Skelton & Lindop

Case [2022] FedCFamC1A 47

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Skelton & Lindop [2022] FedCFamC1A 47   

Appeal from: Skelton & Lindop [2021] FedCFamC2F 196
Appeal number(s): NAA 61 of 2021
File number(s): SYC 7487 of 2018
Judgment of: AUSTIN J
Date of judgment: 4 April 2022
Catchwords: FAMILY LAW – APPEAL – Leave to appeal – Where the primary judge dismissed the appellant’s application pursuant to s 44(6) of the Family Law Act 1975 (Cth) (“the Act”) to bring an application for de facto property settlement out of time – Where the decision of the primary judge was incongruent – Where the decision is attended by sufficient doubt to warrant appellate scrutiny and a substantial injustice would result if leave were refused – Where it was not open to find the appellant failed to demonstrate she would suffer hardship if deprived of the chance to bring her property settlement claim – Where it was found the delay was not substantial – Where it was found the respondent could not point to any real prejudice he would suffer in having to meet the claim out of time – Leave to appeal granted – Appeal allowed – Orders of the primary judge set aside – Discretion re-exercised – Order made granting the appellant leave pursuant to s 44(6) of the Act to prosecute her claim for property settlement relief under Pt VIIIAB of the Act – Parties granted costs certificates in relation to the appeal.
Legislation:

Family Law Act 1975 (Cth) Pt VIIIAB ss 44(6), 90SF, 90SM, 117

Federal Proceedings (Costs) Act 1981 (Cth)
Cases cited:

Althaus & Althaus (1982) FLC 91-233; [1979] FamCA 47

Arcand & Boen (2021) FLC 94-046; [2021] FamCAFC 155

Australian Broadcasting Commission v O’Neill (2006) 227 CLR 57; [2006] HCA 46

Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1

Carlon & Carlon (1982) FLC 91-272; [1982] FamCA 60

Edmunds & Edmunds (2018) FLC 93-847; [2018] FamCAFC 121

Emerald & Emerald (2018) FLC 93-870; [2018] FamCAFC 217

Gadzen & Simkin (2018) FLC 93-871; [2018] FamCAFC 218

Hall & Hall (1979) FLC 90-679; [1979] FamCA 50

Whitford & Whitford (1979) FLC 90-612; [1979] FamCA 3

Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34

Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30

Sharp & Sharp (2011) 50 Fam LR 567; [2011] FamCAFC 150

Warren v Coombes (1978) 142 CLR 531

Welland & Hawthorn [2021] FedCFamC1A 43
Number of paragraphs: 41
Date of last submission: 31 March 2022
Date of hearing: 22 March 2022
Place: Newcastle (via video link)
Counsel for the Appellant: Mr Moutasallem
Solicitor for the Appellant: Platinum Lawyers
Solicitor for the Respondent: Mr Longworth
Solicitor for the Respondent: Pearson Emerson

ORDERS

NAA 61 of 2021
SYC 7487 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION
BETWEEN:

MS SKELTON

Appellant
AND:

MR LINDOP

Respondent

ORDER MADE BY:

AUSTIN J

DATE OF ORDER:

4 APRIL 2022

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AGLC
Skelton & Lindop [2022] FedCFamC1A 47
Case
[2022] FedCFamC1A 47
Decision Date

CaseChat Overview and Summary

The appeal, brought pursuant to s 44(6) of the Family Law Act 1975 (Cth), concerns the refusal of the primary judge to grant leave for the appellant, Ms Skelton, to bring an application for de facto property settlement out of time. The primary judge dismissed the appellant’s application for leave on the basis that she had failed to demonstrate that the deprivation of the opportunity to bring a substantive property settlement claim out of time would cause her hardship. Ms Skelton appealed against the primary judge’s decision, arguing that the primary judge’s reasoning was incongruent and that she had demonstrated sufficient likelihood of success to justify leave to proceed out of time.

The court was required to determine whether the primary judge’s decision was incongruent and whether a substantial injustice would result if leave to appeal were refused. The court also had to consider whether the appellant had demonstrated sufficient likelihood of success to justify leave to proceed out of time and whether the delay was substantial enough to warrant refusal of leave. The court was required to re-exercise its discretion in the appellant’s favour if it found that she had demonstrated sufficient likelihood of success and that the delay was not substantial.

The court found that the primary judge’s decision was incongruent, as the reasonable prospects enjoyed by the appellant’s claim for property settlement relief were manifest from the evidence. The court found that the appellant had demonstrated sufficient likelihood of success to justify leave to proceed out of time, as her financial and non-financial contributions to the de facto relationship were noteworthy. The court found that the delay was not substantial, as the appellant’s application for leave was brought about eight months late. The court found that the respondent could not point to any real prejudice he would suffer in having to meet the claim out of time.

Accordingly, the court granted leave to appeal and allowed the appeal. The orders of the primary judge were set aside, and leave was granted to the appellant to prosecute her claim for property settlement relief under Pt VIIIAB of the Family Law Act 1975 (Cth). The parties were granted costs certificates in relation to the appeal.

Orders

Orders of the court

NAA 61 of 2021

SYC 7487 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MS SKELTON

Appellant

AND:

MR LINDOP

Respondent

ORDER MADE BY:

AUSTIN J

DATE OF ORDER:

4 APRIL 2022

THE COURT ORDERS THAT:

1. Leave to appeal is granted.

2. The appeal is allowed.

3. The orders made by the Federal Circuit and Family Court of Australia (Division 2) on 15 October 2021 are set aside.

4. Leave is granted to the appellant, pursuant to s 44(6) of the Family Law Act 1975 (Cth), to prosecute the application for property settlement relief under Pt VIIIAB, filed on 22 November 2018.

5. The appellant is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by her in the appeal.

6. The respondent is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by him in the appeal.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Background

Background to the litigation

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Evidence

Evidence Before The Court

In Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622–623, the High Court of Australia said that, for the purposes of an interlocutory application in which it is necessary for an applicant to demonstrate a prima facie case:The first [inquiry] is whether the [applicant] has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the [applicant] will be held entitled to relief.How strong the probability needs to be depends, no doubt, upon the nature of the rights the [applicant] asserts and the practical consequences likely to flow from the order the [applicant] seeks.(Emphasis added) The Full Court has previously affirmed that principle binds the determination of interlocutory applications under s 44 of the Act (Edmunds & Edmunds at [19]–[20]). In Australian Broadcasting Commission v O’Neill (2006) 227 CLR 57 (at [65] and [69]), the High Court of Australia said this to explicate the test established in Beecham:65.… By using the phrase "prima facie case", their Honours did not mean that the [applicant] must show that it is more probable than not that at trial the [applicant] will succeed; it is sufficient that the [applicant] show a sufficient likelihood of success to justify [the interlocutory relief].…69.…it [is] not necessary for the [applicant] to show that is [is] more probable than not that the [applicant] [will] succeed at trial.(Emphasis added) It may be in this case the primary judge was saying no more than that the appellant did not demonstrate her case had “sufficient likelihood of success” to prove hardship, which would be the correct test, but his Honour’s reference in the reasons for judgment to not being satisfied “on the balance of probabilities” (at [82]), nor that the appellant’s claim has “a real probability of success” (at [87]), has the flavour of demanding more from the appellant than she needed to give. She certainly did not have to prove it was more probable than not that her claim for property settlement relief would succeed if allowed to proceed. The respondent contended the test applied by the primary judge was not the subject of any ground of appeal. Even so, as the respondent was bound to accept, that does not obviate the need to correct any frank error which is identified in an appeal conducted by way of re-hearing (Warren v Coombes (1978) 142 CLR 531 at 553; Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at [30]–[32]). It is unnecessary to find error in the test applied by the primary judge because, even it be assumed the correct test was applied, the result was incongruent. The reasonable prospects enjoyed by the appellant’s claim for property settlement relief, taking into account the factors prescribed by both ss 90SM(4) and 90SF(3) of the Act, were manifest from the evidence, as the following short summary should reveal. The parties lived in a de facto relationship for eight years, during which time the appellant made many noteworthy financial and non-financial contributions. The respondent did not deny she had, but rather contended her contributions paled by comparison with his.

Decision

Reasons for decision

For the following reasons, leave to appeal should be granted and the appeal succeeds.The primary decision The parties began a de facto relationship in late 2009 or early 2010. It was common ground they had been in a de facto relationship, but they disputed how long it lasted and when it ended. The appellant brought her application for substantive property settlement in November 2018. The proceedings were undoubtedly brought late and the appellant sought an interlocutory order under s 44(6) of the Act enabling the application to be prosecuted out of time. Regrettably, her application for leave to proceed out of time was not entertained until June 2021. The respondent asserted he and the appellant separated in February 2014, whereas the appellant contended their separation did not occur until March 2016 (at [18]). The primary judge correctly recognised that, for the purpose of determining the interlocutory dispute under s 44(6) of the Act, the untested evidence of the appellant should be accepted at its highest (at [41], [45] and [54]–[55]). The primary judge therefore accepted separation occurred in March 2016 and so the appellant’s application was about eight months late (at [20]). The appellant joined the respondent and the respondent’s sister (“Ms C”) as parties to the proceedings below. By way of substantive relief, the appellant sought that a parcel of real property (“the Suburb M property”), owned jointly by the respondent and Ms C, be sold and the net sale proceeds then divided between the parties in these shares: the appellant (20 per cent); the respondent (30 per cent); Ms C (50 per cent). The primary judge correctly referred to the established legal principles by which the interlocutory decision must be made, including that the appellant must first demonstrate hardship if deprived of the chance to bring her claim, that such alleged hardship depends upon the prima facie strength of her claim, and that the decision to extend time still requires an exercise of discretion in the appellant’s favour even if she first establishes hardship. It was not contended the primary judge wrongly recited the applicable law. His Honour then turned to the question of hardship, accepting the parties’ de facto relationship lasted nearly nine years (at [55]) and the net value of their property at the time of separation in March 2016 fell in the range between $1.079 million and $2.436 million, of which amount the Suburb M property comprised between $850,000 and $900,000 (at [17] and [56]). The primary judge concluded the appellant’s financial and non-financial contributions, on the strength of her own evidence, were “minimal” and so she was unable to establish on the balance of probabilities that the deprivation of the opportunity to bring a substantive property settlement claim out of time would cause her hardship (at [82] and [87]). The parties adduced evidence about the likely costs of the substantive proceedings. The appellant said the litigation would cost her $100,000 and the respondent said it would cost him $151,000 (at [83]–[84]). The primary judge accepted that the appellant’s costs would exceed the financial return she could likely expect from the proceedings (at [85]). His Honour also accepted that the joinder of Ms C to the proceedings would increase the appellant’s exposure to an adverse costs order, which she would be unable to pay (at [86]).

Ratio Decidendi

Legal Principle Established

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