· 2022-04-20T19:03:54+0000 · 750 posts

Appellant Seeks De Facto Property Settlement

Skelton & Lindop [2022] FedCFamC1A 47 (4 April 2022)

The primary judge dismissed the appellant’s application pursuant to s 44(6) of the Family Law Act 1975 (Cth) (“the Act”) to bring an application for de facto property settlement out of time. The appellant asserts that the decision of the primary judge was incongruent. The Court, in making its final orders, assessed whether the decision is attended by sufficient doubt to warrant appellate scrutiny and if a substantial injustice would result if leave were refused.

Facts:

The parties began a de facto relationship in late 2009 or early 2010. It was common ground they had been in a de facto relationship, but they disputed how long it lasted and when it ended. The appellant brought her application for substantive property settlement in November 2018. The proceedings were undoubtedly brought late and the appellant sought an interlocutory order under s 44(6) of the Act enabling the application to be prosecuted out of time. Her application for leave to proceed out of time was not entertained until June 2021.

The respondent asserted he and the appellant separated in February 2014, whereas the appellant contended their separation did not occur until March 2016. The primary judge recognised that, for the purpose of determining the interlocutory dispute under s 44(6) of the Act, the untested evidence of the appellant should be accepted at its highest and accepted that separation occurred in March 2016 and so the appellant’s application was about eight months late. The appellant joined the respondent and the respondent’s sister (“Ms C”) as parties to the proceedings. By way of substantive relief, the appellant sought that a parcel of real property (“the Suburb M property”), owned jointly by the respondent and Ms C, be sold and the net sale proceeds then divided between the parties in these shares: the appellant (20 percent); the respondent (30 percent); Ms C (50 percent).

The primary judge concluded the appellant’s financial and non-financial contributions, on the strength of her own evidence, were “minimal” and so she was unable to establish on the balance of probabilities that the deprivation of the opportunity to bring a substantive property settlement claim out of time would cause her hardship. The primary judge accepted that the appellant’s costs would exceed the financial return she could likely expect from the proceedings. His Honour also accepted that the joinder of Ms C to the proceedings would increase the appellant’s exposure to an adverse costs order, which she would be unable to pay. His Honour concluded that, although the delay of eight months was “not substantial”, the appellant gave no explanation for her delay between separation in March 2016 and her letter of demand to the respondent just before the limitation period expired, which weighed against the exercise of discretion in her favour.

Issue:

Whether or not the appeal should be allowed.

Applicable law:

Family Law Act 1975 (Cth) Pt VIIIAB s 90SM - provides that in property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:

(a) in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them--altering the interests of the parties to the de facto relationship in the property; or

(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship--altering the interests of the bankruptcy trustee in the vested bankruptcy property;

including:

(d) an order requiring:

(i) either or both of the parties to the de facto relationship; or

(ii) the relevant bankruptcy trustee (if any); to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.

Althaus & Althaus (1982) FLC 91-233; [1979] FamCA 47 - provides that the distinction between, on the one hand, a “prima facie claim” and, on the other, a claim which has a “real probability of success” is not novel because it has been discussed before – both long ago.

Arcand & Boen (2021) FLC 94-046; [2021] FamCAFC 155 - provides that another strand of authority speaks of the need for the applicant to only demonstrate his or her prospective claim is reasonable or arguable.

Australian Broadcasting Commission v O’Neill (2006) 227 CLR 57; [2006] HCA 46 - where by using the phrase "prima facie case", their Honours did not mean that the [applicant] must show that it is more probable than not that at trial the [applicant] will succeed; it is sufficient that the [applicant] show a sufficient likelihood of success to justify [the interlocutory relief].

Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 - the High Court of Australia said that, for the purposes of an interlocutory application in which it is necessary for an applicant to demonstrate a prima facie case the first [inquiry] is whether the [applicant] has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the [applicant] will be held entitled to relief.

Carlon & Carlon (1982) FLC 91-272; [1982] FamCA 60 - provides that it is true the appellant did not lead evidence to explain why she omitted to bring her claim with the two-year limitation period, which is of course usually an influential factor, but it is not of itself necessarily fatal.

Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 - provides that the grant of leave usually requires the applicant to show the decision at first instance is attended by sufficient doubt to warrant appellate scrutiny and, additionally, substantial injustice would result if leave were refused, supposing the decision to be wrong.

Welland & Hawthorn [2021] FedCFamC1A 43 - where the appellant correctly acknowledged that leave to appeal from the dismissal order is necessary as it is an interlocutory judgment.

Analysis:

The grant of leave usually requires the applicant to show the decision at first instance is attended by sufficient doubt to warrant appellate scrutiny and, additionally, substantial injustice would result if leave were refused, supposing the decision to be wrong. The appellant was able to demonstrate that the decision at first instance is attended by sufficient doubt to warrant appellate scrutiny and, additionally, substantial injustice would result if leave were refused, supposing the decision to be wrong. The appellant has demonstrated she will suffer hardship if deprived of the chance to bring her reasonably arguable substantive property settlement claim against the respondent. The costs of the [appellant] in pursuing her application compared to the contributions made by her in the relationship, would exceed that which she is likely to receive on any property adjustment.

The respondent was on notice of the appellant’s intention to pursue a claim against him before the limitation period expired, the claim was brought eight months later, which delay was not substantial. The respondent could not point to any prejudice he would suffer in having to meet the claim out of time which he would not have otherwise suffered if the claim was brought within time.

Conclusion:

The Court granted the leave to appeal. The appeal is allowed. The orders made by the Federal Circuit and Family Court of Australia (Division 2) on 15 October 2021 are set aside. Leave is granted to the appellant, pursuant to s 44(6) of the Family Law Act 1975 (Cth), to prosecute the application for property settlement relief under Pt VIIIAB, filed on 22 November 2018. The appellant 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 the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by her in the appeal. The respondent is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by him in the appeal.

#DeFactoPropertySettlement

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