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- Unreported Judgment
MJS v AJH QDC 287
DISTRICT COURT OF QUEENSLAND
MJS v AJH  QDC 287
105 of 2021
District Court at Cairns
23 November 2021
1 October 2021; supplementary outlines of submissions filed by leave 5 and 7 October 2021.
REAL PROPERTY – PARTITION OF LAND – STATUTORY TRUST FOR SALE OR PARTITION – where former de facto spouse applied for appointment of trustees for the sale of land pursuant to s 38 Property Law Act 1974 (Qld) – where property is held by the parties as tenants in common in equal shares – where respondent cross – applied for leave to apply out of time for a property adjustment order pursuant to Part 19 Property Law Act 1974 (Qld) and also filed proceeding pursuant to Family Law Act for de facto property settlement – whether proceeding should be stayed or adjourned pending determination of those proceedings
FAMILY LAW AND CHILD WELFARE – DE FACTO RELATIONSHIPS – ADJUSTMENT OF PROPERTY INTERESTS – where former de facto spouse applied for leave to apply for property adjustment order pursuant to Part 19 of Property Law Act 1974 (Qld) – whether more than two years have elapsed since relationship ceased – whether applicant has sufficient explanation for delay – whether applicant would suffer “hardship” if denied leave to apply
Family Law Act 1975 (Cth) s 4AA, s 4, s 39, s 39A(5), s 44(5), s 44(6), s 90RC, s 90SS, s 90SL
Property Law Act 1974 (Qld) s 38, s 255A, s 255(c)
s 258, s 282, s 283, s 286, s 288(1), s 288(2), s 289, Pt 19
Uniform Civil Procedure Rules 1999 (Qld) r 283
Coleman v Penfold  QCA 98
SAM v IDP  2 Qd R 456
Bannister & Pergolesi  FamCA 888
Ranger v Ranger  QCA 226
Ex parte Eimbart Pty Ltd  Qd R 398
CL v JMG  QSC 169
Green v Johnston  QSC 81
Simonidis Steel Lawyers Brisbane Pty Ltd v Johnston & Ors
Williams v Williams (1979) 1 NSWLR 376
National Australia Bank v Pasupati  NSWSC 540
Carr v Finance Corp of Australia Ltd (No 1) (1981) 147 CLR 246
Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318
C Ryall for the applicant
J Blackburn (sol) for the respondent
Bolt Burchill & Tranter for the applicant
Gayler Cleland for the respondent
- The applicant, MJS, is 75 years old. She owns a house at Wonga Beach, south of Daintree (the property), as tenant in common in equal shares with AJH, who is 65 years old. The parties were in a de facto relationship from 1976 until at least 2006. There is a dispute about exactly when that relationship ended. There is no dispute that they are no longer in a de facto relationship, or that for some time they have been separated but living under the same roof. MJS is in poor health and needs to move to Cairns to access health facilities. Without receiving her equity in the property, she will be unable to do so. MJS attempted to reach agreement with AJH that he acquire her interest in the property or that they sell the property. The parties were unable to reach agreement.
- On 13 July 2021 MJS filed an originating application seeking orders pursuant to s 38 of the Property Law Act 1974 (Qld) (PLA) for the appointment of trustees for the sale of the property. The application was returnable on 3 September 2021.
- One day before the return date, AJH filed an application in the proceeding seeking an order that MJS’s application be permanently stayed to permit him to file an application for property settlement in the Federal Circuit Court (as it then was). Alternatively, he sought that it be stayed until “the Respondent [sic] application for a property adjustment order under s 282 of the Property Law Act 1974 (Qld) is heard and finally determined”. AJH sought a property adjustment order that he was entitled to 100 percent of the property. He also sought leave to make the application out of time “as failure to would result in hardship to the applicant is [sic] leave was not granted.” AJH did not file an originating application seeking that relief but sought those orders by way of an application in MJS’s proceeding.
- AJH’s primary argument is that this court lacks jurisdiction to determine the s 38 PLA application because it is a “de facto financial cause” which falls within the exclusive jurisdiction of the Federal Circuit and Family Court of Australia (FCFCOA). In the alternative, he argues that even if this court does have jurisdiction, it should not exercise its discretion to make the orders sought by MJS but rather, stay the proceeding pending determination of his application for de facto property orders, either in this court or the FCFCOA.
- On 2 September 2021 when the matter came before the applications judge, he ordered that the application be adjourned to 1 October 2021. No further directions were made. In his ex tempore reasons, the learned applications judge referred to AJH’s arguments that the Federal Circuit Court had exclusive jurisdiction and his alternative argument for a property adjustment order under the PLA as arguable, but weak. I respectfully agree with that characterisation. He went on to say:
“However, while the prospects of those matters are yet to be exhausted, it seems to me that this court should act cautiously so as to preserve all of the parties’ interests and not otherwise erode their financial capacity to finalise matters between them, including the appointment of trustees for sale, who would necessarily be doing so for reward.
So as to provide the respondent with an opportunity to deal with the matters that he broadly agitates through his legal representative here, it seems to me the appropriate course is the application be adjourned to the next applications day of 1 October 2021. It seems to me that if those matters are not acted upon or otherwise fall short in that court, this court is the appropriate jurisdiction to deal with the parties’ rights as a coincidence of their co-ownership as individuals of property as tenants in common in equal shares, and the costs of today are reserved.”
- On 1 October 2021 the matter came before me as the applications judge. By then, MJS had filed a further affidavit on 27 September 2021 responsive to matters raised in AJH’s affidavit of 2 September 2021. AJH did not file any further affidavit material, nor did he file an originating application. However, he had by then filed an Initiating Application and affidavit in the FCFCOA on 28 September 2021 seeking financial (property) orders. That application has its first return date on 24 November 2021. Those documents became an exhibit in this proceeding. In the FCFCOA application, AJH seeks orders that MJS transfer to him her interest in the property, indemnify him from the mortgage over the property, and that each party otherwise retain the assets in their possession. On 1 October 2021 MJS filed a further affidavit by leave, disputing the factual assertions in AJH’s FCFCOA affidavit.
- The disputed issues may be summarised as follows:
- (a)does the court have jurisdiction to determine MJS’s application under s 38 PLA and AJH’s application under Part 19 PLA?
- (b)if it does, is it appropriate to exercise the court’s discretion to make the orders sought by MJS, or should her application be stayed pending determination of AJH’s application for property adjustment orders, either in this court or the FCFCOA?
- I heard oral submissions from both parties, on the basis of the affidavits filed, and reserved my decision.
- Having now had an opportunity to consider all of the material, authorities and the parties’ written outlines, I have come to the reluctant conclusion that, on the current state of the evidence, it is not possible to determine the question whether this court has jurisdiction to consider AJH’s application for property adjustment orders under the PLA.
- That is because there is a factual dispute about whether the de facto relationship ended before or after 1 March 2009. Determination of that issue affects whether this court has jurisdiction or whether the FCFCOA has jurisdiction.
- If the de facto relationship ended before 1 March 2009, this court has jurisdiction to deal with an application by AJH for a property adjustment order arising from the breakdown of the relationship under Part 19 of the PLA. But AJH cannot proceed without the court’s leave. In both the Queensland and Federal jurisdictions, applications for de facto financial orders must be made within two years after the relationship ended. A court may grant leave to proceed out of time but only in certain circumstances. Pursuant to the PLA, this court may grant leave only if it is satisfied hardship would result to the applicant if leave were not given.
- These threshold issues being potentially determinative of the whole matter, I have decided to rule that the questions of:
- (a)when the de facto relationship ended; and
- (b)if it ended before 1 March 2009, whether the court is satisfied of hardship pursuant to s 288(2) of the PLA;
should, pursuant to UCPR 283, be determined separately and before any further steps in this proceeding. Those preliminary issues will be the subject of a hearing (including cross examination on the affidavit evidence, if required). MJS’s application for appointment of statutory trustee for sale will be adjourned until determination of those matters.
- There are a number of possible outcomes.
- If the court finds that the de facto relationship ended before 1 March 2009, then this court has jurisdiction to determine AJH’s application under Part 19 of the PLA. It must consider whether leave should be granted to permit AJH to apply out of time. If the court declines to grant such leave, AJH will not be able to pursue that application and MJS’s application can be heard and determined. If the court does grant leave, AJH’s application can proceed to a contested hearing.
- If the court finds that the de facto relationship ended after 1 March 2009, this court has no jurisdiction to deal with AJH’s application for Part 19 PLA orders. His FCFCOA application (and corresponding application for leave to file out of time) must be heard and determined in that jurisdiction. It will remain for this court to determine whether MJS’s application for appointment of statutory trustees should be stayed pending the outcome of the FCFCOA proceeding.
- It is regrettable that the court is not in a position to make findings on those issues at this stage and that there will need to be a hearing of these preliminary issues. But that is an unfortunate result of the unsatisfactory state of the evidence, which has not yet been tested by cross examination.
- I have set out below a summary of the matters that were particularly relevant in reaching this conclusion. I have not canvassed all of the submissions and legal issues raised by the parties on 1 October 2021, as it is not necessary to do so at this stage.
- None of this prevents the parties from making a further attempt to resolve the disputed issues by mediation, with an appropriately qualified mediator, independent of the court process.
- Even if the de facto relationship ended before 1 March 2009 and this court has jurisdiction, it is open to both parties to agree to “opt in” to the FLA and have the FCFCOA determine the question of when the relationship ended and whether leave should be granted.
Matters that are not in dispute
- The value of the property is within the monetary jurisdiction of the District Court of Queensland.
- The FCFCOA has exclusive jurisdiction for applications for “de facto financial causes”: ss 39A to 39D Family Law Act 1975 (Cth) (FLA).
- Property settlements relating to de facto couples who separated after 1 March 2009 in Queensland are governed by the FLA. Former de facto partners who separated before that date can ‘opt in’ to the federal regime or elect to finalise a property settlement under the State legislation.
- Under Part 19 of the Property Law Act 1974 (Qld) (PLA), Queensland courts retain jurisdiction to deal with financial matters relating to de facto partners arising out of the breakdown of de facto relationships where the relationship broke down before 1 March 2009.
- The legislative provisions deal primarily with financial adjustment between de facto partners after the termination of their de facto relationship. Power is conferred on the court to adjust the interests of the parties in the property held by both or either of them, and to declare the legal and equitable interests of the partieshttps://advance-lexis-com.ezproxy.sclqld.org.au/document/?pdmfid=1201008&crid=c6abdf58-cb08-4c40-b063-62b9a4fef889&pddocfullpath=%2Fshared%2Fdocument%2Fanalytical-materials-au%2Furn%3AcontentItem%3A58VT-00H1-JWR6-S297-00000-00&pdcontentcomponentid=120520&pdteaserkey=sr0&pdicsfeatureid=1517127&pditab=allpods&ecomp=xbfrk&earg=sr0&prid=abcfd26c-dd18-45de-986a-65c017fade2e. The statutory schemes do not exclude the application of general principles of law and equity to financial claims between de facto partners or the right of de facto partners to apply for any other remedy or relief under any other Act or law.
Relevant PLA provisions
- Under Part 19 of the PLA a de facto partner may apply to the court for an order adjusting interests in property of the de facto partners. Division 4 is headed “Resolution of financial matters by the court”. Subdivision 2 is headed “Adjustment of property interests”. The purpose of subdivision 2 is to ensure a just and equitable property distribution at the end of a de facto relationship. This purpose is achieved by (a) providing de facto partners who satisfy the requirements mentioned in subdivision 2 with particular property rights; and (b) allowing applications to a court for an adjustment of interests in property. After a de facto relationship has ended, a de facto partner may apply to the court for an order adjusting interests in the property of either or both de facto partners.
- Pursuant to s 286 the court may make any order it considers just and equitable about the property adjusting the interests of the de facto partners.
- There is a time limit for such applications. Pursuant to s 288, the court may make a property adjustment order only if the application is made within 2 years after the day on which the de facto relationship ended, or the court has given the applicant leave to apply. The court may give leave “only if it is satisfied hardship would result to the applicant” if leave were not given: s 288(2). In the context of s 288(2), “hardship” requires the court to be satisfied the person seeking leave will suffer a real and substantial detriment if leave is not granted; which is not the mere loss of the right to litigate a claim for property readjustment, but the hardship caused by the loss of that right.
- There are additional requirements. Section 289 provides that a party to a proceeding for a property adjustment order must disclose the party’s financial circumstances in the way prescribed by the rules, or a practice direction, of the relevant court. A court may make a property adjustment order in favour of a party only if the party has complied with that requirement.
- District Court Practice Direction 5 of 2004, “Applications for Adjustment of Property Interests, Property Law Act 1974 Part 19” requires an applicant, at the time of service of their originating application initiating a de facto property adjustment application, to also serve a statement disclosing the applicant’s financial resources pursuant to s 289.
- AJH did not file an originating application or the statement required by s 289 PLA and the relevant practice direction. Nor did he comply with the other requirements of that practice direction with respect to the affidavit and draft directions order.
- I accept that where an application for Part 19 orders is raised in response to an application under s 38 PLA (as it was here), it is open to the court, in lieu of requiring the respondent to file an originating application, to direct the filing of pleadings and evidence with respect to that issue.
Relevant FLA provisions
- A de facto relationship is defined in s 4AA of the FLA. It requires that the applicant and their former partner had a relationship as a couple living together on a genuine domestic basis. Whether a de facto relationship exists between two people is a question of fact. The relevant factors in considering whether a de facto relationship exists are set out in s 4AA(2).
- The end of a de facto relationship is brought about by the separation of the parties, which will be determined by the court as a question of fact having regard to the whole relationship. There is no legislative definition of the circumstances which establish that a de facto relationship has come to an end.
- Here, there is a dispute as to whether:
- (a)the de facto relationship ended before or after 1 March 2009; and
- (b)an application pursuant to s 38 of the PLA to appoint a trustee for sale is a “de facto financial cause” within the meaning of the FLA.
When the de facto relationship ended
- There is no dispute that the parties began a de facto relationship in about 1977 and it subsisted until at least 2006.
- MJS deposes that the de facto relationship broke down in 2006. Therefore she says that this court has jurisdiction to deal with any property application arising from the breakdown of the relationship. MJS submits that leave should not be granted to AJH to apply out of time because, summarising, AJH has not given an adequate explanation for the long delay, the court would not be satisfied he would suffer hardship within the meaning of s 288(2) PLA, and there are other factors militating against the grant of leave.
- AJH’s evidence on when the de facto relationship ended is contradictory. It is sufficient to refer to just some of it.
- In his affidavit sworn 31 August 2021 filed in this court, he deposed twice that the de facto relationship ended in 2006. He confirmed that they continued to live separated but under one roof until the present. He deposed that MJS had lived at the property rent free since 1997 and had not made any contributions to the mortgage repayments, rates or insurance since 1997. He deposed that he bought lot 20 South Arm Drive in 1988. He deposed that “following the finalisation of our de facto relationship in 2006”, he caused lot 20 to be subdivided in half, he kept his half (the current property) and transferred to MJS lot 19 South Arm Drive. She then sold that lot for $55,000 and retained the proceeds of sale. He deposed that since 2013 they had been “in the process of trying to finalise a sale of the Applicant’s half to myself however have been unsuccessful in same.”
- Consistent with this, at the hearing on 2 September 2021 AJH’s position was that the de facto relationship ended in 2006.
- In AJH’s Originating Application filed in the FCFCOA on 28 September 2021 he again stated that the relationship ended in 2006. In Part C, question 27, “Date of final separation” he inserted “2006”. In Part H, De Facto relationship jurisdiction – financial causes”, question 55a “Did your de facto relationship break down on or after 1 March 2009 …” he answered “No”.
- But in AJH’s affidavit in support of the FCFCOA application he deposed that:
- (a)“I can not say when exactly our Defacto relationship was over given the definition of what constitutes a Defacto relationship but I can advise the court that both myself and the respondent have been finically [sic] independent since 2020”;
- (b)“My relationship with the Respondent did end in 2006, however in 2010 we attended a holiday in Adelaide wherein we reconciled our relationship and I considered the relationship to be recommenced”.
- Each party also relies upon other documents in evidence relevant to this issue. For example, there are documents exchanged by the parties’ respective solicitors in 2006 referring to the relationship having broken down.
- With respect to whether MJS had made any financial contributions, AJH’s position changed from that in his earlier affidavit.
- In his supplementary outline of submissions, AJH’s solicitor conceded that on the current state of the affidavit evidence it was not possible for the court to determine whether the relationship ended before 1 March 2009 or after that date.
- MJS disputes many of Mr AJH’s factual assertions, including that the relationship resumed after 2006.
Whether an application pursuant to s 38 of the PLA is a “de facto financial cause”
- The right to seek appointment of statutory trustees for sale under s 38 of the PLA falls within Part 5, headed “Concurrent interest – co-ownership”. Section 38(1) provides:
“Where any property (other than chattels personal) is held in co-ownership the court may, on the application of any 1 or more of the co-owners, and despite any other Act, appoint trustees of the property and vest the same in such trustees, subject to encumbrances affecting the entirety, but free from encumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition.”
- That right has been described as “an incident of co-ownership”. It arises where any property is held in co-ownership, regardless of the nature of the relationship between the owners. In the statutory regime of the PLA, a s 38 application does not fall within Part 19 of the PLA, headed “Property – de facto relationships”.
- In contrast, one of the main purposes of Part 19 of the PLA is “to facilitate a just and equitable property distribution at the end of a de facto relationship”. Applications under part 19 of the PLA for alteration of property interests of parties to a de facto relationship that has broken down have been described as applications for “property distribution”.
- Turning to the FLA, “de facto financial cause” is defined in s 4, relevantly, to mean:
“(c) proceedings between the parties to a de facto relationship with respect to the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them.” [emphasis added]
- The relevant provisions within Part VIIIAB of the FLA, s 90SL and s 90SM, deal with declarations of interests in property and alteration of property interests respectively.
- I accept the applicant’s submissions that the reference in the definition of “de facto financial cause” to ‘distribution of property’ is a reference to a cause where a party to a de facto relationship that has come to an end seeks an order for the alteration of property interests. An order altering property interests has the effect of altering the legal and equitable interests the parties otherwise had to or in respect of property, to the extent that is required for the just and equitable distribution of the former couple’s property.
- Under the FLA, the court has broad powers with respect to de facto financial causes. In exercising its statutory power to make orders adjusting property rights between de facto partners, a court has power to order the transfer of property; order the sale of property and the distribution of the proceeds of sale in such proportions as the court thinks fit; order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order; order payment of a lump sum, whether in one amount or by instalments; order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs; appoint or remove a receiver or trustees; make an order or grant an injunction; impose terms and conditions; make an order by consent; make an order in the absence of a party; or make an order or grant any other injunction which it thinks is necessary to make in order to do justice.
- Those powers may be contrasted with the specific power under s 38 PLA for the appointment of a statutory trustee for sale.
- I prefer the applicant’s submission that the application under s 38 PLA is not of itself a “de facto financial cause” for the purposes of the FLA. My current view is that this court has jurisdiction to deal with the s 38 application.
- Where an application for de facto property orders is filed in the FCA, that does not remove this court’s jurisdiction to deal with an application under s 38 PLA. But it will be relevant to whether (as a matter of discretion) the s 38 application should be stayed pending determination of any FLA proceedings. It is premature to determine that issue at this stage.
Conclusion and orders
- I will hear the parties’ submissions on orders reflecting these reasons for judgment. The orders should provide for directions to list the preliminary issues for hearing in this court on the earliest available date, and for adjournment of MJS’s application pending determination of those preliminary issues.
- Costs of both parties’ applications are reserved.
Postscript – supplementary submissions
- At the end of the hearing on 1 October 2021, I granted leave for each party to file a supplementary outline of submissions (not exceeding three pages) confined to the issue of the court’s jurisdiction, together with draft orders. Each party did that. The respondent’s solicitor also attached to his supplementary outline of submissions nine pages of additional documents said to relate to the issue of whether the de facto relationship had ended or not. The respondent’s supplementary outline stated at : “Leave is sought to file and rely upon a sequence of events …”. There is no suggestion that the respondent’s solicitor sought or obtained the consent of the applicant’s legal representatives before communicating with the court in this way about a matter of substance in connection with the proceeding.
- I have not had regard to the documents attached to the respondent’s supplementary outline. They should not have been sent. Neither the rules of court nor any order I made gave any authority for them to be forwarded without leave, and the court has not been asked to give or given leave for them to be filed. As has been said repeatedly by the High Court, the idea that parties may, without leave, file supplementary written submissions or present evidence after the conclusion of oral argument is misconceived. The time and place to present argument and evidence is the hearing. Once the hearing has concluded it is only in exceptional circumstances, if at all, that the court will later give leave to a party to supplement submissions. In this case, I gave leave to the parties to file supplementary written submissions confined to a specific issue within a short period of the hearing. No leave was given for further evidence. Legal practitioners must understand that they have no legal right to continue putting in evidence or submissions to the court after the hearing.
 This section does not empower the court to make any order, but nothing turns on that. The application later referred to an order under Part 19, Division 4, Subdivision 2. That includes s 286, which contains the power to make a property adjustment order.
 Family Law Act 1975 (Cth) s 44(5); Property Law Act 1974 (Qld) s 288(1).
 Family Law Amendment (De Facto Financial Matters and other Measures) Act 2008 s 86A.
 Property Law Act 1974 (Qld) s 255A.
 Property Law Act 1974 (Qld) ss 279-328.
 Property Law Act 1974 (Qld) s 286.
 Property Law Act 1974 (Qld) s 258.
 Property Law Act 1974 (Qld) s 282(1).
 Property Law Act 1974 (Qld) s 282(2).
 Property Law Act 1974 (Qld) s 283.
 Property Law Act 1974 (Qld) s 288.
 See Coleman v Penfold  QCA 98 at  citing SAM v IDP  2 Qd R 456 at 459, and the authorities there referred to.
 Property Law Act 1974 (Qld) s 289.
 See also Property Law Act 1974 (Qld) ss 260, 261.
 Family Law Act 1975 (Cth) s 4AA(1).
 Family Law Act 1975 (Cth) s 4AA(2).
 Bannister & Pergolesi  FamCA 888.
 At paragraphs 5 and 13.
 At paragraph 2.
 At paragraph 19.
 Ranger v Ranger  QCA 226 at , citing Ex parte Eimbart Pty Ltd  Qd R 398, 402.
 Property Law Act 1974 (Qld) s 255(c).
 CL v JMG  QSC 169 at .
 Family Law Act 1975 (Cth) s 90SS, s 90SL; Property Law Act 1974 (Qld) s 333(1).
 Simonidis Steel Lawyers Brisbane Pty Ltd v Johnston & Ors; Green v Johnston  QSC 81, 5 and 6 citing Williams v Williams (1979) 1 NSWLR 376, National Australia Bank v Pasupati  NSWSC 540 to the effect even if there had been such proceedings on foot the Court would still have had jurisdiction to hear this matter.
 See Australian Solicitors Conduct Rules r 22.5.
 Carr v Finance Corp of Australia Ltd (No 1) (1981) 147 CLR 246, 258 (Mason J); Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318 at 330. Notwithstanding those observations have been made in the context of the exercise of appellate jurisdiction, the essential principles are equally applicable to proceedings at first instance.
- Published Case Name:
MJS v AJH
- Shortened Case Name:
MJS v AJH
 QDC 287
23 Nov 2021