light of the substantive judgment and the relative success or failure of the parties. This is naturally something that can only be addressed after judgment has been delivered.

3. The Court proposes to make the orders and directions in relation to any application for costs that might be made as set forth in the orders at the commencement of these reasons.

I certify that the preceding one hundred and thirty-six (136) paragraphs are a true copy of the reasons for judgment of Judge Harper

Date:  11 July 2018