Pitney and Nilsen

[2018] FCCA 751

FEDERAL CIRCUIT COURT OF AUSTRALIA

PITNEY & NILSEN [2018] FCCA 751

Catchwords:
FAMILY LAW – De facto property proceedings – leave to commence proceedings out of time. 

Legislation:

Family Law Act 1975, ss.44,90SM

Cases cited:

Adler & Adler [2017] FCCA 821

Sharp & Sharp [2011] FamCAFC 150

Applicant: MS PITNEY

Respondent: MR NILSEN

File Number: WOC 950 of 2016

Judgment of: Judge Altobelli

Hearing date: 1 March 2018

Date of Last Submission: 21 March 2018

Delivered at: Sydney

Delivered on: 21 March 2018

REPRESENTATION

Counsel for the Applicant: Mr Ford

Solicitors for the Applicant: Kells The Lawyers

Counsel for the Respondent: Ms Doosey

Solicitors for the Respondent: Southern Coast Lawyers & Conveyancing

Solicitors for the Independent Children's Lawyer: Legal Aid NSW Wollongong Family Law

ORDERS

(1)The Application in a Case filed 22 September 2017 is dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT WOLLONGONG

WOC 950 of 2016

MS PITNEY

Applicant

And

MR NILSEN

Respondent

ORAL REASONS FOR JUDGMENT

Introduction

1. By way of an Application in a Case filed 22 September 2017, the Applicant seeks an order under s.44(6) of the Family Law Act 1975 (‘the Act’) to the effect that she be permitted to amend an existing application before the Court that deals with parenting matters so that she may seek an order for alteration of property interests under s.90SM of the Act.

2. The Applicant’s parenting application was filed 13 September 2016. The Applicant’s Application in a Case is supported by her affidavit sworn and filed 20 September 2017. That is the only evidence on which the Applicant relies in support of her s.44(6) application. It is a long affidavit consisting of 105 paragraphs and 52 pages, including annexures. Much of it deals with parenting issues. The evidence relevant to the present application seems to commence at paragraph 70 and then from paragraphs 85 to 104. The application was supported by written submissions, as well as the oral submissions of her Counsel, Mr Ford.

3. By way of a Response to an Application in a Case filed 3 November 2017, the Respondent seeks dismissal of the said application, together with costs. The Respondent relies on his affidavits of 17 November, 3 November and 17 January 2017. Again, much of this evidence deals with parenting matters. The Response was also supported by written submissions, as well as the oral submissions of the Respondent’s Counsel, Ms Doosey. These Reasons for Judgment explain why the Court has dismissed the application for leave under s.44(6) of the Act.

The Applicable Law

1. Section 44(6) of the Act states:

   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 theparty 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.

A number of observations can be made about this section.  Firstly, the relief is discretionary.  Secondly, the Applicant must establish hardship if leave were not granted to her.  The Court is not required to undertake a full hearing on the merits of the claim in respect of which leave is sought.  The exercise is to determine whether there is a reasonable claim to be heard. 

1. The matter proceeded on the papers without cross-examination. This means that the Applicant’s evidence is taken at face value unless it is inherently unbelievable or contradictory.  Whilst it was certainly the Court’s expressed preference to deal with the matter without cross-examination, no application was made in that respect by either party. Also, whilst the Applicant’s evidence is taken at face value, it does not mean that the Court can necessarily draw inferences where the evidence is silent about salient matters, nor can gaps in the evidence be filled by submissions.

2. The need for the Applicant to demonstrate hardship is clear from the words of s.44(6) itself. However the extensive case law - much of which was referred to in both the written and oral submissions - establishes that even if hardship is established, the Court must still exercise a discretion whether to grant leave and which discretion is exercised by reference to factors that include adequate explanation for the delay in bringing the application, and whether hardship would be caused to the Respondent.

3. The test of hardship is not an onerous one.  It is normally satisfied by the Applicant demonstrating that she has a prima facie case of some consequence and will be significantly worse off if leave is not granted.  Of course, the test of hardship is not an onerous one so far as the Respondent is concerned as well. 

The Hearing

1. The evidence that was filed by the parties will be summarised and a number of observations made.  The Applicant says that her relationship with the Respondent ended 25 January 2012, which means that the time for bringing her claim expired on 25 January 2014.

2. The application for leave was filed in September 2017, over five and a half years after the date of separation and over three and a half years since the expiration of the statutory period.  On the Applicant’s own evidence she seems to have become aware of the property coming into the ownership of the Respondent in about August 2017.  It was, in fact, the property that they lived in during cohabitation.  It was owned by the Respondent’s father but devolved to the Respondent on the death of his father on 28 October 2016, pursuant to a grant of probate dated 24 April 2017.

3. The Will in question was made 3 May 2006.  The Court observes that the Respondent’s father died over four years after the date of separation and over two years after the expiration of the statutory period for bringing a claim.  An important paragraph in the Applicant’s affidavit is paragraph 99.  Here, she deposes to commencing parenting proceedings on 13 September 2016 and not being aware of a potential claim for property settlement until conference with Counsel in August 2017.

4. It is common ground that the Applicant was at all times legally represented during the proceedings.  Significantly, the Court observes that as at 13 September 2016, the Applicant’s claim had lapsed by over two and a half years and over four and a half years had passed since the date of separation.  Moreover, the Applicant gives no further evidence about why she did not activate a claim from 25 January 2014.  Her assertion is, of course, that she did not know she had a right to bring a claim until August 2017.  This seems odd in circumstances where:

   (a)She knew at all relevant times in the relationship that the family home was actually owned by the Respondent’s father.  This is at paragraph 70 of her affidavit; and

   (b)She contributed to the utilities and rates for that property, and this is at paragraph 9 of her affidavit; and

   (c)She was the main income earner in the relationship and paid for an air conditioner (at paragraph 93) and she paid for improvements to the property, (at paragraphs 95 to 98). 

5. A reasonable inference to draw from her evidence is that either:

   (a)She made contributions of a financial nature to the property but did not formally pursue the same because the informal division of property on separation already reflected that contribution; or

   (b)She made those contributions and deferred claiming until the property passed to the Respondent.

6. Both of these scenarios are actively postulated on behalf of the Respondent.  In any event, what is clear is that she was represented between 13 September 2016 and the day before she conferred with her Counsel, but did nothing.  This is not a case where the Applicant says “I gave instructions that were not acted on” and therefore the solicitor’s delay should not be visited on her.  Rather, this is a case where the Applicant makes no complaint about her representation at all, but asks the Court to accept as plausible that she was not advised about her rights until that fateful conference with Counsel.

7. The Respondent submits that the Applicant’s evidence must establish the hardship that she contends exists, but fails to do so.  Indeed, it is hard to discern a factual basis for hardship.  One would have expected some attempt in the evidence to explain not just what the Applicant has now, which she does do, but rather what the Applicant had at the time of separation followed by some attempt to explain what the Respondent had at the same time.

8. It is hard to discern hardship without a benchmark of sorts.  It is necessary to also consider the Respondent’s evidence which must be taken at face value unless it too is inherently implausible.  The Respondent deposes that whilst he and the Applicant and their children lived at the property, they paid no rent.  He deposes that he witnessed the Applicant reading the Will of his later father and that it was kept in an easily accessible place.  The Respondent used his one third share in the sale proceeds of the property to buy real estate in Queensland jointly with his partner.

9. He deposes to having created a new life for himself since the date of separation and making financial decisions and arrangements on the basis of a belief that the financial issues were settled between them.  He joins issue with some of the assertions the Applicant makes about the contributions she made.  There was little difference in the submissions made in relation to the law on this issue.  The divergence was on how hardship manifested, or did not manifest itself, on these facts.

10. The submissions made on behalf of the Applicant are very eloquent, but they assume evidence that is not before the Court.  The submissions emphasise that hardship is established because the Applicant will otherwise lose a legal right to bring a claim to property acquired by the Respondent well after separation, which claim is to be evidenced by her substantial post-separation contribution to the care of the children with little support from the Respondent.  But how does the Court know that the right that would be lost is valuable without some evidence of the financial circumstances of the parties after separation and whether what they then had would have justified an order?

11. The issue is not whether the Applicant made a contribution to the inherited property.  Much emphasis was placed on this by the Applicant. The issue is where is the substantial detriment to her? Counsel for the Respondent quite properly referred the Court to the decision of Her Honour Judge Mead in Adler & Adler [2017] FCCA 821 at paragraphs 86 to 92, referring to the Full Court’s decision in Sharp & Sharp [2011] FamCAFC 150 at paragraph 17. The Applicant seems to have assumed, with respect, that hardship to her would be stablished merely because of the inheritance received by the Respondent several years after separation.

12. That is not the law as the Court understands it. Hardship to the Applicant is not established by what happened to the Respondent after the date of separation. It might be established however, by reference to the comparative financial positions of the Applicant and Respondent at the date of separation and at the date of determining the s.44(6) claim, but hardship is not established on the evidence before the Court. The whole rationale for s.44(6) and de facto claims is undermined if applicants believe that they can obtain leave simply because of windfalls obtained by former partners well after the date of separation, indeed, well after the date of expiration of a statutory time limit for bringing the claim. 

13. However, the Court will consider whether it would have exercised its discretion to grant leave if hardship had been established.  The Court would not so exercise its discretion.  There is no adequate explanation for the delay in bringing the claim.  Knowledge of one’s legal right does not depend solely on legal advice about the same, but even if that is not correct, it is clear that the Applicant was legally represented from September 2016.  Indeed, the reality is that the Applicant solicitor’s first correspondence with the Respondent was on 9 August 2016 and this letter is annexed to the Husband’s affidavit of 12 September 2016. It is simply not plausible that the Applicant was not advised of her rights before August 2017.

14. In any event, hardship and prejudice that the Respondent will suffer is another insuperable obstacle for the Applicant.  He has moved on with his life, both personally and financially, as he was well entitled to do.  His financial interest in the property inherited crystallised on sale and he applied his share towards the purchase of a joint property with his new partner, as he was well entitled to do.  The hardship to him if leave were granted is a matter that would also cause the Court not to exercise its discretion in favour of the Applicant.

15. Having regard to these reasons, the Court orders that the Application in a Case filed by the Applicant on 22 September 2017 is dismissed.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Date: 29 March 2018