Lombard & Wamsley [2021] FamCAFC 124 (23 July 2021)

Last Updated: 30 July 2021

FAMILY COURT OF AUSTRALIA

Lombard & Wamsley [2021] FamCAFC 124

Appeal from:	Wamsley & Lombard [2020] FCCA 1725
Appeal number(s):	NOA 49 of 2020
File number(s):	DNC 394 of 2016
Judgment of:	AINSLIE-WALLACE, RYAN & WATTS JJ
Date of judgment:	23 July 2021
Catchwords:	FAMILY LAW – APPEAL – PROPERTY – Appeal from property settlement orders – Dispute as to when the de facto relationship ended – Whether leave required to commence proceedings out of time pursuant to s 44(6) of the Family Law Act 1975 (Cth) – Factual findings – Material facts overlooked – Incorrect finding as to date relationship ended – Leave pursuant to s 44(6) not considered – Appeal allowed – Re-exercise of discretion – Leave given to apply out of time – Property settlement orders made – COSTS – Parties to pay own costs.
Legislation:	Family Law Act 1975 (Cth) ss 4AA, 44, 90SF, 90SM, 90XE, 90XT, 106A Federal Circuit Court Rules 2001 (Cth) rr 14.06(2), 22.01 Family Law (Superannuation) Regulations 2001 (Cth) Pt 6
Cases cited:	Clarence & Crisp (2016) FLC 93-728; [2016] FamCAFC 157 Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54 Gadzen & Simkin (2018) FLC 93-871; [2018] FamCAFC 218 Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63 Herford & Berke (No 2) (2019) FLC 93-919; [2019] FamCAFC 182 House v The King (1936) 55 CLR 499; [1936] HCA 40 Radecki & Fairbairn (2020) FLC 94-001; [2020] FamCAFC 307 Sharp v Sharp (2011) 50 Fam LR 567; [2011] FamCAFC 150 Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173 Whitford and Whitford (1979) FLC 90-612; [1979] FamCA 3
Division:	Appeal Division
Number of paragraphs:	46
Date of hearing:	8 December 2020
Place:	Brisbane (via video-link)
Counsel for the Appellant:	Mr Hibble
Solicitor for the Appellant:	Marino Law
The Respondent:	Litigant in person

ORDERS

		NOA 49 of 2020 DNC 394 of 2016
APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN:	MR LOMBARD Appellant
AND:	MS WAMSLEY Respondent

ORDER MADE BY:	AINSLIE-WALLACE, RYAN & WATTS JJ
DATE OF ORDER:	23 JULY 2021

THE COURT ORDERS THAT:

1. The appeal be allowed.
2. Orders 1–9 dated 26 June 2020 made in the Federal Circuit Court of Australia be set aside.
3. Pursuant to s 44(6) of the Family Law Act 1975 (Cth) (“the Act”) the wife have leave to file an application for property settlement under the Act in accordance with her application filed on 19 September 2016 as subsequently amended.
4. Within 90 days of the date of these orders the husband is to pay the wife the sum of $96,665, after a set-off in the sum of $1,000 the wife is to pay for costs, and that such sum/cash payment will be paid to the wife care of the Trust Account of her solicitor KJ Lawyers & Migration Consultants.
5. In default of payment of all or some of the moneys ordered pursuant to Order 4 herein interest shall be charged and become payable on the amount owing at the rate prescribed by r 22.01 of the Federal Circuit Court Rules 2001 (Cth) until such time as all payments are made in full to the wife by the husband.
6. The wife retain for her sole use, benefit and enjoyment her right, title and interest in:

(a) the real property located at B Street, Suburb C (otherwise known and identified as the property Lot ... Plan(s) ... Volume ... Folio ...) (“the B Street, Suburb C property”);
(b) her motor vehicle;
(c) her superannuation entitlement.

7. The husband retain for his sole use, benefit and enjoyment his right, title and interest in:

(a) the real property located at D Street, Suburb E (otherwise known and identified as the property Lot ... Plan(s) ... Volume ... Folio ...) (“the D Street, Suburb E property”);
(b) his motor vehicle;
(c) his interest in the family investment share portfolio and properties and family investment (however defined).

8. Dispense with r 14.06(2) of the Family Law Rules 2004 (Cth).
9. In accordance with s 90XT(1)(a) of the Act, whenever a splittable payment within the meaning of s 90XE of the Act becomes payable to or on behalf of the husband from his interest in the Super Fund F (member number ...) (“Super Fund F”), the wife is entitled to be paid (by the trustee) the amount calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 (Cth), using a base amount of $30,000 and there is a corresponding reduction in the entitlement the husband would have had but for these orders.
10. Order 9 has no effect until the expiration of 28 days after the order has been served on the trustee of Super Fund F. In the event that the trustee of Super Fund F has not applied to vary or set the order aside within that 28 days, Order 9 binds the trustee of Super Fund F.
11. The operative time for Order 9 is twenty eight (28) business days after the service of these orders on Super Fund F.
12. That except and unless otherwise specified in these orders:

(a) Each party be solely entitled to the exclusion of the other to all other property (including real property) and chattels of whatsoever nature and kind in the possession and/or control of such party or in which the party has an interest as at the date of these orders and that for this purpose funds in bank accounts and shares are deemed to be in the possession of the person whose name appears on the bank's record thereof; insurance policies are deemed to be in the possession of the person who took out the policy; superannuation entitlements are deemed to be in the possession of the person who is named as the worker to whom the entitlement or benefit is payable, and chattels (including but not limited to motor bikes, cars, personal effects, jewellery and other items) are deemed to be in the possession of the person with the control of the said items as at the date of these orders.
(b) Each party is solely liable for and is to indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders or to which the party has in their possession, care and control including but not limited to the mortgages attached to any real property each party is to retain pursuant to Orders 6 and 7 herein.
(c) Each party is solely liable for and is to indemnify the other against and with respect to all and any personal or private loans, mortgages, lines of credit, credit card debt and all and any other debt whatsoever in their respective names or to which they are otherwise liable.

13. That the parties will execute all documents and do all acts and things necessary to give validity to and operation of these orders and if a party refuses or neglects to execute a document or to do any such thing or act:

(a) a Registrar of the Federal Circuit Court of Australia is appointed to execute such document or to do such act or thing in the name of the defaulting party under s 106A of the Family Law Act 1975 (Cth) and
(b) The defaulting party will pay all reasonable solicitor/client costs incurred by the non-defaulting party for the purpose of enforcing any order or part thereof and such costs will be paid on a party/party or indemnity basis.

14. In the event that the payment due by Order 1 dated 26 June 2020 has been made, that payment is to be offset against the amount due pursuant to Order 4 herein.
15. In the event that the husband’s superannuation interest in Super Fund F has been split in accordance with Orders 5–7 dated 26 June 2020 that adjustment is to be treated as being in compliance with Orders 9-11 herein.
16. Each party pay their costs of the appeal.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

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

REASONS FOR JUDGMENT

AINSLIE-WALLACE, RYAN & WATTS JJ:

INTRODUCTION

1. By Notice of Appeal filed on 23 July 2020, Mr Lombard, the de facto husband (“the husband”) appeals orders for the settlement of property made pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”). The husband and Ms Wamsley, the de facto wife (“the wife”) who is the respondent to the appeal, were in a de facto relationship which broke down. Section 90SM can only be invoked if the application is made within two years after the end of the de facto relationship (s 44(5) of the Act). However, s 44(6) of the Act enables the Court to grant leave to apply after that period provided the conditions in the provision are satisfied. On the husband’s case, the parties’ de facto relationship ended in March 2014 and thus, the wife’s application for property settlement, which was filed on 19 September 2016, required leave pursuant to s 44(6), which was not given.
2. The wife agreed that aspects of the parties’ relationship changed in March 2014. However, the wife said that the parties continued to live together as a family until January 2015 and that their de facto relationship ended later than the husband said. Although the primary judge did not nominate a specific date for when the parties’ relationship ended, he was satisfied that it ended during October 2014 [38]. It followed, that the wife’s application was made within the two year limit and thus, she did not require leave.
3. The primary judge found that the parties’ net non-superannuation property was valued at $468,124 and between them, they held superannuation in the amount of $506,569 [71]. In relation to non-superannuation property, the husband was assessed as making contributions at 68 per cent compared to the wife’s 32 per cent [64]. In relation to superannuation, the wife’s contributions were assessed at 46 per cent compared to those of the husband at 54 per cent [66]. The application of s 90SF(3) of the Act was moot [67]. Taking into account the net property and superannuation held by each party, this required that the husband pay the wife $97,655 and a superannuation splitting order in the amount of $30,000 in favour of the wife against one of the husband’s superannuation funds [66] and [70].
4. In early 2015 and at about the same time the parties stopped living together, they divided their assets. According to the husband, this was a complete and fair, albeit, informal property settlement. His case at trial was that the parties should each retain what they had and, in the event that the wife’s property settlement application was heard on its merits, she was not entitled to anything more.
5. On the other hand, the wife said this was the first step in the settlement of their property and she sought a further cash payment of $214,200 and a superannuation splitting order against the husband’s superannuation interest of $181,841. It is depressing to record that between them, the parties spent more on legal costs than the property settlement sought by the wife. The volume of material filed in the proceedings below is extraordinary and grossly disproportionate to the matters in dispute. We do not know why this occurred but this is family law litigation at its worst. Indeed, given the modest adjustment ordered, there can be no doubt that any semblance of commercial reality in this dispute and, in the appeal, was abandoned long ago.
6. If there was any doubt about the ongoing lack of proportionality to this dispute, the husband’s position, assuming success in the appeal, that the proceedings be remitted for rehearing by a judge other than the primary judge, establishes the point. Given that neither party wanted to adduce further evidence in a remitted hearing, common sense ultimately prevailed and it is agreed, that in the event error is established, we will re-exercise and not remit.
7. The wife filed a Submitting Notice save as to costs in the appeal. She did not file a Summary of Argument as directed and, although the wife appeared at the appeal hearing, she did not address the husband’s submissions.

BACKGROUND FACTS

8. The husband was born in 1969 and the wife was born in 1976. They have a daughter whose care they share.
9. The husband is a public servant and the wife works in healthcare.
10. The parties met in 2004 and commenced cohabitation in May 2006 [4].
11. At the commencement of cohabitation, the wife had superannuation worth $28,318 and the husband had superannuation worth $32,500 [66]. Otherwise, each of the parties had a motor vehicle and personal effects. In addition, the husband had an interest in four properties in Queensland. This was a family venture and at that time the husband had a 1/5^th share in one of the properties and a 1/6^th share in each of the other properties. He also had a 1/6^th interest in a share portfolio with his family members [3].
12. In 2007, the parties moved to Darwin where they purchased a unit at B Street, Suburb C for $428,000. The property was acquired in the parties’ joint names and, having contributed $15,000 towards the purchase price, the rest was obtained by a mortgage borrowed in their joint names. This is where the parties lived until, in 2009, they moved to a town some distance from Town J. But for the parties’ final move to Darwin, all of their moves were undertaken in furtherance of the husband’s career [7] and [60].
13. Following the birth of the parties’ daughter in 2010, the wife took time away from work and focussed her time on running the home and child care.
14. In January 2011, the parties purchased D Street, Suburb E for $628,000. The property was acquired jointly and in relation to which they borrowed $413,308 from a third party lender and $25,000 advanced from the husband’s family. The advance was repaid [9].
15. Both properties were tenanted and enabled the husband to take advantage of tax losses by applying the shortfall of income versus expenses against his other income [10].
16. In May 2011, the parties moved to Town K and after four years they moved to Town G [12].
17. According to the husband, the parties separated in March 2014, albeit they continued to live together.
18. In November 2014, the wife commenced a relationship with her now partner [37].
19. In January 2015, the parties returned to Darwin and ceased living together.
20. Circa February 2015, the parties agreed that the husband would retain the D Street, Suburb E property and the wife would retain the unit at B Street, Suburb C. The husband had savings, including $70,000 (from tax refunds) that he transferred to his father in 2014 which was returned to him a few weeks after the informal property settlement. The wife knew nothing of this [24] and the primary judge was satisfied that the husband attempted to put these monies beyond her reach [26]. Although there was evidence that the husband had additional funds, the actual amount could not be ascertained. On the other hand, the wife had some $45,000 and otherwise, the parties divided a savings account equally [49]. The husband retained the investments with his family and both parties retained their superannuation.
21. As mentioned earlier, the wife commenced proceedings for property settlement in the Federal Circuit Court of Australia on 19 September 2016. Provided that the de facto relationship still existed on 20 September 2014, the wife did not require s 44(6) leave.

THE GROUNDS OF APPEAL

22. No challenge is made to the statements of principle by which the case was decided and the focus of the grounds is particular factual findings. Before an appellate court can interfere with the facts as found or the inference drawn from them, it must be shown that the primary judge was wrong. Relevant to this appeal, this may be established by showing that material facts were overlooked (Edwards v Noble (1971) 125 CLR 296). A different view by an appellate court only on matters of weight by no means justifies a reversal of a decision of the primary judge (Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513 at 519).
23. The husband contends that the primary judge erred by:
    • finding that the de facto relationship did not end in March 2014 (Ground 1); and
    • failing to correctly identify the property pool available for distribution (Ground 2).

When did the relationship end?

24. To answer this question, it is necessary to consider what must be proved to establish the existence of a de facto relationship (Clarence & Crisp [2016] FamCAFC 157; (2016) FLC 93-728 (“Clarence”)) and to then consider what has changed to the extent that the relationship no longer exists (Herford & Berke (No 2) (2019) FLC 93-919 at [23]–[25]). As this Court said in Radecki & Fairbairn [2020] FamCAFC 307; (2020) FLC 94-001 at [35] and citing Clarence at [51]–[52]:
    51. Ultimately, however, we consider the real test (since it conforms with the statute as a matter of logic) was that identified by Murphy JA earlier in H v P [[2011] WASCA 78]:
        56. ... a de facto relationship is inherently terminable at any time, and continues to exist only insofar as the indicia which give the relationship its ... character continue to exist.
    52. Looked at in this way, the task of determining whether a relationship has ended at or before a particular date is precisely the same task that must be performed when determining whether a de facto relationship exists in the first place – i.e. by reference to the indicia laid down in the legislation...
25. A de facto relationship exists where a court finds that the parties were “a couple living together on a genuine domestic basis” (s 4AA(1)(c) of the Act), which in turn is decided by reference to the factors set out in s 4AA(2) of the Act below:

(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.

26. Regard may also be had to such other matters as the court considers relevant (s 4AA(4) of the Act).
27. The primary judge understood these principles and between [13] and [38] of the trial reasons, the factors which pointed one way or the other were recorded and analysed. From this analysis, the primary judge concluded:
    35. I now turn to a consideration of the indicia in s 4AA(1). In this case the duration of the relationship of the parties was several years. They resided together in a single household for the entirety of the relationship. The parties did not have a sexual relationship after March 2014 but they did not cease living together until January 2015. Throughout the relationship, and until about January 2015, the parties shared the expense of their joint household, borrowed money and invested in property together and, until March 2014 at least, provided mutual financial support as, for example, when the wife was caring for the parties’ young child. After March 2014, the parties expressly agreed to continue to share a household, to continue to share household expenses, to continue to service joint borrowings for their investment properties and share the expenses of caring for their child. They maintained a joint bank account into which they paid their salaries. Their joint ownership of their investment properties in Darwin continued until early 2015. Their mutual commitment to a shared life ceased by agreement in March 2014 but, significantly, they agreed to defer ceasing living together as a family until 2015. Aspects of a shared life ceased, such as their sexual relationship, but other aspects such as living together and caring for their child continued. There was no real evidence of the reputation and public aspects of their relationship after March 2014 but the wife did not deny the husband’s assertion that they no longer presented as a couple. The wife commenced another sexual relationship in November 2014.
    36. No particular finding in relation to any circumstance is to be regarded as necessary in deciding if there is a de facto relationship: s 4AA(3). The court is to have regard to such matters, and to attach such weight to any matter as may seem appropriate to the court in the circumstances of the case: s 4AA(4). There are no other matters that I consider relevant to the issue other than those I have described.
    37. It can be seen that, in considering the circumstances referred to in s 4AA, some of the indicia of a de facto relationship were absent in September 2014 but some remained present. In particular, in March 2014, the parties’ sexual relationship ceased and they agreed to end their relationship. However, the parties also agreed to remain living together in the same house, sharing expenses, and to care for their daughter until 2015. The[y] agreed to continue to service, through a joint account, their joint investments. I attach particular weight to these latter elements in the circumstances of this case. The parties deliberately decided to maintain some aspects of their lives together, including their financial interdependence and care of their child, until January 2015. The wife did not commence a new relationship until November 2014.
    38. Taking all these circumstances into account I am satisfied that the de facto relationship of the parties continued to exist on 20 September 2014 and, accordingly, the wife’s application filed on 19 September 2016 was made within the period of 2 years after the end of the de facto relationship. To the extent that it is necessary to make a finding, I am satisfied that the relationship ended in October 2014.
28. October 2014 appears to relate to the wife’s date for the end of the relationship given in her Initiating Application and evidence of her booking a flight in late October 2014 to visit her current partner. In any event, the husband contends that by reference to the composite picture that emerged from these findings the primary judge should have found that the de facto relationship ended in March 2014 and at that time the parties entered in a new relationship, which was akin to their being housemates. Although it is accepted that the primary judge could have viewed the facts along these lines, it is not accepted that the attribution of weight and conclusion reached as to the nature of the relationship were not open.
29. However, in finding that the de facto relationship ended in October 2014, as the husband contends, the primary judge overlooked important evidence. Namely, that in February 2017 the wife served on the husband a Notice to Admit Facts which asked that he admit that “in or about March 2014 [the husband] and [the wife] decided to separate but continued to live under the same roof” (Transcript 5 February 2020, p.25 lines 35-36). The admission sought was given. This was powerful evidence of the parties’ mutual intention and agreement that they were separated and their de facto relationship ended in March 2014. Analysed against that background, the changes that the parties then made to the way they lived take on a different complexion and demonstrate that not only did they agree to separate, they clearly acted on that decision. The effect of this is that the primary judge erred in failing to consider the wife’s Notice to Admit Facts and, as Ground 1 contends, in failing to conclude that the de facto relationship ended in March 2014.
30. It follows, that the primary judge was obliged, but failed to consider, whether the wife should be given leave pursuant to s 44(6) to bring her application out of time.

The property pool

31. By Ground 2 the husband challenges findings that there was an unexplained shortfall in the application of the proceeds of sale from one of the properties he co-owned with his family and the approach taken to $200,000 that he borrowed from his family and used for legal fees in this case.
32. Turning to the proceeds of sale, the primary judge said:
    51. As noted, one of the four investment properties the husband co-owned with his family was sold for $536,500 by the time of trial. According to the husband and his father, the entire sales proceeds were applied to reduce indebtedness in respect of the other properties. The husband’s father said that this reduced the indebtedness from $890,000 (elsewhere a figure of $895,716 was referred to by the husband and his father – the discrepancy was not explained) to $410,000. This is a reduction of $480,000, not $536,500. This shortfall was not explained. Sale agent commission and other costs of sale would not appear to completely account for the discrepancy.
33. In other words, there was a shortfall in the vicinity of $56,000 (less selling costs) which was not explained. By reference to the husband’s father’s affidavit filed on 16 October 2019, the husband sought to establish that the unexplained difference was only $50,719. In relation to this lesser sum, the husband submitted that “[g]iven that the family loans to other brothers and the father and mother, the alleged shortfall is not significant (noting the father’s comment that loans to other family matters (sic) are a private matters between the father and those other sons...” (Husband’s Summary of Argument filed 6 October 2020, paragraph 4.22). The same can be said of a shortfall circa $56,000. If it is an error, it is without consequence.
34. In relation to the $200,000 that the husband borrowed from his family in respect of legal fees, it was his contention that this debt should be included in the formulation of the parties’ net property available for distribution. The argument failed and neither the paid legal fees nor the allied loan were included in the asset pool [71]. By reference to the principles collated in Trevi & Trevi [2018] FamCAFC 173; (2018) FLC 93-858 (“Trevi”), the primary judge said:
    58. I propose to ignore the indebtedness of the parties for money borrowed to pay legal fees. However, I will add back as a notional asset the amount of $70,000 from savings in existence at the time of separation used by the husband to pay legal fees, in conformity with the guidelines in Chorn v Hopkins.
35. The primary judge cited, inter alia, Trevi at [58] and [59] where this Court said:
    57. ...

...

58. If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
59. Outstanding legal fees themselves are generally not taken into account as a liability.
36. The husband does not cavil with these principles but contends that:

...His Honour did not exercise or even consider any discretion in how to determine the way in which the Husband’s legal funds should be considered – including the debt arising for them. Rather His Honour, in error, simply ignored them because they were monies borrowed post separation for legal fees without any consideration of their source, contributions or the effect if (sic) the debt on the property pool...
(Husband’s Summary of Argument filed 6 October 2020, paragraph 4.26)(As per the original)

37. This submission misstates the trial reasons. For example, the source and nature of the borrowings are identified at [46], [47] and [68]. As to the assertion that the debt was simply ignored, this raises the question of whether the primary judge failed to take into account a relevant consideration. If the proposition hold true this would establish error in a House v The King (1936) 55 CLR 499 sense. However, although in [58] of the trial reasons the primary judge said this debt would be ignored, it can be seen that his Honour considered the husband’s contention for the debt to be included in the property pool and, then for the reasons given, the argument was rejected. This was an orthodox application of well settled principles and undoubtedly correct.
38. The challenges raised against the formulation of the property pool have not been established. Nevertheless, because the wife was permitted to proceed with her application in contravention of s 44(5) of the Act, the appeal must be allowed and the orders must be set aside. Our reasons by way of re-exercise follow.

SECTION 44(6) LEAVE

39. In relation to an application for property settlement, s 44(6) permits the court to give leave to apply beyond the two year period if the court is satisfied that “hardship would be caused to the party...if leave were not granted”. In Sharp v Sharp [2011] FamCAFC 150; (2011) 50 Fam LR 567, the Full Court said of hardship:
    17. It is well-accepted that hardship for these purposes is more than the loss of a right to commence proceedings. It is the consequences attending the loss of the right to commence proceedings that constitutes hardship. That is a matter to be determined by the circumstances of the particular case.
    18. In assessing hardship in this context the well-established test is that the applicant must have a prima facie claim worth pursuing or a “real” probability of success. Further, leave will not be granted if to do so would not, in the substantive result, alleviate that hardship. However, whether or not hardship exists is not to be assessed only by reason of the monetary value of the probable order to be made if leave were granted.
    19. In considering the meaning of hardship, in Whitford at FLC 78,144...the court said:

... 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 ... 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.

40. If hardship is established, the Court must then consider, whether, in the exercise of its discretion, leave to institute proceedings should be given or refused (Gadzen & Simkin [2018] FamCAFC 218; (2018) FLC 93-871 citing Whitford and Whitford ([1979] FamCA 3; 1979) FLC 90-612).
41. The husband relied on the submissions he made at trial to oppose leave. He contended that the wife was unable to establish hardship because the parties had already completed an informal property settlement from which she received an almost equal share of the parties’ property. On the husband’s case, and by reference to 2015 values, the wife received approximately $40,000 less than him. However, reference has already been made to the $70,000 which the husband sent to his father and of which the wife was unaware. This alone provides sufficient reason to reject the husband’s analysis of the nature and effect of the agreement reached in February 2015. Given that the husband failed on Ground 2, the proposition that the wife has a prima facie claim worth pursuing is unarguable. It is at least as reflected in the primary judge’s assessment of her entitlement.
42. As to discretionary matters, it was the husband’s submission at trial that the wife failed to provide any explanation for delay in seeking leave to proceed and he would be prejudiced if leave was granted. On the basis that the de facto relationship ended in March 2014, the delay is six months. Unsurprisingly, before us, counsel for the husband acknowledged that delay was not a significant issue. Nevertheless and for completeness, the wife’s explanation for the delay is obvious; on her case leave was not required because the de facto relationship ended later than we are satisfied is the case. The facts on which the wife relied to establish the later date included, for example, that the parties continued to live in the same residence, share their daughter’s care and maintained joint finances. That the wife proceeded under a mistaken belief as to the effect of these matters on the question of when the de facto relationship ended, is an adequate explanation for her failure to apply within the two year period.
43. The husband gave no details of his asserted prejudice. It is inferred that he is concerned about legal expenses and the stress inherent in litigation. However, as the case will be finalised without a further hearing and thus legal expense, it is not accepted that he would be prejudiced if leave is given. In any event, prejudice is a comparative exercise and the prejudice to the wife inherent in our finding as to hardship if she were refused leave, outweighs any prejudice to the husband.
44. Thus, the wife will be given leave to apply for a property settlement under the Act in accordance with her application filed on 19 September 2016 and as amended on 10 January 2018.

SECTION 90SM

45. In relation to the wife’s application for property settlement, subject only to the possibility that the unexplained shortfall is closer to $50,000 than $56,000, we agree with and adopt his Honour’s analysis of the facts, statement of principles and conclusion. Thus orders will be made to the same effect. It is not known whether the parties have already given effect to the orders now set aside and provision will be made to ensure that the orders do not have the effect of requiring that the husband pay the wife twice.

COSTS

46. Fortunately for the husband, the wife did not incur legal expenses in the appeal and she does not seek costs against him. If she had, any application by her for costs of the appeal would have been irresistible. For the avoidance of doubt, an order will be made that the parties pay their own costs.

I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Ainslie-Wallace, Ryan & Watts.

Associate:

Dated: 23 July 2021