FLC v AJO [2012] QSC 21

SUPREME COURT OF QUEENSLAND CITATION: FLC v AJO [2012] QSC 21 PARTIES: FLC (Applicant) v AJO (Respondent) FILE NO/S: 31 of 2006 DIVISION: Trial PROCEEDING: Application ORIGINATING COURT: Supreme Court, Cairns DELIVERED ON: 14 February 2012 DELIVERED AT: Cairns HEARING DATE: 23 -24 November 2011 & 30 January 2012 JUDGE: Henry J ORDER: 1. Pursuant to s 288 Property Law Act (Qld) 1974, the application not having been made within 2 years after the day on which the de facto relationship ended, the applicant is granted leave to apply for a property adjustment order. 2. I will hear the parties as to the directions which should be given about the further conduct of the application, including its listing for hearing. CATCHWORDS: FAMILY LAW AND CHILD WELFARE – DE FACTO RELATIONSHIPS – ADJUSTMENT OF PROPERTY INTERESTS – where de facto spouse sought leave to apply for a property adjustment under Part 19 of the Property Law Act 1974 (Qld) – whether proceedings had started within two years of the cessation of the relationship – whether the applicant would suffer hardship if denied leave to apply – whether the discretion to grant leave should be exercised in favour of the applicant Acts Interpretation Act 1954 (Qld) s 32DA Property Law Act 1974 (Qld) Pt 19 DA v KG & Anor [2010] QSC 318 D v D [2007] QSC 131 HT v CS [2009] QSC 051 In the Marriage of Whitford (1979) 35 FLR 445 PY v CY [2005] QCA 247 -- 1 of 11 -- 2 SAM v IDP [2006] QSC 344 S v B [2004] QCA 449 COUNSEL: Applicant for himself PT Wilson for the respondent on 23 and 24 November 2011 and the respondent for herself on 30 January 2012 SOLICITORS: Applicant for himself Mark Gray for the respondent [1] The applicant seeks orders relating to property under Part 19 of the Property Law Act 1974 (Qld) („PLA‟), in particular a property adjustment order, as against the respondent, his former de facto partner.1 [2] The respondent did not concede the past existence of a de facto relationship but in any event contended that the application for division of property was not made within the time limitation period. Under s 288(1)(a) of the PLA an application must be made within two years of the end of the relationship. [3] The application was filed on 17 January 2006. In order for that application to be in time the de facto relationship must not have ended before 16 January 2004. [4] The applicant contends the application was made in time. Further, he argues that if he was out of time, the court should nonetheless give him leave to apply. Under s 288(2) the court can only do this where it is satisfied that hardship will result to the applicant or his children if leave is not given. [5] These threshold issues being potentially determinative of the whole matter, I ruled on 23 November 2011 that the question of whether: (i) the parties were in a de facto relationship; (ii) and, if so, when it ended; (iii) and, if it ended two years prior to the originating application whether the Court is satisfied of hardship pursuant to s 288(2) of the PLA should, per UCPR 283, be determined separately and before the substance of the proceeding. [6] A hearing to determine these preliminary issues was held on 23 and 24 November 2011 and 30 January 2012. Each party called a number of witnesses. In addition, the parties relied on affidavits and statutory declarations exhibited at the hearing. Was there a de facto relationship? [7] Section 260 of the PLA defines de facto partners by reference to s 32DA of the Acts Interpretation Act 1954 (Qld). This section requires that de facto partners live “together as a couple on a genuine domestic basis but who are not married to each other”. [8] There are a number of circumstances listed in s 32DA(2) which may be taken into account when deciding whether two people lived together on a „genuine domestic basis‟, namely: 1 Per the Further Amended Originating Application. -- 2 of 11 -- 3 (a) the nature and extent of their common residence; (b) the length of their relationship; (c) whether or not a sexual relationship exists or existed; (d) the degree of financial dependence or interdependence and any arrangement for financial support; (e) their ownership, use and acquisition of property; (f) the degree of mutual commitment to a shared life, including the care and support of each other; (g) the care and support of children; (h) the performance of household tasks; (i) the reputation and public aspects of the relationship. [9] The relationship between the parties commenced sometime in the early to mid 1980‟s.2 A sexual relationship existed between them. The respondent already had one child when they met. Subsequently, the parties had four children together.3 The last child of the relationship was born in 1994. In varying ways they each cared for and supported the children. The parties resided together with the children at a number of properties. While the respondent acquired the properties the applicant contributed to their maintenance and development by his work. Photographs of the parties and their children depict them as if they were a family.4 [10] Ultimately it was not pressed by the respondent that there was not once a de facto relationship between the parties5. I find there was such a relationship. The real issue is at what point it ended. When did the de facto relationship end? [11] Despite the volume of evidence advanced by both sides there was little direct evidence of any precision as to when the indicia of a de facto relationship ceased. It appeared that much of the evidence advanced on the topic was, on analysis, actually only opinion. The objectivity of the evidence of the children of the parties also appeared to be clouded by emotional influences. [12] The parties resided at a number of properties, the last being one in Kuranda, until the mid to late 1990‟s (the dates given range from 1994 to 1999).6 At that time a property was purchased in Severin St in Cairns in the respondent‟s name. The applicant states that the property was purchased for the use of the family when they visited Cairns.7 The applicant‟s witnesses said that the property was purchased to 2 See, eg: T1-24, L50-53 (AJJ);T1-46, L31-33 (SEC); T2-43, L16-18 (FC). See also: Exhibit 10A at [4]; Exhibit 10H at [1]. 3 T1-4, L28-32 (Applicant‟s Opening Address). See also Exhibit 10H at [2]; Exhibit 17 at [5]-[6]. 4 Exhibit 10G. 5 T2-104, L23. 6 See, eg: T1-53, L31-37, T1-61, L12 (CMT); T2-67, L39-57 (ZC); T2-80, L20-23 (AJO). See also Exhibit 17 at [14]. 7 Exhibit 10A at [57]. -- 3 of 11 -- 4 allow the children to live in Cairns with their mother so they could easily attend school and participate in extracurricular activities.8 [13] The respondent and her two daughters stated that at some time in the late 1990‟s the children were residing at both properties.9 The evidence of the respondent was that when she left the Kuranda property any de facto relationship that may have existed between the parties ended. This was supported by two of her daughters who were both definite that the applicant was only ever a visitor at the Cairns property. On their evidence the applicant was an unexpected visitor when he would attend the Cairns property. [14] Likewise, the evidence of CMT was that the relationship between the parties had ended by 1995 and at that point the respondent was living by herself at the Cairns property. The evidence of CRW was that since he met the respondent in 2000 the applicant has never resided at the Cairns property. [15] It is apparent from the evidence of the applicant‟s son, CMT and CRW that the respondent had other relationships once she moved out of the Kuranda. The applicant admits in one of his affidavits that this may have occurred but he was not aware of them and still believed that they were together. [16] The applicant advanced photographic evidence that supports the existence of a de facto relationship, arguably as late as 2002.10 However, the photographic evidence exhibits contained few photographs after 1999. Nonetheless this evidence undermined the credibility of evidence by and for the respondent that the relationship ended in the mid-1990‟s. [17] The applicant‟s evidence is that the parties continued in a de facto relationship until late 2002 or early 2003 when they separated for the second last time. He associates this separation with the respondent‟s birthday, which is in June or July, suggesting that the separation occurred in June or July of 2002. [18] The reason for this separation was that the applicant discovered the respondent was having a relationship with CRW. The respondent and CRW lived together as a couple from early 2002 until early to mid 2003.11 This suggests the second last separation of which the applicant gave evidence occurred earlier in time, namely early 2002, than the mid-2002 time-frame identified in his evidence. [19] The applicant originally said that the separation lasted from six to eight months.12 In cross-examination this was revised down to two or three months.13 This is difficult to accept in light of the evidence from CRW. CRW‟s evidence was more consistent and credible than that of the applicant on this issue. 8 See eg: T1-23, L21-29 (AJJ); T1-47, L40-45 (SEC), T2-9, L1-6 (SMS) (although her affidavit seems to suggest that the couple broke up when the respondent moved to Cairns: Exhibit 8 at [4]); T2-12, L46-50 (MAS). 9 T2-68, L1-3 (ZC); T2-80, L38-50 (AJO); Exhibit 17 at [17]. 10 See photographs 0028 and 0053 of Exhibit 10C and the last photograph on the fifth page of Exhibit A to Exhibit 10G. 11 T2-100, L20-28 (CRW). 12 T2-29 L1-4. 13 T2-39, L31-35. -- 4 of 11 -- 5 [20] The applicant‟s evidence was that once they reunited, the relationship continued for at least another six months before they finally separated.14 He puts the final separation between June and September of 2004.15 Again this appears to be later in time than is suggested by CRW‟s recollection of when his relationship with the respondent ended. [21] The applicant‟s evidence as to the nature of the relationship once they re-united for the final time was that they “slipped back” into their “old habits”.16 He gave no detail of the qualities of the relationship that had been resumed. [22] KM gave evidence for the applicant that he believed the parties were still in a relationship at 2003.17 At that time the respondent saw KM about the purchase of a second property in Cairns. KM asked about the family and was told by the respondent that the applicant was building a house at Kuranda where he lived with some of the children and he would visit on the weekends. That hearsay cannot be acted on as evidence of the truth of its content but KM did give evidence he would often observe the applicant‟s car at the Cairns property. That evidence is of limited assistance in that the applicant may well have visited the household where his children were on weekends even if the de facto relationship was over. [23] As to the date of the end of the relationship, KM says that the respondent told him that the parties had parted company and were no longer together in a conversation about six to eight weeks after the settlement of a second Cairns property the respondent was acquiring.18 The date given for this conversation was late 2003 or early 2004. This accords with a settlement of sixty or ninety days following the contract date of 1 September 2003.19 At its highest the conversation about the separation could have taken place eight weeks after a ninety day settlement, that is, at the end of January 2004. However, on KM‟s account of the conversation the respondent did not specifically say how long before the conversation the separation had occurred other than it was “recently”.20 [24] The parties‟ son, LC, gave evidence that in 2003 and 2004 he would often tell the applicant that the applicant was being “led on” as there were other men at the Cairns property.21 He said he did not think that the applicant “gave up” until 2004.22 Up until that time the applicant would come to visit every weekend and the parties would sleep in the same room. LC admitted that he was not always around in this period but ultimately put the date of the end of the relationship at July or August of 2004 on the basis that it was some six months after he finished school in 2003.23 [25] The respondent, as mentioned earlier, refutes that a de facto relationship existed in 2004. Her evidence is that it ended years before, in the mid-1990‟s, and explains that she remained on friendly terms with the applicant for the sake of the children. 14 T2-29 L51-53. 15 T2-26 L18-20. See also Exhibit 10H at [1]. 16 T2-30, L1. 17 T1-11, L54 to 1-12, L3. 18 T1-12 L7. 19 T1-19, L2-4. 20 Exhibit 1 at [9]. 21 T1-31, L10-13. 22 T1-31, L16-17. 23 T1-41, L6-8 and L50-60. -- 5 of 11 -- 6 She gave evidence that the applicant was in fact living with another woman from 2001 until 2004. [26] The applicant‟s sister purported to give evidence that the relationship ended in mid 2004. She recalls the applicant telling her in 2003 that the parties were having troubles. The following year, in 2004, she was told that the relationship was over. The witness lives in Western Australia and her evidence is based on telephone conversations between her and the applicant. On analysis it is not direct evidence of when the relationship ended. [27] SS gave evidence for the applicant that the applicant told her when he found out that the respondent did not want to live with him anymore. She estimates that this was five or six years prior to the trial which would place the conversation at 2005 or 2006.24 It is difficult to accept this as accurate given that the evidence, at its highest, suggests that the latest the relationship ended was sometime in early 2004. [28] Similarly, the evidence of AJJ was unable to take the matter any further as he could not put a date on the end of the relationship.25 MAS was able to provide some dates but no real reliance can be placed on these in light of the fact that he admitted in cross-examination that he only became aware that the relationship had ended through the applicant when these proceedings started.26 Was there a de facto relationship at 16 January 2004? [29] As previously discussed, for the application to be made in time the parties must still have been living together as a couple on a genuine domestic basis on 16 January 2004. [30] Few indicia of a de facto relationship, such as those listed in s 32DA(2) of the Acts Interpretation Act 1954 (Qld) existed at 16 January 2004. The applicant resided on property in the name of the respondent. He had some role relating to the care and support of the children, although not as significant at that stage as that of the respondent. [31] The parties were not residing together. This alone does not preclude the existence of a de facto relationship. Section 32DA(3) explicitly states that no particular circumstance is to be regarded as crucial to the decision about whether two people lived together on a genuine domestic basis. [32] The courts have also made it clear that de facto partners need not live together. In PY v CY 27 the Court of Appeal upheld a decision that the parties were in a de facto relationship even after the applicant moved in order to care for her elderly parents whilst the respondent remained in Rockhampton to tidy up his business affairs. Chief Justice de Jersey considered that it was important that the respondent had not moved in order to leave the appellant and that “substantial, regular, intimate and contact continued thereafter, embracing their mutual interest in matters personal, property and financial”.28 Similarly, Williams JA found that a couple can continue to live together on a genuine domestic basis even though separated due to 24 The witness says five or six years before the trial: T2-9, L19-20. 25 T1-24, L5-7. 26 T2-14, L42-50. 27 [2005] QCA 247. 28 At [19]. -- 6 of 11 -- 7 “prevailing circumstances”29 or, in the words of Jerrard JA in that same decision, events “beyond their control”.30 [33] It is likely the de facto relationship persisted for some years after the respondent‟s move to Severin St. That move did not result from a termination of the de facto relationship, although it heralds an era of obvious decline in the state of the relationship. While not necessarily determinative, the existence of a de facto relationship between the applicant and CRW at Severin St for at least a year from 2002 into 2003 provides powerful evidence that the respondent and applicant were by then no longer in a de facto relationship. [34] The existence of a de facto relationship depends upon the ongoing existence in fact of the relationship. This was recognised in S v B [2004] QCA 449 where it was noted at [33] that: „[t]he robust institution of marriage survives until formally dissolved by legal process, even though the parties are no longer a couple and exhibit none of the observable indicia of a domestic arrangement. It has been recognised, however, that the persistence of those indicia are fundamental to the continuance of a de facto relationship‟. [35] In the case at hand there was, over time, a decline in the existence of indicia of a de facto relationship. It is not possible to identify with precision exactly when the relationship ceased being a de facto relationship however it is apparent that over time the applicant‟s visits to the Severin St household altered from those of a de facto husband maintaining an existing relationship to a father visiting his children at the household of his former partner. [36] The de facto relationship likely ended in early 2002, around the time of the commencement of the respondent‟s de facto relationship with CRW. Such limited evidence as there is about a resumption of some sort of relationship for a period of six months or so after CRW moved out falls short of demonstrating the on going presence of indicia during that period of a de facto relationship. To the extent a relationship resumed it likely ended by late 2003. [37] For the purposes of the present application the critical question is whether a de facto relationship as between the applicant and respondent ended before 16 January 2004. I find it did end before 16 January 2004. Hardship: The Two Step Process [38] Given that the parties were not in a de facto relationship at 16 January 2004 the only way that an application under Part 19 of the PLA can proceed is if the court gives leave. Under s 288(2) the court may only do this if it satisfied hardship would result to the applicant or a child of the de facto partners if leave was not given. [39] In DA v KG & Anor31 McMeekin J provided a useful summary of the relevant principles. His Honour noted that the Court engages in a two step process. This two step process has also been applied in other decisions of this Court, most notably SAM v IDP,32 D v D33 and HT v CS.34 29 At [31]. 30 At [44]. 31 [2010] QSC 318. 32 [2006] QSC 344. -- 7 of 11 -- 8 [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”.35 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.36 Furthermore, it is irrelevant whether the applicant or child is suffering hardship presently.37 [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.38 [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.39 This must be considered in the context of the strength and weaknesses of the applicant‟s case. Will hardship result if leave is not granted? [43] The applicant and his son both gave evidence generally about the fact that life has been tough for the applicant since they were evicted from the Kuranda property. [44] The applicant gave evidence about his job prospects. He contends that they are not strong given his age and the fact that he suffers from rheumatoid arthritis making physical labour painful. Letters from his doctor were tendered about his medical condition, however, minimal weight can be placed on these letters given that the writers did not give direct evidence. [45] In addition the applicant gave information about his present financial position at trial. As of November 2011 he had $1000 in his bank account and $500 in cash. His only other asset is his car that he estimates to be worth $10,000. The applicant did receive an inheritance of $319,250 but that has since been either spent on legal costs or gifted.40 In relation to expenses, the applicant has few because he is supported by his partner with whom he resides. [46] This evidence does not of itself demonstrate hardship of the kind required by s 288. It is of more relevance to the consideration of what is just and equitable if leave is given.41 The matter with which the court is here concerned is not whether the applicant is suffering hardship, but whether the applicant would suffer hardship if leave is not granted. The hardship must result from the loss of the right to litigate. 33 [2007] QSC 131. 34 [2009] QSC 051. 35 DA v KG citing In the Marriage of Whitford (1979) 35 FLR 445, In the Marriage of Neocleous (1993) 113 FLR 451; Deves v Porter [2003] NSWSC 625 and SAM v IDP at [15]. 36 DA v KG citing SAM v IDP at [16] and In the Marriage of MacKenzie (1978) 34 FLR 56 per Strauss J. 37 In the Marriage of Whitford at 454,455. 38 DA v KG citing In the Marriage of Whitford. 39 At [5]. 40 T2-33, L12-22. 41 Eg, Property Law Act 1974 (QLD) ss 297, 298. -- 8 of 11 -- 9 Proof of necessitous circumstances is not necessary in order to demonstrate that loss of an entitlement to property may constitute hardship.42 [47] What then is the hardship the applicant would suffer consequent upon the loss of his right to pursue his application for orders under Pt 19 of the Property Law Act for a division or adjustment to property interests? The evidence demonstrates that while the respondent was the primary contributor of assets towards the acquisition of real estate during the relationship, some funds were also contributed by the applicant, in particular $45,000 towards the deposit for the acquisition of Severin St.43 Moreover, there is evidence from the applicant that he made very substantial contributions to the worth of the properties acquired during the relationship both by his work building and developing them and his expenditure on materials needed for that work.44 The respondent‟s affidavit tendered at the hearing does not directly contradict or even address much of this evidence.45 The parties were repeatedly warned the hearing of the preliminary questions would be determined solely by reference to the evidence lead and exhibited at the hearing. [48] On the state of the evidence advanced at the hearing the applicant‟s application would probably be successful. This was a lengthy de facto relationship during which the applicant made substantial financial and non-financial contributions yet there has not been any settlement in respect of the assets of the relationship, most of which appear, on the evidence adduced before me at the hearing, to have remained under the respondent‟s control. The applicant had the use of the Kuranda property for a number of years but it is inherently unlikely the worth of that use is commensurate with the overall worth of the applicant‟s just and equitable entitlement under the orders sought. There has simply not been a resolution of the financial entitlements of the parties as between each other in the aftermath of their lengthy de facto relationship. [49] It appears likely the applicant would be successful in his Part 19 application in securing orders delivering a financial benefit to him. While the quantum of that benefit cannot be sensibly assessed on the materials before me on this application it would likely be a minority percentage but more than a merely negligible or trivial percentage of the assets of the relationship. The hardship which would flow from the loss of the right to a determination of his Part 19 application would be the loss of the financial benefit he would likely gain if the application proceeds. In the circumstances of this case the range of determinative considerations on a Part 19 application and the extent of his claim is likely to be greater than would be available through equitable remedies. [50] The applicant‟s position is akin to that described of the female applicant in SAM v IDP by McKenzie J at [18]: “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 Part 19 42 In the Marriage of Whitford at 454,455. 43 Exhibit 10A [14], Exhibit 10G [3] (where the figure of $50,000 is given). 44 Exhibit 10A from [40]. 45 Exhibit 17. -- 9 of 11 -- 10 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.” [51] The applicant has demonstrated hardship will result if leave is not given. Should the Court exercise its discretion to grant leave [52] The limited extent of the evidence adduced by the respondent at the hearing makes it difficult to clearly identify how the delay may prejudice the respondent if leave is granted. I readily infer the presence of difficulties common to most cases of this kind, such as the loss of opportunity to gather relevant evidence, diminishing recollections and dealing with assets in the assumption no dispute persists. That said, it is unlikely the respondent perceived the applicant had foregone his pursuit of some interest in the property of the relationship. There is evidence for example that the applicant remained in possession of the Kuranda property for some years and after he was evicted in 2009 he unsuccessfully pursued proceedings relating to that property.46 [53] Furthermore, the respondent only took the point that this application was out of time belatedly, when the listed trial of the matter was due to start. The failure to take the point in a timely way detracts from the weight to be given to such limited evidence as there is of prejudice to the respondent. [54] On the other hand the period of the applicant‟s delay in making his application is also relevant. It appears to have been about two years out of time, the de facto relationship having ended in early 2002. However the applicant plainly perceived there had been a resumption of some type of relationship for some further time, even though it was not as a matter of law a de facto relationship. His delay in tending to a formal resolution of their property interests is also explained by the applicant belatedly learning that the respondent disputed the legitimacy of his then occupancy of the Kuranda property.47 [55] It is relevant to the exercise of the discretion whether to give leave that the material advanced at the hearing, bearing upon the relative strength of the cases of the applicant and respondent, suggests the applicant will probably succeed in his application. [56] In all of the circumstances the discretion to give leave to the applicant to apply per s288(2) should be exercised. Conclusion [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. 46 Eg, Exhibit 17 at [14] and [20]-[24]. 47 Exhibit 10A at [68]. -- 10 of 11 -- 11 [58] I will hear the parties as to what directions ought be given about the further conduct of the matter, including its listing for hearing. Orders [59] My orders are: 1. Pursuant to s 288 Property Law Act (Qld) 1974, the application not having been made within 2 years after the day on which the de facto relationship ended, the applicant is granted leave to apply for a property adjustment order. 2. I will hear the parties as to the directions which should be given about the further conduct of the application, including its listing for hearing. -- 11 of 11 --