DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application under s 288(1)(b) of the Property Law Act 1974 (“the Act”) for leave for the applicant to apply for a property adjustment order under the Act.  Section 288(1) provides that a court may make a property adjustment order only if the application was made within two years after the day on which the de facto relationship ended, or the court has given the applicant leave to apply.  Although there is a dispute between the parties as to when the de facto relationship ended, on either view the relationship has ended more than two years ago and indeed, more than two years before the application for leave was filed.  The application seeks an order that there be leave to make an application for a property adjustment order within fourteen days of the grant of leave by the court.^[1]

2. [2]
   By s 288(2), the court may give leave only if it is satisfied hardship would result to the applicant or a child of the de facto partners if leave were not given. The matter that is particularly at issue in the present case is whether the applicant would suffer hardship if leave were not given, but there is also the question of whether, assuming that test is satisfied, as a matter of discretion leave should be granted.

3. [3]
   Section 288 is, in this respect, similar to s 44(3) of the Family Law Act on which, to some extent, this part of the Act was based.^[2]  That provision was considered by the full court of the Family Court in Whitford (1979) FLC 90-612.  In that case the court in a joint judgment, said at p 78,144:

“On an application for leave under s 44(3),  two broad questions may arise for determination.  The first of these is whether the court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted.  If the court is not so satisfied, that is the end of the matter.  If the court is so satisfied, the second question arises.  That is whether in the exercise of its discretion the court should grant or refuse leave to institute proceedings.”

4. [4]
   Their Honours then went on to discuss the question of what “hardship” means, and after referring to use of the term in other legislation, at p 78,145, the court rejected a definition which meant simply “any appreciable detriment, financial personal or otherwise” as being something less burdensome than the meaning of hardship in ordinary parlance. Having said that the word should have its usual though not necessarily most stringent connotation, the court adopted the ordinary meaning, as “akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment,” as the correct meaning of the test.^[3]  Their Honours, however, did say that an inability to pursue a claim which is trifling, or which did not outweigh the costs of pursuing it, would not be hardship, but that subject to that it could not be said that whether there was hardship depending on whether the right or entitlement lost was a substantial one; for some people in some circumstances the inability to obtain something of relatively small monetary value may be a hardship.

5. [5]
   Their Honours also said that there could be hardship arising in circumstances where property was left in joint ownership for some good reason for a period of time after the end of the marriage, but it was later necessary to settle the financial relationship of the parties. On the whole it seems to me that the principal significance of this decision was to emphasise that one has to assess hardship in the circumstances of the particular case, and the cases give rise to all sorts of circumstances, and that it emphasises that the finding of hardship from an inability to pursue the application is a necessary pre-requisite to the grant of leave, but does not necessarily lead to the grant of leave.

6. [6]
   It occurs to me that the legislation, in requiring that the court be satisfied of hardship if the application is not granted, was intending to impose a more stringent test on the grant of an extension of time within which to make an application than would have applied if there was simply a discretion to extend time, under which it would have been sufficient to show that there was some good reason to exempt particular proceedings from a general time limit.^[4]  Whatever is required by way of hardship, it must be more than that.  The term suggests to me that the legislature had in mind a significantly more rigorous test although the approach in Whitford is more moderate.  It is also apparent that the section operates by reference to the hardship produced if leave were not given, so that the relevant hardship must emerge from the difference between the position of the applicant^[5] if leave is not given and if leave is given.  It also seems to me that the question of whether there is hardship can arise not just by reference to the quantum of the claim;  it also involves the circumstances which led to a failure to bring a claim within the two years provided by the Act for bringing a claim as of right.

Facts

7. [7]
   There is at least common ground between the parties that they were at one time in a de facto relationship. There is not much other common ground; there is not even agreement as to when their relationship started and finished. According to the applicant, the relationship lasted from approximately January 1999 until on or about 6 March 2004.^[6]  The respondent however, said that the relationship lasted between 5 May 2000 and 19 January 2004, and said there were a number of separations between February 2001 and February 2002.^[7]  It is common ground that there was one child of the relationship, born on 2 May 2002; the respondent is the primary caregiver for that child.  On either account, the relationship was relatively short; on the respondent’s version, quite short.

8. [8]
   An “asset pool” for the relationship consists principally of a residence which was purchased during the relationship by the respondent in her own name, subject to a mortgage also held by the respondent in her own name. According to the applicant, he lived initially in property rented by the respondent before they moved to other property where again the rental agreement was in the name of the respondent.^[8]  The home was purchased by the respondent in about August 2001.  According to the applicant, the purchase price of $115,000 was financed by a $10,000 gift from her father, a $7,000 first home owner’s grant for her and the balance borrowed from a bank in her name.

9. [9]
   According to the applicant, the property was purchased in the respondent’s name alone in order to obtain a first home owner’s grant for it, while preserving the opportunity for the applicant to obtain a similar grant for a different property at a later time.^[9]  Be that as it may, the applicant made no direct contribution to the acquisition of the property by the respondent.  Nevertheless, the applicant claims to have contributed to the discharge of the mortgage, on the basis that he made substantial financial contributions to the relationship which included the amounts being paid for the respondent’s mortgage repayments.

10. [10]
    His case is that, at the time of the purchase of the home, his wages were paid directly into the respondent’s bank account, and that he retained for personal spending money only about $150 per week, with the rest being used to support the household, including repaying the mortgage.^[10]  He also claimed that he did maintenance work such as gardening, mowing and grounds maintenance on the property, and did some work on the property in the form of painting, removing a wall and redoing television points.  The respondent said that there were financial contributions into her account from time to time but those amounts were barely enough to meet the day-to-day living costs which the applicant generated by being a member of the household, and were not sufficient to make a financial contribution towards mortgage repayments.^[11]  She also said that he was out of work for extended periods of time and a significant portion of the applicant’s wages were devoted to payments on vehicles that he had for his own use during the period.

11. [11]
    In support of his case, the applicant exhibited^[12] some computer records which he had obtained from an employer, which seem to show regular weekly payments to him between 16 July 2002 and 4 November 2003 from the employer, although the amounts vary considerably from week to week;  the smallest was $133.53 net, while the largest was $894.25.  For three weeks over the holidays there were no payments made and only one payment between 18 March and 6 May 2003.  Over the whole period of 68 weeks covered by this statement, a total net payment of $34,527.85 was made, which averages $507.86 per week.^[13]  A statutory declaration from the employer^[14] indicates that during this period all his wages were being paid into the respondent’s bank account, except for a period from 12 June to 4 November 2003 when $50 per week was paid into a bank account in his name.  There is no suggestion that there has been any contribution to the asset pool by the applicant since the end of the relationship, in early 2004.

12. [12]
    With regard to the non-financial contributions to the property, the respondent claims that the repainting of the bedrooms was a job they did together, that all that occurred in relation to a wall was that a breather hole about 1m square was created in an internal wall to allow air-conditioning to flow into another room, which was done by the applicant’s brother, and that the applicant did some mowing, maintenance and tree felling and electrical work, but essentially the scale of the contribution by the applicant is disputed.^[15]  The only other items identified in the asset pool are a motor vehicle which is of modest value and some furniture in the house, the value of which is not identified in this material, but which is presumably required in order to make a home for the respondent and the child of the relationship (and the respondent’s other family).^[16]

13. [13]
    The applicant also claims that he was contributing to some extent during the relationship as a parent or step-parent; however, he concedes that the respondent was the primary caregiver to the children of her former relationship.^[17]

14. [14]
    It is not clear just what amount has been paid by anybody towards paying off the mortgage since the property was purchased. The applicant has given^[18] a figure for the mortgage debt at the present time of approximately $108,000, which appears to be more than the amount which, on the figures given,  it ought to have been necessary to borrow in order to acquire the property.  The applicant also referred to a joint liability for credit card debts and a debt relating to motor vehicle repossession of approximately $10,000 on separation, which he has been paying off.^[19]  The respondent maintains that these debts related entirely to separate expenditure for his benefit.  The motor vehicle debt must have related to the applicant’s vehicle, because he said that the asset pool includes the vehicle in the respondent’s possession, which is different from the vehicles identified as the vehicles used by the applicant in the affidavit of the respondent.  On any view of the matter, this is a small asset pool.

15. [15]
    Since the relationship terminated, each of the parties has established a new relationship. The applicant has now married and his wife is pregnant.^[20]  His wife also has two children from a previous marriage.  The respondent has also become pregnant from a new relationship, and has taken maternity leave from some employment.  The applicant says in his affidavit that he is professionally employed as a fitter and installer receiving approximately $650 net per week.

16. [16]
    There is a good deal of information which one would expect to have on the hearing of an application under this part which is not presently available. There is no information about the health of either party; presumably both are in reasonable health for their age. Although the respondent has been in employment at times, she has also been registered for Centrelink benefits at times, and it is not clear what her ordinary capacity to earn income is. I suspect that it is less than that of the applicant, although that is probably really based on the proposition that the applicant was making disproportionate financial contributions to the relationship, which is implied in his affidavit. I would not necessarily criticise the parties, however, for not providing more information at this stage; obviously it would not be appropriate when deciding whether to grant leave under s 288 for there to be a full investigation of the financial position of the parties in the same way as on the hearing of an application under this part.  Nevertheless, it is necessary to get some general idea of the strength of the applicant’s case.  There is no information about any other financial assets of either party;  I assume they are not significant.

17. [17]
    I have already referred to some of the matters mentioned in sub-sub-division 4; other matters that may be noted are that the respondent has the main care of the child of the parties, who is under eighteen, and any order for any significant payment to the applicant would mean that the house which is currently providing accommodation for the respondent and the child of the relationship, as well as other children of the respondent, would have to be sold.  On the material presently available, there is not much else that can be said about the application.

18. [18]
    Since the hearing the applicant has provided a further affidavit exhibiting copies of his tax returns for 2002, 2003 and 2004.^[21]  The 2002 return indicates that he was receiving the Newstart allowance from 13 July to 10 August 2001 and from 17 May to 30 June 2002.  His more important employer paid an average of $518 net per week for the period 21 August 2001 to 16 Mat 2002 (38 weeks).  The 2003 return indicated that he was receiving the Newstart allowance from 27 December 2002 to 24 January 2003, and from 21 March to 2 May 2003.  His most important employer paid on average $474 net per week for the relevant period, 50 weeks.  The 2004 return does not refer to any Newstart allowance, although there was a period from January to April 2004 not covered by any employer’s certificate.  The average net income per week from the two employers in the period from July 2003 to January 2004 (28 weeks) was $449.  The average net income per week from the two employers in the period from April to June 2004 (12 weeks) was $648.

19. [19]
    This confirms that the applicant had the capacity to provide some financial contribution during the relevant period, although the income level is much lower than that claimed by the applicant in his first affidavit ($800 net earnings per week) and supports the respondent’s claim that there were significant periods of unemployment. I do not think this adds anything to the applicant’s case.

20. [20]
    To some extent, the outcome of any application would depend on the resolution of factual issues which are currently in conflict^[22] but assuming that those issues were resolved for the best for the applicant, in view of the short period of the relationship and the limited nature of his contributions, the applicant could expect to receive only a small part of the asset pool that I have identified.  I think any court would be reluctant to make an order which would require the property to be sold.  It would be worse than this for him if the disputed matters of fact were not all resolved in his favour.

Circumstances of the Delay

21. [21]
    No explanation is offered by the applicant for the delay between the time when he says the parties separated and February 2006. It is clear, however, that there were some negotiations, and some steps taken about some matters consequent on the end of the relationship, late last year. A consent order was made by an acting magistrate in the Caboolture Magistrates Court on 17 January 2006, following the filing of an application for consent parenting orders under the Family Law Act which was signed by each of the parties on 13 December 2005, and prepared by solicitors for the applicant.^[23]  A letter from those solicitors^[24] to the solicitors for the respondent dated 7 December 2005, referred to a family law conference on 16 November 2005, and to the fact that discussions involving an offer to settle property matters occurred there.  That letter went on to note an awareness that any application for  property settlement must be filed prior to March 2006.  It continued:

“As you are aware, proceedings in this jurisdiction could amount to the parties paying in excess of $30,000 each in legal fees.”

The affidavit also says that the respondent subsequently received a letter from those solicitors dated 11 January 2006 advising that there had been no response in relation to the property settlement and threatening to advise the client to commence proceedings unless a response was received in seven days.

22. [22]
    The respondent in her affidavit said that on 24 September 2005 the applicant first raised the question of a property settlement and made suggestions to which she responded that they would have to go to court.^[25]  She said there was a mediation conference facilitated by the Legal Aid office on 16 November 2005, at which this issue was discussed but no agreement was reached.  There was no response to this allegation in the applicant’s affidavit filed on 25 October 2006, although it responded to other parts of the respondent’s affidavit.  All the applicant said in his first affidavit was that he first consulted his current solicitors on 14 February this year, and “I was advised by my solicitors at that time that since separation occurred on or around 6 March 2004, that unless the matter was settled by 6 March 2006, then having regard to the expiry of the time limitation as set out in the provisions of the above Act, then it would be necessary to apply for leave from this honourable court to institute proceedings.  Despite this, rather than institute proceedings, I was desirous of an amicable attempt at a settlement with the respondent and thus instructed my solicitors to write to the respondent in relation to the matter…”.^[26]

23. [23]
    On 17 February 2006, a detailed letter was sent to the respondent by the current solicitors for the applicant, the penultimate paragraph of which said that:

“Should however we not hear from solicitors on your behalf within that time, our client instructs that he will have no alternative but to then presume you are not prepared to enter into sensible and urgent settlement negotiations and in order to protect his interests, he indicates that proceedings will then have to be instituted forthwith in the District Court without further notice to you …”.

Within (just) the time limit in that letter, the respondent’s solicitors replied, raising the point about when the relationship ended, and also setting out the respondent’s position in some detail, concluding that no payment would be made and that any proceedings commenced would be defended vigorously.

24. [24]
    The applicant was not cross-examined on his affidavit and in those circumstances, I am wary about whether I am entitled to draw an inference against him that he was actually advised in late 2005 of the two-year limitation period in s 288. In his first affidavit he swore that he was unaware of the two-year limitation until he consulted his present solicitors on 14 February: para 19. Nevertheless, it is clear that he was aware of that limit within two years of the day on which he has sworn the de facto relationship ended. He has exhibited a copy of the letter of 17 February from his solicitors threatening to commence proceedings within two years of that date unless the matter was settled, and stating that he had given instructions that that be done. His affidavit did not dispute that those instructions had been given. The obvious response to the letter of 24 February this year from the respondent’s solicitors was to file an application, which on the applicant’s case would then have been within the time limited by s 288.^[27]

25. [25]
    The applicant’s explanation for not doing so is set out in para 14, 15 of his first affidavit, that as a result of the point about the timing of the end of the relationship having been raised “it was necessary for me to make significant enquiries to substantiate the period of co-habitation as denied by the respondent…  As a result of having to make all of those enquiries, the time taken to do so meant that I was unable to again communicate with my solicitors with such instructions until after 6 March 2006.”

26. [26]
    In my opinion, the applicant has not provided any adequate explanation for his failure to raise the issue of the property settlement in a timely way.^[28]  There is no explanation in the applicant’s material as to why he failed to pursue this matter prior to January of this year, and no explanation anywhere in the material for a failure even to raise the question of a property settlement prior to September last year.  In circumstances where there were other matters being negotiated, and ultimately resolved, between the parties before the two year period expired, and when the applicant at least had a solicitor available to him who could have been consulted about the question of whether an application for property settlement could be made, and who presumably if consulted would have said there was a two-year period provided by s 288 within which to make the application, there is no satisfactory explanation for the applicant’s failure to raise the question with any solicitor prior to February of this year.  There is also no satisfactory explanation for the failure, once he was told of the time limit, to make an application within the two-year period of the date when on, in his case, the relationship ended.  In these circumstances, the applicant has failed to make reasonable efforts to protect his own interests in a timely way. Even after the expiry of the two-year period, it took until August for this application to be filed.

27. [27]
    The respondent has moved on with her life, and as a result of her pregnancy in my opinion it would be even more undesirable that any order be made which would mean that the house would have to be sold. That, I think, involves some prejudice to the respondent which is relevant to the discretion. There is no other evidence of significant prejudice arising although no doubt some prejudice, probably small, might be expected to arise simply because the case would be proceeding somewhat later than it ought to have been.

Conclusion

28. [28]
    If leave is refused, the applicant will be prevented from making an application which, if successful, would be unlikely to produce an award which would exceed the cost to the applicant of litigating the application, on the basis of the estimate given by the then solicitor for the applicant last year. The award could well be much less; indeed, if the respondent’s evidence were accepted, there may well be no award made at all. Whether the loss of this opportunity amounts to hardship in my opinion depends on the circumstances surrounding the loss and how it came about that there was a failure to apply within time, as well as the significance of the potential loss to someone in the position of the applicant. As to the latter, I accept that the applicant’s financial position is quite modest, and that even quite a small award would be of some significance to him. Nevertheless, I do not think that the fact that since he ceased the relationship he has remarried and presumably fathered a child are factors which are relevant to the question of hardship, if he is not now able to pursue a claim out of time.

29. [29]
    In the present circumstances, there is no good reason why the claim was not made within time, and any claim ought to have been, and on the basis of the applicant’s material the failure to make the claim within time was simply due to his own failure to apply in a timely way. In such circumstances, in my opinion, it is not a hardship to him that he is now prevented from making an application under this part of the Act because he failed to file the application within two years of the end of the relationship.

30. [30]
    In those circumstances, the application must be dismissed, because the test in the statute cannot be satisfied, but I would add, if the view were taken elsewhere that the circumstances of this case do amount to hardship, that as a matter of discretion I would not give leave to bring an application now, outside the two-year period allowed by the Act. In circumstances where the failure to apply within two years was essentially due just to a failure of the applicant to take reasonable steps to proceed with his rights in a timely way, in my opinion the applicant has not shown good reason for exempting an application by him from the ordinary requirement under the statute that any such application be filed within a period of two years after the end of the relationship.^[29]

31. [31]
    Accordingly, the application for leave is dismissed. Prima facie on an application under this part of the Act no order for costs is made: s 341(1).  However, there is jurisdiction to make a costs order in certain circumstances, and on publication of these reasons I will hear submissions if either party seeks an order for costs.