MERRICK & DENARD

[2020] FCCA 2110

FEDERAL CIRCUIT COURT OF AUSTRALIA

MERRICK & DENARD [2020] FCCA 2110

Catchwords:
FAMILY LAW – Parenting and property – spousal maintenance – interlocutory applications – upcoming trial.

Legislation:

Family Law Act 1975, ss.69ZL, 90SI, 90SM

Evidence Act 1995 (Cth), s.140

Applicant: MR MERRICK

Respondent: MS DENARD

File Number: BRC 11879 of 2017

Judgment of: Judge Howard

Hearing date: 11 May 2020

Date of Last Submission: 11 May 2020

Delivered at: Brisbane

Delivered on: 11 May 2020

REPRESENTATION

Counsel for the Applicant: Mr Galloway

Solicitors for the Applicant: N R Barbi Solicitors

Counsel for the Respondent: Ms Pendergast

Solicitors for the Respondent: Barry Nilsson  Lawyers

ORDERS

1. That all outstanding applications be adjourned to the final hearing of this matter commencing at 10:00am on 3 August 2020 in the Federal Circuit Court of Australia at Brisbane.

2. That costs be reserved.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 11879 of 2017

MR MERRICK

Applicant

And

MS DENARD

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

A.These reasons were delivered ex tempore on 11 May 2020 and have been settled and corrected for grammatical errors in order to convey the precise intention of the Court. These reasons are also provided in short form pursuant to section 69ZL of the Family Law Act 1975 (Cth) (“the Act”).

1. The matter before the Court involves three different issues. I will address the parenting first.  There are two young boys:  X, born in 2015, and Y, born in 2016.  They are the children of the parents in this case – the father, Mr Merrick, and the respondent mother, Ms Denard.  The parties were in a de facto relationship for a period of three years.  They separated on a final basis in May 2017.  The matter is listed for a final hearing in the Court (listed for three days) commencing in early August 2020.  It has a primary listing.  There is no reserve trial; there is no over listing of this trial. 

2. The parties did file some interim applications and there was a couple of earlier dates originally provided for the hearing of the matter.  Between the Court listings and the onset of the pandemic, matters needed to be re-jigged and I know that there were some attempts made to try and get this matter on earlier.  I suppose for this family the only really good news at this stage is that it has final hearing in August. 

3. Mr Galloway of counsel appears by video link today on behalf of the father. Ms Pendergast of counsel appears by video link on behalf of the mother. The father wants the spousal maintenance reduced from $1800 a week to $300 a week. There is no doubt the Court has power to do this under section 90SI. The earlier spousal maintenance order was made by her Honour Judge Turner in May 2018. The father says that since that time there has been significant change and his income has dropped significantly and he is now a salaried employee of a company called B Pty Ltd. He earns $80,000 gross per annum (plus superannuation and perhaps some other bonuses). He earns less per week than the $1800 that he is currently ordered to pay. On the other hand, the wife’s side points out, that he is well behind on his payments – to the tune of approximately $85,000 in respect of spousal maintenance. He doesn’t really show any intention at the moment of continuing to pay in accordance with the earlier order.

4. On behalf of the wife it is also said that at the conclusion of the final hearing there will be an order sought for ongoing payment of spousal maintenance.  I am aware, of course, that there has also been a submission that there should be a retrospective operation of an order to reduce the amount of spousal maintenance.  Crucially, however, it is said on behalf of the wife that the situation that has arisen has been (it is alleged) organised or arranged by the husband to remove his previous successful business from one entity, close it down or perhaps transfer it to another entity controlled by his mother.  I would say at the outset these are, of course, matters for a final hearing.

5. They are quite serious allegations because the allegation really is that the husband is trying to hide an asset in order to, as it were, put it out of the reach of the Court and diminish the amount of a property adjustment order under section 90SM of the Act. They are very serious allegations that would require a very close examination of the evidence. It will require, obviously, cross-examination; it will require findings. Noting, of course, section 140 of the Evidence Act 1995 (Cth), with such serious allegations there will need to be a particular standard of proof that one would expect the Court to require. That is not saying it could not be reached; all I am saying is these matters need to be looked at forensically, methodically and carefully because what the evidence does disclose is that from late last year the husband cancelled the franchise that his business had with the C Group. He has told the Court that that previous business that he conducted has ceased. A new business commenced operation in early 2020 – B Pty Ltd. The Court is told it operates from the same premises in D Street at Suburb E.

6. The husband himself points out in his affidavit filed 20 February 2020 that because of his sales history he is the face of B Pty Ltd.  Apparently there was some discrepancy in the website as well.  He was stated as a director but he is not a director; he is a sales person.  Be that as it may, the allegations on behalf of the wife is that matters have been arranged by the husband to present to the Court a change of circumstances which would justify the Court in reducing the spousal maintenance order that was made almost two years ago.  And I do think for the reasons that I have stated – that is, there needs to be a close examination of all of the evidence;  there needs to be cross-examination of the parties;  there needs to be – the Court needs to have the time to carefully go through all of the documentary evidence, all of the available income evidence, the BAS statements. 

7. For instance, puts on some evidence in her affidavit which will need, it seems to me and I am sure that the husband’s side are well aware of this, some explanation at the final hearing, which would then be followed by findings of the Court.  But, for instance, in the affidavit of the mother she points out in paragraph 64 that in July of 2018 on an Instagram account it was noted or posted by the father that the C Group – presumably that is the Suburb E Property – had total sales of $39 million and the mother says, well, using 2.5% as a commission rate this would equate to an income for the husband of $980,000 plus GST.  Now, I am well aware that in some circumstances businesses – especially in sales – will do what they can to portray for the world a very positive picture of what is achievable by that company –  so I am well aware that this could be part spruiking or it could be part advertisement marketing and so on –  but these are all matters I will need to have a closer look at and I will need to see the husband in the witness box giving sworn testimony.  It seems to me that it will require findings and it will require evidence. 

8. Really, the same goes in relation to the parenting.  I can see why the father desperately wants to increase his time.  He only has a small amount of time ordered at the moment.  The Court is in a position where I am not able to make findings that would lead me to conclude that there is some issue or problem with the family report.  I am not able to make any findings at the moment that the family report writer has somehow misconstrued the father’s approach and that the family report writer has unfairly drawn a conclusion that the father is self-focussed and not child focussed.  I am not able to make a finding that the family report writer has unfairly come to a view that the father denigrates the mother or that he is disrespectful of the mother. 

9. The situation, as far as the Court is concerned, is similar with the question of spousal maintenance.  The Court needs to see the parents in the witness box to see what the cross-examination throws up and to see whether I come to a conclusion that, for instance, on the one hand perhaps the mother is exaggerating all of this and this father is nowhere near as bad as the mother makes out or, on the other hand, I may come to a conclusion that what the mother is saying is pretty much right and certain findings might flow from that.  But in the absence of seeing the parents in the Courtroom and in the absence of cross-examination and findings – and noting again, that it’s only three months until this matter is listed for final hearing – I do think that it makes much more sense to take a cautious approach with this case and not to pre-empt anything but to adjourn that application on parenting for an increase in time to the final hearing.

10. In some respects – there is complexity here.  The mother is seeking a sole parental responsibility order.  I mean, these boys are very young and the mother is looking to close their father out from major decision-making from a very young age.  What I do say, both in relation to spousal maintenance and parenting, that what is required is a closer examination of evidence, cross-examination, findings made by the Court and I consider, therefore, that the correct way to proceed is to adjourn those applications to the final hearing.  I will deal with all those issues in three months’ time. 

11. There was also an application by the mother for an order for psychiatric assessment.  The father is adamant, though, he will not attend even if the Court ordered it.  The mother, therefore, in those circumstances, Ms Pendergast, her counsel, has told the Court today, in those circumstances the mother will not press for the making of that order.  As to what the Court makes of all of this at the end of the final hearing, who knows.  It will depend upon the impression I form of the parents when they give their evidence.  It will depend upon the findings that the Court makes.

12. I do not think that there is any evidence – certainly none to which I have been referred – that would indicate, for instance, that the father was having to take any antidepressant medication or anything of that nature.  I did not think so.  So there is nothing like that here.  I mean, there is no doubt the Court has the power to make this order;  that is clear enough from those older cases that Mr Galloway provided.  The Court has the power to make the order but it seems to me – and then it would be a matter for the father as to if he didn’t show up, well, he would be in breach of that order.  But it seems to me the mother has pulled back somewhat on that issue and says, look, he says he is not going to go so what is the point in even making the order and I gather from that that there will be a submission about it at the final hearing as to what the Court should or should not do.

13. In those circumstances, I am not inclined to make the order.  I think I would merely say, as an observation, that it may be beneficial to the father to consider – to reconsider that position.  It may be beneficial.  I could be wrong but it may be beneficial, especially since the mother says, you know, the report writer said, well, if the father insisted the mother could have a psychiatric assessment too and she says she will consent to it if he insisted on it or I gather even if he requested it.   I’m not sure about that but it may be something for the parents to consider.

14. All of these issues are matters for the parents.  The recommendation, though, in relation to the father was a clear recommendation.  It may have been an unjustified recommendation.  That is what I do not know at the moment.  I do not know whether the recommendation is justified because I have not seen the father give evidence.  I am not convinced one way or the other, or satisfied one way or the other, whether what the family report writer says about the father is correct or is not correct.  Sometimes the family report writers get it right and sometimes they get it wrong and that’s obviously, then, why it is a matter for the Court – and obviously my comments here are for the benefit of the parents – it is a matter for the Court to distil all of the evidence and to make the necessary findings one way or another.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge Howard

Date: 31 July 2020