Arata & Rex (No 6)
[2024] FedCFamC1F 907
•19 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Arata & Rex (No 6) [2024] FedCFamC1F 907
File number(s): LEC 250 of 2021 Judgment of: HOGAN J Date of judgment: 19 December 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the applicant sought a stay of final parenting and property orders made pending appeal – Where the applicant submitted that the appeal may be rendered nugatory if a stay is not granted – Where the respondent and the Independent Children’s Lawyer opposed the granting of a stay – Where it is not in the best interests of the child to grant a stay of the final parenting orders – Where the balance of convenience favours determining not to grant the stay of the final property orders – Application dismissed Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)) Cases cited: House v the King (1936) 55 CLR 499; [1936] HCA 40
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Division: First Instance Number of paragraphs: 39 Date of hearing: 18 December 2024 Place: Brisbane Applicant: Litigant in person Solicitor for the Respondent: Ms Burgess, Burgess Family Law Solicitor for the Independent Children's Lawyer: Ms Burton, Legal Aid NSW ORDERS
LEC 250 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS REX
Applicant
AND: MR ARATA
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
HOGAN J
DATE OF ORDER:
19 DECEMBER 2024 and amended on 20 DECEMBER 2024
THE COURT ORDERS THAT:
1.The application for a stay of the operation of the orders made 1 November 2024 pending the determination of the appeal in relation to those orders is dismissed.
AND IT IS FURTHER ORDERED THAT:
2.In the event that any party seeks an order that another party pay the costs of and incidental to Paragraph 1 of the Application in Proceeding filed 5 December 2024 and sealed 16 December 2024:
(a)any such party shall, within twenty-eight (28) days of the finalisation of the appeal, file and serve:
(i)any affidavit necessary to support such application; and
(ii)written submissions in support of such application for costs; and
(b)the party against whom an order for costs is sought shall, within a further fourteen (14) days thereafter, file and serve:
(i)any affidavit necessary for the determination of any such application for costs; and
(ii)any written submissions in answer to the submissions filed and served by the party seeking an order for costs; and
(c)the party seeking an order for costs shall, within seven (7) days of being served with the submissions relied on by the party against whom an order for costs is sought, file and serve any further written submissions, strictly in reply, to the submissions served by the party against whom an order for costs is sought,
and any such application for costs shall be considered in Chambers.
IT IS NOTED THAT:
A.There is no Court known by the name “Federal Circuit and Family Court of Australia”.
B.The design of the seal affixed to this order issued by the Federal Circuit and Family Court of Australia (Division 1) has been determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
NOTATION:
C.This Order has been amended on 20 December 2024 pursuant to Rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) by recording the correct appearances.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Arata & Rex has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
By an Application in a Proceeding filed on 5 December 2024, advised to Chambers on 11 December 2024, listed for yesterday on 12 December 2024 and sealed on 16 December 2024, Ms Rex seeks, amongst other things, an order staying the operation of orders 1 to 28 and 30 to 51 of the final property settlement and parenting orders I made on 1 November 2024, pending determination of the appeal against those orders which she commenced by filing a Notice of Appeal on 28 November 2024.
Whilst Ms Rex also sought, in the Application in a Proceeding, a number of other orders, the hearing yesterday was confined to a consideration of the application for stay, being the relief sought at paragraph 1 of the Application.
On 13 December 2024, Aldridge J, exercising the appellate jurisdiction of this Court, struck out Ms Rex's Notice of Appeal (filed 28 November 2024) and granted her leave to file an Amended Notice of Appeal on or before 21 February 2025. As well as making other orders, His Honour listed the matter for further directions on 24 February 2025.
The consequence of the orders made by Aldridge J in relation to Ms Rex's Notice of Appeal means that, as at this stage, the appeal proceedings commenced when the Notice of Appeal was filed are yet to be listed for determination by the Full Court of this Court.
The final orders made on 1 November 2024 disposed of competing applications for final parenting orders and final property settlement orders.
By way of broad overview, that resolution and the effect of the orders made on 1 November 2024 included that the parties’ youngest son, who was born in 2014, live with the father, to whom sole parental responsibility was accorded. The orders also provided that, until 1 June 2025, the child spend time with the mother for up to four hours each alternate week under supervision. Additional parenting orders were made in relation to the progression of time and the provision of information. Insofar as the property orders are concerned, they required that Ms Rex pay to Mr Arata the sum of $1,043,248 within 30 days, and discharge all outstanding rates owing in respect of real property located at Town E and, contemporaneously, that he transfer to her his interest in the real property. Orders were also made for Ms Rex to transfer to Mr Arata specified shares in various entities. Failing compliance with the requirement to make the payment previously discussed, orders were made, in essence, to facilitate the listing of the Town E property for sale and to regulate that process and, upon a settlement of the same, for payment of the funds to the parties.
Whilst Aldridge J's order striking out Ms Rex's Notice of Appeal on 13 December 2024 means that there is no current Notice of Appeal before me for consideration in the stay application, and that there is no such document filed in the appellate jurisdiction of this Court, r 13.1.2(ii) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) provides that if an appeal has been started (as it clearly has been in this case) any party may apply for an order staying the operation or enforcement of all or part of the order to which the appeal relates. Such application is necessary as r 13.12.1 of the Rules provides that the filing of a Notice of Appeal does not stay the operation or enforcement of an order appealed from, unless otherwise provided by a legislative provision. There is no other applicable legislative provision operative in this case.
Insofar as the application for stay in relation to the operation of the final parenting orders is concerned, that course is opposed by the father and the Independent Children's Lawyer.
Insofar as Ms Rex's application for a stay of the relevant property adjustment or property settlement orders made on 1 November 2024, the father, Mr Arata, opposes a stay of the operation of those also.
As I have already adverted to, there is no information before me about when the appeal commenced by Ms Rex by the filing of the now struck out Notice of Appeal would be listed for hearing. No doubt that potentiality is likely to be the subject of at least some consideration, I assume, at the upcoming appearance for Directions on 24 February 2025.
The determination of any application for a stay of the operation of a final order pending appeal involves the exercise of discretion. The principles relevant to the exercise of that discretion are well known. They include the following, that:
(a)a proper basis for a stay must be made out – whilst it is unnecessary for an applicant to demonstrate any special or exceptional circumstances, that person bears the onus of establishing the proper basis; and
(b)a person who has obtained an order is entitled to the benefit of that order and also to assume that the order is correct; and
(c)as already noted, the mere filing of an appeal is insufficient to cause a stay of the operation of the orders pending appeal; and
(d)the court should consider the bona fides of an applicant for a stay; and
(e)in assessing whether to exercise the discretion in favour of granting a stay of the operation of final orders pending an appeal, the court should and/or is required to weigh the balance of convenience and the competing rights of the parties; and
(f)the court is required to weigh the risk that an appeal may be rendered nugatory if a stay is not granted, this consideration being a substantial factor in determining whether or not it is appropriate to grant a stay of the operation of final orders pending appeal against the same; and
(g)there should be some preliminary assessment of the strength of the proposed appeal in the sense of assessing whether an appellant (the applicant for a stay) has an arguable case; and
(h)insofar as appeals against parenting orders are concerned, that it is desirable to limit the frequency of any change in a child's living arrangements; and
(i)the best interests of a child, the subject of the proceedings, are a significant consideration; and
(j)finally, as already adverted to, the court should have regard to the period of time within which an appeal can be heard.
Having stood the matter over yesterday afternoon until this afternoon, I have had the opportunity to revisit Ms Rex's affidavit as relied upon in the hearing of this application for a stay.
Whilst, as I have already said, there is no outstanding or operative Notice of Appeal in this proceeding at this time, it seems to me that the following assertions relevant to a consideration of the application for a stay of the operation of the orders pending the appeal can be gleaned from her affidavit. I consider that they may be summarised as follows, that:
(a)there would be, on her submission, irreversible consequences if a stay of the operation of the November 2024 order is not granted pending appeal; and
(b)there would be, as a consequence of a failure to stay the operation of the property aspects of the order, certain financial outcomes that could not be rectified should her appeal, however finally formulated, be successful; and
(c)one of the aspects likely to form, or potentially to form, an assertion or ground of appeal is an asserted failure during the trial process to provide procedural fairness arising out of the following:
(i)the assertion that there was insufficient time between the adjournment of the trial in February of this year to its hearing dates in April of this year to enable Ms Rex to have her case presented appropriately; and
(ii)an assertion that there was a failure to present available evidence; and
(iii)that there was an absence of procedural fairness because applications made on Ms Rex's behalf for an adjournment of the trial to enable her to engage a forensic accountant were refused; and
(iv)there was asserted non-disclosure by Mr Arata, which, in a sense, as I understood Ms Rex's evidence, infected the entire process.
Insofar as each of those matters are concerned, it seems to me that they have to be considered in the context of the long-standing history of these proceedings before the court. The issue of the potential engagement by Ms Rex of a forensic accountant to undertake a forensic process was raised in 2022 – about two years prior to the trial itself in April of this year. Insofar as the issue of asserted non-disclosure by Mr Arata is concerned: that issue was raised at trial; he was cross-examined about it and, therefore, there was an opportunity for those who represented Ms Rex at the hearing to explore that issue and be heard in relation to it.
Other aspects taken from Ms Rex's affidavit as suggestive of potential grounds of appeal seemed to me to be as follows:
(a)assertions that there were substantial errors of fact and law; and
(b)assertions that I failed properly to consider evidence, albeit that such assertions are, at this stage, unparticularised in terms of detail; and
(c)assertions of a failure to apply the “best interests” principles and the legislative requirement that property settlement orders which are made are made in terms that are just and equitable in the circumstances; and
(d)an asserted failure to properly assess the financial contributions and liabilities of the parties.
In addition, in relation to the final property settlement orders, it seemed to me that reference to Ms Rex's affidavit suggested the potentiality of the following as grounds of appeal:
(a)an asserted failure to consider what was described as "critical evidence" and asserted error in the calculation of liabilities; and
(b)an asserted failure to include the appropriate amount for her R Pty Ltd debt – that is, a debt to a litigation funder; and
(c)asserted reliance in error on asserted incomplete and flawed evaluations of the business and the Town E property; and
(d)an asserted failure to find that Mr Arata deliberately failed to disclose relevant documents during the course of the proceedings; and
(e)an asserted failure to exercise discretion in favour of making adjustments by way of notional add backs for the purpose of determining the total net value of the property of the parties; and
(f)an asserted failure to properly assess contributions and an asserted failure to accord the same adequate weight; and
(g)an asserted failure to adequately consider the financial contributions made by Ms Rex; and
(h)an asserted failure to ensure that there was available evidence, by way of challenge, to the value accorded to the Town E property by the single expert witness appointed for that task – albeit that it appeared from Ms Rex's affidavit that there was some acknowledgement that the information she referred to had not been filed because of what she referred to in her affidavit as a "compressed timeline" – and a challenge to the value found in relation to the corporate entities and business, despite the fact that the single expert witness appointed for that purpose was available to be cross-examined, and was cross-examined at trial by Counsel who appeared on her behalf.
It is trite to note that, insofar as the summary of potential grounds that I have endeavoured to draw from the contents of Ms Rex's affidavit is concerned, those which assert error in the exercise of discretion face, on appeal, the difficulties that all challenges to the exercise of discretion face in appellate proceedings – namely, those adverted to in authorities such as House v the King.[1]
[1] (1936) 55 CLR 499.
In opposing the application for a stay, Ms Burgess, who appears on behalf of Mr Arata, made a number of submissions which may conveniently be summarised as follows:
(a)that the litigation in which these parties have been engaged has been on foot for a large number of years; and
(b)before the trial which resulted in the final orders made on 1 November 2024, there had been two previous adjournments and the costs notices provided by the parties clearly establish that each of them have incurred significant legal costs which, in totality, appear to be in the vicinity of (or in excess of) $1 million, which, it was submitted, suggested that all parties had had significant opportunity to prepare for the conduct of the trial which resulted in the final orders; and
(c)the onus is on Ms Rex to persuade that the appropriate exercise of discretion would result in a determination that it is appropriate to stay the operation of the final orders pending the determination of the appeal; and
(d)the absence of a Notice of Appeal means that it is impossible for me to assess that in any meaningful way and, hence, I have endeavoured, as Ms Burgess did during the course of her submissions, to ascertain potential grounds of appeal from Ms Rex’s affidavit for the purpose of considering that issue as I am required to do (at least in relation to a Notice of Appeal) in exercising the discretion involved in determining whether or not to grant the stay sought by Ms Rex.
Further Ms Burgess submitted that much of Ms Rex's submissions were directed to, in essence, either matters involving the exercise of discretion or in an attempt to run an entirely different case and advance an entirely different position in relation to matters such as the assessment of contributions than was advanced on her behalf at trial. Insofar as that submission is concerned, it is trite to note that, as in any appeal involving an attempt to persuade of a case other than that run on behalf of that party at first instance, the appellant will encounter the difficulties considered in cases such as Metwally v University of Wollongong.[2]
[2] (1985) 60 ALR 68.
In addition, submissions were made by Ms Burgess in relation to the issue of Ms Rex's bona fides. It was submitted on behalf of Mr Arata that the Court would hold serious concerns about Ms Rex's bona fides, particularly taking into account the fact of her occupation of the Town E property for a significant period of time between the parties' separation and the making of the orders on 1 November 2024. Secondly, it was submitted that the Court would be persuaded that, in advancing the appeal, Ms Rex is simply unhappy with the decision that was pronounced; and that I should be persuaded by the fact of the appeal that she lacks bona fides.
It was also submitted that it is now more than six weeks since the orders were made on 1 November 2024 – insofar as the operative parenting orders are concerned, there has been available to Ms Rex the opportunity to spend time with the parties' youngest son, but she has not made any attempt to do so.
Ms Burgess also submitted that, in considering the requirement to consider the balance of convenience and the parties' competing interests, the court would take into account that these parties have been engaged in litigation at very substantial cost for a significant period of time; that Ms Rexhas had sole occupation of the Town E property at no expense, given that it is unencumbered, whilst Mr Arata has been put to substantial cost and expense; that each of the parties have debts to litigation funders and legal expenses secured over their interests in the Town E property, which are of significant amounts, namely, more than $600,000 insofar as Mr Arata is concerned, and that interest continues to accrue at a significant rate in relation to the same; and that the only way, in essence, that the parties' debts to third parties can be extinguished is for the sale of the Town E property to occur.
It was also submitted, in relation to the issue of whether the Court would be persuaded, as Ms Rex advances it would be, that there is a significant risk that the appeal would be rendered nugatory if a stay of the operation of the 1 November 2024 orders is not granted, is that there is no suggestion by Mr Arata that he intends to dispose of the interests in the business or the corporate entities and, in essence, as I understood it, that any sale proceeds remaining after a sale of the Town E property, following the extinguishment of debt secured over it, would be available to each of the parties.
It was submitted that time has now passed since the making of the orders and the only way Mr Arata can, in essence, receive that which it has been found just and equitable that he receive is via a sale of the property.
In responding to Ms Rex's submissions about her attempts to engage with Mr Arata and have him agree to a disposal of the Town E property in a way other than its sale, as provided for in the final orders, Ms Burgess submitted, quite correctly, that I no longer have the power to make such an order absent the agreement of the parties and that I am simply unable to change the terms of the final orders I pronounced and made on 1 November 2024.
It was submitted, in essence, that the Court would be persuaded that Ms Rexhas failed to discharge the onus of establishing that she has an arguable case on appeal. Ms Burgess also submitted that, in assessing this consideration, the Court would take into account that Ms Rex had informed that she is unable to afford the transcript of the proceeding – it was submitted this should be regarded as an indicia that it may be that she is unable to prosecute the appeal properly.
Ms Burgess also submitted, in relation to the stay about the parenting orders aspect of the final orders, that the Court would be persuaded, as authority suggests, that the most desirable course is to limit the frequency of changes in a child's parenting arrangements. Insofar as this issue is concerned, I infer that the submission made was, in essence, that there is a prospect that, if the orders are stayed, that would leave in place orders made in August and September of 2024 – which provided for Ms Rex to have only telephone-style communication with the child and no in-person time.
A submission that should be accorded greater weight, it seemed to me, was, in essence, that there is a risk that changing the existing parenting arrangements – which have been in place in the sense that the parties' youngest son has lived with the father since August 2024 – runs the risk that, if Ms Rex's appeal is ultimately unsuccessful, the child will have been subjected to the very frequent changes of parenting arrangements about which authority cautions the court.
In emphasising the father’s position that the Court would not be persuaded to grant a stay and would not be persuaded that Ms Rex had discharged the onus of establishing an arguable appeal or proper grounds for the making of an order staying the operation of November 2024 orders, Ms Burgess emphasised, again, on behalf of Mr Arata, the significant financial impost of a situation that would prevent steps being taken to discharge the financial liabilities to third parties.
In dealing with the application for a stay of the parenting orders, Ms Burton, the Independent Children's Lawyer, submitted, in essence, that the Court should place significant weight upon the importance of limiting changes to the child’s living arrangements. She submitted that in particular in this case, where the parties' youngest son has been living with the father since August 2024, the Court would not be persuaded that it is in his best interests, pending the determination of Ms Rex's appeal by the Full Court of this Court, to make further changes to his living arrangements. She emphasised the importance, because of its impact on his best interests, of limiting the changes to his living arrangements.
Ms Rex's submissions, in addition to the contents of the affidavit to which I have already referred, included, in essence, that the Court would be persuaded that the grounds of appeal which she would seek to advance are very serious, that the orders made are very unjust and entirely inequitable and would have a significant adverse impact upon her capacity to run, from the Town E property, the business that she has run there for some time, and would also adversely impact her ability to continue to live on that property as she has for a number of years.
She submitted and emphasised, in essence, that the asserted failures to which I have already referred in my summary of her affidavit, would be regarded as being so significant and so overwhelming as to persuade the Court that it is appropriate to grant a stay of the operation of the orders until she is in a position to have her appeal against them determined by the Full Court. She also submitted, in essence, that failing to stay the operation of the November 2024 orders would mean that the parties' youngest son is exposed to ongoing risk; again, as I have said, that her livelihood would be destroyed if she was misplaced (to use her term) from the Town E property where she lives.
I proceed in my assessment of the competing submissions on the basis that Ms Rex's appeal, in whatever terms it is ultimately crystallised, will confront the difficulties faced by all appeals asserting error in the exercise of discretion and will also confront the difficulties associated with attempts to raise and prosecute cases on a basis or bases different to those advocated at first instance.
Despite the submissions made by Ms Burgess to the contrary, I intend to proceed on the basis that in prosecuting her appeal and in prosecuting the application for a stay of the operation of the orders pending the determination of that appeal, Ms Rex is bona fide.
I accept that her perspective is that she has suffered great injustice and that her son is at risk. Insofar as the parenting aspect of the application for a stay is concerned, I note, in particular, that the parties' youngest son has lived with the father since August 2024. Given the admonition of authority to place particular significance and importance on limiting changes to a child's living arrangements pending the determination of an appeal, I am not persuaded that it is in his best interests that there be any change to those arrangements. I am not persuaded, therefore, that Ms Rex has established an appropriate ground or grounds for the stay of the operation of the parenting orders.
Insofar as the property orders aspect of the stay application is concerned, I have considered and accorded particular weight to the following aspects of the matter – namely that:
(a)at its highest, Ms Rex's appeal will likely proceed on the basis of some of the matters I have outlined as summarised from her affidavit; and
(b)these parties have been engaged in long-standing litigation; and
(c)Mr Arata is entitled to the fruits of the judgment and the benefit of the orders I made on 1 November 2024; and
(d)Ms Rexhas already had accorded to her, by the terms of those orders, the opportunity to cause a payment to Mr Arata in order to avert the consequences of the failure to make such a payment: namely, that the Town E property be listed for sale and sold; and
(e)on the evidence, it seems to me that the only way in which Mr Arata can achieve the benefit of the judgment and the orders made is for that property to be sold; and
(f)each of the parties are continuing to incur significant financial impost as a consequence of interest accruing on their outstanding liabilities to third parties, including litigation funders.
Those reasons persuade me that the balance of convenience favours determining not to grant the stay sought by Ms Rex.
I am not persuaded that Ms Rexhas, in this case, discharged the onus of persuading that the appropriate order in the circumstance is to stay the operation of the order pending appeal.
For these reasons delivered orally this afternoon, I intend to dismiss that aspect of the Application in the Proceeding by which the order staying the operation of the final orders is sought.
I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 28 January 2025
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