Davern & Davern (No 2)
[2023] FedCFamC1F 763
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Davern & Davern (No 2) [2023] FedCFamC1F 763
File number(s): SYC 9296 of 2020 Judgment of: ALTOBELLI J Date of judgment: 6 September 2023 Catchwords: FAMILY LAW – MODIFICATION OF SPOUSAL MAINTENANCE – Interim – Husband’s application to “rescind” previous spousal maintenance orders pursuant to s 83(1) of the Family Law Act 1975 (Cth) – Change in circumstances – Where the husband has never complied with previous orders for spousal maintenance – It is ordered that the spousal maintenance orders are stayed conditional upon the husband’s compliance with previous orders for sale of property. Legislation: Family Law Act 1975 (Cth) s 83 Cases cited: Pratt & Pratt (2012) 47 Fam LR 234; [2012] FamCAFC 81
Ritchie & Ritchie [2021] FedCFamC1F 138
Division: Division 1 First Instance Number of paragraphs: 35 Date of hearing: 27 July 2023 Place: Sydney Solicitor for the Applicant: Litigant in person Solicitor for the Respondent: Litigant in person ORDERS
SYC 9296 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR DAVERN
Applicant
AND: MS DAVERN
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
6 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.Within 42 days of the date of these orders, the Applicant husband (“the husband”) is to comply with all of the orders made on 18 October 2021 and all orders subsequently made in relation to the vessel known as Vessel B.
2.Conditional upon Order 1 being complied with, Orders 1 and 2 made on 18 October 2021 in relation to spousal maintenance are stayed from the date of the husband’s compliance.
3.The husband’s Application in a Proceeding filed 14 April 2023 is otherwise dismissed.
4.The costs of both parties are reserved to the final hearing.
THE COURT NOTES THAT:
A.As a result of the Respondent wife inadvertently disclosing an offer of settlement made by the husband in her submissions, Justice Altobelli recuses himself from hearing these proceedings.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Davern & Davern has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
These reasons for judgment explain the orders that the Court has made in an application by the applicant husband (“the husband”) to “rescind” orders for spousal maintenance in favour of the respondent wife (“the wife”) that I made in October 2021.
BACKGROUND
On 18 October 2021 I made orders for spousal maintenance and the sale of a vessel known as Vessel B. For all practical purposes very few, if any, of those orders have been complied with and the matter has been back before this Court on numerous occasions.
The focus of the present application is the orders for spousal maintenance. Order 1 in this regard was made by consent and states:
1.By way of spousal maintenance, the husband pay the following to the wife pending further order:
a.all instalments at the current scale to the private health fund for the wife (policy number […]), including cover for private hospital, optical, physiotherapy, dental and medical expenses for the wife in addition thereto meet such expenses as in respect of the wife which are not able to be recovered from the fund provided the wife shall not undergo any elective procedure without the parties’ written agreement;
b.contents insurance in relation to the wife's Commonwealth Bank home insurance (policy number […]); and
c.all amounts owing in respect of the parties' storage facility operated in Tasmania.
Order 2 was made by the Court and states:
2.By way of spousal maintenance, the husband pay the following to the wife until four weeks after the date the wife receives the payment pursuant to Order 7 herein:
a.The sum of $1,655 per week into a bank account nominated by the wife; and
b.The wife’s mobile telephone bills.
In my reasons published on that date and reported as Ritchie & Ritchie [2021] FedCFamC1F 138 (“the reasons for judgment”) I found that the wife, who was the applicant at the time, was in need of maintenance, and the husband, who was the respondent at the time, had the capacity to pay the maintenance sought. The maintenance was limited to the amount of rental that the wife was paying for the accommodation that she was renting for the benefit of the family consisting of the children and herself. In finding that the husband had capacity to pay the maintenance the Court took into account that he was in paid employment at the time, but that at the end of 2021 when his employment was likely to end, he would receive annual leave and possibly long service leave entitlements in a substantial amount. At the time, the husband’s weekly income was $16,160, and expenses claimed at $21,700. The Court’s findings about the husband’s claimed weekly expenditure are set out in the reasons for judgment.
By way of an Application in a Proceeding filed 14 April 2023 the husband asks the Court to “rescind” the order for spousal maintenance “back to October 2021” which the Court infers to mean retrospectively to the date of the order. For all practical purposes the Court will treat this as an application under s 83 of the Family Law Act 1975 (Cth) (“the Act”) to vary the existing order for spousal maintenance.
By way of the wife’s Response to an Application in a Proceeding signed 8 May 2023, the wife opposes any variation to the spousal maintenance order.
The Court notes that both the husband’s Application and the wife’s Response contain orders in relation to other matters including parenting, and the vessel. The Court regards that the issue before it for determination was the spousal maintenance issue, as all the other issues appear to have either been settled (as regards parenting) or are otherwise before another Judicial Officer of this Court (in relation to the vessel and matters ancillary thereto).
Both parties represented themselves in the present application. They did the best they could but the evidence they present before the Court manifests the deep underlying mistrust that they have for each other. Accusations and assertions made which, even in the context of an interim hearing, lack the support of any cogent probative evidence. The onus of proof was on the husband. Both parties had a duty of disclosure to the Court. Both allege the other has failed to comply with this duty.
THE MATERIAL BEFORE THE COURT
In support of his case, the husband relies on the following documents:
(a)Application in a Proceeding filed 14 April 2023;
(b)His affidavit filed 23 May 2023;
(c)His affidavit filed 22 May 2023;
(d)His affidavit filed 31 December 2022;
(e)Financial statement filed 25 July 2023; and
(f)Case outline filed 23 July 2023.
In support of her case, the wife relies on the following documents:
(a)Response to an Application in a Proceeding signed 8 May 2023;
(b)Her affidavit filed 11 May 2023; and
(c)Case outline filed 24 July 2023.
THE APPLICABLE LAW
Section 83 of the Act relevantly provides:
Modification of maintenance orders.
83. (1)In proceedings with respect to the maintenance of a party to a marriage or of a child of a marriage, if there is in force an order (whether made before or after the commencement of this Act) with respect to the maintenance of that party or child by the other party to the marriage-
(a)made by the court; or
(b)made by another court and registered in the first-mentioned court in accordance with the regulations, the court may-
(c)discharge the order if there is any just cause for so doing;
(d)suspend its operation wholly or in part and either until further order or until a fixed time or the happening of some future event;
(e)revive wholly or in part an order suspended under paragraph (d); or
(f)subject to sub-section (2), vary the order so as to increase or decrease any amount ordered to be paid or in any other manner.
(2)The court shall not make an order increasing or decreasing an amount ordered to be paid by an order unless it is satisfied-
(a)that, since the order was made or last varied-
(i)the circumstances of a person for whose benefit the order was made have so changed;
(ii)the circumstances of the person liable to make payments under the order have so changed; or
(iii)in the case of an order that is binding on a legal personal representative, the circumstances of the estate are such,
as to justify its so doing;
(b)that, since the order was made, or last varied, the cost of living has changed to such an extent as to justify its so doing; or
(c)that material facts were withheld from the court that made the order from a court that varied the order or material evidence previously before such a court was false.
(3)Sub-section (2) does not prevent the court from making an order varying an order made before the date of commencement of this Act if the first-mentioned order is made for the purpose of giving effect to this Part.
(4)In satisfying itself for the purposes of paragraph (2) (b), the court shall have regard to any changes that have occurred in the Consumer Price Index published by the Commonwealth Statistician.
(5)The court shall not, in considering the variation of an order, have regard to a change in the cost of living unless at least 12 months have elapsed since the order was made or was last varied having regard to a change in the cost of living.
(6)An order decreasing the amount of a periodic sum payable under an order or discharging an order shall not be expressed to be retrospective to a date earlier than 12 months before the date of the application for the variation or discharge.
(7)For the purposes of this section, the court shall have regard to the provisions of sections 72, 75 and 76.
(8)The discharge of an order does not affect the recovery of arrears due under the order at the time as at which the discharge takes effect.
In accordance with s 83(6) of the Act, the husband will not be able to decrease the amount of periodic sum payable retrospectively to a date earlier than 12 months before his Application was filed. As the husband filed his Application in a Proceeding on 14 April 2023, he is only able to apply to decrease or “rescind” the spousal maintenance up to April 2022. Therefore, the husband will be liable for the full amount in spousal maintenance owed to the wife between the date of the orders (18 October 2021) and 14 April 2022.
THE CASES SUMMARISED
In short, the husband’s case was that there had been a material change in his financial circumstances such that the order of maintenance was no longer appropriate. Moreover, he contended that the evidence presented by the wife in support of her spousal maintenance claim was manifestly false.
The first part of the husband’s claim is that, as anticipated at the time the maintenance orders were made, his employment ceased at the end of 2021. Perhaps what was not anticipated was that he would not be able to obtain alternate employment, despite his diligent efforts in this regard. The second part of the husband’s claim is that the anticipated lump sum payment due to him at the end of his employment did not eventuate as his employer went into liquidation.
The wife disputes that the husband has been unable to obtain alternative employment, inferentially contending that the husband has deliberately not obtained employment. The fact that the husband’s former employer went into liquidation, and that he did not receive the anticipated lump sum, is not in dispute.
The Court notes that, objectively, these events constitute a material change in circumstances. As for the other part of the husband’s claim, that the wife in effect produced false evidence before the Court, this is not an issue that the Court can resolve on an interim basis, and will be left to the trial judge.
The wife’s case primarily challenges the plausibility of the husband’s evidence in relation to his financial circumstances and contends that his lifestyle living on their vessel is simply inconsistent with his stated financial circumstances.
DISCUSSION
The power of the Court to modify a maintenance order is clearly expressed in s 83(1) of the Act. The husband seeks to invoke that power. He cannot do so unless the Court is satisfied about the matters set out in s 83(2). This subsection is expressed in mandatory terms: “… shall not make an order…unless it is satisfied…” of the matters set out therein. Insofar as the exercise of the power is predicated upon a change of circumstances, it is further conditioned by the discretionary consideration: “… as to justify its so doing”. In other words, it is clear that the Court could find a change in circumstances, in this case relating to the person liable to make the payments, but might not necessarily conclude that such changes justify the making of the order. As the Full Court states in Pratt & Pratt (2012) 47 Fam LR 234 at [98]:
A finding of one or more of the circumstances to which s 83(2)(a)(i)–(iii) refer does not conclude the court’s consideration of the matter. If the court is satisfied as to one of these matters as to justify its doing so, it may then turn to consider under s 83(1) whether in all of the circumstances the order ought to be varied as sought. The effect of s 83(7) is that in determining whether an order should be discharged, suspended or varied regard must be had to ss 72 and 75 of the Act.
Indeed, that is the present focus of this case. Accepting that the circumstances of the husband have changed in the sense that he is no longer in employment, has not been able to find alternate employment, and did not receive the contemplated lump sum at the conclusion of his employment, do those circumstances justify an order in terms of that sought by him?
The Court is satisfied that the husband’s affidavit filed 22 May 2023 provides plausible evidence about his unsuccessful attempts to obtain alternate employment. Whether the husband in fact applied for over 50 jobs, as he contends, or something less, it seems that he made diligent efforts in this regard. He has had four job interviews for which he has been unsuccessful. The husband does not dispute that he is in good health, or that, as the wife contends in her case outline, he has “excellent work experience”. What he contends is that notwithstanding that, he has been unable to obtain suitable employment.
To the extent that the wife contends that the husband has not made bona fide efforts to find employment, the Court does not agree having regard to the evidence.
The wife submits that the husband has, indeed at all relevant times, had the capacity to pay the maintenance as ordered and is deliberately concealing bank accounts, financial support, and the funds that he has available to him. She contends that the lifestyle he lives is plainly inconsistent with his alleged impecuniosity. She further submits that his non-compliance with the orders for sale of the vessel, combined with the husband’s lack of transparency around employment and financial status, are matters that would cause the Court not to exercise any discretion in his favour.
The Court has carefully considered these submissions.
It is curious, the Court observes, that the husband at no point complied with the orders for maintenance, even those he consented to, and even in the period before he ceased his employment. He was well represented at the time, but no appeal was filed against the orders made.
On a fair reading of his affidavits, his sense of aggrievement and injustice about the orders made, especially the supposed false basis presented by the wife, is palpable. In his case outline he referred to the “complete fictions” created by her. He complains about her lifestyle. Based on the husband’s own material, one could reasonably infer that, in fact, he never intended to comply with the order, a conclusion that could plausibly extend to the issues of both maintenance and the sale of the vessel.
The husband comes to the Court and seeks an exercise of discretion in his favour in circumstances where he has not complied with orders of the Court.
The wife’s concerns about his lifestyle, and how this is inconsistent with his stated financial affairs, has some substance. Even on the husband’s own evidence, for example, as recently as late 2022 he was able to pay for an apartment in Suburb S in City T, as well as meet all the costs associated with the vessel. Indeed, his own evidence is that he lived in that apartment for almost a year, but he does not explain what the vessel was doing in this period and, in particular, whether it was being used for reward.
The husband’s Financial Statement filed 25 July 2023 prima facie raises issues. He deposes to having no weekly income, but average weekly expenses of $2,585 per week. One possible explanation for this is that he is living off borrowed money, as he indeed asserts. In the said Financial Statement he says that he owes $45,914 to Ms P (who the wife contends, and the Court suspects, is in fact his partner) and $137,000 to Ms U and Mr V. The amount owed to Ms P was disclosed in the same amount in his Financial Statement filed 10 August 2021, but the other loan is not disclosed, presumably on the basis that it was incurred afterwards, again consistent with his evidence. It is plausible, therefore, that the shortfall between income and expenditure is broadly explained by reference to the $137,000 loan.
It is otherwise possible that his expenses are overstated. Weekly expenditure of $400 per week for electricity on a vessel seems implausible. Nonetheless this is an academic exercise if the Court accepts that he has no income.
For reasons that will become apparent below, an examination of the wife’s financial circumstances is unnecessary in this case.
DETERMINATION
The present application was framed as an interim application, and neither party proposed that they cross-examine the other. Central to the issue before the Court is the true financial circumstances of the husband, who bears the onus of proof. The wife makes serious, and at least partially plausible, allegations about the husband’s nondisclosure, his non-compliance with orders, and the seeming inconsistency between the husband’s lifestyle and claim as to financial circumstances. The husband makes some at least partially plausible explanations in relation to some of these issues.
It is impossible to do justice between the parties without their respective evidence being tested in cross-examination. It is clear that the parties are destined to a final hearing and the Court sees little prejudice to either of them if the orders for maintenance are merely stayed, rather than varied or discharged, subject to one caveat which will be discussed below. With the benefit of cross-examination, the trial judge may have a much better insight into the true financial circumstances of the husband and thus whether the Court should exercise its discretion in either rescinding, vacating or varying the spousal maintenance orders. A stay of the maintenance orders merely suspends their operation pending further order. The liability is intact and both parties’ rights are preserved. The trial judge should have the evidence to determine whether the stay should be discharged, either retrospectively, or from the date of any order made by the trial judge.
The husband’s non-compliance with the Court’s orders made on 18 August 2021 in relation to the vessel is particularly troubling in circumstances where both he, and the vessel, are outside the direct jurisdiction of the Court, in the sense that enforcement would likely be expensive and complex. It is almost as if there is little incentive on the husband to comply with an order unless it is on his terms. Accordingly, for the husband to have the benefit of the stay of the maintenance orders he must comply with all orders relating to the sale of the vessel within 42 days. Failing that, the stay of the maintenance orders is retrospectively lifted, and the application that he brings before the Court in relation to maintenance is dismissed.
This matter has a long and unfortunate litigation history. It should proceed to a hearing without delay, with the personal attendance of the husband, or without him if he does not attend. These reasons will be forwarded to the Case Management Judge of the Sydney Registry, Justice Campton, for his information.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 6 September 2023
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