FAMILY LAW – APPEAL – SPOUSAL MAINTENANCE – Appeal from an order of a Family Law Magistrate dismissing the wife’s application for spousal maintenance – In circumstances where orders were made in 2004 providing for the husband to make periodic payments to the wife by way of spousal maintenance to a specified total amount – In circumstances where the husband paid the specified total amount and thereafter ceased paying – Where it was held by the Acting Magistrate that the making of the previous order for spousal maintenance was “fatal” to the wife’s subsequent application – The Acting Magistrate did not consider s 80(2) of the Family Law Act 1975 (Cth) – Appellable error found – No basis for an award for costs – Costs certificates granted to both parties for the appeal and the rehearing.

Vault & Isle [2012] FamCAFC 93 (2 July 2012)

Last Updated: 6 July 2012

FAMILY COURT OF AUSTRALIA

VAULT & ISLE

[2012] FamCAFC 93

FAMILY LAW – APPEAL – SPOUSAL MAINTENANCE – Appeal from an order of a Family Law Magistrate dismissing the wife’s application for spousal maintenance – In circumstances where orders were made in 2004 providing for the husband to make periodic payments to the wife by way of spousal maintenance to a specified total amount – In circumstances where the husband paid the specified total amount and thereafter ceased paying – Where it was held by the Acting Magistrate that the making of the previous order for spousal maintenance was “fatal” to the wife’s subsequent application – The Acting Magistrate did not consider s 80(2) of theFamily Law Act 1975 (Cth) – Appellable error found – No basis for an award for costs – Costs certificates granted to both parties for the appeal and the rehearing.

Family Law Act 1975 (Cth), Part VIII, ss 44(3), 74(1), 75(2), 80(1)(ba), 80(2), 81, 83, 83(2)(a)

Bevan and Bevan (1995) FLC 92-600 Caska and Caska [2001] FamCA 1279; (2002) FLC 93-092

APPELLANT:

Ms Vault

RESPONDENT:

Mr Isle

FILE NUMBER:

PTW

3547

of

2003

APPEAL NUMBER:

WA

3

of

2012

DATE DELIVERED:

2 July 2012

PLACE DELIVERED:

Perth

PLACE HEARD:

Perth

JUDGMENT OF:

Thackray J

HEARING DATE:

8 June 2012

LOWER COURT JURISDICTION:

Magistrates Court of Western Australia

LOWER COURT JUDGMENT DATE:

22 December 2011

LOWER COURT MNC:

[2011] FCWAM 77

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Ms Brownlie

SOLICITOR FOR THE APPELLANT:

Leach Legal

COUNSEL FOR THE RESPONDENT:

Mr Berry

SOLICITOR FOR THE RESPONDENT:

Bannermans Solicitors

ORDERS

(1) The appeal be allowed.
(2) The orders made by Acting Magistrate Kaeser on 22 December 2011 be set aside.
(3) The application of the appellant wife for spousal maintenance be remitted for rehearing before a Family Law Magistrate other than Acting Magistrate Kaeser.
(4) There be no order for costs in relation to the appeal.
(5) The Court grants to the appellant wife a costs certificate pursuant to the provisions s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by her in relation to the appeal.
(6) The Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by him in relation to the appeal.
(7) The Court grants to each of the parties a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each of the parties in respect of the costs incurred by the appellant and respondent in relation to the rehearing of the application.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Vault & Isle has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WA 3 of 2012
File Number: PTW 3547 of 2003

Ms Vault

Appellant

And

Mr Isle

Respondent

REASONS FOR JUDGMENT

1. I am required to determine an appeal against an order made by Acting Magistrate Kaeser dismissing the wife’s application for spousal maintenance.
2. The essence of the appeal is that his Honour erred in holding that the provisions of an earlier order for maintenance were fatal to the wife’s application.

Background

3. The appellant wife and the respondent husband were married in 1989 and separated in 2003. Importantly, they have not been divorced.
4. There is one child of the marriage who was born in January 1990 and who was therefore over the age of 18 years at the time of the hearing.
5. The wife commenced proceedings for property settlement and spousal maintenance in 2003, which were resolved by consent orders made on 11 June 2004.
6. The consent orders provided for the husband to transfer to the wife his interest in the matrimonial home at suburb E, and for the wife to transfer to the husband her interest in a business.
7. The orders went on to provide that “the husband pay or cause to be paid to the wife the sum of $1,450.00 per fortnight by way of spousal maintenance to an account nominated by the wife, to a total of $28,000.00”. In other words, the husband’s obligation would end in less than one year, provided he paid on time.
8. The husband paid spousal maintenance totalling $28,000 and thereafter ceased paying, although continuing to pay child support for the child of the marriage.
9. On 29 March 2011, the wife filed another application for spousal maintenance. By the time of the hearing she was seeking $1,850 per fortnight.
10. The matter came before Kaeser AM in November 2011. On 22 December 2011 his Honour delivered his judgment dismissing the wife’s application.

The Magistrate’s Reasons for Decision

11. Having set out relevant background, the Acting Magistrate turned to discuss what he called a “preliminary issue”.
12. In considering this issue, his Honour noted that the husband had paid the full amount of $28,000 specified by the consent orders. He further observed that “the order was in the nature of a final order for spousal maintenance because it was for a fixed amount of money and the orders made on that date otherwise dismissed the applications before the Court”. His Honour went on to note that the consent orders did not contain provision for “liberty to apply”.
13. His Honour continued:
    9. [The husband] no doubt considered at the time that once he had fulfilled the obligation to pay the entire amount of $28,000 his potential liability for any future spousal maintenance would be at an end. Whilst the orders do not include a reference to section 81 of the Act, the Court does operate on a clean break principle. The terms of section 81 provide that as far as practicable the Court must make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
    10. The Court in Bucknell & Bucknell (2009) Fam CAFC 177, noted that at paragraph 55 that;

‘A Court making a spousal maintenance order often has a choice between, on the one hand, leaving the order to operated [sic] for an indefinite period, knowing that section 83 of the Act provides for variation if circumstances so change that variation is justified or, on the other hand, fixing a date of cessation, which often involves a prediction, albeit on the balance of probabilities, about future events’.

11. The Court in Bucknell therefore, given these uncertainties, did not set an end date to the spousal maintenance order.
12. The Court in this matter has effectively set an end date being the time when the $28,000 has been paid in full.
14. The Acting Magistrate then referred to s 83 of the Family Law Act 1975 (Cth) (“the Act”) which makes provision for the discharge, variation and suspension of spousal maintenance orders that are “in force”, and for the revival of spousal maintenance orders that have been suspended.
15. His Honour found there was no maintenance order “in force” at the time of the hearing, or when the wife filed her application. He concluded that “the final order that was made in June 2004 had expired, having been fully complied with”. The Acting Magistrate went on to say this was “therefore not a case about modifying a spousal maintenance order. The order has not been suspended earlier; it had simply been fulfilled”. His Honour concluded that the application was “effectively a fresh application for spousal maintenance being brought some years after an earlier order for spousal maintenance had been made and completely complied with”. This part of his Honour’s reasons was properly not the subject of any complaint: see Caska and Caska [2001] FamCA 1279;(2002) FLC 93-092.
16. His Honour then went on to deal with the wife’s case, as he understood it:
    17. [The wife’s] case can be summarised as follows. I will deal with each of these arguments in turn.

a. The issue of spousal maintenance has not been dealt with as the orders by consent in June 2004 were not made pursuant to section 77A of the Family Law Act. In my view that argument is misconceived. Section 77A is a provision that provides that when a lump sum amount is to paid [sic] (whether in one amount or by instalments) or there is a transfer of property and one of the purposes of that payment or transfer is to provide for the maintenance of a party to the marriage, then a reference to section 77A should be made. In this matter such a reference to section 77A was not necessary in the June 2004 orders as it was clear that a spousal maintenance order was being made. The issue of spousal maintenance therefore was properly dealt with in those orders.

b. [The wife] relies upon section 72 of the Act. She is still the lawful spouse of [the husband] and as such her rights are governed by section 72 of the Act. She says that she is no longer able to adequately support herself and [the husband] has his ongoing obligation to support her pursuant to that section. As part of this argument she also says that at the time the original consent orders were made she was unable to support herself without an income tested pension or benefit. I accept that that was the case.

17. The Acting Magistrate accepted that the wife “has very little by way of income as she continues to rely on Centrelink pension or benefit, which in assessing a spousal maintenance claim is ignored pursuant to the provisions of the Act”.
18. His Honour went on to record that the wife owned the property in suburb E, estimated to be worth $340,000, together with some shares. He noted that she had “a very small mortgage”. He then concluded that the wife’s “financial position has improved since the orders were made in 2004” and noted that she had “received the benefit of the $28,000 in spousal maintenance claims”.
19. His Honour then gave his reasons for dismissing the wife’s application:
    19. In my view there would be potential merit in this claim were it not for the orders made in 2004. Had the spousal maintenance issue not been dealt with in 2004 and [the wife] now came before the Court seeking for the first time a spousal maintenance order, then there might be some merit in her claim. It is clear on the basis of income alone that she is unable to support herself, although the Court is able to take into account the assets of parties as well.
    20. I would however have to take into account the lengthy period between the date of separation and the date of the application. There would need to be a reasonable explanation for the delay in applying.
    21. In my view however, the provisions of the orders made in 2004 are fatal to [the wife’s] application. A clear ‘fixed amount’ spousal maintenance order was made on a final basis. It is entirely unfair to [the husband] to be in a position to have to face a further spousal maintenance claim several years after a spousal maintenance order was made and fully complied with.
    22. There has been no reasonable explanation for the delay in filing this application from the time the earlier order expired.
    23. In my view therefore there is no merit in the spousal maintenance application made by [the wife] and I intend to dismiss it.

The grounds of appeal

20. There were four grounds of appeal, expressed as follows:
    1. In his judgment delivered on 22 December 2011 and in his written reasons for decision the learned Acting Magistrate made an appealable error in failing to consider section 80(2) of the Family Law Act 1975 when finding that the Appellant’s application for periodic spousal maintenance should be dismissed.
    2. In his judgment delivered on 22 December 2011 and in his written reasons for decision the learned Acting Magistrate made an appealable factual error in finding that the Appellant’s financial position had improved since the Court Orders of 11 June 2004.
    3. In his written reasons for decision delivered on 22 December 2011 the learned Acting Magistrate made an appealable factual error in finding at paragraph 20 of his reasons for decision that there had been an unexplained delay between the date of the parties’ separation and the date of the Appellant’s application. In particular, the learned Acting Magistrate failed to consider paragraph 15 of the Appellant’s affidavit filed 29 March 2011.
    4. The learned Acting Magistrate failed to consider that the Respondent tacitly acknowledged the Appellant’s need for financial support as evidenced in paragraph 14 of the Appellant’s affidavit filed 29 March 2011.

Ground 1 – failure to take account of s 80(2)

21. The first ground of appeal asserts failure on the part of the Acting Magistrate to consider s 80(2) of the Act, which provides as follows (my emphasis added):

The making of an order of a kind referred to in paragraph (1)(ba), or of any other order under this Part, in relation to the maintenance of a party to a marriage does not prevent a court from making a subsequent order in relation to the maintenance of the party.

22. This subsection appears in Part VIII of the Act, which is the part dealing with spousal maintenance and property settlement. The reference to “paragraph 1(ba)” is, of course, a reference to s 80(1)(ba), which confers power on a court to make an “order that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage”.
23. There is no doubt that the 2004 order was an “order in relation to the maintenance of a party” made under Part VIII. Section 80(2) makes clear that the existence of such an order does not preclude the making of another maintenance order. It was therefore submitted that his Honour was in error in concluding that the earlier order was “fatal” to the wife’s application.
24. Counsel for the husband did not seek to expand upon his written submissions in responding to the obvious merit in the wife’s complaint. Those submissions are set out in full below:

The terms of s. 80(2) provide that a Court may make a subsequent order in relation to the maintenance of a party. This provision gives express legislative effect to the remarks of the Full Court by way of obiter dicta in Lusby and Lusby (1977) FLC 90-311 at 76,656 – 76,657. The learned Acting Magistrate recognised that it was a “sensible call” for the husband not to pursue the summary dismissal application (Transcript 15 November 2011, page 3 lines 38 – 54); and further recognised that it was open to the wife to pursue a maintenance application (Transcript, page 9 lines 10 - 40). (Submissions of the respondent husband, page 2).

25. The first passage of transcript relied upon was one where, in response to an enquiry from the bench, counsel for the husband advised she “[did not] think it is a case that would possibly meet the criteria required for summary dismissal”. It was in response to this concession that his Honour said the decision not to pursue the summary dismissal application was a “sensible call”.
26. The second passage of transcript to which counsel for the husband referred is set out in full below, but I will also set out the preceding interchange. It will be noted from the transcript that the wife was self-represented.

[THE WIFE]: Your Honour, the proposed consent orders they divided into property division, they were divided into – the second part was child support. The one para regarding any form of payment to me was the husband pay or cause to pay to the wife the sum of 1450, et cetera. That may be so, but my husband paid that, yes, but I am not appearing now on trying to re-visit that issue, I’m re-visiting the issue of my current need and my husband’s current ability to meet to help that need.

HIS HONOUR: So you accept then that the spousal maintenance order that was made in 2004 had completed by the middle of 2005?

[THE WIFE]: Certain parts of it. There are certain parts of it that are still – he has not completed.

HIS HONOUR: Certain parts of the other parts of the order not the spousal maintenance order?

[THE WIFE]: Yes, the other parts of the order, yes.

HIS HONOUR: Just looking at that, as you have mentioned, and you are correct, this is only about the spousal maintenance issue. It is not about property, it is not about child support, it is just about the spousal maintenance. So there is a spousal maintenance order that ceases to have effect in the middle of 2005 and then some almost six years later you file a fresh application for spousal maintenance.

Now, I would have thought one of the arguments is going to be, and I think it is in the submissions, that the spousal maintenance order was made, it is finished, it has been complied with and there should be no further order made, especially some six years down the track. Do you understand that principle or that argument?

[THE WIFE]: I do. I do, your Honour, except that it is through by research I found that the consent orders that were made in 2004 were not of a nature of binding agreements, they were not signed off, they were left open-ended and this is the reason why I have bought this present case.

HIS HONOUR: ...what is it about paragraph 1.11 you would describe as open-ended?

[THE WIFE]: 1.11 of?

HIS HONOUR: Of the original consent orders in June 2004.

[THE WIFE]: 1.1 is simply about the house which I owned anyway.

HIS HONOUR: 1.11 on page 3.

[THE WIFE]: 1.11 on page - - -

HIS HONOUR: “The husband pay or cause to be paid to the wife.” Do you have that in front of you?

[THE WIFE]: 1.11?

HIS HONOUR: Yes, 1.11.

[THE WIFE]: Yes, three, yes.

HIS HONOUR: “Pay or cause to be paid to the wife the sum of $1450 per fortnight by way of spousal maintenance to an account nominated by the wife to a total of $28,000”.

[THE WIFE]: Yes, your Honour.

HIS HONOUR: So what about that paragraph is open-ended? It seems to be rather defined and limited.

[THE WIFE]: Yes, but the consent orders themselves are not binding financial agreements.

HIS HONOUR: And do you think that makes a difference?

[THE WIFE]: From what I have read of the law it does because there are cases that have been decided where wives have asked because their situation has declined after separation. I’m still married to [the husband]. There is still a responsibility under the law under section 72 and 75 for him to, in the case of need, to provide maintenance. The law is fairly clear on those issues.

HIS HONOUR: I agree that those issues are open, which is why the respondent is not proceeding with the summary dismissal application, but, again, if we focus our minds on what then is relevant to my determination do you accept that this is about the spousal maintenance issue, it is about whether you should be permitted to continue with an application that is filed some six years after that earlier order expired and whether in my discretion I should allow you to do so, and, if so, if you get over what [counsel for the husband] has called that threshold issue, then whether in the circumstances as they exist now you should be entitled to any further spousal maintenance. Do you agree that they are the issues that the court needs to determine?

[THE WIFE]: Correct, yes, your Honour.

(Transcript, 15 November 2011, pages 7 – 9).

27. I accept that counsel for the husband could do nothing more to advance his client’s case than place reliance on these transcript passages. However, they do not assist the husband, since the basis for his Honour’s order must be found in his reasons, rather than anything said in the course of the hearing.
28. The ratio of the decision is to be found in paragraph 21 of the reasons:
    21. In my view however, the provisions of the orders made in 2004 are fatal to [the wife’s] application. A clear ‘fixed amount’ spousal maintenance order was made on a final basis. It is entirely unfair to [the husband] to be in a position to have to face a further spousal maintenance claim several years after a spousal maintenance order was made and fully complied with.
29. His Honour did not at any point in his reasons, or in the course of argument, refer to s 80(2) of the Act. It seems the provision was simply overlooked, having not been referred to by either party in the course of the hearing. As a result, his Honour mistakenly proceeded on the basis that the existence of the earlier order was “fatal” to the wife’s application, whereas at most it provided important background to the application he was obliged to consider.
30. I accept the proposition advanced on behalf of the wife that the failure to take the provisions of s 80(2) into account constitutes appellable error.
31. Success of this ground alone justifies the setting aside of the order, but I will nevertheless refer briefly to the remaining grounds of appeal.

Ground 2 – error in finding the wife’s position had improved

32. This ground criticises the finding of the Acting Magistrate that the wife’s financial position had improved since the making of the consent orders.
33. I accept, as was contended by counsel for the husband, that this finding may have been open on the evidence. However, the difficulty is that success of the wife’s application for maintenance, or the husband’s opposition to it, did not depend upon any change in the wife’s financial position.
34. A change in the financial circumstances of the beneficiary of a maintenance order is relevant to an application for variation of such an order (by operation of s 83(2)(a)). But the wife was not, as his Honour accepted, seeking to vary the earlier maintenance order – she was seeking a new order. The obligation on the court therefore was to give effect to s 74(1), namely to make such order as was “proper” in the current circumstances, after taking into account the matters in s 75(2) of the Act.
35. Although his Honour found the wife’s circumstances had improved, he nevertheless concluded she was unable to support herself from income. Indeed, he went so far as to say her application for maintenance had “potential merit” were it not for the 2004 consent orders. Had his Honour properly directed himself, he would have turned to consider the wife’s assets and decided whether she ought to support herself from them. He did observe that he was “able to take into account the assets of the parties as well”, but did not proceed to consider that issue, electing instead to discuss the matter giving rise to the complaint in Ground 3.

Ground 3 – failure to accept there were reasons for “delay”

36. By this ground the wife complains about his Honour’s finding that there had been “no reasonable explanation for the delay in filing this application from the time the earlier order expired”.
37. It was submitted that this finding failed to take into account paragraph 15 of the wife’s affidavit, in which she said:

I am increasingly anxious about my ability to secure and retain full-time employment for a variety of reasons. After three (3) years of concerted efforts in applying for jobs, including jobs not in my field and below my level of training, I was finally able to obtain employment in my field in September 2005. In the five (5) years since then I have worked for three companies however I was made redundant in November 2010 with no redundancy payment. Since then I have not been able to secure work.

38. Counsel for the wife drew attention to the fact that the Acting Magistrate had made no reference to this part of the wife’s evidence when finding there was no explanation for her delay in bringing the present application. Counsel for the husband did not seek to expand upon his written submissions in response to this ground which read simply as follows:

In relation to paragraph 15 of the wife’s affidavit...the husband filed an affidavit sworn on 1 July 2011 and specifically responded at paragraph 32. (Submissions of the respondent, page 2).

39. With respect to counsel for the husband, this is no answer to the wife’s complaint. The wife had provided what would appear to be a reasonable explanation for filing her application when she did. His Honour did not address that evidence.
40. Ultimately, however, the wife was not obliged to explain her “delay”. The only context in which delay may have been relevant would have been if the parties had been divorced and the wife needed to seek leave to apply for maintenance more than 12 months after the divorce became final (see s 44(3)). In this case the parties had not been divorced. There was therefore no impediment to the wife seeking a further maintenance order.
41. Although it was not the subject of separate complaint, it is appropriate before leaving this ground to note that in placing emphasis on the “clean break” principle in s 81 of the Act, his Honour did not make reference to the fact that s 81, by its own terms, does not apply to “proceedings with respect to maintenance”: see Bevan and Bevan (1995) FLC 92-600 at 81,980.

Ground 4 – husband’s acceptance of wife’s need

42. By this ground the wife complains that the Acting Magistrate failed to consider the fact that the husband himself had effectively acknowledged the wife’s need for financial assistance from him.
43. In support of this ground, reliance was placed on paragraph 14 of the wife’s affidavit, in which she gave evidence that since April 2009 the husband had made contributions to her support in an amount totalling over $14,000 “in recognition of the financial difficulties I am experiencing”. The husband responded in paragraph 31 of his affidavit, where he said he believed the assertion made by the wife “to be true”.
44. I accept that the fact the husband had provided financial support to the wife recently may have been relevant in determining whether it was “proper” for another maintenance order to be made. However, his Honour did not get to that point, having determined that the earlier order was “fatal” to the wife’s application. It was the latter conclusion that led his Honour into error, not his failure to have regard to the voluntary assistance provided by the husband.

The Notice of Contention

45. It follows that I consider there is merit in the wife’s appeal. Counsel for the husband sought to meet this eventuality by relying upon a Notice of Contention, which was expressed in the following terms:

If the Court finds that the learned Acting Magistrate fell into appellable error on any ground, then the orders the subject of appeal should be upheld on the basis that the wife was able to support herself adequately and that, even if she was not able to do so, it was not ‘proper’ within the meaning of s.74 of the Family Law Act 1975 to make an order and the learned Acting Magistrate should have so held.

46. Counsel for the wife effectively joined with counsel for the husband in asking that I redetermine the matter on the basis of the evidence provided at trial. Whilst recognising the understandable desire of the parties to avoid a further hearing, I do not consider it appropriate I adopt this course.
47. The Acting Magistrate heard evidence from both parties concerning their present financial circumstances and their likely future financial positions. Given the approach he adopted, his Honour did not make what I would regard as sufficient findings of fact to provide a foundation on which to re-exercise his discretion. In this regard it is noteworthy that in seeking to sustain the order made, counsel for the husband referred to factual matters that were not mentioned in his Honour’s reasons. I am also mindful of the fact that the appeal from any decision that I might make would be by way of special leave to the High Court, which would be undesirable.
48. The preferable course is for the matter to be remitted to the Magistrates Court of Western Australia to be determined on its merits.

Costs

49. Both counsel submitted that if the appeal was allowed, and a rehearing ordered, it would not be appropriate for there to be an order for costs and that the parties should receive costs certificates, both for the appeal and the rehearing. I agree.

I certify that the preceding forty nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thackray delivered on 2 July 2012.

Associate:

Date: 2 July 2012