Reyburn and Reyburn
[2009] FMCAfam 1210
•20 November 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| REYBURN & REYBURN | [2009] FMCAfam 1210 |
| FAMILY LAW – Application for leave to initiate property proceedings out of time – leave granted. |
| Family Law Act 1975 (Cth), ss.44(3) & 44(4) |
| Hall & Hall (1979) FLC 90-679 Whitford & Whitford (1979) FLC 90-612 |
| Applicant: | MR REYBURN |
| Respondent: | MS REYBURN |
| File Number: | ADC 5066 of 2008 |
| Judgment of: | Simpson FM |
| Hearing date: | 6 May 2009 |
| Date of Last Submission: | 6 May 2009 |
| Delivered at: | Adelaide |
| Delivered on: | 20 November 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Byrne |
| Solicitors for the Applicant: | Hume Taylor & Co |
| Counsel for the Respondent: | Mr Eid |
| Solicitors for the Respondent: | Georgiadis Lawyers |
ORDERS
Pursuant to sub-section 44(3) of the Family Law Act 1975 (Cth) the husband be granted leave to institute property proceedings pursuant to section 79 out of time.
IT IS NOTED that publication of this judgment under the pseudonym Reyburn & Reyburn is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 5066 of 2008
| MR REYBURN |
Applicant
And
| MS REYBURN |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by a former husband for leave pursuant to s.44(3) of the Family Law Act 1975 (Cth) (“the Act”) to proceed and seek orders pursuant to s.79 of the Act. The application for leave is resisted by the former wife.
Material relied upon
The applicant husband filed his Initiating Application on 23 December 2008. It was supported by his affidavit and a Financial Statement both sworn 22 December 2008.
The mother’s Response was filed on 13 February 2009. It was supported by her affidavit and a Financial Statement both sworn on 5 February 2009. The wife’s Response was supported by a further affidavit of hers sworn and filed 31 March 2009.
I have considered all the material put before me by the parties. Where in these reasons I make statements of fact they are findings of fact decided on the balance of probabilities after a consideration of the material filed.
Brief background facts
The brief background facts to this matter are as follows:
a)The applicant was born [in] 1957 and was 51 years of age at the time the application was filed;
b)The applicant is in good health and currently employed as a [tradesman] by [company omitted];
c)The respondent wife was born [in] 1959 and was 49 years of age at the time the application was filed;
d)The respondent wife is in good health and currently employed [in the Retail Industry];
e)The parties started living together in April 1981;
f)The parties married [in] 1982;
g)The parties separated on 2 July 2000;
h)The parties were divorced on 28 July 2006; and
i)The parties had three children together: [X] born in 1983, [Y] born in 1986 and [Z] born in 1989.
The legislation
A time limitation applies to the commencement of property proceedings. Section 44(3) of the Act provides as follows:
(3)Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983:
(a) a divorce order has taken effect; or
(b) a decree of nullity of marriage has been made,
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c) in a case referred to in paragraph (a) - the date on which the divorce order took effect; or
(d) in a case referred to in paragraph (b) - the date of the making of the decree.
The court may grant such leave at any time, even if the proceedings have already been instituted.
There are limitations upon the granting of leave by reason of to sub-s.44(3) of the Act . Sub-section 44(4) provides as follows:
(4)The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:
(a) that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
(b) in the case of proceedings in relation to the maintenance of a party to a marriage—that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.
The correct approach to determination of an application for an extension of time pursuant to sub-s.44(3) of the Act was put in this way in the case of Whitford & Whitford (1979) FLC 90-612 at pg.78,144, a Full Court decision of the Family Court of Australia:
“(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 an end to 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”.
The first question that I have to decide is whether on the evidence before me hardship has been established. “Hardship” in this context means “substantial detriment”. The loss of the mere right to institute proceedings itself is not a “hardship”. Proof of hardship does not involve the proof of necessity, poverty or need. If it were otherwise all affluent applicants would be refused leave. As was also said in Whitford & Whitford (supra) at pg.78,145:
“Hardship may be caused to an applicant if leave were not granted to institute proceedings, although the applicant is not in necessitous circumstances. Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved, may constitute hardship.”
It is necessary for an applicant to prove that he has a claim worthy of litigation before he can establish hardship. If he does not have a claim worthy of litigation hardship in being unable to institute such proceedings would not be shown. As was said in Hall & Hall (1979) FLC 90-679:
“The cases … have considered what is meant by “hardship” in this context, and the term “substantial detriment” seems to be the generally accepted interpretation of that word.
Fundamental to that is a determination of the quality or character of the potential claim. In relation to that different cases have used somewhat different phrases to describe it so that it has become something of a matter of semantics to describe in different ways what is really the same basic concept.
For example in Swallows Case (unreported Emery J., 16 September 1977; referred to in MacDonald’s case) it was said to be “a prima facie case which is in the circumstances substantial”; The Full Court in MacDonald’s case differed from that by stating that it ought to be a “reasonable prima facie case”. In MacKenzies’ case it was described as being “a probability of success”, and in Whitford’s case the distinction was said to be that the applicant would need to show that she would “probably succeed” to be contrasted with the situation where she had “no real probability of success”. In Perkins’ case (1979) FLC 90-600 Lindenmayer J described it as “a reasonable probability of the claim being successful in some measure”.
These varying phrases tend to suggest different shades of meaning whereas in reality they directed to the same fundamental enquiry which basically is in the context whether on the applicant’s material he or she has a reasonable claim to be heard by the Court. It is not necessary to further categorise the nature and quality of that claim, subject, however, to the qualification referred to by Lindenmayer J in Perkin’s case at pg 78,054 when he said: “I would add only this qualification, that if the applicant’s evidence as to merits of his or her proposed claim is in itself inherently improbable or self-contradictory in important respects, or it is clearly shown by other unimpeachable evidence (such as undisputed documentary evidence or the testimony of independent witnesses) to be false, then the applicant may be held to have failed to establish a prima facie case notwithstanding that if his or her evidence were accepted there would be a reasonable probability of success.””
Detailed background information
At the time of separation the wife remained in the former matrimonial home. The husband left taking with him some clothes and other personal items. All furniture, the husband’s tools and other home contents remained in the home with the wife. The wife kept a car that the husband eventually, five years later, took possession of.
On or about 25 June 2006 the husband sent a letter to the wife. The letter, which was annexed to the husband’s affidavit, is partly illegible. It is clear from the legible parts however that he was asking the respondent wife to have discussions with him about a property settlement and, as he put it, particularly in relation to the house. He expressed his interest in the best way to achieve a settlement without the parties arguing. He suggested that one party should buy out the other’s half share. He suggested as an alternative that the house be sold and the proceeds divided equally between them. He asked that she talk to him about the matter as he wished to reach an agreement quickly if at all possible. He then gave his telephone contact details.
The wife responded by letter dated 27 August 2006. Some introductory remarks in the wife’s letter indicate a level of hostility by the wife towards the husband. As to the husband’s suggestion that there be a property settlement the wife resisted that course. She indicated that she believed that there was nothing to discuss as, firstly, money that she received from an inheritance of her grandfather’s deceased estate had been used to purchase the house and, second, because she had been making the necessary regular payments in relation to the mortgage since separation. She said that on the basis of these factors the husband had no claim on the house. She stated that engaging lawyers to assist with a property settlement would be a waste of money. She asked the husband to remove his tools from the property.
The husband met with his solicitors on 14 March 2007. The solicitors asked him to obtain a number of details with respect to assets and liabilities and said that they would require money in their trust account prior to commencing proceedings on the husband’s behalf. The husband frankly admitted that the solicitor’s advised him that the application for property settlement needed to be filed prior to the expiration of 12 months from the date of divorce. The husband says that he started gathering the information needed to be able to properly instruct his solicitors but that his mother became very ill. He says that he was under pressure at this point in time because of the demands that his mother’s poor health put on him and as a result of having insufficient funds to be able to pay his regular expenses let alone put money into his solicitor’s trust account. He did not do so. He says that he gave priority to looking after his mother rather than attending to his legal affairs.
The husband says the whilst he understood that proceedings had to be issued within 12 months of the date of divorce he says that he thought that the solicitors would attend to this without him having to do anything further. He thought that they would protect his position. He says that he was shocked when he was told that the proceedings had not been issued.
The husband says that whilst he understood that he should have made further enquiries to ensure that his understanding was correct he had put his faith in the solicitors that they would do what was needed to be done.
The husband says that on 19 December 2008 he was finally able to pay enough money into the trust account of his solicitors to enable the proceedings to be issued. He says that he instructed the solicitors to deal with the matter as a matter of urgency to prevent any further delay.
The wife continues to reside in the former matrimonial home. At the time of separation the former matrimonial property was being used as security for a home loan which then had a balance of approximately $10,000.00 owing. The wife has since separation re-financed this loan. The parties agree that the property now has a value $280,000.00.
The husband says that the only assets that he took with him at the time of separation were his clothing and some other personal items. He also had a certain amount of superannuation. The husband does not own any real estate and is currently renting a property with his new partner. The husband says that if leave to bring property proceedings is not granted he does not believe that he would be able to rebuild his life financially.
The husband says that he commenced training and work as a [tradesman]in Adelaide when he was 16 years of age after finishing year 11 at school. After six years he started working [at company omitted].
The husband says that after nine years of working at [company omitted] he went back to [a different trade]. He worked for 16 years with a [occupation omitted], a further two years elsewhere doing similar work and now works for [company omitted] doing government work. The husband says that his work hours are from 7.00 am to
4.00 pm Monday to Friday.
When the parties started living together the wife was working full time [in the Retail Industry]. After about two years the wife stopped work to have the parties’ first child. The wife was devoted to caring for the children and home duties from about 1983 to 1994. She then obtained 12 months paid work [in the Education Industry]. The husband says that other than in that period the husband has continued to be the income provider.
The husband says that when he commenced cohabitation with the respondent wife he had five acres of land at [W] which he had bought about two years before for $16,000. He also owned two motor vehicles which he values at $7,000 and $3,000 and also various items of furniture, a TV and a fridge. He says that the respondent wife brought to the relationship a motor vehicle worth about $500 and some furniture, a TV and a fridge.
The husband says that when the parties were living together he would help around the house. He would help with cleaning the house and the cars. He says that he also helped with cooking which he did on average two or three nights per week. He helped maintain the garden. He says did most of the cleaning and a fair amount of the cooking. He said they would work together with any painting that was needed around the house. He says that he did cementing and fixing the roof of the house. He says that he would maintain the cars and the lawnmower. He also maintained the children’s bikes. He says that he would help with the supervision of the children during the evenings and on weekends. He says that both he and the wife attended to bath-time and bed-time responsibilities in relation to the children.
The husband says that he put a transportable house on the land at [W] in about 1982 or 1983 after the parties married. Prior to this the parties had been renting accommodation at Gawler.
The husband says that after the parties married he transferred the land at [W] into joint names. He says that $30,000 was borrowed secured by a mortgage over the [W] property and that the money was used to put a transportable home on the property.
The husband says that the wife inherited approximately $25,000 to $30,000 from her grandfather in England in about 1988. He says that she used the money to buy a car. He says that the money was also used to pay out the existing debt ($20,000 - 25,000) secured by the [W] property. He says that the parties sold the property in 1994 or 1995 to build a new home. He says that the property was sold for about $90,000. He says that when the [W] property was sold the parties bought a house and land package at [P] which property was bought in joint names. He says that they had a home loan of about $30,000 in order to buy the property. They built the house and then moved in and lived there with their three children.
The husband says that when the oldest child [X] was 13 or 14 years of age he (the father) cashed in about 12 weeks annual leave (approximately $3,500) to enable [X] to travel to America and Canada on a basketball camp with a local basketball club.
The husband says that he and the wife did not purchase any other significant assets or incur other significant liabilities during the relationship with the exception of a couple of occasions when they upgraded motor vehicles or bought new ones. He says that he and his wife operated a joint bank account into which the husband’s pay was paid. He says that both he and the wife would use and have access to the money in that account for household and other family expenses. He says that the wife had most of the control over finances.
The husband says that in about 2005 the wife requested and he consented to her re-financing the former matrimonial home. He now understands that the document that he signed had the effect of removing his name from the title and making the wife the sole legal owner of the property. At the time that he signed the re-financing documents that were provided to him by the wife he believed that they were simply for the purposes of re-financing and did not change legal ownership of the property. He says that he would not have signed the documents if he had known that it would have the result of his name being removed from the title to the property.
The husband says that he had superannuation with [C]at the time of separation which he valued at $23,256.10. He says that he had further superannuation through [company omitted] which he values at about $15,000 at the time of separation.
The husband summarises the asset position at the time of separation as follows:
a)House at [P] estimated value $200,000
b)Husband’s superannuation with [C]
estimated value $23,256.00
c)Husband’s superannuation with [company omitted] estimated
value $15,000
d)Motor vehicle in joint names estimated value $2,000
e)Savings Negligible
f)Furniture contents of the home estimated value $15,000
g)My tools (retained by the wife in the shed) $5,000-$10,000
h)Wife’s superannuation Unknown
The husband estimates that the liabilities at separation were as follows:
a)Home loan estimated value $10,000
The husband complains that the wife has had the benefit of living in the former matrimonial home since the time of separation. He has received no payment from the wife in respect of his equity in the home.
As a result of certain instructions given to his solicitors shortly prior to these proceedings being commenced to perform a property search the husband has discovered that the property was purchased jointly by the parties in November 1994, that in July 2005 the property was transferred to the name of the wife solely and that in May 2006 a transfer of the property was made into the joint names of the wife and the parties’ daughter [Y]. The husband says that prior to this recent search he was not aware of the fact that the property had been put into the names of the wife and his daughter. He says that he was shocked to discover this.
The husband says that he understands that the wife now works full time running a [business omitted] from the shed at the [P] property and that she does this jointly with [Y].
The wife says that the husband has at her request over the last few years removed certain items from her possession namely his furniture and tools.
The wife says that at the divorce hearing in June 2006 the husband attempted to raise the issue of property settlement at which time the husband was told by the presiding person of the time limit in which to issue property proceedings.
The wife says that she does not believe that the husband’s time has been unduly taken up with caring for his mother.
The wife says that the husband cannot complain that he did not have enough funds to pursue property proceedings as, firstly, free assistance is available through a community legal centre, and, secondly, the husband clearly had sufficient funds as he “… has purchased motor vehicles and other unnecessary gifts for the children over the years.”
The wife says that the balance owing on the [P] property at the time of separation was closer to $45,000 and not $10,000 as suggested by the husband.
The wife disputes that the husband did much work around the home. She says that he offered very little assistance generally, rarely cooked but would instead arrange takeaway food, did not do any concreting around the home and did not help with the children at bedtime.
In relation to the husband’s evidence about the wife’s inheritance from her grandfather’s estate the respondent wife says that she inherited £24,301 which equates to approximately $60,000. The husband, she says, was therefore incorrect in suggesting that she inherited $25,000 - 30,000. She admits that a motor vehicle was purchased with the money but says that the vehicle was for the husband’s use. She says that the husband also purchased a lawn mower for his parents using part of the monies. She says that the remainder of the inheritance monies was used to reduce the loan secured on the [W] property. She says that when the [W] property was sold in April 1995 the parties received a total of $20,000.
The wife says that when the [P] property was purchased it was vacant land. She says that the parties borrowed $104,984 to purchase the land and construct a home and that the husband was incorrect when he suggested that only $30,000 was used for the purchase and construction. She says that the building of the home took about one year and not one month as suggested by the husband.
The wife admits that the husband cashed in his annual leave to enable their child [X] to travel overseas to advance his basketball skills. She says that she was opposed to the child travelling to the USA at that time as she was concerned for his safety and also because she knew that they would not be able to afford for the other children to have the same sort of opportunity.
In relation to the signing of documents that resulted in the husband having his name removed from the title of the property the wife says that the husband was made aware at the time of signing that this would be a consequence of his signature. She says that the husband was advised of this in the presence of their daughter who was 18 years old at the time. She says that at the time the property was re-financed and put into the name of herself and the daughter the balance owing on the loan secured by the property was $38,172.99. The re-finance was for a loan of $150,000. She says that the money borrowed was used to set up a jointly run business providing [omitted] and that she and her daughter performed this work on a part-time basis. The wife says that in addition to this part-time work she works full-time [in the Retail Industry].
The wife says that she believes that sometime in the 2005/2006 financial year the husband received a payout from his employer “[M]” for approximately $10,000. She does not say what the payout was for. She says in addition that the husband has income from his employment [in the sports industry] and that she believes that the husband does not declare that income for tax purposes or for the purposes of his Financial Statement filed in these proceedings.
The wife says that since separation she has supported and continues to support the three children. Two have completed tertiary studies and the third is an apprentice in receipt of an apprentices’ wage. She says that she has paid all school fees, sporting fees, mortgage and insurance payments. The only assistance that she has received from the husband has been by way of child support payments and these ceased when the children turned 18 years of age.
The wife says that during the last few years she has struggled financially. She has sometimes been in the situation where she has been unable to meet mortgage payments without selling items of personally property.
The wife says that if leave is given for the property proceedings to continue she will suffer severe financial hardship. She says that she would be unable to maintain the home and the home would have to be sold. She says that if this occurs she and her daughter will no longer have anywhere to run their part-time business from. She says that the daughter will also be adversely affected if the property proceedings are allowed to continue as her name is on the title to the property and she has invested her time and money into same since the husband agreed to take his name off the title.
Conclusions
After carefully considering the submissions that have been put on behalf of the parties, both in writing and orally, I have come to the conclusion that the applicant husband will suffer hardship if leave is not granted. The applicant husband has never had a property settlement. At the time of separation and subsequently he took items of little value. The major asset owned by the parties at the time of separation was the house at [P]. There was substantial equity in that property at the time of separation. The respondent wife has remained in occupation of those premises since separation and has continued to make mortgage repayments. The loan at separation was $40,000 and when the property was transferred from joint names to the wife in 2005 the loan was $37,800. The loss of a prospective substantial claim for property clearly constitutes hardship.
Having satisfied myself that there is hardship I next have to consider how I should exercise the discretion as to granting leave. The delay has been 17 months. The wife was clearly aware as a result of the husband’s statements both in his letter of 25 June 2006 and statements that he made at the divorce hearing that the husband wanted to negotiate a property settlement. Whilst the husband has clearly been dilatory in pursuing his property claim this dilatoriness is only one factor that I have to consider in exercising the discretion. I am satisfied that the husband believed that his solicitors would protect his interests in a property proceeding by taking some step to ensure that this occurred.
In comparing the hardship that might be suffered by the husband if the discretion is not exercised in his favour with the hardship or prejudice that the wife might suffer if I grant the husband’s application for leave, I consider that the husband’s potential hardship or prejudice is greater.
It is not possible for me to make findings of fact on the disputed evidence about the father’s signing of the documents that resulted in his name being removed from the Certificate of Title. Such findings will have to await the trial of the matter which will occur if an agreement cannot be reached. I consider it proper in exercising the discretion to take into account the fact that the applicant husband’s version of what took place is credible and therefore not wholly unbelievable. If the husband is ultimately believed he at all times believed himself to be the joint owner of the former matrimonial home. He therefore was entitled to believe that this would have remained the position until such time as some agreement was reached between himself and the respondent wife about how the joint asset was to be dealt with. This would be the position whether or not proceedings were brought pursuant to the Act or at common law.
I take into account all of the submissions that have been put on behalf of the wife. I do not agree with the suggestion put on her behalf that the applicant husband will not experience any significant hardship should he be unable to pursue his claim. The former matrimonial home was the only significant asset that these parties had. Being able to bring an application for property proceedings is not offset by the fact that he has ongoing employment as well as his health and a new partner.
I do not accept the argument put on behalf of the respondent wife that the husband has not provided an adequate explanation for his delay in issuing the proceedings. I also do not accept the submission put on behalf of the respondent wife that there has been a fair and equitable property settlement between the parties through the exchange of chattels prior to the current application being brought and further on the basis of the wife retaining primary care of the three children of the relationship. I do not believe it can be said as was submitted by Counsel for the respondent wife that the husband’s failure to pursue the property settlement amounts to a tacit acceptance of the status quo that the matter had been finalised.
I make the orders to be found at the beginning of these reasons.
I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of Simpson FM
Associate: J. Semler
Date: 20 November 2009
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