Slocomb & Hedgewood
[2015] FamCAFC 219
•12 November 2015
FAMILY COURT OF AUSTRALIA
| SLOCOMB & HEDGEWOOD | [2015] FamCAFC 219 |
| FAMILY LAW – APPEAL – LEAVE TO APPEAL – Where the wife made an application for property settlement 18 years out of time – Where the primary judge refused to grant leave to extend time under s 44(3) of the Family Law Act 1975 (Cth) – Leave to appeal is required (Taffa & Taffa [2014] FamCAFC 106) – Leave to appeal granted. FAMILY LAW – APPEAL – PRACTICE AND PROCEDURE – Where the primary judge found the wife had demonstrated hardship and a reasonable primary face case – Where the primary judge did not accept the wife’s explanation for the delay was adequate and found there would be prejudice to the husband – The conclusion of the judge in relation to delay demonstrated an error of law affecting the proper exercise of discretion – Where the result was unjust – Where it is appropriate to re-exercise and grant leave to the wife to file an initiating application out of time seeking property settlement orders – Appeal allowed. FAMILY LAW – COSTS – Costs Certificates – Where it is not appropriate to make a costs order against the husband in circumstances where the wife is “approaching the Court for an indulgence” (Jacenko and Jacenko (1986) FLC 91-776) – Where appeal allowed on a question of law – Costs certificates granted to each party. |
| Family Law Act 1975 (Cth) ss 4(1), 44(3), 94AA Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 9 Family Law Regulations 1984 (Cth) reg 15A |
| Carlon and Carlon (1982) FLC 91-272 |
| APPELLANT: | Ms Slocomb |
| RESPONDENT: | Mr Hedgewood |
| FILE NUMBER: | PAC | 886 | of | 2013 |
| APPEAL NUMBER: | EA | 182 | of | 2013 |
| DATE DELIVERED: | 12 November 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | May, Ainslie-Wallace & Johnston JJ |
| HEARING DATE: | 10 November 2015 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 25 November 2013 |
| LOWER COURT MNC: | [2013] FCCA 1949 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Campton SC |
| SOLICITOR FOR THE APPELLANT: | Matthews Dooley & Gibson |
| COUNSEL FOR THE RESPONDENT: | Ms Judge |
| SOLICITOR FOR THE RESPONDENT: | A J & Associates |
Orders
Leave to appeal is granted.
The appeal is allowed.
The application of the wife filed 6 March 2013 seeking leave pursuant to s 44(3) of the Family Law Act 1975 (Cth) is granted.
The wife file and serve any Initiating Application seeking property orders within 21 days of today.
That the Court grants to the appellant wife a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act1981 (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 wife in respect of the costs incurred by the appellant wife in relation to the appeal against the orders which dismissed her application pursuant to s 44(3) of the Family Law Act 1975 (Cth).
That the Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (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 husband in respect of the costs incurred by the respondent husband in relation to the appeal against orders which dismissed the wife’s application pursuant to s 44(3) of the Family Law Act 1975 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Slocomb & Hedgewood has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 182 of 2013
File Number: PAC 886 of 2013
| Ms Slocomb |
Appellant
And
| Mr Hedgewood |
Respondent
REASONS FOR JUDGMENT
On 6 March 2013, Ms Slocomb (“the wife”) filed an application for property settlement. On the same day an application was filed seeking leave pursuant to s 44(3) of the Family Law Act 1975 (Cth) (“the Act”) to institute proceedings for property settlement because the application was filed outside the time limit. Mr Hedgewood (“the husband”) asked that both applications be dismissed. Judge Donald dismissed the wife’s applications.
In an amended Notice of Appeal filed 7 May 2014, the wife seeks to appeal those orders.
Leave to appeal
The first question is whether leave to appeal is necessary.
Section 94AA of the Act provides that leave is required in respect of “prescribed decrees”. That expression is defined in reg 15A of the Family Law Regulations 1984 (Cth) as “an interlocutory decree”. The definition of “decree” is found in s 4(1) of the Act, to include “an order dismissing an application” and a “refusal to make a decree or order”.
It was contended on behalf of the wife that as leave was refused, that order determined the rights of the parties finally and that leave to appeal is not required. Counsel for the husband argued that leave was necessary and should not be granted as a substantial injustice could not be shown to the wife. It was argued that the wife had a remedy in the State courts.
In a number of decisions in this Court, the requirement of leave to appeal from the granting of a s 44(3) application or the refusal of such application has been discussed.
As to whether leave is required to appeal from a refusal of a judge to grant leave to institute property proceedings out of time, this court has consistently held that leave is required. See, for example, Taffa & Taffa [2014] FamCAFC 106:
10.As to whether leave is required to appeal a refusal to grant leave per s 44(3), since this court in In the Marriage of Emamy and Marino (1994) FLC 92-487 overturned the decision in In the Marriage of Thallon (1992) FLC 92-322, this Court has consistently held that leave is required to appeal an order refusing leave pursuant to s 44(3) (see, for example, Hedley & Hedley (2008) FLC 93-413; Richardson & Richardson [2008] FamCAFC 107; Sharp & Sharp [2011] FamCAFC 150).
There is no reason to depart from that position.
As leave will only be granted if it is demonstrated that the primary judge made an error of principle and/or a refusal to grant leave to appeal would cause a substantial injustice to the wife, the merits of the appeal must be considered.
Background
The central relevant facts are uncontroversial. The parties commenced living together and subsequently married in 1989. They had three children, all now adults. The parties separated in January 1994, the children were then aged four, three and less than two years old. They were divorced on 1 September 1995. When the wife filed the application on 6 March 2013 she was some 18 years out of time.
Prior to divorce the wife consulted solicitors who on 23 September 1994 wrote a letter to the husband (annexure “C” to the wife’s affidavit filed 6 March 2013). In that letter it was said that the assets at the date of separation consisted of the former matrimonial home with a net equity of $15,000, furniture valued at $10,000 and a car valued at $12,000. The wife took possession of the car when the parties separated and subsequently sold it.
It was proposed in the letter that the wife receive a number of items of furniture. The wife now says that she did not receive all those items. The letter also proposed that in return for the car and furniture the wife would transfer to the husband the matrimonial home.
In addition to property settlement orders, the wife instructed she wanted “sole custody and sole guardianship orders, with you to have reasonable access”.
No agreement was reached, no orders were made by the court. The husband acknowledges receiving the letter and says that he would not agree to the proposed orders in relation to the children.
The only current asset of significance is a house valued in the vicinity of $350,000. The monies owing to the bank secured by a mortgage as at the date of the hearing before the judge were $43,000. The house is owned by the husband and wife as joint tenants and they are jointly liable under the mortgage.
At the time the parties separated, the wife left the home with the children returning for short periods. The children remained living with the wife, with limited financial support from the husband. The extent of this support was a matter of some controversy in the material before the primary judge.
Despite a child support assessment, the wife at first received only one payment of $55.75. The husband sought a review of that assessment. The wife was apparently prepared to compromise and despite the sum of $10,000 being outstanding for child support the wife agreed to forego that money as her parent’s owed money to the husband. Over a period of two years between July 2008 and April 2010 the wife received $22,981 through the Child Support Agency.
The husband agreed to pay some of the children’s expenses for education and sport. The wife explained in her affidavit the moneys she received from the husband. The judge accepted her evidence in this regard. It was reasonable for the primary judge to conclude that the husband overall made very little contribution to the children’s financial needs.
The husband continues to have the benefit of living in the house but has also paid the outgoings, substantially reduced the mortgage and made improvements.
At the time of the hearing before the judge, one of the schools attended by the children had obtained a judgment against the wife and another school, where there is an outstanding bill in respect of school fees, is pursuing the wife for the money. In total the debts are approximately $20,000.
In relation to the wife’s knowledge of the time limitation, the wife explained that she represented herself in the application for divorce. Despite a notation as to the time limitation on the decree nisi document, the wife said that the first she knew of the time limit was in January 2013 when she consulted her current solicitor. In the affidavit, the wife referred to the other solicitors she saw in September 1994 who wrote to the husband on her behalf with a proposed offer for property distribution but she says they did not inform her of the time limitation.
As mentioned already, the husband said that he accepted the property settlement offer proposed in the September 1994 correspondence and that the wife received the items she asked for in the letter. This is denied by the wife. The judge noted that there was no correspondence produced by the husband to support his assertion. In any event, there remains the unfortunate situation that the house is held as joint tenants and the wife is jointly liable under the mortgage.
By a letter dated 16 July 2012 the husband’s solicitors wrote to the wife proposing that the husband discharge the mortgage and asking the wife to transfer the house to the husband and his present wife. For reasons that were not explained, the wife did not receive the letter until later that year.
On 17 January 2013 the wife’s present solicitors wrote to the husband’s solicitors proposing there should be a property adjustment and making an offer to settle. This was rejected by the husband.
Reasons of the primary judge
The facts upon which the judge placed most weight included:
·At the time of the separation the letter from the wife’s solicitors asserted there was approximately $15,000 equity in the house;
·The wife made no contribution to the preservation or improvement of the home since separation;
·The wife received some assets including a motor vehicle sold for $10,000; and
·The husband re-partnered in 1996, then remarried and with that spouse has met all the outgoings on the home since separation.
The primary judge referred to the provisions of section 44(3) of the Act and well known decisions including Whitford and Whitford (1979) FLC 90-612 (“Whitford”) and McDonald and McDonald (1977) FLC 90-317.
In considering the question of hardship, the judge referred to the evidence of the wife in relation to the financial support of the children but noted that despite this, it was not until 2013 that any claim was made for property settlement.
The judge however found that the wife had demonstrated hardship, a finding which is clearly correct. The reason given for this finding is as follows:
27.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.
It should also be noted that the finding of hardship was not challenged in the appeal by the husband.
The judge also found that the wife demonstrated a reasonable prima facie case that an application for property settlement could succeed.
The application was dismissed however because the judge concluded:
·The wife had not provided an adequate explanation for the delay considering the notation on the decree nisi warning of the time limitation and that she had consulted solicitors; and
·The prejudice to the husband would be significant by reason of the contributions he has made to the home and reliance that no claim had been made (or already informally agreed).
The primary judge concluded:
30.…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.
discussion
The judge accepted that the wife had a prima facie case and that hardship would be caused if leave were not granted. The wife did not succeed because of the findings of the primary judge:
1.That there was not adequate explanation for the delay – the delay being 18 years; and
2.The prejudice to the husband.
In Whitford the court said of the exercise of discretion at [78,145-146]:
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 sec. 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.
The determination how this discretion should be exercised, must depend on the facts of the particular case. 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, sec. 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 decree nisi.
It was contended that in finding at [29] that the wife had not provided an adequate explanation for the delay in bringing proceedings, his Honour did not accept the evidence. Thus it was asserted that since there had been no challenge to the wife’s evidence in this regard, his Honour denied her procedural fairness. We do not accept this submission. His Honour’s finding was directed to the adequacy of the explanation, not the reliability of her account.
The judge was entitled to observe that the wife had earlier seen solicitors and also to take into account the information about time limits contained in the notation in the decree nisi document which the wife annexed to her affidavit. The remarks of the judge were connected with his consideration of adequate explanation for delay. His Honour did not find that the evidence of the wife in this respect should not be accepted.
Further, it was submitted that since the application for leave was considered “on the papers” without oral evidence, the wife was in some way deprived of procedural fairness. This contention is founded on the same misconception, namely that his Honour did not accept the wife’s evidence and no unfairness arose.
The more compelling question is whether the conclusion of the judge that the wife’s explanation for the delay was inadequate, properly lead him to refusing leave?
The oral argument of counsel for the wife in the appeal, submitting error on the part of the judge, concentrated on the treatment by the judge of the question of delay and the significance he gave to what he regarded as the wife’s inadequate explanation. There is no doubt that explanation for delay is no more than a factor to be considered in the circumstances of the case.
Reference was made to Carlon and Carlon (1982) FLC 91-272 at [77,533]:
…[I]t is in our judgment a correct statement of the law that while Parliament in sec. 44(4) has placed a fetter on the discretion of the Court, the Court itself should not and probably cannot do the same by laying down any strict principles such as that a party must give an adequate explanation for delay. Once hardship has been established in the sense referred to in Whitford (supra) then the Court is in the exercise of its discretion at large and should take into account all relevant facts including, if that be the case, that no or no satisfactory explanation has been given for delay. Such a position namely no or no satisfactory explanation for delay is no more than another factor which must be given appropriate weight in the exercise of discretion.
conclusion
It is essential for the proper operation of a system of justice for time limitations to be imposed. In an application such as this the central consideration is that justice must be done between the parties (see Gallo v Dawson (1990) 93 ALR 479).
In appropriate cases the interests of justice might overcome long delay and on occasions an inadequate explanation for the delay, which is only one factor to be considered in determining an application for leave pursuant to s 44(3) of the Act.
It is useful to refer to the well-known passage in Jacenko and Jacenko (1986) FLC 91-776 (“Jacenko”) per Nygh J at [75,644]:
The issues then before his Honour were those which have been established in this Court as long ago as 1977 in McDonald and McDonald (1977) FLC ¶90-317; (1977) 3 Fam. L.R. 426. The applicant must establish three principal matters: first, a reasonable prima facie case for relief, had she instituted proceedings in time; secondly, that denial of the wife's claim would cause her hardship; and thirdly, an adequate explanation as to her delay.
That third requirement must now be read, subject to the decisions of the Full Court in Althaus and Althaus (1982) FLC ¶91-233; (1979) 8 Fam. L.R. 169, and Howard and Howard (1982) FLC ¶91-234; (1979) 8 Fam. L.R. 178 which indicate that in appropriate cases the degree of hardship to be suffered by the applicant may well outweigh an inadequate explanation of delay.
If those three elements are satisfied, the Court should further, in determining whether to exercise its discretion to grant relief, consider the question of prejudice which the respondent would suffer by reason of the delay in bringing the application.
In this case, there was some explanation for the delay on the part of the wife.
It should be observed the husband has been equally inactive in protecting his rights. The husband contended that the offer of settlement from the solicitors for the wife contained in a letter dated 23 September 1994 was accepted by him. The time limit had not then passed, but the husband took no steps to complete the agreement or institute proceedings.
It was not until late 2012 that the letter from the husband dated 16 July 2012 was delivered to the wife. After consulting her current solicitor on 16 January 2013 the wife filed the applications.
In view of the lengthy time that had expired from the date of the divorce to the filing of the application, the judge was correct to consider the prejudice to the husband. In Sharp & Sharp (2011) 50 Fam LR 567 the Full Court said at [57]:
Merely because the respondent to an application for leave does not point to particular prejudice that might arise if leave were granted, does not dispose of the question. The law presumes prejudice to flow to a person sought to be joined in litigation after the effluxion of the relevant time limits. Even if the Court came to the view that there was no significant prejudice to the respondent, the Court may consider whether in all of the circumstances of the case, it is just and reasonable to grant the extension sought.
Having accepted that hardship was demonstrated and that the wife had a prima facie case, the only prejudice to the husband was the possibility of a hearing in relation to property settlement where the parties’ main asset is jointly held and they have been divorced for 18 years. The conclusion of the judge in relation to delay demonstrated an error of law affecting the proper exercise of discretion. The prospect of the parties’ legal position remaining as it is seems unjust.
That either of them could make an application to a State court does not ameliorate the hardship to the wife. In such an application, a State court could not exercise discretion to apportion the proceeds of sale of the home to the wife by taking into account her contribution to the children during and including post separation, and other relevant matters.
Leave should be granted. The appeal should be allowed.
Re-exercise
There is no good purpose in remitting this matter for re-hearing. Counsel for the husband conceded that should the appeal be allowed, we could re-exercise. This is so because of the unchallenged finding of hardship and a prima facie case. Although the time delay is significant and the assets of the parties relatively minor leave should be given to pursue property proceedings in the interests of justice. It will be necessary for the wife to file an initiating application seeking property settlement orders.
Costs
At the conclusion of these proceedings we indicated to counsel that we intended to give leave and allow the appeal.
Counsel for the wife asked that the husband pay the costs. It is only necessary for us to again refer to Nygh J in Jacenko at [75,647]:
The point was taken that since the wife was approaching the Court for an indulgence, it was a situation in which, prima facie, the husband should not be ordered to pay costs. I would agree with that proposition as generally stated.
We have determined that each party should bear their own costs pursuant to s 117(1) of the Act. In those circumstances, as the appeal is to be allowed on a question of law, we should allow the applications of the parties for certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth).
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, Ainslie-Wallace & Johnston JJ) delivered on 12 November 2015.
Associate:
Date: 12 November 2015
17
3
13