They informally agreed in 2010 on how to divide their family home, motor vehicles and furniture.
Initial Agreement not documented legally in either Consent Orders or a Binding Financial Agreement.
Husband now wants to include Wife’s Superannuation.
Leave to Extend Time Limit Granted.
NOTE: This case has been published by the Court under a PSEUDONYM, rather than using the real names of the parties.
Newall & Scarrow  FCCA 1422 (4 July 2017)
Last Updated: 5 July 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
NEWALL & SCARROW
FAMILY LAW – Application for leave to extend time – consideration of principles applicable to exercise of discretion as discussed in Gallo v Dawson HCA 30; (1990) 93 ALR 479 – whether strict application of the rules would cause injustice – whether conduct of the parties relevant – whether the principles of estoppel apply – whether the doctrine of laches is applicable in the circumstances – whether appropriate to exercise discretion in favour of the husband – leave to extend time granted.
Gallo v Dawson  HCA 30; (1990) 93 ALR 479
Hughes v National Trustees Executors and Agency Co of Australasia Ltd  VicRp 27; (1978) VR 257
Avery v No 2 Public Service Appeal Board (1973) 2 NZLR 86
Jess v Scott (1986) 12 FCR 187; 70 ALR 185
Hedley v Hedley  FamCAFC 179
Neocleous & Neocleous (1993) FLC 92
Whitford & Whitford FamCA 3; (1979) FLC 90-612
McDonald & McDonald  FamCA 93; (1977) FLC 90-317
Althaus & Althaus (1982) FLC 91-233
Wong v Minister for Immigration & Multicultural & Indigenous Affairs  FCAFC 242
Port of Melbourne Authority v Anshun Pty Ltd  HCA 45; 147 CLR 589
Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543
BC v Minister for Immigration & Multicultural Affairs  FCAFC 221
BC v Minister for Immigration & Multicultural Affairs  FCA 1669
Port of Melbourne Authority v Anshun (No.2)  VicRp 9;  VR 81
Bryant v Commonwealth Bank  FCA 1299; (1995) 57 FCR 287
Yat Tung Investments Co Ltd v Doa Heng Bank Ltd  AC 581
Selen & Selen and Anor  FamCA 310
Crawley v Short  NSWCA 410
Stanford v Stanford  HCA 52
Wirth v Wirth  HCA 71; (1956) 98 CLR 228
R v Watson; Ex parte Armstrong  HCA;  HCA 39; (1976) 136 CLR 248
CAC 1262 of 2015
31 May 2017
Date of Last Submission:
31 May 2017
4 July 2017
Solicitors for the Applicant:
Canberra Legal Group
Counsel for the Respondent:
Mr RJ Clutterbuck
Solicitors for the Respondent:
Hill & Rummery
(1) Pursuant to paragraphs 44 (3) (d) and 44 (6) (a) of the Family Law Act the applicant Mr Newall is granted leave out of time in which to file an application for adjustment of property interests under section 79 of the Family Law Act.
(2) The matter is listed for directions before Judge Tonkin on 7 August 2017 at 9.30am.
FEDERAL CIRCUIT COURT
CAC 1262 of 2015
REASONS FOR JUDGMENT
- By application filed on 5 December 2016 the husband sought leave to extend the time in which to file his property application. The parties separated in February 2010 and reached an agreement regarding the distribution of their non–superannuation assets including the family home, motor vehicles and chattels. The husband contends that no final property settlement was reached and the parties’ superannuation interests did not form part of that agreement.
- The wife contends that when the parties settled their property dispute in 2010 their respective superannuation interests and the husband’s inheritance were taken into account. She argued that the husband is estopped from denying the agreement then reached. Further that the husband by his conduct and acquiescence has waived any future right to distribution of property. In the alternative the husband should not be granted leave pursuant to section 79A to vary the initial agreement.
- The husband relied on his amended application filed on 4 May 2017 his affidavits filed on 5 December 2016 and 5 May 2017, his financial statement filed on 5 December 2016 and an affidavit from Mr P valuing the wife’s superannuation interest (Exhibit A1). The wife relied on her response filed on 31 March 2017, her affidavit filed on 21 February 2017 and the affidavit of Ms J filed on 30 May 2017. In addition the wife relied on written submissions.
The husband sought the following orders:
2. The Respondent wife forthwith provide all documents in her possession and control relating to her interest in her (omitted) superannuation fund as it goes to establishing her true financial position pursuant to her obligation under Rule 24.03 of the Federal Circuit Court Rules 2001 (Cth).
3. The wife’s superannuation interests be subject to a splitting order to affect an equal division of superannuation interests acquired during the marriage.
4. Within 60 days from the date of these Orders, the Respondent pay to the Applicant the sum of $30,000.00 by way of bank cheque.
5. The Respondent pay the Applicant’s costs of and incidental to the interim and final applications.
- The wife sought the following orders:
1. That order 1, 2 & 3 in the Initiating Application be denied/dismissed for the reasons set out below (a-e)
(a) That the Applicant and Respondent held a property settlement on or about 22 February 2010.
(b) In the premise of (a) the Applicant is the estopped from denying the agreement between the parties.
(c) A consequential declaration upon the making of the orders sought in 1(a) and 1(b) above.
2. That the Applicant is to pay the Respondents costs on an indemnity basis.
Notwithstanding items 1 & 2 & 3 that the Applicant provide all documents in his possession or control relating to his bank statements, tax returns, superannuation statement, details of the application for grant of letters of administration of his late mother Ms M and the details of all motor vehicles registered/unregistered in the possession or control of the Applicant.
- The husband was born on (omitted) 1951 and is 65. The wife was born on (omitted) 1954 and is 62. The parties married on (omitted) 1976 in Sydney. There were three children of the marriage all of whom are now adults and live independently. The marriage was a long marriage lasting almost 34 years.
- Both parties worked during the marriage and shared in the care of the children. The husband’s mother also contributed in assisting in the care of the children and contributing financially towards expenses from time to time.
- The parties separated on 22 February 2010. It is common ground that they divided their non-superannuation property between them at this time. They sold the Property B property for $550,000.00 and divided the net proceeds of sale with the wife receiving $103,000 and the husband $96,000. The husband paid the wife $7,000 for the Mazda (omitted) vehicle, and wife paid the husband $6,000 for the 1998 (omitted) Ford vehicle. The parties amicably divided their furniture and personal effects.
- No orders were made regarding the interim property distribution between them in 2010 nor was that agreement formalised in writing. The wife asserts that her (omitted) superannuation interest at that time was worth about $400,000 whilst the husband had an interest in superannuation of about $130,000. The central issue in dispute is whether the husband agreed that neither party would make a claim against the other’s superannuation or inheritance in 2010 as the wife contends or as the husband contends the parties did not finalise their property dispute with respect to their respective superannuation interests.
- Following separation the husband’s mother died in 2010 and he inherited her estate comprising a property at Property E valued at $340,000 subject to a mortgage liability of approximately $70,000. He spent some $80,000 making improvements to that property.
- In October 2010 the wife purchased a property located at Property D for $231,000 subject to a loan. She continued to work in Canberra commuting from Property D and continued to contribute to superannuation. She retired from the (employer omitted) on 8 February 2013. She received cash of about $54,000 from her interest in (omitted) superannuation and commenced receiving a pension of about $42,000 p.a.
- Between May 2014 and November 2016 the husband engaged solicitors in an attempt to obtain financial disclosure regarding the wife’s superannuation interests and property. The wife also engaged solicitors in this regard. The parties entered into lengthy negotiations which were subject to significant delays. The wife contends that a Binding Financial Agreement was drafted but the husband refused to sign the agreement. That document was not produced in evidence.
- In February 2015 the husband retired from the (employer omitted). He withdrew $30,000 from his (omitted) Superannuation Fund. On 6 March 2015 the husband withdrew $140,000 from his (omitted) Superannuation Fund.
- On 12 August 2015 the husband filed for divorce. A divorce order was made on 25 September 2015 and the decree became absolute on 26 October 2015.
- In November 2015 the husband sold the Property E property receiving net proceeds of sale of approximately $90,000. He purchased a property at Property R, New South Wales for $105,000. The property has no mortgage.
- The husband lodged a property application on 5 December 2016 seeking leave to extend time in which to file that application. He was some 40 days late in commencing proceedings. The respondent filed a response on 21 February 2017 opposing the application. On 23 March 2017 the applicant filed an amended application and on 31 March 2017 the respondent filed a response. A further amended application was filed on 3 May 2017. The matter was heard by me on 3 May 2017 and my decision reserved.
- The husband is currently in receipt of the Aged Pension, which is $877.10 per fortnight. The wife currently receives $2,215.23 per fortnight which includes her superannuation pension of $1815.23 and a carers allowance of $400.00. Her partner, Ms J, receives $1,254.00 per week from a DFRDB pension and is a Gold Card recipient. On (omitted) 2017 the wife and her partner married.
- Pursuant to subsection 44 (3) (d) of the Family Law Act 1975 (Cth) (“the Act”) the Court’s leave is required if a party commences proceedings for adjustment of property interests more than 12 months after a divorce order has taken effect. Pursuant to subsection 44 (4) of the Act the Court is required to be satisfied that greater hardship would be caused to a party to a marriage if leave were not granted. The applicant is required to have an adequate explanation for delay.
- The principles relating to whether it is appropriate to extend time for lodging an application are set out in Gallo v Dawson HCA 30; (1990) 93 ALR 479 at page 480 where McHugh J made the following observations:-
- <li “=””>
“The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties: see Hughes v National Trustees Executors and Agency Co of Australasia Ltd  VicRp 27; (1978) VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board (1973) 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187at 194-5; 70 ALR 185.”
- In Hedley v Hedley FamCAFC 179 the Full Court allowed an appeal against Brewster FM’s order (as he then was) refusing to grant the wife leave under s 44(3) of the Act to institute property proceedings. Justice Boland succinctly discussed the relevant authorities at  to :
“ The procedure to be followed in an application under s 44(3) and the consideration of what is meant by “hardship” in s 44(4) is the subject of well-known authority. The authorities have consistently recognised, whilst an application under the section is not a matter of practice and procedure, it should be summary in character (see Neocleous & Neocleous (1993) FLC 92 – 377 and the cases there cited at 79,914).
 In Whitford & Whitford (1979) FLC 90 – 612 the Full Court (Asche and Pawley SJJ and Strauss J) referred to the appropriate way for proceedings to be conducted. Having said they did not consider it necessary or desirable to lay down any definitive procedural rules their Honours noted the following:
- an application for leave to institute proceedings under s 44(3) is not intended to be the final hearing of the matter;
- the applicant should file adequate affidavit evidence;
- the respondent should have an opportunity to file an affidavit in answer to adduce material showing why leave to institute proceedings should not be granted;
- in an appropriate case the applicant should have an opportunity to file an affidavit in reply;
- cross-examination of either party on his or her affidavit material should be permitted. On occasions oral evidence may be received;
- if necessary, the Court may allow an applicant to conduct some investigation into the financial position of the respondent; and
- the question to be borne in mind is whether leave should be granted, enabling the applicant to institute proceedings (and the extent of the proceedings and any investigation should be regulated accordingly).
 Earlier authorities, including McDonald & McDonald (1977) FLC 90 – 317, referred to the establishment of a prima facie case which is substantial, that denial of the right to litigate that claim would cause hardship, and there is an adequate explanation as to delay. Additionally, Evatt CJ in McDonald said the Court may, in an appropriate case, take into account prejudice to a respondent.
 In Althaus & Althaus (1982) FLC 91-233 Evatt CJ confirmed that ss 44(3) and (4) do not require “a detailed hearing on the merits to determine whether the applicant’s claim will succeed”. Her Honour said:
…The exercise is to determine whether there is a reasonable claim to be heard. That is the essence of the inquiry into whether hardship will be suffered by denying the applicant the right to litigate that claim.
 In Whitford the Full Court conducted an expansive discussion of what will constitute hardship. Their Honours noted:
- the loss of the right to institute proceedings is not the hardship to which the subsection refers, but the consequences of the loss of that right;
- the hardship, if leave is not granted, implies that the applicant would probably succeed if the substantive application were heard on the merits;
- if there is no probability of success the Court cannot be satisfied that hardship will be caused if leave were not granted;
- if the probable result of the hearing on the merits is that hardship is not likely to be alleviated then the Court cannot be satisfied that the applicant would suffer hardship if leave were not granted; and
- the right or the entitlement to be lost if leave is not granted should not be trifling or likely to be outweighed by the costs of the proceedings. However, it is not necessary to establish the loss must be a substantial one.
 The Full Court concluded that if a court is satisfied hardship would be caused if leave were not granted, the court should then, as a second step, consider whether to exercise its discretion to grant leave or to refuse such leave. It is relevant to note that the Full Court, at 78,146, saw the nature of the jurisdiction to be exercised by the Court required that:
… this power 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 decree nisi.
 In Neocleous the majority, Fogarty and Nygh JJ, discussed the Full Court decision in Whitford. The majority explained that the remarks in Whitford were clearly obiter. They went on to say:
“As we see it, the essence of the remarks in Whitford as further exemplified by decisions such as Jacenko, is that the judge must always bear in mind that the only question to be determined is whether leave should be granted to enable proceedings to be instituted and this should govern the procedure before him or her. For that reason it will often be undesirable to allow cross-examination on any issue which will or can be fully litigated at the principal hearing or on any issue which is not immediately relevant to the question of granting leave.”
 Lindenmayer J, in his dissenting judgment, explained that it was not necessary for the applicant to be cross-examined about matters going to a prima facie case, but in his view, the trial Judge’s refusal to allow a cross-examination on other issues of delay and hardship, was a denial of natural justice.
 It appears to me from the discussion between the Federal Magistrate and counsel at the commencement of the hearing, and during the course of the proceedings, together with his Honour’s findings in paragraphs 21, 22 and 25 of his reasons, that he did proceed to treat the matter before him as one which required determination of the wife’s entitlement under s 79 concurrently with the s 44(3) application, rather than one in which he focused on the issue of hardship to the wife if unable to commence proceedings, the reason for her delay in instituting proceedings, and any prejudice to the husband flowing from the proceedings being commenced outside the 12 month limitation period.”
- Boland J concluded:
“ The Federal Magistrate’s reasons demonstrate that he made findings about the husband’s debt to his father, ownership of the cars, and that as a result of these findings, his Honour, in effect, determined as the first step in the preferred approach to proceedings under s 79, the assets and liabilities of the parties. This appeared to distract the Federal Magistrate from the task he was required to carry out under s 44(3) and (4) and constituted error of principle. Thus on this basis, I would grant leave to appeal, and allow the appeal.”
Orders were then made by the Full Court granting leave to appeal the Federal Magistrate’s Orders and allowing the appeal.
- An application for leave to extend time is not intended to be a final hearing on the merits and does not require the Court to determine whether the applicant’s claim will succeed. The Court is required to consider whether a strict application of the rules will cause injustice. The question remains whether hardship would be caused to the husband if he is unable to commence proceedings, the reason for the delay in instituting proceedings and whether there would be any prejudice to the wife flowing from proceedings being commenced outside the 12 month limitation period.
- The marriage was a long marriage lasting almost 34 years. The wife’s interest in superannuation accumulated over 27 years, 24 years of which were referrable to the marriage. The husband argues that he made substantial indirect contributions to the wife’s superannuation interest which have not been taken into account in determining the property dispute between them. He argues that he will suffer hardship if he is not permitted to pursue his claim because as a consequence he will lose the right to have the parties’ property dispute determined on a final basis.
- The husband disputes that the initial agreement between the parties in 2010 settled their property dispute on a final basis. When the parties separated in February 2010 they divided their non-superannuation assets between them. Neither commenced proceedings at that time, the wife asserting that neither had sufficient funds to engage solicitors. Both parties continued in full time employment for some years after 2010. Both parties continued to contribute to their respective superannuation interests until each party retired.
- The wife asserts that the parties’ superannuation interests formed part of their initial agreement about property distribution in 2010. She said at paragraph  of her affidavit:
“Mr Newall and I had a verbal agreement regarding our marital property split. He had also told me several times that he did not want any of my money and as this decision was amicable I did not question his meaning. No formal property agreement was made with Mr Newall because he refused to sign a Binding Financial Agreement and did not provide a reason why or even provide any amendments to the original draft copy. He simply ignored it so I assumed he was content with our initial agreement. …Mr Newall made it expressly clear at the time that in return for my not seeking any financial gains from his inheritance and superannuation he would leave my superannuation alone. …It is true that we both agreed no court order needed to be made on my superannuation and the same applies on his accumulated assets including his superannuation and inheritance and chattels he derived from it.”
- The wife’s assertion that the parties’ superannuation was included in the parties’ initial settlement appears to be contradicted by correspondence annexed to the husband’s affidavit filed on 5 December 2016.
- On 15 May 2014 the husband instructed solicitors at Nicholl & Co, to write to the wife requesting that she provide full and frank disclosure of her financial situation in particular the value of her interest in superannuation. The husband was still employed with the (employer omitted) at that time. The wife had recently retired in February 2013. By letter to the wife dated 15 May 2014 the husband asserts through his solicitors “our client wishes to negotiate a formal property settlement without the need to approach the Court on a contested basis.”
- The wife’s solicitors, Hill & Rummery replied via letter on 30 May 2014, that they had “obtained most of the requested documentation” and added that “this matter involves….a long marriage (38 years) and one that has yet to be terminated. So too as you have correctly pointed out the matrimonial property is yet to be fully finalised including but not limited to the parties’ superannuation.” The wife did not assert on this occasion that the parties had previously entered into a verbal agreement wherein the husband agreed to leave her superannuation alone in return for the wife not seeking any “financial gain from his inheritance.”
- In her affidavit of 21 February 2017 the wife states that at separation she and the husband were both still working full time and “happy to leave the property settlement at that” inferring that the parties entered into a property settlement with respect to non-superannuation assets. She deposed in her affidavit at paragraph :
“This did not include dealing with my superannuation which is by way of annuity with (omitted). Our salaries at the time were myself $79,000 and Mr Newall $80,000 gross. Neither of us had the spare funds to formalise an agreement with solicitors as I recall. Mr Newall and I discussed the nature of our property settlement including the nature of our superannuation.”
- Further at paragraph  of the same affidavit the wife deposed that “My superannuation (annuity not lump sum) was at the time of divorce worth approximately $400,000 and was left out of the divisible marriage asset pool. Mr Newall’s superannuation entitlements were valued at approximately $130,000.” She said at paragraph  “I provided all documentation which was available to me which was somewhat dated. With respect to the superannuation statements requested by Mr Newall’s solicitor they were costly requests and if Mr Newall wanted such statements he should have offered to pay for the valuations.”
- As at 18 June 2014 the husband’s solicitors wrote to the wife’s solicitors complaining they had not received any disclosure documents from the wife.
- On 11 November 2014 the husband through his solicitor wrote to the wife’s solicitors requesting the wife’s superannuation statements for her (omitted) account to obtain a superannuation valuation. The husband’s solicitor sought agreement that Mr P value the wife’s superannuation interest and that the parties share that cost equally. A request was made for the wife’s superannuation statements from the date of cohabitation, as at the date of separation, and the most recent statement.
- The wife agrees that no financial documents were provided to the husband on this occasion. She said she had already provided documents in her possession. She inferred that she did not provide any superannuation documents as “they were costly and if he wanted these he should have offered to pay for a valuation.” She said her solicitors sought full disclosure from the husband and his response in his letter dated 19 August 2014 was “less than frank.” The wife says the husband has never disclosed his superannuation nor any evidence with respect to his mother’s estate nor other documents requested.
- By letter dated 4 December 2014, the husband’s solicitors requested a response from the wife’s solicitors to previously unanswered correspondence dated 11 November 2014.
- By letter dated 14 January 2015, the husband’s solicitors requested a response from the wife’s solicitors to previous unanswered correspondence dated 11 November 2014 and 4 December 2014.
- James Madden solicitor from Hill & Rummery emailed the husband’s solicitors on 16 January 2015. He stated that he was in the process of obtaining instructions from the wife, and anticipated that they would receive those instructions within “the next 28 days”.
- In February 2015 the husband retired from the (employer omitted).
- In a follow up email dated 25 February 2015, the husband’s solicitors asked the wife’s solicitors if they had obtained instructions from the wife. On 25 February 2015 in response to an enquiry whether the wife would participate in mediation, Mr Madden from Hill and Rummery on behalf of the wife responded that his client “still desires to settle her matrimonial property.” He indicated that the wife could not afford to share the costs of a valuation of her superannuation and suggested that the husband pay for this along with any upfront costs of mediation.
- In an email dated 25 February 2015, Mr Griffiths solicitor stated that he now had carriage of the matter and he had relayed the husband’s request to obtain a superannuation valuation to the wife.
- Both parties agree that a Round Table Conference was held on 24 April 2015 where Hill & Rummery solicitors verbally agreed they would provide the husband’s solicitors with the wife’s financial disclosure documents by the end of April 2015.
- In a letter dated 5 May 2015, the husband’s solicitors requested that the wife provide financial disclosure documents that were requested at the Round Table Conference held on 24 April 2015. The wife’s solicitors were asked in this letter to advise when those documents would be provided.
- No response was received from the wife’s solicitors in relation to the letter dated 5 May 2015. On 25 May 2015, the husband’s solicitors sent a further letter to the wife’s solicitors requesting the disclosure of financial documents asked for at the Round Table Conference held on 24 April 2015.
- The wife’s solicitors replied via letter on 16 June 2015, to the husband’s solicitors confirming that various events had occurred since the Round Table Conference held on 24 April 2015. The wife’s solicitors requested that the husband’s solicitors seek certain further financial disclosure documents from the husband.
- On 12 August 2015 the husband filed an application for divorce. At that time the parties had been separated for 5 years. It is apparent from the correspondence that both parties were aware that the husband was seeking to formalise a property settlement between them on a final basis and was seeking information regarding the wife’s interest in superannuation. Both parties were apparently engaged in negotiating through their solicitors a final resolution to the property dispute.
- By letter dated 19 August 2015, the husband’s solicitors wrote to the wife’s solicitors requesting the wife’s consent to appoint a single expert to value her superannuation and documentation relating to her borrowing capacity.
- On 11 November 2015 the husband settled the Property E property for $365,643.90. The proceeds from the sale of the Property E property and part of the money withdrawn from his superannuation were used to purchase and renovate the residence situated at Property R in the State of New South Wales (“the Property R property”). The husband purchased the Property R property for $105,000.00 in November 2015 unencumbered.
- In a letter faxed to the wife’s solicitors on 8 February 2016, the husband’s solicitors again requested financial disclosure documents from the wife in relation to bringing an application regarding a split of her superannuation interest.
- The wife’s solicitors replied via email on 12 February 2016 to that letter acknowledging receipt of the email dated 8 February 2016. They advised that they were trying to get instructions from the wife and would reply as soon as they were able.
- The wife’s solicitors advised in a telephone discussion with the husband’s solicitors on 15 February 2016 that they had been unable to contact the wife and had no instructions to give.
- In an email dated 18 February 2016, the wife’s solicitors stated that they believed the wife had returned to Canberra and they would seek her formal instructions.
- In an email dated 18 February 2016 the husband’s solicitors wrote to Hill & Rummery, stating that the wife still had not given full and frank disclosure in relation to her superannuation and that if she did not provide disclosure, proceedings would be commenced in the Federal Circuit Court to order the wife to disclose those documents. The husband’s solicitors also stated that until they were provided with disclosure, they had no instructions to effect a settlement.
- By letter dated 25 October 2016, the husband’s solicitors again wrote to Hill & Rummery solicitors advising that the primary reason the matter had not yet settled was because the wife had and continued to refuse to provide full and frank disclosure of her financial position, including having her superannuation interest valued. The husband’s solicitors indicated they had hoped to avoid commencing proceedings. They advised that the deadline for filing a property application was 26 October 2016 and advised that if a reply was not received within 7 days the husband would file a property application including an extension of time application. The husband deposed that the only superannuation value the husband’s solicitors had received from the wife was a value of $450,000 contained in a Loan Application form from “Super Rate” dated 19 August 2011. At this stage the parties’ solicitors had been negotiating for more than 2 years.
- By email dated 1 November 2016, John Feeney of Hill & Rummery wrote to the husband’s solicitors stating that they had been instructed to vigorously defend the husband’s “alleged” claim against the wife’s superannuation.
- The husband lodged his application for property settlement on 5 December 2016 seeking leave to extend the time for filing.
- I am satisfied that the husband will suffer hardship if leave to extend time is refused. I accept that the husband made an indirect contribution to the wife’s interest in superannuation during 24 years of the marriage. I accept also that the wife made an indirect contribution to the husband’s superannuation interest which accumulated during the marriage.
- The wife’s interest accrued over 27 years and until her retirement. She became an eligible contributing member of the (omitted) fund (initially) in October 1986 and then transferred to the (omitted) fund. As indicated the bulk of her superannuation interest accrued during the marriage. She receives a pension of about $45,000 p.a. (on my calculations) which is indexed and payable for her lifetime. The pension has a reversionary benefit available to her spouse in the event of the wife’s death. She has had the full benefit of the pension for 3 and a half years following retirement and the benefit of a lump sum. In the event that leave is not granted the husband will lose the right to pursue a claim for a splittable payment of the wife’s interest in superannuation. I accept that the husband had superannuation of about $130,000 at the date of separation. He has used his superannuation for living expenses and towards the purchase of Property R.
- The husband has few assets and is in receipt of the aged pension. Even a modest splittable payment will improve his financial circumstances given his age and the fact that his income is limited to a single person aged pension. I am satisfied that the husband will suffer hardship should leave not be granted. The assertion by the wife that the husband has deliberately squandered or dissipated his assets is an issue for determination should the matter proceed to final hearing. As indicated the Court is not required to determine the section 79 application on its merits on an application for leave to extend time.
- The wife argues that the husband delayed for 7 years and contends that he provides no adequate explanation for delay. Following separation in 2010 both parties continued to work full time and both continued to contribute towards superannuation. The wife did not retire until February 2013.
- By May 2014 the wife was on notice that the husband sought a splittable payment with respect to her superannuation interest. She acknowledged in correspondence to the husband’s solicitors that the parties had yet to finalise their property dispute including superannuation. I do not accept that the delay on the husband’s part amounts to 7 years.
- There was significant delay in negotiations. The husband’s express intention in correspondence to the wife was to attempt to resolve the matter on a final basis without resorting to litigation. She was aware of this over the two year period the parties corresponded. Once the divorce order became absolute the husband had a further 12 months in which to file his application. The husband continued to attempt to resolve the matter without commencing proceedings. I am satisfied that the wife had sufficient notice for many years that the husband sought to finalise the matter and as such he was not dilatory in his conduct. The fact that the application was lodged 40 days after the time for filing expired was not significant. The wife was aware in February 2016 that the husband considered filing an application due to the wife’s lack of disclosure and the parties inability to reach agreement however he continued to attempt to resolve the matter without litigating.
- No valuation of the wife’s superannuation interest was provided and the issue of financial disclosure with respect to both parties was outstanding when the husband lodged his application. The wife’s Counsel did not suggest with respect to the 40 day delay following the expiration of the limitation period that this delay in itself was significant. I accept that the husband has provided an adequate explanation for delay.
- With respect to any prejudice to the wife, her affidavit indicates that the parties’ superannuation interests were excluded from the parties’ initial property settlement in 2010. The assertion by the wife that the husband agreed to exclude those interests is in dispute and will be determined should the matter proceed to hearing. From May 2014 until he lodged his application the wife was aware that the husband was seeking a valuation of her superannuation interest and a claim with respect to that property. I am unable to ascertain from her affidavit when and why the wife increased the mortgage on her Property D property purchased by her in 2011. I am satisfied that the hardship caused to the husband with respect to the loss of pursuing his claim for a splittable interest of the wife’s superannuation and finalising the parties property settlement outweighs any prejudice to the wife in circumstances where she was aware the husband was claiming that interest in her superannuation at least since May 2014. Unless an order for a splittable payment is made, the wife will continue to receive her full pension for which she has had the benefit over the last 3 and a half years. That is a matter to be determined if the matter proceeds to final hearing.
Defences raised by the wife
- The wife argues that the Court should dismiss the husband’s application for leave on a number of bases:
1. That the husband is estopped from denying the agreement between the parties on 22 February 2010.
- In Wong v Minister for Immigration & Multicultural & Indigenous Affairs  FCAFC 242 the Full Court of the Federal Court discussed the relevant legal principles with respect to estoppel as follows:
“36 The doctrines of res judicata and issue estoppel are founded on the broad rules of public policy expressed in the maxims nemo debet bis vexari pro una et eadem causa (‘a person ought not to be vexed twice for one and the same cause’) and interest reipublicae ut sit finis litium (‘it is in the interests of the State that there be an end to litigation’). It would be an abuse of process to allow parties to litigate repeatedly matters that have been finally determined by the Court. Also, quite apart from any psychological detriment that might flow from an individual having to undertake litigation of the same issue a second time, the State has an interest in ensuring that, once an issue has been determined according to law and all rights of appeal have been exhausted, that should be an end of the matter. The resources of the community ought not to be expended in the litigation, more than once, of the same issue.
37. A plea in bar may be raised in respect of an issue, not only if the Court in the earlier proceeding was actually required by the parties to form an opinion and pronounce a judgment, but also in relation to every issue that properly belonged to the subject of the earlier litigation and which the parties, exercising reasonable diligence, might have brought forward at the time of the earlier litigation: Port of Melbourne Authority v Anshun Pty Ltd  HCA 45; (1981) 147 CLR 589 at 598 and 602. Anshun estoppel arises where the issue now raised for the first time, properly belonged to the subject of the earlier proceeding but, by negligence, omission or accident, was not raised in earlier proceeding. In essence, where the issue was so relevant to the subject matter of the earlier action that it would be unreasonable not to have raised it at that time, it is an abuse of process to endeavour to raise that issue for the first time in a subsequent proceeding between the parties. Anshun supra at p602
38. Nevertheless, where an issue has not actually been litigated and decided before, there must be exceptions to that general rule (cf the operation of res judicata and issue estoppel where the action/issue has been determined on a final basis). As foreshadowed in Anshun, there will be instances where, even though there is every reason why the matter should have been raised earlier but was not, there are special circumstances that prevail to permit a party to raise the issue in a subsequent proceeding. The Court therefore has a discretion, if it determines that special circumstances exist, to allow an issue to be raised, even where it is found that the point was unreasonably omitted from the earlier proceeding: see Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd
at 558. However, the circumstances in which that would be permitted must, because of the principles referred to above, be exceptional, constituting ‘special circumstances’: see BC v Minister for Immigration & Multicultural Affairs  FCAFC 221 at par . What will be sufficient to constitute special circumstances is by no means fixed and may involve consideration of a wide range of factors, all of which bear upon the general discretion of the Court where justice requires the non-application of the general principle: see BC v Minister for Immigration & Multicultural Affairs  FCA 1669 (Sackville J) at  referring to Port of Melbourne Authority v Anshun (No 2)
at 296,298-299, citing Yat Tung Investments Co Ltd v Dao Heng Bank Ltd
- 65. In this matter I do not understand the husband to be denying there was an initial agreement on 22 February 2010. He confirms this in his affidavit that there was an agreement in February 2010, the agreement was informal and the parties distributed between them their non – superannuation property. Their superannuation interests were not included as part of that agreement. They were both still working and both still contributing to superannuation and neither party had retired. I understand this to be the husband’s argument.
- 66. Iis also common ground that no proceedings were commenced in February 2010 and the property dispute between the parties was not litigated. Nor were Consent Orders entered into or any agreement reduced to writing.
- It is also apparent from the wife’s evidence that the parties were “happy to leave the property settlement at that” inferring that the parties distributed only their non – superannuation property interests in 2010. The wife deposed in her affidavit of 21 February 2017 at paragraph  “This (the agreement in 2010) did not include dealing with my superannuation which is by way of annuity with (omitted). Our salaries at the time were myself $79,000 and Mr Newall $80,000 gross. Neither of us had the spare funds to formalise an agreement with solicitors as I recall.” However the wife asserts in the same paragraph “Mr Newall and I discussed the nature of our property settlement including the nature of our superannuation.”
- Further at paragraph  of the same affidavit the wife deposed that “My superannuation (annuity not lump sum) was at the time of divorce worth approximately $400,000 and was left out of the divisible marriage asset pool.” This evidence is consistent with the response provided by the wife’s solicitors in May 2014 that the property dispute had not been finalised and superannuation remained an issue to be determined.
- I reject the wife’s assertion that the husband is now estopped from denying any agreement. Even if I am incorrect in this conclusion having regard to the evidence before me, I am unable to be satisfied that the parties’ respective superannuation interests formed part of an agreement between them. It may be that the Court will be satisfied of this fact if and when the matter proceeds to hearing.
2. The wife argues that the husband has waived by his action and acquiescence any future right to a distribution of property. The wife relies on the doctrine of laches.
- In Selen & Selen and Anor FamCA 310 Austin J considered the principles applicable to the doctrine of laches as follows:
“Laches is a recognised defence to an equitable claim. The elements of the defence are that the plaintiff had knowledge of the subject wrong, delayed in pursuing it, and thereby caused the defendant unconscionable prejudice. In considering the defence, all three elements must be taken together and the ultimate question asked as to “whether, in all the circumstances, the plaintiff has impliedly, in equity, released the defendant from his or her claim or has so acted as to make it unfair that the claim should now succeed.” (seeCrawley v Short  NSWCA 410at[163-164,175]).
- The central issue in dispute in this matter is whether there was an agreement between the parties (whether in 2010 or before May 2014) that took into account the parties respective superannuation interests. The wife contends the parties discussed their superannuation interests and reached a verbal agreement. The husband contends that the parties’ superannuation interests were left out of the assets divided between them and the division of their superannuation remained an issue to be determined.
- Between 2010 and 2013 the wife and the husband continued to work and contribute to superannuation. I am not satisfied that the husband by his inaction has placed the wife in a situation where it is now unreasonable for him to enforce a remedy. The wife did not retire until February 2013. By May 2014 she was on notice that the husband was seeking a settlement regarding the parties’ superannuation interests. The correspondence forwarded on the wife’s behalf through her solicitors does not suggest that the parties had already reached agreement (in 2010 or any other time) regarding the division of their superannuation interests. On the contrary she acknowledges that this issue is yet to be determined.
- I do not accept that the wife is unfairly prejudiced by the husband bringing the application. I do not accept that any conduct on the husband’s part has induced the wife to act contrary to her financial interests. The wife purchased the property in Property D in 2011 whilst she was still working. It is unclear why she refinanced that property increasing the mortgage.
- With respect to the change in circumstances, I am not satisfied that the change in the husband’s financial circumstances would give rise to him having an unjust advantage or would impose unfair prejudice on the wife. The husband’s claim is primarily for a splittable payment of the wife’s superannuation interest which accrued over 24 years of a 27 year marriage. In the event that the Court finds that the parties’ superannuation interests did not form part of the initial property settlement the husband has a reasonable claim. Further I am satisfied that a Court hearing the matter would be capable of having regard to the parties’ partial property settlement in 2010, the receipt by each party of any lump sum superannuation entitlements and the disposal of those lump sums, the receipt by the husband of any inheritance and the parties’ respective incomes and financial resources.
- Under the Family Law Act 1975 (Cth) a limitation period is imposed on a party with respect to bringing an application. The wife was on notice as early as May 2014 that the husband foreshadowed a claim against her superannuation interest. This was the subject of years of correspondence between the parties. The husband was required to file his application within 12 months of the decree absolute. He filed 40 days after the limitation expired. Whilst the statutory limitation period is not conclusive to determining whether laches applies, I am not satisfied that the husband from May 2014 caused the wife to alter her financial position on the basis of any failure on his part to bring his claim. On the contrary the wife was well aware that he sought to finalise the property dispute. In the present matter in my view it could not be said that the husband has acted in a way that constituted abandoning his claim or by his delay has induced the wife to alter her position.
Should the Court exercise the discretion and grant leave?
- The discretion given under section 44 of the Act is for the sole purpose of enabling the Court to do justice between the parties. The question remains would the applicant probably succeed if the substantive application were heard on the merits. The authorities indicate that the issue to be determined is whether the applicant has a reasonable claim. His claim need not be substantial. The Full Court in Althaus & Althaus (1982) FLC 91-233 said “the Court is not required to undertake a detailed hearing on the merits to determine whether the applicant’s claim will succeed”.
- The hearing of this application proceeded on the basis of affidavits, financial statements and written submissions. Neither party was cross examined. There are a number of factual disputes between the parties. The wife disputes that the husband made any initial financial contribution to the purchase of the parties’ first home from the proceeds of sale of a property owned by his mother (it is unclear whether this was a property at (omitted) or (omitted)). The wife made an initial contribution of about $7,000 towards that purchase from money received through a personal injury claim.
- The parties moved to Canberra and purchased acreage at Property Q for approximately $300,000. The husband contends that his mother contributed approximately $130,000 from the sale of her (omitted) property to assist the parties to purchase that property. The parties raised a small mortgage secured against that property. The husband’s mother lived with the parties in the Property Q property and assisted the family by cooking and caring for the parties children on a regular basis.
- In about 1984 the parties sold the Property Q property and purchased two properties in the ACT. The husband’s mother lived in a property at (omitted) which was unencumbered. The parties lived in a property at Property M which was subject to a mortgage. The wife had returned to work, and the husband’s mother commuted by bus from (omitted) to the Property M property to care for the children and assist the family with cooking and cleaning while the parties worked full time.
- In October 1986 the wife commenced full time work with the (employer omitted). The husband contends that in about 1986 the husband’s mother purchased a property next door to the parties in Property M after selling her property in (omitted). She provided further assistance to the family by caring for children before and after school and cooking and cleaning while the parties worked full time.
- In about 1990 the parties purchased a parcel of land at Property P. They sold their Property M property and the husband’s mother sold her property and the proceeds of both sales funded the building of a home on the Property P land. All the parties lived in the Property P property together.
- In about 1998 the Property P property was sold. The husband’s mother purchased a property at Property E from part of the sale proceeds from the Property P home. The Property E property was unencumbered however the husband’s mother took out a loan for $46,000 to effect repairs. In 1998 the parties purchased a property at Property B. That property had a mortgage. They lived there until separation in 2010.
- The husband joined the (employer omitted) in 2009 and worked with (employer omitted). The wife alleges that the parties’ contributions to the five properties purchased during the relationship were not equal.
- On 22 February 2010 the parties separated. They sold the Property B property (owned as joint tenants) for $550,000.00 and divided the net proceeds of sale between them at $103,000 to Wife and $96,000 to Husband. The husband paid the wife $7,000 for the Mazda (omitted) vehicle, and wife paid the husband $6,000 for the (Ford (omitted) vehicle. The parties amicably divided the furniture and personal effects between them.
- The wife contends that her superannuation interest at the time of the divorce was worth about $400,000 and the husband’s superannuation entitlements were about $130,000.
- The wife continued to work full time as a (occupation omitted) earning approximately $79,000 per annum before tax. The husband also worked full time as a (occupation omitted) earning approximately $80,000 per annum before tax.
- The husband inherited from his mother’s estate the Property E property valued at $340,000 subject to a mortgage liability of approximately $70,000. The wife says that the “reverse mortgage” was only $60,000 and he borrowed additional funds to erect a 4 car garage, new fencing, purchased a speed boat and different vehicles. She alleges that the Property E house flooded and destroyed most of the items the husband had inherited. He received an insurance payout. She asserts that he then increased the mortgage purchasing high quality furnishings, fittings and three televisions.
- In October 2010 the wife purchased a property located at Property D (“the Property D property”) for $231,000 subject to a loan. The wife says she moved into that property on 21 October 2010 and thereafter commuted to Canberra for work for two and half years retiring on 8 February 2013 after 26 years of service. On her retirement she took a cash payout from her superannuation of about $54,000 to pay her liabilities including a credit card and to effect improvements on the Property D property. The wife commenced receiving about $42,000 p.a. from her superannuation pension.
- In May 2014 the husband engaged solicitors in an attempt to obtain financial disclosure regarding the wife’s superannuation. In February 2015 he retired from the (employer omitted).
- On 4 February 2015 the husband withdrew $30,000 from his (omitted) Superannuation Fund. He used the money to pay for everyday living expenses, household bills and to cover the mortgage repayments on the Property E property. On 6 March 2015 he withdrew $140,000 from his (omitted) Superannuation Fund. He used these funds to pay for everyday living expenses, household bills and to cover the mortgage repayments of the Property E property.
- On 25 September 2015 the Divorce Order was made by Registrar Payget of the Federal Circuit Court.
- In November the husband sold the Property E property for $365,643.90. He deposed that he received net proceeds of sale of $90,000 and purchased a property at Property R, New South Wales for $105,000 from the proceeds of the sale of the Property E property and part of his superannuation draw down. The property has no mortgage. He contends that he used the remainder of his superannuation to conduct repairs and renovations to the property including the construction of a shed and installing a sewerage system and electricity to the shed. He also used his superannuation to pay for everyday living expenses and household bills.
- On 5 December 2016 the husband became eligible to receive the Aged Pension, which is $877.10 per fortnight.
- The wife receives $2,215.23 per fortnight (a combination of her superannuation pension of $1815.23 and a carers allowance $400.00). Her partner, Ms J, receives $1,254.00 per week. Their household is in receipt of $3,469.23 per fortnight.
- The parties have the following assets and liabilities
|1.||Property D||Ms Scarrow||$330,000.00|
|2.||Property R, NSW||Mr Newall||$105,000.00|
|1.||Mortgage for Property D||Ms Scarrow||E$247,540.00|
|2.||Credit Card debts||Ms Scarrow||$15,400.00|
|1.||Superannuation pension||Ms Scarrow||E$42,000.00; valued at $741,942.73|
- The husband is desirous of a clean break from his former partner in accordance with section 81 of the Act. Once the limitation for filing of his property application expired, the wife indicated that she intended to vigorously defend the husband’s claim. The wife had not previously suggested in correspondence that the parties had already effected an agreement with respect to their superannuation interests. She continued to negotiate (for more than 2 years) until such time as the husband indicated his intention to commence proceedings.
- The bulk of the wife’s interest in superannuation accumulated during the marriage. Both parties contributed indirectly to the superannuation interests of the other during the marriage. The parties’ non superannuation assets are modest however it is agreed that the parties divided their non-superannuation assets in 2010. The wife is in a superior financial position as a consequence primarily of the receipt of her pension entitlements. The husband’s only income is the aged pension.
- The husband is seeking a splittable payment of the wife’s pension. Assuming the parties respective superannuation interests were excluded from their initial property settlement in 2010, I am satisfied that the husband’s claim for a splittable payment will probably succeed. The basis for this is that I accept that the husband made indirect contributions to the wife’s interest in superannuation (as she did towards the husband’s superannuation interests). On her evidence the value of her interest in 2010 was $400,000, three times the value of the husband’s superannuation interest. I do not accept that the wife was necessarily entitled to a “50% share of the husband’s inheritance” though the Court would have had regard to the fact that the inheritance was received by him shortly after separation.
- As indicated by Justice Boland in Hedley v Hedley (supra) it is not the task of the Court on this application to determine finally the section 79 application.
- In Stanford HCA 52 at  to  the High Court held:
“36. The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition . It is not possible to chart its metes and bounds. And while the power given by s 79 is not “to be exercised in accordance with fixed rules” , nevertheless, three fundamental propositions must not be obscured.
37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79 (1) (a) itself, which refers to “altering the interests of the parties to the marriage in the property” (emphasis added). The question posed by s 79 (2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed  that a power  to make such order with respect to property and costs “as [the judge] thinks fit” in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion.” And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong :
“The judge called upon to decide proceedings of that kind is not entitled to do what has been described as ‘palm tree justice’. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down.”
40. Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79 (4) the power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down” . To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79 (4), without a separate consideration of s 79 (2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.”
- In my view this is a matter where a Court is likely to determine that it is just and equitable to alter the parties’ existing rights with respect to their interests in superannuation. In the circumstances leave is granted to the husband to extend the time in which to file his application for adjustment of property interests.
I certify that the preceding one hundred and one (101) paragraphs are a true copy of the reasons for judgment of Judge Tonkin
Date: 4 July 2017
NOTE: This case has been published by the Court under a PSEUDONYM, rather than using the real names of the parties. Section 121 of the Family Law Act 1975 makes it an offence, except in very limited circumstances, to publish or distribute a report of a case or part of a case, including information contained in a Judgment, which identifies parties, related or associated persons, witnesses or others involved in the case. A breach of the section is a criminal offence. The section also sets out certain limited defences to criminal liability. An example is where the Court has expressly authorised the publication.
A printable version can be accessed from Austlii without pictures or advertisements here, which should be used if you wish to provide the case to the Court in your matter.