Al v TW
[2014] WASCA 175
•19 SEPTEMBER 2014
AL -v- TW [2014] WASCA 175
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASCA 175 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:112/2013 | 19 AUGUST 2014 | |
| Coram: | BUSS JA NEWNES JA MURPHY JA | 19/09/14 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed Orders of magistrate set aside Order for fresh hearing before a different magistrate | ||
| B | |||
| PDF Version |
| Parties: | AL TW |
Catchwords: | Family law De facto relationship Whether magistrate erred in finding respondent's financial circumstances had changed Family Court Act 1997 (WA), s 205ZL Turns on own facts |
Legislation: | Family Court Act 1997 (WA), s 205ZL |
Case References: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : AL -v- TW [2014] WASCA 175 CORAM : BUSS JA
- NEWNES JA
MURPHY JA
- Appellant
AND
TW
Respondent
ON APPEAL FROM:
Jurisdiction : FAMILY COURT OF WESTERN AUSTRALIA
Coram : SUTHERLAND M
Citation : [2013] FCWAM 80
File No : PTW 445 of 2011
Catchwords:
Family law - De facto relationship - Whether magistrate erred in finding respondent's financial circumstances had changed - Family Court Act1997 (WA), s 205ZL - Turns on own facts
Legislation:
Family Court Act 1997 (WA), s 205ZL
Result:
Appeal allowed
Orders of magistrate set aside
Order for fresh hearing before a different magistrate
Category: B
Representation:
Counsel:
Appellant : Mr M R Berry
Respondent : In person
Solicitors:
Appellant : O'Sullivan Davies Lawyers
Respondent : In person
Case(s) referred to in judgment(s):
Nil
1 JUDGMENT OF THE COURT: This is an appeal from an order of Magistrate Sutherland, exercising the jurisdiction of the Magistrates Court under pt 5A of the Family Court Act 1997 (WA) (the Act). By that order the magistrate discharged an earlier order of the Magistrates Court that the respondent pay spousal maintenance in the sum of $655 per week for five years to the appellant and also discharged all outstanding arrears of spousal maintenance owing pursuant to the earlier order. The appellant contends that her Honour was in error in doing so.
2 An appeal from the decision of the magistrate lies to this court pursuant to s 210A of the Act. The appellant, however, requires an extension of time to commence the appeal, as it was filed out of time. The decision of the magistrate was delivered on 7 August 2013 and the appellant was therefore required to file an appeal notice by 28 August 2013. The appeal notice was not filed until 3 October 2013. The application for an extension of time to appeal was referred to the hearing of the appeal.
Background
3 The parties commenced living together in a de facto relationship in May 2002. The relationship came to an end in February 2009. There was one child of the relationship, born on 16 November 2007. Following the parties' separation the respondent resided in Karratha. From April 2009 to April 2011, the appellant and the child resided overseas and since April 2011 have resided in Perth.
4 The appellant commenced an application for property settlement and spousal maintenance on 31 January 2011. The respondent did not participate in the proceedings and the appellant was granted leave to proceed to trial on an undefended basis. At the trial, the magistrate accepted the appellant's evidence (relevantly) that:
1. The respondent was employed by B Co in Karratha on an income of approximately $90,000 per annum plus substantial benefits, including his costs of accommodation and utilities.
2. The appellant had not sought an assessment of child support from the Child Support Agency as the respondent was voluntarily paying her $125 per week for the support of their child.
3. So far as the appellant was aware, the respondent had not 're-partnered' and had no obligation to financially support any other person.
5 The magistrate found that the respondent was in full-time employment and after taking into account the sum of $125 per week he was paying for the child, he had a net available income of $1,350 per week. There was no evidence that his income or work arrangements were likely to change. Her Honour concluded that the respondent's reasonable expenses amounted to $655 per week. The magistrate found that an appropriate amount of spousal maintenance was the sum of $655 per week and that the respondent had the capacity to pay that amount.
6 On 24 May 2011, the respondent was ordered to pay the appellant by way of spousal maintenance the sum of $655 per week for a period of five years.
7 On 6 September 2012, the respondent applied, amongst other things, for the spousal maintenance order to be discharged or alternatively to be varied to 'a much lower and more manageable amount'. The application was opposed by the appellant.
The relevant statutory framework
8 Section 205ZL(1) of the Act provides (relevantly):
(1) In proceedings with respect to the maintenance of a de facto partner, if there is in force an order with respect to the maintenance of that person by the de facto partner of that person made by a court, the court may, by order -
(a) discharge the order if there is any just cause for so doing;
…
(d) subject to subsection (2), vary the order -
(i) so as to increase or decrease any amount ordered to be paid; or
(ii) in any other manner.
(2) A court must not make an order increasing or decreasing an amount ordered to be paid by an order unless it is satisfied -
(a) that, since the order was made or last varied -
(i) the circumstances of a person for whose benefit the order was made have so changed; or
(ii) the circumstances of the person liable to make payments under the order have so changed; or
(iii) in the case of an order that operates in favour of, or is binding on, a legal personal representative, the circumstances of the estate are such,
as to justify doing so.
10 In an affidavit filed in support of the application, the respondent referred to four significant changes in his financial circumstances since the spousal maintenance order was made. They were as follows.
11 First, he had ceased his employment with B Co in mid-2011 to travel to Sydney. After his return in August 2011, the respondent had taken up employment with S Co as a yard hand and driver. He said he had a 'net income' of approximately $2,400 per fortnight after deduction of $377.93 per fortnight for child support and $116 per fortnight in reduction of accrued arrears of spousal maintenance of $28,844.92. The respondent annexed to the affidavit his pay slip for the fortnight ending 12 April 2013. It will be necessary to come back to the pay slip.
12 Second, the respondent had since entered into a de facto relationship. That appears to have occurred in or about September 2011. At the time the respondent swore the affidavit, he was living with his partner and her three children from a previous relationship in housing obtained through the Department of Housing at a rental of $600 per week. The respondent said his partner was not in employment and he fully supported her financially. (I note there was no evidence as to whether the respondent's partner received child support for her children from their father.)
13 Third, after the trial the appellant had sought an assessment of child support by the Child Support Agency, as a result of which the respondent was required to pay child support of $377.96 per fortnight ($188.98 per week), instead of the $125 per week he had been paying at the time of trial.
14 Fourth, the respondent and his partner owed $13,200 in outstanding rent for a property they had previously occupied, in addition to the arrears of spousal maintenance the respondent owed.
15 The respondent also filed a financial statement, pursuant to r 13.05 of the Family Law Rules 2004 (Cth), adopted by r 13 of the Family Court Rules 1998 (WA) in respect of the jurisdiction of the Magistrates Court under pt 5A of the Act. In the financial statement, the respondent stated that his pre-tax income was $1,525 per week. An amount of $137.08 per week was deducted for superannuation and he had an amount of $206,079.68 by way of superannuation entitlements. He said he had 'minimal' savings and no assets beyond household furniture he valued at $5,000. In addition to rent of $600 per week, the respondent assessed his average household expenses to be $770 per week, of which he attributed $114 to his partner, $236 to her children and $100 to himself. The balance of those expenses, predominantly household utilities and motor vehicle expenses, were not allocated.
16 At the hearing, the appellant's counsel elected not to cross-examine the respondent. The respondent was asked by the magistrate to clarify some entries on his pay slip, but there was otherwise no oral evidence. The appellant was not called and did not seek to rely on her affidavit filed in opposition to the application.
The findings of the magistrate
17 The magistrate referred to each of the changes in the respondent's circumstances referred to in his affidavit, namely:
1. his change of employment and the diminution in his income;
2. he was now living in a de facto relationship and fully supporting his partner;
3. he had been assessed to pay child support of approximately $189 per week; and
4. his expenses had increased significantly as a result of the changes in his employment, new living arrangements, and increased child support obligations.
18 In relation to the respondent's income, her Honour observed that there was a discrepancy between the taxable income of $1,525 per week stated in the respondent's financial statement and the pay slip attached to his affidavit, which revealed that he had an income for the year to 12 April 2013 of $82,298. Her Honour said:
Notwithstanding the apparent contradiction in [the respondent's] evidence, I propose to accept the estimate contained in [the respondent's] financial statement as to do otherwise would ignore the fact that in calculating [the respondent's] taxable income, he may well have valid deductable expenses from the gross income received by him. I accept that his total gross income is accordingly $1,525 per week [10].
19 Her Honour noted that the respondent estimated his total personal expenditure at approximately $2,097 per week as follows:
|
|
| $387 |
| $137 |
| $600 |
| $14 |
| $189 |
| $770 |
| $2,097 |
20 It is evident that her Honour accepted that the respondent had nominal savings and no assets beyond household furniture. Her Honour also accepted that the respondent and his partner owed $13,200 in outstanding rent for a property they had previously occupied, and the respondent owed $28,850 in relation to outstanding child support and spousal maintenance arrears. Her Honour noted there was no evidence to suggest that the respondent would be able to access his superannuation entitlements of $206,079.68 before retirement.
21 Her Honour concluded that since the spousal maintenance order was made the respondent's income had 'marginally decreased' and his reasonable expenses had substantially increased, as a result of:
(i) having to meet his own accommodation costs and the cost of utilities;
(ii) forming a de facto relationship with his current partner and financially supporting her; and
(iii) the increase in the payments for his child arising from the Child Support Agency assessment sought by the appellant.
22 Whilst her Honour found that the respondent did not have an obligation to financially support his partner's three children, even when that cost was deducted from his weekly expenses those expenses still exceeded his taxable weekly income of $1,525. Her Honour further noted that even if the costs of supporting his partner were also removed the position remained the same. With both amounts deducted from his weekly expenditure of $2,097, it amounted to $1,747. In addition, the respondent and his partner had the outstanding liability for rental arrears and the respondent had a significant liability for arrears of child support and spousal maintenance.
23 The magistrate concluded that the spousal maintenance order should be discharged. Her Honour further found that it would not be appropriate to require the respondent to discharge the outstanding spousal arrears or to leave the appellant having to repay any spousal maintenance arrears she had received. Her Honour therefore ordered (relevantly) that the spousal maintenance order be discharged and all outstanding arrears of spousal maintenance pursuant to the orders of 24 May 2011 be discharged.
24 The appellant appeals against those orders.
Grounds of appeal
25 The grounds of appeal were as follows:
1. The learned Magistrate erred in law by failing to give any or any adequate or sufficient reasons for her decision.
2. The learned Magistrate erred in law by failing to use the best evidence available in relation to the Respondent's income.
Particulars
a. The Magistrate had before her evidence of the Respondent's income in the form of his assertion in his Form 13 Financial Statement, and evidence of his income in the form of a payslip annexed to his Affidavit filed 29 May 2013.
b. The Magistrate preferred the evidence of the Respondent's income contained in his Financial Statement.
3. The learned Magistrate erred by making an error of fact in relation to the Respondent's reasonable expenses.
Particulars
a. The learned Magistrate included a superannuation contribution of $137 per week as an expense. This amount is the employer superannuation contribution shown in the pay slip attached to the Respondent's affidavit filed 29 May 2013.
4. The learned Magistrate erred in considering the Respondent's obligation to pay arrears of spousal maintenance and child support as a basis for the discharge of the Respondent's future obligation to pay maintenance and to discharge the arrears owing.
Particulars
a. The learned Magistrate made the following finding: 'I am persuaded that [the Respondent's] overall financial position has so significantly deteriorated that the 2011 order should be discharged' (para 23)
b. The learned Magistrate made that finding on the following basis (para 23):
i. The Respondent and his partner have an outstanding liability in relation to rental arrears.
ii. The Respondent has a significant liability to the Child Support Agency in relation to child support and spousal maintenance arrears.
iii. The Respondent has only nominal assets.
c. The learned Magistrate then also made an order that the Respondent's obligation to pay arrears of spousal maintenance be discharged, without assessing the impact of that order on the earlier finding that the ongoing maintenance obligation be discharged.
The disposition of the appeal
Ground 2
27 As it was developed in the appellant's submissions, this ground involved, in substance, a contention that the magistrate had erred in finding that the respondent's income before tax was $1,525 per week. It was submitted that, based on the pay slip annexed to the respondent's affidavit, her Honour should have found that the respondent's weekly income substantially exceeded that figure.
28 The most cogent evidence of the respondent's income was undoubtedly the pay slip, which had been provided by his employer and which the respondent produced as evidence of his income. There are two obvious discrepancies between the figures in the pay slip and the taxable income of $1,525 per week (or $79,300 per annum) accepted by the magistrate.
29 First, as mentioned above, the pay slip records the respondent's taxable income for the year to 11 April 2013 to be $82,298.47. It is to be inferred that, in accordance with ordinary accounting practice, the 'year' is the financial year commencing 1 July 2012. That constitutes an average taxable income of $2,007.28 per week for that 41 week period. In his affidavit, the respondent said that he had 'recently' been appointed a permanent employee of S Co, as a result of which his hourly rate of pay had dropped from $35 per hour to $30 per hour. That may account for some diminution in his weekly income from the average taxable income of $2,007.28 per week but it falls well short of accounting for a taxable income of $1,525 per week.
30 The magistrate found that the respondent 'may well have valid deductable expenses from the gross income received by him [10]' which accounted for the difference. That, however, with respect, was conjecture. There was no evidence of any relevant deductions and nothing from which they might be inferred.
31 Second, the pay slip records his actual taxable income for the fortnight ending 11 April 2013 as $4,841.70 ($2,420.85 per week). That is made up of three elements:
1. 76 hours of work at the respondent's ordinary rate of $30 per hour, plus 35.9 hours overtime at $45 per hour and 2.4 hours overtime at $75 per hour, totalling $4,075.50;
2. an allowance of $650 per fortnight, which the respondent understood to be a housing allowance; and
3. a 'District' allowance of $116.20 per fortnight, which the respondent was unable to explain but did not dispute that he received.
32 In his affidavit the respondent does not explain how he arrived at a taxable income of $1,525 per week, but it would appear to be based on his income for 76 hours work per fortnight (a 38 hour week) at $30 per hour and the allowances of $650 and $116.20, a total of $3,046.20 per fortnight or $1,523.10 per week. In other words, the respondent has disregarded the income he earns from working overtime.
33 There was no evidence that the respondent normally worked a 38 hour week and that overtime work was unusual. On the contrary, in his affidavit the respondent referred to 'averaging 45-50 hours [work] for 6 days a week' [5]. There was therefore no basis for disregarding income received from overtime work in determining the respondent's overall income.
34 On the evidence, there was, with respect, no proper basis upon which the magistrate could conclude that the respondent's pre-tax income was $1,525 per week. On the basis of the figures contained in the pay slip, it was significantly greater than that.
35 This ground of appeal must be allowed.
Ground 3
36 The magistrate found that the respondent's reasonable expenses were $1,861 per week, being the $2,097 claimed by the respondent less the $236 he expended on his partner's children [22]. Her Honour included in those expenses of $1,861 an amount of $137 per week for superannuation payments. That was based on the respondent's financial statement where, against the printed item 'Superannuation' in the standard list of weekly personal expenditure, the respondent had inserted the sum of $137.08. However, the respondent's pay slip shows precisely that amount, the sum of $274.16 per fortnight, as a superannuation contribution made for the benefit of the respondent by his employer. Neither in the respondent's financial statement nor in his affidavit is there any suggestion of a separate, personal superannuation contribution made by the respondent.
37 On the evidence the only reasonable inference is that the amount stated in the respondent's financial statement is a reference to the amount paid by his employer. Accordingly, there was, with respect, no basis upon which the magistrate might properly have concluded that the payment was an expense incurred by the respondent.
38 This ground of appeal must be allowed.
Ground 4
39 As counsel for the appellant observed, the outcome on grounds 2 and 3 of the appeal will be relevant to the disposition of this ground. In the circumstances, we do not consider it is a ground this court should attempt to determine on the material before us. As the magistrate has erred in her findings as to the respondent's income and expenses, it will become necessary for fresh findings to be made as to both. The respondent's overall financial position may then be significantly different. That will be relevant to the issues which arise under this ground.
40 In addition, the decision of the magistrate was delivered some 13 months ago and there may have been material changes in the financial position of one or both of the parties. It is appropriate that the Magistrates Court have the opportunity to consider whether the parties should be permitted to adduce further evidence in that event.
Notice of contention
41 The respondent filed a notice of contention. In it, the respondent stated that he did not believe he should be required to pay spousal maintenance as the appellant was fit and healthy with cooking experience and a history of working as a chef.
42 Suffice it to say that the respondent adduced no admissible evidence before the magistrate in support of such a contention. There was therefore nothing before her Honour which would have justified an order relieving the respondent from any liability to pay spousal maintenance on that basis.
43 We would dismiss the notice of contention.
Conclusion
44 We would allow the appeal and set aside the orders made by the magistrate. Regrettable though it is in view of the time and cost involved, the only appropriate course is to order a fresh hearing before a different magistrate.
45 We would therefore make orders as follows:
1. the time within which the appeal may be commenced be extended to 3 October 2013;
2. the appeal be allowed;
3. the notice of contention be dismissed;
4. the orders of Magistrate Sutherland made on 7 August 2013 be set aside;
5. there be a fresh hearing of the respondent's application, and any other application and response heard in conjunction with the respondent's application, before a different magistrate.
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