Waldmann & Paddack

Case [2024] FedCFamC1A 100

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Waldmann & Paddack [2024] FedCFamC1A 100

Appeal from: Paddack & Waldmann (No 2) [2023] FedCFamC2F 1629
Appeal number: NAA 8 of 2024
File number: MLC 3714 of 2023
Judgment of: MCCLELLAND DCJ
Date of judgment: 24 June 2024
Catchwords:

FAMILY LAW – LEAVE TO APPEAL – Where leave to appeal is required because orders pursuant to s 44(6) of the Family Law Act 1975 (Cth) are interlocutory – Application of Medlow & Medlow (2016) FLC 93-692 – Where a substantial injustice would be suffered by the de facto husband if he were denied the opportunity to prosecute a meritorious appeal – Leave to appeal granted.

FAMILY LAW – APPEAL – Where the primary judge erred in failing to provide adequate reasons for the basis of the finding that the de facto wife had a prima facie case of establishing hardship – Where the de facto wife has proved she will suffer hardship if she were not allowed to commence proceedings out of time – Where the Court has to weigh hardship against other discretionary factors – Where the de facto wife has not provided a sufficient reason as to the delay in commencing proceedings – Where neglectful legal advice or lack of knowledge of a limitation period is not an adequate reason for delay in commencing proceedings – Where the length of delay in commencing proceedings causes prejudice to the de facto husband who has administered his affairs on the basis that there will be no further property settlement – Appeal allowed – Re-exercise of discretion – Orders of the primary judge set aside – De facto wife’s application for leave to commence proceedings out of time dismissed – De facto wife’s Application for Review dismissed –Where the de facto wife was wholly unsuccessful – Costs certificate granted to the de facto husband.
Legislation:

Family Law Act 1975 (Cth) Pt VIII, ss 44, 90SF, 90SM, 117

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 5

Federal Proceedings (Costs) Act 1981 (Cth) s 9

Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) r 13.13
Cases cited:

Althaus and Althaus (1982) FLC 91-233; [1979] FamCA 47

Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25

Carlon and Carlon (1982) FLC 91-272; [1982] FamCA 60

CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67

Edmunds & Edmunds (2018) FLC 93-847; [2018] FamCAFC 121

Hall and Hall (1979) FLC 90-679; [1979] FamCA 50

Hardwick & Hardwick (No 2) (2022) FLC 94-126; [2022] FedCFamC1A 216

Hedley & Hedley (2009) FLC 93-413; [2009] FamCAFC 179

Jacenko and Jacenko (1986) FLC 91-776; [1986] FamCA 25

Krueger & Krueger [2023] FedCFamC1A 203

Lambertson v Lambertson (2021) 63 Fam LR 185; [2021] FamCAFC 48

McIver v Australian Capital Territory; Williams v Australian Capital Territory [2024] ACTSC 112

Medlow & Medlow (2016) FLC…

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AGLC
Waldmann & Paddack [2024] FedCFamC1A 100
Case
[2024] FedCFamC1A 100
Decision Date

CaseChat Overview and Summary

The appeal in Waldmann & Paddack was heard by the Federal Circuit and Family Court of Australia, Appellate Division. The de facto husband, Mr Waldmann, sought leave to appeal the decision of the primary judge, who had allowed the de facto wife, Ms Paddack, to commence proceedings out of time and granted her leave to appeal. The central legal issue was whether the de facto wife had a bona fide reason for the significant delay in commencing proceedings, and whether this delay prejudiced the de facto husband. Additionally, the court needed to decide if the primary judge's reasoning for allowing the de facto wife to proceed out of time was adequate.

The court found that the de facto wife's explanation for the delay in commencing proceedings was insufficient. The de facto wife had not provided adequate reasons for the delay, and the length of the delay had prejudiced the de facto husband, who had administered his affairs on the basis that there would be no further property settlement. The court also found that the primary judge erred in failing to provide adequate reasons for the basis of the finding that the de facto wife had a prima facie case of establishing hardship. The court held that the de facto wife's neglectful legal advice or lack of knowledge of the limitation period was not an adequate reason for the delay in commencing proceedings. Given these findings, the appeal was allowed, the orders of the primary judge were set aside, and the de facto wife's application for leave to commence proceedings out of time was dismissed.

The court issued several orders. Firstly, leave to appeal the orders of the primary judge was granted. Secondly, the appeal was allowed, and the orders of the primary judge were set aside. Thirdly, the de facto wife's application for review was dismissed. Fourthly, the de facto wife's application for leave to commence proceedings out of time was dismissed. Lastly, a costs certificate was granted to the de facto husband. This certificate allows the de facto husband to seek reimbursement for the costs incurred in the appeal from the Attorney-General.

Orders

Orders of the court

NAA 8 of 2024

MLC 3714 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MR WALDMANN

Appellant

AND:

MS PADDACK

Respondent

ORDER MADE BY:

MCCLELLAND DCJ

DATE OF ORDER:

24 JUNE 2024

THE COURT ORDERS THAT:

1. Leave to appeal the orders of a judge of the Federal Circuit and Family Court of Australia (Division 2) made on 15 December 2023 is granted.

2. Appeal NAA 8 of 2024 is allowed.

3. Orders of the Federal Circuit and Family Court of Australia (Division 2) made on 15 December 2023 are set aside.

4. Pursuant to Pt VIII of the Family Law Act 1975 (Cth), the de facto wife’s Application for Review filed on 21 September 2023 is dismissed.

5. The de facto wife’s application for leave to commence proceedings out of time pursuant to s 44(6) of the Family Law Act 1975 (Cth) is dismissed.

6. The de facto husband is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of this Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the de facto husband in respect of the costs incurred by him in Appeal NAA 8 of 2024.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

I have dismissed the de facto wife’s application as she has failed to satisfy me that she has a bona fide reason for the delay in commencing proceedings. This delay has prejudiced the de facto husband. After having regard to likely costs associated with the proceedings and the lack of adequate reasons for this delay, I have concluded that there would be marginal utility in the proceedings being commenced. BACKGROUND For the purpose of this appeal, I provide the following brief outline of background facts and contentions insofar as they are relevant to the issues that require determination in this appeal. The appellant, Mr Waldmann, was born in 1962 and is currently 62 years of age. The respondent, Ms Paddack, was born in 1971 and is currently 52 years of age. In circumstances where this decision considers various applications, and an appeal, it is convenient to refer to the parties as the de facto husband and the de facto wife. The de facto husband has two children from a previous relationship and the de facto wife also has two children from a previous relationship. The parties commenced a relationship in 1999 and separated in November or December 2018. Both parties agreed that, during the period of cohabitation, their finances and property were intermingled. The parties agree on the initial contributions to the relationship but dispute the value of those contributions. The parties also agree that the de facto husband brought in a larger initial contribution. However, the extent of that contribution is disputed. The acquisition and disposal of property and business interests in the relationship are set out below:(a)In 2000, the de facto wife moved with her children into the home of the de facto husband situated at Property B, which was owned by the de facto husband on an unencumbered basis. At the time of cohabitation, the de facto husband owned a vehicle and some plant and equipment that was subject to some finance. The value and contents of this equipment is disputed.(b)In 2002, the de facto husband purchased a header for $450,000.(c)In 2006, the parties spent significant time at Property C to farm the property owned by the de facto wife’s mother. (d)In 2006, the parties commenced a partnership with the de facto wife’s mother, trading as D Company. The parties continued to operate the farming partnership even after separation until 2019. (e)Although there has been some dispute between the parties throughout the proceedings as to the dates of the events set out below, in written submissions filed on 1 May 2024, it is agreed that in 2007 the following events occurred:(i)The de facto husband sold the Property B for $75,000. (ii)Property E was acquired. The nature of the purchase of the property is disputed, with the de facto wife contending that Property E was purchased by her mother and the de facto husband contending that the parties purchased Property E and that the de facto wife’s mother acted as guarantor. Both parties agree that Property E was in the de facto wife’s mother’s sole name. The parties agree that they jointly farmed the property.(iii)The de facto husband inherited Property F from his parents as a gift. The property was unencumbered. The de facto husband asserts at the time of the transfer, the property had a value of approximately $352,000, although the Court has no retrospective valuations to this effect.(iv)It is agreed that the parties jointly farmed Property E, Property F, Property G and Property C properties. (f)In 2010, the parties purchased farm equipment from finance and savings valued at $700,000.(g)In 2018, the parties purchased farm equipment for $312,000 from a deposit and finance.

Evidence

Evidence Before The Court

Consistent with authority, in circumstances where the de facto wife’s evidence is not “inherently unbelievable or contradictory” I have presumed her evidence to be correct: Jacenko at 75,643.Summary of the de facto wife’s evidence At paragraphs 11–15 of the de facto wife’s affidavit filed on 25 August 2023, she set out her understanding of the parties’ initial contributions. By way of summary, those contributions are set out below. The parties commenced cohabitation in mid-2000, at which time the de facto wife and her daughters moved into the de facto husband’s three bedroom home at Property B. At the time of cohabitation, the de facto wife was employed casually at in hospitality, earning around $10,000 per annum. The de facto wife recalls that she owned household furniture valued at $15,000, a motor vehicle with an estimated valued of $25,000 and personal savings of approximately $10,000. The de facto wife acknowledges that the de facto husband owned an older motor vehicle, a truck and farm equipment. She also says that the de facto husband jointly owned farm equipment with his father. At the time of cohabitation, the de facto wife did not know the value of those items or if they were encumbered by debt. While the de facto wife acknowledges that the de facto husband also owned other miscellaneous items of plant and equipment, she disagrees with the de facto husband’s estimate of contributing approximately $500,000 of farming plant and equipment at the beginning of the relationship. The de facto wife contends that a more accurate estimate is in the vicinity of, but no more than, $200,000.Contributions during the course of the parties’ relationship At paragraphs 16–48 of her affidavit filed 25 August 2023, the de facto wife attests to making contributions during the course of the parties intact relationship as set out below. Throughout the relationship, the de facto wife contends that she was the primary caregiver for her children and would also look after the de facto husband’s children when they visited their father each alternate weekend. The de facto wife also stated that she undertook the majority of the domestic duties including laundry, washing and cleaning. She said the de facto husband would cook from time to time and take his own children to extracurricular activities. In 2001, the de facto wife established a small business, earning an average of $1,000 per week. She continued to operate the small business between 2001 and 2007, balancing their family and farming responsibilities and the small business. In 1999, she met the de facto husband, who worked as a contract labourer and had a share farming arrangement with two local men. The de facto wife attests to assisting the de facto husband in this business by attending to administration. The de facto wife states the de facto husband was earning approximately $1,500 per week during this period. In 2002, the parties entered into a business with an assigned Australian Business Number (“ABN”), which was used for all contracting, labouring, and farming work.

Decision

Reasons for decision

For reasons which follow, it has only been necessary for me to consider Ground 4.THE DECISION OF THE PRIMARY JUDGE The primary judge noted (at [31]) that the relevant time limit within which the de facto wife should have commenced proceedings pursuant to s 44(5) of the Act, expired in November or December 2020, resulting in the Initiating Application being filed approximately two and a half years out of time. In considering the de facto wife’s explanation for that delay, the primary judge detailed the nature of the communication between the parties concerning their property, as follows (at [33]):(a)On “several occasions” between December 2018 and February 2019, the de facto husband was unwilling to communicate or provide details about the location or value of machinery purchased jointly by the parties. (b)In mid-January 2019, the parties agreed to obtain valuations for machinery and equipment and put Property E on the market for sale. (c)In February 2019, the parties had a conversation regarding the valuation of machinery and equipment, which had not yet occurred. (d)In March 2019, the parties engaged in a conversation regarding property settlement, wherein the de facto husband reported having held valuations, although the de facto wife did not see them.(e)In April 2019, the de facto wife made attempts to arrange a valuer to attend Property E, but the de facto husband refused.(f)Between April and June 2019, the de facto wife contacted the de facto husband once per fortnight regarding their ongoing joint partnership.(g)In June 2019, the de facto wife spoke to the de facto husband saying words to the effect of “We need to sort things out”.(h)In February 2020, the de facto wife attended Property E with the intention of speaking to the de facto husband about a property settlement. Significantly, the primary judge noted there was silence in respect to any further discussions from approximately May 2020 until the filing of the Initiating Application on 11 April 2023 (at [36]). The primary judge nevertheless held that the almost three year delay in bringing the Initiating Application is explained by the de facto wife’s “reasonable belief that the parties could resolve the matter out of court, particularly where they had an ongoing business relationship” (at [38]). The primary judge then considered the de facto wife’s claim that she has a prima facie case for property adjustment orders due to “the significant contributions made by both parties throughout their long relationship” (at [42]), which the de facto wife contended justified an adjustment of the parties’ property such that she would receive 50 per cent of the total asset pool. This was in circumstances where the primary judge accepted that, as at the date of filing the Initiating Application, the de facto wife had approximately 32 per cent of the parties’ combined net property (at [43]). In that respect, reference was made to the de facto wife’s Amended Financial Statement filed 25 August 2023 which declared that she has property valued at a total of $638,000, $12,290 in superannuation, and $5,000 in liabilities (at [43]). The primary judge noted that the de facto wife calculated the total net asset pool of the parties as being in the order of $1,955,774. Accordingly, the primary judge found that the de facto wife had approximately 32 per cent of the parties’ net property.

Ratio Decidendi

Legal Principle Established

As these proceedings are interlocutory in nature, I am in as good a position as a judge at first instance to redetermine the matter. I have read and considered the material contained in the Appeal Book including the parties’ affidavits, Financial Statements and their respective Case Outlines, together with the transcript of the parties’ submissions at first instance. I have also been assisted by supplementary written submissions of the parties filed on 1 May 2024.Consideration As noted by counsel for the de facto wife, the Full Court has said that the hearing of applications for leave pursuant to s 44(6) of the Act should be “summary in character”,[3]and not a final hearing of the matter: Edmunds & Edmunds (2018) FLC 93-847 at [16], citing Whitford and Whitford (1979) FLC 90-612 at 78,143 and Hedley & Hedley (2009) FLC 93-413 at [32].[3] Neocleous and Neocleous (1993) FLC 92-377 at 79,914, citing Hall and Hall (1979) FLC 90-679 at 78,628 and Jacenko and Jacenko (1986) FLC 91-776 at 75,643–75,644 (“Jacenko”). The de facto wife’s written submissions filed 1 May 2024, in substance, contend that the evidence of the parties’ property before the primary judge was, if anything, undervalued.[4] While that approach is understandable where the issue of proportionality is a substantial issue in the proceedings, in actual fact that approach, with respect, tended to cloud rather than clarify the de facto wife’s case. That is in circumstances where the de facto wife carries the persuasive onus of satisfying the Court of a reasonably likely outcome of the proceedings. In considering that question, I have found more utility in referring to the sworn evidence presented by the de facto wife in the proceedings at first instance. [4] Written submissions of the de facto wife filed 1 May 2024, paragraph 35. The de facto wife contends that the assets of the parties are as set out at paragraphs 85 and 86 of her affidavit filed 25 August 2023 which are as follows: Outlined below in Table 1.1 is my preliminary understanding of the likely balance sheet associated with the matter if leave is granted to commence proceedings.Table 1.1 – Balance Sheet As earlier noted, the parties are essentially in agreement as to the assets that each party brought into the relationship. However, there is a significant level of dispute as to the value and form of the parties’ contributions. Consistent with authority, in circumstances where the de facto wife’s evidence is not “inherently unbelievable or contradictory” I have presumed her evidence to be correct: Jacenko at 75,643.Summary of the de facto wife’s evidence At paragraphs 11–15 of the de facto wife’s affidavit filed on 25 August 2023, she set out her understanding of the parties’ initial contributions. By way of summary, those contributions are set out below. The parties commenced cohabitation in mid-2000, at which time the de facto wife and her daughters moved into the de facto husband’s three bedroom home at Property B.