APPLEFORD & MERIDEN (No.2)
[2019] FCCA 234
•6 February 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| APPLEFORD & MERIDEN (No.2) | [2019] FCCA 234 |
| Catchwords: FAMILY LAW – De facto property proceedings – application for extension of time – appeal following final adjudication granting leave to proceed and the making of final orders – orders envisaged payment of fixed sum by respondent to applicant – respondent has appealed on the basis trial judge’s discretion miscarried in respect of both extension and final orders – application for stay pending disposal of appeal – matters to be considered – balance of hardship – potential for appeal to be rendered nugatory if stay not granted. |
| Legislation: Family Law Act 1975 (Cth), ss.44(6), 117B(1) |
| Cases cited: Appleford & Meriden [2018] FCCA 3333 |
| Applicant: | MR APPLEFORD |
| Respondent: | MS MERIDEN |
| File Number: | ADC 25 of 2016 |
| Judgment of: | Judge Brown |
| Hearing date: | 1 February 2019 |
| Date of Last Submission: | 1 February 2019 |
| Delivered at: | Adelaide |
| Delivered on: | 6 February 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jordan |
| Solicitors for the Applicant: | Jordan & Fowler |
| Counsel for the Respondent: | Mr Tredrea |
| Solicitors for the Respondent: | Angela Ferdinandy |
ORDERS
That Order 3 made on 20 November 2018 be stayed, pending the determination of the appeal in Appeal file number SOA 95 of 2018.
IT IS NOTED that publication of this judgment under the pseudonym Appleford & Meriden (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 25 of 2016
| MR APPLEFORD |
Applicant
And
| MS MERIDEN |
Respondent
REASONS FOR JUDGMENT
Introduction
On 13 January 2016, over two years ago, Mr Appleford began proceedings, in this court, seeking orders to settle the division of de facto relationship property between him and Ms Meriden. It is evident through the protracted proceedings which followed this application that Ms Meriden has stringently opposed Mr Appleford’s application.
I have not been previously involved in the proceedings, which has gone to judgment. The trial judge was Judge Kelly, who is currently indisposed. Ms Meriden has appealed and seeks a stay of Judge Kelly’s final orders pending the outcome of her appeal.
Background
Mr Appleford was born in 1945. He receives an aged pension. He is not in a strong financial position. His original financial statement indicated accumulated assets worth around $5,000.00 and negligible superannuation.
It is Mr Appleford’s case that he met Ms Meriden in August of 1995 and the two began to live together, as a couple, in a property owned by Ms Meriden at Property B, a few months later. He asserts that they finally separated in October of 2013.
Ms Meriden responded to the application on 25 May 2016. It was her position that there had never been a de facto relationship between the parties. Rather, she asserted that Mr Appleford had boarded at her home and made some modest contributions to shared living expenses at the Property B property.
Ms Meriden was born in 1957. She has been married twice before, resulting in previous property settlements, which no doubt have had significant financial consequences for her. By occupation, she is a health care worker but she is not working currently, due to a serious back injury.
In February of 2015, Ms Meriden began a relationship with her current partner, Mr E. She sold the Property B property in November of 2015 for the sum of $525,000.00. She utilised the proceeds to purchase a property, with Mr E, at Property A. This property is unencumbered.
The case was allocated to the docket of Judge Kelly. It has had a tortuous process to judgment, with Ms Meriden unwilling to make concessions easily and those concessions, which she has made, made late in the piece.
Judge Kelly found that the asset pool, relevant to this case, consisted solely of the net proceeds of the sale of the Property B property, which had been utilised to purchase the Property A property. The sum total calculated by Her Honour, for the asset pool, was $452,000.00.[1]
[1] See Appleford & Meriden [2018] FCCA 3333 at [60]
On 11 July 2016, after some initial controversy regarding service, Judge Kelly listed the parties’ competing applications for trial on 5, 6 & 7 April 2017. At this stage, the major controversy between the parties was whether there had been a de facto relationship between the parties, which was amenable to the jurisdiction provided to the court by Part VIIIAB of the Family Law Act 1975.[2]
[2] Hereinafter referred to as “the Act”
The trial scheduled for April 2017 did not proceed. Ms Meriden changed solicitors and wished more time to canvas their advice. The trial was rescheduled for 12-14 December 2017 and the solicitors for Ms Meriden were ordered to pay Mr Appleford’s costs.
It is common ground, between the parties that, shortly prior to the December 2017 trial, Ms Meriden conceded that there was in fact a de facto relationship between the parties. However, she asserted that Mr Appleford had brought his application out of time and the court should not extend the time for the application to be filed pursuant to the discretion granted to it by section 44(6) of the Act.
This issue was adjudicated by Judge Kelly, who found as follows:
“The Applicant’s delay was only five months or so. He has explained the delay, saying that he anticipated negotiations would continue and would proceed satisfactorily towards a resolution. Further, when he became aware that the Property B property was on the market for sale, he was content to await the outcome of that process and expected to receive further correspondence from the Respondent’s solicitors. I conclude that there is a sufficient explanation for the delay in filing these proceedings.
There is a considerable negative impact upon the Applicant if leave is not granted, given his financial circumstances. There will be some inconvenience for the Respondent if the application proceeds, given that she has re-structured her finances with Mr E, but her position is no different to many other litigants who have entered new relationships and purchased new properties after separation. This inconvenience does not outweigh the Applicant’s entitlement to pursue his potential entitlement.
I am satisfied the husband has established a prima facie claim for property settlement and that he will suffer hardship if he is not permitted to argue his case before the Court. I grant leave for the Application to proceed out of time, pursuant to s.44(6) of the Act.”[3]
[3] Ibid at [16] – [18]
In these circumstances, Her Honour also adjudicated the parties’ competing applications regarding their various financial contributions made during the de facto relationship between them. Her Honour’s findings can be summarised as follows:
·The parties sexual relationship ended not long after they had met;
·They had kept their personal finances separate and had never operated any joint bank accounts;
·Mr Appleford had made no direct financial contributions towards the mortgage secured over the Property B property;
·During the parties’ relationship, they had been each engaged in significant relationships with other individuals.
Judge Kelly, in her judgment, was critical of some aspects of Ms Meriden’s evidence, particularly in relation to discovery issues. As I understand, during the trial, Ms Meriden asserted that she had been the victim of an internet scam, which had led to her sending significant sums of money irretrievably overseas.
These sums were alleged to have come from her superannuation and significantly diminished it. For obvious reasons, given its potential implications for the parties’ pool of property over the course of a long de facto relationship, this was a matter of some controversy. The existence of documents proving the scam is likely to be central to its resolution.
After the evidence in the December 2017 trial had been completed and Her Honour had reserved her decision, Ms Meriden successfully applied to the court to reopen her case to provide documentary evidence in respect of this aspect of the case. This further delayed the proceedings and put Mr Appleford to further expense.
Judge Kelly found as follows:
“Ms Meriden was cross-examined at length, particularly surrounding the alleged loss of funds through an Internet scam. Counsel for Mr Appleford urged the Court to find that the Respondent was an unreliable witness who deliberately misled the Court in relation to a number of matters – from her refusal to accept the nature of the parties’ relationship, to the Internet scam and the “disappearance” of her superannuation entitlements.
I decline to find that the Respondent lied on oath, but I am satisfied that she failed to fully disclose her financial dealings, until forced to do so. This does not mean that all of her evidence was unreliable. On the contrary, the Respondent presented with a more sophisticated understanding of the parties’ financial arrangements during the relationship and I am satisfied her evidence in this regard was generally accurate. However, her failure to disclose relevant evidence early in the proceedings, and to provide proper and timely disclosure of financial records led to considerable delays. This is a factor I will return to in these Reasons.
The Respondent had failed to provide proper discovery of relevant bank statements until trial, to the point where Counsel for the Applicant, Mr Lindsay, sought an adjournment arguing that he and his client were unable to properly consider discovered documents that were provided only the day before trial.”[4]
[4] Ibid at [30] – [32]
On the other hand, Judge Kelly found Mr Appleford to be honest and straight forward. Judge Kelly also characterised the case as an unusual one. From my limited assessment, given my recent and brief involvement in it, I agree with Her Honour’s assessment. It is also one which, notwithstanding the modest pool of property available, has enormous financial consequences for each of the parties.
On the one hand, Mr Appleford is an elderly person, with no financial backing, who is reliant on social security for his financial support. On the other hand, Ms Meriden has been invalided out of the workforce, and in order to pay Mr Appleford any sum of money, may have to sell the home, which she owns with Mr E.
Ultimately, Judge Kelly found that Mr Appleford’s contributions to the parties’ de facto pool of property, when expressed as a percentage, was 20%. However, as a consequence of Ms Meriden’s failure to make adequate disclosure, Her Honour awarded Mr Appleford a further 5%. In arithmetical terms, this resulted in Ms Meriden being liable to pay Mr Appleford the sum of $113,000.00, given the asset pool calculated by Her Honour.
The current proceedings
Her Honour’s judgment was delivered on 20 November 2018. On 17 December 2018, solicitors for Ms Meriden lodged an appeal in respect of Her Honour’s orders. The grounds of the appeal can be summarised as follows:
·Her Honour had fallen into error in concluding that Mr Appleford had given an adequate explanation for his delay in instituting the proceedings;
·Further Her Honour had not adequately considered any prejudice likely to be suffered by Ms Meriden on the granting of an extension;
·Her Honour had fallen into error in finding that the orders proposed by her were just and equitable;
·Her Honour had failed to discharge her discretion properly in respect of the calculation of the parties’ various contributions;
·This was significant given the unusual circumstances of the case and the modest asset pool;
·Her Honour had erroneously calculated the net asset pool;
·Her Honour had erroneously allowed 5% in respect of issues relating to non-disclosure.
Essentially, Ms Meriden attacks the entire basis of Judge Kelly’s decision, including both in respect of whether Her Honour should have entertained the application in the first place and thereafter Her Honour making any award whatsoever, in Mr Appleford’s favour, on the basis of consideration of justice and equity.
In tandem with this application, on 18 December 2018, Ms Meriden has filed an application in a case, in which she seeks a stay of the orders of Judge Kelly made on 20 November 2018 pending the disposal of her appeal. The application is supported by an affidavit of her solicitor, Ms Boylan.
Ms Boylan deposes as follows:
·The appeal is genuine;
·The grounds have been carefully considered and drafted by experienced counsel;
·Mr Appleford has no assets and if Ms Meriden is successful in her appeal and there is no stay granted, it is likely that she will not be in a position to recover any moneys from Mr Appleford and therefore her appeal would be rendered nugatory;
·Mr Appleford has placed a caveat on the Property A property and therefore his interest arising from Judge Kelly’s orders, if they are preserved by the Court of Appeal, remains secure;
·In addition, Mr Appleford will be entitled to interest, on the current judgment sum, pursuant to section 117B(1) of the Act;
·In these circumstances, the grant of the stay will not cause Mr Appleford undue prejudice and given the risk arising to Ms Meriden of being robbed of the fruits of her appeal, the balance of convenience favours the granting of the stay.
Mr Appleford filed a response to the application on 30 January 2019. He seeks the dismissal of the stay application or, in the alternative, pending the determination of Ms Meriden’s appeal, the orders of 20 November 2018 be stayed save and except for an amount of $70,000.00.
Mr Appleford has deposed an affidavit in support of his position. It is his position that Ms Meriden has been recalcitrant throughout these proceedings, leading to them being unduly protracted. This has been both unfair and stressful for him, given his impecunious circumstances.
In addition, he points to Judge Kelly’s findings in respect of Ms Meriden’s conduct during the case. In these circumstances, it is his position that Ms Meriden is not entitled to the court’s exercise of any discretion in her favour, including in respect of the granting of a stay.
Judge Kelly described Mr Appleford as being an unsophisticated person in respect of his understanding of financial matters. His counsel, Mr Jordan has indicated that, at present, Mr Appleford has unsatisfied legal fees in an amount of $55,000.00. Mr Jordan has further deposed that, in the absence of funds, Mr Appleford is not likely to be represented by his firm on the appeal and Mr Appleford himself will experience extreme difficulty in appearing on his own behalf.
In all these circumstances, it is Mr Jordan’s position that the balance of hardship favours Mr Appleford, at least in the respect of the release of some of the judgment sum, to his client, to enable him to protect his interests in the appeal.
These reasons for judgment are directed to resolving this issue. It is uncertain when the appeal will be heard and whether it will be determined by a single Judge or a full bench.
Legal principles applicable
In Jackson & Balen[5] the Full Court summarised the relevant principles applicable to the grant of a stay, pending appeal, in the following terms:
[5] See Jackson & Balen [2009] FamCAFC 131 at [28]
·the onus to establish a proper basis for the stay is on the applicant for the stay. However it is not necessary for the applicant to demonstrate any “special” or “exceptional” circumstances;
·a person who has obtained a judgment is entitled to the benefit of that judgment;
·a person who has obtained a judgment is entitled to presume the judgment is correct;
·the mere filing of an appeal is insufficient to grant a stay;
·the application must be bona fides;
·a stay may be granted on terms that are fair to all parties - this may involve a court weighing the balance of convenience and the competing rights of the parties;
·a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted – this will be a substantial factor in determining whether it will be appropriate to grant a stay;
·some preliminary assessment of the strength of the proposed appeal – whether the appellant has an arguable case.
It is clear that a stay is not to be granted lightly or as a matter of course. An appeal, of itself, is not sufficient to result in any stay of orders. Rather, the granting of a stay is a discretionary remedy, which should be determined by reference to the merits of the case concerned. The fundamental principle is that the court should do whatever is necessary to prevent injustice occurring to one or other of the parties concerned in the appeal.
Discussion
I accept that Ms Meriden’s appeal is genuine in nature and not a delaying tactic, on her part. True it is that the delay in Mr Appleford commencing the proceedings is not a great one. However, given the unusual circumstances of the parties’ relationship, I am not in a position to conclude that there are no merits to this particular aspect of the case.
In my view, similar considerations arise in respect of the other aspects of the appeal, which relate to the assertion that Her Honour’s discretion miscarried because she did not consider the overall justice and equity of her orders and failed to approach the assessment of contributions with sufficient care.
It is not my role to conduct a quasi-review of Her Honour’s reasons. I will only observe that this was a highly unusual case with extremely idiosyncratic features, so far as the parties’ financial relationship with one another was concerned. In these circumstances, although I suspect that the appeal is likely to be a finely balanced one, I am unable to conclude that it is entirely unmeritorious.
It is hard not to be sympathetic with the position in which Mr Appleford finds himself. He is essentially impecunious but with a liability to pay a significant sum in respect of his legal fees. His view of the relationship between him and Ms Meriden has been entirely vindicated by Judge Kelly. In these circumstances, I acknowledge that it is a significant matter to deprive him of the fruits of his judgment, which ostensibly is assumed to be correct.
The manner in which Ms Meriden has elected to pursue her appeal means that there is at least the possibility of Mr Appleford’s application being dismissed in its entirety. Accordingly, in my view, if a stay on terms is granted, it may nonetheless mean that it would result in a significant level of unfairness being occasioned to Ms Meriden, if her appeal is found to be completely meritorious.
In my view, these circumstances are analogous to those confronting Foster J in Atuk & Atuk & Anor (No2).[6] In the case, His Honour said as follows:
“It is readily apparent that the uncertainty as to the outcome of the appeals renders the distribution of any of the funds problematic. Ultimately any funds released would in all likelihood not be able to be recovered if it was necessary to do so as a consequence of the determination of the appeal or orders made on a rehearing if ordered. In that event refusing to grant the stay would render the appeals nugatory at least in part.
Whilst it can be argued that the wife who was substantially successful at trial is entitled to the fruits of her judgment the reality is that the substance of that judgment is now the subject of the present appeals.”
[6] See Atuk & Atuk & Anor (No2) [2016] FamCA 491 at [18] – [19]
It is the same situation in the present case. Mr Appleford has been entirely successful at first instance. However, Ms Meriden has elected to put the entirety of that judgment in issue on appeal. As such, I accept that it is problematic, if she is entirely successful, that she will be able to recover moneys advanced to Mr Appleford.
It would not appear to be the case that there are any issues of such complexity that the appeal is likely to be subject to significant delay. This is particularly the case if the Chief Justice elects to allocate the appeal to a single judge.
The further delay, in this case, coming as it does after the significant delays arising from the trial process, is highly regrettable. However, in my view, the interests of Mr Appleford are likely to be preserved by his caveat on the Property A property and the fact that his judgment is subject to interest, stipulated by statute, which is above current market rates.
For all these reasons, I will grant the stay sought by Ms Meriden. For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Brown
Date: 6 February 2019
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