MULLIS & QUIMBY
[2019] FCCA 1516
•7 June 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MULLIS & QUIMBY | [2019] FCCA 1516 |
| Catchwords: FAMILY LAW – De facto relationship – date of commencement of cohabitation in dispute – application for leave to proceed out of time – whether hardship to the Applicant outweighs prejudice to the Respondent – application granted. |
| Legislation: Family Law Act 1975 (Cth), ss.44(6), 78, 90SL, 90SM, 117C |
| Cases cited: Whitford & Whitford (1979) FLC 90-612 In the Marriage of Pearce (1982) FLC 91-276 In the Marriage of Aldred (1984) FLC 91-510 In the Marriage of Aldred (No 2) (1985) 91-602 In the Marriage of Jacenko (1986) 11 Fam LR 341 Sharp v Sharp (2011) 50 Fam LR 567 Slocomb v Hedgewood [2015] FamCAFC 219 Edmunds & Edmunds [2018] FamCAFC 121 Gadzen & Simkins [2018] FamCAFC 218 |
| Applicant: | MR MULLIS |
| Respondent: | MS QUIMBY |
| File Number: | SYC 5033 of 2013 |
| Judgment of: | Judge Morley |
| Hearing date: | 18 April 2019 |
| Date of Last Submission: | 18 April 2019 |
| Delivered at: | Sydney |
| Delivered on: | 7 June 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jackson |
| Solicitors for the Applicant: | Anne Day & Associates |
| Solicitors for the Respondent: | Mr Miller of Willis & Bowring Solicitors |
ORDERS
That pursuant to section 44(6) of the Family Law Act 1975 (“the Act”) leave is granted to the Applicant de facto husband to apply for orders under section 90SM of the Act after the end of the standard application period by extending the time for him to apply to 14 May 2015, the date he filed his Amended Initiating Application.
IT IS NOTED that publication of this judgment under the pseudonym Mullis & Quimby is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 5033 of 2013
| MR MULLIS |
Applicant
And
| MS QUIMBY |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings relate to the Application by Mr Mullis as Applicant de facto husband (‘the Applicant’) for an order pursuant to section 44(6) of the Family Law Act 1975 (‘the Act’) granting him leave to commence proceedings for property settlement orders under section 90SM of the Act out of time. The Respondent de facto wife (‘the Respondent’) is Ms Quimby.
The Applicant asserts that the parties commenced cohabitation in 1988. The Respondent asserts that the parties commenced cohabitation in 1992. The parties agree that they separated in September 2012. The parties never married.
There are two children of the relationship; [X] born … 2004, currently aged 14 years, and [Y] born … 2005, currently aged 13 years. Both children have lived with the Respondent since separation and have spent time, though not always consistently, with the Applicant.
The Applicant commenced proceedings by filing an Initiating Application on 29 August 2013 in which he sought only parenting orders.
The Respondent filed her response on 31 October 2013, also seeking only parenting orders.
On 3 March 2014, Her Honour Judge Walker made an order granting leave to the Applicant to file an Amended Application seeking property orders within 6 weeks. The Applicant did not take advantage of that leave and did not file his Amended Application initiating proceedings seeking property settlement orders, in addition to parenting orders, until 14 May 2015.
Pursuant to section 44(5) of the Act, the time for filing an Application for orders under section 90SM of the Act had expired at the end of September 2014 and so it is necessary for the Applicant to seek leave pursuant to section 44(6) of the Act to make his Application out of time.
Final parenting orders were made by consent on 30 April 2018.
The Parties’ Proposals
The Applicant seeks an order granting him leave pursuant to section 44(6) of the Act (incorrectly stated as leave pursuant to section 44(5) in his Amended Initiating Application) to commence proceedings for an order under section 90SM of the Act out of time.
If granted leave, the Applicant seeks property settlement orders whereby the two real estate properties of the parties, being Street A1, Suburb B, and Street A2, Suburb B, be sold and after payment out of all proper costs of sale, and payment out of loan accounts secured on the properties by way of mortgage, the net proceeds of sale remaining be divided as to 55% to the Respondent and 45% as to the Applicant.
The Respondent, in her Response to Amended Initiating Application filed 6 July 2015, seeks an order that the Applicant’s Amended Initiating Application filed 14 May 2015 be dismissed. In effect, the Respondent seeks that leave under section 44(6) not be granted. In the event that such leave is granted (again erroneously referred to in the Response as leave pursuant to section 44(5)), the Respondent seeks that a declaration be made pursuant to section 78 of the Act that the she is the sole legal and beneficial owner of Street A2, Suburb B, and of all its furniture and contents.
The Respondent also seeks that a declaration be made pursuant to section 78 of the Act that the Applicant is the sole legal and beneficial owner of Street A1, Suburb B, and of all its furniture and contents subject to the Applicant doing all things necessary to grant to the Respondent an option to purchase that property from him for a purchase price of $550,000, with an option fee of $1000, payable within 14 days of the orders being made, with such option to be exercised on or before the expiration of 24 months from the date of the Deed of Option.
In the event that the Respondent does not exercise the option, she seeks an order that she cause to be demolished the home standing on Street A1, Suburb B, that the resulting vacant land be sold, that from the sale she be paid all proper costs of sale and all monies owing on any loan accounts secured on the property by way of mortgage, that $10,000 be paid into a trust account for each of the children for their educational needs, and that the balance remaining be paid to the Applicant.
The Interim Proceedings
The time within which a party to a de facto relationship may apply for an order under section 90SM, or a declaration under section 90SL is set by section 44(5) of the Act:
(5)Subject to subsection (6), a party to a de facto relationship may apply for an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, only if:
(a) the application is made within the period (the standard application period) of:
(i) 2 years after the end of the de facto relationship; or
(ii) 12 months after a financial agreement between the parties to the de facto relationship was set aside, or found to be invalid, as the case may be; or
(b) both parties to the de facto relationship consent to the application.
Parties concur in their evidence that they separated in September 2012. Neither party asserts a particular date during September 2012 and therefore I take their separation to have occurred not later than 30 September 2012. Accordingly, the standard application period referred to in section 44(5) of two years after the end of the de facto relationship expired on 30 September 2014.
Pursuant to section 44(6), the Court may grant leave to a party to a de facto relationship to apply for orders out of time under section 90SM or section 90SL:
(6) The court may grant the party leave to apply after the end of the standard application period if the court is satisfied that:
(a) hardship would be caused to the party or a child if leave were not granted; or
(b) in the case of an application for an order for the maintenance of the party—the party’s circumstances were, at the end of the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.
In filing his Amended Initiating Application on 14 May 2015, the Applicant was about 7 months and 14 days out of time.
The hearing on 18 April 2019 of the Applicant’s application for leave to bring his Application out of time is interlocutory in nature.[1]
[1] Sharp v Sharp (2011) 50 Fam LR 567 per Young J at [110].
The Applicant was represented before the Court by Mr Jackson of Counsel. Mr Jackson provided to the Court a helpful Case Outline document and made some additional short submissions.
The Respondent was represented before the Court by Mr Miller as solicitor advocate. Mr Miller advised the Court that the Respondent neither consented to nor opposed the Applicant’s application for leave to proceed out of time. Mr Miller confirmed that for the purpose of the Application, the Respondent agreed with the values of the matrimonial property set out at page 8 of Mr Jackson’s Case Outline document, which I will repeat hereunder.
Material Relied Upon
The Applicant relied upon:
a)His Amended Initiating Application filed 14 May 2015;
b)The Affidavit of Mr Mullis sworn 20 December 2018 and filed that day;
c)The Financial Statement of Mr Mullis sworn 12 May 2015; and
d)The Case Outline document provided by Mr Jackson.
The Respondent relied upon:
a)The Response to Amended Initiating Application filed 6 July 2015.
Mr Miller indicated at the hearing that the circumstances of the Respondent not filing any evidentiary material in specific opposition to the Application for leave does not mean that she consents to the Application.
The Respondent swore an Affidavit on 30 June 2015, filed 6 July 2015, with her Response to Amended Initiating Application, in which she sets out her evidence relating to the property matter.
The Respondent filed with those documents a Financial Statement sworn by her on 30 June 2015. She filed another Financial Statement on 30 September 2018, sworn by her that day. I have had regard to those documents in deciding this matter.
Background
The Applicant asserts that the parties’ cohabitive relationship commenced in 1988 at the time when he was boarding with Respondent’s mother at Suburb C. The Applicant was employed as a tradesman and the Respondent was attending school.
The Respondent asserts that in early 1988 the Applicant commenced boarding in her mother’s home and that she was in Year 10 at Suburb D High School. She asserts that the cohabiting relationship between the parties did not commence until “late or early 1992” when she rented premises in Street E, Suburb F, and furnished the property at her own expense.
Both the Applicant and Respondent agree that at the commencement of cohabitation, whenever that occurred, neither party had assets of any significant value.
The Respondent asserts that from the commencement of cohabitation until about 2000, when the Applicant qualified as a tradesman, she was the principal financial support in the relationship.
The Respondent ceased paid employment in … 2004 when she was pregnant with the parties’ first child, [X]. She asserts that from about … 2008, she attempted various forms of self-employment and then engaged in casual work up until the time of the parties’ separation.
She asserts that she ceased work in late 2013 or early 2014, and from June 2014 she engaged full-time in home duties and was in receipt of Centrelink benefits.
The parties agree that in 2001, the Applicant purchased, in his sole name, the property at Street A1, Suburb B. The parties disagree as to the facts leading up to the purchase and as to who was the organising and negotiating party. The parties agree that the purchase price was $200,000. The Applicant asserts that he borrowed $180,000 secured over the property by way of mortgage, and that the balance was funded from the parties’ savings.
The parties agree that at about the same time, the Respondent purchased, in her sole name, the property at Street A2, Suburb B, being a vacant block of land, for $150,000.
The Applicant does not give any evidence as to the source of the purchase price paid.
The Respondent asserts that:
Mr Mullis did not contribute to the purchase of this block of land and was not able to borrow any further monies to assist with the purchase of Street A2, Suburb B. I used my savings to pay the deposit and obtained a loan from Westpac of approximately $137,000
I note that at the time the Respondent asserts that she:
Used my savings to pay the deposit
The parties had been in a de facto relationship, on her evidence, for nine years.
A house was then built on the property at Street A2, Suburb B, with the parties’ evidence once again diverging markedly in relation to how that was organised and achieved.
The Applicant asserts:
I built a house on the land at Street A2, Suburb B. I arranged for plans to be drawn up and lodged with the Council, together with the other documents the council needed such as a geotechnical report, fire report, and flood report
The Applicant asserts that:
After Council approval was obtained, I used my income and credit cards to pay for materials and costs. I undertook most of the building work to build a house at Street A2, Suburb B. I paid for the site to be levelled.
I then constructed the poles, the frame and the roof. I had an electrician friend and a plumber to assist me; otherwise I undertook the building work.
I worked on weekends. I also had some periods of about 3 weeks off work to enable me to complete the work
The Respondent, for her part, asserts:
I engaged the services of Mr G, Designer in Suburb H to design and submit a Development Application on my behalf.....
On or about … 2001 I was granted an owner builder permit. Mr Mullis assisted me in estimating, costing and sourcing of materials, quotes and all items associated with the construction and arranging of tradesmen. I assisted with the marking/pegging, clearing and preparations for excavations. I also assisted with the excavations and commencement of building works including placement of poles and digging of foundations, laying of flooring, framing, lifting placement and fitting of windows. Mr Mullis’s experience allowed me to undertake the project and he offered advice in regard to all stages of the construction. I used my income to pay for the materials and tradesmen in relation to the construction of the building works
The Respondent asserts that:
In October 2002 my mother lent me $50,000 to complete the construction of the house on Street A2, Suburb B. In … 2004 prior to the birth of [X] we moved into the incomplete house at Street A2, Suburb B
The property at Street A1, Suburb B, was, and remains, in the sole name of the Applicant. The property at Street A2, Suburb B, was, and remains, in the sole name of the Respondent.
The Applicant deposes that:
In 2005, I refinanced the mortgage over the property at Street A1, Suburb B, and increased the mortgage from about $170,000 to $365,000. I had the capacity to borrow this amount. Ms Quimby I understand did not because she was not then engaged in paid work, with her work focused on caring for the children
I note at this point, that at the relevant time, on the Applicant’s evidence, the parties had been in a de facto relationship for 17 years.
The Applicant continues:
I obtained in 2005 about $295,000 from the refinance, which was used to complete the house and Street A2, Suburb B....
After the house at Street A2, Suburb B was completed, Ms Quimby and I continued to live at Street A1, Suburb B, which is an older style home. The property at Street A2, Suburb B was rented out
Once again, the Respondent’s evidence is somewhat different. She asserts:
In October 2002 my mother let me $50,000 to complete the construction of the house on Street A2, Suburb B
In relation to the refinance by the Applicant in 2005, which the Applicant asserts was used to complete construction of the house on Street A2, Suburb B, the Respondent asserts:
In 2005 I assisted Mr Mullis obtain a “low doc” mortgage to assist with payment of his outstanding tax
However the evidence following this assertion in her affidavit does not specifically assert that the “low doc” loan monies were used to pay outstanding tax then, or in the succeeding several years.
In this regard the Applicant asserts in his affidavit:
In about 2005 I became aware that I had a tax debt of about $75,000. This was for the period of 2000 to 2005, for my earnings and for GST which I have not remitted. I pay $300 per week towards his liability and the current balance is $48,000
It is agreed between the parties in their evidence that since separation, the Respondent and the children have occupied the dwelling on Street A1, Suburb B, and that from sometime after the parties’ separation, the Respondent’s mother moved into Street A2, Suburb B and commenced paying her rent and assisting her to care for the children.
The Applicant asserts that since separation, the Applicant has continued to pay the loan account secured by way of mortgage on Street A1, Suburb B, with a debit balance of $365,000. The Applicant’s payments are on an interest only basis.
The Respondent for her part deposes that since separation she has continued to pay all outgoings including “mortgage payments” in respect of Street A2, Suburb B, water rates in respect of Street A1, Suburb B, and all living expenses for herself and the children. She deposes that since separation, the Applicant has not paid her any child support.
The children have lived with the Respondent since separation. On her evidence, the Respondent has not received any financial assistance for their support from the Applicant since separation. This would appear to be corroborated, to an extent, by the Applicant’s Financial Statement sworn 12 May 2015 and filed 14 May 2015. At item 31, he indicates that the amount of child support paid by him for [X] and [Y] is “NIL”.
On the evidence, following separation, the Applicant spent alternate weekends with the children from December 2012, originally for daytime only time with the children on specified dates, increasing to alternate weekend time in accordance with consent orders on 3 March 2014. The orders made on 3 March 2014 also included the order:
Leave is granted to the father to file an amended application for property orders within 6 weeks
The property pool set out on page 8 of Mr Jackson’s Case Outline, with values consented to by the Respondent for the purpose only of these interlocutory proceedings, is as follows:
ASSET OWNERSHIP VALUE
1. Street A1, Suburb B Applicant $815,000
2. Street A2, Suburb B Respondent $925,000
3. Wife’s superannuation Respondent $17,827
TOTAL$1,757,827
LIABILITYLIABLE VALUE
4. Loan account – mortgage on Street A1, Suburb B Applicant $350,600
5. Loan account – mortgage on Street A2, Suburb B Respondent $132,887
6. Debt to ATO Applicant $48,000
TOTAL $531,487
NET $1,226,340
Accordingly, on the basis of current ownership and liability, the Applicant’s share of the net assets is $416,400, being 33.95%, and the Respondent’s share of the net assets is $809,940, being 66.05% of the net assets.
In his Amended Initiating Application, the Applicant seeks 45% of the net sale proceeds of each of the real properties, which, without any deduction for sale costs, but taking into account his ATO debt, would give him $517,430.85 or 42.2% of the net assets and would give the wife $708,909.15 or 57.8% of the net assets. The difference is $101,030.85 or 8.25% of the net asset pool.
In his Case Outline document, Mr Jackson asserts on behalf of the Applicant that a just and equitable property division between the parties would be as to 57.5% to the Applicant and 42.5% to the Respondent.
The parties attended a Conciliation Conference pursuant to an order of the Court on 20 October 2015. In preparation for the Conference, the parties obtained valuations of the real estate properties at Street A1, Suburb B and Street A2, Suburb B, on 15 October 2015. Updating reports were obtained on 20 February 2017 and 6 August 2018. The parties were not able to settle their property settlement issues at the Conciliation Conference.
On 9 December 2016, her Honour Judge Sexton made an order that by no later than 28 February 2017, each of the parties was to serve on the other party a section 117C offer, and noted that the wife would consult with the bank about her borrowing capacity prior to an offer being served.
Further orders were made in relation to the parties obtaining an updated valuation for each property and that the parties engage in private mediation and share equally the costs.
On 30 April 2018, the day on which the final parenting orders were made by consent, orders were also made by his Honour Judge McGuire for each of the parties to file and serve an updated Financial Statement within 28 days, for the parties to do all things necessary to attend the mediation with the Law Society of NSW mediation service, and for the parties to share equally in the costs of the mediation.
On 27 June 2018, orders were made by Chief Judge Alstergren that each party file and serve an updated Financial Statement and provide updated disclosure within 14 days, the parties obtain updated valuations of the Street A1, Suburb B and Street A2, Suburb B properties at their joint expense, and that the parties proceed to the Law Society Family Law Settlement Service mediation as previously ordered.
The parties attended a private mediation through the Law Society Family Law Settlement Service on 4 September 2018, but again were not able to settle their property settlement issues.
Legal Principles
An often referred to starting point is the passage from the judgment of Nygh J in the Full Courts decision in In the Marriage of Jacenko[2]:
As I stated in my decision of Frost and Nicholson (1981) FLC ¶91-051, a prima facie case should be judged on the evidence put forward by the applicant in her affidavit evidence available at the time of the hearing of the application for leave.
The respondent may demur that the evidence which the applicant seeks to rely upon is not sufficient to justify the costs involved. In so holding, I followed the views expressed by Lindenmayer J. in Perkins and Perkins (1979) FLC ¶90-600; (1979) 4 Fam. L.R. 634. And I wholeheartedly accept the qualification that he introduced there; that there may be situations where, because of lack of clarity in the evidence of the applicant, oral evidence may have to be called and cross-examination may have to be allowed.
But the general principle is that on the issue of the establishment of a prima facie case the Court proceeds on the basis that the evidence of the applicant, unless it is inherently unbelievable or contradictory, should be accepted, and the Court should therefore decide whether or not on that basis a prima facie case has been made out. If leave is granted, then it is for the Court conducting the ultimate hearing to determine whether that prima facie case can be established.
[2] In the Marriage of Jacenko (1986) 11 Fam LR 341 at 343.
Later in His Honour’s judgment:
The issues then before his Honour were those which have been established in this court as long ago as 1977 in McDonald and McDonald (1977) FLC 90-317; (1977) 3 Fam LR 426. The applicant must establish three principal matters: first, a reasonable prima facie case for relief, had she instituted proceedings in time; secondly, that denial of the wife's claim would cause her hardship; and thirdly, an adequate explanation as to her delay.
That third requirement must now be read, subject to the decisions of the Full Court in Althaus and Althaus (1982) FLC 91-233; (1979) 8 Fam LR 169, and Howard and Howard (1982) FLC 91-234; (1979) 8 Fam LR 178 which indicate that in appropriate cases the degree of hardship to be suffered by the applicant may well outweigh an inadequate explanation of delay.
If those three elements are satisfied, the court should further, in determining whether to exercise its discretion to grant relief, consider the question of prejudice which the respondent would suffer by reason of the delay in bringing the application.
In Sharp & Sharp[3] the Full Court said:
[3] Sharp & Sharp [2011] FamCAFC 150
[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) 186 CLR 541 at 551; 139 ALR 1 at 8 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 3 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".
[13] At CLR 553; ALR 8 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 subs (3) unless".
[15] In In the Marriage of Whitford (1979) 24 ALR 424; 4 Fam LR 754; 35 FLR 445; (1979) FLC 90-612 (Whitford) the Full Court noted at ALR 433; Fam LR 761; FLR 455-6; FLC 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.
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 ALR 430; Fam LR 759; FLR 452-3; FLC 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 ALR 431; Fam LR 760; FLR 454; FLC 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 subsection 44(3) or 44(4) for saying that the right or entitlement lost must be a substantial one.
[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.
Discretion
[23] In Whitford the Full Court continued at ALR 432-3; Fam LR 761; FLR 455; FLC 78,145-6 to consider the exercise of discretion:
Section 44(4) inhibits the granting of leave unless the requisite case is made out, but it does not provide that leave must be granted if the court is satisfied that hardship would be caused ... Due weight must be given to the expressed legislation 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 s 44(3) and s 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.
………
[27] We observe that subsequent Full Court decisions have indicated 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 at ALR 431; Fam LR 760; FLR 454; FLC 78,145; In the Marriage of Cox (1981) 7 Fam LR 627; (1981) FLC 91-068 (Cox); In the Marriage of Walker (1984) 9 Fam LR 983; (1984) FLC 91-564. See also Hedley v Hedley (2009) 42 Fam LR 147; 235 FLR 58 ; (2009) FLC 93-413; [2009] FamCAFC 179 at [132] (Hedley) per Boland J and at [218] per Cronin J).
Later at paragraphs 75 to 77, the Full Court said:
[75] In Tamaniego v Tamaniego [2010] FamCAFC 254 (Tamaniego) O'Ryan J said at [162]:
[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) 93 ALR 479; [1990] HCA 30. 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.
[76] In In the Marriage of Althaus (1979) 8 Fam LR 169 at 173; (1982) FLC 91-233 at 77,267-8 (Althaus), Evatt CJ stated, and the Full Court held that:
The requirement that the applicant under s 44(3) give an explanation of the delay in bringing proceedings in my view requires a consideration of the whole period from the date of the decree nisi to the lodging of the application. It requires the court to consider whether the wife took all reasonable steps to pursue her claim or whether, on the other hand, she acted at any time as if she had no intention of proceeding or pursuing any claim at all against the husband. It requires the court to consider whether it can reach conclusions as to why the proceedings were started beyond the time lodged and whether those proceedings are attributable to default on the part of the applicant.
[77] Of interest in this case Evatt CJ added at Fam LR 173; FLC 77,268:
"Where hardship to the applicant is established and there is no question of prejudice to the respondent, the court should not seek to raise artificial barriers if the applicant has behaved in a reasonably diligent manner in prosecuting her claim."
Later at paragraphs 94 to 97, the Full Court said:
[94] ….. In considering the question of prejudice, the court does not merely look at the time which has elapsed since the expiration of the limitation period.
[95] As Meagher JA observed in Ramadam v Leda Holdings [2001] NSWCA 41 at [6] (Ramadam) "it is the prejudice to the defendant as at the date of the filing of the statement of claim which must be examined, no matter what was the date of its origin". Although, in Ramadam the limitation period related to a personal injuries claim and particular provisions of the Limitation Act 1969 (NSW), the prejudice to the respondent as assessed as at the time the application was filed is particularly relevant in assessing delay in the circumstances of this appeal: see In the Marriage of Hall (1979) 5 Fam LR 411; (1979) FLC 90-679 (Hall).
[96] Additionally, in these circumstances the fact that the wife may have reasonably expected that the husband would later bring an application does not ameliorate the prejudice that she may suffer as a result of the husband's delay.
[97] Merely because the respondent to an application for leave does not point to particular prejudice that might arise if leave were granted, does not dispose of the question. The law presumes prejudice to flow to a person sought to be joined in litigation after the effluxion of the relevant time limits. Even if the court came to the view that there was no significant prejudice to the respondent, the court may consider whether in all of the circumstances of the case, it is just and reasonable to grant the extension sought. The New South Wales Court of Appeal in McLean v Sydney Water Corporation [2001] NSWCA 122, per Giles JA (Hodgson and Stein JA agreeing) said at [22] that:
[22] ... Prejudice engendered by delay and unlikelihood of a fair trial will be highly material, and if there is prejudice and unlikelihood of a fair trial that will tell strongly, often conclusively, against the grant of an extension of time. It does not follow that in the absence of prejudice (other than general prejudice) and unlikelihood of a fair trial it will be just and reasonable to grant an extension of time.
Two recent decisions of the Full Court have examined the relevant legal principles to be applied on hearing of Applications for leave to apply for property settlement orders out of time under section 44 of the Act. In Edmunds & Edmunds[4] (Ryan, Aldridge & Watts JJ) the Full Court stated:
[4] Edmunds & Edmunds [2018] FamCAFC 121.
[16] The hearing of applications for leave pursuant to s 44(3) should be “summary in character” (Neocleous & Neocleous (1993) FLC 92-377 at 79,914) and not a final hearing of the matter (Whitford and Whitford (1979) FLC 90-612 at 78,143; Hedley & Hedley (2009) FLC 93-413 at [32] per Finn J and at [111] per Boland J). A detailed hearing of the case on its merits is not required (Althaus and Althaus (1982) FLC 91-233 at 77,267).
[17] In Wood v Glaxo Australia Pty Ltd [1994] 2 Qd R 431 at 434 Macrossan CJ of the Queensland Court of Appeal, in the course of discussing s 31(2) of the Limitation of Actions Act 1974 (Qld), relevantly observed that:
… applicants for extension of limitation periods are not intended by the legislation to be placed in the position where they must establish an entitlement to recover on two occasions, first on the hearing of the application and once more at the trial of the action. Although the requirements of the legislation must be complied with if an extension is to be granted, the extent to which an applicant must show a case on the hearing of the application to extend time will frequently depend on the impression on the judge’s mind of the material which the applicant presents or the existence of which he demonstrates or points to. It is nevertheless recognised as wrong to place potential plaintiffs in anything like a situation where they must on the probabilities show that it is likely they will succeed in their actions. A judge may harbour a feeling that there is a strong chance that particular applicants will fail at trial but, in my opinion, he should not act on the basis of this impression both because that is a question reserved for another occasion and because he cannot know and should not insist on being able to see in all of its ramifications the full strength of the case which will eventually be presented at trial. There are some resemblances in this to the situation of a defendant who resists a summary judgment application. The Court should be cautious in shutting out a party from the opportunity to make his case at the appropriate time. In any situation where proof of a case is difficult and very far from straightforward, it would be very expensive to require a party applying to extend time to demonstrate his case with any high degree of elaboration.
[18] The point to be drawn from this passage is that an applicant for leave is not required to establish their final case on the leave application. Similarly, the Court is not to approach the application on that basis.
[19] In the context of an interlocutory injunction in a patent case but in terms that apply to all interlocutory injunctions, in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 (“Beecham”) at 622 the High Court described the inquiry the Court is to undertake in the following way:
The Court addresses itself in all cases, patent as well as other, to two main inquiries. The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief: Preston v. Luck; Challender v Royle. How strong the probability needs to be depends, no doubt, upon the nature of the rights he asserts and the practical consequences likely to flow from the order he seeks.
[20] We consider that as an application for leave is also an interlocutory application, these principles appropriately apply in this case. Thus the Court, when considering the issue of leave and the strength of the proposed case, will look to see whether, in the event that the evidence remains the same at a final hearing, there is a probability that the applicant would succeed in obtaining a property settlement adjustment in her favour. The Court does not undertake a preliminary trial but looks to see whether there is some or a fair or reasonable probability that relief will be granted.
[21] In Sharp at [18] the Court, consistently with Beecham in our opinion, considered that there must be a “‘real’ probability of success”.
Their Honours continued at paragraph 47:
[47] As the Full Court pointed out in Sharp at [18], “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.
And, pointedly in this matter:
[72] In our opinion, the primary judge erred by not considering whether the wife had a prima facie case for, or a real probability of, obtaining a property settlement order that may well have fallen short of the outcome sought by her but nonetheless would see her obtain a greater share of the property available for division than the 31.2 to 32.9 per cent currently held by her.
Continuing on at paragraph 121:
[121] In Sharp the Court said:
[97] Merely because the respondent to an application for leave does not point to particular prejudice that might arise if leave were granted, does not dispose of the question. The law presumes prejudice to flow to a person sought to be joined in litigation after the effluxion of the relevant time limits. Even if the court came to the view that there was no significant prejudice to the respondent, the court may consider whether in all of the circumstances of the case, it is just and reasonable to grant the extension sought. The New South Wales Court of Appeal in McLean v Sydney Water Corporation [2001] NSWCA 122, per Giles JA (Hodgson and Stein JA agreeing) said at [22] that:
[22] Prejudice engendered by delay and unlikelihood of a fair trial will be highly material, and if there is prejudice and unlikelihood of a fair trial that will tell strongly, often conclusively, against the grant of an extension of time. It does not follow that in the absence of prejudice (other than general prejudice) and unlikelihood of a fair trial it will be just and reasonable to grant an extension of time.
In Gadzen & Simkins[5] (Murphy, Aldridge & Kent JJ) the Full Court examined the authorities on section 44 leave at paragraphs 29 to 37 as follows:
[29] The statutorily expressed requirements for the grant of leave in s 44(3) of the Act are in identical terms, for all practical purposes, as those requirements with the grant of leave under s 44(6). It follows that authoritative pronouncements as to the principles applicable to the operation of s 44(3) apply equally to s 44(6). In Whitford and Whitford (1979) FLC 90-612, 78,144 (“Whitford”) the Full Court stated:
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.
[30] Self-evidently, the Full Court there and subsequent Full Courts (as will be discussed) have emphasised that hardship within the meaning of the section must first be established for the discretion to grant leave to arise.
[31] In discussing hardship the Full Court in Whitford said At 78,144:
The hardship referred to in sec. 44(4) is the hardship which would be caused to the applicant or a child of the marriage if leave were not granted. The loss of the right to institute proceedings is not the hardship, to which the subsection refers. It is with the consequences of the loss of that right, with which the subsection is concerned. The requirement, that the Court must be satisfied that hardship would be caused if leave werenot 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. Further, the matter with which the Court is concerned is not whether the applicant or a child is suffering hardship, but the question is whether the applicant or a child would suffer hardship 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.
[5] Gadzen & Simkins [2018] FamCAFC 218.
[32] The Full Court then proceeded to discuss the meaning of “hardship”. In the course of that discussion the Full Court said At 78,144 – 78,145:
In our view the meaning of “hardship” in subsec. 44(4) is akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment. Cf. the meanings assigned to “hardship” in the Shorter Oxford Dictionary and in Webster’s New International Dictionary…
…
In ordinary parlance, hardship means something more burdensome than “any appreciable detriment”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations. It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense. 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 that the right or entitlement lost must be a substantial one.
[33] In Althaus and Althaus (1982) FLC 91-233, 77,266 – 77,267 Evatt CJ (with whom Marshall SJ and Strauss J agreed) observed of earlier cases:
…Now to some extent there may be an exercise of semantics involved here. The case of Mc Donald referred to a reasonable prima facie case as the test. Other cases such as McKenzie and Whitford suggest that the applicant needs to show that she would probably succeed. In the case of Perkins and Perkins (1979) FLC 90-600, Lindenmayer J. suggested that the test was that there was a reasonable probability of the claim being successful…
In my opinion, sec. 44(3) and (4) are not intended to require a detailed hearing on the merits to determine whether the applicant’s claim will succeed. The exercise is to determine whether there is a reasonable claim to be heard. That is the essence of the inquiry into whether hardship will be suffered by denying the applicant the right to litigate that claim.
[34] In Hall and Hall (1979) FLC 90-679, 78,627; (see also McCoy and Chancellor [2014] FamCAFC 62; Sharp v Sharp (2011) 50 Fam LR 567 (“ Sharp ”) and Edmunds & Edmunds (2018) FLC 93-847 (“Edmunds”)) the Full Court said:
Fundamental to that [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 …
[35] In Sharp the plurality of the Full Court observed:
[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 exits is not to be assessed only by reason of the monetary value of the probable order to be made if leave were granted.
[36] In Edmunds the Full Court recently cited with approval the judgment in Sharp and said:
[17] As the Full Court pointed out in Sharp at [18], “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”.
[18] 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.
[37] It follows from these authorities that the starting point in determining an application for leave is to consider the question of hardship which requires for its existence a conclusion that an applicant has a prima facie or arguable case of substance having regard to all of the circumstances of the case. That must take into account the costs or likely costs to be incurred in pursuing the claim.
A neat summary of the required approach is stated by the Full Court in Edmunds paragraphs at 5 and 6:
[5] The primary judge described the task before her in the following way:
[16] The authorities on the issue of an application pursuant to s44(3) are numerous. The Court must consider whether the applicant has established:
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.
[17] 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 to be considered.
[6] Such an approach is 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 (“Jacenko”) at 75,644; Sharp v Sharp (2011) 50 Fam LR 567 (“Sharp”).
A Prima Facie Case?
On the Applicant’s evidence, the parties cohabited for 24 years. They had two children, [X] and [Y]. At the commencement of cohabitation, neither party had any significant assets. Both parties engaged in income generating work during the cohabitation, with the Respondent being primarily responsible for the day-to-day care of the children from the time of their birth, and the Applicant being the primary financial support for the family unit from about the time of the birth of [X].
The Applicant asserts in his evidence that he was responsible, in large part, for the construction of the home on Street A1, Suburb B, with some assistance from tradesmen friends, working on weekends and applying his income and credit cards to pay for materials and costs. It is to be noted that construction was occurring from 2002 to 2005, some 14 to 17 years into the de facto relationship, on the Applicant’s telling.
By necessary inference, during the time that the Applicant spent building the house on weekends, the Respondent was caring for the children.
The Applicant asserts that in 2005 he refinanced the mortgage over the property at Street A1, Suburb B in his sole name, and applied the net refinanced funds of $295,000 towards the costs of building the house on Street A2, Suburb B.
The Applicant deposes that he has maintained payment of the required payments on the loan account secured by the mortgage on Street A1, Suburb B on an interest only basis since the parties’ separation in September 2012.
It is uncontested on the evidence that the Respondent and the children have been in occupation of Street A1, Suburb B since separation in September 2012, whilst the Applicant has resided elsewhere.
On the Applicant’s evidence, the Respondent has, since separation, had sole control as between the parties of Street A2, Suburb B, asserted by the Applicant to have been tenanted at the time of separation on a weekly rent of $500.
On the Respondent’s evidence, the tenant vacated Street A2, Suburb B in April 2014 and sometime thereafter, though impliedly soon thereafter, the Respondent’s mother leased Street A2, Suburb B from the Respondent.
The Respondent was paid the rent, being $500 per week as shown in her financial statement sworn 30 June 2015. Presumably at some time since June 2015, the Respondent’s mother has vacated Street A2, Suburb B as in the Respondent’s financial statement sworn 3 September 2018, no rental income is shown.
On the Applicant’s evidence, though not on the Respondent’s evidence, he has made at least equal contribution with the Respondent overall on an amalgam of the matters, by way of contribution referred to in section 90SM(4)(a)-(c) of the Act.
It is open to argument on the Applicant’s case, as asserted by his Counsel Mr Jackson in his Case Outline document, that the Applicant’s overall contribution under those parts of that section, during cohabitation and post-cohabitation, has been in excess of an equal contribution with the Respondent, if his evidence is taken at its highest.
On the basis of the evidence to date, it would not seem that there would be any effect of a proposed order by either party upon the earning capacity of either of the parties.
It is asserted by Mr Jackson, in his Case Outline document, that there would be an adjustment in favour of the Applicant, under section 90SF(3), on a final hearing of the property settlement issues consequent upon an asserted failure of disclosure by the Respondent. I cannot find, when assessing whether or not the Applicant has a prima facie case, that such would be the result as the matter has not progressed to a point where leave has been granted to the Applicant under section 44(6) and the matter is proceeding towards a final hearing under section 90SM, despite some disclosure orders having been made and the parties having engaged in both a Conciliation Conference and a private mediation property settlement.
It is more likely, on the basis of the Applicant’s evidence contained in his Affidavit sworn and filed 20 December 2018, that any adjustment under section 90SF(3) on a final determination would favour the Respondent on the basis of disparity in the parties’ incomes and current earning capacities to the Respondent’s detriment, and the Respondent’s ongoing day-to-day care and control and sole financial support of the children of the relationship.
Even if it is the case that there is a section 90SF(3) adjustment in favour of the Respondent, I find that the Applicant, on his evidence to date, has a prima facie case for the orders altering the interests of the parties in property so as to move him from his current position of having 34% of the net relationship assets, with a value of about $416,000, to him having the 42.2% of the net relationship assets he claims, with a value of about $517,430. That is a difference of $101,430.
The combined legal costs of the parties in proceeding to a final hearing of their property settlement issues, having come as far as they have to date, should not exhaust that sum of $101,430.
Hardship
Having found a prima facie case for the Applicant, the Court must now consider whether hardship would be caused to the Applicant if leave is not granted to him to bring his Application for property settlement orders after the end of the standard application period.
Counsel for the Applicant submits that if leave is not granted, the Applicant will suffer hardship in that he will be denied the opportunity to seek a share of the relationship asset pool greater than the share he currently holds. This being an increase in his share significantly greater than the amount of costs that will be expended in litigating the matter through a final hearing.
Counsel makes further submissions based upon hardship to the Applicant consequent upon his being denied access to an occupation of the property in his sole name at Street A1, Suburb B. I accept the first submission as establishing hardship to the Applicant if leave is not granted. I do not accept the second submission establishing hardship to the Applicant.
On the evidence of the Applicant, he voluntarily surrendered occupation of Street A1, Suburb B to the Respondent, and has allowed her to continue to reside there with the children of the relationship. If the Applicant sought to retake control of that property or to reoccupy the property to the exclusion of Respondent, he would have recourse to the applicable remedies under New South Wales State law if the refusal of leave to proceed under the Family Law Act 1975 left him unable to proceed with his application for orders under section 90SM.
In relation to this last aspect of the matter, it was submitted by Mr Jackson for the Applicant, in paragraph 49 of his Case Outline document:
The applicant will be unable to obtain a remedy under state law because any application would be a “matrimonial cause” and therefore outside the jurisdiction of the state courts. This will be a factor suggesting hardship.
This is consistent with the position taken by authorities such as In the Marriage of Aldred[6] and on appeal to the Full Court In the Marriage of Aldred (No 2),[7] and In the Marriage of Pearce.[8] I note that the reference to “matrimonial cause” should be a reference to “de facto financial provisions” as defined in section 90C of the Act.
[6] In the Marriage of Aldred (1984) FLC 91-510
[7] In the Marriage of Aldred (No 2) (1985) 91-602
[8] In the Marriage of Pearce (1982) FLC 91-276
I have considered the decisions referred to by Mr Jackson, but I consider that a better statement of the law is found in the Full Court decision of Slocomb v Hedgewood,[9] where at paragraph 49 the Court said:
That either of them could make an application to a state court does not ameliorate the hardship to the wife. In such an application, a state court could not exercise discretion to apportion the proceeds of sale of the home to the wife by taking into account the contribution to the children during and including post separation, and other relevant matters
[9] Slocomb v Hedgewood [2015] FamCAFC 219
The parties have been engaged in property settlement litigation, at all times subject to leave eventually being granted to the Applicant, since the Applicant filed his Amended Initiating Application on 14 May 2015, just short of three years prior to the Interim Hearing on section 44(6) leave. During that time, the Respondent has, in effect, acquiesced in preparation for, and attendance at, a Conciliation Conference and in preparation for, and attendance, at a Law Society of NSW Family Law Mediation Service mediation.
Overall, I find that there would be hardship caused to the Applicant if leave were not granted.
Delay
The delay in filing his Application for property settlement orders beyond the end of the standard application period provided for in section 44(5) of the Act is from the end of September 2014 to 14 May 2015, a period of 7 months and 14 days.
As the Applicant acknowledges in his Affidavit, an order was made on 3 March 2014, some six months still within the standard application period, for the Applicant to file an Amended Initiating Application to include application for property orders within six weeks. The Applicant failed so to file.
In paragraph 42 of his Affidavit sworn and filed 20 December 2018, the Applicant refers to this failure and deposes that he did not comply with the order until May 2015 for the following reasons:
(a) After separation, I had focused on the parenting proceedings. I found it difficult and stressful that I was unable to see the children or speak to them on the phone. For many months I would ring and leave a message on the answering machine, with no response. I consulted a psychologist to assist me.
(b) I had left the home at Street A1, Suburb B upon separation. There were financial and other records located at the home which I could not access because Ms Quimby did not permit me to come to the home. I abided by her wishes in the hope of resolving our parenting arrangements as the situation between us was highly conflicted.
That is the only evidence provided by the Applicant in relation to delay.
In his Case Outline document, Counsel for the Applicant addresses “Explanation as to delay” in paragraphs 54 to 60.
Council concedes that:
This does not represent a big part of the de facto husband’s leave out of time case
Counsel for the Applicant addresses three aspects in relation to delay:
a)The delay is only eight months
b)The hardship is particularly significant
c)It has been to the Respondent’s benefit that there has been a delay as she has enjoyed, and continues to enjoy, occupation of the former relationship home, and in effect, encompasses both real estate properties at Suburb B, to the exclusion of the Applicant.
Council asserts that the Applicant:
As a matter of benevolence...delayed in bringing proceedings allowing her and the children longer to stay in the property
I cannot find, on the basis of the Applicant’s evidence, that his leaving the Respondent and their children in the real estate properties was done by him as a matter of benevolence. Nevertheless, the delay has gone some way to the benefit of the Respondent in that she has been able to remain in occupation of the real estate property, and in receipt of income from the adjoining real estate property since separation, a period of six and a half years, without having to either refinance, so as to buy the Applicant out of the real property in his sole name, or take part in the sale of one or both of the real estate properties.
I find that the period of the delay in filing an Application for property orders after the end of the standard application period, at some seven and a half months, is a moderate delay.
Though the explanation for the delay offered by the Applicant is somewhat less than adequate, with his reasons being rather irrelevant to the issue of delay, the overall hardship to the Applicant in being prevented from pursuing property settlement orders under the Act, together with the benefit to the Respondent during the period of the delay, is sufficient reason to find that there would be hardship caused to the Applicant if leave were not granted.
The Court must then proceed to consider if, as a matter of discretion, leave will be granted or refused. In exercising the discretion, the Court must give due weight to the expressed legislated intention that ordinarily proceedings should not be commenced outside the standard application period provided in section 44(5) of the Act.
The Court must reflect against that expressed legislated intention the considerations outlined above, going to the length of the delay, the reasons for the delay, and also the consideration as to whether any prejudice was occasioned to the Respondent by reason of the delay.
The Court must consider the strength of the Applicant’s prima facie case and the degree of hardship that would be caused to him if leave were not granted. There can be other considerations affecting the exercise of the discretion, but I find that in this case, those outlined in the preceding paragraphs are the relevant considerations.
I remain mindful of the comments of the Full Court in Whitford & Whitford,[10] that:
The legislature intended to confer power of the court to grant leave to Institute proceedings in order to avoid hardship. Having regard to the nature of the jurisdiction this power should be exercised liberally in order to avoid hardship, but nevertheless in the manner, which would not render nugatory the requirement that proceedings should be instituted within the standard application period
[10] Whitford & Whitford (1979) FLC 90-612
I find that the prejudice to the Respondent, if leave is granted, is found in the difference between the process, powers and likely result of proceedings in this Court under section 90SM of the Act, and either the legal and equitable entitlement to the real properties as they now stand remaining the same, or proceedings being commenced by the Applicant in a State Court of New South Wales asserting an equity to his benefit in Street A2, Suburb B consequent upon his assertions in relation to the improvements to that property by construction of the house.
I find that the hardship to the Applicant, if leave is refused, outweighs the prejudice to the Respondent if leave is granted by the possible loss by her of some of her current share of the net relationship asset pool.
I find that the delay by the Applicant has not caused any particular prejudice to the Respondent.
Accordingly, I grant leave to the applicant under section 44(6) of the Act and I make the order as set out at the start of these reasons.
I certify that the preceding one hundred and twenty (120) paragraphs are a true copy of the reasons for judgment of Judge Morley
Date: 7 June 2019
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