Lockett v Duckett [2004] VSC 377

5. By s.279(1), a domestic partner may apply to a Court for an order under Division 2 of Part IX for the adjustment of property interests of another domestic partner. Division 2 comprehends orders for adjustment of property interests, Part IX being of property of domestic partners, and which was introduced by s.3 of the Property Law Amendment Act 1987.

8. Section 275(1) defines domestic partner and domestic relationship. The parties of this proceeding come within the definition of domestic partner.

11. By s.282(1) an application to a court must be made within two years after the day on which the relationship ended. By s.282(2) a court may grant leave for an application to be made after that time "if the court is satisfied that greater hardship would be caused to the partner applying if that leave were not granted than would be caused to the other partner if that leave were granted".

14. The plaintiff and the defendant lived together as domestic partners from early 1987 until December 1998 according the plaintiff, and from September 1987 until an unstated time in 1997 according to the defendant. There are two children of the relationship, both girls, born respectively on 28 September 1992 and 2 August 1994. The children reside with their mother, the plaintiff, and have done so since the parties separated. The parties have never married.

17. The motion and summons in this matter were filed on 22 June 2004. Thus the application is some three and a half years out of time according to the plaintiff, and some five years out of time according to the defendant. The circumstances for that delay appear in the first affidavit of the plaintiff, of 30 June 2004.

20. In that affidavit the plaintiff set forth what she said was the history of the relationship. She stated that she worked, apart from in matrimonial leave, throughout the relationship and that all of the earnings from her employment were applied to the benefit of the family which was the first defendant, herself, and the children from their birth. The first defendant worked in various occupations and obtained accountancy qualifications and thereafter commenced employment as an accountant, currently being an accountant in Brighton.

23. The plaintiff deposed that the first defendant acquired an interest in premises at 96 Dendy Street Brighton (the domestic premises of the parties) at or about the time of commencement of their cohabitation. He became the joint register to that property with his sister, brother and mother. The property was rented for much of the period of cohabitation Arrangements were made between the first defendant and his family as a consequence of which one share was owned by the first defendant, one share by the second defendant and a third share by the first and second defendants jointly.

26. The plaintiff sets forth various property transactions which occurred during the marriage, and in particular dealings with property by the first defendant. A sub-theme of her affidavit is that she says she is unable to ascertain the true financial situation of the first and second defendants until after discovery, if leave to institute proceedings is granted.

29. In relation to the period of delay the plaintiff deposed in paragraph 14 that after separation she was anxious to maintain the good relationship she had with the first defendant's family, and in particular his mother and sister. She further deposed that as the first defendant had indicated he was going to indirectly financially support the plaintiff by putting their daughters through private education at Firbank Girls Grammar School. In the event she decided not to issue any court proceedings otherwise to secure a financial settlement. Pursuant to this informal arrangement between them the children were in fact enrolled at Firbank Grammar School in 1998 and remained there until 2002 when the first defendant said he was unable to afford the fees and the children were removed from that school.

32. The plaintiff further deposed that the first defendant represented to her that he had permitted the children and the plaintiff to reside at a nominal rental in the domestic property which they have done for the sum of $650 per month. She further deposed that the first defendant has engaged in tax restructuring to reduce his exposure and that he has failed to pay her maintenance for the children and also child support assessed at $1300 per month. She deposed that she has made financial contributions including her initial financial contribution and contributions of income throughout the relationship, and also substantial non-financial contributions towards the welfare of the children and of the first defendant.

35. Finally the plaintiff deposed that she would have made a claim within time "but for the agreement reached between myself and the first defendant". That is the agreement which initially in her affidavit in paragraph 4 was described as a decision, and in paragraph 15 described as an informal arrangement.

38. The first defendant deposed in an affidavit sworn 27 July 2004 on his own behalf and that of the company, MRT Pty Limited, of which he is the sole director and shareholder a contrary history, especially financially, to that of the plaintiff. He denied, indeed "strenuously" denied which is an adverb which appears throughout his affidavit, that the plaintiff ever applied funds to the benefit of the plaintiff and defendant or ever conducted a joint bank account; and he deposed that he, not she was responsible for all the utility accounts; that they lived in rented accommodation throughout the relationship and that he shared the payment of rental while he paid all the household bills and the plaintiff provided food for the family from her earnings.

41. In relation to the Dendy Street Brighton property he deposed that he held a one quarter interest, with the balance held by members of his family, well before the commencement of the parties' cohabitation, that an Orrong Road property was sold on 5 October 1998 (again a shared arrangement with his family), and that the plaintiff did not make a contribution, financial or non-financial in relation to either the Dendy Street Brighton property or the Orrong Road property or any other real property. He deposed that the plaintiff was a party to the setting up of a child-support trust and she was knowledgeable as to the arrangements therein.

44. In relation to his present financial situation he deposed that, by reason of his relationship with the other members of his family, after expenses his total equity in the Dendy Street property is approximately $163,000. He also deposed that it was he, not the plaintiff, who spent a substantial amount of time caring for the children whilst he was studying for his accountancy degree and the plaintiff was working.

47. He deposed that the plaintiff agreed to move into the Dendy Street property at half the current rental cost as part of his contribution to her. He deposed that he is, himself, in limited financial circumstances and as he put it "in financial difficulties" because of his responsibility to pay for the repayments on the Dendy Street property plus his child support obligations.

50. He finally deposed, and this is a fundamental point relied upon by the defendant's counsel, that at the time of their separation he and the plaintiff discussed the division of their property and a division was effected and that was treated by both of them as a conclusion of the property matters. He deposed: "It is for this reason and no other that the plaintiff never sought to issue proceedings for a property settlement."

53. In an affidavit in reply of the plaintiff sworn 18 August 2004 the plaintiff, in paragraph 3, took issue with numerous statements of fact in the first defendant's affidavit. She deposed in paragraph 3(c) that her earnings from her work were spent entirely on the family. In paragraph 3(e) she denied that she was ever consulted about the establishment of the child support trust in any meaningful way; in paragraph 3(g) that she believed that the purpose of the defendant entering into the child support trust was to save income tax; in paragraph 3(h) that she believed that the equity of the first defendant, and indeed the first defendant's whole asset situation, is far greater than has been disclosed, but that she will not be able to establish that until discovery is effected if leave were granted. The plaintiff further deposed that the defendant has refused to disclose details of his savings and shareholdings.

56. The law, except perhaps in one respect, on these matters is well settled. The one respect in which it is not so well settled is whether or not under s.282(2) the applicant needs to provide a reason or a reasonable excuse for not issuing within time.

59. On that matter there appears to be some divergence of view expressed on the one hand by Gillard J in Harrison v Harrison[1] and on the other by Warren J as then she was in McGibbon v Marriott[2]. With every respect I prefer the view expressed by Warren J in paragraph 7 of McGibbon v Marriott, namely that the applicant should establish "a reasonable explanation for such delay". I consider that is the preferable view because it follows from the circumstance that a time limitation has been laid down in the statute under s.282(1). In my view if the time limit has been laid down it follows, in the normal course, that if an extension is to be granted a reason ought be provided. Such a conclusion also is consistent with policy (giving people some certainty in their lives so far as properly it may be achieved). Further, the provision in s.282(2) that a Court "may" grant leave is permissive, not mandatory; and while satisfaction of the comparative hardship criterion in s.282(2) can found exercise of the discretion to grant leave, satisfaction of that criterion is not conclusive of the discretion.

62. However I consider that the standard is not a rigorous or high standard of satisfaction, but rather a standard of reasonableness; that is, a reasonable explanation, allowing, in particular, for the emotional and human factors involved in domestic arrangements and the complex of factors involved in such arrangements.

65. Applying that test of Warren J (which is more favourable to the defendant) I consider that the plaintiff has made out her reasonable excuse: that in the complex of the situation there obtaining, including in particular the funding of the children's education (a significant matter to the plaintiff and to the children), the plaintiff did not, at that time, seek to exercise her claim or rights. I am satisfied that the plaintiff has satisfied the requirement of s.282(2) as to time.

68. As to the actual matter in dispute between the parties, I consider that the plaintiff has established a prima facie case and that by no means is her case untenable. Of course I cannot and do not finally judge the case. That is for another judge on all the material. In terms of the criteria set out in s.282(2) I am satisfied that greater hardship would be caused to the plaintiff if the leave were not granted than to the defendant if the leave were granted. That in particular turns upon the circumstance that she is the child rearer and the mother of the children and in my view in all the circumstances it is just and appropriate that leave be granted. It may or may not be the case upon discovery that the defendant has failed to reveal his full financial situation. However even if he has revealed his full financial situation I am satisfied that the greater hardship test is satisfied as contemplated by s.282.

71. Accordingly I propose to grant the orders sought, namely that the plaintiff be granted leave to apply to the court for orders pursuant to Part IX of the Act within the time which I shall now discuss with Mr Finemore and Mr Van Der Heyden.

HIS HONOUR: Mr Finemore, what is sought in relation to time needed or any consequential steps for the formal institution of these proceedings on a proper footing?

MR FINEMORE: Your Honour I believe that what would be appropriate is that the plaintiff be given leave to file the statement of claim being exhibit JML1 to the affidavit of 24 June '04 within 14 days.

MR FINEMORE: And then I think it would be appropriate that the matter be referred back to the master for further directions.

HIS HONOUR: Thank you that seems sensible. Any other orders?

MR FINEMORE: I would seek costs for this application, Your Honour.

HIS HONOUR: Thank you very much, Mr Finemore. Mr Van Der Heyden, they are normal orders in this type of case. The draft statement of claim has been exhibited as exhibit 1 to the plaintiffs affidavit, and do you suggest any other orders than those sought?

MR VAN DER HEYDEN: No Your Honour, I believe that those are the sensible orders as well, other than I oppose the costs order being made. I think that it is proper that our client oppose this application based on the Statute of Limitations and it would have been written on behalf of our firm not to have pursued that action, especially in light of our client's affidavit in which he states that the matters have been resolved and that that - he thinks that this application should not have been brought, so on that basis I oppose the costs application alone.

86. I formally grant leave to the plaintiff, pursuant to s.282(2) Property Law Act 1958 to institute proceedings under Part IX of the Act. I grant the period of 14 days for the institution of the proceedings as a statement of claim has already been exhibited. The affidavit is exhibit 1.

89. I further refer the matter to the Master for further directions.

92. I consider that an order that the defendants pay the costs of the plaintiff in these proceedings is justified and appropriate. That is the normal order following the event, and in the circumstances set forth in the affidavit of the plaintiff I consider it is justified that an order be made and accordingly I order the costs of the proceedings to be paid of the plaintiff by the defendants.

[1] (1997) 22 FLR 263.

[2] (1999) VSC 381.