Dalrymple and Dalrymple (No 2)
[2010] FamCAFC 245
•13 December 2010
FAMILY COURT OF AUSTRALIA
| DALRYMPLE & DALRYMPLE (NO. 2) | [2010] FamCAFC 245 |
| FAMILY LAW - APPEAL – SPOUSAL MAINTENANCE – whether the Federal Magistrate erred in discharging an order for the husband to pay the wife spousal maintenance and all arrears of maintenance – whether the Federal Magistrate erred in failing to suspend, revive or vary the operation of the order – whether the Federal Magistrate failed to give sufficient weight to matters – whether the Federal Magistrate erred in placing too much weight on matters the subject of speculation – whether the Federal Magistrate erred in characterising a sum of money the husband may receive as capital – whether the Federal Magistrate erred in failing to take into account that the husband had allegedly arranged his affairs so as to reduce his income and had the capacity to allocate, defer, characterise or convert his expected income into a capital entitlement – whether the Federal Magistrate failed to take into account or give proper consideration to the evidence of the husband’s income and financial position – whether the Federal Magistrate displayed bias – no merit in any ground of appeal – appeal dismissed. FAMILY LAW - APPEAL – APPLICATION IN AN APPEAL – application by the wife to adduce further evidence – application dismissed. |
| Family Law Act 1975 (Cth) ss 72, 75, 83 & 93A(2) |
| Abalos v Australian Postal Commission (1990) 171 CLR 167 Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343 CDJ v VAJ (1998) 197 CLR 172 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 Gronow v Gronow (1979) 144 CLR 513 House v The King (1936) 55 CLR 499 Johnson v Johnson (2000) 201 CLR 488 Re JRL; Ex parte CJL (1986) 161 CLR 342 SSHontestroom v SS Sagaporack [1927] AC 37 |
| APPELLANT: | Ms Dalrymple |
| RESPONDENT: | Mr Dalrymple |
| FILE NUMBER: | ADC | 2406 | of | 2008 |
| APPEAL NUMBER: | SA | 12 | of | 2010 |
| DATE DELIVERED: | 13 December 2010 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 23 June 2010 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 3 September 2009 |
| LOWER COURT MNC: | [2009] FMCAfam 931 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | In person |
| COUNSEL FOR THE RESPONDENT: | Mr Bryant |
| SOLICITOR FOR THE RESPONDENT: | Andersons Solicitors |
Orders
The wife’s Application in an Appeal filed on 24 May 2010 is dismissed.
The appeal is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Dalrymple & Dalrymple (No. 2) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SA 12 of 2010
File Number: ADC 2406 of 2008
| Ms Dalrymple |
Appellant
And
| Mr Dalrymple |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal by Ms Dalrymple (“the wife”) against orders made by Brown FM on 3 September 2009 in which his Honour discharged an order made on 14 December 2004 for Mr Dalrymple (“the husband”) to pay spousal maintenance to the wife and all arrears of maintenance arising from that order. The husband seeks that the wife’s appeal be dismissed.
Background
At the time of the final hearing before the federal magistrate the husband was aged 53 years and the wife was aged 52 years.
The parties were married in September 1989. They separated in early 1997 and their marriage was finally dissolved on 4 January 2003.
There is one child of the marriage, X Dalrymple, born in January 1990. At the time of the hearing before the federal magistrate X was in her second year of a four year degree at university.
The wife has qualifications in accountancy and business. In 1999 and 2000 the wife began to display symptoms of carpal tunnel syndrome in her right arm due to her computer use. She has also been diagnosed with degenerative changes in her left thumb. At the time of the hearing before the federal magistrate the wife was employed as an accountant. She was working approximately 30 hours per week.
The husband has professional qualifications and has been employed as a property developer and advisor. He is a director of a number of companies.
On 10 July 2002 final property settlement orders were made by consent, whereby the wife was to receive a 50 per cent entitlement in the husband’s superannuation benefit.
On 29 December 2003 the wife commenced proceedings in the Federal Magistrates Court seeking orders with respect to spousal maintenance. Prior to the commencement of proceedings, the parties had entered into a number of informal arrangements regarding the husband’s financial support of the wife and their child. The parties registered child support agreements with the Child Support Agency from 6 December 1998 until 14 January 2007.
Since approximately 2004 the husband has been involved in a development on the River Murray near N (“the marina project”) on behalf of investors who hold units in an investment unit trust, the trustee of which is A Pty Ltd (“A Pty Ltd”).
On 14 December 2004 Mead FM made final orders by consent. Those orders provided that the husband was to pay to the wife the sum of $242 per week by way of spousal maintenance, such amount to increase by CPI plus 2 per cent per annum. The husband’s obligation to pay spousal maintenance was to be “reviewed by the parties” if the husband’s income increased or decreased from his taxable income for the year ended 30 June 2004. In the event that the husband’s wage did increase or decrease, or if the husband sought to alter the amount payable, he was to provide to the wife, on an annual basis, his personal and business taxable income statements. The orders also provided that should the husband “unreasonably cease” to make payments pursuant to the orders, the husband was to indemnify the wife as to any costs or loss incurred by her, whether directly or indirectly, due to his default. It was noted in the order that the husband agreed to financially assist the wife and their daughter “whenever possible”.
In 2005 A Pty Ltd purchased a boat, the C vessel. The husband is the master of this vessel
On 15 January 2007 the husband’s child support obligations reverted to the child support formula calculated under the Child Support (Assessment) Act 1989 (Cth). For the period 15 January 2007 to … January 2008 (at which time the parties’ daughter turned 18), the husband was assessed to pay child support at the annual rate of $2671. An objection by the wife to this assessment was dismissed.
The husband paid to the wife spousal maintenance pursuant to the December 2004 order until 8 June 2007, at which time the husband said his financial circumstances prevented him from paying spousal maintenance.
On 27 February 2008 the parties’ daughter X commenced proceedings in the Federal Magistrates Court seeking that the husband pay adult maintenance to her. This application was ultimately dismissed on 11 March 2009.
On 18 June 2008 the husband commenced proceedings in the Federal Magistrates Court seeking that the order of 14 December 2004, and any arrears of maintenance arising under the order, be discharged. At the time of the final hearing before the federal magistrate, the husband owed in the vicinity of $30,000 in arrears of spousal maintenance.
The application came before Brown FM for final hearing on 2 July and 13 July 2009, when his Honour reserved judgment.
On 3 September 2009 Brown FM delivered his reasons for judgment and made the following order:
(1) 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 were otherwise dismissed.
On 5 January 2010 the wife filed an Application in an Appeal seeking an extension of time to file a Notice of Appeal against the order made on 3 September 2009.
On 26 February 2010 I granted the wife an extension of time to file a Notice of Appeal. The wife subsequently filed her Notice of Appeal on 4 March 2010.
Reasons for judgment of the federal magistrate
Following an introduction to the matter before his Honour, the federal magistrate identified the applications before him and the orders sought by the parties.
His Honour then addressed the background of the proceedings. His Honour recorded that both parties asserted that their current health restricted the amount and type of work they were able to undertake. Both parties had supplied medical reports to the court in support of their positions. His Honour recorded, however, that none of the doctors concerned provided sworn evidence in the proceedings nor had their respective opinion been the subject of scrutiny or cross-examination. His Honour recorded that in these circumstances it seemed to be common ground that neither party could be regarded as having “robust” good health.
His Honour also recorded that in his view both parties were of an age when it was “notoriously” difficult for persons to obtain permanent and well remunerated employment.
His Honour then outlined the qualifications of the wife, as referred to above, and the health issues suffered by her, with reference to a report provided by an occupational therapist the wife consulted. At the time of trial the wife was working 30 hours per week and earning $35,985 gross her annum. It was the wife’s position before the federal magistrate that her workload was unsustainable in the long term due to her injuries.
The federal magistrate recorded the wife’s position that since the husband ceased making spousal maintenance payments in May 2007 she had borrowed approximately $23,000 from her eldest daughter, who lives overseas, to meet her and X’s living expenses.
Turning to the husband’s financial circumstances, his Honour observed they were “complex”. As previously mentioned, the husband had been employed as a property developer and advisor and had been involved in a project to subdivide land at L. The husband is also a director of a number of companies involved in property development and also the operation of a unit trust.
The federal magistrate recorded that the husband’s most recent project involved the purchase of a partially developed marina property on the River Murray near N on behalf of investors who hold units in an investment trust.
The federal magistrate referred in detail to the husband’s involvement in the marina development. The husband claimed to not personally hold any of the units in the trust and it was the husband’s position that the marina was not generating any income for its new owners due to the drought. The husband also gave evidence before the federal magistrate that while some of the blocks of land at the marina had been sold, the two most significant parcels of land – the marina itself and a kiosk and land suitable for a “tourist village” – remained unsold and on the market.
The husband maintained that he held no definable legal interest in the development or any of the corporate entitles which he controlled and did not hold an investment unit. The husband had conceded before the federal magistrate that he had been the “guiding hand and genius” of the enterprise on behalf of the investors who held units in the trust, the trustee of which was A Pty Ltd, of which the husband was the director.
The husband also conceded that various unit holders had paid him a salary for his services in relation to the development of the land. The husband and his current wife, Mrs V Dalrymple, also derived income from operating the kiosk at the marina. The federal magistrate recorded that M Pty Ltd was the corporate entity operating the kiosk business, a company of which the husband had been a shareholder and director.
The federal magistrate recorded that the husband asserted he no longer received any remuneration from the investors due to the delays in the development, and the kiosk had closed due to the drought. The husband maintained that the marina project was still a “fundamentally good investment” and that improvements made since its acquisition had improved the property’s value. He was thus confident the remaining lots would be sold at a considerable profit.
The federal magistrate found, however, that the difficulty with this position was that the marina was “high and dry”, that boats were not at that time able to access it and until the water returned “the marina cannot fulfil its potential and only a fool would buy it.”
The federal magistrate then recorded further the husband’s submissions with respect to the prospects of water returning to the marina and the future potential of the marina development. His Honour was of the view that he could take judicial notice of the fact that “the question of water allocation in the lower Murray and the environmental consequences of such allocations are vexed, both in political and scientific terms.” However, there was no firm evidence before his Honour as to when any decisions may be made regarding the construction of a weir.
The husband conceded before the federal magistrate that he had committed too much of his time and effort to the marina project to “walk away from it now empty handed.” The husband contended that while none of the unit holders had a legal obligation to pay him any monies, he expected they would hold themselves “morally obliged” to recompense him for his efforts in relation to the development when it sold. The husband estimated he was likely to receive $360,000 from the unit holders when and if the marina sold. However, the husband also said a large amount of the sum would be consumed by debts relating to the development.
His Honour then turned to consider the purchase of a boat, the C vessel, by A Pty Ltd in 2005. The husband contended that the boat was his and his current wife’s only source of income. The husband was the master of the vessel and his wife the cook. However, the husband said he did not draw a regular wage from the business, which had been hit badly by the drought. The husband also gave evidence that he was finding it increasingly difficult to physically operate the boat due to its weight, but that he could not afford to hire a replacement captain.
The federal magistrate then outlined further the husband’s qualifications, before considering the medical report provided by the husband’s general practitioner detailing his health issues, which included hypertension, chronic lung disease as well as back and knee problems. The husband said he was required to take five types of medicine daily
The federal magistrate recorded the fact that the parties had reached a settlement with respect to matrimonial property issues, and the nature of this settlement, as previously mentioned above, namely that the wife was to receive a percentage of the husband’s superannuation when it vested.
It was the wife’s case before the federal magistrate that she had not received any sum from the husband’s superannuation fund and that she believed he had rolled over his superannuation into a self managed fund, which “heightened the wife’s perception that the husband has behaved inappropriately towards her” in a financial sense. The husband rejected this and maintained that he had “behaved honourably” with respect to both the wife and their daughter. In this context, the husband referred to the maintenance agreements he had reached with the wife.
The federal magistrate recorded a concession made by counsel for the wife that the wife had not located a “pot of gold”. Counsel maintained, however, that the wife was entitled to a share of the husband’s prospective financial gain, and that it would not be fair to the wife for the arrears of maintenance to be discharged or for the spousal maintenance order to be varied or set aside given the wife’s significant financial needs. Counsel contended that the amount the husband expected to receive from the marina project represented “deferred wages”.
After outlining the legal principles to be applied to the determination of the application, and in particular the provisions of s 83 of the Family Law Act 1975 (Cth) (“the Act”), the federal magistrate turned to the evidence before him.
The federal magistrate identified that the major evidentiary controversy in the case was the husband’s interest in A Pty Ltd, W Pty Ltd and M Pty Ltd and the unit trust related to those entities.
The federal magistrate found that while the husband’s financial affairs were complicated, his Honour did not consider that he had “organised his affairs with a view to obfuscation or to mask his true financial position.” In general, his Honour found the husband to be a truthful witness. In particular, his Honour accepted that the husband did not currently have a reliable stream of income and did not have at his disposal assets of significant worth.
The federal magistrate also accepted that the wife was a witness of truth and that there could be “no doubting that she [was] a person in significant financial need, who [had] a limited capacity to support herself financially.”
Neither party sought to challenge the medical evidence in relation to each party’s respective health issues before the federal magistrate. His Honour thus concluded that both parties had significant and permanent health issues which acted as impediments to their abilities to gain employment. He also accepted that both parties were of an age which made it difficult to obtain employment.
The federal magistrate firstly turned to consider the husband’s financial circumstances. In this respect, his Honour noted his most significant asset was his home, which was subject to a mortgage and also a warrant for sale arising from an unsatisfied judgment debt. The husband’s mortgage repayments were approximately $284 per week. The husband also had superannuation to the value of $24,067 in a self-managed fund, which was not readily accessible.
The federal magistrate recorded that the husband was cross-examined at length regarding his involvement in A Pty Ltd. The federal magistrate accepted the husband’s evidence that neither he nor his current wife hold any shares in the company or any units in the investment trust. His Honour also accepted that any profits in relation to the L development were long since distributed.
The federal magistrate then had regard to the husband’s evidence regarding the C vessel. His Honour accepted that a significant proportion of any takings would be allocated to servicing the debt in relation to the vessel and that the C vessel was “at best breaking even” and that the husband and his current wife were only able to draw the “most meagre” of living expenses.
The federal magistrate then had regard to the husband’s income as recorded in his financial statement and tax return. On the basis of the evidence, the federal magistrate was unable to find that the husband had an undisclosed stream of income or that he was directing income “surreptitiously” to himself through any of the corporate entities.
His Honour then outlined further evidence relating to W Pty Ltd, M Pty Ltd and the operation of the kiosk.
The federal magistrate accepted that the C vessel was trading under difficulties and was not at that time generating sufficient income to pay its debts. He found it was unlikely in the short to medium term that the vessel would generate more income and accepted the husband’s evidence that patronage had been adversely impacted by the negative perception of the Lower Murray held by many tourists.
His Honour thus concluded that the husband had no reliable stream of income and that the vessel provided a “subsistence income, at best.” His Honour accepted the husband was also under pressure from a number of sources to pay debts arising from the operation of the vessel.
The federal magistrate concluded that given these findings it was impossible to see how the husband could satisfy an order for recurrent spousal maintenance. However, his Honour also accepted that the husband had either elected, or was compelled, to defer his receipt of possible income arising from the services provided by him to A Pty Ltd until the remaining portions of land had been sold. The federal magistrate commented in this respect that given the company’s current circumstances, it was difficult to see what else the husband could do, other than walk away and receive nothing. The federal magistrate determined the husband was not in a position to seek alternative sources of employment.
The federal magistrate found that the husband could at best be described as the “factotum” of the project and that the idea to acquire the vessel was the husband’s. The federal magistrate did not accept that the husband could be described as the beneficial owner of the vessel in any shape or form, however, and that its owner is A Pty Ltd.
The federal magistrate described the husband’s relationship and history with A Pty Ltd as a “complex” one, however, his Honour accepted the husband’s evidence that he no longer holds any units. Notwithstanding his lack of formal equity in the company, the federal magistrate said the husband had remained integral to its overall management and direction, describing the husband as the company’s’ “guiding hand”.
Nonetheless, the federal magistrate reiterated his finding that the husband does not have some “clandestine form of proprietary interest in the assets of the business” nor is he receiving “some secret stream of income.”
The federal magistrate said he could understand why the wife may be highly suspicious of the husband and his business activities given his previous involvement with the company and the unusual nature of the relationship. However, his Honour found that the wife’s feelings or suspicions had not “translated into reasonably based reality upon the evidence presented in the actual case.” His Honour accepted the husband was struggling financially and that there was no “pot of gold” from which the husband could satisfy the current spousal maintenance order.
The federal magistrate next turned to discuss the wife’s financial circumstances, which his Honour repeated could not be doubted as “precarious and likely to remain so”. Referring to the wife’s employment, the federal magistrate again noted that she was required to work at a computer, which work caused her pain, for which she was regularly required to take pain relief. His Honour also again noted the wife’s submissions that she should be working less than the 30 hours she was, and accepted that the wife could not afford to reduce her hours for financial reasons.
His Honour had regard to the wife’s income, which was slightly less than $36,000 per annum, noting that the wife said her expenses exceed her income. His Honour took into account that the parties’ daughter was largely dependent on the wife.
The wife had given evidence before the federal magistrate that she had borrowed approximately $23,000 from her adult daughter who lives overseas and that she feared she may have to borrow more which she may be unable to repay.
Finally the federal magistrate outlined his conclusions. His Honour was satisfied there was a change with respect to the husband’s financial circumstances and accepted that he had no recurrent or reliable source of income from which to satisfy the spousal maintenance order.
His Honour concluded that the wife’s suspicions of “chicanery” were not sufficient to ground her case. While his Honour accepted there are financial benefits which come from self employment, and that self employment can lead to the possible concealment, conversion or redirection of income, there was no evidence in this case to indicate the husband was “leading a lifestyle at odds with his professed currently straitened financial circumstances.” His Honour accepted that the activities of the C vessel were greatly curtailed by the drought and that the husband was not concealing income received from the vessel. His Honour also accepted that the proprietors of A Pty Ltd and holders of the investment units were not currently remunerating the husband, but that the husband retained an expectation he may be rewarded for his services when the project reaches its fruition, a matter which was out of the husband’s control.
His Honour repeated that the wife had not been able to present any concrete material to allow the court to conclude that the husband’s evidence was so unreliable that the only conclusion open was that he was concealing income. On the contrary, he found the husband to be an honest witness.
His Honour was thus satisfied that the pre-requisite condition in s 83(2)(a)(ii) was satisfied.
The federal magistrate identified that the more difficult aspect of the case was whether there was just cause to discharge the order.
In addressing this issue, his Honour commented that it was “theoretically” open to the court to suspend the operation of the order until if and when the husband received any payment from the investors in the marina project. However, his Honour observed that there was no certainty the husband would ever receive a payment, and in any event, the quantum could not be accurately predicted. Therefore it was highly uncertain whether he would receive any of the $360,000. His Honour also found that as the sum has some characteristics of a term investment, it had attributes of being potential capital as opposed to income. His Honour was of the view that “an ongoing stream of maintenance should be fundamentally provided from the recurrent income of a spouse rather than through the provision of capital.”
His Honour finally concluded that the husband was not reasonably able to pay maintenance, which had been the circumstance for some time, nor did the husband have any capacity to satisfy arrears of maintenance accrued at that time. The husband thus had no realistic alternative other than to seek the discharge of the order. Thus it was proper to discharge the order for spousal maintenance and all arrears arising from the order.
Application to adduce further evidence
On 24 May 2010 the wife filed an Application in an Appeal seeking to adduce further evidence pursuant to s 93A(2) of the Act. In her application the wife sought “[u]pon the question of facts that further evidence to the Appeal be accepted so that to ensure the proceedings do not miscarry.”
Section 93A(2) of the Act provides that on appeal the Full Court can, in its discretion, receive further evidence upon questions of fact. The principles relevant to the adducing of further evidence on appeal were outlined by the High Court (McHugh, Gummow and Callinan JJ) in CDJ v VAJ (1998) 197 CLR 172 at 200:
104. In the exercise of the discretion conferred by a power such as s 93A(2), the critical factor is the subject matter of the proceedings with which the appeal is concerned. This is because the purpose of the power to admit further evidence is to ensure that the proceedings do not miscarry.
…
107. The discretion conferred by s 93A(2) to receive further evidence on appeal is not expressed to be limited in any way. In particular, the subsection contains no requirement, comparable with that often found in statutes conferring power on an appellate court to receive further evidence, that “special grounds” or “special leave” be shown before the evidence can be adduced. Nor, in contrast to the common law position, must the motion to receive the evidence be designed to set aside the verdict at first instance. Nothing in s 93A(2), for example, prevents the respondent to the appeal from bringing a motion to adduce further evidence to support the orders made.
108. When regard is had to Pt X and its place in the scheme established by the Act, it is apparent that the common law rules which govern the admission of fresh evidence in the common law courts cannot exhaustively define the scope of the discretion. The discretion is more ample than the principles applicable in common law proceedings and applied in Wollongong Corporation. That, of course, does not mean that the discretion reposed in the Full Court by s 93A(2) is unfettered, a point recognised by the Full Court in In the Marriage of Abdo. Although the discretion to admit further evidence is not attended by any express words of limitation, the subject matter, scope and purpose of the appeal provisions in Pt X of the Act and the issues involved in each appeal will point to the considerations which are or are not extraneous to the exercise of the power.
109. One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
…
113. In any event, we cannot accept that the discretion to receive further evidence is so wide that the Full Court can admit further evidence merely because it is useful. Such a criterion is inconsistent both with the nature of the appellate jurisdiction exercised by that Court and with the perceived purposes of s 93A(2).
…
116. The failure to have adduced the evidence before the primary judge will be a variable factor, the weight of which will depend upon all the other factors pertinent to the case. Where the evidence has been deliberately withheld, the failure to call it will ordinarily weigh heavily in the exercise of the discretion. In other cases, the failure to call the evidence even if it could have been discovered by the exercise of reasonable diligence may be of little significance. No invariable rule concerning the failure to call the evidence can or should be laid down in view of the wide discretion conferred on the court by the section. (Footnotes omitted)
I also observe that the discretion to admit further evidence should be exercised sparingly.
The wife filed two affidavits in support of the application, one on 24 May 2010 and the other on 1 June 2010, and she annexed to both affidavits the further evidence she wished to lead. At the hearing of the appeal she indicated that she was only relying on the second affidavit. The annexures to this affidavit were as follows:
A Unit Trust Deed for [A] Unit Trust No.2_Relevant Pages
B [A] Fixed Unit Trust Registration
C [A] Discretionary Trust Registration
D [W] Trust’s Balance Sheet and Notes to Financial Statements 2003 & 2008
E [C vessel] Partnership Returns 2007
F [Dalrymple] Superannuation Fund Statement 2007
G LTO search for CT […], [property P] SA as at 9 December 2009
H River Murray Water Resources Report, Issue 57, Department of Water Land and Biodiversity Conservation, 17 May 2010.
Photograph of [N] Lake area on 20 July 2009
I “Floodwater Flows”. The Advertiser 20 January 2010.
ABC News.Increased flows boost houseboat tourism hopes, 18 March 2010
Counsel for the husband submitted that all of the evidence outlined by the wife was essentially irrelevant and the application was thus opposed.
The wife deposed in her affidavit filed on 1 June 2010 that she wished to adduce the evidence contained in items A to F to “further prove the husband’s controllership [sic] and ownership of his business, which were mentioned at some point at the Trials but were not considered or were not explored.” The wife wished to adduce item G to establish that the husband’s house at P was not the subject of a warrant of sale as accepted by the federal magistrate. The wife also deposed that she was seeking to adduce items G, H and I “as these events happened after the Trials and which were not available at the time.”
In relation to items A to F, this material was available at the time of the trial. The wife, through this evidence, is attempting to prove that the husband has income or has an interest in the various business/corporate entities that has not been disclosed. However, this evidence simply does not establish this. More importantly, the wife has not established that the evidence, if admitted, would demonstrate that the federal magistrate made an error in making the findings that his Honour did. I consider it would thus be of no assistance to the court and therefore inappropriate to allow the wife to adduce this evidence.
In relation to items G to I, consisting of a title search of the husband’s property at P, newspaper articles regarding water levels in the River Murray, a report from the Department of Water Land and Biodiversity Conservation and a photograph of the N Lake area, the wife herself conceded that this evidence only became available subsequent to the hearing before the federal magistrate. It is therefore inappropriate for this evidence to be received on appeal. As this evidence was not available to his Honour, it cannot be used to establish that the federal magistrate erred.
The wife complained in the context of her application to adduce further evidence and her appeal itself that the federal magistrate made findings based on speculation regarding the water levels in the River Murray and that the drought was likely to continue. She thus sought to adduce further evidence on this issue. In relation to this, at the hearing of the appeal I explained to the wife that the purpose of an appeal is not to effectively “run the case again” on new evidence, but that an error on the part of the federal magistrate needs to be established. If the evidence now available indicates that the situation in relation to the water levels in the River and the drought has improved, this does not establish an error on the part of the federal magistrate such as to lead to a successful appeal. In such circumstances, however it may be open to the wife to bring a new application in the Federal Magistrates Court on the basis that there are changed circumstances.
I therefore propose to dismiss the wife’s Application in an Appeal seeking to lead further evidence.
I also mention that the husband’s counsel tendered an affidavit of the husband’s solicitor at the hearing of the appeal to which was annexed a number of financial statements. It was not clear why this was done but it was claimed that some at least of the annexed documents were before the federal magistrate and thus should be before me. Despite none of this being raised when I had previously considered the draft appeal index, the wife agreed that one or two of these documents were before the federal magistrate but did not agree that the rest were in that category. In the circumstances I allowed only the agreed documents to be before me for what they were worth.
Principles applicable to the appeal
This is an appeal against an exercise of discretion by the federal magistrate. The principles applicable to an appeal from a discretionary judgment are well settled.
The limitation of an appellate court hearing an appeal from a discretionary judgment was discussed by Kitto J in Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 where his Honour said at 627:
… the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong.
In House v The King (1936) 55 CLR 499, Dixon, Evatt and McTiernan JJ said at 504:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of discretion is reviewed on the ground that a substantial wrong has in fact occurred.
In Gronow v Gronow (1979) 144 CLR 513 Stephen J stated at 519:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight.
Similarly, in Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343 at 345, Asquith LJ said:
It is, of course, not enough for the wife to establish that this court might, or would, have made a different order. We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.
Grounds of Appeal
The wife’s Notice of Appeal filed on 4 March 2010 contains the following grounds of appeal:
1. That the Learned Federal Magistrate erred in discharging the Spousal Maintenance Order.
2. That the Learned Federal Magistrate erred in not suspending, reviving or varying the operation of the Spousal Maintenance Order.
3. In refusing to suspend, revive or vary the Order the Learned Federal Magistrate failed to accord sufficient weight to the obligation whereby the debt has arisen and the ongoing expenditure by the [wife] for the daughter of the parties.
4. In refusing to suspend, revive, or vary the Order the Learned Federal Magistrate erred in placing too much weight on the “factors that are subject to significant speculation” and in particular:
(A)Described the husband’s income as “highly uncertain” when there was evidence from the husband to the contrary.
(B)Did not sufficiently weigh the size of the existing debt and needs of the wife and daughter.
(C)Failed to consider fixing a specific date for the purposes of reviewing the husband’s circumstances.
5. The Learned Federal Magistrate erred in finding that an ongoing stream of maintenance should come from recurrent income and in particular he erred in failing to take into account the fact that the husband has arranged his financial affairs so as to have a reduced income and a capital entitlement, where as:
(A)There is evidence that the husband has the capacity to allocate the income as he lives and that the income was unusually and purposely split to his current wife.
(B)The husband has a capacity to allocate, defer, characterise or convert the expected income to capital entitlement, as he likes.
6. Further to the above, the Learned Federal Magistrate erred in characterising any money that the husband may receive as capital when his evidence was that it was payment for services.
7. In the process of assessing the husband’s complex financial arrangement for the purposes of discharging the Spousal Maintenance and the arrears arising from it, the Learned Federal Magistrate erred in gathering material evidence and in particular:
(A)Evidence of the husband’s current financial position
(B)Evidence to [sic] the husband’s proprietary interests and authority in his businesses. As such incorrectly interpreted the husband’s position in those businesses.
(C)Failed to consider the income evidence that was presented before him
(D)Had a contradicting and confusing view about the husband’s income and assets.
8. In the process of discharging the Spousal Maintenance, the Learned Federal Magistrate failed to consider other relevant matters when interpreting and applying section 75 (2) and section 83 (2), where as:
(A)The wife has a full [sic] care of a child of the marriage who had not attained the age of 18 years at the time the husband stopped paying maintenance.
(B)The wife has limited health and income capacity and is providing a rental shelter to the daughter of the parties.
(C)The Learned Federal Magistrate [sic] satisfied that the husband’s circumstances have changed but refused to make an order to vary the amount ordered to be paid.
9. In the process of assessing the husband’s honesty, the Learned Federal Magistrate erred in failing to take into account the accounting irregularities in the husband’s business financial statements and the inconsistencies in the husband’s income deposition.
10. Further to the above, the Learned Federal Magistrate did not give proper consideration to evidence that indicates there was a substantial profit earned in 2004 but was not disclosed at the time the Spousal Maintenance Order was made. As such, pursuant to section 83 (2) (c), the amount ordered to be paid in the Spousal Maintenance Order 2004 should be increased and should not be discharged.
11. The Learned Federal Magistrate was biased in reaching a conclusion to discharge the Spousal Maintenance and the arrears arising from it, where as
(A)The evidence of the husband’s capacity to pay maintenance in 2007 and 2008 were not taken into account, and in particular:
(B)The evidence of the husband characterising his income receipt were not taken into account.
(C)The business’ fluctuation and seasonal cycle, which have always been seen as a common feature of business life, were not considered when assessing the husband’s future income and his current financial situation.
(D)The Learned Federal Magistrate has a view that Spousal Maintenance is for a current spousal relationship. This in not correct, as it is not a condition in The Family Law Act 1975, section 75.
The wife seeks the following orders in her summary of argument, which differ slightly from the orders originally sought in her Notice of Appeal:
1. The Order 3 September 2009 be set aside.
2. The Spousal Maintenance in arrears to be satisfied.
3. Child Maintenance before the child turned 18 to be met.
4. Adult child maintenance of $300.00 per week to be awarded until our daughter completes her tertiary education.
5. An adequate lump sum to be awarded in respect of Spouse Maintenance Order 2004.
6. Order for costs and reimbursement of all costs.
Orders 3 and 4 as sought by the wife are clearly inappropriate and are not orders that could be entertained by me on an appeal from orders solely in relation to spousal maintenance.
At the hearing of the appeal the wife was unrepresented. The husband, although initially unrepresented during the appeal process, was represented by counsel at the hearing before me.
The husband seeks that the appeal be dismissed.
Discussion
Grounds 1 and 2 of the wife’s appeal are general grounds which do not particularise the nature of her complaint, asserting only that his Honour erred in discharging the order and in not suspending or varying the order. Further, in her summary of argument the wife says that she withdraws ground 8 as it “overlaps” with ground 1.
The principal issues which emerge from the wife’s grounds of appeal and her submissions, however, are the alleged non-disclosure by the husband of interests in the various corporate entities, a consequential non-disclosure of his actual income and ability to obtain funds, and the complaint that the federal magistrate did not sufficiently take into account the wife’s financial circumstances.
Grounds 3 and 4 – issues of weight
It was submitted by the wife that the federal magistrate erred in failing to give sufficient weight to the obligation to pay spousal maintenance giving rise to the debt and the expenditure of the wife and the parties’ daughter.
In this respect, the wife made reference to her health problems, that she resides in a rental property and has no assets of value and that the parties’ daughter was largely dependant on the wife financially. The wife also made reference to the money she had borrowed from her eldest daughter.
There is no doubt that the federal magistrate was acutely aware that the wife was a person “of significant financial need, who has a limited capacity to support herself financially.” [Reasons for judgment at paragraph 78] His Honour did not doubt that the wife’s financial circumstances were “precarious” and likely to remain so.
The federal magistrate was cognisant of the wife’s health difficulties and that she could not afford to reduce her working hours for financial reasons. [Reasons for judgment at paragraphs 105 – 106] The federal magistrate also had regard to the wife’s income, that she had no assets of value and that her expenditure exceeded her income. The federal magistrate took into account that the wife primarily had financial responsibility for the parties’ daughter and the money she had borrowed from her eldest daughter.
It thus cannot be said that the federal magistrate erred in considering the needs of the wife. Despite the wife’s needs, however, given that the federal magistrate found that the husband had no capacity to meet the spousal maintenance or arrears, his Honour considered in the circumstances that the order and arrears should be discharged. No error has been established by the wife in relation to the federal magistrate’s consideration of the wife’s needs and the weight given to them.
To the extent that the wife refers to the needs of the parties’ daughter, such needs were only relevant to the extent that they impact on the ability of the wife to adequately support herself. However, it is quite apparent that the federal magistrate had regard to this aspect and properly took it into account.
The wife also submitted that the federal magistrate erred in placing too much weight on factors that were subject to significant speculation. These matters included future rainfall, the construction of a weir and the future sale of the marina.
In this respect, the wife submitted that although the federal magistrate found the husband’s future income to have been “highly uncertain”, there was evidence from the husband himself to the contrary. The wife submitted that the husband conceded in cross-examination that he would receive 40 per cent of the profit from the sale of the marina project. However, this is not entirely accurate. In fact the husband gave the following evidence during cross-examination by the wife’s counsel [Transcript 2 July 2010, p 33]:
[MR HEMSLEY] So your expectation is that in the fairly near future you could, in fact – [A Pty Ltd] could, in fact, get a reimbursement of the monies it’s put in? --- Mm.
40 per cent of the profit?--- Mm.
And from that you’re going to get paid?---If we can get this to a point of our original contention of – intention, sorry, of completing this development, the circumstances of the day is the biggest issue. We do not expect to have water in here from normal rainfall for the next 10 years. We can’t hold this hovering cost for 10 years. We will not get to completion. We’ve exhausted all our funds for this so.
I’m not sure why you’re telling us all that. What’s interesting – sorry, what’s important is the sale price?---I don’t know whether I’m going to get 40 per cent anymore because I can’t get to completion. That’s what I was trying to get to, sir.
Sorry, that’s the simple answer then, yes. But you’re not going to walk away and get nothing, are you? After all the effort that [A Pty Ltd] has put in?---I would hope that I can make something from this, of course. (Emphasis added)
This evidence does not support the contention by the wife that the husband conceded he would receive 40 per cent, but rather highlights the speculative nature of the husband’s possible return.
In support of ground 4 the wife also referred to events which had occurred following the hearing, namely the level of rainfall and the change to water levels.
The federal magistrate could only make findings on the basis of the evidence that was before his Honour at the time. That evidence was that, at the time of the hearing, while the husband had an expectation of receiving a payment upon the sale of the marina project, the amount and timing of any such payment was uncertain. At that time it was of course also unknown how long the drought would last or how long it would take for the water levels to improve in the N area, nor was it known what steps the government may take to try and improve the situation, for example by the construction of a weir.
To the extent that the wife complains that the federal magistrate failed to consider fixing a specific date to review the husband’s circumstances, the federal magistrate did discuss the possibility of suspending operation of the order until a date in the future. Ultimately, however, his Honour found this would be inappropriate given the high level of uncertainty involved.
The wife has not established that the federal magistrate placed an inappropriate amount of weight on such matters which are “subject to speculation”. Given the nature of the evidence, his Honour did the best he could in the circumstances. As I have already mentioned, if the circumstances have improved since the time of the hearing before the federal magistrate, or improve in the future, it may be open to the wife to bring a further application in the Federal Magistrates Court. However, I am not satisfied that the federal magistrate erred in relation to this issue.
Grounds 5 and 6 – income versus capital issue
The wife asserts by these grounds, firstly, that the federal magistrate erred by finding that an “ongoing stream of maintenance” should come from recurrent income rather than capital, and, secondly, that the federal magistrate erred in characterising any money the husband may receive as capital when the husband’s evidence was that it was payment for services. The wife also submitted the federal magistrate erred in failing to take into account that the husband had arranged his affairs so as to reduce his income and have a capital entitlement.
With respect to these issues of which the wife now complains, the federal magistrate said this:
124. 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.
125. 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.
126. 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. (Emphasis added)
With respect to the finding for the need for spousal maintenance to come from income, the wife submitted that s 72 of the Act does not specifically outline as a pre-requisite the need for recurrent income. The wife also referred to s 75(2)(b) of the Act which requires the court, inter alia, to take into account the parties’ income, property and financial resources. The wife thus submitted that the husband’s assets and capital should be taken into account when assessing his ability to pay spousal maintenance, not only his income.
I consider that the federal magistrate not only had regard to the husband’s income, but also his assets (of which the most significant issue was his home), his superannuation and his financial position as a whole. Taking all of these factors into account, his Honour concluded the husband could not satisfy an order for recurrent spousal maintenance. The federal magistrate did not accept that the husband had an undisclosed stream of income and found the husband to be struggling financially.
The wife also contended that the federal magistrate failed to take into account that the husband had arranged his affairs to have a reduced income. Further, the wife maintained her argument before the federal magistrate that the husband also had the capacity to allocate, defer, characterise or convert his expected income into a capital entitlement.
In this regard, the wife submitted that the husband has the capacity to allocate income from A Pty Ltd as he wished, and that this income was “purposely split” with his current wife. The wife also submitted that as a director and shareholder of A Pty Ltd the husband paid to himself substantial sums in 2007 and 2008 in addition to his normal wages, and that these sums were “disguised” as shareholder loans. The wife contended that under s 109D in Division 7A of the Income Tax Assessment Act 1936 (Cth), these shareholder loans should have been treated as an income dividend.
The wife refers to the financial statements of A Pty Ltd and W Pty Ltd to establish that the husband has shareholder loans in these companies that he did not disclose.
Firstly, turning to the records of A Pty Ltd, the statement of financial position for the financial year ended 30 June 2007 records shareholder loans of $65,602.62. For the financial year ended 30 June 2008, the statement of financial position records shareholder loans in the sum of $116,947.78.
The statement of financial position for W Pty Ltd for the financial year ended 2008 likewise includes as a current asset, under investments, shareholder loans in the amount of $62,426.
Now it is the case that the husband did not include these loans or any part of them in his financial statement filed on 18 June 2008, but they were clearly disclosed in the financial statements of the entities tendered before the federal magistrate.
It is also the case that the federal magistrate incorrectly recorded in his reasons for judgment that the husband’s evidence was that neither he nor his wife held shares in A Pty Ltd. In fact, his evidence was that his wife held one share and he held the balance.
In these circumstances it is fair to say that the federal magistrate would not have attributed these shareholder loans in A Pty Ltd to the husband and/or his new wife. However, what the wife appears to overlook in her submission is that the shareholder loan is a liability of the shareholder and has to be repaid. There was also no evidence before the federal magistrate as to the breakup of the loan as between the shareholders.
The wife, of course, in her submission suggested that because this loan or these loans did not appear to be being repaid they therefore became deemed dividends. Now, there is clearly insufficient evidence to found this submission, but even if correct it would then be necessary to take into account the consequent taxation liabilities.
Although the federal magistrate made an error in not recognising the husband’s shareholding in A Pty Ltd, in my view it is an error of no consequence. The correct position does not indicate that the federal magistrate erred in his findings as to the claim by the wife that the husband was concealing income or not disclosing a diversion of income.
The federal magistrate expressly rejected the claims by the wife that the husband was concealing income or otherwise directing income away from himself without that being disclosed. In relation to the income revealed in the husband’s statement of financial circumstances his Honour said:
88. 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.
It is also useful to outline his Honour’s comments and findings in relation to the wife’s claims of undisclosed or redirected income in some detail:
102. 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.
103. 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.
…
111. … 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.
112. But the wife’s suspicions of chicanery are not sufficient to ground her case against the husband…
113. 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…
…
116. Again, Mrs [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.
117. Although an accountant herself, she 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.
118. … 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.
The wife was clearly not able to substantiate her claims before the federal magistrate, and an appeal is not another opportunity for the wife to argue her case. I do not accept that the federal magistrate erred in reaching his findings in relation to the husband’s financial position, outside of his error as to the shares in A Pty Ltd.
Finally, it is submitted the federal magistrate erred in characterising any money the husband will receive as capital. In this respect, the federal magistrate did not in fact “characterise” the potential future payment as capital, but rather commented that while it had some characteristics of being income, it also had some of the attributes of being potential capital. In any event, nothing turns on this issue. The primary issue in relation to the payment was that it was “highly uncertain” whether, or if so when and in what amount, the payment would be received, and it was this factor which was most significant to his Honour’s ultimate conclusion in relation to the potential payment.
There is no merit in these grounds.
Ground 7, 9 and 10 – evidentiary issues and failure to take into account or give proper consideration to matters
Ground 7 alleges that the federal magistrate erred in relation to “gathering material evidence” in the process of assessing the husband’s complex financial arrangement. As a preliminary point, it was of course not his Honour’s task to “gather” the relevant evidence. His Honour could only rely on the evidence that was put before him by the parties.
In relation to the husband’s financial position, the wife submitted that the federal magistrate erred in accepting “the husband’s outstanding business bills”. The wife submitted that this was “technically erroneous” as the debts would already have been accounted for in the businesses’ tax returns, and thus there would be a double counting.
The wife also referred to the shareholder loans in A Pty Ltd and M Pty Ltd which the husband did not disclose at trial. I have already discussed the difficulties associated with these shareholder loans above in relation to grounds 5 and 6.
The wife further contended that the husband’s house was not subject to a warrant of sale as alleged by the husband, and that the C vessel did not make a loss in 2008.
In relation to the husband’s property interests, the wife complained that the federal magistrate failed to realise that the husband had ultimate control over the disposition of income and assets in the companies and trusts and did not explore the husband’s interests in the Unit Trust No 1 or the Unit Trust No 2.
The wife also contended the federal magistrate failed to consider the evidence before him as to the husband’s level of income in 2007 and 2008, which she asserted was sufficient to meet the maintenance obligation, and that his Honour had a “contradicting and confusing” view of the husband’s income and assets.
The federal magistrate found the husband to be an honest witness in relation to his financial circumstances. However, the wife contends that in assessing the husband’s honesty, the federal magistrate erred in failing to take into account irregularities in the husband’s business financial statements and the inconsistencies in his income and asset position.
Specifically, the wife outlined that the federal magistrate failed to take into account:
oA land revaluation for land that no longer existed;
oThat interest payments were claimed as a deduction in the absence of interest bearing liabilities;
oAlleged irregularities in the register of members for a discretionary trust
oThat contrary to the husband’s claim that there were 21 unit holders in the W Unit Trust, the evidence shows that A Pty Ltd is the unit holder and the funds came from A Pty Ltd;
oThe husband’s inconsistent statements of income and assets throughout the trial.
Further, the wife says that the federal magistrate did not give proper consideration to evidence that there was a substantial profit earned in 2004 that was not disclosed. The wife also refers in her summary of argument to evidence in relation to the sale of the land allotments at L, in respect of which the federal magistrate had concluded that the profits relating to this development had long since been distributed.
I do not consider that there is any merit in the wife’s complaints in relation to these grounds. The wife has not established that the federal magistrate failed to consider the evidence before him as to the husband’s income and financial position. The federal magistrate appropriately canvassed the husband’s interests and financial position and ultimately accepted the evidence of the husband. The wife has not established that the federal magistrate erred in this respect such as to warrant appellate intervention.
Ground 11 – allegations of bias
The wife complained that the federal magistrate was biased in reaching his conclusion discharging the spousal maintenance order and arrears. In support of this ground the wife again submitted that the federal magistrate failed to take into account relevant evidence regarding the husband’s capacity to pay maintenance. I have already addressed these complaints and rejected them.
The wife also asserted that the federal magistrate had “a view that Spousal Maintenance is for a current spousal relationship”, and suggested that that was incorrect.
The wife expanded in her summary of argument that the federal magistrate erred in finding the husband was an honest witness when the evidence was to the contrary. The federal magistrate was in the best position to assess the credibility of the husband as a witness. The advantages of a judicial officer at first instance in seeing and hearing the parties are well known (see for example SSHontestroom v SS Sagaporack [1927] AC 37 per Lord Sumner at 47-48 and Abalos v Australian Postal Commission (1990) 171 CLR 167 per McHugh J at 178).
The wife complained that the federal magistrate gave less weight to s 83(7), s 72(1)(a), (b), and (c) and s 75(2), and that as a result a lump sum payment was not considered. In my view, the federal magistrate appropriately considered the relevant matters in s 72 and s 75(2) of the Act, principally the parties’ health, their income, property and financial resources and their earning capacities. The application before the federal magistrate was that of the husband’s seeking the discharge of the spousal maintenance order. There was no application before the federal magistrate seeking an order for a lump sum payment of spousal maintenance.
The wife also contended that the federal magistrate “unfairly framed or suggested an answer to effectively cease further negotiation but in doing that, failed to consider a lump sum.” In support of this assertion, the wife refers to the transcript of the hearing on 2 July 2009. Firstly, the wife refers to an exchange at p 62 of the transcript. To put this into context, the relevant part commences at p 61 and continues on p 62 as follows:
[MR HEMSLEY] You could be up to $350,000 worth?---Yes. There’s a lot of “could be’s” here, you know, well, it could come back and it may not; it could have an approval for a weir in a month or two, but I’ve been hearing this since 2005. So it may not. This is a bit like trying to bet on a horse; you can only hope that that horse will come in, you know. There’s no guarantees here. What I’ve got to deal with is today s situation and the ongoing situation until those - those things can be realised. The same as the people who invested in me. Today - - -
Just as those people have expressed trust in you, in the event that you were realise those moneys, would you be prepared for the agreement to stay in place and for the - and to pay the arrears?---I would be prepared to sit down, like, we’ve done in the past together, and talk about what we can do to help - things that are not stupid, like, I was, I guess a little bit earlier on, without getting advice about the amount of moneys that I agreed to pay. But I had the money at that time; I paid it at that time. I wouldn’t - I would definitely sit down and talk about what we can do primarily to -for my daughter and, secondly, to help my wife.
Would you be prepared to leave the order in place and to meet the arrears when you receive this windfall?---My problem - - -
HIS HONOUR: Isn’t that really a matter for me. I mean, the proceedings are on foot - - -
MR HEMSLEY: It’s a quite proper question to put to this witness?
HIS HONOUR: Well, I mean, ample time has been given to compromise the proceedings and I’ll let you ask it, but at the end of the day, it may be if the proceedings go to finality - and it depends on, I suppose, if there’s been a change of circumstances, section 83 - and I don’t know if you’ll argue that there haven’t been a change of circumstances. And if there had been a change of circumstances, don’t I have to go through the exercise again, possibly, about what’s an appropriate award of spousal maintenance? And I suppose I have a discretion about the arrears. I mean, it’s not a simple task.
Secondly the wife referred to the following exchange at p 63 of the transcript in support of her contention:
HIS HONOUR: What you want to ask Mr [Dalrymple] is that, “You will receive a sum of money, which is analogous to your income over the last five years or so, which is a capital sum maybe somewhere around $300,000. Do you think it is appropriate that a portion of that sum go to your former wife to bring the maintenance order, in effect, up to date?” And after that it should keep on going. I mean, that’s what you want to ask, isn’t it?
MR HEMSLEY: Well, no, I don’t think the last phrase is necessary but, at least, just to bring it up to date. To that point?---I can’t - this has been a compounding debt due to a court order that I tried, for so long now, to have a stop on it. I can’t make promises of that. This is what got me into trouble with personal things contracts. What I said is, “If I ever can make some money out of this, I am more than willing to sit down with my daughter and help her like I have proven in the past.” Help her further her studies at uni. And no one can deny, even my ex-wife can’t deny, that I have not helped send her to Japan.
HIS HONOUR: Anyway, Mr [Dalrymple], I don’t want to be rude but we have heard that speech before and the answer, I think, to the question is, no?---No.
So the proceedings remain on foot, I suppose, Mr Hemsley.
MR HEMSLEY: Yes, your Honour, that’s fine.
The wife also asserted that the federal magistrate “distorted” counsel for the wife’s submission by “selectively taking a sentence out of its context without considering the whole paragraph it which it was attached.” Here the wife is referring to the following paragraphs of his Honour’s reasons and the reference to a “pot of gold” attributed to the wife’s counsel:
77. 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.
…
121. The more difficulty [sic] 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 support of this point, the wife refers to the following extract from the transcript of submissions of her counsel made on 13 July 2009 at p 23:
There was also, when he was cross-examined - your Honour will recall he was cross- examined - he said he didn’t take any money, and then we put to him a series of wages that had been taken out of the company, and were shown on his taxation return and that he had split those wages with the current Mrs [Dalrymple]. Those appeared to be contradictions in his evidence. At the end of the day our problem is that we can’t point to a pot of money that is accessible to Mr [Dalrymple]. At the same time it’s quite clear that Mr [Dalrymple] is operating in an environment where there are, I suppose, two significant features. One is that he has an expectation of being paid a significant sum of money and, I think, your Honour indicated that currently he had an expectation of something in the order of $360,000.
His most recent affidavit – that’s the affidavit filed on 30 June - refers to the agreement that he has and the fact that that would be honoured. His evidence was to that effect. I suggest to your Honour, and I put this to Mr [Dalrymple], that he his [sic] a businessman and he is unlikely to engage in activities of this nature without some degree of certainty about him receiving some income. Mr [Dalrymple], in my submission, was not entirely as frank with your Honour as to what he - the basis upon - of his expectation and that’s where those issues of credit really go, your Honour. That’s the point where we say they’re important to your Honour. We simply say that we would expect that Mr [Dalrymple] has got an expectation of realising a significant windfall or lump sum in the future. (Emphasis added)
The law with respect to apprehended bias is well settled (see for example Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 and Johnson v Johnson (2000) 201 CLR 488). The test is whether a fair-minded lay observer might reasonably apprehend that the judge may not bring an impartial and unprejudiced mind to the resolution of the issue. It is also clearly the case that an apprehension of bias must be “firmly established” (see Mason J in Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352).
Nothing to which the wife has referred would lead to a reasonable apprehension of bias on the federal magistrate’s part. There is thus no merit in this complaint.
Conclusion
This was an appeal against a discretionary decision. The wife has not established, as asserted by the “catch-all” grounds 1 and 2, that the federal magistrate erred in discharging the spousal maintenance order or in not suspending, reviving or varying the operation of the order. Nor has she established any ground of appeal such as to warrant appellate intervention having regard to the principles stated in House v The King. The appeal will therefore be dismissed.
I certify that the preceding one hundred and forty one (141) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 13 December 2010.
Associate:
Date: 13 December 2010
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