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KDC v KAP[2019] QDC 160

DISTRICT COURT OF QUEENSLAND

CITATION:

KDC v KAP [2019] QDC 160

PARTIES:

KDC

(applicant)

v

KAP

(respondent)

FILE NO/S:

D9/19

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Beenleigh

DELIVERED ON:

30 August 2019

DELIVERED AT:

District Court at Beenleigh

HEARING DATE:

01 August 2019

JUDGE:

Chowdhury DCJ

ORDER:

  1. Both the applicant and respondent are granted leave pursuant to s 288(2) of the Property Law Act 1974 (Qld) to apply for a property adjustment order.

CATCHWORDS:

FAMILY LAW – DE FACTO RELATIONSHIP – PROPERTY ADJUSTMENT ORDER – APPLICATION – where de facto partner sought leave to apply for a property adjustment order under Pt 19 of the Property Law Act 1974 (Qld) – where application has been brought significantly outside of the two year limitation period – whether the applicant would suffer hardship if denied leave to apply – whether discretion to grant leave to apply should be exercised

Property Law Act 1974 (Qld) s 282(1), s 283, s 286, s 287, s 288(2)

Family Law Act 1975 (Cth) s 44(4)

AC v CM [2010] QSC 384

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541

D v D [2007] QSC 131

DA v KG & Anor [2010] QSC 318

FLC v AJO [2012] QSC 21

HT v CS [2009] QSC 051

In the Marriage of Jacenko (1986) 11 Fam LR 341; (1986) FLC 91-776

In the Marriage of Neocleous (1993) 16 Fam LR 557

SAM v IDP [2007] 2 Qd R 456

COUNSEL:

S. Lamb for the applicant

G. Sara for the respondent

SOLICITORS:

Jeff Horsey Solicitors for the applicant

Guy Sara and Associates for the respondent

  1. [1]
    By way of originating application filed on 5 June 2019, the applicant seeks, relevantly, the following orders:
  1. A declaration that the respondent holds the whole of her share in 3 Benjul Drive, at Beenleigh, on constructive trust and in favour of the applicant.
  2. An order that the respondent take all necessary steps to transfer her interest in 3 Benjul Drive, at Beenleigh, to the applicant. 
  3. Further, or in the alternative:
  1. (a)
    Leave to apply for a property adjustment order under part 19 Property Law Act 1974 (Qld) (“PLA”) pursuant to s 288(1)(b) of the PLA;
  1. (b)
    An order that the parties property interest be adjusted with the applicant being entitled to the entirety of 3 Benjul Drive at Beenleigh, or such proportions as determined by the court.
  1. [2]
    At the hearing on 1 August 2019, submissions focused on whether leave should be granted to the applicant pursuant to s 288(1)(b) of the Property Law Act 1974 (“the Act”), as no leave was necessary for the applicant to seek an equitable remedy.[1]  The respondent opposed the granting of any leave under the Act. 

Background facts to the application

  1. [3]
    On 30 August 2018, I made an order granting the application of the respondent for appointment of trustees for sale under s 38 of the Act. On 12 April 2019, the Court of Appeal set aside that order,[2] and made the following relevant orders:
  1. (a)
    In substitution, the application under s 38 of the Act is adjourned to the registry of the District Court at Beenleigh, to a date to be fixed, with no order as to the costs of that proceeding. 
  1. (b)
    The applicant is directed to file, in the District Court at Beenleigh, an application for leave to apply for a property adjustment order under s 288(2) of the Act, or any other applications seeking declarations as to the rights of the parties in relation to the Beenleigh property, within 14 days.
  1. [4]
    The following facts are not in dispute:
  1. (a)
    The applicant and the respondent were in a de facto relationship for about 10 years from about 1995/1996 until 2006, when the relationship ended. 
  1. (b)
    By way of contract signed on 7 November 1998 the applicant and respondent as joint tenants purchased the land and residence at 3 Benjul Drive, Beenleigh. 
  1. (c)
    The property in question was secured by a mortgage for $102,600 through the Westpac Bank.  The purchase price was $108,000.  The applicant and respondent moved into the house in January 1999.
  1. (d)
    The applicant and respondent have two children together, JC who was born on 22 March 1997, and RC, born on 17 January 1999. 
  1. (e)
    While the de facto relationship broke down in 2006, the applicant and respondent remained living in the house until 2008. 
  1. (f)
    The applicant continued to pay the mortgage and the rates and other bills associated with the house when the respondent left the house in 2008.
  1. [5]
    The following parts of the applicant’s affidavit, filed on 5 June 2019, are contested by the respondent:
  1. (i)
    When the respondent left the house, she told the applicant that he could have the house and she didn’t want any money for it because he had paid for it, he had put all his superannuation into it and he couldn’t afford to rent anywhere else on a disability pension, and because it was his home.[3]
  1. (ii)
    Between January 1999 and January 2005 the respondent made a number of withdrawals from the mortgage account amounting to $57,986.84 without the permission of the applicant.[4]  The applicant has made greater contributions to the mortgage and related household bills than the respondent.[5]
  1. [6]
    The respondent in her affidavit relevantly states as follows:

“[44] I refer to paragraph 75 and do not agree.  [KDC] did not make significantly greater contributions to the mortgage or the bills or our general expenses.  I did not withdraw any funds without [KDC]’s knowledge/consent.  I agree that [KDC] has been paying off the mortgage the last approximately eleven (11) years we have not lived together.  I never told [KDC] he could have the house.  I claim that [KDC]’s orders sought would cause hardship for me if they were granted…

[46] I refer to paragraph 79 and say that I never told [KDC] he could have the house or that I did not want any money for it.  I have always maintained that I would not touch the house until our children were no longer living at the house or turned 18.  I made contributions as detailed throughout my affidavit and have not withdrawn any amounts from our mortgage account without [KDC]’s knowledge or consent.  [KDC] and I both signed for any withdrawals made on the account.”

  1. [7]
    Originally, the applicant and respondent were registered as owners of the house as joint tenants. In about August 2016, the joint tenancy was severed and they became registered as tenants in common, in equal shares.[6]

Relevant sections of the Act

  1. [8]
    Part 19 subdivision 2 of the Act is concerned with the adjustment of property interests from a de facto relationship. The purpose of subdivision 2 is stated in s 282(1), namely, “to ensure a just and equitable property distribution at the end of a de facto relationship”.
  1. [9]
    After a de facto relationship has ended, pursuant to s 283 a de facto partner may apply to a court for an order adjusting interests in the property of either or both of the de facto partners.[7]  Such an application can be made regardless of whether there is another application for another remedy or relief made under that part or another law. 
  1. [10]
    Section 286 states that a court may make any order it considers just and equitable about the property of either or both of the de facto partners adjusting the interest of the de facto partners in the property. In deciding what is just and equitable, a court must consider the matters mentioned in subdivision 3.
  1. [11]
    Relevantly, s 287 states that a court may make a property adjustment order only if it is satisfied that the de facto partners have lived together in a de facto relationship for at least two years.
  1. [12]
    Significantly, s 288 states as follows:

“(1) A court may make a property adjustment order only if –

(a) the application was made within two years after the day in which the de facto relationship ended; or

(b) the court has given the applicant leave to apply. 

(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.”

Relevant authorities

  1. [13]
    In DA v KG & Anor [2010] QSC 318, McMeekin J observed that s 288 of the Act is based largely upon an equivalent provision in the Family Law Act 1975 (Cth), s 44(4)(a).  Therefore, extensive case law that had been developed under the Family Law Act was of assistance in guiding the approach that ought to be taken.[8]  His Honour considered the relevant principles to be as follows at [5]:

“(a) On an application of this type the court engages in a two stage process.  First, the applicant must demonstrate that hardship would be caused to him if leave were not granted.  That being demonstrated then the applicant must show that the discretion so enlivened should be exercised in his favour. 

(b) To demonstrate hardship the applicant would need to demonstrate that he would probably succeed if the substantive application were heard on its merits.  If he could not do so then a court could not be satisfied that hardship would be caused if leave were not granted.

(c) The concept of “hardship” requires the applicant to demonstrate that he would suffer a substantial detriment if leave is not granted.

(d) The loss of a mere right to litigate is not the hardship to which the provision refers but rather it is the hardship consequent upon the loss of that right that is relevant. 

(e) Matters that will be relevant to the exercise of the discretion will include the length of any delay, the explanation for any delay, whether the respondent can point to any prejudice should the discretion be exercised in favour of the applicant and all this in the context of the relative strength or weakness of the applicant’s case.

(f) For the purposes of the application I should assume that the evidence of the applicant ought to be accepted unless it is “inherently unbelievable or contradictory.” (References omitted)

  1. [14]
    McMeekin J on the question of hardship said the following:

“[33] The substantial detriment that the applicant seeks to advance is the difference in result that he could expect between a property adjustment order made under part 19 of the Property Law Act and any order that might be made should he be restricted to equitable remedies.  His rights in equity are not removed by the Act: s 258 of the Act.  In the circumstances the equitable remedies in question would be of the type considered by the High Court in Baumgartner v Baumgartner (1987) 164 CLR 137, where the court imposed a constructive trust as a remedy to circumvent what was considered to be unconscionable conduct. 

[34] The difference about what might be achieved under a part 19 application and what might be achieved by resort to equitable remedies was considered by Mackenzie J to be a legitimate measure of the relevant detriment in SAM v IDP (supra).  I agree that that is a proper approach.

[35]  The significant difference as I perceive it, between the approach of equity and the approach under part 19 is in the range of factors that can be brought into account under a part 19 application.  In Baumgartner the majority spoke of ‘the general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them’ (at 149).  Where, as here, the applicant asserts that his contributions were made in the expectation that he was creating a joint home for the parties then it is clear that the equitable principle is, prima facie at least, enlivened.  Thus refusal of leave to proceed with the part 19 application would not mean the end of his potential rights. 

[36] The court can bring into account a very wide range of matters in a part 19 application, matters which include those relevant to any equitable claim.  They include the age and state of health of the de facto partners (s 297), the income property and financial resources of each of the de facto partners and their physical and mental capacity for appropriate gainful employment (s 298), whether either de facto partner has the care of a child who is under 18 years (s 299), any necessary commitments that either de facto partner has to enable that de facto partner to support himself or herself or a child or other person to whom the de facto partner has a duty to maintain (s 300), the responsibility of either de facto partner to support another (s 301), what standard of living is reasonable for each of the de facto partners and in all of the circumstances (s 303), the contributions made by either of the de facto partners to the income and earning capacity of the other (s 304), the length of the de facto relationship (s 305), the extent to which the de facto relationship has affected the earning capacity of each of the de facto partners (s 306), the financial circumstances of any cohabitation with another (s 207), the provision of child maintenance by either de facto partner (s 308) and ‘any fact or circumstance the court considers the justice of the case requires to be taken into account’ (s 309).”

  1. [15]
    In that case, the application was brought six months out of time. His Honour determined that hardship had not been demonstrated by the applicant in that case, and that applicant was still able to pursue his remedies in equity.
  1. [16]
    In FLC v AJO [2012] QSC 21, Henry J, after referring to the judgment of McMeekin in DA v KG & Anor, (supra) said this:

“[40] The first step requires the applicant to show that hardship will result to him or his child if leave is not granted. Hardship has been interpreted as meaning a ‘substantial detriment’.  The authorities are clear that substantial detriment requires more than the loss of the right to litigate. It must be shown that hardship will result from the loss of that right.  Furthermore, it is irrelevant whether the applicant or child is suffering hardship presently.

[41] In addition, this step requires that the applicant show that his substantive application would probably be successful if heard on its merits since if there is no real probability of success the Court could not be satisfied that hardship would result if leave were not granted.

[42] If an applicant successfully demonstrates that hardship will result, the second step is for the applicant to show that the Court should exercise its discretion to grant leave. In DA v KG McMeekin J listed the relevant considerations as being the length of the delay, the explanation for the delay and whether the respondent can point to any prejudice should the leave be granted.  This must be considered in the context of the strength and weaknesses of the applicant’s case.”

  1. [17]
    Henry J observed at [47] that the respondent’s affidavit tendered at the hearing before him did not directly contradict or address much of the evidence of the applicant about the substantial contributions to the worth of the properties acquired during the relationship. Therefore, on the state of the evidence he concluded that the applicant’s application would probably be successful. Importantly, his Honour said this at [57]:

“It should be appreciated the above discussion of the applicant’s prospects of success is solely for the purpose of considering the granting of leave to proceed. It will carry no force on the substantive hearing of the application that must now proceed.  The determination of the application will depend entirely upon the evidence that is adduced by the parties at that hearing.”

  1. [18]
    It should be noted that in that case his Honour had to determine when the de facto relationship ended. He found that the relationship in question ended before 16 January 2004, thereby requiring the applicant in that case to seek the court’s leave.
  1. [19]
    In SAM v IDP [2007] 2 Qd R 456 Mackenzie J said this at 459-460:

“[14] The application was made about two years two months out of time.  The reasons advanced by SAM for the delay and some other observations have been summarised earlier. It is not an unreasonable inference that each for their own reasons did not agitate the need for a property adjustment in a timely way.  Those factors are relevant to the exercise of the discretion if hardship is established.  ‘Hardship’ in the context of s. 288(2) has been discussed in relation to similar provisions (e.g. s. 44(4) Family Law Act 1975 (Cth)).

[15] It is commonly accepted that the concept of “hardship” in this kind of provision requires the court to be satisfied that the person seeking leave must demonstrate that they will suffer a substantial detriment if leave is not granted; see for example In the Marriage of Whitford, which was applied in In the Marriage of Neocleous (1993) 113 F.L.R. 451, where Lindenmayer J. said:

‘… However, it is clear from many cases that ‘hardship’ is a relative term, and that there is no absolute measure of it. What amounts to ‘a substantial detriment’ depends upon the circumstances of each particular case.  Whilst the existence of a reasonable claim to relief under s 79 is obviously a necessary ingredient of hardship, it has been held that the mere loss of the right to litigate that claim is not itself hardship.’

(See also the analysis of relevant cases by Campbell J. in Deves v. Porter [2003] NSWSC 625).

[16]  In In the Marriage of Mackenzie [1978] F.L.C. 90–496 Strauss J. said that the loss of the mere right to litigate a claim is not the hardship to which s. 44(4) of the Family Law Act referred.  He went on to say:

‘…What amounts to a substantial detriment will depend on the circumstances of the applicant or a child of the marriage. In an appropriate case, the loss of something of comparatively little value may constitute a substantial detriment … The loss of the mere right … to litigate a claim … is not the hardship to which subsec. (4) refers. It is the hardship which would be caused by the loss of that right, with which the subsec. is concerned. … A party or the parties may have chosen to leave the financial and property relationships of the parties unchanged for the time being, in order to provide for children during their infancy, or for a spouse until remarriage, or until some other change in the circumstances of either of them should occur. Obvious examples are where the matrimonial home has been left in joint names or where a joint business venture has been continued after the dissolution of the marriage.  If then the situation arises in which the justice of the matter requires that their financial or property relationships should be resolved or adjusted … hardship in the relevant sense may result to an applicant if an applicant is not granted leave to institute proceedings.’

[17] The notion of explicit forbearance that may underlie those examples is not necessarily present in this case but the situation is analogous.  The fact that nothing has been done to settle matters between the parties, if the motivation is driven by individual perceptions of self interest, should not lead to a more restricted outcome.

[18]  On the evidence I am satisfied that the applicant has shown to the required standard that she will suffer hardship.  The substantial detriment she will suffer is that if she is precluded from making a claim, her capacity to obtain a just division of property consistent with current notions of the entitlements of parties to a de facto relationship will be significantly limited.  The relationship was of relatively long duration.  If she has to rely on equitable remedies, the prospects of her obtaining an outcome within the range she might obtain in pt 19 proceedings are not promising.  In this case, that detriment extends beyond mere deprivation of the right to bring proceedings.  She will probably suffer a real and substantial detriment.

[19] The next question is whether the discretion should be exercised.  The respondent submitted that leave should not be granted.  It is undoubtedly correct, as the respondent submits, that the applicant was aware at all times of her right to apply for orders consequential upon the end of the de facto relationship.  The applicant has attempted to explain why she did not focus on taking steps within the prescribed period.  There is, of course, also the inference that this was a case where the applicant was residing in a home acquired as property of the relationship on favourable terms and that the respondent had control of the business and the investment property.  Each was using, to their own advantage, part of the property in existence at the time of separation.

[20]  It is open to the inference that neither was concerned over this situation until circumstances changed, in the form of the respondent’s ill health which seems to have been the catalyst for his wish to dispose of Lots 18 and 19.  When faced with the possibility that she might get only half the proceeds of the sale of Lots 18 and 19 without account being taken of the kinds of things that would ordinarily be taken into account in pt 19 proceedings, the present application was made by SAM.

[21] It is therefore not a case that can properly be characterised as one where the parties, being aware of their rights, have been neglectful of their own interests and belatedly tried to bring proceedings. Rather, while the status quo existed to the advantage of each in their own way, an inference open may be that neither was inclined to bring the matter to a head.”

  1. [20]
    Mackenzie J then went onto consider whether trustees for sale should be appointed. He said this at 460-661:

“[24] But for the complication arising from the pt 19 proceedings, the applicant would ordinarily be entitled to an order appointing trustees for sale.  The grant of leave to bring proceedings for a property adjustment order means that the court’s discretionary powers under pt 19 are enlivened.  The capacity of the court to fashion an order designed to achieve a just division of property of former de facto partners, especially where the facts of the case may make it appropriate to make an order adjusting rights of the parties in respect of property held as tenants in common by the parties, has to be taken into account in deciding whether to appoint trustees for sale.

[25]  One of the practical problems about retaining the premises comprising Lots 18 and 19 in specie is that there is evidence that the applicant’s circumstances have materially changed, casting doubt on whether he will continue to pay mortgage instalments.  If the mortgage instalments are not paid, the mortgagee may go into possession and the property will be sold.  It may be that, if neither party has the financial capacity to service the loan, the property may have to be sold in any event.

[26]  There is no evidence enabling a safe conclusion to be drawn whether there is any practical alternative to the property being sold at this point.  If there is no practical alternative, an order appointing trustees for sale would seem appropriate; but whether provision should be made for preservation of the proceeds to await the outcome of the pt 19 proceedings would also need to be resolved.  In the circumstances it seems appropriate not to make an order immediately but to adjourn the application to a date to be fixed to enable the parties to address whether there is any practical alternative to making an order under s. 38 of the Property Law Act and, if not, what orders should be made with respect to disbursement of the monies derived from sale.  Directions designed to bring the matter to a conclusion as soon as possible might also be addressed.”

Evidential approach to the application

  1. [21]
    In AC v CM [2010] QSC 384, McMeekin observed that s 288 of the Act was similar in wording to s 44(4) of the Family Law Act 1974, as observed above.  His Honour went on to say the following:

“[16] Generally speaking, on an application of this type, I think that I am obliged to proceed on the assumption that the applicant’s facts are accepted. The applicant bears the onus of demonstrating a prima facie case, without which there could be no possibility of hardship being suffered by a refusal to allow it to proceed.  I am in no position to determine disputed facts. While there must be some limitation on what might be accepted – assertions that are inherently improbable and have no independent support or matters that are demonstrably wrong for example – the principle otherwise should apply.  That is the approach that has been adopted in the Family Court: In the Marriage of Jacenko.[9]

[17] The applicant contends, and the respondent disputes, that the relationship was one of ‘de facto partners’ within the meaning of s 32DA of the Acts Interpretation Act 1954.  The respondent says that whilst the relationship was ‘intimate’ the parties at no time lived together.  Rather they were ‘boyfriend-girlfriend’.

[18] The matter cannot be resolved by mere assertion by the parties. The characterisation of the relationship is not straight forward as the respondent at all times maintained a residence at Blackwater where he worked. The applicant worked in Yeppoon and resided there.”

  1. [22]
    In In the Marriage of Jacenko, (supra), Nygh J, with whom Fogarty and Walsh JJ agreed, said this at 342-343:

“I should state at the outset my concern at the manner in which the husband’s case was conducted before his Honour.  It was listed before his Honour originally, it would appear, as a so-called short cause which was expected to be finished within one day.  As a result of circumstances outside anybody’s control, it was not reached until late in the evening and accordingly had to stand over to continue on another day. 

However, the matter was conducted not merely on one day but spread out over five separate hearing dates.  That was largely because of the attitude taken by counsel for the husband who took the view that he was entitled not merely to argue whether or not the wife, on the basis of the affidavit evidence, had presented a prima facie case, but to probe that prima facie case and seek to destroy it by cross-examination of the wife, and by introduction of contrary evidence. 

As a result, that approach pressed upon his Honour by counsel for the husband was misconceived.  As I stated in my decision of In the Marriage of Frost and Nicholson (1981) 7 Fam Lr 9; [1981] FLC 91-051 a prima facie case should be judged on the evidence put forward by the applicant in her affidavit evidence available at the time of the hearing of the application for leave. 

The respondent may demur that the evidence which the applicant seeks to rely upon is not sufficient to justify the cost involved.  In so holding, I followed the views expressed by Lindenmayer J in In the Marriage of Perkins (1979) 4 Fam Lr 624. And I wholeheartedly accept the qualification that he introduced there: that there may be situations where, because of lack of clarity in the evidence of the applicant, oral evidence may have to be called and cross-examination may have to be allowed.

But the general principle is that on the issue of the establishment of a prima facie case the court proceeds on the basis that the evidence of the applicant, unless it is inherently unbelievable or contradictory, should be accepted, and the court should therefore decide whether or not on that basis a prima facie case has been made out.  If leave is granted, then it is for the court conducting the ultimate hearing to determine whether that prima facie case can be established.”

  1. [23]
    Fogarty and Nygh JJ in In the Marriage of Neocleous (1993) 16 Fam LR 557 dismissed a husband’s appeal on the grounds that he had been denied the right to cross-examine his former wife on an application under s 44(3) of the Family Law Act 1975.  Their Honours considered that although an application under s 44(3) of the Family Law Act has been held rightly to raise a substantive issue, and was not merely a matter of practice and procedure, “the application is of a preliminary nature which, if granted, does not preclude a full examination of the relevant issues between the parties and which leaves open the granting or eventual denial of the claim.  At a time when complaint is frequently made about the cost of and the delay in the judicial system, it is important to avoid such a preliminary hearing being used as a fishing expedition to gather evidence for the final hearing, as a delaying tactic or as a means of intimidating the financially weaker party.”[10]
  1. [24]
    Their Honours said the following at 561:

“As we see it, the essence of the remarks in Whitford[11] as further exemplified by decisions such as Jacenko, is that the judge must always bear in mind 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.”

  1. [25]
    As part of the application of that case, the wife had annexed a letter to her affidavit purportedly signed by the husband in which he promised to honour a commitment to buy a house for the wife and children. The husband alleged that the letter was a fabrication, and his signature a forgery. Leave was sought at the hearing at first instance to cross-examine the wife. Their Honours said this at [562]:

“It was argued that cross-examination of the wife on the authenticity of the letter might have established that it was a forgery with consequent effect on her credit.  But it is difficult to see what effect, if any, this would have had on the question of whether or not leave should be granted under s 44(3).  The only effect would have been that her explanation for the delay was not accepted.  As the Full Court pointed out in Carlon[12] the rejection of a proffered explanation for delay does not end the application for leave.  Had her Honour accepted the wife’s explanation based on the letter and regarded this as relevant or part of a reason for granting leave, the refusal to allow cross-examination on that point would have been viewed quite differently by this court.

In this case her Honour found that the wife had a claim worthy of being pursued under s 79 and indeed if her evidence were accepted, she had made and continued to make substantive contributions to the assets of the parties and the welfare of the family for which she had received little, if any, recompense.  In view of such a substantive prima facie case for the wife, her Honour, in our view, rightly considered the issue of prejudice to the husband if leave were granted to be more important than any explanation for the delay.

In relation to the issue of prejudice her Honour accepted the evidence of the husband on which he was not sought to be cross-examined by counsel for the wife.  It cannot, therefore, be a subject of complaint on the part of the husband either that he was not cross-examined himself or that he was not allowed to cross-examine the wife who gave no evidence directly relevant to that issue.”

  1. [26]
    It should be noted in that case that Lindenmayer J dissented, holding at 572 that there was a substantial issue between the parties on the affidavits as to whether the wife had any, or any adequate, explanation for a delay of almost nine and a half years in pursuing the application. His Honour considered that “by denying the husband’s counsel the right to cross-examine the wife upon the explanation which she advanced, her Honour precluded herself from making any finding upon that issue.”
  1. [27]
    It is important to observe in the current application that neither party sought to cross-examine the other on their affidavits.

Significance of the limitation period

  1. [28]
    The respondent in her outline relied on the following comments of McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551-553:

“The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods.  For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims.  The enactment of time limitations has been driven by the general perception that ‘where there is delay the whole quality of justice deteriorates’.  Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed.  But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties.  Prejudice may exist without the parties or anybody else realising that it exists.  As the United States Supreme Court pointed out in Barker v Wingo[13], ‘what has been forgotten can rarely be shown’.  So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now ‘knowing’ that it ever existed.  Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose.  A verdict may appear well based on the evidence given in the proceedings, but, if a tribunal of fact had all the evidence concerning the matter, an opposite result maybe have ensued.  The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose… 

The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions.  But it is not the only one.  Courts and commentators have perceived four broad rationales for enactment of limitation periods.  First, as time goes by, relevant evidence is likely to be lost.  Second, it is oppressive, even ‘cruel’, to a defendant to allow an action to be brought long after the circumstances which give rise to it have passed.  Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them.  Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period… Even where the cause of action relates to personal injuries, it will be often just as unfair to make the shareholders, ratepayers or tax payers of today ultimately liable for a wrong of the distant past, as it is to refuse a plaintiff the right to reinstate a spent action arising from the wrong.  The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.

In enacting limitation periods, legislatures have regard to all these rationales.  A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society.  It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated.  Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods.  A limitation provision is the general rule; an extension provision is the exception to it.” (References omitted)

  1. [29]
    In HT v CS [2009] QSC 051, White J said this at [26]:

There is no prejudice to the respondent by the delay as the funds remain with the Public Trustee. Nonetheless there is the prejudice of needing to deal with these issues after the expiration of the limitation period. In order to give effect to the legislative intention that there is a distinct bar to bringing an application for a property adjustment order after two years from the end of the de facto relationship it is essential that an applicant produce appropriate evidence to allow the court to comprehend in some clear fashion the nature of the hardship if the opportunity to litigate to a successful order is not granted. It is the applicant who must satisfy the onus of proof and I am not persuaded that she has done so. The application to extend time is refused.”

Submissions of the parties

  1. [30]
    The applicant in his outline submits that he will suffer relevant hardship if the application is not granted because of the following reasons:
  1. (a)
    the applicant made greater financial and non-financial contributions to the de facto relationship, the children and to the house than the respondent did, including after the respondent stopped living in the house;
  1. (b)
    the respondent withdrew money from the mortgage account (just under $60,000), which the applicant continues to pay back on his own.  Any contributions that the respondent may have made while living in the house had been reduced to nil by the respondent’s withdrawals, which the applicant was not aware of;
  1. (c)
    the respondent told the applicant that he could have the house;
  1. (d)
    if the arrangement is not accepted by the court at trial, and leave is not granted, the applicant will not obtain just property adjustment, despite his greater contributions and the respondent’s withdrawals.
  1. [31]
    In respect of whether the discretion should be exercised to grant leave despite the fact that the applicant is approximately eleven years out of time, the applicant submits the following:
  • a property adjustment application was not brought earlier because the applicant believed, and relied on, what the respondent said to him when she left the house in 2008;
  • for approximately ten years, between when the respondent left the house and when she served her application for the appointment of trustees of sale on the applicant, neither the applicant nor the respondent sought any property adjustment nor to change the arrangement;
  • the parties appeared to have wanted to maintain the status quo;
  • before 9 February 2019 the applicant did not know that he needed to bring a property adjustment application within two years of his de facto relationship ending, let alone that he could apply for a property adjustment order out of time;
  • the applicant is 51 years old and cannot work because of his multiple medical conditions.  He has been on a disability pension since 1996 and has not worked since 2007.  He has two boarders living with him at the house to help pay the mortgage and the bills;
  • justice requires that the property interests be adjusted, particularly given the lengthy maintenance of the status quo.
  1. [32]
    The respondent in her outline observes that the application is entirely based on the disputed conversation that the applicant alleges he had with the respondent. It is submitted at [6] of the respondent’s outline in respect of this:

“With the greatest of respect, given that the application is now at least eight (8) years, if not nine (9) years out of time, is poorly particularised and uncorroborated conversation, which is denied by the respondent, cannot at law, and/or in equity, form the basis of such a prejudicial court order as against the respondent.”

  1. [33]
    The following points are made by the respondent in her outline at p. 3:
  • abundance of convenience clearly favours the respondent as the prejudicial effect at law of granting the application far outweighs the prejudice to the applicant, when he is still going to own 50% of the house if a trustee for sale is appointed;
  • most or not all orders sought by the applicant seek 100% distribution to him, and no distribution at all to the respondent;
  • the “just and equitable” requirement for distribution is offended on the applicant’s own material, as the respondent has made financial contributions to the property;
  • the respondent is of limited means, and the granting of the application would be highly prejudicial to her. 
  1. [34]
    It is specifically submitted that if the application is granted, leave should also be granted, in exactly the same terms, to the respondent.

Conclusion

  1. [35]
    There is no question that there has been significant delay on the part of the applicant in bringing the application. As the respondent submits, it is well beyond the periods considered by the Supreme Court of Queensland in the cases referred to me. It is however comparable to the ten year delay in In the marriage of Neocleous, supra. 
  1. [36]
    There is a serious question to be tried, which goes to the heart of the application, namely whether the respondent had the conversation with the applicant as deposed by him at [6] of his affidavit. It is accepted that the details of the conversation are brief, and in general form. On the respondent’s affidavit she made significant contributions to the purchase of the house, including providing half of the deposit, paying moving costs and fees associated with the purchase, and that during the period she was working she made greater financial contributions.
  1. [37]
    While one may seriously question whether the respondent would ever willingly give up her significant interest in the only asset of the relationship, namely the house and land, the circumstances do not allow me to hold that the applicant’s evidence concerning the conversation is inherently unbelievable or contradictory.
  1. [38]
    I therefore conclude that on the basis of the applicant’s affidavit a reasonable prima facie case for relief has been shown. I consider that hardship may be suffered by the applicant if leave is not given, in that he may not receive a just distribution of his contributions to the property, and that his interests would not be properly reflected by having to rely on an equitable claim.
  1. [39]
    In respect of prejudice to the respondent, it appears to me the principal prejudice is that the granting of leave will necessarily delay an order in her favour for the appointment of trustees under s 38 of the Act. I also accept that the respondent is of limited means, and it will be burdensome for her to have to respond to the application so many years after the end of the relationship. However it is not suggested that there has been a loss of any evidence nor the loss of any witnesses, and depending on the evidence to be called at any hearing, the respondent may receive a greater distribution.
  1. [40]
    I am therefore satisfied that leave should be granted to the applicant pursuant to s 288(2) of the Act to apply for a property adjustment order. I also give leave to the respondent to apply for a property adjustment order. The appellant acknowledged that would be fair in the circumstances.
  1. [41]
    The respondent’s application under s 38 of the Act has already been adjourned to the registry for a date to be fixed by order of the Court of Appeal. The applicant’s application for a declaration is also adjourned to the registry to a date to be fixed.
  1. [42]
    I make no order as to costs.

Footnotes

[1]  R1-6, l 10. 

[2]Coleman v Penfold [2019] QCA 98.

[3]  [6] of applicant’s affidavit.

[4]  [47]-[53] of the applicant’s affidavit. 

[5]  [75] of applicant’s affidavit.

[6]Coleman v Penfold [2019] QCA 98, per Bowskill J at [4].

[7]  The parties’ relationship ended before the commencement of Part VIIIAB of the Family Law Act 1975.

[8]  This approach was adopted in SAM v IDP [2007] 2 Qd R 456 and D v D [2007] QSC 131.

[9]  (1986) 11 Fam LR 341; (1986) FLC 91-776.

[10]  At 560.

[11]In the Marriage of Whitford (1979) 4 Fam LR 754; [1979] FLC 90-612.

[12] In the marriage of Carlon (1982) 8 Fam LR 729; [1982] FLC 91-272.

[13]  (1972) 407 US514 at 532.

Close

Editorial Notes

  • Published Case Name:

    KDC v KAP

  • Shortened Case Name:

    KDC v KAP

  • MNC:

    [2019] QDC 160

  • Court:

    QDC

  • Judge(s):

    Chowdhury DCJ

  • Date:

    30 Aug 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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