Stahl & Acker
[2023] FedCFamC2F 801
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Stahl & Acker [2023] FedCFamC2F 801
File number(s): ADC 5736 of 2021 Judgment of: JUDGE McGINN Date of judgment: 4 July 2023 Catchwords: FAMILY LAW –de facto relationship – whether resumption after separation – no resumption or continuation – leave sought to extend time within which to issue proceedings for property settlement – arguable case – explanations for delay – leave granted – costs of “failed” mediation – no costs order made regarding mediation Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021
Cases cited: Althaus and Althaus (1982) FLC 91-233 at 77,269; [1979] FamCA 47
Edmunds & Edmunds (2018) FLC 93–847; [2018] FamCAFC 121
FairBairn v Radecki [2022] HCA 18
Gadzen & Simkin (2018) FLC 93-871; [2018] FamCAFC 218
Herford & Berke (No 2) [2019] FamCAFC 182; (2019) FLC 182
Moby & Schulter (2010) FLC ¶93-447; [2010] FamCA 748
Parke & The Estate of the Late A Parke [2016] FamCAFC 248
Pavey & Pavey [1976] FamCA 36; (1976) FLC 90-051
Sinclair & Whittaker [2013] FamCAFC 129 ;(2013) FLC ¶93-551
Division: Division 2 Family Law Number of paragraphs: 180 Date of last submission/s: 10 August 2022 Date of hearing: 9-10 August 2022 Place: Adelaide Counsel for the Applicant: Ms Lewis Solicitor for the Applicant: Resolve Divorce Lawyers Counsel for the Respondent: Mr Roberts Solicitor for the Respondent: Thomson And Associates ORDERS
ADC 5736 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS STAHL
Applicant
AND: MR ACKER
Respondent
order made by:
JUDGE McGINN
DATE OF ORDER:
4 July 2023
IT IS ORDERED:
1.That pursuant to section 90RD of the Family Law Act 1975(Cth) (“the Act”) it is declared that a de facto relationship existed between the applicant and the respondent for the period June 1999 to 20 August 2017.
2.That pursuant to section 44(6)(a) of the Act leave be granted to the applicant nunc pro tunc to issue proceedings seeking orders pursuant to s 90SM of the Act on or before 25 November 2021.
3.That paragraphs 1, 2 and 7 of the applicant’s Further Amended Initiating Application sealed 12 July 2022 do stand dismissed.
4.That the applicant’s alternative application for costs sought at [59] of her written submissions sealed 12 December 2022 be dismissed.
Directions as to Costs
5.That in relation to the parties’ respective applications for costs in respect of applications for orders pursuant to sections 90RD and 44 of the Act:
(a)the parties’ competing applications for costs be determined on the papers;
(b)within 21 days the applicant file and serve any written submission in relation to her application for costs (not exceeding 3 pages) and a schedule setting out the calculation of any claimed costs;
(c)within 35 days the respondent file and serve any written submission by way of response to the applicant’s submission for costs and/or any application for costs sought on his behalf (not exceeding 5 pages) in addition to a schedule setting out the calculation of any claimed costs;
(d)within 49 days the applicant file and serve any written submissions in reply (not exceeding 3 pages);
(e)upon the filing of the last of the submissions in accordance with the preceding orders as to costs that judgement of the respective applications for costs do stand reserved.
6.That this matter be listed before a Judicial Registrar on 26 July 2023 at 2:00pm for directions and orders as to the parties attending a financial conciliation conference in this matter and/or alternative dispute resolution.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Stahl & Acker has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE McGINN
INTRODUCTION
This dispute presently before the Court is whether under the Family Law Act 1975 (the “Act”) the de facto relationship of the parties which commenced in June 1999 and saw the parties separate in October 2017 was resumed in 2018 for the period until October 2019 and if leave should otherwise be granted permitting the applicant de facto wife to bring proceedings for property settlement which she sought to do in November 2021.
For the reasons that follow I have determined that the de facto relationship did not resume after October 2017 and that leave should be granted for the applicant de facto wife to issue proceedings for property settlement.
THE APPLICATIONS BEOFRE THE COURT
Relevantly, proceedings for property settlement in the circumstances of a de facto relationship can be brought within a standard application period of 2 years after the end of the de facto relationship.[1] Leave of a Court is required to commence such proceedings outside of that standard period.[2] The parties have used the phrase “out of time” to describe the filing of an application by the applicant de facto wife beyond the standard application period.
[1] Family Law Act 1975 ss44(5)(a)(i).
[2] Family Law Act 1975 ss44(6).
The de facto wife’s application is that a declaration be made pursuant to s 90RD of the Act about the length of the de facto relationship and, if necessary, that she be granted leave pursuant to s 44(6)(a) of the Act on the ground of hardship to institute proceedings for property settlement.
The applicant de facto wife has also, subject to a grant of leave, sought final property settlement orders and costs. As it turns out they will be matters for other occasions.
The respondent de facto husband seeks that all applications be dismissed.
By way of completeness the applicant de facto wife by her Further Amended Initiating Application filed 12 July 2022 seeks (in summary form) the following final orders:
(a)a declaration pursuant to s 90RD of the Act that a de facto relationship existed between the applicant and the respondent from June 1999 until October 2019;
(b)that leave be granted for the applicant pursuant to s 44(6)(a) of the Family Law Act 1975 (Cth) to institute proceedings under s 90SM;
(c)that the respondent pay the applicant a sum representing a 50:50 division of the net non-superannuation asset pool;
(d)that the respondent transfer to the applicant all of his right, title and interest in the real property situated at B Street, Region C in the State of South Australia being the whole of the land more particularly described in Crown Lease Volume … Folio … (“The D Property”);
(e)that the applicant discharge the D Property mortgage;
(f)that the applicant transfer to the respondent at the expense of the respondent all of her right, title and interest in the real property situate at E Street, Suburb F in the State of South Australia being the whole of the land described in Certificate of Title Volume … Folio … (“the Suburb F property”);
(g)the respondent discharge the Suburb F property mortgage;
(h)the applicant resign as director, secretary and member of the office holder of AA Pty Ltd (“the Company”) and transfer the Company into a single director Company if required by the respondent along with any shareholdings in the company;
(i)the respondent keep the applicant indemnified in respect of the Company;
(j)the Acker & Stahl Partnership be dissolved and the costs of the dissolution be met equally by the parties;
(k)the applicant have free from further claim of the respondent all furniture and effects in and about the D Property;
(l)the applicant be entitled to 100% of the respondent’s interest in the Superannuation Fund 1 (“the SMSF”);
(m)that a base amount of 50% be allocated to the respondent out of the applicant’s interest in the SMSF;
(n)that the respondent pay the applicant’s costs of and incidental to her leave application on an indemnity basis; and
(o)that the applicant’s Application in a Proceeding filed 1 April 2022 for costs thrown away be paid by the respondent on an indemnity basis.
The respondent by his Response to Initiating Application filed 15 February 2022 seeks (in summary form) the following:
(a)that the Further Amended Initiating Application be dismissed; and
(b)that the Application in a Proceeding filed by the applicant on 4 April 2022 be dismissed.
As stated above, this judgment is confined to the issues of the length of the de facto relationship and whether leave should be granted to permit an application for property settlement out of time. There is consequent issue as to whether a costs order should be made in relation to mediation which was attempted in the course of the proceedings.
THE DISPUTE ABOUT THE LENGTH OF THE RELATIONSHIP
The applicant states that the parties then resumed their de facto relationship from a point in 2018 until October 2019 (being a period of time following an accident involving the de facto husband).
The respondent denies this, stating that since separation in August 2017 the parties did not resume their relationship.
AGREED MATTERS
The applicant was born in 1962 and was at trial 59 years old.
The respondent was born in 1966 and was at trial 55 years old.
The parties commenced cohabitation in 1999 at what is called the G Property.
The parties separated in August 2017.
The respondent has two children from a previous relationship, Ms H born in 1992 (aged 30 years) and Ms J born in 1994 (aged 29 years). Both children lived with the parties at times during the course of their relationship.
The applicant currently resides at what is called the D Property.
The respondent resides at the G Property.
Both properties are situated in Region L, South Australia.
THE RESPONDENT’S ACCIDENT
In 2018 the respondent was involved in a serious accident at the G Property. The health consequences of that accident were for the respondent catastrophic.
Following the accident he was immediately flown to the K Hospital.
From the time of the accident, for some months, the respondent remained at the K Hospital and spent a number of days in the intensive care unit.
He was then transferred to the M Hospital until mid-2019.
He then spent time at N Hospital before returning to live at the G Property.
The respondent has been diagnosed with permanent physical impediments.
He is supported by full time carers which are required for his survival.
FIRES IN REGION L
From late 2019 to early 2020, Region L was subject to severe bushfires, burning a substantial portion of land.
The properties, save and except the residences located on each property at which each of the parties resided, were devastated by the bushfires.
DOCUMENTS RELIED UPON
The applicant relies upon the following documents:
(a)her Further Amended Initiating Application filed 12 July 2022;
(b)her Amended Financial Statement filed 15 December 2021;
(c)her Application in a Proceeding filed 1 April 2022;
(d)her Affidavit filed 1 April 2022;
(e)her Trial Affidavit filed 24 June 2022; and
(f)the Affidavit of Ms O filed 24 June 2022.
Ms O’s evidence related to efforts by her and the applicant in respect of property owned by the applicant and/or the respondent and/or entities associated with one or other of them following bushfires in late 2019/early 2020.
The respondent relies upon the following documents:
(a)his Response to Initiating Application filed 15 February 2022;
(b)his Trial Affidavit filed 13 July 2022; and
(c)the Affidavit of Ms P filed 18 July 2022.
Each of the parties and their witnesses were cross examined.
For the disposition of the matters before the Court it is not necessary to make specific findings of credit about the parties and their witnesses and, contrary to the submissions of the each party, I find that each of the witnesses who were examined endeavoured to give their evidence at trial to the best of their recollections, imperfect as it may have been in relation to some matters. Although there were conflicts in the parties’ evidence in relation to some matters, they were matters of relatively minor detail or of little or no weight in respect of the issues that had to be decided.
THESE AND OTHER PROCEEDINGS
These proceedings were commenced on 25 November 2021 by the applicant de facto wife filing an Initiating Application for Final Orders.
A Judicial Registrar made orders on 24 January 2022 that the respondent file responding documents and that the parties comply with their duty of disclosure in accordance with Rule 6.06 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021.
In addition to the proceedings pending in this Court, in early 2022 the applicant commenced proceedings in the Supreme Court of South Australia (action number …) that she or a Mr Q be appointed as receiver of a partnership that exists between them until further order. Those proceedings were adjourned to late 2022 for directions and remain pending in the Supreme Court.
On 21 February 2022 a Judicial Registrar ordered the matter come before the Court for Mention on 21 March 2022. At notation C of that order it was recorded the parties had agreed to attend mediation on 8 March 2022.
The de facto wife asserts the de facto husband refused to participate in this mediation and that as a result she incurred substantial costs in preparation for which she is entitled to an order for costs.
On 21 March 2022 the matter was listed for determination of the question of the de facto wife’s seeking leave to issue proceedings pursuant to s 44 of the Act and the length of the de facto relationship.
THE DISPUTE AS TO SEPARATION DATE
The respondent maintains separation was final as and from August 2017 and therefore claims that the de facto wife was 2 years and 3 months out of time when filing her Initiating Application without leave pursuant to s 44(6)(a) of the Act having been granted.
The applicant de facto wife would have it maintained she is but about a month outside of the time within which property proceedings can be filed without leave having been obtained.
THE PROPERTY, LIABILITIES AND SUPERANNUATION OF THE PARTIES
The assets, liabilities and superannuation of the parties as at the date of trial are set out in the applicant’s trial affidavit at paragraph 113. The de facto husband says the values are incorrect and irrelevant as the application is out of time.
Those assets, liabilities and superannuation provided by the de facto wife comprise the following:
Schedule of Assets and Liabilities at Trial
Assets Owner $ (whole dollars) 1. B Street, Region C SA (D Property, Crown lease) Joint 2,400,000 2. E Street, Suburb F SA Joint 250,000 3. R Street, Region S SA de facto wife 175,000 4. 1 T Street, Region C SA (Crown lease) de facto husband 200,000 5. U Street, Region C SA de facto husband 1,000,000 6. 2 T Street, Region C SA (G Property) de facto husband 3,400,000 7. V Street, Region W SA de facto husband 250,000 8. Acker & Stahl Partnership Joint 630,000 9. G Property Stock and Machinery de facto husband 1,000,000 10. AA Pty Ltd Joint Minimal 11. Y Pty Ltd de facto husband Unknown 12. Z Pty Ltd de facto husband Unknown 13. BB Limited, Shares de facto wife E 500 14. CC Bank Account (account number …40) as at June 2022 de facto wife 5,961 15. CC Bank Account (account number …40) as at 9 April 2022 de facto husband 56,073 16. CC Bank Account de facto husband 2,311 17. CC Bank Maxi Saver de facto husband 500,000 18. DD Bank Property Management Deposit Offset (account number …62) as at 1 May 2022 de facto husband 50,000 19. DD Bank Property Management Deposit Offset (account number …96) as at 1 May 2022 de facto husband 50,000 20. DD Bank Property Management Deposit Offset (account number …04) as at 1 May 2022 de facto husband 250,000 21. DD Bank Property Management Deposit Offset (account number …38) as at 1 May 2022 de facto husband 50,000 22. DD Bank Variable Rate Property Management Deposit (account number …22) de facto husband 300,000 Liabilities Owner $ (whole dollars) 1. CC Bank Loan (account number …00) as at 23 June 2022 – secured over Region S property de facto wife 91,712 2. DD Bank Loan (account number …51) as at 23 June 2022 – secured over Suburb F property Joint 300,000 3. DD Bank Loan (account number …69) as at 23 June 2022 – secured over the D Property Joint 394,000 4. DD Bank Loan (account number …69) as at 23 June 2022 – secured over the D Property Joint 50,000 5. DD Bank Loan (account number …35) as at 23 June 2022 – secured over the D Property Joint 50,000 6. CC Bank Visa (ending …68) as at 4 April 2022 de facto husband 1,674 Superannuation Owner $ (whole dollars) 1. Superannuation Fund 1 (SMSF) as at 30 June 2020 de facto wife 233,764 2. Superannuation Fund 1 (SMSF) as at 30 June 2020 de facto husband 577,203 DID THE DE FACTO RELATIONSHIP RESUME AFTER AUGUST 2017?
Whether or not the parties resumed the original de facto relationship and were then in a de facto relationship from a point in 2018 to October 2019 is disputed.
The resolution of this dispute not only resolves the question of the declaration to be made as to the length of the de facto relationship but also affects the resolution of the question of whether leave is to be granted to permit the applicant to bring a property settlement application as to the amount of delay that is to be considered and explained.
Accordingly I intend to resolve the issue of the length of the relationship first of all.
It is the applicant’s position that the parties were in a de facto relationship from June 1999 until October 2019 with the acknowledgement that there was a period of separation of approximately 10 months from August 2017 until a point in 2018.
It is the respondent’s position that the parties were not in a de facto relationship from August 2017.
Section 4AA of the Act sets out the meaning of a de facto relationship and s 4AA(2) sets out some the circumstances that may assist in working out if persons have a relationship as a de facto couple.
The de facto wife relies on the following factors to say a de facto relationship existed during this time:
(a)the de facto wife travelled in 2018 to Adelaide to be with the de facto husband following his accident;
(b)the de facto wife spent considerable periods of time from 2018 until late 2019 in Adelaide visiting the de facto husband daily at the K Hospital and then the M Hospital. This involved:
(i)attending to his care;
(ii)assisting with his feeding;
(iii)familiarising herself with his new daily routine including showering, engaging with doctors and nurses and his therapy;
(c)the de facto wife secured a rental property located 500m from the N Rehabilitation Centre for a period of 12 months;
(d)the de facto wife was appointed the de facto husband’s power of attorney;
(e)the de facto wife celebrated special occasions with the de facto husband over this period including the de facto husband’s birthday, Christmas and New Year’s Eve; and
(f)the de facto wife facilitated EE Support Services attending at the D Property and G Property to prepare a Home Modification Report.
The de facto husband relies on the following factors to say a de facto relationship did not exist during this time:
(a)the parties never resided together again from August 2017;
(b)there was no sexual relationship between the parties after August 2017;
(c)there was no financial dependence or interdependence between the parties after separation in 2017 save and except as a result of the formal business partnership that related to the partnership assets of “D Property”;
(d)the parties did not purchase any further property together after separation save and except for ongoing management of the partnership business of “D Property” and the partnership of Mr Acker & Ms Stahl (that is the parties);
(e)after separation the parties never shared any mutual commitment to a shared life;
(f)the relationship was never registered under a prescribed law of state or territory;
(g)there were no children of the relationship; and
(h)there was no public acknowledgement of the relationship after August 2017.
CONSIDERATION AS TO WHETHER THERE WAS A DE FACTO RELATIONSHIP FROM 2018 - 2019
De facto relationships can subsist over or be comprised of a number of periods.[3]
[3] Section 90SB(a), Moby & Schulter (2010) FLC ¶93-447; [2010] FamCA 748; Dahl & Hamblin [2011] FamCAFC 202
Where it is alleged that a de facto relationship has ceased and then been resumed it is necessary to examine and contrast the circumstances of the relationship before and after the separation[4] and upon the alleged resumption of the relationship.
[4] Pavey & Pavey [1976] FamCA 36; (1976) FLC 90-051 at pages 75,211, 75,214.
The applicant bears the burden of proof to establish this.
However, her case did not go forward on this basis.
The applicant did not seek to establish parallels between the defining constituents of the parties’ de facto relationship in the original term and what was apparent to her as constituting the resumption of the relationship during the period of the alleged resumption.
The applicant has not demonstrated that the nature of the de facto relationship between the parties prior to their separation in August 2017 was resumed or re-established at some subsequent time or at all.
It was conceded by the applicant that the parties did not resume cohabitation while the respondent was in medical facilities and there were no specific discussions between the parties as to the resumption of their relationship following the parties’ separation in in August 2017.
Between the date of the respondent’s accident of 2018 and until mid-2019 the respondent was in care variously at the K Hospital, the M Hospital and the N Hospital. After that the respondent then resumed living in his residence located at the G Property in Region L.
The applicant submits that although the parties did not “live together”, this does not preclude a determination that a de facto relationship had existed. Taken literally, that submission is with respect, difficult to follow. What is better understood by the submission is that a lack of “common residence” as referred to in s 4AA(2)(b) of the Act is not to be regarded as a “rigid criteria” to be identified as existing in every case of a de facto relationship.[5]
[5] Fairbairn v Radecki [2022] HCA 18 [39] – [40], [42].
In the circumstances of this case, however, the fact that such cohabitation previously subsisted in these parties’ relationship until August 2017, was a feature of their separation as at the 2018 accident, and was not reinstated following the 2018 accident indicates that there was no resumption of the previous de facto relationship.
Further there is no evidence of any modification of other arrangements between the parties following the 2018 accident that satisfies me that the previous de facto relationship was resumed. In particular, the circumstances of the granting of and the joint nature of a power of attorney given by the respondent to the applicant (and another) does not satisfy me that a resumption of the earlier relationship had occurred.
The applicant accepted by the time of the respondent’s return to live in Region L that the then relationship between the parties following his confinement in hospitals and in a rehabilitation centre, however to be described, was “over”.
Thereafter, the parties did not cohabit at that G Property or any other place.
To resume residence at his home the respondent had to do so with the assistance of full-time carers to meet his personal needs and help him maintain his health.
From late 2019 to early 2020 there were bushfires in Region L. The respondent was required to vacate his home and move to the N Hospital on account of the risk that the bushfires posed to him not only directly but also in relation to the deterioration in air quality.
To find separation, a Court needs to bring to account “intention, action and communication”.[6]
[6] Pavey & Pavey [1976] FamCA 36; (1976) FLC 90-051 at page 75,211, [147].
In my view, those matters also need to be brought to account in considering whether a previous relationship has been resumed.
The submission made on behalf of the applicant is that the parties’ actions and behaviours made evident sufficient “coupledom” that confirmed the resumption of the relationship.
I find that there was nothing constituting a clear and simple proposal expressed by one party to the other that their de facto relationship resumed following the respondent’s accident or that such a proposal whether express or implied was adopted by the parties.
The parties may have talked around that possibility but such discussions never advanced beyond mere exchanges of ideas and expressions of hope of what the future, in particular for the respondent, might look like.
When the respondent had his accident in 2018 the parties were not in a de facto relationship. They had, following their separation in August 2017, maintained an involvement in their business partnership and self-managed superannuation fund and the properties that that partnership and fund had acquired but not as members of a de facto relationship but rather for commercial reasons.
The nature of this involvement did not fundamentally change after the respondent’s accident and not after his return to live in Region L.
The changes in the applicant’s involvement in the respondent’s life brought about by the respondent’s accident was an increase in terms of time and effort but this did not change the nature of their relationship.
Following the accident, the applicant remained involved in the respondent’s life as a person who, with others, had to cover for the respondent’s absence from his regular working and private life.
The applicant undertook this role in a compassionate and sensible way. The applicant did not have to conduct herself in that way but for her to have done otherwise would lead to the view that she would have been unconcerned about her former de facto partner’s and present business partner’s circumstances which I find would have been out of character for her.
The accident meant that for many months the respondent was a person who was vulnerable in that he was significantly reliant upon others for all aspects of his well-being and was rendered susceptible to being exploited or made an object of persuasion in favour of others’ interests.
Besides the applicant, many others, both professionally and personally, were concerned with the respondent’s care and recovery following his accident. Besides doctors and other medical professionals, care and consideration was provided by mainly the applicant and the respondent’s mother.
Such care and consideration was supplemented by input from the parties’ accountant who they continued to use in common following their separation.
The care and consideration extended by the applicant to the respondent extended to some outings in early and mid-2019, the celebration of Christmas Day and New Year in 2018/2019 and attendance at a celebration at the M Hospital in 2018.
The resumption and commencement of a de facto relationship under those circumstances was not in my view likely. If a resumption had occurred at all it would have been noted by others who could have been brought forward as witnesses at trial.
No such witnesses were forthcoming.
After the respondent’s accident the applicant did increase her involvement in tasks associated with the working of partnership property and assisted with the respondent’s affairs but she only did so as a concerned former partner and acquaintance of the respondent and not as a member of a reinstituted or reconstituted de facto relationship.
THE ENDURING POWER OF ATTORNEY AND SIGNING FORMS
As noted above the respondent’s accident occurred in 2018. From that day in 2018 for a number of days the respondent was in the intensive care unit.
In 2018 the respondent executed an enduring power of attorney granting joint agency to the applicant and the respondent’s sister.
The execution of this power of attorney was consequent upon an earlier decision made at a family meeting (and from which the respondent was absent) of the respondent’s family members and the applicant soon after the accident, convened by the parties’ accountant as to how to operate the applicant’s business interests.
Given these circumstances, the timing and the extent of the respondent’s injuries and his presence in the intensive care unit, the execution of this power of attorney does not in any way suggest the resumption of the parties’ de facto relationship.
The applicant attended to the signing of forms in relation to the respondent’s admission as a public patient at some time in 2018. This signing of forms does not establish the resumption of the parties’ de facto relationship.
HOME MODIFICATIONS ASSESSMENT REPORT AND TRANSFER DOCUMENTS
In late 2018 a Home Modifications Assessment Report was prepared by an occupational therapist after reviewing the respondent’s two properties in Region L to assist in the planning of the respondent’s future and his return from a rehabilitation facility to home and work. The report records it was prepared with the applicant (described in the report as “[Mr Acker’s] partner”) and others, including the parties’ mutual accountant and builders.
Given the report was prepared without input from the respondent and was prepared at a time when the respondent was still undertaking rehabilitation as a resident at the M Hospital, I do not consider that the description of “partner” utilised by the report writer was a description given by the respondent. I do not find it was a description which was not consistent with other matters that indicated the parties at that time had not resumed their de facto relationship or otherwise comprised a de facto relationship for the purposes of the Act. There is nothing in the report which indicates what if any circumstances were given regard to in the then assignation of “[Mr Acker’s] partner” to the applicant.
There is reference in that report as to the properties being reviewed as a property where the applicant lived and to where the respondent possibly might return to live.
This report evidence amounts to no more than the canvassing of a possibility and does not lead me to the view that there was then a de facto relationship. At best it can only be taken as preparatory to such as relationship being possibly established.
In mid-2019 the applicant signed forms at the M Hospital confirming the respondent’s transfer to Region L and subsequently packed up the respondent’s belongings to take back to Region L.
The signing of these forms on the occasion of the respondent’s return to Region L does not persuade me that it was an action undertaken as a de facto partner of the respondent. Rather it was the signing of documents by a person permitted to do so for the purposes of the respondent’s release into the care of or to others while he was transported back to Region L.
ONGOING REFERENCE TO THE APPLICANT AS THE PARTNER OF THE RESPONDENT
The respondent acknowledged that while he was at the N Hospital between 2018 and 2019 that there were references to the applicant as his partner which he said were made by friends from time to time and which reference he was content with as the applicant remained throughout this period his partner in a business sense.
The parties continued to conduct their business partnership affairs following the respondent’s accident and the conduct of those affairs was undertaken under an oversight of the parties’ accountant.
The applicant continued to attend at and work on properties in Region L as did others. This surrounding circumstance permits the inference that the use of the term “partner” by others without protest from the respondent was not so much declaratory of other persons’ knowledge of the personal relationship status of the parties but rather a matter of mere convenience.
THERE WAS A NO DE FACTO RELATIONSHIP BETWEEN THE PARTIES FOLLOWING THE PARTIES SEPARATION IN 2017
Having considered all of the evidence of the parties and their respective witnesses I am not satisfied that the parties resumed their de facto relationship after August 2017.
Section 4AA(2) sets out a non-exhaustive list of factors that may be considered to work out if persons have relationship as a couple constituting a de facto relationship.
None of those matters were established as having occurred following the respondent’s accident as constituting a de facto relationship.
It was submitted on behalf of the applicant that despite the absence of such matters there were other factors present which demonstrated “sufficient coupledom … to demonstrate a resumption of their de facto relationship”.
While that submission may have resorted to the concept of the term “coupledom” as a matter of economy, it must be borne in mind that that concept as a test is to be eschewed.[7] The test is whether having regard to all the circumstances of the parties’ relationship they had a relationship as couple living together on a genuine domestic basis.[8]
[7] Herford & Berke (No 2) [2019] FamCAFC 182; (2019) FLC 182 at [14 – 18].
[8] Sinclair & Whittaker [2013] FamCAFC 129 ;(2013) FLC ¶93-551 at [92 – 94].
Having considered the evidence of the parties and their witnesses I am not satisfied that there was a resumption of the parties’ de facto relationship after it ended in August 2017 by reason of the conduct and/or statements made by the parties in respect of each other following the respondent’s accident in 2018.
For the sake of completeness, I am also not satisfied that the relationship between the parties following the accident constituted a de facto relationship.
What followed the respondent’s accident in 2018 was a period marked by the provision of interest, care and support by the applicant towards the respondent in respect of his recovery from that accident. It was not the resumption of their de facto relationship as claimed.
EXTENSION OF TIME
The standard application period in which a claim for property settlement can be brought is two years from the ending of the de facto relationship.[9]
[9] Family Law Act 1975 (Cth) s44 (5)(a)(i).
In this case the period of time within which the applicant could have issued proceedings for property settlement without the leave of the Court expired on 20 August 2019.
Proceedings seeking property settlement were filed on 25 November 2021. In that application, leave was sought to institute the proceedings.
The institution of the proceedings was two years, three months and three days out of time.
The applicant has sought an extension of time pursuant to s 44(6)(a) of the Act.
That subsection provides:
“The court may grant the party leave to apply after the end of the standard application period if the court is satisfied that:
(a) hardship would be caused to the party or a child if leave were not granted”
In respect of an application for leave under s 44(6) two broad questions arise for determination.
The first is whether hardship would be caused to the applicant if leave were not granted. If I am not satisfied that hardship would be caused to the applicant that is the end of the matter.
If hardship does exist then the second question is whether the Court as an exercise of its discretion should grant or refuse leave to institute the proceedings.
HARDSHIP
In Edmunds & Edmunds[10] the Full Court of the Family Court of Australia identified that the applicant for leave must establish:
(a)a reasonable prima facie case for relief had proceedings been instituted in time;
(b)the denial of the claim would cause the applicant hardship; and
(c)an adequate explanation as to delay.
[10] (2018) FLC 93–847; [2018] FamCAFC 121 at [5] (“Edmunds”) quoting Edmunds & Edmunds [2017] FCCA 2493 at [16].
The Full Court in that case referring to the primary judgement also said that in appropriate cases the degree of hardship to be suffered may well outweigh an inadequate explanation of delay and that if the three elements identified above are satisfied the prejudice the respondent may suffer by reason of the delay should be considered.[11]
[11] Edmunds at [5] quoting Edmunds & Edmunds [2017] FCCA 2493 at [17-18]
NATURE OF THE CLAIM
The claim is for property settlement.
To demonstrate an arguable case of substance the applicant must show that it is arguable that it is just and equitable that an order for property settlement be made and that when considering the factors listed in s 90SM that it is arguable that an order will be made.
To commence this process the applicant must identify the property of the parties.
ASSETS AND LIABILITIES OF THE PARTIES AT THE TIME OF TRIAL
It is to be recalled that the assets, liabilities and superannuation of the parties as at the date of trial are set out in the applicant’s trial affidavit at paragraph 113 and that the respondent said the values were incorrect and irrelevant as the Application was out of time.
However, in his trial Affidavit material, in his oral answers given under cross examination and through the cross examination conducted on his behalf and the tender of documents on his behalf at trial, it was acknowledged that the parties each held items of property including superannuation interests.
Given this, it is “arguable” in the relevant sense that property is held that could be the subject of orders if leave were to be granted.
The table of assets, liabilities and superannuation was set out at paragraph 43 above.
This table excludes the bringing to account of any monies that might be recovered by reason of an action for damages relating to the respondent’s accident which has been commenced on behalf of each of the parties and associated entities. What the product of that action might be at the date of hearing remained unknown.
In recognition of the fact the Court could in a property settlement case make an order in relation to superannuation for the purpose of s 90SM and the applicant seeks such an order, it is convenient and proper to consider both the non-superannuation and superannuation property and interests of the parties.
In summary, on the applicant’s reckoning:
(a)that the net joint non-superannuation the property amounted to $2,486,000;
(b)the applicant’s net non-superannuation property comprised $89,749;
(c)the respondent’s net non-superannuation property comprised $7,106,710;
(d)the applicant’s superannuation comprised $233,764; and
(e)the respondent superannuation comprised $577,203.
In combining non-superannuation property and superannuation interests the respondent’s net position is $7,683,913 and the applicant’s position is $323,513.
If there was an equal allocation of the net equity in the joint non-superannuation property of the parties as might be suggested by the use of the appellation “joint”, the respondent’s net property would increase from $7,683,913 to $8,926,913 and the applicant’s net property would increase from $323,513 to $1,566,513.
Bearing in mind that percentages are but limited tools, it can be noted that on this analysis the respondent holds 85% and the applicant 15%.
The parties cohabited for a period of a little over 18 years. There are no children of the relationship.
There are proceedings pending in the Supreme Court of South Australia as to the appointment of a receiver to the partnership and proceedings for damages arising out of the accident all pending.
The parties have sought through negotiations conducted by their accountant to resolve their financial relationship in relation to jointly owned property and in particular the break up and dissolution of the partnership. The evidence of the need for negotiations on each side as to how to organise their property and working lives following their separation with their accountant, even if such discussions were not about an overall property settlement, suggests that the assumptions about the use of property by each of them for their benefit as members of a de facto relationship had come to an end following their separation and there was a need to reorder the property and its use.
The ongoing holding of joint property created during the course of the relationship now needs to be resolved given the breakdown in the parties’ relationship and their inability to come to an agreement as to the disposition of that property at least in the context of all the property held by the parties.
It is to be seen as arguable that it would be just and equitable for an order for property settlement to be made pursuant to s 90SM(3) in these circumstances of a relationship of the length of that enjoyed by the parties in this case.
It is also necessary for consideration to the type of order that might be arguable which requires consideration of matters identified in s 90SM(4).
In turning to a consideration of matters under s90SM(4), I consider it is of assistance to set out some facts asserted by the applicant which are largely but not totally not contentious and then turn to consider matters of contribution and so called “future needs”.
The facts asserted by the applicant which are largely not contentious are:
(a)the de facto wife was born in 1962 and is now 60 years of age;
(b)the de facto husband was born in 1966 and is now 56 years of age;
(c)the de facto wife works in agriculture;
(d)the de facto husband is despite his significant disabilities conducts an agricultural business;
(e)the parties commenced cohabitation in 1999;
(f)the parties were never married;
(g)the date of separation is in August 2017;
(h)there are no children of the relationship;
(i)neither party has re-partnered;
(j)the de facto wife is in good health; and
(k)the de facto husband has serious health issues which will require him to have full-time carers for the remainder of his life.
At the commencement of cohabitation, the applicant owned a property situated at R Street, Region S, SA (value approximately $80,000 with a home loan of approximately $48,000), some A.S. (value approximately $1,000), a motor vehicle (value approximately $5,000), minimal savings and a BB Insurance Plan (value unknown).
At the commencement of cohabitation, the de facto husband owned a property situated at 2 T Street, Region C, SA.
From the starting point of the de facto relationship the parties developed the property that is now held by each of them.
CONTRIBUTIONS OF EACH PARTY DURING THE COURSE OF THE DE FACTO RELATIONSHIP
Contributions are acknowledge to have been made by the applicant but there remains a dispute as to the significance of those contributions. The respondent says those contributions are more than adequately reflected in the property presently held by the applicant.
The applicant claims that her contributions were made in relation to the operation of business conducted during the course of the relationship and in respect of the respondent’s children who lived with the parties (for how long being a fact in dispute between the parties). There have been other contributions made following the parties’ separation particularly in relation to the applicant’s care of the respondent and the recovery of properties following the bushfires of 2020.
OTHER MATTERS RELEVANY UNDER S90SM
As has been discussed earlier, the ages, state of health and present disposition of property and superannuation interests are all factors which would come to be identified and argued in this matter. The weighting of such matters will turn, at least in part, upon the assessment of the significance of contributions.
FINDINGS AS TO HARDSHIP
The Court is not required to make findings in the nature of a preliminary trial about these matters but only to see whether there is some fair or reasonable probability that relief will be granted.[12]
[12] Edmunds v Edmunds (2018) 58 FamLR 76; [2018] FamCAFC 121 at [20].
I find that a claim for property settlement as to an adjustment being made beyond the property presently held by the applicant (even allowing for an equal allocation of the net value of the property and liabilities styled “joint”) is arguable by reference to the contribution and “future needs” factors referred to above
In so holding, I do not indicate whether at a final hearing the applicant shall be successful to the extent that she seeks by her Further Amended Initiating Application.
I hold that hardship would be caused to the applicant if leave were not granted permitting her to bring an application for property settlement.
DELAY
The delay in this matter is two years, three months and three days.
The proceedings without leave should have been instituted by 20 August 2019.
The explanation for the delay in bringing proceeding is but a factor to be brought to account.
The explanation of delay can be considered by reference to the whole of the period from when time begins to run; that is the case of married persons from the date of the decree nisi dissolving the marriage[13] or in the case of a de facto relationship when that relationship broke down.[14]
[13] Althaus and Althaus (1982) FLC 91-233 at 77,269; [1979] FamCA 47.
[14] Given that the same principles apply to de facto relationships as do to marriages in relation to s44 matters: Gadzen & Simkin (2018) FLC 93-871; [2018] FamCAFC 218 at [29].
For the sake of analysis, the period of separation from August 2017 to issuing of proceedings in November 2021 is best understood in three segments:
(a)the period August 2017 to 2018 (that is, from separation to accident);
(b)2018 to August 2019 (that is, from accident to the end of the standard application period); and
(c)August 2019 to filing in November 2019 (that is, from the end of the standard application period to filing).
Between August 2017 to 2018:
(a)the applicant had acknowledged the end of the original de facto relationship;
(b)in May 2018 there were discussions between the parties through the offices of their mutual accountant described above; and
(c)the parties continued to conduct farming operations developed during the period of their relationship. There is a dispute not relevant for present purposes as to how each of their roles in this regard were discharged.
Between 2018 and August 2019:
(a)this was a period dominated by the demands created by the respondent’s accident and in particular his medical treatment and rehabilitation which was undertaken by the respondent and was participated in and supported by the applicant (among others); and
(b)from July 2019 the respondent was in the process of re-establishing himself into his G Property home.
Between August 2019 and filing on 25 November 2021:
(a)the applicant was able to commence proceedings if she chose to do so;
(b)upon the return of the respondent to live in Region L the applicant’s attendances upon the respondent were limited;
(c)in December 2020 the respondent had forwarded material to the parties’ accountant proposing options for settlement. These were discussed between the applicant and the accountant. I take this to be a continuation of earlier of discussions between the parties as to the conduct of the parties’ financial affairs. Whether these discussions are characterised as negotiations in relation to the separation of the parties joint business interests or the separation of the parties finances generally is for present purposes a distinction without significance;
(d)in early 2020 the properties at which each of the parties resided and worked were devastated by bushfires. The fires causing that devastation continued burning throughout the early part of 2020;
(e)in March 2020 COVID-19 virus outbreaks affected Region L;
(f)the parties utilised their mutual accountant to process insurance claims for the properties as the properties were covered by the same policy and the respondent drew down insurance monies received between July 2020 and May 2021;
(g)in early 2021 the applicant the applicant sought legal advice and retained solicitors with respect to partnership issues;
(h)from early 2021 the applicant was able to return, despite the demands of the bushfires, to consideration of the property settlement issues;
(i)in March 2021 the applicant emailed the respondent in relation to the proposals of the respondent that had been communicated to her by the parties’ accountant in December 2020. This email did not elicit a response from the respondent;
(j)on 25 May 2021 the parties’ accountant attended at the parties’ respective residences in Region L and conducted, by travelling between their respective residences, negotiations about the division of the parties’ assets. The accountant was successful in facilitating an agreement and a document “Notes of Agreement” (“Notes”) was emailed to each party that day;
(k)between 25 May 2021 and 30 June 2021, the accountant following various requests of each of the parties amended the Notes document. At least three lots of modifications were made to the Notes. A version of the Notes entitled “Notes of Agreement – Edition 3” was prepared by the accountant on 1 July 2021;
(l)on 1 July 2021 the applicant signed a copy of the third edition of the Notes and emailed that signed copy to the respondent and the accountant that day. Not long after, the applicant attended upon a solicitor to have a Will prepared that was consistent with the terms of the third edition of “Notes”;
(m)on 26 August 2021 the applicant emailed the respondent informing him that as he had not “signed off” the third edition of the minutes that she was no longer prepared to finalise their property settlement in the manner set out in the Notes and that the process of a “solution” had to be commenced all over again;
(n)on 6 October 2021 the respondent’s solicitor forwarded to the applicant’s solicitor a draft s 90UD Financial Agreement containing a proposal for financial settlement as between the parties and indicated she was willing to continue to negotiate the issue of settlement;
(o)on 12 October 2021 the applicant’s solicitor sought advice from counsel on behalf of the applicant;
(p)on 19 October 2021 the applicant is solicitor wrote to the respondent’s solicitor with respect to the question of property settlement which in part said “Our instructions are to now progress with the formal application for financial orders in accordance with the advice from Counsel, but we do have instructions to continue negotiations at the same time if your client is of a mind to do so.”;
(q)on 28 and 29 October 2021 the respondent arranged for a Mr FF to travel to the region upon which the parties resided to facilitate a series of meetings between Mr FF, the applicant and the respondent to discuss the question of asset division as between them. Those meetings did not resolve the parties’ differences;
(r)on 23 November 2021 the applicant engaged her current solicitors and gave instructions for proceedings to be issued on her behalf, which then occurred on 25 November 2021; and
(s)in November 2021 the respondent sought that the applicant engage in mediation.
This history discloses that the parties were seeking since their separation to effect a separation of their finances and in particular a resolution of their differing approaches as to how they were to dispose of their joint interests in the partnership and property and finalise their financial relationship generally.
That process of endeavouring to comprehensively resolve the parties’ financial relationship commenced in mid-2018. The process has been undertaken with the assistance of various interveners and supporters being the parties’ accountant, lawyers and a friend/acquaintance. The disposition of the parties’ respective property interests has been sought by both of the parties. That being so, I infer that each of the parties perceived the need that their joint assets and interests needed to be dealt with and arranged in some way even if that dealing was to come to constitute a mutual agreement that subject to dealing with joint property there be no further adjustments between them.
Time has passed on account of the respondent’s rehabilitation following his accident and the respondent’s involvement in that which was willingly accepted by the respondent and the applicant’s involvement in the re-establishment of operations following the bushfires and the participation in negotiations.
The applicant has not acted as if she has had no intention of proceeding or pursuing any claim against the respondent.
The applicant’s giving of instructions to solicitors in July 2021, nearly two years after the time within which proceedings could have been issued without leave, did not see any amelioration of the applicant’s delay until other legal representatives were instructed.
The delay occasioned by the failure to issue proceedings soon after July 2021 does not cause the reasons for the delay in filing proceedings in this matter to be differently regarded as the respondent has been generally aware and on notice of the applicant’s demands. In this sense the respondent does not experience prejudice in that he has proceeded to organise his affairs without notice of the general nature of the applicant’s proposed claims.
There was no submission directly upon the finding that should be made about when the applicant’s knowledge of the standard application period was had or when she received advice about it.
The respondent’s submissions do not persuade me otherwise.
The applicant’s actual knowledge of the standard application period is not relevant in this case.
What is of greater significance is that the parties conducted themselves following their separation in a way that acknowledged their financial relationship had to be concluded as soon as practicable. That process was interrupted and delayed by the respondent’s accident and his rehabilitation. But for that accident, the parties would have continued to work towards the finalisation of their financial relationship.
Apart from that delay there is no evidence of prejudice to the respondent as he was continuing to negotiate.
I am satisfied that there has been established an adequate explanation of delay and that the delay has not caused such prejudice to the respondent as to not warrant a grant of leave in all the circumstances.
In all the circumstances I am satisfied given my findings as to hardship that it is otherwise appropriate that leave should be granted to the applicant to institute proceedings for property settlement pursuant to s 90SM of the Act.
COSTS APPLICATIONS
By her Further Amended Initiating Application, costs orders are sought by the applicant in respect of costs said to be thrown away as a result of the failed mediation on 8 March 2022 and in respect of her application for leave.
The respondent by his Response to Initiating Application seeks costs.
In respect of the applications for determination of the length of the de facto relationship and the granting of leave to extend time within which to institute proceedings I will afford each of the parties an opportunity to file submissions in relation to the question of costs in light of these reasons.
In relation to the applicant’s claim for costs on an indemnity basis and, in the alternative, on a scale basis in respect of the mediation that did not proceed on 8 March 2022 I bring the following matters to account:
(a)I note that although the parties had agreed to attend mediation on 8 March 2022 that no order was made to that effect. It is open to the parties to seek that the Court in the exercise of its general powers of case management[15] order parties to attend dispute resolution events including mediation. No such order was obtained here and I am not otherwise persuaded that the mediation attendance is part of the proceedings but rather an agreed undertaking of the parties that was sought to be conducted alongside of or as an adjunct to but not part of the proceedings;
[15] Rule 4.05.
(b)agreement appears to have been made on or about 21 February 2022 to attend mediation on 8 March 2022;
(c)the applicant’s mediation document was sent to the respondent’s solicitor at about 4.19pm on the day before mediation. There were 2 contentious items in that document the main one being the insertion of an item of $1.8 million in a net pool of about $10.3 million or $9 million which the respondent referred to in his evidence as being about 20%;
(d)the respondent wanted to mediate the question of an extension of time in respect of which he considered schedules of assets to be of little or no consequence. There was no evidence of a clear agenda of matters set to be discussed at the mediation;
(e)the respondent was communicating with his solicitor as late as 7.48pm on the evening prior to the mediation;
(f)the respondent refused to mediate that day but not generally and did so after taking advice and speaking to the mediator who was experiencing what the respondent termed “technical difficulties” and offering not to charge the parties fees for the mediator’s efforts on that day;
(g)the respondent had legal representation at the commencement of the mediation and participated in discussions with the mediator but was not prepared to proceed with the mediation that day;
(h)the respondent by his Response sealed 15 February 2022 had sought an order for mediation among the interlocutory orders brought by him. This was consistent with his position expressed to and noted in the order of the Court of 24 January 2022;
(i)generally in relation to the respondent’s health difficulties they can be understood to fluctuate across the day;
(j)the respective financial positions of the parties; and
(k)no further order has been made or sought for mediation since.
FINDING AS TO COSTS EXPENDED ON THE FIRST ROUND OF MEDIATION
I am not persuaded by the submissions I have received or from the evidence placed before me that the respondent’s conduct at the mediation on the day of the mediation is conduct “in relation to the proceedings” for the purposes of s 117(2A)(c) which can be brought to account.
The respondent’s conduct at the mediation, however, can be brought to account pursuant s117(2A)(g).[16] While such conduct can be brought to account, it has to be borne in mind that participation in a mediation unless under a court order, remains a voluntary dispute resolution process and in it being undertaken parties are free to participate or not participate to the extent that they wish in respect of all aspects of the mediation.
[16] Parke & The Estate of the Late A Parke [2016] FamCAFC 248 at [36].
I have set out above the relative financial positions of the parties as they might be understood.
I am not satisfied on the evidence before me that in all of the circumstances that the respondent’s behaviour in relation to the conduct of the proceedings can be regarded as so obstructive as to justify an order for costs in relation to the mediation.
I am not persuaded that orders for costs for should be made that the respondent should pay the applicant’s costs associated with the attendance at the unsuccessful mediation on 8 March 2023.
I would dismiss paragraph 7 of the applicant’s Further Amended Initiating Application and the alternative order for costs in relation to the mediation sought in her written submissions.
In light of the orders made, this matter now should be listed before a Judicial Registrar for the making of orders and directions for the purposes of attendance at a financial conciliation conference and/or alternative dispute resolution.
If there remain other applications for costs I will make orders and directions for the disposition of any such applications in the light of these reasons to be dealt with by way of written submissions.
I certify that the preceding one hundred and eighty (180) numbered paragraphs are a true copy of the Reasons for Judgment of Judge McGinn. Associate:
Dated: 4 July 2023
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