STOCK & MAUDLIN

[2019] FCCA 2919

FEDERAL CIRCUIT COURT OF AUSTRALIA

STOCK & MAUDLIN [2019] FCCA 2919

Catchwords:
FAMILY LAW – Spousal maintenance – application to discharge orders – respondent cohabiting with another person – lack of full and frank disclosure – order discharged.

Legislation:

Family Law Act 1975 (Cth), ss.72, 75, 81(3)(c), 117(1)

Cases cited:

Jones v Dunkel (1959) 101 CLR 298
Cooper & Kingsley [2013] FCCA 277
Cooper & Kingsley [2014] FamCAFC 205
Wreford & Caley (2010) 238 FLR 88
Daniels and Bell (2007) FLC 93-315
In the marriage of Weir (1992) 110 FLR 403

Applicant: MR STOCK

Respondent: MS MAUDLIN

File Number: DNC 483 of 2018

Judgment of: Judge Young

Hearing dates: 9 May 2019, 3 September 2019

Date of Last Submission: 3 September 2019

Delivered at: Darwin

Delivered on: 14 October 2019

REPRESENTATION

Counsel for the Applicant: Mr Barry

Solicitors for the Applicant: Darwin Family Law

Counsel for the Respondent: Mr Felkel

Solicitors for the Respondent: Go to Court Lawyers

ORDERS

1. Order 1 of the orders of Watt J made on 17 March 2000 that the husband pay to the wife for her maintenance the sum of $100 per week is discharged.

2. The arrears of maintenance under that order are fixed at $11,600 and those arrears, apart from the sum of $3,400, are discharged.

3. The applicant is to pay the respondent the sum of $3,400 within 60 days.

4. There is no order for costs.

5. All other extant applications are dismissed. 

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DARWIN

DNC 483 of 2018

MR STOCK

Applicant

And

MS MAUDLIN

Respondent

REASONS FOR JUDGMENT

1. This is an application to discharge a spousal maintenance order made on 17 March 2000 by the Family Court in Melbourne and to discharge the arrears under that order. The respondent also seeks an order for her costs in pursuing payment of an amount of superannuation that she says was due to her under property orders made at the same time.

2. The spousal maintenance order was for payment of $100 a week. The duration of the order was indefinite.

3. An order for spousal maintenance may be discharged under section 83(1)(c) of the Family Law Act 1975 (the Act) “if there is any just cause for so doing”. The “just cause” relied on for the purpose of section 83(1)(c) was manifold: it was asserted that the order of 17 March 2000 was, in reality, an interim order; that the applicant’s circumstances had changed; and that the respondent had failed to make proper disclosure of her financial circumstances. In relation to the first point, this is without merit. There is nothing to suggest that the order was anything other than a final order. I am also not persuaded that there has been any significant change in the applicant’s circumstances.

4. However, after I reserved judgment the applicant applied to reopen his case to allege that he had discovered new evidence that the respondent was in a domestic relationship and that she operated a business, neither of which she had disclosed.

5. The evidence relied on by the applicant to establish these claims was the result of an enquiry he or his wife made, using a false name, to the respondent on Facebook about buying some items that the respondent was offering for sale by Facebook. In the online exchange between the applicant or his wife and the respondent the respondent disclosed that she was operating a small enterprise called “Business A” from her home in country Victoria. She referred to "Mr B", a reference to a Mr B, as being "home on Sundays" to affect delivery of any items purchased. The respondent also provided a telephone number where she could be contacted. The telephone number was a telephone number in the name of Mr B.

6. I permitted the applicant to reopen in relation to this additional material. I made orders that the respondent was to file an affidavit in reply and a further financial statement. She was ordered to provide disclosure all bank accounts in her name or in the name of any business in which she held an interest and bank statements for the previous 12 months. There was also an order that she provide details of sales and income from “Business A”.

7. The respondent provided bank statements but did not disclose any documents relating to sale and income from "Business A".  She said there were no such records.

8. In cross-examination the respondent asserted that she lived on a farm in a farm house owned by Mr B.  She said that she paid him rent of $100 a week.  She denied that she had any romantic relationship with him.  She said that he resided in Melbourne.  In cross-examination the respondent conceded that Mr B had transferred by electronic transfer a total sum of approximately $7,350 (made up of amounts ranging from about $100 to $1,500) to her over the period from July 2018 to April 2019.  The respondent said these were amounts lent to her by Mr B.  At the same time she asserted that she paid him $100 a week rent. She said that up to the hearing in May 2019 this was paid in cash but after that those payments were made by bank transfer. There was no record of the cash payments and no written rental agreement. There was no record of the amounts having been repaid to Mr B.

9. The respondent admitted in cross-examination that the telephone number the respondent offered as her contact for “Business A” was listed in the name of Mr B. She said that this was merely a convenience because she had had some "credit difficulties" and Mr B had kindly offered to provide the phone in his name. She said the telephone account had two numbers attached to it: a mobile number used by Mr B, and a landline used by her at her home. She said that the account was divided between her and Mr B, with her paying the landline component and Mr B paying the mobile component.

10. In re-examination the respondent's counsel adduced some further significant evidence from the respondent that had not previously been given by her.  The respondent had said that Mr B attended at her home, usually on a Sunday, visiting from Melbourne where he worked, and carried out maintenance around the house.  She said, in response to a question from her own counsel, that Mr B occasionally stayed overnight in her home.  She said he had his "own bedroom."  She denied she was in a romantic relationship with Mr B.

11. The above-mentioned transfers from Mr B to the respondent were described as "to Ms Maudlin".  The respondent said that this is the name Mr B used for her but so did everyone else in the region.  She implied that this apparently affectionate name should not be interpreted to suggest any intimate relationship between her and Mr B.

12. Mr B did not prepare an affidavit and there was no evidence from him about the nature of his relationship with the respondent. The respondent described him as "a very good friend". There was no indication that there was any obstacle to Mr B giving evidence on behalf of the respondent. The absence of evidence from him was unexplained. I conclude in the circumstances that the evidence of Mr B could not have assisted the respondent: Jones v Dunkel (1959) 101 CLR 298 at 320. I am satisfied that the respondent has not been forthright about the nature of her relationship with Mr B. In my view the uncontradicted evidence from the respondent that Mr B has extended significant financial assistance to her without security, that there was no evidence that there was any formal rental agreement between the respondent and Mr B and the lack of evidence of any payments of rent until May 2019, the shared telephone account and the use of Mr B’s landline number by the respondent, Mr B's frequent attendance at the respondent's home, including sleeping over at night, indicates an intimate relationship between Mr B and the respondent. I am unable to make a definite finding about whether Mr B sleeps in his “own bedroom”, as asserted by the respondent, but I am satisfied the relationship involves some degree of mutual support, including financial support of the respondent by Mr B. On the balance of probabilities I am satisfied that the respondent and Mr B are in a domestic relationship.

13. The other evidentiary issue concerned the enterprise operated by the respondent, "Business A". The “shop” operated out of a garage or shed on Mr B’s farm. Photographs show the interior to be neat and well organized, with shelving filled with stock. The respondent said she sold a variety of goods from the shop, including curtains, clothes, footwear and party needs. She described the enterprise as "a hobby". I accept that it is not a large enterprise and I accept that any income from the respondent makes from the business would, at most, be modest. Nevertheless, the respondent said that she kept no records whatsoever relating to the business. She did not disclose any income from the business on her tax return because, she said, her accountant's advice was that it was only "a hobby" and it was not necessary to disclose any income. The respondent suggested that she only sold goods on consignment and she took a 10% fee. However, it was clear from the photographs from the respondent's Facebook page that many of the items she sold were new. She asserted the new items had actually been purchased by her daughter and were placed with her on consignment.  The respondent asserted she made no more than a couple of dollars a week from the enterprise. I have difficulty accepting that there were no records of any kind relating to her enterprise. Even if items were placed on consignment, I would expect some record of the consignor and of the sale price and the fee to be charged on sale. The respondent said in her financial statement that her income from “Business A” was $2 a week. She did not say how she calculated this figure and I do not accept it. While I am unable to find that the respondent earns any particular income or any income other than at a modest income from this enterprise I am satisfied that she has not given full disclosure in relation to it.  She completely failed to give disclosure until the applicant made the enquiries which revealed the existence of the enterprise and I am also satisfied that the respondent's lack of disclosure continued.

14. I am satisfied that there has been a significant change in the respondent’s circumstances since the order made by Watt J in 2000. The change in circumstances includes the relationship with Mr B but also the fact that the respondent is now in receipt of WorkCover payments of $783 a week gross, less $100 a week tax. At the time of the spousal maintenance order she was in receipt of a disability pension relating to a back injury.  The respondent’s evidence about the WorkCover payments was unclear but I interpreted her as saying she was receiving payments because her original back injury or condition, apparently suffered or experienced before 2000, had been aggravated. It seems that the respondent may have some kind of workers compensation claim on foot although there were no details provided by her.

15. Having regard to these matters I am satisfied that there is just cause to discharge the current spousal maintenance order. I take into account the right of a spouse to maintenance under s.72 of the Family Law Act, the matters in s.75, particularly the fact that I have found the respondent is cohabiting with another person and is receiving financial support from that person, and the duty of the court to finally determine financial relationships between parties under s.81. Counsel for the applicant referred me a discussion of relevant case law in Cooper & Kingsley [2013] FCCA 277. That decision was overturned on appeal (Cooper & Kingsley [2014] FamCAFC 205) but the discussion of the case law appears to be valid. To the extent that case law, particularly Wreford & Caley (2010) 238 FLR 88 and Daniels and Bell [2007] FLC 93-315, suggests a court should follow a two stage process, first consideration of whether there is “just cause” to discharge an order, and secondly whether it ought or ought not be discharged, I am satisfied that there is “just cause” to discharge the order and that it ought to be discharged. I am also satisfied that the respondent has not provided full and frank disclosure of her financial position and I ought not be unduly cautious in making orders in favour of the innocent party: In the marriage of Weir (1992) 110 FLR 403.

16. The agreed arrears under the order are $11,600. The arrears accrued in two separate periods. First, between … 2013 and … 2014 after the applicant underwent surgery for a brain tumour. He ceased work entirely for part of this period and gradually returned to full-time work in … 2014. He advised the respondent about this and recommenced payments when he returned to full-time work. The respondent appears to have accepted that it was reasonable for the applicant to cease the payments until he returned to full-time work. She confirmed this view in her oral evidence. The arrears accrued in this period were $4,800. The second period was between … 2017 and … 2018. During this period the applicant resigned from his employment in Melbourne and moved to Darwin with his wife. He was unemployed for about a month, worked casually for a period and then obtained a permanent position as a labourer in … 2019.  The arrears accrued during this period were $6,800. His taxable income for the 2017 tax year was $51,367 and for the 2018 tax year was $38,988. It was submitted that the drop in income merited the cessation of spousal maintenance payments. His current income is $48,984 a year. His wife earns $67,288 a year. They have no children.

17. I consider that the arrears for the first period ought to be discharged in their entirety.  In relation to the second, I am not satisfied that the reason given for cessation of payments is entirely reasonable.  On the other hand, I have found that the respondent has not made full disclosure, particularly about her relationship with Mr B.  Balancing these factors I consider that half of the arrears accrued during the second period ought to be discharged, leaving a balance to be paid of $3,400. The applicant will have 60 days to pay this sum.

18. The respondent also sought a costs order for legal fees incurred in pursuing the superannuation that was the subject of an order by Watt J in 2000.  The terms of the order were:

    That the husband pay or cause to be paid to the wife the net proceeds of the units held on his behalf in the Super Fund C (Policy number XXXX) as soon as he becomes entitled to receive those proceeds and do all acts and things necessary to surrender the said policy at the earliest available opportunity.

19. There was no evidence before me about when the applicant became “entitled to receive those proceeds”.  His counsel submitted, without pointing to any evidence, that I should accept that the ordinary law about preservation age and retirement applied to the superannuation interest.  If so, the applicant, who was born on … 1962, would reach preservation age on … 2019, that is, at age 57.  His entitlement would also be subject to him having retired.  The evidence is that he has not retired and continues in full-time employment.  In the circumstances I am not satisfied that he has become entitled to receive those funds.

20. However, after the orders were made by Watt J in 2000 Part VIIIB of the Family Law Act 1975, allowing for splitting of superannuation interests, commenced. It appears that in about 2014 the respondent approached the applicant asking him to agree to a superannuation split. It appears that, after some negotiation, he refused. She appears to have revisited the issue once the applicant sought to discharge the spousal maintenance order. Eventually, consent orders were made by the parties providing for a superannuation split and approximately $53,000 was paid to the respondent in about May 2019.

21. It is unclear from the respondent’s affidavit, which she prepared herself, to which particular issue or issues her legal costs relate. It is also unclear whether those costs, apart from some relatively modest sums, have been paid.

22. Perhaps more to the point, I am not satisfied that the applicant’s entitlement to the superannuation monies referred to in the orders of Watt J in 2000, and hence the respondent’s entitlement to be paid, has accrued. I consider that the only means by which the respondent could have received payment was by virtue of a splitting order. Ultimately, the question of whether such an order could have been made other than by consent was not answered because the applicant consented to such an order. In the circumstances I am not satisfied that there are any circumstances to justify a departure from the requirement in s. 117(1) that each party bear his or her own costs.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge Young

Date:  14 October 2019