Case Note: Slocomb & Hedgewood [2015] FamCAFC 219 – Making an application for leave to proceed out of time
Overview
1. In the case of Slocomb & Hedgewood,[1] the Full Court (May, Ainslie-Wallace & Johnston JJ) overturned on appeal the primary judge’s refusal to grant leave to extend time to bring proceedings some 18 years out of time pursuant to s 44(3) of the Family Law Act (Cth) 1974 (the “FLA”).
Background and the decision at first instance
2. The husband and wife were married in 1989; separated in January 1994; and divorced on 1 September 1995. The Wife filed her application for property adjustment on 6 March 2013, some 18 years out of time.
3. The main asset of the parties was real property valued at $350,000 with a mortgage of $43,000 which the husband and wife owned as joint tenants and for which they were jointly liable under the mortgage. The husband continued to have the benefit of the house post-separation, ultimately living in it with his new wife. The husband paid outgoings, made improvements and also substantially reduced the mortgage.
4. After separation the husband paid some of the children’s expenses (who were at the time respectively aged four, three and less than two) for education and sport but overall made little contribution to the children’s financial needs.
5. As to her explanation for the delay, the wife explained that she represented herself on the divorce application and that her former solicitors did not inform her of the time limitation.[2]
6. At first instance, leave was not granted to proceed out of time because the primary judge concluded that the wife had not provided an adequate explanation for the 18 year delay in bringing proceedings; and that the husband would suffer a prejudice by reason of the contributions he made to the home in reliance that no claim had been made (or already informally agreed).[3] To that end, the primary judge held:
“… It would not be just to now require the sale of the property in which the husband, his wife and her children have resided for many years.” [4]
The Appeal
7. As to the elements for an application for leave to commence proceedings out of time, the Full Court adopted the well-known passage in Jacenko and Jacenko:[5]
“The applicant must establish three principal matters: first, a reasonable prima facie case for relief, had she instituted proceedings in time; secondly, that denial of the wife's claim would cause her hardship; and thirdly, an adequate explanation as to her delay.
That third requirement must now be read, subject to the decisions of the Full Court in Althaus and Althaus (1982) FLC 91-233; (1979) 8 Fam. L.R. 169, and Howard and Howard (1982) FLC 91-234; (1979) 8 Fam. L.R. 178 which indicate that in appropriate cases the degree of hardship to be suffered by the applicant may well outweigh an inadequate explanation of delay.
If those three elements are satisfied, the Court should further, in determining whether to exercise its discretion to grant relief, consider the question of prejudice which the respondent would suffer by reason of the delay in bringing the application.” [emphasis added]
8. The wife’s argument on appeal was that the primary judge had erred in the manner in which great significance had been applied to the Wife’s inadequate explanation for the delay. To that end, the wife made reference to the following passage from the authority of Carlon and Carlon:[6]
“...[I]t is in our judgment a correct statement of the law that while Parliament in sec. 44(4) has placed a fetter on the discretion of the Court, the Court itself should not and probably cannot do the same by laying down any strict principles such as that a party must give an adequate explanation for delay. Once hardship has been established in the sense referred to in Whitford (supra) then the Court is in the exercise of its discretion at large and should take into account all relevant facts including, if that be the case, that no or no satisfactory explanation has been given for delay. Such a position namely no or no satisfactory explanation for delay is no more than another factor which must be given appropriate weight in the exercise of discretion.” [emphasis added]
9. The Full Court agreed with the above principle of law by stating, “there is no doubt that the explanation for delay is no more than a factor to be considered in the circumstances of the case”.[7]
10. In overturning the primary decision, the Full Court concluded that although the wife would have a state based action available to her (presumably an application for the appointment of a statutory trustee), such an action would not ultimately have regard to her financial and non-financial contributions with respect to the children. In the premises, the prejudice to the wife in not granting leave to proceed out of time, outweighed the prejudice to the husband in granting leave to proceed. To that end, the Full Court held:
“[42] It is essential for the proper operation of a system of justice for time limitations to be imposed. In an application such as this the central consideration is that justice must be done between the parties (see Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479).
[43] In appropriate cases the interests of justice might overcome long delay and on occasions an inadequate explanation for the delay, which is only one factor to be considered in determining an application for leave pursuant to s 44(3) of the Act.
…
[47] In view of the lengthy time that had expired from the date of the divorce to the filing of the application, the judge was correct to consider the prejudice to the husband …
[48] Having accepted that hardship was demonstrated and that the wife had a prima facie case, the only prejudice to the husband was the possibility of a hearing in relation to property settlement where the parties’ main asset is jointly held and they have been divorced for 18 years. The conclusion of the judge in relation to delay demonstrated an error of law affecting the proper exercise of discretion. The prospect of the parties’ legal position remaining as it is seems unjust.
[49] That either of them could make an application to a State court does not ameliorate the hardship to the wife. In such an application, a State court could not exercise discretion to apportion the proceeds of sale of the home to the wife by taking into account her contribution to the children during and including post separation, and other relevant matters.
[50] Leave should be granted. The appeal should be allowed.” [emphasis added]
Conclusion
11. The authorities make clear that the Court must adopt a two-step process, as follows:
(a) the first question is whether the court is satisfied that hardship would be caused to a party or a child of the marriage if leave were not granted; and
(b) if hardship is established, the next question is whether the Court, in its discretion, should grant leave. The necessary matters for consideration in the exercise of that discretion are (non-exhaustively):
(i) the length of the delay;
(ii) the reasons for the delay;
(iii) the prejudice occasioned to the respondent by reason of the delay;
(iv) the strength on the merits of the applicant’s case;
(v) the degree of the hardship which would be suffered unless leave were granted; and
(vi) any other relevant consideration having regard to the facts of the particular case (e.g. the availability of alternative remedies or lack thereof).
12. In short, the absence of an adequate explanation for the delay will not necessarily be fatal to an application seeking to commence proceedings out of time. That is because the requirement of section 44(4) of the FLA is hardship. Once hardship has been established, the explanation for delay is only one of a number of factors which the Court ought to consider in the exercise of its discretion as to whether to grant leave or not.
13. Finally, in the words of the Full Court, the discretion conferred on the Courts by section 44(4) FLA, “should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within ayear from the decree insi”.
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[1] [2015] FamCAFC 219
[2] Ibid at paragraph [21].
[3] Ibid at paragraph [31].
[4] Ibid at paragraph [32].
[5] [1986] FamCA 25; (1986) FLC 91-776 per Nygh at [75,644]; cited at paragraph [43].
[6] (1982) FLC 91-272 at [77,533].
[7] [2015] FamCAFC 219 at paragraph [39].