Henry v Ford

Ford v Henry [2009] NSWSC 147; (2009) 41 Fam LR 1 CASES CITED : Selmore v Bull [2005] NSWCA 365; (2005) 34 Fam LR 488 Beavan v Fallshaw (1992) 15 Fam LR 686

PARTIES : Plaintiff: George Francis Henry Defendant: Debra Anne Ford

COUNSEL : Plaintiff: T Hodgson Defendant: T J Morahan

SOLICITORS : Plaintiff: Nicholl & Co Defendant: Hozack Clisdell Lawyers

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3148/09 George Francis Henry v Debra Anne Ford (No. 2) JUDGMENT 1 HIS HONOUR: By statement of claim filed 10 June 2009 the plaintiff claims, amongst other relief, leave pursuant to s 18(2) of the Property (Relationships) Act 1984 (NSW) to make an application to adjust the property interests of the plaintiff pursuant to that Act. The only substantive relief sought in the statement of claim is an order pursuant to s 20 of that Act. The plaintiff pleads that the parties were in a de facto relationship. He pleads that they separated in about August 2001. Hence the statement of claim is filed almost eight years after the termination of the de facto relationship. There is a suggestion that the relationship may have continued until some time in 2002 but, on any view, there has been a long delay before these proceedings were commenced. 2 On 2 September 2005 the parties entered into a settlement agreement. They agreed they would consent to orders that the former matrimonial home at Jeremadra be sold at a price agreed upon by the parties, or, failing agreement, established by a selling agent appointed by the Real Estate Institute. They agreed that, upon sale, the net proceeds should be divided 60 percent to the plaintiff and 40 percent to the defendant. They agreed it should be otherwise declared that the parties were solely entitled to all other real estate and certain other identified property in their respective possession at the date of the separation. 3 They agreed to execute all documents to effect a listing of the Jeremadra property for sale and sign all contracts transfers and the like to facilitate the sale. Clause 5 provided that both parties acknowledged that this was a settlement pursuant to the Property (Relationships) Act and was intended to operate in full and final settlement of all financial dealings between the parties arising out of the relationship. 4 Ms Lawrence, solicitor, signed a certificate dated 19 August 2005 of having provided the plaintiff with independent advice. 5 As Austin J observed in earlier proceedings (Ford v Henry [2009] NSWSC 147; (2009) 41 Fam LR 1), the certificate was in the form prescribed by the Property (Relationships) Regulation 2000 and not in the form of the regulation in force at the time the certificate was given. But, as his Honour also observed: " It was not submitted that the use of the old wording of paras 2-4, rather than the current para 2, itself constituted failure to comply with the requirement of s 47(1)(d) that the certificate be 'in or to the effect of the prescribed form'. It seems to me that certification in terms of the old paras 2-4 is probably tantamount to certification of the advantages and disadvantages of making the agreement, as required by the current para 2, and so there would be nothing in a submission relying on the departure from the current prescribed form, were such a submission to be made."

6 In December 2007 the present defendant instituted proceedings to enforce the parties' agreement recorded in the terms of settlement of 2 September 2005. On 17 March 2009 Austin J declared that the agreement reached between the parties and evidenced by the document entitled "Property (Relationships) Act 1984 Terms of Settlement" and dated 2 September 2005 is a valid and binding agreement between the parties. His Honour made consequential declarations and orders including orders for the appointment of trustees for sale of the Jeremadra property. 7 The plaintiff (the defendant in the 2007 proceedings) filed a cross-claim in those proceedings seeking a declaration that the alleged agreement was not a valid and binding termination agreement under the Property (Relationships) Act, and seeking relief under the Contracts Review Act 1980 (NSW). No application was brought by way of cross-claim for relief under s 20 of the Property (Relationships) Act. Notwithstanding that between the date of entry into the agreement and the commencement of the 2007 proceedings, the plaintiff claims to have made all of the mortgage payments on the mortgage secured over the property, no cross-claim was brought in those proceedings for contribution. Nor is any claim made in the present statement of claim for contribution. 8 Sections 18(1) and (2) provide as follows: " 18 Time limit for making applications

(1) If a domestic relationship has ceased, an application to a court for an order under this Part can only be made within the period of 2 years after the date on which the relationship ceased, except as otherwise provided by this section. (2) A court may, at any time after the expiration of the period referred to in subsection (1), grant leave to a party to a domestic relationship to apply to the court for an order under this Part (other than an order under section 27 (1) made where the court is satisfied as to the matters specified in section 27 (1) (b)) where the court is satisfied, having regard to such matters as it considers relevant, that greater hardship would be caused to the applicant if that leave were not granted than would be caused to the respondent if that leave were granted. "

9 In Selmore v Bull [2005] NSWCA 365; (2005) 34 Fam LR 488, the Court of Appeal said that it was not mandatory for an applicant for leave under the section to explain the delay in commencing proceedings under the Act (at [13]). What is required to be demonstrated is a preponderance of hardship to the applicant if leave is not granted than will be caused to the respondent if leave is granted. If such preponderance is shown it does not automatically follow that leave is to be provided. There remains a residual discretion (see Beavan v Fallshaw (1992) 15 Fam LR 686). 10 The hardship to which counsel for the plaintiff pointed as being hardship the plaintiff would suffer if leave is not granted, was essentially the matters on the basis of which the plaintiff says he is entitled to an adjustment order under s 20; namely, the greater contribution he made to the purchase of the property, his having made mortgage payments on the property, his having carried out renovations and improvements to it and the defendant having received, what he claims to be, an undisclosed amount as damages in a claim she brought arising from the death of the parties' daughter. (It appears that the claim was based upon alleged medical negligence. It appears from the reasons of Austin J that the award of damages was made after separation.) 11 On the other side of the ledger is the hardship to the defendant through being exposed to the vexation of legal proceedings and the cost of legal proceedings when she has already incurred legal costs, (I infer not inconsiderable legal costs), leading up to the negotiation for and entry into terms of settlement, and in connection with the 2007 proceedings. For her part, the defendant, by enforcing the terms of settlement, chose not herself to seek leave under s 18 to bring her own claim for adjustive orders under s 20. 12 It seems to me that the terms of settlement have a dual significance on the present application. First, if the effect of s 47 would be that the court could not make orders inconsistent with the terms of that agreement, then that would take away the force of the hardship to at least a very considerable degree. There would be no hardship to the plaintiff in not being able to spend time and cost in having his claims for an adjustive order under s 20 if that effort and expenditure would in any event be doomed to fail because of the terms of the agreement. 13 Secondly, even if the agreement were not a bar to the plaintiff obtaining relief under the Act, it is relevant to the exercise of residual discretion under s 18. Austin J did not decide whether, if Pt 3 proceedings were taken by the present plaintiff, the terms of settlement would be a defence to the claim under s 47. His Honour said he did not need to resolve that question as no such proceeding was brought. It was sufficient for his Honour to conclude, as he did, that, any non-compliance with s 47(1)(d) did not affect the validity of the terms of settlement or their enforcement (at [45]). 14 His Honour found that the requirements of s 47 had been complied with in the case of the present plaintiff, although not in the case of the present defendant. Counsel for the plaintiff did not rely upon non-compliance with s 47 as a reason why it could be contended at a final hearing that orders could be made inconsistently with the terms of settlement. Rather, counsel relied upon s 50. That section provides: " 50 Effect of revocation etc of agreements

Without limiting or derogating from the provisions of section 46, on an application by a party to a domestic relationship for an order under Part 3, a court is not required to give effect to the terms of any domestic relationship agreement or termination agreement entered into by that party where the court is of the opinion: (a) that the parties to the relationship have, by their words or conduct, revoked or consented to the revocation of the agreement, or (b) that the agreement has otherwise ceased to have effect." 15 Counsel submitted that the parties had, by their words or conduct, revoked or consented to the revocation of the agreement in the terms of settlement, or the agreement had otherwise ceased to have effect. In my view that contention is without substance. It is inconsistent with the reasons and orders of Austin J. 16 It was submitted for the plaintiff that he understood that, notwithstanding entry into the terms of settlement, the defendant would adhere to an earlier oral agreement he asserted which dealt with parties' rights to the property in different terms. Any such understanding and any such prior agreement, if established, would be quite irrelevant, having regard to the agreement the plaintiff entered into and the declaration and orders made by Austin J. 17 I was not referred to any evidence which could seriously support a contention that the parties had revoked or consented to the revocation of the agreement, or that it had ceased to have effect. No such contention could be advanced in respect of anything done prior to 19 March 2009 in the light of the orders made on that day. 18 The other aspect of hardship which the plaintiff points to is his having continued to make mortgage payments. I do not accept that he did so in the belief that the terms of settlement had ceased to have effect. The reasons of Austin J refer to the present plaintiff having asserted on 6 September 2006 that the terms of settlement were invalid. His Honour refers to the present defendant having attempted to have the property listed for sale in 2007 and a sale not proceeding because the plaintiff refused to sign an agency agreement. 19 I am satisfied on the evidence read on this application that the plaintiff continued to make mortgage payments, but did so in the knowledge of the terms of his agreement with the defendant and in the knowledge that she was seeking to enforce the agreement. 20 In my view, a greater hardship would be caused to the defendant if leave were now given for these proceedings to be brought than would be caused to the plaintiff if that leave is refused. To grant leave would be to require the parties to traverse, no doubt in considerable detail, their financial and personal dealings going back to the mid 1990s when there has already been one proceeding between the parties, and when the parties, with legal advice, took the appropriate steps in 2005 to avoid just such an outcome. I think it would be grossly unfair to the defendant for her to be compelled to meet such a case in the light of the history of this matter. 21 If I am wrong in that view, I am nonetheless not minded to exercise the residual discretion under s 18(2) for much the same reasons; although I would add that a further reason for not exercising such a residual discretion is the failure of the plaintiff to have advanced this claim by way of cross-claim in the 2007 proceedings. 22 It might be arguable that the terms of settlement do not preclude the making of an order under s 20 in respect of a disproportion of mortgage payments made by the plaintiff after 2 September 2005. I express no concluded view on that matter. In the same way, it might be arguable that the terms of settlement would not preclude the plaintiff from making a claim for contribution in accordance with the ordinary principles of equity where one co-mortgagor makes disproportionate payments of the mortgage debt. No such claim is made in the present application and, in so far as such a claim might be sort to be advanced under s 20, it is out of time unless leave is given. 23 For the reasons I have given I do not consider it an appropriate case for leave. Particularly is that so given that the statement of claim seeks much wider relief, the granting of which would be inconsistent with the terms of settlement. For these reasons I refuse the plaintiff's application for leave pursuant to s 18(2) of the Property (Relationships) Act. 24 I will hear the parties on what consequences should flow from that order.

[Counsel addressed.] 25 I order that the statement of claim be dismissed. I order that the plaintiff pay the defendant's costs of the proceedings. For the assistance of a costs assessor I note that the hearing of the present application commenced at about 12.30pm today.

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