Salmar and Bark

[2018] FCCA 2460

FEDERAL CIRCUIT COURT OF AUSTRALIA

SALMAR & BARK [2018] FCCA 2460

Catchwords:
FAMILY LAW – Application for leave to proceed out of time s 44(3) – husband has cashed in joint funds and kept proceeds for his own use, husband and wife have continued to negotiate for the years between divorce in 2010 and filing in 2018; parties have had a variety of issues about which they disagree – parties had agreement not to object to the other party filing proceedings out of time for a period, however, by their conduct the parties continued on with that agreement and no express statement was made by the husband that his period had come to an end – the wife has acted to her detriment – husband refused to pay half the rates on their joint block of land and prefers to let the Council sell up the block – long marriage – significant contributions by the wife to both child rearing and financial contributions including superannuation – husband and wife both (occupations omitted) – Court satisfied that hardship will be caused to the wife – and explanation for delay – Any detriment to the husband finite and amounts to alleged payment of higher interest on his own mortgage, however, husband makes no allowance for his own receipt and use of joint funds during the post separation years.

Legislation:

Family Law Act 1975, s.44(3)

Cases cited:

Whitford and Whitford (1979) FLC 09-612

Carlon and Carlon (1982) FLC 91-272

Gallo & Dawson (1990) 93 ALR 479

Althaus and Althaus (1982) FLC 91-233

Applicant: MS SALMAR

Respondent: MR BARK

File Number: CSC 253 of 2018

Judgment of: Judge Willis

Hearing date: 16 May 2018

Date of Last Submission: 16 May 2018

Delivered at: Cairns

Delivered on: 5 September 2018

REPRESENTATION

Solicitors for the Applicant: Vandeleur & Todd Solicitors

Solicitors for the Respondent: Self-represented

ORDERS

1. That pursuant to section 44 (3) of the Family Law Act 1975 (“the Act”), leave be granted to the Applicant Wife to institute property and/ or maintenance proceedings under the Act.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT CAIRNS

CSC 253 of 2018

MS SALMAR

Applicant

And

MR BARK

Respondent

REASONS FOR JUDGMENT

1. This is an application of Ms Salmar (the wife) seeking leave of the court pursuant to section 44 (3) of the Family Law Act1975 (Cth) (the Act) to proceed out of time in relation to instituting proceedings with respect to the property of the parties arising out of her marriage to Mr A (the husband).

2. The husband is opposed to the Court granting such leave.

3. The parties married on 1992.  They have one child of the marriage ([X]) born on 2001 and who turns 17 in 2018.  The wife was born on 1969 and is currently aged 49.  The husband was born on 1966 and turns 52 in 2018.  When the parties married in 1992 the husband (then 26) was working as a (occupation omitted) and the wife (then 23) worked as a (occupation omitted).

4. The parties separated in June 2008. Their only child [X] lives in an equal time arrangement with each party and is in his final year of secondary education. Through post separation negotiation and involvement of their lawyers, the parties resolved that [X] would live with each party on an equal time arrangement, though there are no formal orders.

5. Both parties work for the (employer omitted).  The wife is a (occupation omitted) and the husband is also a (occupation omitted) who at the time of the application was an “(occupation omitted)”.  They currently each earn just over $2,000.00 per week. Each party has Super Fund A, the wife lists the value of her Superannuation at $436,705.00 and the husband lists his Superannuation value as $658,742.55.

6. The parties were divorced on 29 August 2010. 

7. The wife first instructed her solicitors in July 2010.  It is not contested that the husband was initially also legally represented at that time and that for some years the parties through their solicitors engaged in correspondence and processes aimed to resolve their property dispute through their dialogue and processes (such as disclosure and obtaining valuations) and then mediation and without the need to commence proceedings.  It is not contested that on 25 August 2011 (prior to the 12 month limit post divorce) when the husband was legally represented, the wife’s solicitors wrote to the husband’s then lawyers stating in general terms that their client wished to continue with their negotiations and that if the negotiations did not result in a resolution of the property issues within the next few months and either party files an application or property application, both parties agree not to raise any objection for an application to proceed out of time. Confirmation was sought to this proposal and that their letter and the husband’s response would be considered open letters and able to be relied upon by either party in relation to any subsequent application for leave to proceed filed within the next 12 months.  On the following day being the 26 August 2011, the husband through his lawyers consented to the matter proceeding on the basis outlined by the wife’s lawyers. I will refer to this extended period as the moratorium period.

8. It is the wife’s case that despite the ongoing extensive attempts by her through her solicitor to resolve the property dispute with the husband  through offers and counter offers and proposals contained in Consent Orders (both whilst the husband has been legally represented and then later self represented),  it has not been possible to reach a final settlement.   The wife has given evidence of issues about which the parties have become bogged down in their negotiations including but not limited to the potential sale and or acquisition by one of the parties of a block of land on Property A (the Property A block) jointly owned.  The Property A block was purchased during the marriage in 2007 for the sum of $150,000.00.  The Property A block remains unsold and as I will explain elsewhere in these reasons, issues to do with the alleged agreement that each party pay one half of the rates remain in dispute as at the time of this application.

9. During the post separation period when the parties attempted to resolve the matter, it is not agreed that partial distributions have been made including distribution of a Bank 1 term deposit of $228,000.00 which was divided by agreement between the parties.  It is also not contested that another asset which existed at separation in 2008 namely a Bank 2 term deposit account was cashed in at a value of $32,000 in 2014 by the husband and retained solely by him.

10. The wife submits that it is clear that no agreement will be reached with the husband without formal property proceedings being on foot.

11. In general the wife submits that the delay is explained through on going negotiations to resolve the matter, that she has a prima facie case for a property settlement and that she will suffer hardship if leave is not granted.  The wife raises various issues of hardship including financial detriment that have occurred as a result of the husband not paying a contribution to the rates since 2013, possible loss of further funds from a forced sale of the Property A block by the Council and damage to her financial credit rating will follow from such litigation and the husband retaining joint funds to his own advantage.  The wife contends that the husband will not suffer any prejudice or hardship if leave is granted to institute proceedings.

12. The husband agrees that there has been a long period since separation in which the parties have been negotiating a final settlement.  He does not disagree with the wife’s history of exchanges of offers, disputes about a variety of issues, arguments about disclosure, and differences of opinion about the basis upon which the matter could be resolved and that there have been offers and counter offers going backwards and forwards for years.  The husband states that the wife has been legally represented from the start whilst there have been negotiations ongoing as described by the wife.  The husband says he has tried to settle and negotiate with the wife. He agrees that there was an agreement not to oppose the late filing of an initiating application, but that it has all taken too long and he has waited “long enough” and that it is now too late for the wife to commence proceedings.  The husband says he does not recall extending the period in which no objection would be made, but he agrees that the parties kept negotiating beyond the moratorium period (being a further 12 months after the statutory limit). The husband also agrees that after the moratorium period expired, he had a telephone call with his former mother in law (the applicant’s mother) in which she reached out to him and explained the distress that the applicant was under.  He said he stalled the proceedings as the mother stated she would bring the applicant to round table discussions.[1]

    [1] Paragraph 39 of the husband’ affidavit.

13. The husband submits I do not believe the applicant has suffered any hardship[2].  The husband agrees that one of the issues in dispute for years has been how to resolve the issue of splitting the ownership of the vacant 4000 square metre Property A block.  He confirms that there have been various settlement proposals in their negotiations regarding the Property A block and strongly submits that the wife has fluctuated in her position as to whether she wishes to retain the block and build a house herself on it, or agree to sell the block as was the husband’s position. The husband submits that The applicant changed their mind many times as to whether they wished to retain the land[3].  The husband argues that the wife has refused his reasonable offers to buy the Property A block at a price he says was discounted. He submits that both through his solicitor and when acting for himself, he has asked for the block to be listed for sale and the wife has refused to do so.  The wife denies that she has declined to list the Property A block for sale.  The husband seems to acknowledge that she has agreed to sell the block and that the real issue at the time was that he would not agree where the sale proceeds were to be held.  At paragraph 48 the husband states The one time the applicant wishes to list the property was such that the applicant’s solicitor would be in charge of the sale and that all proceeds go into the applicant’s solicitor’s trust fund.  I did not agree.

    [2] Paragraph 10 of his affidavit filed 27 April 2018

    [3] Paragraph 13 of his affidavit.

14. The husband confirms that in 2013 he decided that he would no longer pay one half of the rates on the block as had been happening for years post separation.   He says he did this in 2013 when the applicant refused to pay her half of the ongoing bills associated with the block, namely the cost of mowing.  The husband states I stated to the Applicant, I will pay for the mowing and you the applicant will pay the Rates.  I received no response[4].  It seems at this point the husband’s refusal to pay his one half share of the rates on the Property A block resulted (not surprisingly) in the Regional Council instituting debt collection procedures by appointing a Debt Collection Agency to recoup the sum representing one half of the outstanding rates not paid by the husband.  The wife remained as the only “joint owner” paying the rates.

    [4] Paragraph 15 of the husband’s affidavit.

15. The husband’s solution to this dispute and stalemate which continued for years and which remains the position at the date of the application, is that the block can be sold by the Council as far as he is concerned and the rates he owes can be taken out of the sale proceeds. He says that the proceeds can then be split 50/50.  The wife also raised this issue as being part of the reason that the property matters have not resolved.  The wife is the only one paying the rates since around 2013, the husband refusing to do so on the basis that he was paying for the mowing of the block.  The wife deposed that she asked the husband to produce a copy of the invoice for the mowing, of which she had been paying one half to the husband who organised the mowing. The husband is alleged to have refused to produce the invoice. The wife therefore refused to pay her one half until he did.  The wife says that the husband then stopped paying his one half of the rates.  The wife foreshadows an urgent application, if leave is granted, that the husband be ordered to pay his one half share of the Council rates outstanding so as to prevent the local council instituting court proceedings to recover the arrears of rates from both the wife and husband and to preserve the asset (estimated value by the husband $140,000 to $180,000 and $160,000 to $180,000 by the wife) from being sold up by the Council.

16. The husband also submits that if the Property A block is not sold by the Council, that the parties can go the District Court and seek an Order for sale and that the proceeds would then be divided 50/50.  He says that this will finalise the property settlement.

17. The husband also alleges that another issue of dispute between the parties which remains unresolved despite their ongoing negotiations is the issue regarding the wife receiving a sizeable inheritance during the marriage and prior to separation.  The husband says that the applicant received a sizeable inheritance while we were still married (prior to separating) a half share of $1.2 million from the sale of the family farm the other half share to the applicant’s brother.  This inheritance was in turn gifted to the applicant’s mother against my advice and without my consent[5]. The husband alleges he did not receive the necessary disclosure regarding the inheritance. (Similar allegations of non-disclosure regarding financial issues are made by the wife regarding the husband).  The wife submits that there is a dispute about the husband’s version of events as to the alleged inheritance and that she denies she actually received the inheritance, it being disclaimed by her and her sibling in favour of their mother.  The husband describes the issue of the wife’s alleged inheritance as being part of the “inaccurate” information that prevented a “simple equitable 50/50 split” and further that the $600,000 which the applicant gifted to her mother did not receive a mention.[6]

    [5] Paragraph 19 of his affidavit.

    [6] Paragraph 36 of his affidavit.

18. The husband submits that the wife’s delay in not reaching a final property resolution earlier and in her delay in wanting to now commence proceedings has caused him to suffer financial and emotional distress.   The husband submits that this occurred when he purchased a home of his in 2011/12 post separation. The husband submits that in doing so, given the failure of the wife to agree to sell the Property A block, he had to take out a mortgage greater than it would otherwise have been if there had been a property settlement. Therefore he argues that if there had been agreement to the Property A block being sold (either on the market or to the wife) or a final property settlement, he would have had his share of those funds.  Based on a value of $140,000 the husband argues he would have received $70,000.00 from the proceeds of sale of the Property A block which he has not received. Therefore he submits he has suffered financial distress in having to incur more interest on his home loan, than he would have otherwise had to pay if there had been a property settlement.  The husband says the mortgage he has is approximately $70,000.00 on his own house which he purchased for $160,000.00.  The husband accepts that he used the funds he retained from cashing in the  Bank 2 account of $32,000.00, accrued during the marriage, to reduce his own mortgage on his own new house.  Overall, the husband submits that he will suffer emotional and financial distress if the Court grants leave for the wife to institute proceedings out of time.

19. I have had regard to the material relied upon being the wife’s initiating application, financial statement and affidavit filed on 28 March 2018 and affidavit of Stephen Thomas Todd filed on 16 May 2018.  The husband’s material is his response, affidavit and financial statement filed on 27 April 2018.  

20. I have also had regard to the wife’s written outline of case and the authorities attached to those submissions, and the oral submissions of each of the parties.

21. The Wife is represented by her solicitor Mr Todd.  The husband is self-represented though he has been legally represented during some of the post separation period.

The Law.

The application pursuant to s 44 (3) and s 44(4)

1. Section 44(3) of The Family Law Act 1975 (“the Act”) provides that[7] where a divorce order has taken effect or a decree of nullity of marriage has been made, proceedings for property and spousal maintenance shall not be instituted after the expiration of 12 months, except by leave of the Court or with the consent of both parties to the marriage. The discretion to grant leave to commence proceedings is not wholly unfettered. It is subject to the requirements set out in s 44(4)(a) being satisfied. The Court must not grant leave unless it is satisfied that hardship would be caused to a party to the relevant marriage or a child if leave were not granted.

   [7]At 11 Fam LR 343 pere Mygh J, with whom Waalsh and

2. Turning to the law applicable to this application, in The Marriage of Jacenko 1986 11 Fam LR 341 the Full Court said; that the general principle is that the Court proceeds on the evidence of the applicant, which should be accepted unless it is inherently unbelievable or contradictory, although oral evidence may have to be called and cross –examination allowed however, because of lack of clarity in the applicant’s evidence.

Does the applicant have a prima facie case

1. There seems to be little disagreement between the parties about the factual history of their marriage.  This is a long marriage.  The parties were married on 1992 and separated in June 2008, a period of 16 years.  Each of the parties deposes to each of them making financial and non-financial contributions to the acquisition and preservation of the assets.  The parties have each worked as (occupations omitted); the wife has stepped in and out of (occupation omitted) due to her mothering obligations. It seems she has worked fulltime, part time and/or casual depending on the age of [X].   The husband, it seems, has worked as a (occupation omitted) continuously, and made non-financial contributions as he could manage.  The parties appear to be in good health, age wise there is a 3 year age difference, the wife being born in 1969 and the husband in 1966.  At this time, their incomes are about the same: around $2,000.00 per week.  The parties entered into a parenting plan in relation to the care of [X], and he lives on a week about arrangement with each parent. 

2. The single biggest asset of the parties at this point is their accumulation of Superannuation, with the husband having $511,564 as his current balance with Super plan 1 and $147,178.00 on plan 2, a total of $658,742. The wife has $436,705.00 on Super Plan 1 and $36,409.00 on plan 2, a total of $473,114.00. Together they have purchased real estate, shares and accumulated investment accounts.

3. The parties were divorced 29 August 2010. Proceedings ought to have commenced by 29 August 2011, so this application is 7 years and 7 months out of time.  During the whole of the post separation period from June 2008 up until the filing of her application on 28 March 2018, a further period of just under 8 years, the wife has continued to make financial and non-financial contributions. Her contributions have therefore spanned 24 years. Given the estimate of values for the remaining property including the Property A block, other assets and Superannuation, I am satisfied that the claim the wife would have is substantive and not merely trifling.

1. I am satisfied that if the wife was granted leave to proceed out of time pursuant to section 44 (3) of the Act, she would have a prima facie entitlement under the Family Law Act to a property division in relation to significant assets including Superannuation

Issue of Delay

1. In relation to the question of delay, in Althaus and Althaus Chief Justice Evatt at pp. 77,267,268[8] said:

   “The requirement that the applicant under sec. 44(3) give an explanation of the delay in bringing proceedings in my view requires a consideration of the whole period from the date of the decree nisi to the lodging of the application.  It requires the Court to consider whether the wife took all reasonable steps to pursue her claim or whether, on the other hand, she acted at any time as if she had no intention of proceeding or pursuing any claim at all against the husband.  It requires the Court to consider whether it can reach conclusions as to why the proceedings were started beyond the time lodged and whether those proceedings are attributable to default on the part of the applicant.

   Where hardship to the applicant is established and there is no question of prejudice to the respondent, the Court should not seek to raise artificial barriers if the applicant has behaved in a reasonably diligent manner in prosecuting her claim.”

   [8] Althaus and Althaus (1982) FLC 91-233.

2. In this matter it is clear that there have been extensive negotiations continuing for many years in order to reach a resolution of their property dispute without the need to instigate proceedings.  At the heart of the husband’s complaint about the wife now seeking leave to institute proceedings is his complaint that “they should have settled it by now” and that there have been ongoing delays with the offers, counter offers, disputes about issues such as the treatment of the wife’s purported inheritance, who is to retain the Property A block, how the cost of maintaining that land until final resolution is to be shared between the parties and how to deal with the wife’s payment of one half of the joint debt for rates at a time when the husband has refused to pay his half of their joint legal obligation.  Other issues have arisen such as a dispute over in which account the sale proceeds would be placed until final resolution: the wife nominating the trust account of her solicitors, the husband refusing to agree to this.  

3. It is also in evidence that, at least initially, there was joint agreement that no objection would be raised by either party as to property litigation being commenced out of time whilst the parties were negotiating.   That is clear from the exchange of letters by the lawyers of each of the parties confirming such terms.  There is reference in the agreement to “the next few months” and “whilst the parties are negotiating” and also that neither party would take objection for 12 months (being a further 12 months beyond the statutory limitation period).   This was an agreement that property proceedings could be commenced out of time, at least until 29 August 2012.

4. The husband says he has no recollection of ever extending the statutory period (Respondent’s Affidavit para 40). The husband will only say that in August 2011 he had a conversation with the applicant’s mother, who said that the applicant was most distressed.  The husband says he stalled proceedings as the applicant’s mother told him she would bring the mother to round table discussions.

5. That the statutory period was extended, however, is evidenced by the letters between the parties’ respective solicitors of 25 and 26 August 2011[9].  The husband’s evidence is that in October 2011 his solicitors sought a mediation[10] and he further says that in December 2011 he made another offer.[11]  It is clear that, during the moratorium period, whatever the husband now says, he regarded the matter as continuing which is consistent with the wife’s evidence of the existence of the moratorium.

   [9] See affidavit of Steven Todd.

   [10] Husband’s affidavit para 41

   [11] Paragraph 43.

6. Although there is no evidence before me that the parties did anything about extending the agreement, neither did either party suggest that the property negotiations were at an end. Indeed, the opposite is the case. The husband personally wrote to the wife’s solicitors on 18 August 2015 advising that he intended to mediate the matter. On the wife’s part, she persisted in her claim and, through her solicitors she maintained efforts to obtain proper disclosure, for example, regarding the husband’s cashing in of a jointly owned Bank 2 Investment account in September 2014.

7. The husband has not at any time put the wife on notice that the agreed period is at an end.  Nor has he given the wife any notice that she had a much smaller period to actually commence proceedings once it was agreed that the moratorium period had finished.  Practically speaking, if the parties were continuing to negotiate for the 12 month period, there must have been a small window of opportunity intended to occur at the end of the moratorium period to allow either or both to actually commence proceedings. 

8. It seems to me that the absence therefore of any express agreement about the day on which the moratorium period ended, has left each of the parties vulnerable. The husband stated many times in his submissions that “they have taken too long” and that the whole matter ought to have been resolved.  If the husband felt so strongly about the delay, I ponder why he did not commence the litigation himself.  When I asked the husband why he had not commenced litigation he replied that he never wanted to and he always wanted a mediated outcome.   Regrettably with so many issues in dispute, as in this case, it is not always possible to achieve a mediated outcome.  To achieve a mediated outcome, both parties have to be prepared to make compromises and sometimes let issues go.  It is clear from the negotiations which have continued for years in this matter, that there are a variety of issues which the parties are not able to agree upon and which are preventing settlement.  As I have said, it is not clear to me precisely when the moratorium period was to end and I am satisfied that the wife in particular, kept proceeding with efforts to resolve the matter, albeit there were periods when she was working and left an appointment to the next school holidays. The husband also has stopped giving his lawyers instructions for about four months at one point, but he did not ever expressly state through his lawyers or directly to the wife or her solicitors that the moratorium period was over.  In fact the husband does not mention the agreement to have a moratorium in his affidavit at all.  

9. The wife was entitled to take his acquiescence and continued negotiations, as suggestive that neither party was taking issue in extending the negotiating period on the same terms: that is neither party will take objection to the time limitation issue. It is arguable that as neither party expressly declared the period ended, and each party kept negotiating as per the initial agreement, that each party has acquiesced.

10. In any event, I am satisfied that for the duration of the period since the statutory limitation has expired, the wife has continued to seek to press her property claim and advance the matter to finalisation. If the husband intended to prevent the wife from commencing litigation when he says he “has waited long enough” I consider he ought to have expressly indicated that the time for resolving the matter by agreement was coming to an end, and to give the wife notice that she would need to file proceedings before the agreed new deadline.  That has not occurred. 

11. The husband has himself stated that it was never his intention to resort to formal litigation and that he always wanted to resolve the matter by mediation.  The husband in fact seeks orders as set out in his response that the parties attend mediation even if the application to proceed out of time is dismissed.

12. I accept prima facie that the wife has remained fully committed to trying to resolve the matter without the need for litigation commencing during the period of the delay and that the delay is explained by the ongoing negotiations and the subsequent disagreements and differences of opinion that have arisen in that time as to procedure and the substantive issues involved in resolving their property dispute.

S44 (4) – The issue of hardship

1. It is a condition precedent to exercising my discretion that the Court is satisfied that the applicant or a child of the marriage would suffer hardship if leave were to be denied.  Once hardship is established the Court may grant leave, but whether that leave is granted is another matter.  The extent of that hardship is one of the matters which together with all other relevant facts must then be taken into account[12].

   [12] Carlon and Carlon (1982) FLC 91-272 (Full Court – Ellis and Emery S.JJ, McGovern J:

2. The Full Court in Carlon and Carlon (supra) a case Mr Betts of Counsel referred me to, agreed with the Full Court decision in Whitford and Whitford (1979) FLC 90-612 at p 78,145:

   “If the Court is satisfied that hardship would be caused if leave were not granted, the Court may exercise the discretion which is conferred upon it by s 44(3) to grant leave or it may refuse such leave.  Section 44 (4) inhibits the granting of leave unless the requisite case is made out, but it does not provide that leave must be granted if the Court is satisfied that hardship would be caused.”

3. The case law indicates that the loss of the right to institute proceedings is not a hardship in itself, rather it is the consequence of that right.     Hardship in this context means substantial detriment[13].  The fundamental issue in any application for extension of time is whether this will enable the Court to do justice between the parties. 

   [13] Richardson (2000) FLC 93-012; Whitford (1979) FLC 90-612;

4. In relation to the general discretion to be exercised Justice McHugh in Gallo v Dawson (1990) 93 ALR 479, a case upon which the husband relied, referred to the need to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences to the parties of the grant or the refusal of the extension of time.

5. The discretion to exercise the discretion is unfettered, save for the requirement relating to hardship and whilst the discretion is unconditional, guidelines have been formulated which are not, however, absolute.  Each case depends on its own facts and each fact, including the severity of the hardship, must be given appropriate weight, as it affects the decision in that particular application. 

6. Their Honours in Carlon and Carlon[14] endorsed the approach to an application pursuant to s 44(3) set out in Whitford’s case (supra) at p 78,144 as follows:

   Thus, on 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. 

   [14] (supra)

7. On the evidence before me, the wife argues there are several issues arising on the wife’s case which point to hardship which will be suffered by her in the event that leave to proceed is not granted.

8. The wife says she will suffer detriment if the husband’s conduct in not paying half of the rates for the past 5 years (since 2013) is left to be resolved by the husband’s proposal which is to allow the Council to sell up the Property A block and have the rates owing taken out of the sale proceeds.  The husband proposes that the sale proceeds then be divided.  I accept that the husband’s proposal to resolve the ownership of the Property A land is radical and in the circumstances, somewhat self-serving.  He does not wish to keep the block.  He has not paid one half of the rates.  He seems to overlook the issue that the Council, if they take the necessary legal action, will likely be less motivated vendors than a private sale by either of the parties.  To that extent, sitting back and letting the Council sell up the block to pay the overdue rates unpaid by the husband is self-defeating and likely to diminish the property pool.  The wife will clearly receive no accounting for her additional contributions.  On both of these accounts, the wife will suffer detriment.   

9. The other issue raised by the wife is the issue of no accounting being made to her for the sum of approximately $32,000.00 the  husband retains as a result of him cashing in their shares in the their Bank 2 Investment Account.   This account was, on all of the evidence, the product of their joint endeavours during the marriage.  The husband has cashed in the investment account shares and retained the proceeds for his own use.  In the absence of  Family Law litigation being commenced, the husband has profited from cashing in and keeping what amounted to joint funds.  The husband has expressly agreed that he cashed in the funds and used the funds to put on his own mortgage on a house he purchased after separation. The husband has profited from taking control of the joint funds, cashing them in and using them for his own advantage.  Again, in the absence of Family Law proceedings, the wife will suffer financial detriment. 

10. The issue of the wife’s inheritance has been interpreted by the husband as the wife “gifting away” her inheritance.  It seems to me, from the complaint of the husband that there has “been no mention of this” in the offer of settlement, that he expects to see some accounting for that in his proposed settlement. The circumstances in which any inheritance was or was not received may have a bearing on any settlement under the Family Law Act. The parties are in strong disagreement on this issue. There is no other legal forum where the wife can have her case heard as part of an overall property settlement, as to the circumstances surrounding this particular inheritance. Without the opportunity to place her evidence before the Court, the husband’s position that she “gifted it away” and that it should be included in the property settlement prevails. I consider the loss of opportunity to have this issue determined by a Court, may likely result in a significant hardship to the wife.

11. During their long marriage, the parties each contributed to their Superannuation to provide for the financial security upon retirement.  The wife has accumulated Superannuation, however, given her child rearing role, she has not had the same opportunity to build up her superannuation as has the husband.  As can be seen from the disparity between their respective superannuation values, if the wife is not granted leave she will be deprived of the opportunity to advance her case for the equal distribution of the parties jointly accumulated superannuation during the period of the marriage, and also during the period post 2008 in which the wife has continued to make financial and non-financial contribution and up to the present time. 

12. The husband has two Super funds in his name, totalling $658,742. The wife also has two Super funds in her name, totalling $473,114.00. The difference of some $185,628.00 is substantial. In the absence of any Family Law litigation being commenced, the husband will retain for his exclusive use the full amount of his Superannuation and the wife will retain her superannuation. The husband has deposed in his material that the wife has stepped out of the work force for a period when [X] was born, and at times has worked part time pursuant to their role division during the marriage as to child raising and working in the paid workforce. The wife’s obligations in child raising have prevented her from earning the same salary as the husband and accordingly having the same superannuation. On the husband’s proposals of each keeping their own superannuation, the wife will be deprived of the opportunity to advance her case that the superannuation should be divided on principles according to section 79 of the Family Law Act. Without that opportunity the wife will be deprived of significant funds arising from what is otherwise an asset built up through the parties’ joint endeavours. This represents a further financial loss to the wife in the event that leave is not granted. There is no other forum that the wife can approach to pursue an equitable division of these significant Superannuation assets.

13. Overall I am satisfied that the wife will suffer quite significant hardship in the event that leave is not granted to proceed out of time.

Hardship/prejudice to the husband.

1. The husband argues that has suffered financial distress and emotional distress.  He points to the fact that he has had to pay more interest than he otherwise would have, on a mortgage he took out in order to acquire a post separation home for himself.  The husband’s position is that if the wife had agreed to sell the Property A block, then he would have had half of those funds which he estimates at $70,000.00 (being one half of the lowest estimate of $140,000 for the Property A block).  He says he would have used that money to reduce his mortgage by $70,000.00.  Therefore he has suffered financial distress.   I have taken account of this detriment. 

2. The husband says he has suffered emotional distress in not having the matter resolved.   On the material before me it would be fair to say that each of the parties have been frustrated and distressed that their arguments and differences of opinion have not been resolved for all of the years since separation, since the divorce in 2010, since the statutory period expired in 2011, and since the further moratorium period expired (whenever that was).

3. I have taken account of the husband’s contention regarding the additional interest he alleges has had to pay assuming he had been received  half of the proceeds of the Property A land sale proceeds.  That position assumes that it is the wife’s fault that the Property A land is not sold and that it would have sold. That would be a matter for trial but in any event it is a finite amount of money likely offset by other factors.  There are many competing factors at play in the post separation period in terms of the parties respective financial and non-financial contributions, and it may be that the husband’s “increase in the amount he had to pay interest on“ is more imagined than real when looking at the overall position. 

4. The husband on his own evidence had the sole use of joint funds from the cashed in Bank 2 Investment account of approximately $32,000.00 which he directed to reduction of his own mortgage he took out post separation to acquire a home in his own name.  It could be argued that the wife has not had the benefit of her share of that money as it has been retained by the husband and she has suffered a loss of receiving interest she might have had, along with the loss of not having those funds to use herself.  The husband bought his own home he says in 2011/12 at a time it seems to me, that the parties were still negotiating and the husband knew the Property A block was not sold.  The statutory limitation period following their divorce did not expire until August 2011.  Then comes the issue of the moratorium for a further period of at least 12 months. I am not satisfied that the position is as simple as the husband suggests in terms of his argument that the wife’s actions have resulted in him paying interest on a higher amount.  The husband has in fact kept the full proceeds of the cashed in shares from Bank 2 Investment for his own use to reduce his own mortgage.  He used what were joint funds for his own advantage, not detriment. The husband has also enjoyed a period of 5 years of not paying the rates on their jointly owned land at Property A. He says he paid for the mowing, but it seems there is no evidence that this cost as the same as one half of the rates.

1. I have had regard to the husband’s alleged hardship or “economic distress” as referred to by him.

Conclusion

1. Having regard to the leading authorities[15] and the circumstances of this case, I am satisfied that leave should be granted for the wife to institute her proceedings out of time.  It is abundantly clear that the parties have been trying without success, to resolve this matter without resorting to litigation and that both of the parties have not wanted to initiate litigation. It is this resolve that has in fact lead to them being in the situation in which they find themselves in 2018. I am satisfied that there is a valid explanation for the delay between the statutory period of 12 months after the divorce and up to the date of filing.  Each of the parties have persisted with trying to secure a negotiated settlement probably much longer than has been productive. 

   [15] The leading authorities are referred to in the wife’s case outline.  I have had regard to  but do not repeat all of the authorities.

2. I am satisfied that the wife has a substantial claim to prosecute. I am satisfied that she will suffer hardship if leave is not granted. Regrettably during the post separation period, the husband has cashed in the Bank 2 Investment Account and kept the proceeds, thus depriving the wife of what would otherwise be her entitlement under the Family Law Act. Added to that the husband, has used the funds for his own benefit to reduce his own post separation mortgage acquired to buy himself another home. Similarly, the dispute which arose when the wife requested to see the invoices for the mowing of the Property A block, which were never produced by the husband, has resulted in the husband deciding to leave all the rates payments to the wife. The wife has paid her half of the rates. The husband’s actions in not paying his half of the rates has left the wife in a precarious position and possible forced sale by the Council, likely for a more conservative amount than might be obtained at a private sale. The husband’s position is that the outstanding rates he has failed to pay for years can be taken out of the sale proceeds and then the remaining funds will be split. This will also cause the wife to be deprived of any accounting for the rates she has paid over and above payments made by the husband. I accept also that this type of sale by the Council is likely to affect the credit rating of the wife (and the husband though he does not appear to raise this as an issue for him).

3. The husband’s other solution to the division of the Property A block suggested by the husband is that an application be made to the District Court “to sell” the Property A block. The husband, rather naively in my view, does not seem to appreciate that an application for the appointment of a statutory trustee for sale will cost each of the parties many thousands of dollars.  Mr Todd, a very experienced solicitor in general practice in Innisfail, advised the Court that fees of upwards of $25,000.00 are not unusual, on top of the other costs of sale. Whatever the cost is, that solution does not provide for an equitable distribution of the sale proceeds and in my view would result in further detriment to the wife.

4. The issue of the husband simply retaining joint funds is not addressed at all by the husband who has enjoyed the benefits of the full amount of the account which was built up during the marriage.

5. The other significant outcome of the wife not being able to institute proceedings is that the wife will be deprived of the opportunity to claim a percentage division of the single biggest asset which has built up during the marriage, the husband’s superannuation. 

6. I have considered the hardship and detriment to the husband.  His alleged financial distress in having to pay more interest than he otherwise would have taken an extremely narrow view of the whole of the circumstances, including that he has not had to pay the rates on the Property A property for years and he has kept for his sole benefit the cashed in funds from the joint account with the Bank 2. If the husband was getting frustrated with the delay or negotiations, he ought to have expressly called an end to the moratorium period, given the wife a set period in which to file so she knew where she stood. Finally nothing has prevented the husband from instigating proceedings, so to some extent he is the author of his own frustrations. I am satisfied that the wife’s hardship is greater than any alleged detriment that the husband may suffer.

7. It seems to me that to the extent that the husband wants this whole uncertainty and arguing to end and for Orders to be made finalising their property matter, his opposition to the wife’s application is inexplicable, save and except for the financial advantage he will receive if no proceedings are initiated.

8. I therefore intend to exercise the Court’s jurisdiction to grant leave pursuant to s 44(3) of the Family Law Act to enable the wife to institute proceedings pursuant to s 79 of the Act.

I certify that the preceding sixty-five (65) paragraphs are a true copy of the reasons for judgment of Judge Willis

Date: 5 September 2018