Dalrymple and Dalrymple
[2009] FMCAfam 931
•3 September 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DALRYMPLE & DALRYMPLE | [2009] FMCAfam 931 |
| FAMILY LAW – Application to discharge award of spousal maintenance made in December 2004 – whether just cause to discharge order – whether payer’s financial circumstances have changed – what is proper and just. |
| Family Law Act 1975, ss.72, 74, 75(2), 83 |
| Lutzke & Lutzke (1979) FLC 90-714 Smith & McKinnon (unreported) ML5510 of 1993 delivered 22 January 1996 |
| Applicant: | MR DALRYMPLE |
| Respondent: | MS DALRYMPLE |
| File Number: | ADC 2406 of 2008 |
| Judgment of: | Brown FM |
| Hearing dates: | 2 & 13 July 2009 |
| Date of Last Submission: | 13 July 2009 |
| Delivered at: | Adelaide |
| Delivered on: | 3 September 2009 |
REPRESENTATION
| Counsel for the Applicant: | In Person |
| Counsel for the Respondent: | Mr Hemsley |
| Solicitors for the Respondent: | Graeme Hemsley |
ORDERS
The order for spousal maintenance made on 14 December 2004 whereby the husband was to pay spousal maintenance to the wife is discharged together with all arrears of maintenance arising thereunder.
All applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Dalrymple & Dalrymple is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 2406 of 2008
| MR DALRYMPLE |
Applicant
And
| MS DALRYMPLE |
Respondent
REASONS FOR JUDGMENT
Introduction
This case relates to an application to discharge a spousal maintenance order, which was made on 14 December 2004 by Mead FM.
The parties to the proceedings are Mr Dalrymple “the husband” and
Ms Dalrymple “the wife”.The parties married [in] 1989. The marriage between them was finally dissolved on 4 January 2003. It seems to be common ground between the parties that the separated in early 1997.
The parties have one child together. She is [X] born [in] 1990. [X] is a university student. Currently, she is in the second year of a four year [omitted] degree.
On 29 December 2003, the wife commenced proceedings in this court seeking an award of spousal maintenance for herself. Prior to this date, the parties had entered into a number of informal agreements regarding the husband providing recurrent financial support to the wife.
The proceedings were resolved on 14 December 2004 by a number of consent orders which were made by Mead FM. Pursuant to these orders:
·The husband agreed to pay the wife the sum of $242.00 per week by way of spousal maintenance;
·The amount to be paid was to be reviewed “if the husband’s wage increases or decreases from his taxable income for the year ending 30 June 2004 …”;
·The amount was to subject to CPI increases and a two percent increase each year from 1 July 2005 onwards.
It is this order which the husband seeks to discharge. It is his position that his financial position has deteriorated markedly since the orders were made and therefore circumstances exist which justify the discharge of the order pursuant to the provisions of section 83(2) of the Family Law Act 1975.
The husband has not paid any amount of spousal maintenance since mid-2007. At some stage, the order of 14 December 2004 was lodged with the Child Support Agency for collection purposes.
The husband commenced the proceedings to discharge the order of December 2004 on 18 June 2008. Currently, he owes a considerable amount in arrears pursuant to the order. The amount concerned is in the vicinity of $30,000.00.
The wife resists the order for discharge. It is her case that she is unable to support herself adequately, in a financial sense, because of poor health which restricts her employment capacity and because of her responsibility to support [X], whilst she remains at University.
These proceedings are directed to resolving this dispute between the parties.
The applications
The husband seeks orders that would discharge the order for spousal maintenance made in the wife’s favour on 14 December 2004. Further he seeks the discharge of any arrears of maintenance arising under that order.[1]
[1] See husband’s application filed 18 June 2008
The wife seeks the discharge of the husband’s application.[2] Both parties seek that the other pay his or her costs.
[2] See wife’s response filed 2 April 2009
Background
The husband was born [in] 1956. The wife was born [in] 1957.
Both parties assert that their current level of health restricts the amount and type of work which each can undertake. Both the husband and wife have supplied medical reports from doctors in support of their respective positions.
None of the doctors concerned has provided sworn evidence in the case nor have their opinions been subject to any detailed scrutiny through cross examination. As such, it seems to be common ground between the parties that neither of them can be regarded as having robust good health.
In addition, without intending any disrespect to either of them and notwithstanding the demographic pressures within the Australian workforce, it is, in my view, axiomatic that both parties are of an age – their early fifties – when it is notoriously difficult for citizens to obtain permanent and well remunerated employment within the Australian community.
The wife has some qualifications in [the financial industry]. More recently, she has been employed in performing [administrative duties].
In this role, she uses a computer keyboard and mouse. In 1999 and 2000, she began to display symptoms of carpal tunnel syndrome in her right arm. She has also been diagnosed with degenerative changes in her left thumb.
In 2007, the wife consulted an occupational physician, Dr B, who opined as follows:
“As a result of these conditions [degenerative changes at the left first carpometacarpal and bilateral carpal tunnel syndrome, moderately severe on the right], you are partially incapacitated for work. There is a limit to the number of hours of keyboard work which you will be able to perform without aggravating your carpal tunnel syndrome, or the degenerative changes in your thumb. I understand you are managing 15-20 hours of computer work a week, and this is probably about your limit. You are unfit for frequent, forceful or prolonged grasp, lifting over five kilograms, or work requiring frequent wrist movement to the limit of range.”[3]
[3] See report of Dr B dated 11 January 2009 being annexure MD1 to the wife’s affidavit filed 2 April 2009.
At the present time, the wife is working [in the financial industry]. She is working around 30 hours per week and earning $35,984.00 gross per annum. It is her position that this workload is unsustainable in the long term because of her injuries and can only result in her physical deterioration.
The wife’s case is that, since the husband withdrew spousal maintenance payments in May of 2007, she has borrowed around $23,000.00 from her oldest adult child, who lives in Singapore, in order to supply her and [X]’s living expenses.
The husband’s financial circumstances are complex. He has been employed as [occupation omitted]. He was significantly involved in a project to subdivide land at [L] for residential purposes. He is a director of a number of companies, which have been involved in property development and also the operation of a unit trust through which investors have been able to invest in development projects.
The most recent project in which he has been involved concerns the purchase of a partially developed marina property on the River [B] near [W] on behalf of investors who hold units in an investment trust. It is Mr Dalrymple’s case that he personally does not hold any of the units involved.
It is the husband’s position that, due to the drought affecting the
River [B], the marina and other enterprises related to it are not operating and, as such, the marina is not generating any income for its owners.Mr Dalrymple also deposes that some blocks of land at the marina, suitable for residential accommodation, have been sold but the two most significant parcels of land relating to the development – the marina itself and a kiosk and land which is suitable for the construction of a tourist village – remain unsold, although on the market.
Mr Dalrymple’s position is that he personally holds no definable legal interest in the development nor do any corporate entities which he himself controls. He concedes that he has been the guiding hand and genius of the enterprise, on behalf of the various investors who hold units in the unit trust, the trustee of which is a company [A] Pty Ltd, of which he is a director. However, he asserts he personally does not hold an investment unit.
In the past, Mr Dalrymple concedes that the various unit holders have paid him a salary for his services, which have related to the development of the land in question, particularly gaining the necessary local government consents and planning approvals required.
In addition, he and his current wife, Ms D have derived an income from operating the kiosk at the marina. A company [M] Pty Ltd has been the corporate entity operating the kiosk business. Mr Dalrymple has been a shareholder and director of this company.
However, Mr Dalrymple asserts that due to the stall of the sale of the remaining portions of land relating to the marina, he is no longer receiving any remuneration from the investors in the marina project and, due to the drought, the kiosk has been closed.
However, it remains Mr Dalrymple’s position that the marina project remains a fundamentally good investment. It was purchased for a competitive price in 2004 and some preliminary improvements have been made to it, particularly the construction of an access road. These improvements have improved the properties’ value.
As such, Mr Dalrymple is confident that the remaining plots of land, at the marina, can be sold at a considerable profit to some individual or entity wishing to utilise its potential as a tourist resort with direct access to the lakes of the lower River [B].
The difficulty is that the marina is “high and dry”. Boats cannot access it. Accordingly, until water returns, the marina cannot fulfil its potential and only a fool would buy it.
Mr Dalrymple’s evidence is that ten years of good rain are needed to fill the marina. Given what he understands about expert predictions for rainfall in the district concerned, he is not sanguine that there will be such rains. However, there is a prospect government will intervene and construct a weir, which will effect the level of water in the lower lakes of the [B] River system.
If the weir is constructed, there is the likelihood of water being gradually returned to the marina through human intervention. If this occurs, the likelihood is the property will become attractive to potential developers, who will see its obvious tourist potential.
No firm decision has been made about the construction of the weir. The decision is subject to approval by both the South Australian and Commonwealth Governments. Mr Garrett, the Commonwealth Environment Minister would have to approve the project.
I think I can take judicial notice of the fact the question of water allocation in the lower [B] and the environmental consequences of such allocations are vexed, both in political and scientific terms.
As such, I have not been provided with any firm evidence as to when the decision will be finally made and the qualifications to which it may be subject. Mr Dalrymple hopes the decision is imminent. Even if the decision for a weir to be built is made soon, I do not know how long it will take for the marina to be replenished with an adequate level of water.
Until the weir is constructed or there are heavy and protracted falls of rain, which appears unlikely, the marina will be a facility which cannot service any marine craft whatsoever, no matter how small. Its pontoons and decking will remain on the dry lake bed.
Mr Dalrymple concedes that he has committed too much of his time and effort to the marina project to walk away from it now empty handed. It is his position that the various holders of the investment units concerned are under no legal obligation to pay him any moneys, if and when the marina sells. However, Mr Dalrymple believes that the investors concerned will hold themselves morally obliged to recompense him, in some way, for his as yet unrewarded efforts over the past four or five years.
It is Mr Dalrymple’s position that he is likely to receive the sum of $360,000.00, from the unit holders, when and if, the marina sells. What are the implications of the receipt of this sum, by Mr Dalrymple, for taxation purposes, is unclear to me. It is also Mr Dalrymple’s position that a significant portion of the sum will be consumed by debts relating to the development of the marina project.
In 2005, [A] Pty Ltd purchased a paddlewheel riverboat, the [C].
Mr Dalrymple deposes that the [C] was purchased with the intention of it being a tourist attraction at the marina. However, with the lack of water at [W], it has been relocated to [B], where it is used to operate tourist cruises on the river there.It is Mr Dalrymple’s case that the “[C]” is his and his wife’s only source of income. Mr Dalrymple is the master of the vessel. Ms D is the cook. Mr Dalrymple has deposed that he does not draw a regular wage from the business, which is showing some promise but has been badly hit by the drought.
Mr Dalrymple categories the duties he performs on the [C] as being “light”. He controls the vessel’s wheel and makes a commentary to any passengers onboard. He holds the necessary tickets to operate the vessel. It is Mr Dalrymple’s evidence that he is finding it increasingly difficult physically to operate the [C]’s wheel because of the weight of the vessel. However, the financial constraints on the business mean he cannot afford to hire a replacement captain.
Mr Dalrymple has qualifications as an [omitted]. In the past, he has operated [businesses omitted] but has not done so for many years. He does not believe he could return to this type of work, particularly as his skills are outmoded.
Mr Dalrymple concedes that he is qualified to be either a master or mate of another paddle steamer on the River [B]. However, it is his position that this is not a realistic possibility, at present, because of his physical limitations and the fact that other tourist vessels on the river are also struggling, due to the protracted drought.
Mr Dalrymple has provided a medical report from his general medical practitioner, Dr G. Dr G has diagnosed Mr Dalrymple as suffering from hypertension, chronic lung disease and chronic back and right knee problems. In his opinion, Mr Dalrymple is only able to work up to four hours per day.[4] Mr Dalrymple is currently working many more than four hours per day. However, his duties on the [C] require him to remain seated and do not involve any heavy lifting.
[4] See medical report of Dr G dated 25 November 2008 being annexure B to the husband’s affidavit filed 17 December 2008.
During the course of his evidence, Mr Dalrymple stated that he takes five different types of medication each day. It is his case that stress and worry exacerbate his high blood pressure. It is his position that he has been constantly worried about his financial circumstances, particularly those which relate to the sale of the marina.
After the parties separated, they negotiated a settlement of matrimonial property issues. At the time, there were few, if any, assets available to be divided between them. The only relevant financial resource was the husband’s accumulated and future entitlements to superannuation, which was modest in value.
The property proceedings arose prior to the inauguration of Part VIIIB of the Family Law Act, which deals with the division of spousal superannuation interests. As such, it was not open to the court to make any “splitting” order in respect of the husband’s superannuation.
In these circumstances, the parties agreed that a percentage of the husband’s superannuation would be transferred to the wife, when the superannuation vested in his hands.
It is the wife’s case that she has never received any such sum and she believes that the husband has rolled over the superannuation concerned into another fund, which is self managed by him. This has heightened the wife’s perception that the husband has behaved inappropriately towards her, so far as financial matters are concerned, including the payment of spousal maintenance.
The husband does not accept that this is so. It is his case that he has behaved honourably, both so far as the wife is concerned but also [X]. In this regard, he points to two previous informal maintenance agreements he reached with the wife in December of 2002 and August 2003.
These agreements dealt with the provision by Mr Dalrymple of financial support for both the wife and [X]. On this basis,
Mr Dalrymple asserts that he is not attempting to shirk his financial responsibilities for his former wife and now adult child. Rather, it is his position that, due to his current circumstances, his financial resources are now exhausted and he can no longer provide financial support to the wife.Mr Hemsley, the wife’s counsel, in closing submissions conceded that his client had been unable to locate a “pot of gold”, so far as
Mr Dalrymple’s current financial circumstances are concerned. However, it is Mr Hemsley’s position that his client is entitled to a share of the husband’s prospective financial gain, if and when, the marina is sold.To this end, Mr Hemsley argues that it would not be fair to his client for the current arrears of maintenance to be discharged or for the order of 14 December 2004 to be either otherwise varied or ended. Rather, he contends that, given her significant financial needs, Ms Dalrymple is entitled to a pro-rata share in the sum due to Mr Dalrymple, when it comes from the sale of the marina, as it represent deferred wages on Mr Dalrymple’s part.
These proceedings are directed to resolving these issues between the parties. In these reasons for judgment, findings of fact are made on the balance of probabilities, following my observations of the witnesses concerned and my consideration of any relevant documents.
The legal principles to be applied
Section 83 of the Family Law Act 1975 deals with the discharge, potential suspension or variation of a spousal maintenance order.
The court may discharge such an order if there is “any just cause for so doing” [section 83(1)(c)].
In addition, a spousal maintenance order may be suspended, either wholly or in part, until a specified time or the occurrence of some specified event [section 83(1)(d)].
Accordingly, in this case, it is theoretically open to the court to suspend the order for spousal maintenance until the marina has been sold and Mr Dalrymple receives any payment as a result.
The Family Law Act does not contain a definition of “just cause”. However, it is clear that the expression must be interpreted within the context of the provisions of the Act as a whole, particularly the provisions of Part VIII, which deals with property, spousal maintenance and maintenance agreements.
In Lutzke & Lutzke[5], Lindenmayer J said as follows:
“… the Act is silent as to what may constitute “just cause” for the discharge of an order. In my opinion, however, the words “just cause” are not used in any broad general sense, nor are they intended to import any abstract notions of justice, “palm tree” or otherwise into the determination of applications for discharge.
In my opinion those words must be interpreted in the context of the Act as a whole, and in particular with regard to the other specific provisions of the Act which relate to maintenance. Thus a “cause” for the discharge of an existing maintenance order will be a “just cause” only if, having regard to the other provisions of the Act, particularly those relating to maintenance, it can be said that it is “right” or “proper” that the order should be discharged.”
[5] See Lutzke & Lutzke (1979) FLC 90-714 at 78,832
In this regard section 83(7) is relevant. In both the discharge, variation and suspension of a maintenance order, the court is directed to have regard to the provisions of section 72 and 75 of the Act, which pertain to the right of a spouse to maintenance and the matters to be taken into account in making such an order.
Section 72 deals with the right of a spouse to maintenance and reads as follows:
“S.72 (1) A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).”
Given the factual basis for this case, the relevant matters referred to in section 75(2) are likely to be the following:
a)the age and state of health of each of the parties;
b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
d)commitments of each of the parties that are necessary to enable the party to support:
i)himself or herself;
ii)a child or another person that the party has a duty to maintain;
g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration.
Pursuant to section 74, the court is directed to make whatever order, relevant to the maintenance of a party to a marriage, which it considers “proper”.
The Full Court of the Family Court in Bevan & Bevan[6] determined that the approach to be taken in respect of applications for spousal maintenance involved a four step process as follows:
a)a threshold finding under s.72;
b)consideration of s.74 and s.75(2);
c)no fettering principle that a pre-separation standard of living must automatically be awarded where the respondent’s means permit;
d)discretion exercised in accordance with the provisions of s.74 with “reasonableness in the circumstances” as the guiding principle.
[6] Bevan & Bevan (1995) FLC 92-600 at 81,981-2
Accordingly, in determining whether to discharge the order for spousal maintenance, I must be satisfied that it is proper to do so. In considering this issue, I must make some assessment of the financial circumstances of both parties, particularly whether the wife is able to support herself adequately because of her current level of physical or mental incapacity to undertake appropriate gainful employment.
Pursuant to section 83(2) before varying an order for spousal maintenance, either in terms of increasing or reducing the amount previously ordered to be paid, the court must be satisfied as to one of the following:
a)There has been a change of circumstances for one of the parties concerned;
b)There has been a change of the cost of living;
c)In the case of a consent order, that the amount ordered to be paid is not proper or adequate; or
d)Material facts were withheld from the court.
The evidence
The husband relied on the following documents:
i)An affidavit of himself filed 18 June 2008;
ii)A statement of his financial circumstances filed 18 June 2008;
iii)A further affidavit of himself filed 17 December 2008;
iv)Two affidavits of himself filed 30 June 2009.
At the outset of these proceedings, the husband was represented by solicitors. I accept his evidence that his financial circumstances now preclude him from being legally represented and through financial necessity he is now self represented.
The major evidentiary controversy in this case has concerned the husband’s interest in [A] Pty Ltd, [W] Pty Ltd and [M] Pty Ltd, as well as the Unit Trust related to those corporate entities.
The last two affidavits filed by Mr Dalrymple relate to these various companies. These affidavits were prepared by Mr Dalrymple himself. Attached to one of these affidavits are a number of photographs of the marina itself indicating the current dearth of water there when compared to 2004.
The wife relied on the following documents:
i)An affidavit of herself filed 2 April 2009;
ii)A statement of her financial circumstances filed 2 April 2009.
Mr Dalrymple’s financial affairs are complicated. However, I do not think that he has organised his affairs with a view to obfuscation or to mask his true financial position. In general terms, I found
Mr Dalrymple to be a truthful witness, who attempted to tell the truth about his current financial circumstances.In this regard, the concession made by Mr Hemsley that there is no “pot of gold” at Mr Dalrymple’s disposal is a significant one. I accept that Mr Dalrymple does not currently have a reliable stream of income and does not have at his disposal assets of significant worth.
I also accept that Ms Dalrymple is a truthful witness. There can be no doubting that she is a person of significant financial need, who has a limited capacity to support herself financially. In this regard,
Mr Dalrymple chose not to challenge the medical evidence on which his former wife relies.Similarly, Mr Hemsley did not assert that Mr Dalrymple was feigning his current medical difficulties and so had a greater capacity to earn an income than was disclosed in his evidence.
In this case, it is my finding that both parties have significant and permanent medical issues, which act as impediments to their respective ability to gain employment. In addition, both parties are of an age when it is notoriously difficult to obtain full-time employment, even in times of economic prosperity.
a) The husband’s financial circumstances
The husband’s most significant asset is his home situated at Property P. He owns it in equal shares with his current wife. Its value is estimated to be $500,000.00. It is subject to a mortgage of around $360,000.00.
Mr Dalrymple’s evidence, which I accept, is that the property is subject to a warrant for sale arising from an unsatisfied judgement debt. In my view this is indicative that he is currently struggling financially. His mortgage repayments are in the vicinity of $284.00 per week.
The husband’s next most significant financial resource in dollar terms is his superannuation, which is held in a self-managed fund. He believes its value to be $24,067.00. It is not a sum which is readily accessible by Mr Dalrymple.
The husband was cross-examined at length in respect of his involvement in [A] Pty Ltd. His evidence was that neither he nor his current wife holds any shares in the company. I accept that this is so. I also accept that they do hold any units in the investment trust. It is also clear to me that any profits relating to the development and sale of the land at [L] are long distributed.
The husband’s evidence is that the [C] was purchased for the sum of $225,000.00 by [A] Pty Ltd. All of which sum was borrowed from the National Australia Bank. Loan repayments in respect of this sum and other expenses relating to the vessel are in the vicinity of $2800.00 per month. Accordingly it would seem likely that a significant proportion of any takings from the vessel’s operations would be allocated towards servicing this debt.
Certainly it is Mr Dalrymple’s evidence, again which I accept, that the [C] is at best breaking even and he and his current wife are only able to draw the most meagre of living expenses from its operations. In recent times Mr Dalrymple has been sleeping on board the vessel to act as a security guard as he is unable to afford the cost of professional security.
In his statement of financial circumstances, the husband calculated his average weekly earnings to be $413.00 or $21,476.00 per annum.[7]
Mr Dalrymple’s tax return for the year ending 30 June 2007 gives an annual income of $50,638.00. His tax return for the year ending30 June 2008 gives an annual income of $15,460.00.[7] See husband’s statement of financial circumstances filed 18 June 2008.
The wife is unable to point to any evidence which indicates that these figures are likely to be inaccurate. On the basis of the evidence before me I am unable to find that Mr Dalrymple has an undisclosed stream of income or is directing income surreptitiously to himself through the corporate entities of [A] Pty Ltd; [W] Pty Ltd; or [M] Pty Ltd.
[W] Pty Ltd was incorporated in 2004 as the entity necessary to purchase the marina property on behalf of the investment trust. It is
Mr Dalrymple’s evidence that the company has never traded and its sole function is to act as a trustee.[M] Pty Ltd was incorporated around the same time. It holds the liquor licence for the kiosk and café which were formerly operated at the marina. Mr Dalrymple is a director of this company but it is his evidence that he does not draw a salary in respect of his directorial duties. His evidence is that the kiosk/café is no-longer being operated by either him or his current wife.
Initially it was hoped that the [C] and the kiosk/café could be run in conjunction with one another. The [C] was relocated to [B] in 2006. This relocation spelled the end of the viability of the kiosk/café business, which has now closed its doors.
Although the [C] is owned by [A] Pty Ltd, [M] Pty Ltd runs the business side of the vessel. [M] Pty Ltd has a tax debt of $17,902.02 as at 25 April 2009. It has other debts to ASIC.[8] These debts confirm
Mr Dalrymple’s evidence that the [C] is trading under difficulties and is not currently generating sufficient income to pay its debts.[8] See exhibit E
Mr Dalrymple’s evidence is that he and his current wife draw enough money from the takings of the [C] to survive. In the short to medium term it seems unlikely that the vessel will generate more income. In this regard I accept Mr Dalrymple’s evidence that the patronage of the vessel has been adversely impacted by the unwillingness of tourists to visit the Lower [B] because of the popular perception that the river has an insufficient level of water in it for the operation of a paddle steamer.
Given these various factors, I find that the husband currently has no reliable stream of income. I also accept that the [C] provides him and his current wife with a subsistence income, at best. In addition I accept that he is currently under some pressure from a variety of sources to pay debts which have arisen from the operation of the vessel.
In these circumstances, it is impossible to see how Mr Dalrymple could presently satisfy an order for recurrent spousal maintenance in the wife’s favour. However I also accept that Mr Dalrymple has either elected or been compelled to defer his receipt of possible income arising from the services provided by him to [A] Pty Ltd until such time as the remaining portions of land at the marina have been sold.
Given the extent of his services to the company and its present circumstances, it is difficult to see what else he could do other than work away from the company and receive nothing. Mr Dalrymple is not in a position, it seems to me, to seek an alternative source of employment.
The initial acquisition of the [C] was integral to the development of the marina project. As such, the beneficial owners of the vessel are the holders the investment units in the project. Mr Dalrymple is not one of those unit holders.
Mr Dalrymple can best be described as the factotum of the project. The idea to acquire the [C] was his. He has remained to ensure the vessel remains utilised and at least generates some income for its owners. However I do not accept that he can be described as the beneficial owner of it in any shape or form. Its owner is [A] Pty Ltd.
Mr Dalrymple’s relationship and history with [A] Pty Ltd is a complex one. In the past, particularly when the land at [L] was being acquired and developed, he and his current wife held a number of the investment units which the company held on trust on behalf of the various investors.
However I accept Mr Dalrymple’s evidence that he no longer holds any such units, principally because he failed to pay the funds required to acquire the units in question and it was no longer legally permissible for the amount owing to be regarded as a shareholders loan.[9]
[9] See Letter from Ms W to the husband’s former solicitor dated 3 December 2008 and being exhibit C to the husband’s affidavit filed 17 December 2008
Notwithstanding his lack of formal equity in [A] Pty Ltd,
Mr Dalrymple has remained integral to its overall management and direction. He is its guiding hand. However that does not necessarily entail that he must have some clandestine form of proprietary interest in the assets of the business or is receiving some secret stream of income. I find that he does not have the former nor is receiving the latter.Given the complexity of the husband’s previous involvement with [A] Pty Ltd and the unusual nature of his relationship with the company, I can understand why the wife would be highly suspicious of the husband and his business activities. I accept that there are very often legitimate additional benefits, of a financial nature, which accrue to a person in self-employment, which are not always reflected in that person’s declared income.
However, the difficulty from the wife’s point of view is that her general feelings or suspicions about the husband and his business affairs have not translated into reasonably based reality upon the evidence presented in the actual case. I accept that the husband is currently struggling financially. Mr Hemsley is right in his concession that there is presently no discernible pot of gold which the husband is able to access to satisfy the current spousal maintenance order.
b)The wife’s financial circumstances
I have great sympathy for the wife as it cannot be doubted that her financial circumstances are currently precarious and likely to remain so. She has qualifications in [omitted] and is currently employed as a [occupation omitted].
The wife’s employment requires her to work at a computer entering data. She uses a mouse. These activities cause both her arms and shoulders to ache. It is evidence that she cannot lift her arm without experiencing “excruciating” pain. In the past she has been prescribed morphine for the pain. She regularly takes panadol. It is also her case that she suffers chronic anaemia.
The wife’s evidence is that she is currently working 30 hours per week but should in fact be working less because of her various physical incapacities. However it is her case, which I accept, that she cannot afford to reduce her working hours, as she has been advised to do by her medical practitioner, for financial reasons.
The wife calculates her weekly income in the sum of $692.00, which equates to just under $36,000.00 per annum. Her major expense is her rent which amounts to $250.00 per week. She has no assets of any significant value. At present she calculates that her weekly recurrent expenses exceed her income.
It is also Ms Dalrymple’s case that [X] is largely dependent upon her financially. [X] apparently suffers from severe migraines, which are exacerbated by stress. In the past [X] has had some part time employment. However Ms Dalrymple does not believe that [X] should work during exams and the period leading up to them as this increases the pressure on her and so heightens the risk of migraines. As a consequence, for significant periods of time, there is only one modest income coming into the wife’s home.
As a result of these various factors, Ms Dalrymple deposed that she has borrowed a significant sum of money from her oldest daughter, who is a bank employee in Singapore. The sum involved is around $23,000.00 and Ms Dalrymple’s evidence is that she has used this sum to pay for her and [X]’s basic living expenses. Ms Dalrymple fears that she may have to borrow still more money from her daughter, which she fears she may not be able to repay.
Conclusions
In this case, it is my finding that there has been a change in circumstances, so far as Mr Dalrymple’s financial situation is concerned. I accept that the evidence reveals that he has no recurrent or reliable source of income, from which to satisfy the current spousal maintenance order.
As I have already observed Mr Dalrymple’s financial affairs are complex. These affairs include involvement with three proprietary companies and an investment trust. In addition, he is self employed running a business which receives cash. In these circumstances, I can well understand why Ms Dalrymple would think that this state of affairs is prima facie evidence of some form of financial legerdemain.
But the wife’s suspicions of chicanery are not sufficient to ground her case against the husband. I accept that there are benefits, of a financial nature, which come from self employment. In addition, self employment can lend itself to the possible concealment, conversion or redirection of income, which is not available to those in PAYG employment.
However, in this case, there is no evidence to indicate Mr Dalrymple is leading a lifestyle at odds with his professed currently straitened financial circumstances. I accept that the activities of the [C] are greatly curtailed by the current drought. As such, I do not find that
Mr Dalrymple is concealing income received from the vessel.In addition, I accept Mr Dalrymple’s evidence that the proprietors of [A] Pty Ltd and the holders of the investment units arising from the company’s ownership of the [W] marina are not currently renumerating Mr Dalrymple. However, given the length and depth of his involvement with the marina project, Mr Dalrymple is not prepared to walk away from it. Rather, he retains an expectation that he may be rewarded for his services, if and when the marina project reaches its fruition.
I accept that this state of fruition depends on factors outside of
Mr Dalrymple’s control. These factors include the breaking of the drought, such as to fill the lower lakes of the [B] River naturally (an occurrence which appears unlikely) or the artificial damming of the river, which is dependent upon government approval and intervention.Again, Ms Dalrymple is highly suspicious of the husband’s relationship with [A] Pty Ltd and believes that Mr Dalrymple is likely to have some significant capital holding in the marina property.
[Ms Dalrymple] is ill equipped to conduct a forensic accounting of the company’s affairs. For obvious reasons, Ms Dalrymple is likely to believe that Mr Dalrymple is not the most reliable person to be left to explain his financial circumstances.
Fogarty J summarised a similar scenario in Smith & McKinnon[10].
“It is a generally acknowledged circumstance that it is difficult for a wife placed in this position to present a true picture of the husband’s income, self employed as he is, and also that there are legitimate additional benefits of a financial nature which are often derived from self employment.
The difficulty in all of these cases is to translate that general feeling or suspicion into reasonably based reality upon the evidence in the actual case.”
[10] Smith & McKinnon (unreported) ML5510 of 1993 delivered 22 January 1996
In this case, it is my view that Ms Dalrymple has not been able to present any concrete material to allow the court to reach the conclusion that the evidence of Mr Dalrymple is so unreliable that the only conclusion that can be drawn from it is that he is concealing income and assets from the wife. To the contrary, in general terms, I found
Mr Dalrymple to be an honest witness about his financial circumstances.
Accordingly, from the evidence which has been lead before me, I am satisfied that Mr Dalrymple has no significant stream of income available to him, from which to satisfy the spousal maintenance order. This was not the position when the order was made in December of 2004. Accordingly, I am satisfied that the pre-requisite condition provided by section 83(2)(a)(ii) has been satisfied, in that the financial circumstances of Mr Dalrymple have changed.
The more difficulty aspect of the case is whether there is just cause to discharge the order in question. Mr Hemsley, quite rightly in my opinion, concedes that there is no asset currently available to
Mr Dalrymple, which he could access or liquidate to satisfy the order. However, it would appear to be Ms Dalrymple’s position that, at some stage in the future, Mr Dalrymple will receive a significant sum of money from the proprietors of [A] Pty Ltd, which can only be characterised as deferred income.In these circumstances, Mr Hemsley argues that it would be unjust to discharge the order. Because Mr Dalrymple has, in effect, elected to defer the receipt of his income entitlements, arising from the discharge of his responsibilities, both legal and moral, to [A] Pty Ltd. As such, he contends that Mr Dalrymple will have access to significant funds to satisfy the spousal maintenance order at some stage in the future.
Pursuant to the provisions of section 83(1)(d), I am authorised to suspend the operation of a spousal maintenance order until the occurrence of some specified event. Accordingly, it is theoretically open to the court to suspend the operation of the order until if and when Mr Dalrymple receives any payment from the investors in the marina project.
The difficulty is in ascertaining if and when this will occur. The successful sale of the marina is dependant on factors outside
Mr Dalrymple’s control, which in my view, are subject to significant speculation. Accordingly, in my view, there is no certainty that
Mr Dalrymple will ever receive the payment to which he aspires. In addition, its quantum cannot be accurately predicted.Accordingly, I have reached the view that it is highly uncertain whether Mr Dalrymple will receive any of the sum of $360,000.00. In addition, although the sum has some characteristics of being income, it also has some characteristics of being a term of investment, which may or may not come to fruition. As such, it has some of the attributes of being potential capital.
It seems to me that an ongoing stream of maintenance should be fundamentally provided from the recurrent income of a spouse rather than through the provision of capital. At the present time,
Mr Dalrymple has no reliable income at present. Nor do I think it can be said that he is not properly utilising his capacity to earn an income.Section 72 imports a requirement for the court to only make a spousal maintenance order, if it is reasonable to do so. This necessitates the court to conduct an examination of the financial capacity of any proposed payer of such maintenance.
A payer is only required to pay maintenance if he or she is reasonably able to do so. In this case, I do not think that Mr Dalrymple is reasonably able to pay maintenance to Ms Dalrymple. This has been the circumstance for some time.
In addition, I do not think Mr Dalrymple at present has any capacity to satisfy the arrears of maintenance currently accrued against him. In my view, he had no realist alternative other than to seek a discharge of the order, which he did on 18 June 2008.
In these circumstances, I have come to the conclusion that it is proper to discharge the order for spousal maintenance made in the case and all arrears of maintenance arising from it. I do not think it proper that any orders for costs be made.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and thirty-one (131) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: P Smith
Date: 3 September 2009
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