Newbeld and Newbeld and CSR and Newbeld
[2007] FMCAfam 465
•12 July 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NEWBELD & NEWBELD and CSR & NEWBELD | [2007] FMCAfam 465 |
| FAMILY LAW – Spouse maintenance – application to discharge or vary overseas maintenance order – application to stay enforcement of registered maintenance liability. |
| Family Law Act 1975, ss.83, 83(1)(c), 110(1) and 110(2) Family Law Regulations1984, ss.25, 36, 36(1)(b), 36(2) and 36(4) Child Support (Registration and Collection)(Overseas – Related Maintenance Obligations) Regulations 2000, ss.5, 11(2), 12 and 16 Child Support (Registration and Collection) Act 1988 |
| Lutkze (1979) 5 FamLR 553 Vakil (1997) FLC 92-743 |
| Applicant: | MR NEWBELD |
| Respondent: | MS NEWBELD |
| File Number: | BRM 7806 of 2002 |
REPRESENTATION
The Applicant appeared on his own behalf.
| Counsel for the Respondent: | Mr Baston |
| Solicitors for the Respondent: | Ryan Kruger Lawyers |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR NEWBELD |
| File Number: | BRM 7806 of 2002 |
REPRESENTATION
| Counsel for the Applicant: | Mr Schulte |
| Solicitors for the Applicant: | Australian Government Solicitor |
The Respondent appeared on his own behalf.
| Judgment of: | Slack FM |
| Hearing dates: | 10 & 11 April 2007 and 12 June 2007 |
| Date of Last Submission: | 12 June 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 12 July 2007 |
ORDERS
That the registered maintenance liability be discharged as and from
31 May 2005(provided that any monies paid under the liability since 31 May 2005 be applied to the reduction of arrears owing under the liability).
That otherwise the application be dismissed.
That the Enforcement Summons be adjourned for further hearing to
7 September 2007 at 9.30am in the Federal Magistrates Court of Australia at Brisbane.
IT IS NOTED that publication of this judgment under the pseudonym Newbeld & Newbeld is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRM 7806 of 2002
| MR NEWBELD |
Applicant
| MS NEWBELD |
Respondent
And
| CHILD SUPPORT REGISTRAR |
Applicant
| MR NEWBELD |
Respondent
REASONS FOR JUDGMENT
The applicant (hereafter “the husband”) applies by his application filed on 10 January 2003 for:
1. Stay of enforcement proceedings in the Federal Magistrates Court until the Superior Court of Arizona in Maricope County has ruled on the petition to modify the support order of 5 August 1995.
2. The application for stay is based on the fact that the order by the Superior Court of Arizona in Marciope County was based on incorrect information supplied by the former Ms Newbeld and her lawyer Mr Mitchell.
The applicant husband also applies for an order (pursuant to his application filed on 16 July 2004) for an order:
1. That pursuant to Regulation 36(2) of the Family Law Act 1975 the orders made in the Superior Court of the State of Arizona in the United States of America as to spousal maintenance be discharged and any arrears remitted.
The respondent (hereafter “the wife”) applies that the husband’s applications be dismissed and that he pay her costs in responding to the applications.
The Child Support Registrar seeks enforcement of a debt alleged to be payable to the Commonwealth under s.30 of the Child Support (Registration and Collection) Act 1998.
Background facts
I have accepted and taken into account the following facts.
The husband is 62 years (born in October 1944).
The wife is 69 years (born in June 1938).
The husband and the wife married in May 1970 and separated in 1995. (The husband contends the date of separation was in April 1995 and the wife contends it was in July 1995.)
There are two children of the marriage, [X] born in 1963 and [Y] born in 1970.
During the marriage, the parties have lived and worked in Sweden, Australia, New Zealand and the United States of America. The wife, in paragraph 8 of her affidavit sworn on 8 March 2007, provides a brief chronology of the movement of the parties between January 1970 and 1995. The chronology is not disputed in any material way by the husband.
Just prior to their separation, the parties were residing in Arizona in the United States of America.
In September 1995, the wife returned to Sweden and has lived in Sweden since that time.
Litigation history between the parties
On 25 October 1995, the wife commenced proceedings in the Superior Court of Arizona in the USA (“Arizona Court”) for property settlement, divorce and spousal maintenance.
In May 1996, Commissioner Reinstein of the Arizona Court made orders, the effect of which, relevantly, was to order the husband to pay the sum of US$500 per month for the maintenance of the wife pending the final determination of the wife’s applications in that Court.
In May or June 1996, the husband left the United States and returned to live in Australia.
In August 1996 contempt proceedings were brought against the husband in the Arizona Court for his failure to pay the ordered maintenance. In September 1996, a judgment was entered against the husband that he pay the sum of $2,750 in arrears.
On 16 January 1997 the husband brought an application to stay the Arizona proceedings. That application was refused and a civil arrest warrant was issued for the husband’s arrest for his failure to pay the monies owing under the Orders made in May 1996.
On 3 April 1997, the husband filed an application for property settlement in the Family Court of Australia (Townsville Registry). In his application, the husband sought an equal division of the property.
On 21 May 1997 the Arizona proceedings went to hearing before Judge Sherry Hutt in the Arizona Court. Judge Hutt made final orders on
5 August 1997. Judge Hutt ordered that the wife receive the sum of US$300,000 from the husband, representing her half share of the community property at the date of the trial. In relation to ongoing maintenance, Judge Hutt also ordered that the applicant pay the sum of US$3,000 per month to the wife for the remainder of her life.
The husband has paid very little maintenance under those orders.
In January 1998, Justice Jordan in the Family Court of Australia heard and determined an application by the wife to have the orders for property settlement registered in Australia. The property settlement orders made by the Arizona Court were not registered.
On 23 December 1998 the wife filed a response to the husband’s application for property settlement in Australia seeking that that application be permanently stayed and a Declaration that she was entitled to receive the sum of US $300,000 from the husband.
That application was heard and determined by Justice Lindenmayer in the Family Court and on 26 May 1999 Justice Lindenmayer made orders that the husband’s application for property settlement be permanently stayed and he also made Declarations in relation to the monies owing under the Arizona Court judgement.
In September 1999 the husband made a further application which was heard and determined by Justice Jerrard in the Family Court. That application was also dismissed.
Enforcement proceedings were taken against the husband for the property orders and that application was determined by Registrar Spelleken (as she then was). The husband sought a review of that determination and the matter was reviewed and determined by Justice Warnick in the Family Court in Brisbane in January 2000 (judgement delivered in May 2000).
On 10 August 2000, the maintenance order of the Arizona Court was registered in Australia and on 26 September 2002 the Child Support Registrar commenced proceedings in this Court to enforce the spousal maintenance order and recover the arrears and late payment penalties owing under the order.
The husband then filed his present applications for discharge of the maintenance order and all arrears accrued and to stay the orders of the Arizona Court.
The applications were heard on 6 June 2005 by Federal Magistrate Rimmer. Federal Magistrate Rimmer delivered judgment on
22 September 2005. The husband appealed the orders and the Appeal was heard by Justice Warnick in the Family Court on 8 March 2006. His Honour delivered judgment in the matter on 19 May 2006 and remitted the matter to the Federal Magistrates Court for re-hearing.
The law
At common law, an order for maintenance made overseas cannot be enforced as a final order by an Australian Court. So, too, it could not be varied or discharged. However, international enforcement of maintenance orders is now governed by treaty and laws of mutual recognition.
Section 110(2) of the Family Law Act 1975 (as amended) (hereafter “the Act”) provides relevantly for the power to make regulations in respect of registration and enforcement of maintenance orders made in “reciprocating jurisdictions”. The Family Law Regulations 1984 (as amended) (hereafter referred to as “the Regulations”) contains such regulations as do the Child Support (Registration and Collection) (Overseas – Related Maintenance Obligations) Regulations 2000 (hereafter referred to as “the Overseas Regulations”).
Section 110(1) of the Act defines “maintenance order” as relevantly “An order or determination (however described) with respect to the maintenance of a party to a marriage.” It further defines “reciprocating jurisdiction” to mean “a country or part of a country outside Australia declared by the regulations to be a reciprocating jurisdiction for the purposes of this section”.
Section 110(2) of the Act not only provides for the making of regulations for the registration and enforcement of maintenance orders made by Courts of reciprocating jurisdictions, but goes on, in sub-paragraph (c) of that sub-section, to provide for:
“The making of orders … for the variation, discharge, suspension or revival of maintenance orders registered in accordance with regulations under this section …”
Regulation 25 of the Regulations provides:
“Each of the jurisdictions specified in Schedule 2 is declared to be a reciprocating jurisdiction for the purposes of s.10 of the Act (elsewhere defined to mean the Family Law Act).”
Schedule 2, consequent to amendments to the regulations made in May 2000, includes the United States of America.
The Overseas Regulations effected a significant change in respect of the registration and enforcement of maintenance orders and agreements made overseas. In simple terms, those regulations permitted child maintenance obligations to be registered with the Child Support Registrar and to be enforced pursuant to the Child Support (Registration and Collection) Act as if they were child support obligations. The relevant legislative provisions follow.
Regulation 5 of the Overseas Regulations defines “overseas maintenance liability” to mean a liability that arises under, relevantly, a maintenance order made by a judicial authority of a reciprocating jurisdiction and it goes on to define “registrable maintenance liability” to include “a liability that is a registrable maintenance liability under Regulation 11”.
Regulation 24A of the Regulations defines “registered maintenance liability” as meaning:
“A registrable maintenance liability under sub-regulation 11(1) or (2) or paragraph 11(3)(a) of the… (Overseas-related Maintenance Obligations) Regulations 2000 that is registered under those regulations.”
Regulation 11(2) of the Overseas Regulations provides as follows:
“A liability is a registrable maintenance liability if:
(a)it is a liability of a party to a marriage to pay a periodic amount for the maintenance of the other party to the marriage; and
(b)it is an overseas maintenance liability.”
Regulation 12 of the Overseas Regulations provides:
“1. If the Registrar receives an application for registration of a liability that is a registrable maintenance liability under Regulation 11, the Registrar must, within 90 days of receipt of the application, register the liability by entering particulars of the liability in the Child Support Register.”
The Overseas Regulations permit maintenance to be paid pursuant to an overseas order in a reciprocating jurisdiction to be collected by the Child Support Agency as if it was a child support payment.
An important aspect of the regulations to that effect is Regulation 16 which provides:
“If a registrable maintenance liability mentioned in Regulation 11 is registered by the Registrar, an amount payable under the maintenance assessment or order agreement, or the agency reimbursement liability, is a debt to the Commonwealth by the payer in accordance with the particulars of the liability entered in that Child Support Register.”
Regulation 36 of the Family Law Regulations provides as follows:
“36(1) This regulation applies to:
(a)an overseas maintenance order or agreement registered in a Court before 1 July 2000; and
(b)an overseas entry liability or registered maintenance liability.”
(2) Application may be made to a Court having jurisdiction under the Act (ie the Family Law Act) for an order discharging, suspending or reviving or varying an order, agreement or liability to which this regulation applies.
(3) An application may be made by:
(a)the person for whose benefit the order or agreement was made or for whose benefit the liability was created; or
(b)the person against whom the order was made or the person who is liable to make payments because of the agreement or the liability.
(4) The law to be applied to determination of an application is the law in force in Australia under the Act.”
There is no issue in this matter that the Arizona Court order is a registered maintenance liability.
The husband's application is under regulation 36(1)(b) and 36(2) of the Family Law Regulations 1984.
The husband seeks to discharge the registered maintenance liability brought about by the registration by the wife of the order of the Arizona Court.
The Child Support Registrar has certified the amount which would be owing under the registrable maintenance liability.
The applicable law under regulation 36(4) is the law in force in Australia under the Family Law Act1975 and in particular s.83 of the Act – Modification of spousal maintenance orders.
An order made under regulation 36 in relation to a registrable maintenance liability is a final order as to the effect of that liability where the United States is the reciprocal jurisdiction (see Regulation 38).
Thus on the husband’s application I am to consider making orders under s.83 of the Family Law Act 1975 that the registered maintenance liability be discharged.
As to what constitutes just cause under s.83(1)(c), the observations of Lindenmayer J in the marriage of Lutzke (1979) 5 FamLR 553 which were adopted by the Full Court in the marriage of Vakil (1997) FLC 92-743, sets out the considerations that should be taken into account.
His Honour said:
The Act is silent as to what may constitute just cause for the discharge of an order. In my opinion, however, the words "just cause" are not used in any broad general sense nor are they intended to import any abstract notions of justice, "palm tree" or otherwise, into the determination of applications for discharge. In my opinion, those words must be interpreted in the context of the Act as a whole, and in particular with regard to the other specific provisions of the Act which relate to maintenance. Thus a "cause" for the discharge of an existing maintenance order will be a just cause only if, having regard to the other provisions of the Act, particularly those relating to maintenance, it can be said it is "right" or "proper" that the order should be discharged.
In this matter, as I understand it, the husband also seeks a stay of the enforcement of the registered maintenance liability on the basis that:
The judgments from the Superior Court of Arizona both by Commissioner Reinstein and Judge Hutt based on fraud (lies, false and misleading information and non-disclosure) and should be dismissed on that basis.
Both in relation to the stay application and the application to discharge the order, the husband argues:
There is no need for spousal maintenance because the wife has and has had for a long time substantial assets, and she has not been disclosing the factual situation. She has also withheld information about her income from investments and pension in the USA to the Superior Court of Arizona, the Family Court of Australia and the Federal Magistrates Court of Australia, as well as to Swedish Social Security, Swedish Legal Aid and charitable organisations in Sweden.
III. The children [Y] and [X] have been involved in and assisted the ex-wife in concealing property and cash. There is cross-pollination between the children and the ex-wife. This makes the children accessories to fraud or whatever the correct legal term is.
IV. I do not have any ability to pay and have never had any ability to pay, and I will again disclose all the facts. Because of what will be proven in I, II and III, I have nothing and I have very minimal income.
V. I have been forced to spend an enormous amount of money defending myself in Courts both in America and in Australia, and hereby make application not only for costs, but also for compensation for time and expenses and punitive damages to be determined by the Court.
Decision
Ultimately I am persuaded that there is a just cause for varying the registered maintenance liability in this matter but only from 31 May 2005.
My reasons for reaching that conclusion are as follows.
The husband submits that I should find that the wife had income and/or the capacity to support herself both at the time that the Arizona Court orders were made and since then. The evidence of the wife (which is not disputed) is that she has lived in Sweden since 1996 and has not been in paid employment. She has been in receipt of a pension from the Swedish Government and a pension from the United States of America. She has also received some assistance from charitable organisations. She has an income of AUS$470 per week. She says that her reasonable needs are AUS$1,282 per week. She was not challenged to any significant extent about her needs. The wife is not in good health and I am satisfied that it is unlikely that she will return to employment. Albeit that the husband submits that the wife has failed to disclose in past proceedings her receipt of a US pension and monies from charitable organisations, I am satisfied that:
a)she has not been in paid employment since the Arizona orders were made;
b)she has not otherwise had the capacity to support herself since the Arizona orders were made.
There is no evidence that the wife has been able to adequately support herself since the separation from any earned income. It is not in dispute that she has remained unemployed since the separation. I am not satisfied that she has been adequately able to support herself on the pensions and charity that she has received.
I am not therefore satisfied that there has been any significant change in the wife’s circumstances since the Arizona orders were made. I am satisfied that she has not been able to adequately support herself.
The husband’s other contention is that the wife received much of the community property and that she has had that property, at least, since the separation. He contends that she gave false and misleading testimony to the Arizona Court about the property that she retained after the separation.
The husband had the opportunity to put that case in the applications that he brought in the Family Court of Australia before Justices Lindenmayer (orders dated 26 May 1999) and Warnick (orders dated 25 May 2000). Justice Lindenmayer granted a permanent stay of the husband’s property settlement application in Australia and made a declaration as to the amount owing by the husband to the wife under the Arizona orders.
The husband also had the opportunity to put his case before the Arizona Court both at the hearing and in his attempts to reopen the matter. I acknowledge that the Arizona Court did not allow him to present evidence in the matter but the husband could have cured that problem by paying what he was required to pay under the interim orders that were made in the matter. He was the author of his own misfortune in that regard.
The husband has had at least two opportunities to put this case before the Family Court. As I understand it, he did raise in those applications the same arguments that he raises in this application, namely that the wife had given false testimony to the Arizona Court and she retained assets and property that she had not disclosed. As I understand it there was a further application heard and determined by Justice Jerrard. In every application, the husband has been unsuccessful. It is not in dispute that the husband has not paid to the wife the amount owing under those orders.
There is no additional evidence before me to satisfy me that the wife has or has had property and resources, the application of which could have been made to her support. I am simply not satisfied on the evidence that the wife has or has had the property and/or resources as alleged by the husband.
The husband, as I understand his case, also alleges that the wife at the time of the hearing before the Arizona Court knew his true income and that she falsely alleged that he had a much higher income.
The husband asserts that his taxable income for the relevant period leading up to the Arizona Court orders was less than $39,000 per annum; he never had the capacity to pay the orders for maintenance that were made; and that the wife well knew that.
However, it is not in dispute that the husband had the opportunity to be represented at the hearing in the Arizona Court. He needed to pay the arrears owing under the interim orders made by Commissioner Reinstein. He was otherwise represented at that hearing. An application to reopen the proceedings was refused.
Further it is disingenuous of the husband to assert that his income in the years leading up to the application was less than $39,000 per annum.
He acknowledged in the course of his examination in this matter that during the marriage the parties operated a company called [Company A]. The company profits between 1990 and 1995 were:
a)1990 -US $7,332.
b)1991 -US $60,053.
c)1992 - US$80,570.
d)1993 - US$120,000.
e)1994 - US$120,000.
f)1995 - US$60,000.
The husband acknowledged that he was in control of the company. Although his personal taxable income was less than US$39,000, he had control of the profits of the company and the assets of the company (see pages 63-65 of the transcript of the proceedings).
Although the company apparently experienced difficulties with the Tax and Inland Revenue Service in the United States which caused it to cease business, the husband nevertheless retained the intellectual property from that company.
After the separation from the wife, the husband incorporated a company [Company B]. He estimated his shares in that company to be worth $65,000 in August 1996. The company commenced operations in November 2005 and the assets of the company were not part of the community property with his wife. In the space of eight months, the company share value reached, according to the husband, $65,000 (page 54ff of the transcript).
There is no evidence to suggest that after the separation the wife had control of either company. Although the husband can assert that his personal taxable income for the period leading up to the Arizona Court orders was near $39,000 per year, that ignores the fact that in addition to that, he was in control of the profits of [Company A] and was also in control of the intellectual property and assets of [Company A] which he subsequently used to establish the company [Company B].
The husband has simply not provided any evidence to satisfy me that the orders made by the Arizona Court were based on fraudulent or false or misleading testimony about his income or resources given by the wife. To the contrary, the available evidence suggests that the husband did have the capacity to pay the maintenance as ordered.
The evidentiary onus to establish that there has been a change in his circumstances since the Arizona orders is upon the husband. He has not provided evidence of his income, financial resources and/or living expenses for the years between 1996 and 2004.
During cross-examination of the husband, it emerged that between 1996 and May 2003 the husband operated the business [Company B] (later [name omitted]) with his then partner Ms L and over that period of time he acquired, with Ms L, a number of assets [see 45ff of the transcript and the affidavit of the husband filed in proceedings in the Supreme Court of Queensland (see TRT4 to the affidavit of Ms T)].
There is no explanation or evidence as to the reasons why [Company B] ceased operating. The husband conceded during cross-examination that he retains the intellectual property of [Company B]. I note that according to the Balance Sheet produced by the husband (Exhibit 2) the [omitted] had a value, according to the company, of $75,000 in September 1998.
There is virtually no explanation by the husband why it is that he cannot utilise the intellectual property to generate an income for himself. He is a qualified and highly skilled [occupation omitted].
The husband commenced an action against Ms L in the Supreme Court of Queensland in June 2005. To date, as far as I can determine, those proceedings have not progressed to a trial.
The husband commenced a [Company C] business some time in 2003 and obtained a [omitted] licence. He says that in the infancy of the business he continued to be in receipt of Centrelink benefits. On 24 May 2005, he asserted by his Statement of Financial Circumstances that his income was $297 per week.
He continues to operate the business and undertakes consultancy work as an [occupation omitted]. Since June 2006 he has been “employed” by [W] and is paid $40,000 per annum. He works 37.5 hours per week. As I understand his evidence, since his employment with WEG, he has not conducted significant business with his business [Company C].
He has not produced any taxation returns or documents for his income for the financial years up to and including the year ended 30 June 2004.
He produces a taxation return for the year ended 30 June 2005 but not for subsequent years. He attaches an Income Statement that sets out his income from 1 July 2005 until 28 February 2007. This document was prepared by him and there is no supporting documentation that verifies the income.
Notwithstanding the deficiencies in the disclosure of documents by the husband, however, I am satisfied that since May 2005 (the date of the filing of the statement of financial circumstances relied upon by him in these proceedings) he has not had the capacity to meet the maintenance payments under the Arizona Orders.
Whilst I have some concerns about the husband’s credibility in so far as his financial circumstances are concerned, in particular, whether he has the capacity to once again use the intellectual property he has in the [omitted] to generate an income for himself, I am nevertheless satisfied with the evidence of the husband that since May 2005 he has had an income of less than $40,000 per annum.
My reasons for reaching that conclusion are:
a)There are no indications and there is no evidence from any other source that he has earned any greater amounts of income or that he has had a greater earning capacity.
b)Whilst I have no satisfactory explanation why he has not relied on his intellectual property in the [omitted] to earn an income, I am satisfied that there is no other evidence to support a conclusion that he has been hiding income or actively in business using that technology.
c)There is no indication or evidence about his lifestyle that would indicate to me that he is living beyond his alleged income. There is no evidence of excessive expenditure or living circumstances, or lifestyle choices such as overseas holidays, expensive motor vehicles, clothing or purchases etc that would indicate that he has failed to disclose his true position.
d)I accept that the husband is highly motivated to discharge this liability but I listened carefully to his cross-examination and I did not detect any deliberate false testimony that would suggest that he has tried to mislead the Court about his current circumstances.
I also take account of the fact that the husband is now 61 years. He has the skills and qualifications to continue working and he may be able to resurrect his business but he will nevertheless have a substantial continuing debt as a result of my orders. I conclude that he will have limited ability to meet that debt and any ongoing maintenance for the wife.
The husband also submits that his current financial circumstances should be taken into account to satisfy the Court that he has no capacity to meet or pay any arrears that may be owing under the orders.
Whilst I accept that I should have regard to his current financial circumstances, I am not satisfied his current circumstances should be the only factor that should be taken into account. I am not persuaded that I should discharge the arrears owing up to and including May 2005. My reasons for reaching that conclusion are as follows.
The husband has made no payments under the maintenance orders made by the Arizona Court. He has an attitude that he has been dealt a serious injustice and consequently, has simply refused to comply with the Arizona orders. I am satisfied that this has been his motivation for failing to pay the maintenance in accordance with the Arizona orders. Even at this hearing he has chosen not to put any evidence of his financial circumstances for the years after the orders until 2005.
At the moment he retains the intellectual property from [Company B] and he is also proceeding with his claim against Ms L. According to his claim against Ms L he used his income and the business [Company B] to contribute to the property of Ms L. This income should have in part been used to satisfy the Arizona order. Although the husband has, prima facie, limited capacity to meet the arrears owing under the orders he nevertheless has the claim against Ms L.
I am not satisfied that the arrears owing under the Arizona orders should be discharged on the basis that the husband has no present capacity to meet those arrears.
Having come to that conclusion and for the reasons already given, I am not persuaded that I should stay the enforcement proceedings against the husband.
I intend to relist the matter on 7 September 2007 to hear submissions about the orders sought by the Child Support Registrar in the enforcement proceedings.
I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of Slack FM
Associate: Karen Smith
Date: 12 July 2007
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