HT v CS[2009] QSC 51

SUPREME COURT OF QUEENSLAND

[1] On 16 January 2009 the applicant filed an application for leave to commence proceedings for a property adjustment order pursuant to s 288(2) of the PropertyLaw Act 1974.  It was heard on 26 February.  The respondent opposes leave being given.  The respondent’s only asset out of which any order might be satisfied is the respondent’s share of the proceeds of the sale of their former home.

[2] Section 288 provides:

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

(a)the application was made within 2 years after the day on 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.”

[3] The parties commenced a de facto relationship in or about 1985.[1]  The applicant is aged 46 years and the respondent 45 years.  The respondent is presently serving a term of imprisonment of eight years imposed in 2005 after pleading guilty to the rape of their daughter (who was born in 1993), over a four year period from 2001 to 2005.  His full time release date is September 2013.

[4] The applicant is not able to say with any precision when the relationship came to an end except that she ceased her visits to him in prison after a time and regarded that as the moment when she separated from him.  The respondent is more precise and identifies 10 September 2005 – the date of the applicant’s last visit and her uttering words which would convey to him that their relationship was at an end.  There is, in any event, no argument but that the applicant needs leave under s 288(1)(b) to commence proceedings pursuant to Pt 19 of the Property Law Act 1974 for a property adjustment order.  If 10 September 2005 signified the end of the de facto relationship, and there is no reason not to accept the respondent’s evidence, the applicant is well over a year out of time. 

The issues

[5] Pursuant to s 288(2) a court may give leave only if satisfied hardship would result to the applicant or a child of the de facto partners if leave were not given.  This provision reflects the wording of s 44(4) of the Family Law Act 1975 (Cth).  Mr Selfridge, for the applicant, submitted that reaching a decision involves a two step process:

● the court must be satisfied that hardship would be caused to the applicant (or a child) if leave were not given; and,

● if it is so satisfied, whether, in the exercise of its discretion, the court should grant leave. 

This was the approach taken by the Full Family Court in In The Marriage of Whitford[2] which has been followed regularly in the Family Court and in this court.[3]

[6] On the other hand, the respondent contends for a four step process.

● identify “with precision” the existing financial and life circumstances of the applicant and any relevant child;

● identify the relative hardship “with precision” to the applicant and any relevant child if leave were not given;

● compare the positions arrived at in the above exercise;

● the court must be persuaded on the balance of probabilities that a substantial detriment would result if leave were not given.

The approach is fundamentally similar, although the stricture is added that there must be precision in identifying the underpinning facts.  There is no sound reason for expanding what has been accepted and acted upon satisfactorily in the past.  Section 288(2) is clear as to its requirements, and the approach of the Full Family Court in Whitford is reflective of the words of the statute and serves as a useful guide on an application for leave.

[7] A significant difficulty with the application is the applicant’s failure to provide reliable or, at times, any detail, about the relevant past, hers and the daughter’s present circumstances and their future needs.  The respondent has provided detail about the relationship, particularly financial, and, except where there is controversy between them of a kind which cannot be resolved on an interlocutory application, his evidence may be accepted.  The respondent has been given leave[4] to defend this application by the Public Trustee, who, by virtue of s 91 of the Public Trustee Act 1978, manages his property.

The relationship

[8] There are three children of the de facto relationship – two sons aged 21 years and 17½ years, both of whom live independently of the applicant, and the daughter, now nearly 16, who lives with the applicant.  At the commencement of the relationship in 1985 the respondent was employed whilst he undertook an apprenticeship for about three-and-a-half years for very modest wages.  The applicant deposes that she was employed as a machinist and planned to train as a bookkeeper but, by agreement, in anticipation of having children, ceased work after the relationship commenced.  The respondent disagrees and says that the applicant was employed as a contract cleaner for a few hours each afternoon but that after co-habitation commenced she ceased all outside paid work and has not worked in that capacity since.

[9] For approximately 12 months early in their relationship neither of them worked and received assistance from Centrelink.  They lived with a relation.  They then moved and the respondent obtained employment for about two years.  Over the following years he obtained short-term employment in various capacities in different parts of Queensland.  The respondent used part of his superannuation to supplement their living expenses.

[10] The parties had virtually no assets when they began their relationship.  In December 1996 they purchased a home in both names.  There is disagreement as to the source of funds.  The respondent deposes that it was purchased for $102,000 financed by a loan from the bank for $97,000.  They had saved $10,000 from which $5,000 was used for the deposit and the balance used for stamp duty and associated legal fees.  The $10,000 came from $2,500 in Family Tax Benefit at the end of the financial year; $2,500 in savings; and $5,000 from an income tax rebate.  On the other hand, the applicant contends that her parents gave them $5,000 for the deposit but makes no reference to any other sums. 

[11] At about the time they bought the house the respondent deposes that he obtained new employment working 12 hours a day and earning between $800 and $1,000 each week.  Some minor repairs were done to the house such as installing a new hot water system and new plumbing.  He was responsible for maintaining the outside, including the gardening, and the applicant cared for the inside of the house and was the primary carer for the children.

[12] The applicant deposes that over the last few years of their relationship the respondent was emotionally abusive towards her and that they were always “highly stressed” due to inadequate finances and the respondent’s extravagance purchasing “unnecessary items” to fix before failing to do so and selling those items at a loss.  She deposes that due to this stress she was diagnosed with a number of stress related disorders such as “diabetes, being severely obese, having very high blood pressure and being under massive emotional stress”. 

[13] The respondent deposes that the applicant has been obese since they first met and was diagnosed with diabetes, he understood, due to her obesity, some seven to eight years prior to their separation.  The respondent disagrees with the applicant’s description of their relationship.  He accepts that he was named as the respondent to an application for a protection order a short time after the applicant’s father’s death.  He deposes that he had a close relationship with him and experienced significant depression following his death and it was at that time that the order was taken out.  During the two years of their separation the applicant and the children lived with the applicant’s mother and he lived in the home.  After the expiration of the order they commenced co-habitation again.  He made all the mortgage repayments for the property including during the period of separation.  He denies that he had an inadequate income or that he wasted money on unnecessary items.

[14] In 2004 the parties refinanced the loan secured by a mortgage over the property and changed lenders.  The debt was then $80,000 and they borrowed $118,000 in order to meet outstanding debts such as rates and electricity, credit card debts and debts on cars.  At the time of the respondent’s incarceration there were no outstanding liabilities on the loan in respect of which the house had been mortgaged.  The applicant and children remained in the home.  At the time he was incarcerated the parties owned two motor vehicles – a VL Commodore and a Ford Falcon

[15] The respondent notes that on 25 February 2008 the mortgagee of the property filed proceedings in this court seeking recovery of possession of the property and the balance of the money owing plus interest and other costs.  Default judgment was obtained in May 2008 but by arrangement the parties were permitted to sell their house privately.  The property was sold for $457,500 with settlement taking place on 25 July 2008.  At settlement the net proceeds were applied to paying out the mortgagee in the sum of $140,512.11; $385 in solicitor’s costs; some rates; and the balance $291,416.24 was paid into the applicant’s solicitors’ trust account.  On 10 September 2008 the respondent signed a trust account authority sent to him by the applicant’s solicitors enabling them to pay their legal fees from the sale proceeds and to divide the balance between the applicant and the Public Trustee on behalf of the respondent.  Each party received $149,241.82.

Hardship:  applicant’s use of funds and her needs

[16] The applicant deposes that she has, to a large extent, disbursed the almost $150,000 she received in September 2008:

• “Due to my health issues and employment history, I have had to pay approximately $15,000 upfront in rent to obtain rental accommodation for myself and [the daughter].”

• “Due to the location of [the daughter’s] counsellors and her needs we have had to purchase a motor vehicle that was safe and reliable.  The cost of the motor vehicle was $15,000.”

• “I have invested $30,000 in a fixed term savings account for emergencies that may occur in light of the fact that the respondent is due for release in May 2009 [this is incorrect:  September 2013] and I am uncertain as to the effect that this going to have on [the daughter].”

• “I have provided my sons with $30,000 to obtain assistance they need with dealing with their emotional trauma of their father’s actions as my sole focus has had to be on the care of [the daughter].”

• “Due to the continuous rape of [the daughter] in our home for four (4) years by the respondent, I have had to give away or sell all our household items and purchase new items to replace them as [the daughter] could not cope with being around the items that reminded her of what had happened to her.  The approximate costs of replacement of our household items were $25,000.”

• “Due to the fact that [the daughter] and I reside in a two bedroom apartment, my mother has had to move into a nursing home and there are continuous costs associated with her care at same.”

• I have also had to satisfy all the debts accrued since separation whereby I had to borrow money from others to maintain our home and to continue to pay the mortgage on the property which has also amounted to approximately $20,000.”

• “The balance of the monies is used for our day to day needs and care until such time as I can obtain some employment to supplement our income.”

Hardship:  the daughter’s needs

[17] The applicant deposes that the daughter has made two failed suicide attempts; that she has an obsessive need to be near the applicant so that she is unable to attend school for long periods and she changes schools and spends part of her time at home where she is “schooled”.  The daughter, according to the applicant, is treated by psychiatrists.  She requires ongoing care and attention “particularly since she is aware that the respondent is due for release in May 2009”.  The daughter attends private counselling sessions “and tuition”.

Explanation for delay

[18] The applicant deposes that since she learnt of the rape of the daughter she has been suffering from “deep depression”.  She deposes that her sole focus and reason for trying to continue and function normally is the daughter “who still struggles with day to day life”.  She says that she is responsible for “ensuring that she is monitored at all times as well as getting her to school and other counselling sessions”.  She says that initially she struggled to cope with what had happened and “without even realising it” the weeks turned into months and then years.

Hardship:  discussion

[19] It is recognised that the hardship referred to in s 288(2) is the hardship which would be caused to an applicant or a child of the relationship if leave were not granted.[5]  The loss of the right to institute proceedings is not the hardship contemplated by the provision, it is the consequences of the loss of that right to which attention must be directed.  The Full Family Court in Whitford said: [6]

“The requirement that, the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits.  If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted.  Further, the matter with which the Court is concerned is not whether the applicant or a child is suffering hardship, but the question is whether the applicant or a child would suffer hardship if leave were not granted.  If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the Court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.”

Mr Fisher for the respondent contends that the hardship that the applicant and/or the daughter suffer is not as a consequence of having no access to the balance of the funds obtained from the sale of the home or part of them – it is the consequences of the criminal conduct of the respondent, to the daughter (and, perhaps, the applicant) and the loss of his financial support as a consequence of his incarceration.  I will return to those matters.

[20] The concept of “hardship” in the context of legislation like s 288(2) or s 44(4) of the Family Law Act has been the subject of much judicial observation.  In Whitford the Full Family Court said “hardship”:

“… is akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment.”[7]

Their Honours continued:[8]

“It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense.  As a general proposition it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship.  Similarly, where the costs which the applicant will have to bear himself or herself are about as much or more than the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted.  But otherwise we find no warrant in either subsec. 44(3) or 44(4) for saying that the right or entitlement lost must be a substantial one.”

The Court said:[9]

“Having regard to the nature of the jurisdiction which this Court exercises, this power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.”

This approach to “hardship” was endorsed by Mackenzie J in SAM v IDP.[10] 

[21] The “hardship” which needs to be identified by the applicant must be as a consequence of being unable to access the respondent’s share of the house sale proceeds which are needed over and above those which she received from that sale by her and/or the daughter.  Therein lies the difficulty.  There has been no attempt to identify the nature of the daughter’s future therapeutic needs such as a report from her counsellor or psychiatrist and the costs associated with satisfying those needs.  Indeed, the only evidence of the daughter’s difficulties are assertions by the applicant in the most general of terms.  There is no attempt at a proper identification and quantification of the applicant’s own health needs.  She speaks broadly of not coping well with the stress associated with learning of the respondent’s wrongdoing.  She already had health problems, it would seem, for many years.  There is no affidavit from the applicant’s solicitor, for example, that the applicant was reluctant to permit an enquiry of her treating doctors or the daughter’s treating health specialists which might explain this paucity of evidence.  There is money available which could be utilised for such reports.  It is hard to resist the inference urged by Mr Fisher for the respondent that in a Jones v Dunkel[11] sense, any material of that kind would be unhelpful to this application.  It may well be that money would not alleviate the situation even if the applicant’s general assertions are accepted.

[22] It is also difficult to resist the respondent’s submission that the applicant has not dealt with her almost $150,000 wisely.  As to whether a court would be likely to make an order of the kind sought by the applicant, it is very difficult to say.  The applicant has not identified what she seeks by way of a property adjustment order.  She has received half the net proceeds of the sale of the only asset of substance of the relationship.  She has lived in that property for approximately three years although for two years she lived with her mother with the children.  She says she has paid $20,000 towards the mortgage.  Some payments must have been made because of the period of occupation.  She has had the sole use of the household contents and furniture since mid-2005.  The applicant does not say what she received for the furniture which she sold and replaced at a cost of $25,000.  Neither does she mentioned what she did with the two motor vehicles which the parties owned when the respondent went to prison.  The gift of $30,000 to the two sons without further explanation is concerning.  A requirement to pay an up front amount of $15,000 to obtain rental accommodation is puzzling. 

[23] The applicant has had in excess of 50 per cent of the joint assets but in making a property adjustment order the court does what it “considers just and equitable”.[12]  In addition to the applicant’s contribution as a homemaker and parent, a court will consider[13] the age and state of health of both parties.  The respondent has serious spinal deterioration and cannot work in prison.  His post-prison needs would be taken into account.  Apart from her health problems, the applicant has no work skills so that future employment for both might be an unlikely prospect.  The care of the daughter is an important factor the court would consider.  Whether a court would make an order is speculative in the absence of any evidence of financial need.

[24] It is important to keep in mind that this application is not one for criminal compensation or a civil claim for damages by the daughter or the applicant against the respondent for unlawful assault in the case of the daughter or nervous shock in the case of the applicant. 

[25] The explanation for the delay is not unreasonable although some supporting evidence as to the applicant’s state of mind and condition from 2005 to the present would have been expected.  She has had the benefit of solicitors.  In May 2008 the applicant’s present solicitors wrote to the respondent acknowledging his authorisation with respect to the sale of the house and added:

“… but in the meantime would you please let me know what proposals you have for a just and equitable division of property (not simply the balance proceeds of sale of the house) by way of final property settlement.”

[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.

Costs

[27] The respondent has sought his costs of the application.  The express legislative intention is that a party to a proceeding under Pt 19 of the Property Law Act 1974 should bear the party’s own costs.[14]  The respondent contends that there are circumstances which would justify making an order for the costs of this application.  The only circumstance pointed to by Mr Fisher in his submissions is that there is no evidence that the respondent was requested to consent to the terms sought in the originating application thus obviating the need for a court appearance.  Section 341(4)(e) lists as a circumstance which the court “must” consider is whether any party has been wholly unsuccessful in the proceeding.  Nonetheless, in the circumstances there should be no order as to costs.

Orders

1.The application for leave to bring proceedings for a property adjustment order pursuant to s 288 of the Property Law Act 1974 is refused.

2.No order as to costs.