Slocomb and Hedgewood

[2013] FCCA 1949

FEDERAL CIRCUIT COURT OF AUSTRALIA

SLOCOMB & HEDGEWOOD [2013] FCCA 1949

Catchwords:
FAMILY LAW – Property proceedings – leave to proceed out of time – significant delay in commencing proceedings.

Legislation:

Family Law Act 1975 (Cth) s.44(3)

Whitford and Whitford (1979) FLC 90-612
McDonald and McDonald (1977) FLC 90-317

Applicant: MS SLOCOMB

Respondent: MR HEDGEWOOD

File Number: PAC 886 of 2013

Judgment of: Judge Donald

Hearing date: 19 September 2013

Date of Last Submission: 19 September 2013

Delivered at: Parramatta

Delivered on: 25 November 2013

REPRESENTATION

Counsel for the Applicant: Mr Schroder

Solicitors for the Applicant: Matthews Dooley & Gibson

Counsel for the Respondent: Mr O'Connor

Solicitors for the Respondent: A J & Associates

ORDERS

1. That the Wife’s Initiating Application is dismissed.

2. That the Wife’s Application in a Case is dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 886 of 2013

MS SLOCOMB

Applicant

And

MR HEDGEWOOD

Respondent

REASONS FOR JUDGMENT

Applications

1. This is a matter in which the applicant wife has sought leave pursuant to s.44(3) of the Family Law Act 1975 to institute proceedings for property orders out of time.  The husband has opposed the granting of such leave and has sought that both the Initiating Application and the Application in a Case filed by the wife be dismissed.[1]

   [1] Response of the Husband filed 9 April 2013

2. If such leave was granted, the wife then seeks orders whereby the former matrimonial home would be sold and whereby she would receive 70% of the net proceeds after payment of costs of sale, mortgage and outstanding school fees in relation to the children of the marriage.[2]

   [2] Application filed by the Wife 6 March 2013 and Wife’s Application in a Case of the same date

Background

1. The applicant wife was born in (omitted) 1964 and is aged 49 years.  The respondent husband was born in (omitted) 1963 and is aged 50 years.

2. The parties commenced cohabitation in 1987 and married in (omitted) 1989.  The parties had three children who are now aged 24 years, 22 years and 21 years respectively.  The parties separated in January 1994.  They were divorced in September 1995.  Accordingly, 18 years has now passed since the date of the parties divorce.

3. It seems common between the parties, and I accept, that the only substantial asset of the parties was and is the former matrimonial home located at Property O in the State of New South Wales.  That property is now valued at between $320,000 (as submitted by the husband) and $350,000 (as submitted by the wife).  The balance secured by mortgage over that home as at 24 June 2013 was approximately $43,000.[3]

   [3] Affidavit of the Wife sworn 5 September 2013 para.3

4. Upon separation, the wife left the former matrimonial home with the children.  On two occasions she and the children moved back into that home but only for a number of weeks each time.[4]  The children of the relationship lived with the wife.  The husband continued to live in that former matrimonial home.

   [4] Affidavit of the Wife sworn 7 May 2013 para.2

5. The husband did not pay child support in relation to those children until 2008.  The wife did obtain a child support assessment in relation to the children, with the wife at that point, receiving only one payment of $55.75.  The husband sought a review of the assessment and approached the wife in 1999 asking the wife to sign a form so that the Child Support Agency would no longer pursue him.  It is the wife’s evidence that at that point he agreed to pay for the children’s sporting needs and half of school fees and uniforms.[5]  It is the wife’s evidence that there was then about $10,000 owed by the husband in relation to child support and an approximately equal amount owing by the wife’s parents to him.  Upon signing the document, he agreed also to a forgiveness of that loan.

   [5] Affidavit of the Wife sworn 7 May 2013 para.2

6. The husband alleges that he paid cash sums to the wife up from the date of separation until 2008 by way of child support.[6]  The husband has not produced any documentation to substantiate this assertion.  There are, for example, no bank records evidencing such transactions produced to the Court.  I prefer the evidence of the wife in this regard.

   [6] Affidavit of the Husband sworn 8 April 2013 paras.15 and 16

7. It is the evidence of the wife that the husband ceased paying for the children’s sporting activities in 2003 and that he made a payment of $800 in relation to the school fees of two of the children in 2004; made further payments of $100 and $2,900 on 14 April 2010 and then monthly payments of $100.  He made no payments in relation to the school fees for the other child.[7]

   [7] Affidavit of the Wife sworn 7 May 2013 para.2

8. There is currently an outstanding sum owing to the school attended by two of the children in the sum of $13,618.  The collection of that debt has been placed in the hands of mercantile agents by the school.  A judgment was obtained by the child X’s school in the sum of $5,732 against the mother.  A garnishee order has been made in respect of the wife’s wages.[8]

   [8] Affidavit of the Wife sworn 5 September 2013 paras.4 and 5

9. The wife represented herself in the proceedings whereby a dissolution of marriage was granted.[9]  It is the evidence of the wife that she was unaware of any time limitation in relation to the commencement of property proceedings until she consulted her current solicitor in January 2013.  I do note that a notation appears on the Decree Nisi of Dissolution of Marriage annexed to the wife’s affidavit sworn 6 March 2013.  That notation advises that any application as to property must be made within 12 months of the date that the decree becomes absolute.[10]

   [9] Affidavit of the Wife sworn 6 March 2013para.18

   [10] Annexure “A” to the Affidavit of the Wife sworn 6 March 2013

10. The wife also admits that she did consult with solicitors on one occasion in September 2004.  That consultation resulted in a letter being forwarded on her behalf to the husband regarding proposed property distribution but no further actions were taken and, it is the evidence of the wife, no advice was given to her as to time limitations in property proceedings.[11]

    [11] Affidavit of the Wife sworn 6 March 2013 para.19

11. The husband has asserted that he accepted the offer of settlement sent to him by the wife’s solicitors in September 2004 but has not finalised the transfer of the former matrimonial home into his name alone as proposed in that letter.  He asserts, however, that the wife did take those items indicated in the letter that she wished to have.[12]  This is denied by the wife in part.  I do note that there is no evidence produced by the husband whereby any acceptance was communicated to the wife or her solicitors and that there is no evidence of any formal document evidencing any such settlement.

    [12] Affidavit of the Husband sworn 8 April 2013 paras.8 to 11

12. There is no evidence that the wife has made any contribution towards the preservation or improvement of the former matrimonial home since the date of separation.  I also note that at the time of separation there was only approximately $15,000 equity in that home.  As already noted the wife did take a number of items from the home including a motor vehicle which she admits was sold for $10,000.

13. The husband remarried in 2011 and with his wife has paid all mortgage payments since the date of separation.  Although only marrying in 2011, the husband and his current wife were in a defacto relationship since about (omitted) 1996.[13]  It is also the husband who has maintained and improved that home.

    [13] Affidavit of Ms D sworn 21 April 2013 para.1

Evidence

1. This is a matter in which it was appropriate to determine the question of leave based upon the materials placed before the Court and upon the submissions made on behalf of each of the parties.  Accordingly, the Court has had regard to each of the documents referred to in the course of this hearing and to the submissions made.

Law

1. Subsection 44(3) of the Family Law Act 1975 is in the following terms:

   (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.

2. Proceedings for property orders as sought by the wife are proceedings of the kind referred to in paragraph (ca) of the definition of “matrimonial cause” in sub-s.4(1) of the Family Law Act 1975. Accordingly, leave of the Court is necessary as more than 12 months has expired after the date on which the divorce order took effect.

3. Subsection 4 of s.44 provides a preliminary hurdle to be overcome by the Applicant:

   44(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; …

4. The appropriate approach by a court to such an application was as described by the Full Court of the Family Court of Australia in Whitford[14] :

   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 an 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.

   [14] Whitford and Whitford (1979) FLC 90-612

5. In McDonald and McDonald[15] the Full Court of the Family Court of Australia listed the factors required to be taken into account as:

   a)That to deny the right to litigate the claim would cause hardship to a party or a child of the marriage.

   b)That a prima facie case which is reasonable would have to be shown.

   c)That there is an adequate explanation of the delay.

   d)That consideration should be given to the question of prejudice to the respondent and that the period of the delay may be particularly relevant.

   [15] McDonald and McDonald (1977) FLC 90-317 and as summarised in Australian Family Law and Practice, CCH Australia Limited, 3-205

Discussion

1. There is no doubt that the application for property proceedings is made well outside the limit of one year after the date of divorce.  Accordingly, leave of the Court is required to commence such proceedings.

2. I have turned firstly to consider the question of hardship established by the wife.  As noted earlier in these Reasons, the establishment of hardship is a necessary precondition to the exercise of the Court’s discretion.

3. I do note the various authorities relating to the meaning of “hardship” in the context of the competing applications being considered by the Court.  I accept that “hardship” in this context is generally interpreted as being “substantial detriment”.  I also accept that proof of hardship does not require proof of necessity, poverty or need.  In that respect, I note that the Full Court of the Family Court of Australia in Whitford[16] stated:

   Hardship may be caused to an applicant if leave were not granted to institute proceedings, although the applicant is not in necessitous circumstances.  Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved, may constitute hardship.

   [16] Whitford and Whitford  (1979) FLC 90-612

4. I do note, however, that the loss of a mere right to institute proceedings does not in itself constitute hardship.

5. I again note the evidence of the wife as to the promises of the husband to pay for the children’s sporting costs and half of school fees.  I note the evidence of the wife that she did not pursue child support until 2008 as a result of such promises and that such promises were largely unfulfilled.  There is no evidence from the wife, however, that the promises made related to the question of property settlement.  Rather, they related to the question of collection of child support.  Further, it is the evidence of the wife that payments pursuant to the agreement were not being made as early as 2003 and yet no claim was made for property settlement until 2013.  There was no inducement made by the husband to the wife in order to discourage the commencement of property proceedings by her.

6. I do accept, however, that if leave is not granted, then the wife will be left to pursue a remedy in the State courts and in circumstances where any post separation contribution would not be taken into account.  I do find that this is sufficient to constitute hardship.  The wife has overcome the preliminary hurdle.

7. I now turn to the discretionary component of this Court’s consideration of the application.  I accept that on the documents before the Court, the wife raises a reasonable prima facie case.  That prima facie case would include consideration by the Court of the significant contribution by her post separation as homemaker and parent for the children of the relationship.

8. As to the question of delay, I note that one of the factors to be considered is whether or not the wife has provided an adequate explanation for the delay.  I do not accept the wife’s explanation as being adequate.  She was the applicant for the dissolution of her marriage.  Her own annexure, being the Decree Nisi for Dissolution of Marriage carries the notation that proceedings for property orders must be commenced within 12 months.  Further, she did consult solicitors who proposed settlement of property to the husband.  It is her evidence that she did not take this further.  The wife has had ample opportunity to commence proceedings.  She has not.

9. I turn then to consider the question of any prejudice to the respondent if leave was to be granted.  Eighteen years has now expired since the date of divorce.  The husband has been in a subsequent relationship for a significant proportion of those years.  As a consequence of that relationship, his financial circumstances have been combined with those of his new wife.  Both he and his new wife have financed the payment of the mortgage and the maintenance and improvement of the former matrimonial home.  He has ordered his life on the basis that no claim was made (or on his evidence that property division was arranged informally between the parties).  It would not be just to now require the sale of the property in which the husband, his wife and her children have resided for many years.

10. Taking all of the matters in the Reasons above into consideration, the application for leave is dismissed and the application for property settlement is also dismissed.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Judge Donald

Date:  25 November 2013