Wilder & Wilder
[2022] FedCFamC1F 575
Federal Circuit and Family Court of Australia
(DIVISION 1)
Wilder & Wilder [2022] FedCFamC1F 575
File number(s): BRC 14583 of 2021 Judgment of: SCHONELL J Date of judgment: 10 August 2022 Catchwords: FAMILY LAW – PROPERTY – Where the wife sought to bring proceedings out of time – Consideration of whether hardship would be suffered and whether leave should be granted – Where the Court was satisfied that the wife would suffer hardship if leave was not granted and that there was an adequate explanation for the delay – Leave granted pursuant to s 44(3) of the Family Law Act 1975 (Cth) (“the Act”) – Where the wife sought a costs order if she was successful – Consideration of factors in s 117(2A) of the Act – Each party to bear their own costs. Legislation: Family Law Act 1975 (Cth) ss 44, 75, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 1. 05
Cases cited: Althaus & Althaus (1982) FLC 91-233; [1979] FamCA 47
Edmunds & Edmunds (2018) FLC 93-847; [2018] FamCAFC 121
Jacenko & Jacenko (1986) FLC 91-776; [1986] FamCA 25
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116
Montano & Kinross (2014) FLC 93-626; [2014] FamCAFC 231
PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 FamLR 123; [2005] FamCA 158
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Sharp v Sharp (2011) 50 FamLR 567; [2011] FamCAFC 150
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Whitford and Whitford (1979) FLC 90-612; [1979] FamCA 3
Division: Division 1 First Instance Number of paragraphs: 82 Date of hearing: 1 August 2022 Place: Sydney Counsel for the Applicant: Mr Wilson QC Solicitor for the Applicant: Lander & Rogers Counsel for the Respondent: Ms Davison Solicitor for the Respondent: Mills Oakley ORDERS
BRC 14583 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS WILDER
Applicant
AND: MR WILDER
Respondent
order made by:
SCHONELL J
DATE OF ORDER:
10 AUGUST 2022
THE COURT ORDERS THAT:
1.That the wife be granted leave pursuant to s 44(3) of the Family Law Act 1975 (Cth) to commence proceedings out of time.
2.That each party pay their own costs of the leave application.
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 Wilder & Wilder has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
This is an application brought by the applicant wife (“the wife”) for leave to bring proceedings for property settlement against the respondent husband (“the husband”) out of time. It is an agreed fact that the wife is a fraction under twelve months’ out of time.
As will be apparent from these reasons, I am satisfied that the wife would suffer hardship and in the exercise of my discretion propose to grant her leave to bring property proceedings.
The wife relied upon the following documents:
(1)Amended Initiating Application filed 9 December 2021;
(2)Affidavit of wife filed 3 November 2021;
(3)Affidavit of wife filed 22 February 2022;
(4)Affidavit of wife filed 14 April 2022;
(5)Affidavit of wife filed 15 May 2022;
(6)Wife's Outline of Case filed 13 April 2022; and
(7)Wife's Written Submissions filed 31 July 2022.
The husband relied upon the following documents:
(1)Response to Initiating Application filed 25 March 2022;
(2)Affidavit of husband filed 25 March 2022;
(3)Affidavit of husband filed 13 April 2022;
(4)Affidavit of husband filed 12 May 2022;
(5)Affidavit of husband filed 28 July 2022;
(6)Husband’s Outline of Case filed 28 July 2022; and
(7)Husband's Written Submissions filed 1 August 2022.
It was not explained by either counsel or Queen’s counsel who appeared for the parties as to why each of the parties had filed four affidavits, many of which were repetitive.
I allowed some short cross-examination of the wife at the urging of counsel for the husband.
Background facts
The parties commenced cohabitation in 1995 and were married mid 1998. The wife contends that at the commencement of cohabitation she had assets having a value of approximately $122,000 and the husband had assets of approximately $75,000. The husband disputed this difference.
At the commencement of cohabitation, the wife was working in a service business where she was working full-time and earning approximately $60,000.
She says that the husband was working and earning about $35,000 to $40,000.
The wife says that during the course of the parties’ relationship they both worked and their income was applied to family expenses.
The wife says that during the course of the relationship, she was the primary carer of the parties’ three children and she was the primary homemaker. The wife concedes that the husband’s income was greater than hers was during most of the relationship.
In 1997, the parties purchased a property at Suburb B (“the Suburb B property”) in their joint names for $160,000. The wife contends that they both contributed equally to the purchase and there was no mortgage on the property.
In 2010, the wife received an inheritance from her father of $110,000. She says that the husband used this money to invest in trading and that the husband lost $100,000 of her inheritance.
The parties separated on 5 January 2018. The wife gives evidence that at the date of separation the parties were the joint owners of the Suburb B home and had approximately $200,000 in a bank account. The husband had a motor vehicle which she says was worth $3,000. She had superannuation worth $105,000 and there were some joint shares worth $5,000. The wife asserts that she did not know what the husband's shares and investments were worth, but says that she saw a document that the husband's superannuation was worth, as at late 2019, approximately $209,000.
The wife says that following separation the parties divided their joint savings.
The parties since separation have reached an informal agreement that they equally share the care of the children.
Following separation, the parties commenced negotiations in an endeavour to try and resolve their financial dispute. The wife says the following in her affidavit filed 14 April 2022:
20. There is an income disparity between the Respondent and I.
21. However, the extent to which this is relevant is unknown because the Respondent has refused to provide me with any financial disclosure, including his income tax returns for the last 3 financial years. I also note that the Respondent has refused to file a Financial Statement, Financial Questionnaire and Genuine steps certificate in this matter pursuant to 1 c,d and e of the Orders made by [a] Judicial Registrar on 22 February 2022 . The Respondent is not willing to take these steps until the Interim Hearing has been determined. Annexed hereto and marked “[MW]-1” is a true and correct copy of correspondence from the Respondent’s solicitor to my solicitor dated 25 March 2022.
Annexed hereto and marked “[MW]-2” is a true and correct copy of the Orders made by [a] Judicial Registrar on 22 February 2022.
22.I am aware that the Respondent’s employment with [C Organisation] (which he held during the relationship and I also worked for this organisation as well) is secure and also provides numerous other benefits in addition to his income including but not limited to;
a. Company car including fuel card, registration, insurance etc;
b. Rent for a 4 bedroom home;
c. Phone; and
d. Private health insurance for the Respondent and the children.
Annexed hereto and marked “[MW]-3” is a true and correct copy of correspondence from [C Organisation] dated 19 December 2019 which confirms the Respondent’s employment is secure and he is not expected to be transferred out of the Brisbane region for 9 years.
23. I earn approximately $400 per week from my income […] which equates to $20,800 per annum after tax. In addition to this, I also receive $100 per week in rent from the jointly owned [Suburb B property].
24. The rent from the jointly owned [Suburb B property] is $400 per week. The Respondent retains $300 and ensures the mortgage, Council rates, insurance and outgoings for the property are paid and then he gives me $100 per week from these funds. I do not know how much the Council rates, insurance and outgoings total each week.
Relevantly, the wife contends that apart from a document identifying the husband's superannuation entitlements as at 2019 and three pay slips, he has provided no documents to her by way of disclosure.
The wife says both parties have new partners. The wife has disclosed her income and that of her partner. The husband has chosen not to disclose his income or that of his partner.
The wife gives evidence that in the period post the parties’ separation she attempted, on a number of occasions, to reach agreement with the husband out of court. She says the following in her affidavit filed 14 April 2022:
32. We were together for almost 23 years and I did not feel that it was fair for the Respondent to not acknowledge this and to attempt to keep all his assets his own. Because of his stand point, I could not negotiate with him.
33. I recall a particular meeting on Wednesday 6 May 2020 when the Respondent and I had a meeting to discuss our property settlement. During this meeting I recall I said to him words to the effect of “after 19 years of marriage I am entitled to at least 50% of the total property pool”. This included real property, superannuation and shares. The Respondent responded with words to the effect of “you get what is fair” and “I will never agree to anything more than a 50% split of the rental house only as that is the only asset in joint names”.
34. I tried to explain to the Respondent that it did not matter whose name an asset or liability was in, it was all matrimonial property. He refused to accept this.
35. The Respondent and I would go back in forth in our discussions and he would take his time responding to me. I reached a conclusion that the Respondent and I would be unable to reach a property settlement and in mid 2019 I engaged [Legal Firm G] to act on my behalf in the property settlement.
36. I instructed [Legal Firm G] to write to the Respondent on multiple occasions (the first-time being late 2019, before we were even divorced) and attempted to negotiate the property settlement. Annexed hereto and marked “[MW]-4” is a true and correct copy of correspondence my solicitor sent to the Respondent on 8 November 2019 which set out the history of our relationship, the property pool, proposes mediation, requests disclosure etc.
37. The Respondent responded to my solicitor on 18 December 2019 and provided a few disclosure documents, advised he was liaising with his accountant and specifically stated “I am truly not trying to drag this out…” I genuinely believed that the Respondent would now liaise with and work with my solicitor to reach an agreement for property settlement. Annexed hereto and marked “[MW]-5” is a true and correct copy of correspondence the Respondent sent to my solicitor on 18 December 2019.
38. I was growing tired of waiting for the Respondent to advance the matter. I then instructed my solicitor to proceed and draft consent orders for a 50/50 split but the Respondent failed to respond to them or complete the consent order documents. After a length period of time of [Mr Wilder] refusing to engage in our property settlement, I then instructed my solicitor to draft consent orders for a 60/40 split in my favour, because I was frustrated that the Respondent had not replied and time was continuing to pass by. Annexed hereto and marked “[MW]-6” is a true and correct copy of correspondences my solicitor sent to the Respondent on 7 October 2020 and 5 May 2021 date which attached draft consent orders.
39. During this time and on several occasions throughout 2019/2020 I would go to the Respondent’s house to collect the children (as that’s where changeovers took place) and we would discuss the matter. I encouraged the Respondent to engage his own lawyer.
40. The Respondent engaged a law firm to act on his behalf in early 2021, being Mills Oakley.
41. I was hopeful that after the Respondent received legal advice that we could negotiate the matter successfully.
42. My Solicitors told me of the cost to go to Court and I simply could not fathom how I could afford such costs so was reluctant to commence court proceedings. I did not want to further diminish what resources I had on the cost and risk of Court. I am yet to pay the court costs.
In late 2021, the husband commenced proceedings in the District Court in Queensland seeking a sale of the parties’ former matrimonial home. The wife says the following in her affidavit filed 14 April 2022:
45. The Respondent commenced Court proceedings in the District Court of Queensland seeking the sale of the [Suburb B property] [in late 2021]. His position was that the only joint item of property that required dealing with was the [Suburb B property].
46. Orders were made by consent [in late 2021] which provided for the sale of the [Suburb B property] and for [Mr H] to be appointed as the Trustee for Sale. Because the [Suburb B property] forms part of our property settlement, I was willing to agree to Orders that it be sold.
47. Following these Orders, the Respondent wished to purchase the [Suburb B property]. We have now agreed on a purchase price for the Respondent to buy out my interest for $145,000 and [Mr H] is making arrangements for settlement.
Subsequently the wife was paid $145,000 as her half share of the value of the Suburb B property.
A divorce order was made on 30 November 2019.
The wife commenced proceedings on 3 November 2021.
On 22 February 2022, the Court ordered the husband file a Financial Statement and a Financial Questionnaire by 22 March 2022.
He did not comply with that order.
By letter dated 25 March 2022, the husband’s solicitor made the following extraordinary statement:
As has been made clear, it is our client’s position that your client’s application has not been “instituted” as a consequence of the operation of s 44(3) of the Family Law Act 1975. Our client will therefore not be filing a Financial Statement, Financial Questionnaire, Undertaking as to Disclosure, nor a Genuine Steps Certificate before the preliminary issue of whether your client has leave to proceed out of time has been determined.
(Wife’s affidavit filed 14 April 2022, Annexure AJM-1)
At the time that statement was made, the husband had not been relieved of his obligation to comply with the Court’s order of 22 February 2022.
An issue was raised at the commencement of the hearing as to why the husband had not complied with orders of the Court.
The husband through his counsel indicated that this issue had been raised before various judges in Division 2 of the Court subsequent to the letter of 25 March 2022, and that whilst the Court had not discharged the order made earlier, the husband was of the understanding that he did not need to comply with an obligation to file a financial statement.
I do not agree.
The Family Law Practice Direction for financial proceedings provides as follows:
2.4 A financial proceeding is commenced by filing an Initiating Application (Family Law), unless the proceeding involves an application for consent orders only (which requires an Application for Consent Orders: see rule 10.04(4) of the Family Law Rules).
…
3.1 A respondent must file a Response to Initiating Application if consenting to or opposing any of the orders sought by the applicant, or if seeking any other orders in accordance with Part 2.4 of the Family Law Rules.
…
3.3 The following documents must be filed with a Response to Initiating Application:
(a) a Genuine Steps Certificate, confirming the respondent’s compliance with the pre-action procedures listed in Schedule 1 of the Family Law Rules;
(b) a Financial Statement (unless the respondent is objecting to jurisdiction: see rule 2.19 of the Family Law Rules);
(c) a Financial Questionnaire;
(d)an Undertaking as to Disclosure in accordance with rule 6.02 of the Family Law Rules;
(e) if the respondent opposes any of the interlocutory orders sought by the applicant or seeks interlocutory orders in their Response to Initiating Application, an affidavit;
(f) if the Response to Initiating Application seeks a search order, an affidavit which includes the required evidence as set out in rule 5.19(3) of the Family Law Rules; and
(g) if the Response to Initiating Application seeks a freezing order, an affidavit which includes the required evidence as set out in rule 5.23(3) of the Family Law Rules.
Rule 1. 05 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) defines “financial proceeding” as follows:
financial proceeding means a proceeding (other than an appeal) involving an application:
...
(b) relating to the property of the parties to a marriage, or of a de facto relationship after the breakdown of the relationship, or of either of them, including the following:
(i) an application for permission to start a property proceeding;
…
I am of the view that the current Rules make it abundantly clear that a Financial Statement is to be filed by both parties in an application pursuant to s 44(3) of the Family Law Act (Cth) (“the Act”). The husband should have filed a Financial Statement.
The husband has elected to give very little evidence of his contributions over the course of their relationship. He has elected to provide no evidence of his income or that of his partner. He has not responded to the wife's contentions that he owns shares of unknown value nor has he provided any evidence of the current value of his superannuation entitlements. He does not put in issue the contribution by the wife in 2010 of an inheritance of in excess of $100,000.
Applicable law
Section 44(3) of the Act prescribes that a party must commence proceedings for property settlement within 12 months of the expiration of a divorce order and proceedings may only be commenced after that period with the leave of the Court.
Section 44(3) of the Act provides:
44Institution of Proceedings
…
(3) Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983:
(a) a divorce order has taken effect; or
(b) a decree of nullity of marriage has been made;
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c) in a case referred to in paragraph (a)—the date on which the divorce order took effect; or
(d) in a case referred to in paragraph (b)—the date of the making of the decree.
The court may grant such leave at any time, even if the proceedings have already been instituted.
An applicant for leave needs to establish two things. Firstly, would they suffer hardship if leave were not granted? If hardship is not established then that is the end of the enquiry. If hardship is established then under the second limb the Court needs to determine whether in the exercise of its discretion, it should grant or refuse leave to commence proceedings.
In Whitford and Whitford (1979) FLC 90-612, the Full Court stated at 78,139:
The hardship referred to in sec. 44(4) is the hardship which would be caused to the applicant or a child of the marriage if leave were not granted. … The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits. If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted. Further, the matter with which the Court is concerned is not whether the applicant or a child is suffering hardship, but the question is whether the applicant or a child would suffer hardship if leave were not granted. If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.
As to what actually might be hardship, the Full Court said at 78,140–78,145:
In our view the meaning of ‘hardship’ in subsec. 44(4) is akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment. Cf. the meanings assigned to ‘hardship’ in the Shorter Oxford Dictionary and in Webster’s New International Dictionary …
…
In ordinary parlance, hardship means something more burdensome than “any appreciable detriment”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations. 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 on a property claim, ordinarily 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 lose must be a substantial one.
(Emphasis in original)
Subsequent Full Courts have stated that an applicant needs to establish “a reasonable claim to be heard” (Althaus & Althaus (1982) FLC 91-233 at 77,267) or said another way “the applicant must have a prima facie claim worth pursuing or a ‘real’ probability of success” (Sharp v Sharp (2011) 50 FamLR 567 at [18]).
The authorities also make plain that the Court’s enquiry is a limited one and not a detailed hearing on the merits of the claim, but rather is there one. In Jacenko & Jacenko (1986) FLC 91-776, the Full Court said at 75,643:
But the general principle is that on that issue of the establishment of a prima facie case the Court proceeds on the basis that the evidence of the applicant, unless it is inherently unbelievable or contradictory, should be accepted, and the Court should therefore decide whether or not on that basis a prima facie case has been made out. lf leave is granted, then it is for the Court conducting the ultimate hearing to determine whether that prima facie case can be established.
While in Edmunds & Edmunds (2018) FLC 93-847 (“Edmunds”), the Full Court observed that the search for a prima facie case or real probability of success involves:
48.…a consideration, but not a final determination, of the nature of the applicant’s claim. In doing so, the Court must weigh the applicant’s case against that of the respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.
If hardship is established, the court must then consider whether in the exercise of its discretion it should grant leave. In Montano & Kinross (2014) FLC 93-623, the Full Court observed:
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 parties to proceed with their post separation lives free of the spectre of prospective litigation, (see, for example, Gallo v Dawson (1990) 93 ALR 479, and the statutory requirements in section 81 of the Act).
15. This Full Court spoke in Whitford of “such matters as” the “length of delay, the reasons for the delay and prejudice occasioned the respondent by reason of the delay and the strength of the applicant’s case and the degree of hardship which would be suffered unless leave were granted”. All of those matters were said by the Court to be “matters which affect the exercise of the discretion”. Yet, this Court was at pains there to point out that those considerations were not exclusive of the matters to be considered in the exercise of the broad discretion; an overall requirement to do justice between the parties is the ultimate criterion. The strength or weakness of, or the relative weight to be attached to, those various matters in the exercise of the discretion must necessarily depend on the facts of the particular case. This court said explicitly in Whitford that “these matters are not necessarily the only ones”.
The Wife’s Submissions
The wife submitted through her Queen’s counsel that she had a strong case for an adjustment of the parties' property having been in a relationship for over twenty years. Her counsel in reliance on the Written Submissions submitted that:
5. In this case, the Applicant wife has a strong case for an adjustment of the parties’ remaining property pursuant to s. 79 of the Act. The parties were married for almost 20 years. They have three daughters, currently aged 16, 13 and 10, who live with the parties on an equal time basis. Having regard to the Applicant’s evidence it would be most surprising if the Wife was not found to have an entitlement to at least 50% of the parties’ total assets. She in fact claims 60% having regard to the Husband’s superior earning capacity and the benefits provided to him in his employment.
6. The parties have dealt with the division of a joint bank account, shortly after separation, and have more recently dealt with a jointly owned property at [Suburb B property].
7. The Applicant has identified, as best as she can, the assets of the parties. The sole reason that the Wife cannot be more particular as to the value of assets in the Husband’s name is because of the Husband’s conspicuous (despite an order of the Court) refusal to disclose his financial position. This is despite him being invited to make disclosure as part of pre-action procedures in November 2019, well within time.
8. The Wife therefore does not know the present value of husband’s superannuation or his share investments or other assets. The Wife is able to say that the husband’s superannuation balance in December 2019 was 209,403.58. The Husband’s refusal to make any disclosure to the Wife is apparently compounded by his apparently misguided belief that only assets in both names are amenable to orders.
9. In circumstances where the Husband has the ability to put before the Court evidence which could demonstrate (if it were the case) the lack of utility of the Wife pursuing s. 79 relief, the Court ought not hesitate to accept that there are additional assets amenable to orders under s. 79, and that the value of the property concerned, in the circumstances of this case, is of such a value as to warrant proceedings. It has been held that depending on the circumstances, hardship may be caused by the loss or deprivation of something which is of comparatively small money value.
…
11. The difficulty in the present case is that the quantum of costs is incapable of quantification until it is known whether the Husband will contest the substantive proceedings, whether the parties will settle the matter at an early stage, and a host of other matters. Given the quantum of at least the Husband’s superannuation (as well as the other as yet undisclosed assets) the test of hardship is plainly satisfied by the Wife.
…
14. In this case the total delay between 12 months after the divorce order coming into effect and the commencement of proceedings is less than 12 months.
15. At no time did the Wife behave, or lead the Husband to believe, that she was not interested in pursuing a claim.
16. From the time the parties separated on 5 January 2018 they have negotiated in relation to the division of their property. On 8 November 2019 (before the 12 month period began to run) the Wife’s solicitor sent the documents required by the pre-action disclosure provisions then in force. The Husband failed to provide any disclosure, despite being asked to do so, and despite suggesting that he would do so.
17. The Wife deposes that the first time she became aware of the 12 month time limit was when her solicitors received a letter from the Husband’s solicitors in March 2021. The Husband says he became of the time limit at the same time. The Wife candidly says she did not read the notes on the divorce order. She deposes that her former solicitor did not draw this to her attention, and despite engaging her lawyer in August 2019 she does not recall ever being advised of the time limit.
18. That the former solicitor was not aware of the time limit, or of its consequences, is demonstrated by the solicitor’s and paralegal’s conversations with the Wife, deposed to by her, and that as late as 7 October 2020 he was corresponding with the Husband, and providing draft consent orders (although how that could be done in the absence of any disclosure by the Husband is unclear).
19. The Husband has not adduced any admissible evidence to demonstrate that the Wife was advised of the 12 month time limit and that she consciously chose to ignore it.
20. In any event, an inadequate explanation for delay in commencing proceedings is only one factor to be considered in determining an application for leave.
21. There is no prejudice to the Husband if leave to proceed is granted. The Husband has known for some time (indeed from shortly after separation) of the Wife’s desire to negotiate a property settlement. Correspondence continued throughout 2019 and 2020. Costs were undoubtedly incurred in the Husband taking steps to bring an application for the appointment of a statutory trustee for sale in the District Court of Queensland. Any costs incurred after the proceedings in this Court were instituted were incurred by the Husband because of his desire to retain the [Suburb B property]. In any event, the costs of the conveyance could, if relevant, be taken into account on the adjustment of the parties’ property under s. 79 of the Act.
22. The prejudice to the Wife of not being able to pursue her claim far outweighs the prejudice to the Husband (if any).
(Footnotes omitted)
The Husband’s Submissions
The husband’s counsel also relied on comprehensive written submissions.
The written submissions commenced with a reference to the High Court’s decision in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) and then identified by reference to a table that the wife had retained property, including superannuation totalling $414,698. The table excluded any reference to the value of property retained by the husband.
The submissions proceeded to identify:
10 The following evidence is relied upon in support of the Respondent’s submission that it would not be just and equitable for any property adjustment orders to be made:
(a) For the majority of the marriage the parties kept their finances separate;
(b) During the marriage there were no joint assets and no joint liabilities, other than the [Suburb B property];
(c) The parties have divided their joint assets by way of informal agreement being:
(i) Sale proceeds from the [Suburb B property] pursuant to orders of the District Court of Queensland dated […] 2021 made by consent (the Consent Orders):
(A) $152,423 or 52% to the Applicant (taking into account the costs associated paid on her behalf by the Respondent); and
(B) $145,000 or 48% to the Respondent;
(ii) The parties’ joint bank account divided on separation in on 8 January 2018 in the following proportion:
(A) $117,260.00 or 51% to the Applicant; and
(B) $113,260.00 or 49% to the Respondent;
(d) Post-separation the parties continued to have separate bank accounts;
(e) Presently, the parties do not have intermingled or joint finances; and
(f) The parties have been separated since 5 January 2018, being 4.5 years.
11 The High Court has held there must be “a principle reason for interfering” with the way these parties expressly organised their financial affairs. It is respectfully submitted there are no reasons in this case for any further adjustment to the Applicant.
12 If the Court is against the Respondent and finds that a property adjustment is just and equitable, then the following relevant matters are addressed by way of the next steps the Court must consider.
The Pool
13 The Applicant’s affidavit includes a Schedule of Asserted Assets and Liabilities which deposes to the parties’ known property, being $396,015. In addition to this amount, the Applicant deposes to each party receiving a partial property settlement post-separation of $100,000 or $117,260.00 on the Respondent’s case.
Contributions
14 The Applicant asserts the parties’ financial contributions were “relatively equal”. The Applicant also asserts that her non-financial contributions were higher than the Respondent’s contributions. However, the Applicant provides minimal evidence about non-financial contribution, and on this basis, such assertion should not be accepted by the Court.
15 The Respondent contributed greater post-separation financial and non-financial contributions on the basis that:
(a) Following separation on 5 January 2018 until 23 June 2021, the parties’ three children lived with the Respondent on a full-time basis;
(b) The Respondent claimed no child support from the Applicant during this time;
(c)From February 2020 until the recent transfer of the [Suburb B property], the Respondent redirected $100 per week rent from the [Suburb B property] rental income to the Applicant;
(d) The Respondent paid all mortgage repayments, rates, and other expenses associated with the [Suburb B property].
Future Factors
16 In relation to section 75(2) factors, the following evidence is relevant:
(a) The Applicant is 51 years old and the Respondent is 52 years old;
(b) The Applicant is employed as a [health worker] and the Respondent is employed as a [community worker];
(c) The parties’ three children currently live with the parties on a week about basis;
(d) The Respondent is responsible for almost all the children’s “non-periodic” costs, including 100% of their medical expenses and 95% of their school fees and associated costs;
(e) The Applicant has re-partnered and her partner contributes towards the Applicant’s rent and food;
(f) The Applicant is in good health.
Justice and equity
17 In light of the property adjustment the Applicant has received to date of at least $414,698, no further adjustment is required between the parties to do justice and equity to the parties.
…
20 In the context of the parties’ modest pool, the Applicant has received significant assets of $414,698 by way of property settlement. The Applicant retains no debt.
21 In addition, the Respondent also identifies deposits of over $335,000 into the Applicant’s account which he cannot reconcile from the disclosure provided.
22 In her Financial Statement, the Applicant deposes to having:
(a) A weekly income that exceeds her weekly expenses;
(b) $240 per week by way of rent paid by her partner [Mr K];
(c) $30 per week by way of food paid by [Mr K].
23 It is apparent from disclosure, and the Applicant’s financial statement, that the Applicant’s partner, [Mr K], contributes significantly to the Applicant’s living expenses. However, no other evidence is offered about his financial position.
24 Further, the Applicant has incurred legal fees of $63,520 (including the cost of 1 August 2022) to date. Over half of that sum has been spent with her current solicitors over the past approximately 2.5 months who the Applicant engaged shortly prior to the last interim hearing on 16 May 2022. The Applicant’s cost notice discloses that the source of funds for costs paid and to be paid is the Applicant’s earnings and funds held in her bank accounts. It is submitted that the Court should be sceptical of the Applicant’s claims of hardship when she has the financial capacity to fund over $60,000 in legal fees to date from her income and financial resources, including briefing Queen’s Counsel.
(Footnotes omitted)
The husband also points to the fact that the wife’s likely legal costs are something in the order of $63,000 to $73,000 and says the following:
29 The parties’ modest financial situation must be weighed significantly against the legal costs they will each incur if leave is granted. It is open on the evidence that the Applicant will suffer hardship if leave is granted based on her lawyer’s estimate that she could incur legal fees of at least $72,600 in circumstances where it is possible (if not likely) that she will not receive an adjustment under section 79 of the Act if leave is granted based on Stanford.
30 Further, and in the alternative, if the Court finds that the Applicant has a prima facie case for an adjustment under section 79 of the Act, it is hard to reconcile the benefit to her pursuing such claim taking into account:
(a) the Applicant’s solicitor’s estimated legal fees to date;
(b) the Applicant’s solicitor’s estimated legal fees to trial;
(c) the modest pool; and
(d) the fact the Applicant has already received some $414,698 by way of informal property settlement agreed between the parties following separation and associated District Court consent orders giving effect to this agreement.
31 On that basis, leave should not be granted as a matter of discretion. It is respectfully submitted the court should be slow to exercise its discretion in cases such as this, lest there never be a time by which separated parties can have any closure or finality in their affairs.
The husband goes on to contend that the wife has not provided an adequate explanation for the delay and that prejudice would be occasioned to the husband and says:
39 The fact the Applicant and Respondent were legally represented parties in District Court proceedings (due to the absence of any proceedings in this Honourable Court) reinforces the final nature of the just and equitable division of property between them. It is respectfully submitted the court should be slow to re-open and re-assess the arrangement the parties reached at that time, where they (or more particularly, the Respondent in this instance), have incurred substantial fees and invoked the jurisdiction of the State Courts.
40 Further, if leave is granted, the Respondent can expect to pay further legal fees of at least $33,000 (inclusive of GST) if the matter cannot be resolved.
41 It is respectfully submitted that, even if the Court was to find that the Applicant would suffer hardship (which is denied by the Respondent), then such hardship would be outweighed by the substantial prejudice to the Respondent if leave is granted. Therefore, the proper order is that the Court should decline to exercise its discretion to grant leave to the Applicant to proceed out of time.
42 Lastly, if the Court accepts that the Applicant received legal advice prior to the expiration of the time limitation, then the Court should not, as a matter of policy, grant leave to a litigant who has elected not to commence proceedings within the limitation period having regard for the expressed legislation intention that proceedings should be commenced with a year from a date of the decree nisi. There is no authority for the proposition that the court should exercise its discretion in favour of a person who makes a decision to not proceed.
I prefer the submissions of the wife to those of the husband.
I do not accept the husband’s submissions. The submissions are fundamentally flawed by reference to words such as “partial property settlement” or “the pool”. True it is that the parties have divided between them a joint bank account and the value of the former matrimonial home and the wife has retained assets including superannuation in her own name. However, what is missing from “the pool” is any reference to the assets of the husband including superannuation that had a value nearly double that of the wife.
The husband has failed to make any disclosure of his own financial position thus any reference to “the pool” is meaningless and consequentially pointless. Likewise, a reference to the High Court’s decision in Stanford takes the husband’s argument nowhere other than back to his failure to disclose his financial position. The primary task of identifying the legal and equitable interests of the parties is one-sided. The wife’s is known the husband’s is not.
I am satisfied that over the length of this 23 year relationship, the wife’s contributions were substantial. She made substantial contributions as a homemaker and parent as well as the contribution of her income and an inheritance of over $100,000. I am comfortably satisfied that taking into account her contributions and the matters under s 75(2) by reference to her income and taking into account the benefits of her new relationship that she has a real probability of success of achieving an outcome greater than just an equal division of their joint bank accounts and the value of their home and the retention of her superannuation knowing that the husband has superannuation entitlements nearly double hers and does not deny holding a share portfolio but chooses not to disclose its value.
I take into account the costs that the wife will incur in relation to pursuing an application for property settlement. I note that those costs, assuming the matter proceeds to a final hearing, could be up to $72,000. I am satisfied based on the evidence before me to which I have referred that she has an arguable case of substance even taking into account those costs. I am satisfied that notwithstanding those possible costs, the proceedings will result in “net benefit” to the wife (see Edmunds) Accordingly, I am satisfied that the wife would suffer hardship if leave were not granted.
Having been satisfied that the wife will suffer hardship, I next turn to consider whether the Court should grant the wife leave.
I am satisfied that the wife has provided an explanation for the delay. Her application was brought slightly less than twelve months after the expiration of the period required under the Act. The evidence reveals that during that period of time the parties were attempting to reach a settlement of their property settlement entitlements. When it became apparent that no such agreement could be reached, the wife commenced proceedings.
I am satisfied that she was not advised about the necessary time limits. I accept her evidence where she says the following in her affidavit filed 15 May 2022:
9. I recall a conversation with [Mr L], on a date I cannot now recall, in late 2019 or early 2020, in which [Mr L] confirmed the date the divorce order came into effect, on reviewing a document he had on file, so I obviously had given him a copy of the divorce order.
10. I do not recall reading the Notes at the end of the divorce order. [Mr L] said nothing about Note 1 when confirming the date the divorce order came into ‘effect’.
11. In the course of [Legal firm G] acting for me, I do not recall [Mr L] or [Ms M] ever advising me in writing or verbally, that there was a time limit in relation to commencing proceedings for property settlement.
12. I do not recall that I was ever told by [Mr L] or [Ms M] that if I didn’t file proceedings before a time limit expired, I could lose my right to commence proceedings for property orders.
13. The first time I became aware there was an issue in relation to an expired time limit was when [Mr Wilder's] lawyers, Mills Oakley, sent a letter to [Mr L] in or about March 2021.
The husband’s counsel asked to cross-examine the wife on this issue, with it being said that there were documents that supported a contrary view. I permitted cross-examination. It was never put to the wife that she had received advice about time limits nor was she taken to any document that suggested she had been. I reject the husband’s counsel submission that I can infer from her affidavit that she had received advice. No such inference arises.
I next consider the issue of potential prejudice occasioned to the husband.
I accept that there is a cost occasioned to the husband by having to engage lawyers and pay legal fees in relation to an application for property settlement. I also accept that the husband has a legitimate expectation to move on after separation. The difficulty I have is determining what is the degree of prejudice, if any, occasioned to the husband. His refusal to file a financial statement contrary to a direction or give disclosure of his income or assets or superannuation entitlements leaves the Court in the position that it is unable to assess the degree of prejudice, if any, relative to his wealth. He cannot be heard to complain if the Court is unable to properly assess the prejudice occasioned to him in circumstances where he elects to place no evidence beyond the statement of possible costs incurred.
I am satisfied that the wife will suffer hardship if leave is not granted and that it is appropriate that leave be granted. Taking into account all of the above matters and conscious that I am required to do justice to both parties in the exercise of my discretion, I will grant leave to the wife to commence proceedings.
Costs
I invited the parties to make submissions as to costs. The wife sought an order that should she be successful then the husband should pay her costs and that if unsuccessful then each party should meet their own costs.
The husband sought an order for indemnity costs if leave were not granted and that each party pay their own costs if leave were granted. As the application has been successful, I do not need to consider the issue of indemnity costs. All too often parties as a matter of course seek orders for indemnity costs. It is a practice that should be eschewed given the clear jurisprudence on the circumstances in which they will be ordered.
The authorities make it plain that an order for indemnity costs is not one that is made lightly and there should be circumstances of an exceptional kind that warrant orders for costs on an indemnity basis. In Kohan & Kohan (1993) FLC 92-340, their Honours in the Full Court observed at 79,614:
The intent of s117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the Court may make such order as the Court considers just. As we have pointed out, the Court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges. By O. 38 r. 2, the provisions of O. 38 apply to costs ordered to be paid or taxed, and costs payable or to be taxed between solicitor and client. O. 38 r. 7 makes provision for the allowance of additional amounts for complexity, difficulty or novelty and special skill, knowledge or responsibility. Consequently, the Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind. See Degmam v. Wright (No.2) “(supra); Wentworth v. Rogers (No. 5) (1986) 6 NSWLR 534; Hobartville Stud v. Union Insurance Co. (1991) 25 NSWLR at 368 to 370.
Indemnity costs orders are still an exception in this and other jurisdictions. …
This was never such a case.
An application for costs is governed by the provisions of s 117 of the Act, which provides a general rule that each party to proceedings should bear their own costs.
Section 117(2) reposes in the Court a discretion to make a costs order in circumstances where the Court determines that there are circumstances that justify it making an order and, if there are such circumstances, the Court may make such order as it considers just, having regard to the matters set out in s 117(2A).
In Penfold and Penfold (1980) 144 CLR 311, the plurality in the High Court determined that to make an order under s 117(2), the Court needs to make a finding of justifying circumstances as a preliminary prerequisite to the making of an order. Their Honours also observed that terms such as an exceptional case, special circumstances or a clear case are not necessary determiners of whether or not an order for costs should be made. All that is required or necessary is that there are justifying circumstances.
It is well settled law that no one factor under s 117(2A) is determinative and the Court may give such weight as it considers relevant to any factor. In PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 FamLR 123, the Full Court observed:
41. … Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs
Dealing now with the relative subsections in s 117(2A).
(a) the financial circumstances of each party to the proceedings
It is clear that a disparity in the financial circumstances of the parties may justify an order for costs in favour of one party. Impecuniosity is not a basis of resistance to a costs order.
The wife has provided evidence of her financial position. The husband has not.
(b) whether the parties are in receipt of legal aid
Neither party is in receipt of legal aid.
(c) the conduct of the parties to the proceedings
The husband contends that the wife’s conduct is relevant to either the granting of a costs order or in resistance to one. He relies upon the following assertion in his affidavit of 28 July 2022 as conduct relevant to a cost consideration:
28. On Friday evening, 27 May 2022, [Ms Wilder] called me multiple times both directly and via the children’s phones interrogating me as to why I had not produced disclosure documents in accordance with the informal deadline imposed in the letter of 17 May 2022. She was speaking with a raised voice and when I attempted to diffuse the issue, stating that I was not yet prepared to provide disclosure pending further legal advice, nor was I prepared to put up with her aggressive tone, I ended the call. [Ms Wilder] then drove to my house with her partner at 11.24pm and aggressively knocked on and kicked at my door, and slammed the screen door repeatedly for about 7 minutes while our children were asleep. It was not long before all but one of our children woke up. My neighbour heard the incident and became involved, following which an altercation took place. I was not involved in this and I did not open the door, speak to her or interact with her partner.
29. I found the whole experience to be extremely upsetting, and it only served to compound the ongoing stress I have experienced as a result of these proceedings.
The husband’s submission misunderstands the import of the sub-section. Section 117(2A)(c) is limited to conduct of the parties in relation to the proceedings. What is relevant is conduct of a party, which in some way or other leads to an increase in costs by the other party. Such factors may include uncooperative behaviour, obstruction, prolonging litigation or the bringing of unreasonable or unmeritorious applications. It may include non-disclosure or a failure to comply with the Rules of Court in relation to disclosure. I reject the submission that what is asserted is relevant to the question of costs.
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
This is not relevant.
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings
The term “wholly unsuccessful” refers to a situation in which proceedings as a whole have been unsuccessful, rather than necessarily an application (see Bant & Clayton (Costs) (2016) 56 FamLR 31).
Thus, to the extent to which the wife contends that the husband has been wholly unsuccessful in resisting her application, while in and of itself is correct, the subsection itself refers to being wholly unsuccessful in the proceedings. I note, however, that these are proceedings where the wife is seeking an indulgence. That militates against the making of a costs order in her favour.
(f) whether any party has made an offer in writing
Neither party referred to any offer referable to such a consideration.
(g) any other matter the Court considers relevant
In all the circumstances, having had regard to the submissions of the husband and the wife, I am not satisfied that this is an appropriate case to depart from the general rule that each party to the proceedings should bear their own costs.
I will dismiss each party’s application for costs.
I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 10 August 2022
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