SPADE & SPADE

[2014] FCCA 653

FEDERAL CIRCUIT COURT OF AUSTRALIA

SPADE & SPADE [2014] FCCA 653

Catchwords:
FAMILY LAW – Section 44(3) – filing application out of time – consideration of hardship – leave granted.

Legislation:

Family Law Act 1975

Federal Circuit Court Act 1999

Federal Circuit Court Rules 2001

Whitford & Whitford(1979) FLC 60-612

Applicant: MR SPADE

Respondent: MS SPADE

File Number: MLC 198 of 2010

Judgment of: Judge McGuire

Hearing date: 2 April 2014

Date of Last Submission: 2 April 2014

Delivered at: Melbourne

Delivered on: 4 April 2014

REPRESENTATION

Counsel for the Applicant: Mr Puckey

Solicitors for the Applicant: Melbourne Family Lawyers

Counsel for the Respondent: Ms Daly

Solicitors for the Respondent: Beckwith Cleverdon Rees

ORDERS

1. Pursuant to section 44(3) of the Family Law Act 1975, the husband be given leave to commence property proceedings out of time.

2. The wife’s application in a case filed 6 March 2014 otherwise be dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 198 of 2010

MR SPADE

Applicant

And

MS SPADE

Respondent

REASONS FOR JUDGMENT

1. In this matter, the husband wishes to bring an application for alteration of property interests pursuant to section 79 of the Family Law Act. He first needs leave of the court to file such application given that the parties were granted a final divorce on 24 March 2010, meaning that an application of this type could be filed without leave and as of right only for a period of 12 months following the divorce.[1]

   [1] Section 44(3) Family Law Act 1975 (“The Act”).

2. The wife does not consent to the filing of the application out of time.

3. Section 44(4) of the Act provides:  : 

   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 if not granted. 

   The above subsection is in accordance with the settled law and most prominently in the often-quoted case of Whitford & Whitford[2], where their Honours commented:

   … 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.  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.

   [2] (1979) FLC 60-612 at [78,134]

4. Also in Whitford, their Honours observed:

   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 the 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 hardship which would be suffered unless leave were granted, are matters affecting the exercise of the discretion …

   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 not in a manner which would render nugatory the requirement that proceedings should be instituted within a year from the decree nisi[3].

   [3] Ibid at [78,146]

Relevant History

1. The parties married on (omitted) 2003 at (country omitted).  They separated on 13 September 2008 and a divorce was granted on 24 March 2010.  There are no children of the marriage.

2. The applicant is 45 years of age.  He is currently unemployed but has a history of employment in the (omitted) industry.  The respondent is aged 43.  She is employed by a (employer omitted) in a (occupation omitted) role and based in (country omitted).

3. The husband filed this application on 19 February 2014 thereby being almost 3 years out of time. 

Hardship

1. The husband deposes that there is a property pool of legal and equitable interests between the parties with a value of approximately $3 million.  That pool comprises two pieces of real property with gross value of $1.6 million, and equity of approximately $770,000.  One such property is registered in the joint names of the parties but the second, with a larger equity of approximately $500,000, is registered solely in the name of the wife.  He says that the mortgages are cross-secured by each piece of real property.  He then deposes to other assets being primarily shareholdings and savings in the name of the wife with the parties having roughly equivalent superannuation entitlements.

2. Although the husband, through his counsel, concedes that there have been significant post-separation contributions by the wife, he says that he has a bona fide claim for alteration of those property interests and in his favour such that could not be satisfied simply by dealing with those assets in his possession and by severing of the title to the jointly owned real property in another place.

3. The husband is not able at this stage to particularise his claim any further and I am told that his application will not be properly particularised, if leave is granted, until he has the benefit of some discovery process.

4. In respect of the hardship, the Full Court in Whitford (supra) noted: at page:

   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 was no real probability of success, then the Court can not be satisfied that hardship would be caused if leave were not granted.[4]

   [4]  At [78,144]

5. And the court continued:

   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.  In some cases where a resolution of the property or financial relationships of the parties is desired, it might be that the applicant would receive no more or even less than he or she already owns at law or in equity.  Nevertheless, hardship might be caused to the applicant if leave were not granted so as to facilitate such a resolution[5].

   [5] At [78,145]

6. In the matter before me, whilst I do not have a particularised claim, I do have some evidence from the husband’s affidavit as to the property pool.  The wife has not filed material to contradict the husband’s evidence and, as such, I accept his evidence on a prima facie basis.  It is clear on that evidence that possession, title or ownership of the majority of those assets currently rests with the wife.  The husband points to there being now a period of some 15 years since the commencement of the relationship and a period of 10 years cohabitation.  His affidavit material suggests some matters of contribution which would be given consideration and weight on his argument together with relevant section 75(2) factors which may favour him such as the current differences in the parties’ employment status, and hence their incomes. 

7. Given the circumstances set out above, I am satisfied, following the observations in Whitford[6], that the husband would suffer a hardship if leave were not granted for him to pursue his claim. 

   [6] Supra

Exercise of the Discretion

1. The delay in this matter is now some three years.  Counsel for the wife does not argue (properly, in my view) that this flux of time is such that a proper exercise of the Court’s jurisdiction would be compromised by a disbursement of the assets or by a loss of contact or availability of potential witnesses.  That is, it would remain a relatively simple exercise to ascertain the property pool and for the parties to properly present their arguments as to the relevant contribution and other factors.

2. The husband should give reasons for the delay itself and for not making application within the time limit.  Obviously, he was provided with a copy of the Divorce Order which I presume alerted him to those time limits.  Indeed, he says that he was involved in litigation in another court during the relevant period and presumably with the assistance of legal representatives.  He says that this litigation involved actions against a builder and architect brought jointly by him and the wife in respect of their joint construction of a home which apparently took place or continued after their separation.  That litigation remains on foot in respect of one defendant.  The husband argues that he was unable to quantify the property pool until the recent state of that litigation.

3. The husband says that negotiations between both the parties and their solicitors as to a resolution of the property proceedings under section 79 of the Family Law Act have been continuing since about August 2013, which would, of course, also render him out of time if the application had been filed then.

Conclusions

1. The “threshold”, so far as the husband’s onus of proof is concerned, is in respect of hardship.  Other factors serve only to exercise the discretion of the Court if, and only if, the husband proves hardship.

2. I am satisfied on the matters set out above that the husband would suffer hardship if leave was not given him to file his application. The financial circumstances of the parties together with the husband’s evidence as to the financial history of the relationship and the current status and placement of the assets, satisfies me that hardship would be caused to the applicant, should he not be able to pursue his claim under section 79.

3. Whilst I find some merit in the argument of the counsel for the wife that the husband’s reasons for the delay in bringing his application and, more significantly, in not bringing it within the time limitations, are unconvincing.  This is however just one matter which I must consider with others in the exercise of my discretion.

4. I am satisfied that there would be no prejudice to the wife in the prosecution of her own case by reason of such a delay.  The delay is not a long one.  The asset pool is well defined.  It would be reasonable to conclude that the parties’ recollections, availability of witnesses and necessary documents, would not be compromised by giving leave to bring the application.  The continuing litigation in the Supreme Court may well have delayed progress of an application in any event.

5. On balance, I am of the view, in all of the circumstances, that my discretion should be exercised in favour of the husband being given leave to bring his application. 

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date:  4 April 2014