McGibbon v Marriott [1999] VSC 381

Supreme Court of Victoria|1999-09-13|Before: Warren J

PROPERTY LAW ACT 1958 (Vic) Part IX and s.282 - lump sum payment - extension of

time - application brought out of time - greater hardship - reasonable explanation

The plaintiff and the defendant commenced cohabiting on a de facto basis on about 1 September 1978. The relationship endured for approximately 16 years and the parties separated on 5 May 1994. There were two children of the relationship, Adam Alexander Marriott, aged 16 years, born on 24 January 1983, and Samuel Ingram Marriott, aged 10 years, born on 29 June 1989. I am informed that, as matters are presently arranged between the parties, the younger child, Samuel, lives with the plaintiff and the older child, Adam, lives with the defendant. It is said in the affidavit material, and does not appear to be in dispute between the parties, that throughout the relationship the plaintiff was the primary carer of the children and the substantial home-maker. During the period of the relationship there were clearly stormy and unhappy periods between the parties, and allegations are made against the plaintiff and allegations are made against the defendant as to their respective conduct during the period of the relationship. They are not matters that I need be concerned with in determining the application.

The event that triggered the application being brought by the plaintiff revolves around the defendant receiving the benefit of a lump sum payment from his employer towards the end of 1998. It appears that the total sum, believed to be an accumulated amount consisting of superannuation and various leave and severance pay entitlements, totalled $260,854.42. Upon becoming aware of the defendant receiving this sum, it is said that the plaintiff took steps as soon as it was reasonably possible to institute proceedings under the provisions of Part IX of the Property Law Act making a claim on those amounts, being the lump sum, on her own behalf and also with respect to the younger child, if not both children.

The proceedings were instituted initially in the Family Court. Following the High Court judgment in Re Wakim [1999] HCA 27; (1999) 73 A.L.J.R. 839, the Family Court transferred the plaintiff's proceeding to this court. Hence the proceeding comes before me by way of an application for an extension of time under s.282 of the Property Law Act.

The test to be applied in determining whether or not to accede to an application has been carefully and helpfully considered by Gillard, J. in Harris v Harris (1997) DFC 95-192. In that case the learned judge was concerned with an application similar to that presently before me, namely whether an extension of time should be granted for the institution of proceedings pursuant to s.282 of the Act. Section 282 provides that if de facto partners end their relationship, an application for an order under Part IX of the Act must be made within two years after the day on which the relationship ended. Clearly the present application has been brought well out of time, the relationship having ended in May 1994. In accordance with s.282(1) of the Property Law Act, such application ought have been instituted by May 1996. Accordingly, the application is brought over three years after the expiration of the limitation period.

Sub-s.(2) of s.282 of the Act vests in the court a discretion to allow an extension of time for the institution of proceedings. The test laid down by sub-s.(2) is that leave may be granted for the institution of proceedings out of 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". It follows that the primary matter of which I must be satisfied on the plaintiff's application is whether she will suffer greater hardship than the defendant if leave is not granted to her to bring her proceedings out of time, notwithstanding the fact that those proceedings should have been instituted in accordance with s.282(1) some three years ago.

Sub-s.(2) of s.282 does not raise specifically the issue of requiring an applicant to provide a satisfactory explanation to the court for the delay in instituting proceedings. However, in my view, when a court exercises a discretion for an extension of time such as that contemplated by sub-s.(2) of s.282, it behoves an applicant to provide at least a reasonable explanation to the court as to why there has been a delay in instituting the proceedings. I am aware that in Harris v Harris the learned judge expressed a somewhat different view. It may be that the reason for the difference in view lies with the fact that the period of separation in each case differs. However, in any event, I consider that I must be satisfied that there is a reasonable explanation for such delay.

In the circumstances of this matter I consider that the explanation clearly lies with the fact that the plaintiff was not aware of any bounty or benefit to which she may properly lay claim under Part IX of the Property Law Act until she became seized of the information of the benefit that the defendant had received by way of the lump sum payment. I am satisfied that the plaintiff instituted the proceedings within a reasonable period of time in all the circumstances of the matter, and accordingly I am satisfied that there is a reasonable explanation for delay.

I turn now to the issue of whether the plaintiff will suffer greater hardship than the defendant if the application is acceded to and the discretion exercised.

On the part of the plaintiff it appears that there are three substantial grounds of hardship. Firstly, it is said on her behalf, and indeed deposed to in her affidavit, that her only asset is a half share in a property jointly owned by the plaintiff and the defendant at 93 Henry Street, Greensborough ("the property"). In Family Law proceedings the defendant has deposed that the value of the property is approximately $140,000. In the same proceeding the plaintiff has valued the property at approximately $90,000. I am informed that there is a mortgage registered over the property under which there is presently owed approximately $64,500. It follows that if the plaintiff has a 50% equity in the property her interest on the basis of the defendant's valuation is approximately $75,500, or, on her valuation, approximately $25,500. By way of contrast, the defendant has deposed that he has applied the lump sum that he received from his employer to purchase a house. Presumably the house property has been paid for substantially or in full by the application of the lump sum. It is apparent, therefore, that the financial circumstances of the plaintiff and the defendant differ markedly with respect to the real property in which each has an interest.

The second aspect or ground of hardship relied upon by the plaintiff is that she has made a meaningful contribution during the period of the relationship, both financially and as a home-maker. There is dispute between the parties as to the level of her contribution with respect to both matters. In any event I am satisfied that it is arguable on the authorities that the plaintiff has either made a pro rata contribution or in one way or another has a pro rata entitlement to the value of the lump sum worth approximately $186,000 if one takes account of the period of the relationship between the parties and the accumulation of the interest by the defendant in the lump sum. As to whether or not the plaintiff is ultimately entitled to any part of that sum would in any event be a matter to be determined at trial. I need be satisfied no more than that the plaintiff has an arguable case, and on the authorities I am so satisfied. In particular, in being so satisfied I have taken account of the observations of Fogarty, J. in Re Bourke (1993) Family Law Cases 92-356.

The third matter relied upon by the plaintiff to demonstrate hardship is a matter that I in fact raised with her counsel, Mr Wood. The ground of hardship is deprivation of the opportunity to prosecute the claim under Part IX of the Property Law Act against the defendant.

Turning now to the grounds of hardship relied upon by the defendant, and which it is said demonstrate that he would suffer greater hardship than the plaintiff, there appear to be five grounds. Firstly it is said that the defendant would not have accepted the lump sum package from his previous employer if he was aware of the potential claim by the plaintiff. Such matter is not deposed to in the defendant's affidavit. In any event, the fact is that the defendant did accept the lump sum. In any event, on the authorities, in particular the observations of Fogarty, J. in Bourke, the lump sum may arguably have constituted a resource, if not vested property, to which the plaintiff is potentially entitled. As to whether or not she is actually entitled as a matter of law is a matter that would have to be determined at trial. I need be satisfied no more than at the level that she has an arguable case.

The second ground relied upon by the defendant is that the plaintiff did not make any or very much financial contribution to the home and the joint assets. Again this is a matter, in my view, to be determined at trial. It is not a matter that I need necessarily be satisfied upon. I need be satisfied of no more than the fact that it is arguable on the material before me that the plaintiff can put a case forward in support of her claim under Part IX of the Act. I am so satisfied.

The third matter relied upon by the defendant is that the plaintiff has had free accommodation in the joint property at Greensborough, a financial benefit of which account ought be taken. Conversely she has deposed on affidavit that she made contribution by way of meeting mortgage payments over a substantial period. There is a further allegation of dispute between the parties, namely whether the defendant entered into an agreement, verbally or otherwise, with the plaintiff whereby he would assign his joint interest in the property to the plaintiff. I need not be satisfied of any of these matters for the purposes of the present application. Again that is a matter for determination at trial. It is also said that the defendant, by way of contrast to the plaintiff, has had the benefit of obtaining a home that he can reside in himself, whereas the plaintiff has the disadvantage of living in a home in which she has a modest or confined interest and which is subject to a mortgage. Each of the parties makes allegation against the other that they have provided a home for one of the children and that these matters should be taken into account. Again these are matters to be determined at trial in assessing whether or not the plaintiff has any interest in the lump sum and, if so, the extent of that entitlement.

The fourth matter relied upon by the defendant is that it is said that if an order is made, ultimately it would be irreversible. It is said that the defendant has committed himself by way of purchasing a property and that that property has been utilised to provide a home for one of the children of the relationship. It is said that during this period the plaintiff has had the benefit of the jointly owned home. Again these are matters, in my view, that are properly considered at trial and they do not weigh in the exercise of the discretion, save that I can be satisfied that the plaintiff, on the basis of her affidavit, has at least an arguable case.

The fifth matter that is relied upon by the defendant is that it is said that the plaintiff's financial position or plight is of her own making. It is said that in so far as she has a lack of assets and a lack of resources, it arises from the fact that she has not worked very much or at all since 1989, whereas the defendant has, up until his period of resignation or redundancy, worked and made contributions. On the face of the evidence before me, I can be satisfied that the plaintiff at least has an arguable case that she has been a home-maker. Furthermore, it appears that she has worked part-time and, one way or another, she has managed financially to make contributions to the jointly owned asset by way of meeting some of the mortgage payments for the property.

Weighing all these matters up, I am satisfied that the financial position of both parties, when compared, demonstrate that potentially the plaintiff will suffer greater hardship if she is not given the opportunity to pursue her claim against the defendant than the hardship the defendant will suffer if the application is granted. More so and most significantly, I consider that the greatest hardship that the plaintiff in this case would suffer is if she is deprived of the opportunity to prosecute her claim against the defendant. If the plaintiff has a good case, and I am satisfied on the authorities that it is at least arguable, the plaintiff stands to suffer extreme hardship, being that of not having her claim considered and determined. On the other hand, if the plaintiff proceeds with her claim and fails, the defendant will have had no more than the angst and inconvenience of litigation. Weighing these matters up, the hardship, in my view, is far greater in so far as the plaintiff is concerned.

Accordingly I am satisfied that the plaintiff has fulfilled the test contained in s.282(2) of the Property Law Act, and accordingly the application succeeds.

The plaintiff have leave to apply for an order against the defendant pursuant to Part IX of the Property Law Act 1958.

The plaintiff institute her proceeding by way of writ to be filed and served on or before 4 October 1999.

The further directions in the proceeding be adjourned for mention before His Honour Justice Ashley in the Property Law List on a date to be fixed.

The costs of the application be costs in the cause (save for the costs order made on 6 September 1999).

At a glance

Court

Decision date

Before

Source

Judgment (26 paragraphs)

Parties