Yacoub and Yacoub

[2017] FamCA 503

FAMILY COURT OF AUSTRALIA

YACOUB & YACOUB [2017] FamCA 503

FAMILY LAW – PROPERTY – Application for leave to commence property settlement proceedings out of time pursuant to section 44(3) of the Family Law Act 1975 (Cth) – Whether the husband has demonstrated “hardship” – Factors to be considered in respect of whether the Court should grant leave – Court’s discretion exercised – Leave granted.

Family Law Act 1975 (Cth) ss 44(3), 81
Duties Act 1997 (NSW) s 68(1)

Carlon & Carlon (1982) FLC 91-272
Hall & Hall (1979) FLC 90-679
Neocleous & Neocleous (1993) FLC 92-377
Whitford & Whitford (1979) FLC 90-612

APPLICANT: Mr Yacoub

RESPONDENT: Ms Yacoub

FILE NUMBER: PAC 2889 of 2016

DATE DELIVERED: 17 July 2017

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 12 May 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Shaw

SOLICITOR FOR THE APPLICANT: Hutchison Lawyers

SOLICITOR FOR THE RESPONDENT: Ms Oncu of Oncu Lawyers Pty Ltd

Orders

1. That the applicant former husband be granted leave pursuant to section 44(3) of the Family Law Act 1975 (Cth) (“the Act”) to commence proceedings for property adjustment pursuant to section 79 of the Act.

2. That the Application initiating proceedings filed by the former husband on 24 June 2016 be deemed his Application initiating proceedings under section 79 of the Act.

3. That within 14 days from this date the respondent former wife file and serve an Amended Response setting out with particularity orders sought by her in response to the former husband’s application and a Financial Statement.

4. That proceedings be transferred to the Federal Circuit Court of Australia.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Yacoub & Yacoub has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 2889  of 2016

Mr Yacoub

Applicant

And

Ms Yacoub

Respondent

REASONS FOR JUDGMENT

1. The application for determination relates to application filed by the former husband on 24 June 2016 seeking leave to commence property proceedings out of time pursuant to the provisions of s 44(3) of the Family Law Act 1975 (Cth) (“the Act”).

2. The former husband is now aged 57 and the former wife is 51. The parties commenced cohabitation and married in 1985 and separated in December 2007.

3. Now, 10 years after separation, the Applicant former husband seeks leave to commence proceedings as to property settlement out of time.

4. Section 44(3) of the Act provides that such proceedings cannot be commenced without leave of the Court after the expiration of 12 months after a divorce order takes effect. The Court may grant leave at any time, even if proceedings have already been instituted, however, such leave shall not be granted unless the Court is satisfied that hardship would be caused to a party to the relevant marriage or a child if leave were not granted.

5. In Whitford & Whitford (1979) FLC 90-612 the Full Court held:

   [O]n an application for leave under s 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…

6. Hardship in the context of the former husband’s application means substantial detriment (Hall & Hall (1979) FLC 90-679) and the Court will consider a number of factors:

   a)whether on the evidence he has a reasonable case to be heard;

   b)the financial and other circumstances of both of the parties; and

   c)any other facts of the case relevant to the issue of hardship.

7. After considering the question of hardship, the question to be determined is whether the Court should, in the exercise of its discretion, grant or refuse leave to bring proceedings out of time.

8. Pertinent considerations are:

   a)the length of the delay in bringing proceedings;

   b)whether there has been a reasonable explanation for the delay;

   c)the prejudice that may be caused to a respondent to the application if permission is granted; and

   d)any other facts of the case relevant to the exercise of the Court’s discretion.

9. The absence of any reasonable or other explanation for delay in commencing proceedings is just one of the relevant considerations. The absence of an explanation does not mean that leave will not be granted (Neocleous & Neocleous (1993) FLC 92-377; Carlon & Carlon (1982) FLC 91-272).

10. As the Full Court said in Whitford (supra), having regard to the nature of the jurisdiction which the Court exercises, the power to extend time 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 divorce decree.

11. Pursuant to s 81 of the Act the Court has a duty to end the financial relationship of parties to a marriage as far as practicable, and to therefore make such orders to finally determine the financial relationship between parties to a marriage and avoid further proceedings between them where possible. This, however, is to be balanced against the Court’s power to grant leave to institute proceedings out of time if it is satisfied that not to do so would cause a party to a marriage financial hardship, as referred to above.

12. The questions for determination in this case then are:

    a)Whether the husband has demonstrated hardship as contemplated by the statutory provision?

    b)If hardship is demonstrated, should leave then be granted for the husband to commence proceedings for property out of time?

13. The applicant former husband relied upon his affidavits filed 22 March 2017, 6 April 2017 and 8 May 2017 and his financial statement filed 24 June 2016.

14. The former wife, who seeks an order that the former husband’s application be dismissed, relied upon her affidavits filed 9 August 2016, 11 October 2016 and 3 April 2017 and her financial statement filed 9 August 2016.

15. The application was determined by agreement on the basis of the parties’ affidavit material with brief cross examination of both the former husband and former wife.

Context

1. The former husband says that in May 1985 he sponsored the former wife to Australia and she arrived in about December 1985.

2. There are three children of the marriage now aged nearly 30 and twins aged 23.

3. The former husband says that he worked in various jobs until 1990 when he commenced to work as a driver. He continued working as a driver’s until 2003. During the period from the commencement of cohabitation until 2003 he says that the wife was not in employment but was the primary homemaker and caregiver for the three children of the marriage.

4. In about June 1988 the parties jointly purchased a home and land package at B Street, Suburb C for $72,000.00. The deposit for the purchase was provided from savings from the former husband’s income and the balance of purchase money was provided by way of a Commonwealth government housing assistance scheme loan of about $65,000.00. The parties moved into their new home in December 1990.

5. The former husband says at this time in the early 1990s interest rates were significant being about 17 or 18 per cent. He worked long hours to be able to maintain the family and meet mortgage repayments.

6. In February 2006 the parties executed a memorandum of transfer transferring the property to the sole name of the former wife.

7. The former husband asserts that it was the former wife that suggested that the property be transferred to her name as a protection against creditors. He says it was she that facilitated them attending on a solicitor to sign the necessary documents. The transfer document somewhat inexplicably was marked exempt from stamp duty.

8. The former husband asserts the transfer was to avoid the property being subject to a claim by the former husband’s creditors in particular unpaid work cover insurance premiums that had accumulated to about $36,000.00. Subsequently the debt was addressed by a refinance of the home by borrowing a further $50,000.00 with the surplus being used for the family to holiday in Eurasia.

9. It is common ground between the parties that there were no property settlement orders pursuant to the provisions of the Act or any relevant Binding Financial Agreement that may have facilitated an exemption from stamp duty. The transfer document bears the imprint that it was stamped exempt from duty pursuant to s 68(1) of the Duties Act 1997 (NSW) that provides for exemptions from stamp duty on transfers arising from break-up of marriages and other relationships. The transfer was so marked on 22 February 2006.

10. Thereafter the former husband continued in employment and met payments under the mortgage.

11. Subsequently the parties separated in late 2007. At the time of separation the former husband was employed as a driver.

12. The former husband says that during the period of the cohabitation he was the only income earner and the only reason for transfer of the property was to avoid the prospective claim by his creditors. The former wife for her part contends that she was a major contributor to the mortgage repayments during cohabitation by reason of her Centrelink benefits received for the children which on any view was a payment for the benefit of the household.

13. The former husband asserts that at the time the property was transferred to the wife’s name it had a value he estimates of about $350,000.00 and was subject to a mortgage of about $202,000.00 (the former wife asserts $210,000.00).  

14. The former wife contends that at the time of the transfer she paid to the former husband $5,000.00, allowed him to keep the family car and paid two of his debts totalling $10,000.00. The former husband rejects this contention.

15. The former wife remarried in 2011 and asserts that thereafter her new husband assisted her with mortgage repayments in respect to the property.

16. Subsequent to separation and in 2015 the former wife sold the property for $548,000.00. At the time of sale the former wife asserts that the property was subject to a mortgage of $278,000.00.

17. Prior to sale of the property the former husband lodged a caveat over the property on 4 May 2015 asserting interest by reason of his financial and non-financial contributions to the property during the period from 1988 to 2007. He asserted that the former wife holds a share in the property on trust for him. Subsequently on condition that that the sum of $60,000.00 was retained in a trust account from the proceeds of sale the former husband through his then solicitors facilitated the caveat being withdrawn. Notwithstanding this the whole of the net proceeds of sale were released to the former wife.

18. The former wife in July 2015 applied the proceeds of sale of the home to acquire an interest with her new husband in a property at D Street, Suburb E. The former husband asserts that otherwise the former wife has an interest in a property at F Street, Suburb G. Notwithstanding that the title to the Suburb G property appears to be in the former wife’s name as to a one third share as tenant in common, she disputes that she has an interest in the property.

19. The former husband asserts that he is in poor health having suffered a minor stroke some years ago. He is in poor financial circumstances owning a car of modest value subject to a small loan, living in rented premises at a cost of $250.00 per week and earning about $500.00 to $600.00 per week as a driver since May 2015.

20. The former husband asserts that he had no knowledge of any application for divorce until early January 2017 when he was provided by his legal representative with a copy of a divorce application filed by the former wife on 22 November 2006 alleging separation in February 2004. The former wife asserts that the former husband was well aware of the divorce application and that he had attended at the Suburb C home with a copy of the divorce order.

Consideration

1. Clearly there are significant issues of fact for determination. Taking the applicant former husband’s case at its highest it is clear that he has a claim for final property adjustment as against the former wife.

2. He asserts he received no consideration for the transfer of the matrimonial home to her, she asserts that consideration was at best modest.

3. There has clearly been a delay in the former husband seeking to make application for property settlement. Of course it appears that ultimately the trigger for his consideration of his prospective entitlements was the sale of the former matrimonial home about two years ago in 2015. He commenced proceedings seeking leave about nine months after the sale.

4. Otherwise, there is a factual dispute as to whether the former husband had notice of the divorce order that commenced the statutory period running.

5. However, it is, otherwise, readily apparent that he has an arguable case for property adjustment.

6. In his present circumstances it is concluded that he would suffer hardship in being unable to pursue his claim for property adjustment. Whilst the litigation if continuing will be an impost on the former wife who is employed part time and otherwise dependant on her new husband who earns about $100,000.00 per annum that impost must be balanced against the former husband’s right to have his prospective application heard and determined.

7. It is appropriate that the applicant be granted leave to commence proceedings out of time.

8. Otherwise by reason of the final issues then for determination, it is appropriate that these proceedings be transferred to the Federal Circuit Court of Australia.

9. Orders will be made accordingly.

I certify that the preceding forty four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 17 July 2017.

Associate: 

Date:  12 July 2017