MALONE & MALONE - [2011] FamCAFC 136

FAMILY COURT OF AUSTRALIA

MALONE & MALONE

[2011] FamCAFC 136

FAMILY LAW - APPEAL – Spousal maintenance – Where the husband sought to discharge an order which provided for the husband to pay spousal maintenance arrears –Where the husband delayed in bringing the application – Where there is an absence of evidence within the requisite time frame – Where the husband has not paid child support since 1995 – Where there is no “just cause” for the discharging of the order – Where there is no basis upon which the appeal can succeed – Appeal dismissed.

FAMILY LAW - COSTS – Costs orders do not follow the event – Where there was no merit in the appeal. The husband’s financial circumstances are poor in terms of the property he owns and the substantial debt owing from the non-payment of spouse maintenance – No order as to costs.

Family Law Act 1975 (Cth) s 83

APPELLANT:

Mr Malone

RESPONDENT:

Mrs Malone

FILE NUMBER:

SYC

7311

2008

APPEAL NUMBER:

2010

DATE DELIVERED:

16 June 2011

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

May, Ainslie-Wallace & Crisford JJ

HEARING DATE:

16 June 2011

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

22 February 2010

LOWER COURT MNC:

[2010] FMCAfam 148

REPRESENTATION

COUNSEL FOR THE RESPONDENT:

Ms Friedlander

SOLICITOR FOR THE APPELLANT:

Slater & Gordon Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Maddox

SOLICITOR FOR THE RESPONDENT:

Kells the Lawyers

Orders

The appeal is dismissed.
No order as to costs.

IT IS NOTED that publication of this judgment under the pseudonym Malone & Malone is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 30 of 2010
File Number: SYC 7311 of 2008

Mr Malone

Appellant

And

Mrs Malone

Respondent

REASONS FOR JUDGMENT

An amended Notice of Appeal was filed on 26 August 2010 against Order 1 of the orders made by Federal Magistrate Kemp on 22 February 2010. That order provided:
(1)That the husband’s application filed on 10 December 2008 and as subsequently amended seeking a reduction in spousal maintenance and the discharge of any arrears of spousal maintenance be dismissed save that any arrears for spousal maintenance accrued during the period following the filing of the husband’s application on 10 December 2008 and the discharge of the subject spousal maintenance order on 4 February 2009 be discharged.
Counsel for the husband in effect asked to further amend the Notice of Appeal at the outset of the hearing by seeking that should the appeal be allowed this court re-exercise the decision of the Federal Magistrate.

Background

Consent orders were made by a Registrar in Chambers on 4 March 1992 which made final orders for property settlement and also provided:
…
(9) That the husband pay to the wife by way of maintenance for herself the sum of $200 per week.
(10) That the amount of the maintenance payable be varied each year in accordance with the variation in the Consumer Price Index published by the Commonwealth statistician for all groups for Sydney by comparison of the Consumer Price Index as it stands on either 31 March, 30 June, 30 September or 31 December, whichever month immediately precedes the month in which the maintenance order is made as compared with the same index at the same date 12 months prior thereto.
There was no date provided in the orders for spouse maintenance to cease. The husband has paid some moneys to the wife by way of maintenance and also child support.
The husband filed an application on 10 December 2008 seeking that the spouse maintenance orders be discharged. The application was amended on 11 December 2009 asking that the arrears be discharged from 4 March 1992, that is the date of the consent order, to 5 February 2009. Further, that the rate of maintenance from 4 March 1992 be reduced from $200.00 per week to $78.00 per week. It was then asked that if as a result of such order the husband had in effect over paid the wife, such sum would be forgiven.
The wife asked that the husband’s application be dismissed but conceded that paragraphs 9 and 10 of the orders of 1992 should be discharged.
Prior to the hearing on 30 November 2009, on 4 February 2009, by consent the court ordered that orders 9 and 10 be discharged after 4 February 2009 and that the issue of arrears be adjourned to a conciliation conference, or if necessary a trial.
It can be seen that the issue is the question of spouse maintenance, including arrears, from the date of the consent order 4 March 1992 to 4 February 2009 when the order was discharged.

Facts

There is no real dispute that the facts as plainly set out in the Federal Magistrate’s judgment are other than correct.
The parties who were married, separated in March 1991 and were divorced in July 1998.
There are three children, S born in April 1982, A born in June 1984 and C born in September 1987.
The husband has four other children from other relationships for whom he apparently had child support responsibility.
As mentioned, on 4 March 1992 the husband signed consent orders. This fact is not controversial, however, the husband claimed later that he believed that these were insurance documents and did not understand the nature and effect of the document because he is illiterate and the wife had misled him.
In 1995 the husband moved to New Zealand. Child support recovery action was suspended because at that time there were no reciprocal arrangements. In 2006 the husband was informed by New Zealand Inland Revenue that he had a substantial liability for spouse maintenance. It was not until 10 December 2008 that the husband filed the application with which the Federal Magistrate was concerned and made orders.
The husband currently lives in New Zealand and was at the time of the hearing a driver. The wife remains living in Australia.

The proceedings before the Federal Magistrate

The husband’s case as presented to the Federal Magistrate in reliance on s 83(2)(c) of the Family Law Act 1975 (Cth) (“the Act”) was that at the time the consent orders were made in 1992 material facts were withheld. As recorded by the Federal Magistrate those material facts were essentially that:
55.Turning to the ground under s.83(2)(c) of the Act, the husband asserts that the Family Court of Australia, at the time of making the 1992 Family Court orders, had certain material facts withheld from it. Those material facts were essentially that:‑
(a)The husband was illiterate and could not read the document containing the property settlement terms.
(b)That the husband had been misled as to the contents of the said document in that he asserted that the wife had informed him that they were “insurance” documents and that, if he had known of the effect of the orders, he would not have consented to them.
Of this claim the Federal Magistrate described the evidence as follows:
56.The thrust of the husband’s case was that in 1992 the property settlement terms document had been given to him by the wife at the parties’ home, he believed, in the presence of the wife and her father, a [Mr S], and a friend called [Ms M]. He believed that he signed the document and handed it back to the wife. He has no explanation as to the identity of the signature of the purported witness to his execution of the document which appears on the face of the document itself. He could not recall whether, when he received the document, it had been signed by the wife and witnessed by her solicitor. He says that he had never received a blank form of the document.
57.Notwithstanding this attack on the document itself, there was no challenge to the terms of the property settlement orders, save the spousal maintenance order.
58.The wife’s evidence is that the document was forwarded to the husband by post and that he was requested to sign it after having its contents read to him, as it was a conceded fact that the husband had difficulties reading documents. The actual extent of the husband’s illiteracy was, however, a matter of some contest. The wife did not accept the husband was totally illiterate. No expert evidence was filed by either party to assist the Court. The Court does not find that the wife misled the Court when she deposed to a conversation with the husband wherein she said he said “I’ve been through them [the documents] …and I have signed them”.
59.The wife, however, points to the document, being Exhibit 2, which Mr Maddox says was provided to him from documents in the husband’s possession. The husband conceded to having that document for some 17 years.
60.As Mr Maddox submitted and the Court accepts, the husband’s possession of this document makes it difficult for his story to stand up. The court is of the view that it is more likely that the wife’s version of the evidence is correct. That is, that the document was forwarded to him, blank, care of his employer … at a post office number in [E] Queensland and that he was requested to have someone read the document and witness it. The fact that he had an unsigned copy supports this view.
61.The wife’s evidence was that her recollection was that when she signed the said document in the presence of her solicitor, the document had already been signed by the husband and purportedly witnessed.
62.The husband says that he does not know the identity of the witness. The wife was not aware and nor should she be expected to be so aware of the identity of that person.
63.The Court is of the view that the husband has confused the signing of the transfer document with the signing of the terms of property settlement document.
64.The signing of the transfer document was executed on 7 May 1992 and was indeed signed by the husband in the presence of Mr [S], being the wife’s father. That document is the document which, more than likely, was signed by the husband at the parties’ home, in accordance with his recollection.
65.The husband further asserted that he had been misled by the wife as to the contents of the document and because he was unable to read it he understood it to be an “insurance” document or something which would only take effect if he died. Unfortunately, this makes no sense at all. The parties had separated at the time the document was forwarded to the husband. The circumstances surrounding the parties’ separation meant that they were certainly not on the best of terms at that time. For the husband to say that he relied on the wife and trusted her in the circumstances of this matter beggars belief.
66.Further, it would have been obvious to the husband that this document was a Court‑related document and the Court simply does not accept that he would have signed the document reliant only on what he said the wife had said to him at the time. He acknowledged that he knew it was an important document and that he had in fact signed the document.
67.Further, the husband’s evidence was to the effect that he wished to preserve the matrimonial home for the wife and the 3 children and not to expose it to his then partner “[Ms H]”. He agreed that the wife could have asked him to take the settlement document to someone who could read it to him. He could not deny that this had in fact, occurred.
The conclusions of the Federal Magistrate were supported by the evidence to which we will make some further reference.
In the husband’s affidavit filed 10 December 2008 he claimed that it was not until 2003 that he knew there was an order for spouse maintenance. In evidence, the husband conceded that he had a copy of the order since 1992 (Transcript p 235). Further, that in 1993 he saw a solicitor in E, Queensland who discussed with him his liability to pay $200 per week.
Even if the husband did not immediately appreciate the significance of the document the husband certainly understood it in 1993 and in 1994 when there was a Child Support Review and as contained in a letter from his solicitor in March 1998 in relation to Child Support.
It cannot be correct that simply because the wife was aware of his literacy difficulties there was some onus on her to disclose to the court the husband’s possible comprehension difficulties. The wife contended that his comprehension was not as he claimed and that the husband told her that another man had read the document to him. In addition, despite the husband’s evidence, it is plain that he signed the document in E, far away from the wife’s influence and witnessed by a third party not known to the wife.
It was observed by the Federal Magistrate that the only claim made by the husband was to contest the spouse maintenance element in the orders. In particular, the husband complains that a Court “…would not have made an open‑ended spousal maintenance order in the terms that it did pursuant to orders (9) and (10) of the 1992 Family Court orders”. (Reasons paragraph 68)
The husband may have had some reason to bring an application pursuant to s 79A of the Act, however this was never brought and there is substantial delay.
It seems that the wife’s circumstances at the time of making the orders as explained in her affidavit were that she was dependent on Social Services and maintenance from a previous marriage. Apparently that maintenance was from the husband in these proceedings in the sum of $158.00 per week. Her expenses totalled some $310.00 per week. The children were then aged 10, 8 and 5 years. The parties’ assets consisted of a house valued at $160,000.00 with a mortgage of some $77,000.00 together with numerous other loans. The parties each had a car worth some $4,000.00 and furniture was valued at $2,000.00. Although the husband was a member of a superannuation fund there was no specific evidence before the court as to its value. The husband was employed as a miner. As explained by the Federal Magistrate:
79.The effect of the 1992 Family Court orders was, essentially, that the husband retain the Ford Falcon utility motor vehicle and his MLC superannuation and life insurance policy. The wife took a transfer of the subject land (and the matrimonial home) and took over the obligations to meet the mortgage to Westpac Banking Corporation. She retained her [vehicle], her Westpac Banking Corporation account for her family allowance, her St George Building Society account for her pension payments, her Illawarra Credit Union account and trust for the child [S] and the furniture and contents of the former matrimonial home.
80.The husband was ordered to pay the wife ongoing maintenance for herself in the sum of $200.00 per week adjusted in accordance with order (2) for Consumer Price Index increases.
It was only upon a call for documents that the husband’s counsel produced the application for property settlement and spouse maintenance, the affidavit of the wife as to her financial circumstances in support of the application and an unsigned copy of the consent orders. The husband conceded that he had those documents for 17 years. The husband otherwise did not provide in his case before the Federal Magistrate any other documents referable to the 1992 order.
The other aspect of the husband’s case was that pursuant to s 83(2)(ba) of the Act the amount should be decreased. It was submitted that the Court would conclude that this was an order made by consent and the amount ordered to be paid is not proper. Reference was also made by the Federal Magistrate to s 83(5A) and (6A) which provides that:
(5A)In satisfying itself for the purposes of paragraph (2)(ba), the court shall have regard to any payments and any transfer or settlement of property previously made by a party to the marriage to the other party or any other person for the benefit of the other party.
…
(6A) Where, as provided by subsection (6), an order decreasing the amount of a periodic sum payable under an order is expressed to be retrospective to a specified date, any moneys paid under the second-mentioned order since the specified date, being moneys that would not have been required to be paid under the second-mentioned order as varied by the first-mentioned order, may be recovered in a court having jurisdiction under this Act.
It is quite obvious that at the time the orders were made and subsequently, the wife’s financial circumstances were poor. Apparently the property was sold some two years later for a net sum of $23,000.00, which the wife used to repay her father for the use of a caravan on his property where she and the children had had the benefit of living and later to build a patio on her father’s house. The wife continued to live with her father.
By reference to the history of the matter including that prior to the 1992 Family Court orders, the husband was paying the sum of $158.00 per week and the wife’s financial circumstances, it could not be said that the amount ordered to be paid was not proper in the circumstances at the time the order was made. The Federal Magistrate concluded in paragraph 88 that:
… The real issue is not as to the quantum of the amount but the length of time for which that amount was said to otherwise be payable for.
The Federal Magistrate then correctly referred to the substantial delay in this matter. It was found that even if the husband was not aware of his obligation to pay spouse maintenance in 1992 certainly in 1993 when he spoke to a solicitor at E and a number of times after that including in 1998 when he spoke to other solicitors and in his dealings with the Child Support Agency there was no doubt he knew of the terms of the orders.
It seems that apart from spouse maintenance the husband has paid moneys towards child support including in about May 1998 the sum of $42,878.00 which origin was through a personal injury claim.
Correctly the Federal Magistrate did not accept the husband’s submission that because he was assessed to pay child support and had paid some such support this should be considered together with the spousal maintenance sum. In any event the Federal Magistrate concluded from the evidence that the husband only paid child support from 1992 until 1995 when he ceased making any payments having moved to New Zealand. The children were then aged 13, 11 and 8 years respectively.
The Federal Magistrate rejected the husband’s explanation that he did not have the money to pursue an application and the Federal Magistrate also concluded that the husband had the relevant capacity to make the payments as provided by the consent order.
In addition, considering the husband ceased paying child support in 1995 the Federal Magistrate concluded:
… it may then have been considered just and equitable for the $200 spousal maintenance payment to continue, as the wife was not receiving any child support payments.
The Federal Magistrate determined that the matter was further complicated by reason of the fact that in 1994 the child support obligation was reduced by reason of the spousal maintenance orders and the four other children for which the husband was responsible. The Child Support decision of 11 June 1994 which was before the Federal Magistrate included at page 29 the following:
… I do propose to reduce the amount of child support payable for each child, to take into account the Applicant is also supporting the First Other Party. …
Counsel who appeared for the husband before the Federal Magistrate submitted that the total amount of spousal maintenance as per the order is the sum of $198,308.00. There was then deducted the amount said to be outstanding at 7 September 2009 being $126,238.00 leaving a balance of $72,070.00. This it was asserted was the amount that the husband must have paid for spouse maintenance. If that sum was divided by the number of weeks from the date of the order up until September 2009 the sum equates to $78.00 per week. This no doubt was the basis for the amended application. The purpose it seems was that if the order could be so varied from 5 March 1992 to the date of the hearing then the husband had made these payments and there would be no arrears. The Federal Magistrate was of the view that this was an impossible exercise given that much of the financial information from 4 March 1992 was not available. Consequently that submission was rejected.

In conclusion the Federal Magistrate found that the husband had not satisfied the onus on him to demonstrate that the amount of $200.00 per week ordered on 4 March 1992 was not otherwise a proper or adequate amount.
As to the claim pursuant to s 83(2)(a) being the question of the parties’ circumstances having changed it was clear that the wife’s financial circumstances have changed for the better and at this time she is in a better financial position than the husband. Apart from arrears the husband is no longer liable for spouse maintenance. Consequently, the submissions of counsel for the wife were accepted “that change has been accommodated by the discharge of the spousal maintenance order in February of 2009. The real issue is as to what the Court should do with respect to the arrears”. (Reasons paragraph 103)
It was submitted that the amount owing to New Zealand Inland Revenue by way of arrears is $417,630. It was not clear whether some of this amount is referable to Child Support. The Federal Magistrate considered the husband’s financial position which he described:
108.Given the husband’s current financial circumstances as set out in his financial statement, he earns between $900.00 and $1,000.00 per week after tax ($1,300.00 before tax) with weekly expenses of between $808.00 and $873.00. He has rent of some $300.00 per week together with a number of other debts. His only assets are $10,000.00 worth of household contents and whatever equity he has in a motor vehicle which is the subject of a hire purchase debt. He says that he spends approximately $320.00, on his weekly expenses.
109.The husband says that he has a current child support private arrangement for [Z] of $75.00 a week and a child support assessment referable to [Y] of some $286.00 a week. He has insurance premiums of $39 per week, $70.00 hire purchase to [H Money], $75.00 per week to BNZ personal loan, $25.00 a week to BNZ Visa minimum credit card payments, $60.00 a week for Consumer Finance, $10.00 a week for home direct and $55.28 a week to GE Finance. Those total some $695.00 per week.
Despite the current financial circumstances of the husband the Federal Magistrate in exercising his discretion rejected his application. In particular it was said:
110.The Court finds that the husband knew of his spousal maintenance obligations from 1992 onwards and that at specific times this liability had been brought to his attention and that for various reasons including financial he had chosen to do nothing about it. Indeed, in the 1994 child support review, the assessor made it clear that the spousal maintenance sum was a matter for the husband to take up with the Court. This he failed to do until 2008.
111.The Court has no evidence of the wife’s financial circumstances at any specific time post the 1992 Family Court orders which would have enabled the Court to effect a proper assessment of any variation to the husband’s spousal maintenance obligations. The Court accepts that it was not incumbent on the wife to produce that evidence.
112.The Court is not satisfied that the spousal maintenance sum ordered in 1992 was not in fact a proper sum to be ordered at that time given the parties then asset and income positions and there is no basis for the Court to vary that sum to a figure of $78.00 per week effective as and from that date.
113.The husband says that his mother had told him that she had had a conversation with the wife to the effect that the wife had said that she was “forgetting about the child support and the spousal maintenance”, there was no evidence given by the husband’s mother as to this representation and no evidence of any reliance on it or change of position by the husband based upon it.
114.The Court does not accept that the husband had thought that the wife had voluntarily stopped any liability for the spousal maintenance. This was inconsistent with his own evidence that he had been aware of the spousal maintenance obligation persisting but that he had insufficient funds to make any application to the Court to vary or discharge that obligation.
115.Further, the Court does not accept that the wife had given the property settlement terms document to the husband under the guise of being “insurance” documents and that there had been any fraud in that regard. The wife was never seriously cross-examined on this allegation. The Court prefers the wife’s evidence as to how this document came into existence and how it was ultimately signed by the husband.
116.There is substantial strength in the wife’s submission that because from 1995 onwards the husband ceased paying any child support then any justice and equity required that the husband continue to pay his spousal maintenance obligation of $200.00 per week.
117.Accordingly, the Court is of the view that the husband’s application should be dismissed, save that any arrears for spousal maintenance accrued during the period following the filing of the husband’s application on 10 December 2008 and the actual discharge of the spousal maintenance order on 4 February 2009 should also be discharged.

Conclusion

As a result of the order made by the Federal Magistrate on 22 February 2010 the husband is relieved of his obligation to pay spouse maintenance from 10 December 2008 (the date the application was filed) to 4 February 2009 when the order was discharged by consent.
Thus, the appeal must be focused on the time frame between 4 March 1992, when the court order was made and 10 December 2008, when the application was filed by the husband.
There is no basis upon which the appeal can succeed.
The applicable provisions are as follows:
Section 83 – Modification of spousal maintenance orders
(1)If there is in force an order (whether made before or after the commencement of this Act) with respect to the maintenance of a party to a marriage:
(a)made by the court; or
…
the court may, subject to section 111AA:
(c) discharge the order if there is any just cause for so doing;
…
(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 (including the person entering into a stable and continuing de facto relationship);
(ii)the circumstances of the person liable to make payments under the order have so changed; or
…
as to justify its so doing;
…
(ba) in a case where the order was made by consent--that the amount ordered to be paid is not proper or adequate;
(c) that material facts were withheld from the court that made the order or from a court that varied the order or material evidence previously given before such a court was false.
…
(5A) In satisfying itself for the purposes of paragraph (2)(ba), the court shall have regard to any payments, and any transfer or settlement of property, previously made by a party to the marriage, or by the bankruptcy trustee of a party to the marriage, to:
(a)the other party; or
(b)any other person for the benefit of the other party.
…
(6)An order decreasing the amount of a periodic sum payable under an order or discharging an order may be expressed to be retrospective to such date as the court considers appropriate.
(7) For the purposes of this section, the court shall have regard to the provisions of sections 72 and 75.
…
The Federal Magistrate was correct in refusing to discharge the order. The Federal Magistrate could only discharge the order if “there is any just cause for doing so” (s 83(1)(c)).
There were three difficulties in the husband’s case to which the Federal Magistrate made reference. The first was the delay in making the application, which on its own would not be decisive but is an important discretionary consideration. The second was the absence of evidence within the requisite time frame. The third was the absence of Child Support paid by the husband after 1995.
The Federal Magistrate also properly rejected the argument in relation to s 83(2)(c). The husband’s case that he did not know that the document he signed was for final property settlement orders and spouse maintenance was properly rejected by the Federal Magistrate for reasons well explained by him. The husband was not truthful in this respect as was demonstrated in cross examination of him and by reference to the documents. There are no submissions on behalf of the husband to demonstrate error in this respect.
Finally, the Federal Magistrate was correct in refusing to vary the order to the sum artificially proposed by reference to the moneys paid, or at all.
To vary the order it is necessary for the husband to show by reference to s 83(2) that the circumstances of either of them had so changed as to justify the order being varied, or that the amount is not proper. The husband failed to do so.
Correctly, the Federal Magistrate made reference to s 83(5A) being the transfer of property and the consent order discharging the spouse maintenance order.
In s 83(7) the court is to have regard to the provisions of ss 72 and 75. The Federal Magistrate was correct in placing some weight on the absence of payment of child support to the wife after 1995.
The grounds and the submissions made on behalf of the husband do not demonstrate any appealable error made by the Federal Magistrate. There is therefore no need to consider the application to re-exercise.

Costs

Although we have found no merit in the appeal, costs orders in this court do not follow the event. The wife has no doubt been put to considerable expense resisting the appeal and should ordinarily have her costs paid by the husband.
However, the husband’s financial circumstances, as described by the Federal Magistrate, are poor in terms of the property he owns and the substantial debt owing from the non-payment of spouse maintenance. Consequently, we are of the view that there should be no order as to costs.

I certify that the preceding fifty three (53) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, Ainslie-Wallace & Crisford JJ) delivered on 16 June 2011.

Associate:

Date: 16 June 2011