Property – Leave granted to proceed 26 years after divorce

In Ordway [2012] FMCAfam 624 (13 July 2012) the wife sought an order under s 44(3) FLA for leave to file property proceedings out of time. The parties married in 1969 and divorced in April 1986. The two children of the marriage remained living with the wife in the parties’ home of which the husband was sole registered proprietor. The husband, who repartnered in 1988, continued to meet the outgoings on the property and to support the wife and children, although he did use the property as security from time to time. The wife, who worked in the husband’s business from 1989 to 2010, made renovations to the property at a cost of $12,000.

Cole FM at paras 25-29 reviewed s 44(3) FLA which requires leave to be granted for the institution of property or maintenance proceedings more than 12 months after a divorce order has taken effect and s 44(4)(a) by which the court shall not grant leave unless it is satisfied that hardship would be caused to a party or child if leave were not granted. It was accepted that s 44(4)(b) (enabling leave to be granted for the filing of maintenance proceedings if at the end of the 12 month period – in this case April 1987 – the applicant would have been unable to support herself without an income tested pension, allowance or benefit) did not apply as para (b) was not inserted into the Act until 1 April 1988.

Cole FM at paras 30-40 examined case law relevant to s 44(4)(a), finding that the applicant would suffer hardship in that she “would, in effect, be left with nominal assets” (para 41). The husband ultimately conceded that the wife would suffer hardship but argued that she had given no adequate explanation for her delay. Cole FM, under the heading “Will the granting of leave enable the Court to do justice between the parties?” said at paras 43-44:

“A consideration of these issues requires me to have regard to, amongst other things, the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences to the parties of the grant or the refusal of the extension of time.

That would include a consideration of whether there is an adequate explanation for the delay and the prejudice, if any, that would be incurred by the party in allowing proceedings to proceed at this point in time.”

Cole FM from para 45 reviewed the evidence as to the delay in the institution of proceedings by the wife, including evidence of an unregistered agreement between the parties whereby the wife would have continued use and occupation of the home, a car and maintenance and the wife’s evidence that the husband had promised to convey title to her and that she was reluctant to jeopardise her employment by the husband. Cole FM concluded at paras 85-89:

“I have accepted her evidence that she did not wish to disturb the arrangements, however her failure to seek advice until 2009 remains unexplained save for her statement that she trusted the husband.

The evidence of the wife would support a conclusion that she did not wish to have a major dispute with the husband. It is obvious when considering the parties’ financial circumstances that there was a significant power imbalance.

She was able to continue to reside in the house and rely on the husband for limited financial support. When she subsequently became employed within his business, I accept that she had concerns that if she pushed the issue too far, she would lose her job.

She offers no explanation as to why she did not seek legal advice at that time and did not seek legal advice until 2009. I accept however, her understanding that she had an agreement with the husband and did not need to do so.

I also accept that neither party was willing to disrupt the status quo. I consider the explanation for the delay is made out and that upon matters being clarified in 2009, appropriate steps were taken.”

Cole FM then (from para 90) considered the evidence as to whether the granting of leave would prejudice the respondent, saying at paras 114-117:

“I would therefore find that the husband was always aware that his financial affairs with the wife had not been concluded.

At the very least, it is open to me and I would find that the wife had the impression or perception that the husband had agreed to transfer the property to her in due course. It was not until [solicitor] Mr B’s involvement in 2009 that it would appear that the husband did anything to dissuade the wife from that belief. Whether or not the parties had actually reached agreement to transfer the property is inconsequential, taking into account the fact that I consider that the husband was aware of the circumstances at all relevant occasions.

The arrangements as they then stood left him in a position that enabled him to, amongst other things, use the equity in the house to further his financial position and that of his second wife.

I do not accept that granting leave to the wife would prejudice the husband. This is not something that should come as a surprise to him as I consider he was aware of the unfinished business at all times.”

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