Shale and Woolley

[2016] FCCA 3117

FEDERAL CIRCUIT COURT OF AUSTRALIA

SHALE & WOOLLEY [2016] FCCA 3117

Catchwords:
FAMILY LAW – Property – spousal maintenance – applications out of time – leave to commence proceedings out of time – hardship – leave not granted.

Legislation:

Family Law Act 1975, ss.44, 72, 79, 118

Cases cited:

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541

Sharp & Sharp [2011] FamCAFC 150
Whitford & Whitford (1979) FLC 90-612

Applicant: MS SHALE

Respondent: MR WOOLLEY

File Number: PAC 3510 of 2014

Judgment of: Judge Obradovic

Hearing date: 23 November 2016

Date of Last Submission: 23 November 2016

Delivered at: Parramatta

Delivered on: 7 December 2016

REPRESENTATION

Appearing for the Applicant: Mr Bennett

Solicitors for the Applicant: Foulsham & Geddes

Appearing for the Respondent: Ms Payne

Solicitors for the Respondent: Sharon Payne Family Lawyers

ORDERS

1. The Amended Initiating Application filed on 22 November 2016 is dismissed.

2. All outstanding issues are removed from the list of cases awaiting finalisation.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 3510 of 2014

MS SHALE

Applicant

And

MR WOOLLEY

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 27 September 2016, the wife filed an Initiating Application seeking orders as follows:

   Final Orders Sought

   1. Division of properties in QLD and Victoria

   2. Division of superannuation (Woolley, C)

   3. Return of inheritance money (Shale, H)

   4. Division of (business omitted)

   5. Division of (business omitted) ((omitted))

   Properties at Property B and Property M

   Interim or procedural Orders Sought

   1. This application is slightly overdue and I ask that the Court allow the application as current events have prevented an earlier application.

2. That Application was supported by an Affidavit of the wife filed on the same date, the entire body of which read:

   1. Division of the Property M and Property B properties

   2. Division of the superannuation

   3. Return of the inheritance money

   4. Division of the (business omitted) business

   5. Division of the (business omitted)

   6. Division of the Woolley Family Trust

3. A Financial Statement was filed by the wife on the same date. That Financial Statement is referred to later in these Reasons but suffice to say that it disclosed net assets of over $900,000.

4. At the time of filing her documents, the wife was not legally represented. She did not file an Affidavit of Service.

5. The wife’s Application first came before the Court in a busy duty list on 25 October 2016. On that day, the husband appeared unrepresented. He indicated to the Court that he did not consent to leave being granted for the proceedings (as then filed) to be commenced out of time. The husband submitted that the parties did not have any joint assets, and what assets there had been were either sold and/or divided up between them in an informal manner.

6. On 25 October 2016, the application for leave to commence proceedings out of time was set down for hearing at 9am on 23 November 2016. The wife was granted leave to file an Amended Initiating Application and Affidavit by 4pm on 4 November 2016, same effectively being a guillotine order. The husband was directed to file and serve a Response and Affidavit in answer to the leave application by 4pm on 11 November 2016.

7. On 11 November 2016, the husband filed an Affidavit affirmed on the same day. On 14 November 2016, the husband filed a Response seeking an order dismissing the Initiating Application and an order pursuant to s118(1)(c) of the Act permitting the wife to only institute proceedings against the husband with leave of the Court.

8. On 22 November 2016, at 2.45pm[1] the wife filed electronically an Amended Initiating Application, Amended Financial Statement and an Affidavit of the wife dated 22 November 2016. Those documents were served on the husband’s solicitors at 3.23pm on 22 November 2016. A Notice of Address for Service was filed for the wife by her solicitors on 21 November 2016.

   [1] 1hour and 15 minutes before the close of business of the Registry, the day before the matter was set down for hearing

9. When the hearing of the matter commenced, the wife, through her lawyers, made an oral application for leave to rely on the documents filed by the wife on 22 November 2016. No Affidavit in support of that leave was filed, instead, the wife sought to rely upon the Affidavit which was filed on 22 November 2016, and in particular an Annexure to that Affidavit which was a statement made by the wife. The Affidavit itself contained 29 paragraphs, purporting to address various matters. It is entirely unclear why the statement of the wife was annexed to the Affidavit instead of forming part of the body of the Affidavit. In any event, the leave as sought was granted and the hearing of the wife’s application to commence proceedings out of time was then heard.

10. Importantly, the orders sought in the Amended Initiating Application differed significantly from the orders sought in the Initiating Application, to which the father had responded by way of his Affidavit filed on 11 November 2016. The relief sought pursuant to the Amended Initiating Application was as follows:

    Final Orders Sought

    1. Following full and frank disclosure by the respondent of all of his financial circumstances, the applicant be given leave to file and serve a further amended initiating application seeking orders pursuant to Section 79.

    Interim or Procedural Orders Sought

    1. The applicant given leave to commence these proceedings out of time.

    2. The respondent to file and serve a sworn financial statement within 28 days.

    3. The respondent pay the applicant spousal maintenance of $250 per week.

    4. The respondent pay the applicant, by way of partial property settlement, the sum of $20,000 within 28 days.

11. The wife specifically relied upon paragraphs 7, 11, 18, 20, 21, and Annexure “A” to her Affidavit filed 22 November 2016, however, in reaching the decision herein, the Court had regard to the entirety of that Affidavit and the Amended Financial Statement filed on 22 November 2016. The Court also had regard to the Affidavit of the wife filed 27 September 2016 and the Financial Statement filed by the wife on 27 September 2016.

12. The husband relied upon his Affidavit filed on 11 November 2016 in support of the relief he sought, namely that leave to commence proceedings not be granted and the application be dismissed.

The relevant legislative provisions

1. Section 44(3) of the Act relevantly provides that proceedings for property adjustment orders and spousal maintenance must be commenced within 12 months of the divorce order becoming final.

2. Furthermore, s44 of the Act 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.

3. In Brisbane South Regional Health Authority v Taylor[2] Justice McHugh said:

   [2] (1996) 186 CLR 541 at 551 - 553

   The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that “[w]here there is delay the whole quality of justice deteriorates”. [foot notes omitted] …

   A limitation period should not be seen therefore as an arbitrary cut-off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated…

   A limitation provision is the general rule; an extension provision is the exception to it …

4. In Sharp & Sharp[3] the Full Court of the Family Court held that there was nothing to suggest that this expression of the law as stated by Justice McHugh in general is not entirely applicable to a consideration of s44 of the Act.

   [3] [2011] FamCAFC 150 at [14]

5. In Whitford & Whitford [4]the Full Court noted that while s44 intends to confer power to grant leave to avoid hardship, the…

   “power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.”

   [4] (1979) FLC 90-612 at 78,146

6. Section 44(4) provides the criteria by which the Court must be satisfied prior to exercising its discretion to grant leave pursuant to an application brought under s 44(3).[5]

   [5] Supra n.3 at [16]

7. In accordance with s 44(4)(a) the Applicant wife must establish that hardship would be caused to her if leave was not granted. If hardship is established, the Court must nevertheless be persuaded that the discretion should be exercised in her favour.[6]

   [6] ibid

Hardship

1. Hardship for these purposes is more than the loss of a right to commence proceedings.  It is the consequences attending the loss of the right to commence proceedings that constitutes hardship.[7]

   [7] Sharp at [17]

2. In Sharp the Full Court said:

   [18] In assessing hardship in this context the well established test is that the applicant must have a prima facie claim worth pursuing or a “real” probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship. However, whether or not hardship exists is not to be assessed only by reason of the monetary value of the probable order to be made if leave were granted.

3. In considering the meaning of hardship, in Whitford[8] the Court said:

   ... The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits.  If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted … If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.

   … As a general proposition it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship.  Similarly, where the costs which the applicant will have to bear himself or herself are about as much or more than what the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted.  But otherwise we find no warrant in either subsec. 44(3) or 44(4) for saying that the right or entitlement lost must be a substantial one. (emphasis in original)

   In an appropriate case, and depending on the circumstances of the applicant or the children, hardship may be caused by the loss or deprivation of something which is of comparatively small money value … 

   [8] at 78,144-5 quoted by the Full Court in Sharp at [19] – [21]

4. It will only be if the wife is successful in demonstrating hardship of the type discussed that she must then persuade the Court that in the exercise of its discretion, leave should be granted.

Discretion

1. In Whitford the Full Court continued[9]:

   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 … Due weight must be given to the expressed legislation intendment that ordinarily, proceedings should be commenced within a year from a date of the decree nisi, and the general policy of the Act which appears from sec. 44(3) and sec. 81 that financial relationships between the spouses should, wherever possible be brought to finality within a reasonable time after the dissolution of the marriage.  Hence, such matters as the length of the delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay, and the strength on the merits of the applicant’s case, and the degree of the hardship which would be suffered unless leave were granted, are matters affecting the exercise of the discretion.  These matters are not necessarily the only ones…

   On the other hand, ss 44(3) and 44(4) point to the conclusion that the legislature intended to confer power on the court to grant leave to institute proceedings in order to avoid hardship. Having regard to the nature of the jurisdiction which this court exercises, this power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within a year from the divorce

   [9] At 78,145 to 78,146

Discussion

1. In her Affidavit filed on 22 November 2016, the evidence in respect of the substantive application (i.e. for property adjustment orders pursuant to s79 of the Act) is very limited. This second Affidavit was filed by the wife after she was given the opportunity to file further evidence in support of her Initiating Application. The wife’s first Affidavit, filed with the Initiating Application, contains no evidence whatsoever, but is rather a list of the orders which are sought.

2. The extent of the wife’s evidence is as follows:[10]

   [10] And I paraphrase

   a)The parties commenced a relationship on (omitted) 1992 and were married on (omitted) 1999.

   b)The parties separated on 30 November 2011.

   c)The parties were divorced on 4 August 2015.[11]

   [11] The date of divorce is in fact 10 August 2015, but both parties depose to it being 4 August 2015

   d)There are three children of the marriage.[12]

   [12] I made final parenting orders in this matter on 28 September 2016. Those orders were made after a contested hearing. The children live with the husband pursuant to those orders, and spend very limited time with the wife being 2 hours per week

   e)During the marriage the parties purchased and sold a number of properties.

   f)The wife received $40,000 by way of $400 weekly payments from the husband to “compensate” the wife “for exiting (business omitted)” - a business which formed part of the matrimonial assets at separation. The wife states that “at no point did I believe that [this]… arrangement… was anything near full and final settlement of matrimonial assets”. The wife says that she was primarily responsible for setting up running (business omitted) in 2007-08.

   g)The wife asserts she “made financial and non-financial contributions” to the real properties held in the husband’s name during the parties’ relationship. She provides no particulars of those contributions whatsoever.

   h)The wife asserts she made “contributions to the upkeep/welfare of the family during the marriage”. Once again, no particulars of those contributions are deposed to by the wife.

   i)The wife annexes an Assessment for Child Support dated 1 November 2016, which shows that the wife has been assessed as having to pay $0 to the husband.[13]

   j)The wife asserts that given her health issues and significantly reduced earning capacity, she will not have the means to support herself in the future without an order being made in relation to the property in the Respondent’s name. This of course is not evidence, but rather a submission.

   k)In respect of her asserted mental health issues, the wife annexes a two page document from (omitted) Medical Practice, being a letter dated 16 September 2016 to Ms J that is a referral for psychology counselling. The first page of the letter lists under the heading “Current Medical Problems” the following: uterine fibroids,[14] panic attacks,[15] nephrolithiasis,[16] and anxiety disorder[17]. The first page also lists a number of medications which the wife is currently said to be prescribed. The second page of that document is a mental health plan. The annexure itself is not a treating report, it is not an expert’s report, and it certainly does not give any prognosis or any opinion about how the wife’s current medical issues might impact upon her earning capacity.

   l)The wife asserts:

   If my application to file these proceedings out of time is denied then I would suffer significant financial hardship because I would be deprived of the proceeds of matrimonial assets.

   Once again, this is not evidence, but rather a submission.

   m)The wife asserts that she is in receipt of Centrelink benefits (being a Newstart Allowance), that she runs a (omitted) business and that if she receives more than $400 per week from her income her Centrelink payment reduces. In her Financial Statement, the wife estimates her income from the business at $390 per week although her affidavit make it clear that she sometimes makes $650 per week from the business, albeit the work is infrequent.[18] The payments from Centrelink are estimated at $310 per week. The wife’s Financial Statement discloses weekly expenditure of $545.[19]

   [13] The annexure indicates that the father has 86% care percentage for X and Y. The annexure notes that the “care percentage” is “usually related to the number of nights” the person assessed cares for the children. If this is so, then the assessment is incorrect, as the father, pursuant to the orders I made, cares for the children 100% of the nights. I simply note these matters, and do not make any findings in this regard as the matters are not in any event relevant to the issues I have to decide. 

   [14] With the date 12/2011 noted

   [15] With the date 3 October 2012 noted

   [16] With the date 12/2012 noted

   [17] With the date 2014 noted

   [18] It is not clear why the work is said to be infrequent and it could be for all sorts of reasons, including that the wife is limiting her income in order to ensure that she receives the Centrelink benefits. It could also be, although there is no evidence on which such a finding could be made, that her income is limited because of her limited capacity to work due to her mental health issues. If this was the case however, it is likely that the wife would be in receipt of a disability allowance rather than the Newstart allowance. Once again due to there being very limited, if any evidence on these matters, no findings are made or could be made.

   [19] The Court is of course aware of its obligations under s75(3)

3. The wife also complains about the husband not providing financial disclosure.[20]

   [20] The husband has sworn and filed an affidavit in these proceedings, setting out the parties assets at separation and how those assets were distributed post separation.

4. The wife does not seek any final orders for property adjustment in her Amended Initiating Application, rather she seeks leave to file a further amended initiating application seeking orders pursuant to s79 ‘following full and frank disclosure by the respondent of all of his financial circumstances’. These are the orders the wife seeks after having the benefit of legal advice and the benefit of filing an Amended Initiating Application. The application itself is prima facie an abuse of process.

1. The husband’s evidence may be summarised as follows:

   a)The parties were married on (omitted) 1999, and they separated in October 2011. The husband moved out of a rental property where the family lived in December 2011. The parties were divorced on 5 August 2015.[21] There are three children of the relationship.

   b)In 2008, the parties sold the family home, netting $240,000 and purchased two properties as investments and a share package. The properties were located at Property B and Property M. The share portfolio was purchased using a $100,000 loan. All investments were held in the husband’s name for tax purposes.

   c)At separation the assets and liabilities of the parties were as follows:

   Assets:

   [21] As noted earlier this is not the date of the divorce order, the parties were divorced on 10 August 2015

Description	Ownership	Value
Property B property	Husband	$520,000.00
Property M property	Husband	$325,000.00
(omitted) share portfolio	Husband	$90,000.00
(business omitted) business	Husband	Nominal

Liabilities:

Description	Ownership	Value
Property B	Husband	$470,000.00
Property M property	Husband	$350,000.00
(omitted) share portfolio	Husband	$100,000.00

Superannuation:

Description	Ownership	Value
(omitted) Super	Husband	$48,486.00
(omitted) Super	Wife	$14,031.00

d)The parties also had approximately $5,000 in savings.

e)Six months after separation, the parties reached agreement with respect to property division. The wife was to be paid $40,000 by way of $400 weekly instalments[22], that the husband would retain the properties and be solely responsible for the debt. Furthermore, the husband was to pay the wife an additional $10,000 upon the sale of the Property B property. Savings were to be divided equally and each would otherwise retain their respective assets and liabilities. Household chattels were divided after agreement was reached between the parties.

f)The parties signed Statutory Declarations evidencing in part the above agreement.[23] The wife was paid $400 by weekly instalments until January 2014. [24]

g)The Property B property was sold on 8 June 2012, with the net proceeds of sale being $15,389.00. The wife was paid $10,000 from the sale proceeds.

h)The Property M property was sold on 28 May 2015 for $355,000. It was purchased in 2008 for $440,000.

i)The share portfolio was sold on 2 July 2012, at a loss for $86,000. No dividends were ever paid to the husband. [25]

j)The husband re-married on (omitted) 2016.

k)At present, the husband together with his wife owns motor vehicles and a parcel of land near (omitted) which was purchased in August 2015. That parcel of land is in the process of being developed.

l)The wife has paid $30 per month in child support since separation. She was assessed to pay $466 per month in July 2015.

[22] For the business (business omitted);

[23] The statutory declaration made by the wife states: “My separation from Mr Woolley in October 2011 was amicable. I no longer have any involvement in the Woolley Family Trust or the (business omitted) business.”

[24] The payment of $40,000 is agreed to by the wife in her evidence

[25] The husband was paying $800 per month in interest on the loan for the share portfolio in the interim

1. The wife does not provide any particulars of her contributions, financial or non-financial, she does not provide any meaningful evidence of what the assets during the marriage or at separation were, nor indeed does she say what an appropriate property adjustment order might be and for what reason.

2. The husband at least provides some evidence of assets and liabilities, during the relationship, at separation and post separation.

3. The Court is satisfied that at separation the parties’ assets were approximately $15,000 of non-superannuation assets and $60,000 in superannuation assets. The Court is satisfied that the wife retained her superannuation of approximately $14,000 and received a further $50,000 by way of informal property settlement between the parties. On the evidence before the Court, this would equate to the wife receiving $64,000 of an available $75,000, or rather over 85%.

4. The Court is not satisfied that the wife made any post separation contributions to any of the assets which the husband retained at separation.

5. As such, the Court is not satisfied that the just and equitable requirement for a property adjustment order is prima facie met by the wife.

6. In relation to the issue of interim spousal maintenance, which the wife seeks as part of the interim orders contained in her Amended Initiating Application, the Court finds that the wife’s evidence does not prima facie meet the threshold issues contained in s72.

7. Having regard to the evidence in the wife’s case even at its highest and coupled with the husband’s evidence, the Court is not satisfied that the wife has established any hardship in the requisite sense.

8. Although the Court does not need to consider the issue of discretion as it has made a finding that the wife has not established hardship in the requisite sense, for completeness and for the benefit of the wife understanding fully the reasons for the orders which are made, the Court has taken the time to address the issue of discretion as well.

9. In respect of the issue of discretion, the following are relevant matters which the Court has taken into consideration:

   a)The parties were divorced on 10 August 2015, having been separated since October 2011.

   b)The wife commenced these proceedings on 27 September 2016, some six weeks after the expiry of the 12 month limitation period. While a six week delay of itself is not significant, in the scheme of a 12 month limitation period it is not a trifling delay.

   c)When one considers the separation date, the proceedings were commenced almost 5 years after separation. This is a significant period of time, although in terms of the statutory limitation period not a matter which is of any relevance. However, in terms of discretion to allow proceedings out of time, it is a factor which I take into consideration, albeit it is not accorded significant weight. 

   d)The wife explains the delay in not commencing proceedings until after the expiration of the statutory limitation by saying that she was immersed in parenting proceedings and did not have any time to deal with the property matters in the period after the divorce was made. In this regard, the Court notes that the parenting proceedings were on foot since 29 July 2014 with the final hearing on 25 and 26 July 2016. The wife says that she was self-represented for a good deal of those proceedings, and was not fully aware of what she needed to do in relation to property matters. Importantly the Court notes that the wife does not say that she never received any legal advice in respect of property proceedings, or that she was not aware of the limitation period. Thirdly, the wife says that she has been struggling with anxiety and adjustment disorder, which has impacted on her organisation, that she has difficulties in finding employment and keeping her business going. The Court’s findings about the evidence dealing with the wife’s health issues are referred to earlier in these Reasons. Lastly, the wife says that the culmination of these factors meant that she was not able to file her Initiating Application out of time.[26] This is not a sufficient explanation of the delay. 

   e)The prejudice to the husband in leave being granted was not the subject of specific submissions or evidence. However, the Court notes that on the husband’s case there has already been an informal property distribution between the parties and there is no more property that could be the subject of any order pursuant to s79. Therefore, on the husband’s case the cost to the husband in having to answer proceedings would cause a significant prejudice when ultimately there is not likely to be any property adjustment.

   [26] The wife annexes to her Affidavit a statement by the wife, which is said to set out some other aspects of the delay. That statement only goes to the delay issue post the filing of the Initiating Application on 27 September 2016, that is, it attempts to address the delay in not filing the Amended Initiating Application and Affidavit in accordance with the orders made on 25 October 2016. That statement also contains some other assertions, the relevance of which is entirely unclear and refers to an Initiating Application which does not appear to be before Court.

10. The degree of hardship to the wife in leave not being granted is already the subject of findings earlier in these Reasons.[27]

    [27] See paragraph

11. As is clear from the earlier paragraphs, the Court has particularly considered the delay, the explanation for the delay, the prejudice to the husband, the strength of the wife’s case and the degree of hardship likely to be suffered by the wife if leave was not permitted, these being the relevant matters to the exercise of the Courts discretion.[28]

    [28] Albeit not necessarily being all of the relevant matters which a Court might consider; See Whitford discussed at paragraph 24 above

12. Having regard to the above, the Court is not persuaded that it should exercise its discretion to allow these proceedings to be commenced out of time, both in respect of property adjustment and in respect of spousal maintenance, even had the issue of hardship been established.

Conclusion

1. In all of the circumstances and for all of the reasons set out above the application for leave to commence proceedings out of time is dismissed.

2. In the Response filed 14 November 2016, the husband seeks an order pursuant to s118(1)(c) of the Act. That sub-section was repealed following the amendments made in 2012. Therefore, that application must fail.

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Obradovic

Date:  7 December 2016