MYERS & MAY

[2014] FamCA 332

FAMILY COURT OF AUSTRALIA

MYERS & MAY [2014] FamCA 332

FAMILY LAW – PROPERTY – Application for leave to commence property settlement proceedings out of time pursuant to section 44(3) of the Family Law Act 1975 (Cth) – Whether the husband has demonstrated “hardship” – Factors to be considered in respect of whether the Court should grant leave – Hardship proven – Should the discretion be exercised? – Application granted

FAMILY LAW – SPOUSAL MAINTENANCE – Application for leave to commence spousal maintenance proceedings out of time pursuant to section 44(3) of the Family Law Act 1975 (Cth) – No evidence to satisfy section 44(4)(b) of the Family Law Act 1975 (Cth) – Application dismissed

Family Law Act 1975 (Cth) ss 44(3), 44(4)(a) & (b), 75(2)

Carlon & Carlon (1982) FLC 91-272
Farmer and Bramley [2000] FamCA 1615; (2000) FLC 93-060
Hall & Hall (1979) FLC 90-679
McCarron & McCarron (1978) 4 Fam LR 112
Neocleous (1993) FLC 92-377
Whitford& Whitford (1979) FLC 90-612

APPLICANT: Mr Myers

RESPONDENT: Ms May

FILE NUMBER: PAC 4735 of 2012

DATE DELIVERED: 22 May 2014

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 11 April 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gersbach

SOLICITOR FOR THE APPLICANT: Taperell Rutledge Lawyers

COUNSEL FOR THE RESPONDENT: Mr Hodgson

SOLICITOR FOR THE RESPONDENT: Aitken Lawyers Pty Ltd

Orders

1. That leave be granted pursuant to section 44(3) of the Family Law Act 1975 (Cth) for the Applicant husband to institute proceedings against the Respondent wife in respect of property.

2. That the Applicant husband’s application for leave to commence proceedings against the Respondent wife in respect of spousal maintenance be dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Myers & May has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 4735  of 2012

Mr Myers

Applicant

And

Ms May

Respondent

REASONS FOR JUDGMENT

1. Eight years after separation and seven years after divorce the Applicant husband seeks leave to commence proceedings for the property settlement and spousal maintenance against the Respondent wife.

2. The question for determination is whether circumstances are such that the husband should be granted leave to commence these proceedings out of time.

3. Sections 44(3) and (4) of the Family Law Act 1975 (Cth), in summary, provide that such proceedings cannot be commenced without leave of the Court after the expiration of 12 months after a divorce order takes effect. In this matter the parties were divorced on … May 2007.

4. The Court may grant leave at any time, even if the proceedings have already been instituted, however, such leave shall not be granted unless the court is satisfied that hardship would be caused to a party to the relevant marriage or a child if leave were not granted and, in the case of proceedings in relation to spousal maintenance, that at the end of the 12 month period after a divorce order takes effect, the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.

5. In Whitford& Whitford (1979) FLC 90-612 the Full Court held:

   [O]n an application for leave under s 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…

6. Hardship in the context of the husband’s application means substantial detriment (Hall & Hall (1979) FLC 90-679) and the Court will consider a number of factors:

   a)whether on the Applicant’s evidence he has a reasonable case to be heard;

   b)the financial and other circumstances of both of the parties; and

   c)any other facts of the case relevant to the issue of hardship.

7. After considering the question of hardship, the question to be determined is whether the Court should, in the exercise of its discretion, grant or refuse leave to bring proceedings out of time. Pertinent considerations are:

   a)the length of the delay in bringing proceedings;

   b)whether there has been a reasonable explanation for the delay;

   c)the prejudice that may be caused to a respondent to the application if permission is granted; and

   d)any other facts of the case relevant to the exercise of the Court’s discretion.

8. The absence of any reasonable or other explanation for delay in commencing proceedings is no more than one of the relevant considerations. The absence of an explanation does not mean that leave will not be granted (Neocleous (1993) FLC 92-377; Carlon & Carlon (1982) FLC 91-272).

9. As the Full Court  said in Whitford (supra), having regard to the nature of the jurisdiction which the Court exercises, the power to extend time 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 divorce decree.

10. Pursuant to s 81 of the Act the Court has a duty to end the financial relationship of parties to a marriage as far as practicable, and to therefore make such orders to finally determine the financial relationship between parties to a marriage and avoid further proceedings between them where possible. But this is to be balanced against the Court’s power to grant leave to institute proceedings out of time if it is satisfied that not to do so would cause a party to a marriage financial hardship, as referred to above.

11. The questions for determination are:

    a)Whether the husband has demonstrated hardship as contemplated by the statutory provision?

    b)If hardship is demonstrated then should leave be granted for the husband to commenced proceedings for property and/or spousal maintenance out of time?

Hardship?

1. The Applicant husband is 47 years of age and the Respondent wife is 43 years of age.

2. The parties commenced cohabitation in about 1992 and married in March 1997. At the commencement of cohabitation, to the husband’s knowledge, the parties had no assets of any significance.

3. The parties separated in April 2006 and were divorced in May 2007.

4. There are three children of the parties relationship, now aged 21, 17, and nearly 14, the eldest child and the youngest child reside with the father. The middle child resides with the wife but has resided with the father at times since separation.

5. At the time of separation the parties were living in a home at B Street, Suburb C in Sydney. At the time of separation, the wife left that family home leaving the husband in occupation of the home.

6. The husband presently resides in a property at Property A, D Street, Town E that comprises a cottage on about 1 acre of land. The property is owned by G Pty Ltd, the trustee of H Trust (in respect of which the wife is one of the beneficiaries). The wife owns a nearby vacant property at Property F, D Street, Town E and the cottage on that property is used for storage.

7. G Pty Ltd owns two further properties adjacent to the wife’s property and the wife’s mother owns a vacant lot adjoining the property occupied by the husband.

8. Until recently the husband had been employed by I Pty Ltd, an entity controlled by the wife’s mother. It appears that the husband was employed as a supervisor for the various properties referred to above. On 3 March 2014 the husband received a notice of termination of his employment from I Pty Ltd that is to take effect on 27 May 2014, at which time the husband asserts he will be reliant upon Centrelink benefits.

9. The husband asserts that the present “matrimonial property” comprises of the following:

   a)the wife’s property at Property F, D Street, Town E, estimated by the wife to have a value of $825,000, subject to mortgage;

   b)the wife’s property at Unit J, K Resort, Town L, estimated by the wife to have a value of $425,000, subject to mortgage;

   c)the wife’s 50 per cent shareholding in M Pty Ltd, estimated by the wife to have a value of $23,080;

   d)the wife’s 33 per cent share in N Pty Ltd, that company having retained profits as at 30 June 2012 of $3,515,306;

   e)the wife’s beneficial interest in H Trust, the value of which is not known to the husband;

   f)the wife’s beneficial interest in O Trust, the value of which is not known to the husband. (P Pty Ltd is the trustee for O Trust);

   g)the wife’s Mazda motor vehicle, estimated by the wife to have a value of $18,000;

   h)the husband’s Harley-Davidson motor vehicle estimated by him to have a value of $15,000;

   i)the husband’s Subaru motor vehicle, estimated by him to have a value of $500;

   j)personal effects and contents owned by the husband and wife;

   k)the wife’s superannuation interest in Q Superannuation Fund of about $2,562,187, mostly funded by non-compulsory contributions;

   l)the husband’s interest in the R Super Fund of about $233,012; and

   m)the wife’s interest in S Super Fund of about $2,597.

10. The wife asserts that she has an outstanding loan to a company P Pty Ltd of $974,812. The circumstances of that loan are not known to the husband.

11. The wife asserts that all assets acquired after separation were funded by her family.

12. The husband asserts that the wife sold a property owned by her in Town E in November 2009 for $2,175,000, but has no knowledge as to the circumstances of this sale.

13. The husband asserts that both he and the wife worked full time for various family entities associated with the wife from about 1990 until 2004, being paid salaries working as onsite managers at Business T at Town U owned by the wife’s family.

14. He says that he was actively involved in the day-to-day care of the parties’ three children, although conceding that from time to time when the children were very young, the parties had nannies to assist with childcare.

15. The wife undertook studies and in January 1999 became licensed in the property industry and became the principal of May Pty Ltd.

16. The parties and their children moved to Sydney in 2005. The husband asserts that he continued to assist on the rural property owned by the wife’s family’s entities in Town V, travelling to and from as required. The parties and the children moved into the maternal grandmother’s home at Suburb C in Sydney.

17. During the parties’ cohabitation the husband held various assets in his name in trust for the wife’s family, as required by them, he asserts for tax minimisation.

18. Both parties concede significant financial support and other benefits from the wife’s family’s entities. The nature and extent of the wife’s interest is, at this stage, unknown.

19. At separation in March 2006 the wife left the Suburb C home and a home at W Street, Suburb Y was purchased in the husband’s name, but with funds provided through the wife’s family’s entities. The three children remained living with the husband in the home, whilst the wife pursued tertiary studies.

20. The Suburb Y property was sold by the wife’s family in about April 2009 with the husband’s consent. He thereafter moved to his present residence at Property A, D Street, Town E with the eldest child, who was then aged 16. In January 2010 the youngest child, then aged nine, commenced to live with the husband. The middle child remained living with the maternal grandmother in Sydney until November 2009, at which time she moved to live with the husband at Town E, attending the local high school. In January 2013 the middle child returned to Sydney to live with the wife.

21. The husband did not finish high school and asserts that he has no formal qualifications or significant work experience other than as an unskilled labourer, particularly in the rural industry. The wife says he has a maritime licence and could obtain employment in the marine industry.

22. It is apparent that there is a significant pool of assets now in the wife’s name in addition to her as yet undisclosed interest in several of her family’s entities.

23. In Farmer and Bramley [2000] FamCA 1615; (2000) FLC 93-060, Kay J stated two things clearly:

    The Court's task is to evaluate all of the contributions from the time of the commencement of the parties' relationship until the time of the hearing and give such weight to such contributions as the Court thinks is appropriate in the circumstances.  Further, there is nothing in the legislation that requires s 79(4) (a) (b) and (c) contributions to be measured only in terms of what either party contributed to the assets of which they are presently possessed.

24. The parties had a relationship of about 15 years with three children. Both were in paid employment for a long period together in Town U. Even a modest assessment of the husband’s contributions during the relationship would see a sum payable to him by the wife or a superannuation split.

25. A consideration of the various s 75(2) factors, particularly it seems financial resources available, income capacity and child care, would see any adjustment to a contribution based finding favouring the husband.

26. The ambit of the assessment of contributions and s 75(2) factors that may lead to a final property order awaits more precise evidence at trial, but it is clear that the husband has a reasonable case to be heard.

27. The financial circumstances of the parties demonstrate a stark disparity in favour of the wife. The husband’s prospective property claim could ameliorate his position.

28. Having regard to the matters set out above the husband would suffer hardship if leave were not granted.

Should the Court exercise the discretion and grant leave as to property?

1. The husband has explained his reason for delay of about 7 years in bringing his application.

2. He asserts that his post-separation parenting role and expectation of ongoing support from the wife’s family for the children and him led him to not seek advice until the home in which he was residing in 2012 was to be put on the market without any consultation with him. He was then concerned about being cast aside in circumstance where counsel for the wife submitted “he had been very well looked after by the family” (see McCarron & McCarron (1978) 4 Fam LR 112).

3. He had concerns as to ongoing support and sought legal advice resulting in the present application for leave.

4. The wife it appears received significant benefits from her family post-separation that derive from her interest in the various family entities, in particular superannuation. It was not contended that she is prejudiced by the present proposed proceedings for property adjustment.

5. In all the circumstances, leave will be granted for the husband to pursue property proceedings. Orders will be made accordingly.

Should the husband be granted leave as to spousal maintenance?

1. This application can be disposed of simply. Section s 44(4)(b) of the Act requires the Applicant for leave to demonstrate that at the expiration of 12 months from the date the divorce Order takes effect, that is 27 May 2008 in this case, the Applicant was unable to support himself without an income-tested pension, allowance or benefit.

2. No such evidence was adduced by the Applicant. Accordingly, his application for leave as to spousal maintenance is to be dismissed.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 22 May 2014.

Legal Associate:      

Date:    22 May 2014