Reiner & Aldridge
[2024] FedCFamC2F 1306
•20 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Reiner & Aldridge [2024] FedCFamC2F 1306
File number(s): BRC 8066 of 2023 Judgment of: JUDGE WILLIS AM Date of judgment: 20 September 2024 Catchwords: FAMILY LAW – PROPERTY – leave to proceed out of time application – five years after the statutory date when proceedings ought to have been instituted - where the Applicant submits he has a prima facie case – where the applicant fails to satisfy the hardship requirement – no prima facie case – where the wife would be at detriment to plead her case after such time – delay not explained satisfactorily – application dismissed Legislation: Family Law Act 1975 (Cth) s 44;
Limitation of Actions Act 1974 (Qld)
Cases cited: Brisbane South Regional Health Authority v Taylor [1996] HCA 25
Crafter & Crafter [2011] FamCA 122
Maine & Maine [2016] FamCAFC 270
Stanford & Stanford (2012) FLC 93-495
Whitford & Whitford (1979) FLC 90-612
Division: Division 2 Family Law Number of paragraphs: 102 Date of hearing: 6 June 2024 Place: Brisbane Counsel for the Applicant: Ms Murphy Solicitor for the Applicant: Morgan Conley Solicitors Counsel for the Respondent: Mr Wilson KC Solicitor for the Respondent: Reardons ORDERS
BRC 8066 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR REINER
Applicant
AND: MS ALDRIDGE
Respondent
ORDER MADE BY:
JUDGE WILLIS AM
DATE OF ORDER:
20 SEPTEMBER 2024
THE COURT ORDERS ON A FINAL BASIS THAT:
1.The Application for leave to proceed out of time pursuant to s44(6) of the Family Law Act 1975 (Cth) filed by the husband on 23 June 2023 is hereby dismissed.
2.All outstanding applications are otherwise dismissed, save for any cost’s application.
Costs
3.In the event that the wife is seeking costs she is to file and serve written submissions and attach a draft minute of Orders sought indicating the various scales being relied upon, by no later than 28 days from today’s date.
4.The husband is to file and serve written submissions in response, by no later than 21 days after being served with the wife’s material.
5.The determination of the cost’s application will proceed on the papers in chambers, unless the Court determines otherwise, or a party makes such request.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE WILLIS AM
This matter involves an application by Mr Reiner who is seeking leave pursuant to s44(6) of the Family Law Act 1975 (Cth) (“the Act”) to bring an application for property proceedings out of time.
The applicant de facto husband was in a relationship with the respondent de facto wife Ms Aldridge for a period of 13 years. The parties commenced a de facto relationship in 2003 and separated on a final basis in April 2016. In these reasons I will use the terms "husband” and “wife" for ease of reference.
This application was filed on 23 June 2023, being some five years out of time noting that the legislation requires proceedings to be instituted within 2 years of separation that is two years from April 2016.
BACKGROUND
The parties commenced living together in 2003 in a home on the property owned by the wife's mother at B Street, Town D (“the B Street property”). It seems there were two homes on that property which were owned by the wife's mother Ms C. The parties lived on the property owned by Ms C, who at that time seems to have been aged around 62. The wife says that Ms C's stepdaughter Ms E and her family also lived at the B Street property in one home as did the wife’s brother and his wife and their children in a separate older home.
Ms C also owned another allotment at a separate address, namely F Street, Town D (F Street). It is essentially just a vacant block of land. No one lives at F Street.
Ms C passed away in in 2013. The wife inherited those properties. In early 2014 the B Street property and F Street were transferred to the respondent wife.
The parties finally separated in April 2016.
The wife says the husband refused to move out of the home they had lived in together on the B Street property. The wife therefore moved into the older house also on the B Street property (where her brother and his partner and their children lived) from 2016 until January 2017 when finally, the husband physically moved out of the home.
In terms of the assets owned by either party at the commencement of their relationship, the husband says at the time they moved in together, [Ms Aldridge] and I had very little in the way of assets as I was going through a separation with my ex-wife at the time.
The husband says he had a $12,000 credit card debt which he was regularly paying off with his income, as well as a car and basic furniture. The husband said I was also paying maintenance for my three children, whom resided with their mother. The wife says that the husband’s credit card debts were greater than $12,000 and more in the order of $20,000 worth of credit card debts. The wife agrees that they had only meagre assets. The wife recalls that she also paid towards those two credit card debts of the husband and gave him cash every month or so to make maintenance payments for his children. The wife says this amount was about $200 per month.
There are no children of this de facto relationship.
The husband has his own three children from his prior relationship. The wife has a son born in 1999 who lived with the wife during the de facto relationship, however, the wife describes a difficult relationship between her son and the husband. Given these difficulties the wife says her son spent significant time with his grandmother Ms C, who as I have said, owned both the B Street property and the vacant F Street property.
The husband said when he met the wife he was working as a transport worker for G Company. The parties commenced living together from around 2003, between then or 2004 and for a period of the next 8 years the husband worked as a manager for a Mr H at the property Mr H owned in Town J and then later at Mr H's other property at Town K. Mr H appears to have later acted as the husband’s solicitor.
It seems that during the relationship the wife continued to work at L Company as a customer service officer and earn her income from there whilst the husband worked for Mr H earning $20.00 per hour for 8 to 12 hours per day, 5 days a week and sometimes weekends. The husband says that in the later years he earned $300 per day plus accommodation when he stayed away overnight at Town K.
About three years after moving in together (sometime in 2006) the husband says the parties decided to set up a business of their own to commence farming on the land at B Street owned by the wife’s mother Ms C, where the parties were living.
The husband says that in late 2006, M Pty Ltd was incorporated, and the M Trust was established to operate this business. The husband recalls in his affidavit that he and the wife agreed that she would be sole director, secretary and sole shareholder of M Pty Ltd and he would be simply an employee "as I was going through a separation with my previous wife at the time and we did not want her to make any claims on the business. However, we operated the business as equal partners, with [Ms Aldridge] leaving her work with [L Company] and doing the office work. I did most of the [manual labour] and outside work for the business. Though on occasion I would do invoicing, and [Ms Aldridge] would join me for [the manual labour] or other work we had on."
The wife agrees that they set this business up and says it was done after the husband sought advice from his lawyer (Mr H of N Law Firm) for whom he had performed contract work. The wife says that the husband told her he needed to minimise his exposure to child support in relation to his three children from his prior relationship and hence the husband set up the structure recommended by the husband’s solicitor.
Following the incorporation of M Pty Ltd in 2006, the husband says that he and the wife decided that they would invoice the husband's other work he occasionally did for Ms C using this entity and so that income went into the company M Pty Ltd rather than being income for the husband personally. The wife agrees that if the husband did any work for her mother Ms C, that the work would be invoiced to M Pty Ltd. The wife further says she and her sister Ms E also did work for Mr H and that M Pty Ltd would invoice Mr H for the work the three of us did for him and be paid on those invoices. M Pty Ltd would then pay Ms E and the husband would draw his pre-determined wage.
The husband says that he was responsible for obtaining contracts and doing the labouring including work for the contracts. The husband in his affidavit says that he was paid $200 per week for his work once they set up the Company owned solely by the wife. The husband explained in his evidence that his income for tax purposes was based on the $200 per week he was paid by the company and that he had set up specifically for this purpose. The husband's income for tax purposes was set at this modest level and would form the basis of his child support assessment. The husband now comes to this Court to say that he did not get paid enough for the work he did for the company.
The wife says that the wage paid to the husband was set by him having regard to his child support obligations at the time, and in addition to this wage the husband had full access to the accounts for M Pty Ltd and used the account to purchase items for himself such as his phone, the vehicle he drives, a trailer and fencing for a round yard.
The parties did not ever buy any property during their relationship or after.
The husband now seeks a property adjustment Order, based on what he submits are equitable principles, in relation to the spare allotment at F Street. The husband not only seeks a property alteration Order, but his claim is for 100% of F Street. This property was owned throughout the relationship by Ms C up until her death in 2013. Following the death of the wife’s mother in 2013, the wife inherited the B Street property and F Street in early 2014, some two years prior to separation.
As to the property owned by either party, as explained elsewhere in this judgment, the property almost exclusively consists of what is now the wife’s inheritance. There are a few vehicles in addition.
After their separation in April 2016, it is agreed that the parties tried to resolve their property issues. On 6 August 2018 the parties filed an Application for Consent Orders for consideration by the Court. The wife was legally represented, and the husband chose to act for himself. This agreement provided that the wife would receive 51.8% of the entire property owned by the wife, and the husband receiving 48.2%.
A Registrar from this Court wrote to the parties on 22 August 2018 requisitioning the proposed application for Consent Orders given the parties had brought the application out of time. The Registrar carefully explained to the parties that they were out of time and that if they wished to proceed they would need to seek leave to proceed out of time and that each party would be required to file an affidavit and explain that hardship would be caused to a party if leave were not granted.[1] The Registrar gave the parties a time limit of two months to have the affidavits filed, after which time the application would be dismissed without further notice.
[1] Letter dated 22 August 2018 from a Registrar.
The requisition was not answered by the parties and as such no Orders were made by the Court.
Leave to rely on Further Amended Application
At the hearing of this application, the husband was represented by Ms Murphy of Counsel and the wife was represented by Mr Wilson KC.
The husband relies on the material shown in his case outline noting the correct date of filing of the husband's affidavit is 16 May 2024 and not 16 April 2024.
The affidavit relied on by the husband had attached as annexures, 186 pages. Despite a specific Order made by the Court on 2 May 2024 to do so, the affidavit did not include an index for the annexures.
The wife relies on the documents set out in her case outline. That affidavit has annexures which run from page 14 through to page 176. Again, despite specific Orders to do so, these annexures did not have an index.
At the commencement of this application, Ms Murphy of Counsel for the husband, made an application to rely upon a further amended initiating application which was filed on 5 June, the afternoon prior to the hearing on 6 June 2024 and served on the wife at 3.50pm in the afternoon of 5 June 2024.
The respondent through her Counsel Mr Wilson KC objected to the husband now being permitted to rely on that second amended application which added a new cause of action namely a claim pursuant to s90SM as an alternate to the husband's initial Order seeking A declaration pursuant to section 90SL of the Act be made that the husband has an equitable interest in the property at [F Street] in the State of Queensland and more particularly described as [F Street] on RP […] with Title Reference […] (the Property) held in the name of the Respondent, as claimed in the caveat having dealing number […]".
The remaining ancillary orders provided for the relevant provisions for F Street to be transferred to the husband.
The interlocutory orders sought leave pursuant to s 44(6) and disclosure.
Counsel for the wife submitted that the amended claim pursuant to s90SM is an entirely different case. Further, it is submitted that the respondent wife filed written submissions back in September 2023 pointing out that the husband had made no claim pursuant to s90SM. Counsel for the wife submitted that the applicant had ample opportunity over the months since September 2023 and this hearing in June 2024 to amend his application to include relief pursuant to s90SM earlier. In addition, the husband had even filed an amended application in February 2024 and once again this amended application did not address s90SM. The husband instead waited until late in the afternoon prior to the hearing to file a second amended application. On that basis the respondent wife through her Counsel submitted that leave to rely upon the new second amended application at this hearing should not be granted.
For the reasons given, I refused the application to file and read the second amended initiating application filed the afternoon prior to this hearing introducing a new cause of action. That application included an alternate position which would cause the respondent a disadvantage. It introduced a whole new basis of their claim based on contributions. It would have meant that an adjournment would be required to allow the wife to properly prepare and respond. I made reference to the principles in Aon Insurance and the unfairness of the conduct of the husband in making a last-minute change of position causing prejudice to the wife.
SUBMISSIONS PURSUANT TO S44(6)
The application thereafter proceeded on the basis of the amended initiating application filed on 7 February 2024; the affidavit of the husband filed on 16 May 2024 and the financial statement of the husband 23 June 2023.
The submissions of Ms Murphy of Counsel for the husband broadly referred to the applicant having an adequate explanation for the delay, the existence of a substantial prima face case for property settlement and Ms Murphy submitted that a denial of the claim would cause the husband hardship.
The position of Counsel for the wife was that the husband has failed to identify the facts supporting a cause of action in equity referred to by the husband, that the total period of delay is not adequately explained and within that submission reference is made to the mistakes evident from the material relied on by the husband's former lawyers. Submissions were made that after all of the years that have now transpired since separation that issues of detriment arise for the wife.
CASE LAW.
I have been assisted in the relevant law by both Counsel. Ms Murphy has referred to Whitford & Whitford (1979) FLC 90-612 which identifies a number of factors which the court may consider when determining whether to exercise the discretion:
"…. The length of the delay, the reasons for the delay and prejudice occasion 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".
Mr Wilson has also provided a long list of cases and helpfully prepared a bundle of those cases for the Court.
Turning to the relevant issues that the Court must exercise in its discretion as to whether to grant leave, I will first turn to the issue of hardship.
HARDSHIP
The grant of leave to commence proceedings is an exercise of judicial discretion. Pursuant to s 44(3) of the Family Law Act 1975 (Cth) the applicant has the onus of establishing that he would suffer hardship if leave were not granted.
The applicant submits that he would endure hardship if leave was not granted to proceed with litigation to secure a property settlement on the basis that the parties had previously agreed to a 51.8%/48.2% division split between the parties in favour of the wife, and he will suffer hardship through not having his share of the proposed division (48.2%) put into Orders in his favour.
The husband also submits through his Counsel that because the parties signed the application for Consent Orders that this Court should adopt the position that such an outcome was just and equitable. The husband submits that he has suffered hardship on the basis that to date he has received only 9% of the property as it existed in mid-2018 (being vehicles as I understand it) rather than the agreed figure in the proposed Consent Orders of 48.2% he would have received if the Consent Orders were approved by the Court.
The Court has the ultimate determination whether a proposed agreement is just and equitable. Given the agreement was requisitioned at the preliminary stage of considering the Court’s jurisdiction due to the proposed application being filed out of time and no leave having been granted by the Court, I consider that the Court never reached the point of determining whether an adjustment dividing the wife’s property received by her through an inheritance on the basis of 51.8/48.2% was regarded as just and equitable. This is evident from the correspondence from the Registrar who made it clear that he had not considered the substance of the proposed division yet as he could not do so, given the application for Consent Orders was out of time.
When considering financial contributions of the husband and wife, the fact that the wife inherited almost all of the funds involved in that proposed split is a very significant issue and one which would attract a significant weight in the wife’s favour given she was the party solely contributing the inheritance. That being so, the proposal of splitting the wife’s inheritance so that the husband is to receive some 48% of the assets does not seem to have been considered and reflected in their proposed Consent Order. I reject the suggestion by the husband through his Counsel Ms Murphy, that I would be guided by and accept that if the parties had once agreed to this division, that it could be regarded as just and equitable. Further, once that Consent Order was rejected, there was no obligation on the wife to have to continue with such a proposal. The wife was entitled to have second thoughts prior to signing off on any agreement.
It was submitted by Counsel for the wife with reference to the matter of Maine & Maine [2016] FamCAFC 270 regarding the effect of an informal agreement "at its highest, it is a demonstration of what the party’s thought was a just and equitable settlement at that moment in time". That maybe so, however, no valid Consent Order was placed before the Court and the Registrar specifically stated that consideration of the proposed division could not be considered until the issue of the parties being out of time was addressed.
So whilst the parties might have considered that the settlement was just and equitable at a point in time in mid-2018 for a number of reasons which could include their respective desire to end the litigation or adopt a position where they wish to avoid protracted proceedings, I do not accept that the proposed Consent Orders ever received the imprimatur of the Court or that the Consent Orders were just and equitable or that I should accept that they were just and equitable.
Counsel for the husband further submitted that the views of whether the agreement reflected an appropriate distribution of assets at the time was not relevant, the relevancy of the agreement is that both parties acknowledged that an adjustment is appropriate. I disagree.
I note that had the husband followed the steps in the Registrar’s letter to file an affidavit setting out the hardship that would occur if leave to proceed out of time was not granted, that there is no guarantee leave would have been granted or that the proposed division would have subsequently received the imprimatur of the Court. As I have said (and which was explained by the Registrar in his letter to the parties) the Court was not yet at that time in a position to even consider the just and equitable considerations relating to any proposed property division.
If the Court had ever been in position to consider the leave to proceed application, that inquiry itself would have also included a consideration of the principles in Stanford[2] and the extent of the financial contributions of each party and as part of determining whether or not the applicant had a valid claim that would warrant a property alteration Order under the terms of the Family Law Act. That would have resulted in the husband having to demonstrate that it was just and equitable to make a property alteration Order having regard to his financial and non-financial contributions (s90SM) and then reference to s90SF.
[2] Stanford & Stanford (2012) FLC 93-495.
This inquiry would have resulted in a consideration of the property being divided which consisted almost exclusively of property and funds inherited solely by the wife some two years prior to separation. This was in circumstances where the parties did not own nor did they acquire any other real estate during the relationship and there being no children of the relationship. The leave to proceed out of time may have failed. Even if it succeeded, thereafter the Registrar may well have rejected the proposed Consent Orders given the likely approach to the weight given to the fact of the wife inheriting substantial funds from her mother.
The inheritance received by the wife makes up the majority of the pool, being $2,250,000 worth of assets and includes the B Street property, F Street, livestock and three vehicles (Motor Vehicle 1, Motor Vehicle 2 and Motor Vehicle 3).
At the time of the Application for Consent Orders, the total property pool was $1,658,644 with $1,482,507 being held in the name of the wife. This figure included the personal guarantor loan by the wife to the husband's sister in the amount of $1,100,000 (registered by way of mortgage) which I understand from the evidence is a contingent liability.
After considering all of these issues, I do not accept that the husband’s loss or hardship is what he would have received under the requisitioned Consent Orders.
Hardship - Husband blames his former lawyers.
The husband says he was not legally represented when the wife’s lawyers were drawing up the proposed Consent Orders in 2018.
The husband and wife each received a letter from the Court setting out very clearly that the proposed Consent Orders could not be made as the parties were out of time and moreover, explaining in comprehensive detail what needed to occur and inviting the parties to file the relevant affidavits to establish the basis for an application to proceed out of time. The husband says that when he received the letter from the Registrar on 22 August 2018, (he annexes the letter he received, annexure 6) that he then decided to seek legal advice.
The husband now submits that he was not told by those lawyers O Law Firm that he could apply for leave to proceed out of time. The husband says No one at [O Law Firm] ever advised me about commencing proceedings out of time, save for the comment in their letter of 13 June 2019.[3] As a result, I was not aware that commencing proceedings was an option for me, or that I could seek leave to commence a proceeding out of time. Had I known that, I would have instructed [O Law Firm] to file such proceeding.
[3] That seems to be the letter referring to the wife not being able to show hardship.
I note however the parties were specifically referred by the Registrar to subsection 44 (5) of the Family law Act. The letter continued…
the parties are out of time to make this application for financial orders. Subsection 44(6) does not provide that leave can be granted to proceed out of time by consent.
However, a Registrar may grant leave to proceed out of time if the Registrar is satisfied that hardship would be cause to a party or parties if leave were not granted.
The Registrar then helpfully proceeded to explain in detail what each party needed to do to have the proposed Consent Orders signed off by the Court.
The letter continued:
The substance of the application has not yet been considered. Before doing so, the Court requests that the parties:
a.Each party files a separate affidavit setting out the hardship that would be caused to a party or parties if leave were not granted, and
b.The parties lodge fresh minutes of consent with an additional first paragraph in the minutes of proposed Orders with words to the effect that of:
1. The Court, having been satisfied that a party would suffer hardship if leave were not granted, grants leave to proceed pursuant to section 44(6) Family Law Act (Cth)
Upon the fresh material being received, the Court will look to the substance of the application. The original materials (including the minutes of consent) as lodged, remain on the Court file.
It is thus clear that when the husband said “I was not aware that commencing proceedings was an option for me, or that I could seek leave to commence a proceeding out of time” that he in fact already knew this was an option as it was clearly explained by the Registrar in August 2018. The husband also knew when he approached his lawyers with the letter from the Registrar explaining that the application for Consent Orders could not be made because the parties were out of time to file property Orders. Specific reference was made by the Registrar to commencing proceedings out of time pursuant to section 44(5) and (6) of the Family Law Act and that this could not occur by Consent, but that a Registrar could make such Orders. The letter states requests for affidavits to be filed within two months, otherwise the application for Consent Orders would be dismissed. No action was taken by either party.
Further, when the husband did approach O Law Firm for legal advice, it seems to me that this position of filing further affidavit material in order to avail themselves of the provisions of s44 (5) and (6) as explained by the Registrar, must surely have been discussed between the husband and his lawyers and given consideration when the husband approached them with the letter sent to each of the parties by the Registrar.
The husband instead of following the directions of the Registrar, says he accepted subsequent advice from his lawyers on 3 December 2018[4] to the effect that there recently had been amendments to the Family Law Act; the parties are now able to Consent to the Application for a Property Adjustment Order out of time; unfortunately that amendment is not retrospective; matters commenced after passing of the legislation are able to consent out of time; this means you are not able to use the Consent Application. The letter goes on to say that we have prepared a binding financial agreement.
[4] Affidavit of Mr Reiner filed 16 May 2024, annexure MRR9.
In a letter written to the husband by his lawyers on 28 September 2018[5], his lawyers referred to having had discussions about a Binding Financial Agreement, that this had no issues with the two year limitation, and concluded that we consider this the most appropriate way of proceeding on the basis that we do not consider that your estranged wife is able to show hardship as required by Section 44 of the Family Law Act to enable the Consent Orders to be made.
[5] Affidavit of Mr Reiner filed 16 May 2024, annexure MRR 7.
It seems that the wife did not wish to enter into a Binding Financial Agreement despite the husband’s proposal for her to do so through the approaches of the husband’s lawyers, as she did not accept his proposal to do so.
The husband’s solicitors followed up the proposal for a BFA with the wife’s lawyers in January 2019 [6] and several times throughout 2019. In April 2020 a proposal was made by the husband’s lawyers to the wife’s for a round table discussion. No reply seems to have been received from the wife and no further action taken by the husband. There is no explanation for the delay for the 8 months being the balance of the year 2020.
[6] Affidavit of Mr Reiner filed 16 May 2024, annexure 9 (at the back).
Nor is there any explanation for the delay for the entire following year of 2021 and likewise the year after being 2022. Then on 4 April 2023, the husband has engaged new lawyers, Morgan and Conley, who write to O Law Firm requesting the husband’s file. That seems to have been provided on 26 May 2023.
Mr Wilson of Counsel has submitted that it is possible that the husband has a claim against his former lawyers. I have nothing to say about that proposition except that I do not have enough information about the instructions the husband gave to those solicitors nor any discussions he had with them. The letter of the Registrar confirmed that the parties were already out of time when the Consent Orders were received by the Court in August 2016. The husband’s lawyers may well have advised the husband that he was not going to succeed in any event with the proposed application for leave out of time, or even if he did, that in relation to his substantive application there was a paucity of evidence about any financial contributions or any evidence supporting an equitable claim. The husband’s substantive action involves him having negative assets at the commencement of the relationship and there were no children of the relationship, and other than their own company assets (deliberately put into the wife’s name), there were no other substantial assets acquired by either or both the parties during their relationship. But for the wife’s inheritance, the assets would consist of cars and the former Company. These are all factors which required consideration by his lawyers.
Hardship - Equitable claim.
In respect to the husband's claim that he has an equitable interest in the F Street vacant allotment, the husband says he looked after Ms C and maintained the B Street property (where several families lived) which he was not paid for. Therefore, he says his hardship is his loss of not being able to claim an equitable interest, which he claims in seeking 100% of F Street.
The B Street property was owned by Ms C at the time of cohabitation until Ms C passed away in 2013. The ownership was then transferred to the wife by a grant of probate in early 2014 (the parties did not separate until April 2016, meaning the wife was owner of the B Street property for two years at the time of separation). The parties never lived on F Street; it is vacant land.
Mr Wilson of Counsel for the wife, in response submits that the husband has provided no evidence to give rise to an equitable interest at all, and in particular, an interest in the vacant F Street, in respect of which the husband seeks a declaration that he owns 100%. The husband only makes reference to work he did to the B Street property, however there is no reference to any form of constructive or resulting trust or some form of estoppel in relation to F Street, or for that matter the B Street property on which there are various houses.
On the evidence before the Court the parties each worked in the farm business, the wife doing the books and the husband doing the work mostly, though sometimes with wife did too. They operated their business at the B Street property which, from 2003 onwards and for most of the relationship up to the wife inheriting the property and receiving it in 2014, it was not owned by either of them. The parties separated in 2016, noting however that the wife moved out of the home she shared with the husband on her mother’s property sometime following separation in 2016 as the husband refused to leave.
Moreover, the wife says that the husband occasionally did work for her mother, Ms C, but when that occurred, he was always paid for his work and generally that was billed from M Pty Ltd.
Neither the wife nor the husband had significant assets at the commencement of the relationship. The husband’s credit card debts of $12,000 (his case) or $20,000 (wife’s case) appear to have seen the husband’s financial position at the commencement of the relationship in the negative. The wife had only modest assets too, but it seems she was not in a negative position and that she helped the husband pay down his debts.
Neither the husband or wife purchased any real estate or significant assets during the relationship. No property was jointly acquired by the properties during the relationship.
As noted earlier, the property which the wife has inherited was not owned by the wife whilst the parties lived together between 2003 and when the wife’s mother died in 2013 and which seems to have been inherited in 2014. The husband’s material is devoid of any evidence to support an equitable claim against the wife or against either of the properties subsequently inherited by the wife. In particular there is no evidence at all to substantiate an equitable interest in F Street. There is no evidentiary foundation to support a declaration of an equitable interest through either a resulting trust, constructive trust or any other trust. The husband did not contribute to the acquisition or maintenance of either of the properties both of which were owned by the wife’s mother. Importantly, there is no evidence that he made any contributions nor suffer any detriment arising from any equitable principles. F Street was at the relevant times owned by the wife’s mother, and it remains a vacant allotment.
The husband and wife never lived on F Street. The home they did live in (one of several on the B Street property) was provided through the largesse of the wife’s mother. One of the wife’s brothers and his family also lived on the B Street property, in another home. The parties also used the B Street property to keep the livestock they owned as part of their commercial operations through M Pty Ltd. The wife did not own the B Street property nor F Street for most of the relationship.
The evidence is that the wife’s mother was not “elderly” as suggested by the husband. The wife’s mother did not live alone, her stepdaughter Ms E and Ms E’s son Mr P worked on the property and lived with her. Also, another of the wife’s brothers, Mr Q, worked on the property. He lived in Town R but regularly travelled to the property to help his mother. The evidence is that the wife’s mother was a feisty, fit woman who did not need “assistance” as suggested by the applicant.
Further, there is no evidence of any financial contribution or other contribution by the husband to the acquisition of the two properties owned by the wife’s mother. Rather than make contributions to the property, he obtained benefits (living and running livestock) from the property. The husband seeks a declaration that he holds a 100% interest in F Street. There is a stunning lack of evidence to support such a declaration.
The wife contests the husband’s opinion evidence that he loved her mother like a mother and says that her mother could not stand the husband, she detested him and made no secret to others of her feelings.
Hardship - Wages.
The husband seems to have a grievance about the wages he was paid through M Pty Ltd though this grievance is unsupported by any admissible evidence.
Further it is to be remembered that the husband quite deliberately set up the legal framework of M Pty Ltd in which he quite deliberately was not a shareholder or director of. After receiving legal advice, steps were taken by the husband to set up M Pty Ltd with the wife as the director and shareholder and the husband as an employee. The husband directed he be paid as an employee as intended by the husband to achieve the goal of protecting his assets and paying a lower child support for his own three children. The husband nominated $200 per week as his wage from M Pty Ltd and later he set his wage at $300 per week. The husband said he set this company up to preserve his assets from his former wife.
Part of the plan was also to be able to operate the company nonetheless as an equal partner, as the husband says. The evidence is that the husband could solely acquire assets such as equipment and vehicles to run M Pty Ltd at his discretion. The husband would have made a declaration for the purpose of his annual income tax assessment to the Commissioner of Taxation for all of the years that he received $200 per week and then $300 per week. The flow on from that was that the declared low income would form the basis of his child support assessment.
Whilst not suggesting that the husband in this matter has engaged in any illegal conduct it has not escaped my notice that the husband has enjoyed the advantages of “protecting his assets” from his former wife and paying a lower child support for his three children based on what he claims was an artificially low income.[7] It is possible that the view taken by the Court, that in advancing his current claim, it ill behoves the husband to now come to Court complaining about the wages he was paid by M Pty Ltd as an employee. The wages were set at his direction. It is, in my view, ill-conceived to now put these low wages forward as the basis for him claiming an equitable remedy in property (not owned or acquired by M Pty Ltd) but for most of the relationship owned by the wife’s mother. The wife only received this inheritance from her mother around 2014, two years prior to the end of the relationship.
[7] The High Court case of Nelson v Nelson [1995] HCA 25 [1995] 184 CLR 538 (9 November 1995], McHugh J [50].
DELAY.
As submitted by Mr Wilson of Counsel, the husband in this matter has the onus of proving and explaining the reason for the delay. Further that the husband in this matter should have started his action at separation in April 2016, and the two-year time limit to do so concluded in April 2018. In August 2018 the parties were told they were out of time by a Registrar in this Court. The husband had been on notice since the Registrars letter in August 2018, that he was out of time then and he needed to take action within 2 months.
From 2018 onwards, the husband sought legal advice and changed tack and decided to have the wife agree to a Binding Financial Agreement. Neither party took up the suggestion of the Registrar to apply for leave. The husband was advised by his lawyers that the wife would not be able to show hardship. I am of course not aware of what other advice, if any he received from those lawyers.
By 2020, all attempts of the husband to engage the wife had been unsuccessful. That is two years after the Registrars letter advising of the need to bring an application for leave to proceed out of time within two months.
From April 2020 to April 2023, there is complete inactivity it seems by the husband until he sees a new lawyer around April 2023. This significant further period of almost three years is not explained and takes the whole delay to seven years since separation, but importantly five years since the end of the two-year period in which the proceedings ought to have been instigated.
Whilst the husband was not a lawyer, the letter from the Registrar (annexed to the husband’s affidavit) back on 22 August 2018 explained succinctly what needed to occur. It said in bold type the requirements set out below must be addressed within two months, failing which the Application will be dismissed without further notice. Please return this form when resubmitting the documents. A copy of this notification has been sent to each party.
I accept the proposition that often in cases where the deficits facing a litigant are attributable to the actions of the solicitor, that conduct is not and ought not be attributable to the husband as explained in Althaus and Althaus[8]. Althaus however involved an application for leave to proceed out of time where leave to proceed without leave expired on 20 May 1977 and the solicitors for the wife in that case did not file until 29 July 1977, i.e. two months out of time.
[8] (1982) FLC 91-233, Full Court decision (Evatt CJ., Marshall., SJ and Strauss, J) Appeal No. 13 of 1979.
I therefore also accept the submission as stated in Althaus that, the wife should not be saddled with their conduct (her solicitor) unless the delay was so long after her instructions that even she, as a lay person ought to have become suspicious. In this matter I am satisfied that even as a lay person the husband was, or should have been, well aware that he needed to move quickly in progressing his application for leave to proceed out of time in 2018, as explained by the Registrar. After April 2018 he waited another five years. Overall, I do not consider that the whole delay for the five years involved, has been satisfactorily explained by the applicant husband.
DETRIMENT.
Counsel for the wife did not advance any particular detriment to the wife but rather referred to matters which seem obvious when referring to leave being granted five years after the end of the two-year limitation period set out in the Family Law Act without which leave is required to institute property proceedings. Mr Wilson referred to the detriment the wife faces including the inability to find documents and locate witnesses.
Mr Wilson refers me to Brisbane South Regional Health Authority v Taylor [1996] HCA 25. Referring to the Limitation of Actions Act 1974 (Qld), wherein His Honour Justice Dawson stated in relation to the applicant having the onus to persuade the Court that the discretion should be exercised, and further stating that in relation to detriment:
To discharge that onus, the applicant must establish that the commencement of an action beyond the limitation period would not result in significant prejudice to the prospective defendant. A material consideration (the most important consideration in some cases) is whether by reason of time that has elapsed, a fair trial is possible.
Also, the practical considerations apply in terms of running a contested hearing must be considered.
Whether there is prejudice to the prospective defendant that is likely to thwart a fair trial is to be answered by reference to the situation at the time of the application. It is no sufficient answer to the claim of prejudice to say that, in any event, the defendant might have suffered some prejudice if the applicant had not begun the proceedings until just before the limitation period had expired.
I accept that there will be some detriment to the wife in attempting to conduct this litigation and gather the necessary evidence to support her case, directly due to the length of the period which has transpired since 2018.
CONCLUSION
Counsel for the husband submitted that the onus was not on the husband to have a strong case, rather he is required to have a prima facie case worth pursuing. It is submitted by Ms Murphy of Counsel for the husband that the hardship the husband will endure, if leave is not granted, provides a prima facie case.
As I have referred to in these reasons, the evidence does not support even a prima facie case grounded in equity against the wife. There is no basis explained for an equitable interest at all in either property now owned by the wife and certainly not in the vacant F Street.
I adopt and accept the reference by Mr Wilson to the matter of Crafter & Crafter [2011] Fam CA 122 at paragraph 83, as set out in his outline, where His Honour (Murphy J) stated If legal interests or title are to be “defeated by” or made subject to the demands of equity, the asserted foundation for equitable intervention should be clearly evident from evidence before the Court. There is in fact not one word put forth by the husband to support an equitable claim in relation to F Street.
I also consider that the delay has not been satisfactorily explained beyond 2020, and even then, I consider that the husband was on notice from the Registrars letter, that he was out of time and if he wanted to lodge an application for leave to proceed out of time, there were steps to take within two months. The delay of five years after the expiration of the period permitted in the legislation, will inevitably cause detriment to the respondent wife.
Having considered all of these factors, and particularly the lack of evidence to support a prima facie claim, I consider the interests of justice require that I refuse the application of the husband to proceed out of time.
I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Willis AM. Associate:
Dated: 20 September 2024
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