Riordan & Riordan
[2012] FMCAfam 1297
•13 December 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RIORDAN & RIORDAN | [2012] FMCAfam 1297 |
| FAMILY LAW – Property orders sought – section 44(3) of the Family Law Act 1975 (Cth) application for leave out of time – considerable delay – hardship – prima facie case – application granted. |
| Family Law Act 1975, s.44(3) |
| Applicant: | MS RIORDAN |
| Respondent: | MR RIORDAN |
| File Number: | MLC 3497 of 2012 |
| Judgment of: | Hartnett FM |
| Hearing date: | 27 November 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 13 December 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Sweeney |
| Solicitors for the Applicant: | Slater & Gordon Lawyers |
| Counsel for the Respondent: | Mr Nehmy |
| Solicitors for the Respondent: | Moores Legal Pty Ltd |
ORDERS
Pursuant to s.44(3) of the Family Law Act 1975 the applicant wife be granted leave to institute property and spousal maintenance proceedings out of time.
UNTIL FURTHER ORDER the husband and any agent of his be restrained from:
(a)Further encumbering the properties at Property M, Property B and Property H (‘the properties’);
(b)drawing down on any mortgages secured over the properties without first obtaining the consent in writing of the wife;
(c)selling or otherwise disposing of the properties;
(d)removing, selling or otherwise disposing of any of the contents of the properties;
(e)damaging or otherwise diminishing the value of any of the properties; and
(f)selling or otherwise disposing of his [Z] business.
The parties attend a Conciliation Conference with a Registrar of the Federal Magistrates Court of Australia at the Melbourne Registry on 21 March 2013 at 2.15pm.
The parties file and serve any affidavits on which they seek to rely at least 14 days before trial.
The matter be listed for final hearing on 24 July 2013 at 10.00am.
IT IS NOTED that publication of this judgment under the pseudonym Riordan & Riordan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 3497 of 2012
| MS RIORDAN |
Applicant
And
| MR RIORDAN |
Respondent
REASONS FOR JUDGMENT
By application filed 20 April 2012 the wife sought, inter alia:
a)that she be granted leave to commence property proceedings and spousal maintenance proceedings out of time pursuant to s.44(3) of the Family Law Act 1975 (Cth) (‘the Act’); and
b)restraining orders pending trial.
The respondent husband filed a response on 18 May 2012 seeking the wife’s application be dismissed.
The wife relies upon the following documents in support of her application:
a)her affidavit filed 20 April 2012;
b)her affidavit filed 8 November 2012; and
c)her financial statement filed 20 April 2012.
The husband relies upon the following documents in support of his application (as contained in his response):
a)his affidavit sworn and filed 18 May 2012;
b)his affidavit sworn 5 November 2012 and filed 8 November 2012;
c)his affidavit sworn and filed 14 November 2012;
d)his financial statement sworn and filed 18 May 2012; and
e)affidavit of Ms K sworn and filed 8 November 2012.
Background
The wife was born [in] 1963 and she is now aged 49 years. The husband was born [in] 1963 and he is also aged 49 years. The parties commenced cohabitation in March 1987 and married [in] 1989. Neither party asserts that any assets of significance were held by either of them at the commencement of their relationship. Nor does either argue that contribution throughout the cohabitation was in some way unequal. They have two children of the marriage namely [X] born [in] 1993, now aged 19 years, and [Y] born [in] 1996 and now aged 16 years. Following the birth of the parties’ children, the husband continued to work full time at [omitted] and the wife primarily cared for the parties’ children and obtained part time employment as a [omitted]. She and the husband also ran a [omitted] business known as [Z]. The husband continues to this day to run and work (effectively a second job) in this business. The parties separated on 20 June 2002 (says the wife) or 25 April 2002 (says the husband) when the girls were aged 9 and 6 years respectively. A decree nisi of dissolution of marriage was granted on 17 June 2004 on the wife’s application. The divorce application notes the following:
a)at the time “mother not working full time carer.”;
b)“contact phone daily with father Wednesday nights each second weekend with dad.”; and
c)maintenance $75 per week (this was in fact for each child being a total of $150 each week).
At the time of the divorce becoming absolute on 18 July 2004 and for 12 months thereafter the wife “worked part time and (I) was in receipt of Centrelink sole parents’ benefit as well as family tax benefit part A and part B” (affidavit of wife sworn 7 November 2012 at paragraph 6). The wife’s tax returns disclosed income:
a)for 30 June 2003 of $10,124 as a [omitted]; and
b)for 30 June 2004 of $14,262; and
c)for 30 June 2005 of $23,868.
In addition the wife was in receipt of child support payments from October 2003 in the sum of $150 each week. The husband also attended to the payment of other expenses.
The husband was at all relevant times employed on a full time basis as a [omitted]. He contributed to a superannuation scheme, being a defined benefit fund, which he has been in since 1996. He was a member of the fund for only six years at the time of separation. Neither party alleges that there was an adjustment of those interests in the settlement reached between the parties in October 2003. Nor was there an adjustment of any interests that the wife may have had in a superannuation fund.
During the marriage and following separation the parties bought and sold real estate. They purchased as joint proprietors the real property situate at [omitted] in October 1994 as their family home. That property was subsequently sold by them in February 2002 for a sum of $250,000 as alleged by the husband. The wife claims she is unaware of the sale price or application of the proceeds. That is a curious claim. The settlement did not occur until June 2002, being at or slightly after separation. The husband claims the parties received a net amount from the sale of $210,677.09 and that sum was applied toward the purchase of Property L (referred to hereafter).
In 1998 the parties purchased in the husband’s sole name real property situate at Property H. This was to be an investment property. Its purchase price was approximately $114,000 and that sum together with a further sum of $4,000 approximately for costs and stamp duty was borrowed by the parties. This property remains in the husband’s ownership.
In November 2001 and being 5 or 7 months prior to separation, the parties purchased real property at Property B which was again registered in the husband’s sole name. The purchase price was the sum of $298,000 together with costs and stamp duty. The parties borrowed the entire amount being a sum of $315,000. The husband retained ownership of the property following separation. The parties had negative, no or minimal equity in same at the time. In June 2007, being some five years after separation, he and Ms K (his current partner and mother of two of his children) subdivided the property and built a second dwelling on the site. They then sold the second dwelling for a net profit of approximately $100,000 as alleged by the husband. They retained the original house now known as Property B.
The property at Property L was purchased in the husband’s sole name in December 2001 for a purchase price of approximately $277,500 plus stamp duty costs. Settlement occurred at around the time of separation. The wife moved into the home with the parties’ two daughters and the husband remained in the former matrimonial home as a tenant. The husband paid the mortgage instalments on the Property L property in respect of the loan taken out to complete the purchase of approximately $80,468.14. The wife claimed in her first affidavit that she made such payments with her Centrelink payments, part-time earnings and low child support. She did not dispute however the husband’s subsequent claims that in fact he made the payments. In October 2003 the husband transferred the property to the wife upon, she claimed initially, a payment by her to him of $50,000. She also claimed the husband was intimidatory toward her at the time and she felt compelled to make the payment. The husband denies any harassment or intimidation. When the payment was also challenged by the husband she agreed with his account as to the monies, which was that no monies were paid to him directly. Rather there was a $33,275 approximate deduction in a mortgage over one of the properties held by him and corresponding increase in the mortgage over Property L for which the wife assumed liability. The value of the property at the time of the transfer was on the wife’s calculations approximately $330,000 less a mortgage of (after the increase) then approximately $110,574 leaving a net equity of $219,426 or $189,426 if the value were $300,000 as deposed by the husband. The wife claims she could not sustain the mortgage payments nor the ongoing maintenance and repair costs on her modest income and thus three years after acquiring the property she placed it on the market for sale. The husband claims she had in this time increased the mortgage further by $25,000 to purchase an Audi motor vehicle. The property was sold for $450,500 in December 2006. She deposed to commencing to rent from that time, remaining in rental accommodation in the intervening years. This initial claim was also untrue as conceded by her in her subsequent affidavit after challenge by the husband.
In July 2002 and being immediately after separation the husband commenced a relationship with Ms K. In 2003, Ms K acquired a property at Property C for a purchase price of $130,000. She borrowed $110,000 to finance the purchase. She claims the deposit funds were her own and all loan repayments have been made by her. Ms K had an interest in real property, cash savings and superannuation before meeting the husband in these proceedings and following the death of her own husband in 1999. The mortgage over the Property C property is currently in the sum of $70,000 approximately. The wife does not put before the Court any cogent evidence that this property was funded at the time of purchase by the husband nor anything more than her assertion that the husband must currently contribute to its outgoings, a matter denied by Ms K. The wife’s claim in her first affidavit “I know the $50,000 I gave him for the Property L property was used for the purchase” is clearly not accurate, and on her own evidence.
In 2007 the husband and Ms K commenced a de facto relationship. They have 2 children of that relationship namely [A] born [in] 2006 who is now aged 6 years and [B] born [in] 2008 who is now aged 4 years. Ms K has 2 older children, [C] aged 21 and [D] aged 16. All of the children reside with the husband and Ms K and are supported by them.
At the time of the parties division of their assets in October 2003 they had the following assets:
a)Property L, value $280,000 (husband) $330,000 (wife). The purchase price in December 2001 was $277,500 plus costs.
b)Property B, value $300,000 (husband) $420,000 (wife). The purchase price in November 2001 was $298,000 plus costs.
c)Property H, value $118,000 (husband) and $210,000 (wife). The purchase price in 1998 was $114,000 plus costs.
d)the husband’s van;
and
the wife’s station wagon (these vehicles being of approximately equal value)
e)[Z] Service business, value nil (husband), unknown (wife)
f)wife’s superannuation of $1,700 (at September 2003 as alleged by the wife with no discovery provided) or $20,000 as estimated by the husband.
g)husband’s superannuation of $14,900 (at June 2002)
At the time of division of their assets the parties had the following liabilities:
a)$514,000 in mortgage debt secured over the three properties
On the basis of the wife’s calculation of the value of the real properties she claims to have received 43% of the total asset pool at the time. However, the pool with no value attributed to the business and including superannuation equals $462,600 and she received $219,426 such that she received an apportionment of 47.5%. On the basis of the husband’s calculation of the value of the real properties she received the totality of the assets.
In June 2006 the husband and Ms K purchased real property situate at Property M for $273,000, borrowing $286,000 to fund the purchase. The husband is the sole registered proprietor.
The wife received a net amount of $249,290 from the sale of her property in Property R in 2008. She failed to disclose the existence of this property in her first affidavit. In fact following the sale of Property L the wife did not commence to rent thereafter to the present time but purchased another real property at Property R. The purchase price in April 2007 was $377,000 and the sale price in September 2008 was $431,000. She has since expended this net amount, she claims in the support of herself and the girls.
In paragraph 52 of his affidavit sworn 18 May 2012 the husband set out his and Ms K’s current assets and liabilities as follows:
| Assets | Estimated value |
| Property M – registered in my name (wife says $800,000) | $580,000.00 |
| Property B – registered in my name (wife says $780,000) | $480,000.00 |
| Property H – registered in my name (wife says $380,000) | $275,000 |
| Property C (“Property C”) – registered in Ms K’s name (wife says $310,000) | $180,000.00 |
| [Z] Business | NIL |
| 2005 Ford Falcon | $6,000.00 |
| Total Assets | $1,521,000.00 |
| Liabilities | |
| Mortgage debt – Property M | $263,000.00 |
| Mortgage debt – Property B | $251,000.00 |
| Mortgage debt – Property H | $120,000.00 |
| Mortgage debt – Property C | $70,000.00 |
| GE Mastercard GE Capital | $9,870.00 |
| GE Money | $8,200.00 |
| Esanda Finance | $9,000.00 |
| Total Liabilities | $731,070.00 |
| Total Net Assets | $789,930.00 |
| Superannuation | |
| [1] superannuation | $88,000.00E |
| [2] Superannuation Fund | $46,000.00E |
| Total Superannuation | $134,000.00E |
The wife estimates her current assets to be as follows:
| ASSETS – MS RIORDAN |
| Ms Riordan’s superannuation as at |
| Property D $ 325,000.00 $ 343,760.00 |
| Property D Loan ($ 250,000.00) |
| Ms Riordan’s credit card ($ 10,000.00) |
| TOTAL NET ASSETS $ 83,760.00 |
The husband claims to be in receipt of income in the sum of $1,100 per week gross from his employment with [omitted], together $14,130 in the financial year ended 30 June 2011 from the [Z] business and $450 each week by way of rental receipts. His partner is aged 44 years. She works part-time and receives an average weekly income of $250 each week. The wife receives income of $864 per week gross from her employment as a [omitted] and other funds by way of family tax benefit and rent assistance, together with a child support payment of $182 each week from the husband for the support of [Y]. The husband also supports his de facto wife in part and their two young children.
The husband’s salary with [omitted] in 2002 was approximately $50,000. It is now approximately $65,000. He commenced in that employment in 1996. In addition the husband earns income from the [Z] business. From October 2003 until February 2012 the husband made child support payments directly to the wife for the support of the parties children. This was an amount of $75 per week for each child. A total sum of $150 each week. With these monies the wife has been required to support the children including the payment of their private school fees at [school omitted] and associated expenses. The wife has now approached the Child Support Agency for assessment and collection and the husband has challenged the assessment made.
The wife deposes to being controlled by the husband and in fear of him. In 2004 she commenced divorce proceedings as a litigant in person. She did not seek legal advice and her evidence is that she was unaware of the time limitation to bring these proceedings. The parties attended the divorce hearing together despite the wife’s claims of being in fear of the husband.
The law
The wife makes her application pursuant to s.44(3) of the Act. That section is 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.”
Section 44(4) of the Act provides two alternative conditions without one of which, leave to institute the proceedings under subsection (3) cannot be given. Section 44(4) states:
“(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.”
Section 44(4) makes it a preliminary hurdle for the granting of leave that hardship (or the limited alternative referred to above in the case of maintenance) must be proved. The proof of hardship (or the limited alternative referred to above) is therefore necessary for the success of an application under s.44 of the Act. Upon proof of hardship, the Court is required to consider whether the leave should or should not be granted. It is an exercise of discretion.
In Whitford and Whitford (1979) FLC 90-612 at p.78,144 the Full Court of the Family Court of Australia stated:
“[O]n an application for leave under sec 44(3), two broad questions may arise for determination. The first of these is whether the Court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted. If the Court is not so satisfied, that is the end of the matter. If the Court is so satisfied, the second question arises. That is whether in the exercise of its discretion the Court should grant or refuse leave to institute proceedings.”
The time within which the wife had to bring her application for property settlement and spousal maintenance without the leave of the Court was to 18 July 2005. She instituted these proceedings in April this year being some six years and ten months out of time.
The matters the Court is required to consider on an application of this type are:
a)whether the wife has a prima facie case, being a reasonable claim which requires hearing; and
b)whether the wife would suffer hardship, that hardship being a substantial detriment to the wife were the application not granted; and
c)whether the wife has given an adequate explanation for the delay in bringing the proceedings which, of itself, is a ground not fatal to her application; and
d)what prejudice would be occasioned to the husband in the event the wife was to succeed in her application.
The wife has on her own evidence a prima facie case even if, on the hearing of the matter, she fails to establish that the valuations posed by her are not ones on which the Court can rely and/or the Court determines her current financial position is a result of the manner in which she has applied the funds received by her. There is hardship occasioned to her if the apportionment between the parties of their assets resulted in a less than equal distribution to her at a time when she was in receipt of the Centrelink benefits that she was, and had the primary care of the parties’ young daughters. There is hardship occasioned to her in not adjusting the parties significantly different financial circumstances if the facts of the case as found warrant it.
The wife has not given any adequate explanation of her delay, in particular when having regard to the length of the delay. However, I note this finding against her is not determinative of the application. Finally, I have considered at some length what prejudice is occasioned to the husband should the wife’s application be successful. In the last nearly seven years he has worked very hard, had two further children to support, and intermingled his finances with those of his de facto wife. He has also contributed to the support of his other two children. If his valuations are more accurate than the wife’s, then the wife received almost all of the parties’ assets. He will incur significant legal costs which place a financial burden and stress on his household. The wife does however satisfy the more limited grounds for a maintenance application given I find she would have been unable to support herself without an income tested pension at the relevant time, when looking to her income and actual receipt of such pension. I am further satisfied that she will suffer hardship if not allowed to prosecute her claim and having considered all of the matters required to be taken into account, determine the Court’s discretion should be exercised such that leave be granted.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Hartnett FM
Associate:
Date: 13 December 2012
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