STREETON & STREETON
[2015] FCCA 294
•25 February 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| STREETON & STREETON | [2015] FCCA 294 |
| Catchwords: FAMILY LAW – Application to grant leave to file out of time pursuant to s.44(3) – evidence of hardship – wife has a prima facie case – delay – prejudice – leave granted. |
| Legislation: Family Law Act 1975 |
| Althous & Althous (1982) FLC 91-233 Frost & Nicholson (1981) FLC 91-051 G & G [1999] FamCA 240 Hall & Hall (1979) FLC 90-679 Mackenzie & Mackenzie (1978) 34 FLR 56 Montano & Kinross [2014] FamCAFC 231 Perkins & Perkins (1979) FLC 90-600 Whitford & Whitford (1979) FLC 90-612 |
| Applicant: | MS STREETON |
| Respondent: | MR STREETON |
| File Number: | MLC 2963 of 2013 |
| Judgment of: | Judge McGuire |
| Hearing date: | 16 December 2014 |
| Date of Last Submission: | 16 December 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 25 February 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Dunlop |
| Solicitors for the Applicant: | Berry Family Law |
| Counsel for the Respondent: | Mr Edward |
| Solicitors for the Respondent: | Slater & Gordon |
ORDERS
That the applicant wife have leave to institute proceedings against the respondent husband for property settlement under section 79 of the Family Law Act 1975.
The parties attend a conciliation conference with a Registrar at the Federal Circuit Court at Melbourne on 5 May 2015 at 9:15 a.m.
That unless the valuations of all assets are agreed between the parties within twenty eight (28) days of the date of these orders then the parties obtain valuations on affidavit not later than fourteen (14) days prior to the conciliation conference or at their discretion, obtain joint valuations at shared cost.
IT IS NOTED that publication of this judgment under the pseudonym Streeton & Streeton is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 2963 of 2013
| MS STREETON |
Applicant
And
| MR STREETON |
Respondent
REASONS FOR JUDGMENT
This is an application by the wife for leave pursuant to section 44(3) of the Family Law Act1975 (“The Act”) to bring proceedings out of time under section 79 of the Act. The wife’s application also seeks substantive orders in respect of children’s matters.
The application is filed 16 October 2014. The parties were granted a final order of divorce on 30 June 2013. The application is therefore now some five and a half months out of time, but was filed three and a half months out of time on 16 October 2014.
The application for leave is opposed by the husband.
The wife relies on her affidavit and financial statement both sworn 14 October 2014.
The wife is a (occupation omitted) with an income of approximately $87,000 per annum. There are two children of the marriage aged 11 and 10 years. The children currently live nine nights with the wife and five nights with the husband each fortnight.
The husband is employed as a (occupation omitted). He has filed a response, affidavit and financial statement all sworn 9 December 2014. He discloses an income from his employment of approximately $70,000 per annum.
This application was heard in a duty list and on the basis of submissions from counsel and on consideration of the affidavits. There was no cross-examination.
The parties separated in August 2011. The wife’s affidavit relied upon in this application is sparse in respect of the considerations to be undertaken by the court and in some ways deficient. The affidavit is 66 paragraphs long. On my reading, only paragraphs 64 and 65 of that document relate directly to this application. It is instructive to record those two paragraphs in full in these reasons as an indication of the difficulties often faced by courts in interlocutory or interim applications where solicitors prepare affidavits but with little regard to the requirements of the legislation and matters of onus and standard of proof.
Paragraphs 64 and 65 of affidavit are as follows:
64. I seek leave of the court to file these proceedings out of time. Mr Streeton and I have been negotiating parenting and property matters since we separated. Mr Streeton has been represented by three different lawyers since negotiations began. We have not been able to resolve parenting or property matters privately or with the assistance of our lawyers. I have not been able to instruct my lawyer to issue proceedings for financial reasons and until recently when I borrowed $30,000 from the bank.
65. The children and I will suffer significant financial hardship if I am not granted leave to file my application out of time. At all times I believed the negotiations would result in a settlement of our property issues. I wish to settle property matters with Mr Streeton finally.
The relevant law
Section 44(3) of the Act provides that certain proceedings, including those under section 79 of the Act, shall not be instituted, except by leave of the Court in which the proceedings are to be instituted or with the consent of both parties to the marriage, after the expiration of 12 months after the divorce order took effect.
Section 44(6) 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; or
(b) in the case of an application for an order for the maintenance of the party – the party’s circumstances were, at the end of the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.
Section 44(4) is more assertive in its terms in providing:
The Court shall not grant leave under subsection (3) or (3A) unless it is satisfied:
(a) that hardship would be caused to a party to the relevant marriage or a child if leave were not granted.
The approach for the Court in consideration of such an application is well established. As long ago as 1979 in Whitford & Whitford[1] the Full Court stated:
Thus, on an application for leave under sec 44(3), two broad questions may arise for determination. The first of these is whether the Court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted. If the Court is not so satisfied, that is 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.
[1] (1979) FLC 90-612, at [78-144]
As Ellis J observed in G & G[2]:
…proof of hardship is a necessary pre-condition to the exercise by the Court of its discretion. The generally accepted interpretation of hardship, in the context of s.44(3), is “substantial detriment”. The loss of the right to institute the proceedings itself, however, is not hardship within the meaning of the section.
[2] [1999] FamCA 240 at [22]
However, the Full Court in Whitford (Supra) had observed at [78-145]:
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 considering potential hardship on any applicant, the Court is not required to enter into a detailed hearing on the merits of the applicant’s substantive application. Rather, the applicant must present prima facie a reasonable claim with some chances of success. As the Full Court said in Althous & Althous[3]:
In my opinion, sec 44(3) and (4) are not intended to require a detailed hearing on the merits to determine whether the applicant’s claim will succeed. The exercise is to determine whether there is a reasonable claim to be heard. That is the essence of the inquiry into whether hardship will be suffered by denying the applicant the right to litigate that claim.
[3] (1982) FLC 91-233 at [77-267]
The wife’s case – hardship
It is important to note that this matter proceeded to hearing in a busy duty list. No application was made by the applicant for an adjournment. No application was made by the applicant’s counsel to give oral evidence or to adduce further evidence. No application was made by counsel for either party to cross-examine the other party on their affidavit material. The applicant relied entirely on her affidavit sworn 14 October 2014 and her financial statement sworn the same day.
The wife’s financial statement discloses average weekly income of $1444 as against personal expenditure of $1418. There is no application for spousal maintenance.
The wife’s affidavit directly references “hardship” in only one paragraph, being [65], where she deposes:
The children and I will suffer significant financial hardship if I am not granted leave to file my application out of time.
The wife’s 66-paragraph affidavit does not otherwise particularise any hardship to the wife or the children should leave not be granted to bring her application under section 79 of the Act.
The wife’s initiating application sets out the orders that she would seek if granted leave under section 44(6) of the Act. That application does not particularise any orders sought for property settlement. Similarly, no inference can be drawn as to the wife’s case from that document. Under the heading “Financial”, the wife seeks the following orders in her application:
(1) That pursuant to section 79 of the Family Law Act the Court may make such orders in final resolution of the financial relationship of the parties as is deemed just and equitable;
(2) that the wife have leave to further particularise her application for property settlement subsequent to discovery having been completed;
(3) further orders as this honourable Court deems appropriate.
I have considered the wife’s affidavit in full. Nowhere does it particularise the property settlement orders sought by the wife.
The applicant wife in this matter is seeking an indulgence of the Court to bring an application out of time.
I have considered the recent comments of the Full Court in Montano & Kinross[4] as follows at [14]:
Like many applications for indulgence, an application for leave to apply after the end of the standard application period requires the Court to exercise its discretion in a manner that, ultimately, is consistent with justice being done to both parties. The potential for injustice to the applicant being unable to pursue the remedy precluded by the refusal to grant leave must be compared to the prejudice to the respondent in the granting of leave. So, too, good or legitimate reasons for failing to do that which the Act requires must be compared with wilful blindness or recalcitrance. Equally, a desire to pursue a remedy out of time must be compared to the necessity for the parties to proceed with their post-separation lives free of the spectre of prospective litigation.
[4] [2014] FamCAFC 231
In this matter the wife faces a threshold-test of proving hardship. She asserts in her application that she and the children would face potential hardship by refusal of her application. In making an assertion of fact, the wife must give or adduce evidence in support of that assertion such as to convince the Court on the balance of probabilities. It is not for this Court to assume some inquisitorial or forensic role itself. That onus and burden falls on the applicant together with her legal representatives.
As the Court said Whitford (Supra), at pp. 78-145 – 78, 146:
In ordinary parlance, hardship means something more burdensome than, any appreciable detriment. We consider that in subsec 44(4) the words should have its usual, though not necessarily its most stringent, connotation. It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense. As a general proposition, it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship. Similarly, where the costs which the applicant will have to bear himself or herself are about as much or more than what the applicant is likely to be awarded in a property claim, ordinary hardship would not result if leave to institute proceedings were not granted. But otherwise we find no warrant in either subsec 44(3) or 44(4) for saying that the right or entitlement lost must be a substantial one.
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 (my emphasis).
In the matter now before me I do have evidence of the financial interdependence of the parties in the sense that the wife lives in the former matrimonial home and the parties hold the title to that property jointly. Nevertheless, this in itself is not, in my view, enough to constitute hardship per se. Indeed, the husband, who does not have the benefit of possession of the home, did not bring a section 79 application within time himself and opposes this application.
A detailed and close reading of the wife’s affidavit, however is demonstrative of her having a prima facie case. She discloses the following matters:
a)The parties cohabited for near 11 years;
b)The two dependant children live 9 nights per fortnight with the wife and 5 nights with the husband;
c)Both parties are in employment or part-time employment;
d)The wife deposes to no significant initial contributions by either party;
e)The wife deposes to financial contributions totalling $100,000 on her behalf during the marriage;
f)The net asset pool approximates $970, 000;
g)The husband is assessed to pay child support but is allegedly not paying and has accrued arrears; and
h)The husband’s superannuation entitlements exceed those of the wife by nearly $100,000 within a superannuation pool of about $265, 000.
Given these circumstances, I am satisfied that the wife would suffer hardship if leave was to be denied for what I see as a reasonable prima facie claim to be heard.
Taking the above into consideration, I am satisfied that he applicant has a prima facie case for property settlement pursuant to section 79. As Nigh J observed in Frost & Nicholson[5] :
To deprive a party of a right to institute proceedings is not per se ``hardship'', but to deprive the wife of a right to action in the circumstances of this case would be to work an injustice and that is a “substantial detriment”
[5] (1981) FLC 91-051 at 76422
As the Full Court said in Hall & Hall[6], it is fundamental to the enquiry as to hardship whether the applicant has a reasonable claim to be heard by the Court. That is, not by itself necessarily the same thing as hardship but the stronger the applicant’s prima facie claim the greater the likelihood of hardship if leave were refused. This issue depends on the circumstances of each case as Strauss J so aptly pointed out in Mackenzie & Mackenzie[7].
[6] (1979) FLC 90-679 at p.78, 627
[7] (1978) 34 FLR 56
In the circumstances I am satisfied that the wife’s prima facie case discloses potential hardship should leave not be granted.
The court’s discretion
The delay in this matter is only some three and a half months following the expiration of the two years from the granting of the divorce. Relative to the applications that come before this Court, that is not a lengthy delay. Further, I accept that a Court should not be too rigid or constrained in consideration of a statute which provides for “indulgence” in the sense of giving justice between parties. The discretion of the Court is also broad and unfettered. Nevertheless, an applicant must present a reasonably arguable case and evidence in support of that case. The applicant must do more than simply rely on a relatively short duration of delay[8]. A Court dealing with these matters would usually expect an explanation for the delay supported by evidence. Put simply, there must be some evidence before the Court to convince it to exercise its discretion in favour of an applicant.
[8] Perkins & Perkins (1979) FLC 90-600 at p.78, 055
In this matter, again, the wife’s evidence in respect of the delay is scant. In her affidavit and under the heading “Delay” at paragraph 64, she deposes to having negotiated parenting and property matters “since we separated”, which is as long ago as 2011. Indeed, the wife’s counsel informed me that the wife had enjoyed the assistance of solicitors for the majority of that time. The wife continues at paragraph 64, “I have not been able to instruct my lawyers to issue proceedings for financial reasons until recently when I borrowed $30,000 from the bank.”
This is the extent of the evidence in explanation of the delay. Again, there was no application to give or adduce further evidence or for the wife to give oral evidence.
The wife’s evidence is that she has consistently sought to negotiate a resolution since 2011. I infer her evidence to be that she was required to borrow $30,000 to then bring proceedings. Whilst this evidence is untested, it would be neither unusual nor unreasonable for solicitors to require such a deposit on costs. I have no evidence or suggestion that the wife has orchestrated any delay for her own ends and I am satisfied that she provides a reasonable explanation for what is a short delay.
I turn to consider the relative prejudice to the parties in exercising my discretion in favour of either. The potential prejudice to the wife in not granting leave is set out above in the terms of her reasonable prima facie argument and case for “hardship”.
There is unlikely to be any prejudice to either party by reason of such a short delay in the sense of being able to properly prepare their cases or in the availability of witnesses.
Although he does not specifically argue it, the husband might feel a prejudice to him if the matter is to proceed in this jurisdiction where superannuation entitlements is “treated as property” contrary to arguing his case in another jurisdiction. However, I am of the view that the interests of justice between the parties would counter any such argument. I was not taken to any other prejudices to the husband.
Conclusion
Taking all of these matters in account, I am satisfied that I should exercise my discretion in favour of granting the wife leave to bring her application out of time.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge McGuire
Date: 25 February 2015
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