Bagala and Sacco
[2013] FCCA 1330
•3 September 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BAGALA & SACCO | [2013] FCCA 1330 |
| Catchwords: FAMILY LAW – Stay – application for stay pending appeal – property Orders – where orders amended under the slip rule. |
| Legislation: Family Law Act 1975 (Cth) Family Law Rules 2004, r.22.11 |
| Cases cited: Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 Bevan & Bevan [2013] FamCAFC 116 Jackson & Balen [2009] FamCAFC 131 Kelly & Kelly (1981) 6 Fam LR 741; FLC 91-007 Senior & Anderson (No 2) [2012] FamCA 880 Sacco & Bagala [2013] FCCA 972 Stone & Stone [2013] FamCA 479 |
| Applicant: | MS BAGALA |
| Respondent: | MS SACCO |
| File Number: | SYC 6603 of 2008 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 23 August 2013 |
| Date of Last Submission: | 23 August 2013 |
| Delivered at: | Sydney |
| Delivered on: | 3 September 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Lawrence |
| Solicitors for the Applicant: | Byrnes & Cox Lawyers |
| Counsel for the Respondent: | Mr Schonell |
| Solicitors for the Respondent: | Broun Abrahams Burreket |
ORDERS
In accordance with the Slip Rule Order 7 of the Orders made by this Court on 28 June 2013 is to be altered to provide that in the event that the Wife has not paid to the Husband the sum of $380,306.00 within three (3) months of the date of these Orders interest will accrue on that sum or the remaining balance at the rate prescribed under Rule 22.01 from time to time.
Enforcement of Orders (6), (7), (8), (10) and (13) of the Orders made on 28 June 2013 is stayed pending the hearing of the Appeal filed by the Applicant on 24 July 2013.
IT IS NOTED that publication of this judgment under the pseudonym Bagala & Sacco is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 6603 of 2008
| MS BAGALA |
Applicant
And
| MS SACCO |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application by the wife for a stay of certain property orders pending the hearing and determination of an appeal. The Orders sought to be stayed were made on 28th June 2013 (Sacco & Bagala[1]). Counsel for the Applicant told the Court that the particular orders sought to be stayed are Orders (6), (7), (8), (10) and (13).
[1] [2013] FCCA 972
It was put to the Court by Counsel for the Respondent that a mathematical error had been made by the Court in the original judgment. The submission, which I accept, is that:
a)At paragraph [63] of the judgment I found that the parties’ liabilities amounted to $995,764.00;
b)It follows that in paragraph [64] the amount of the non-superannuation asset pool including the add backs after the deduction of the total of the liabilities should be altered to $2,172,403.00;
c)It then follows that in paragraph [66] of the judgment after adding the value of the superannuation assets to the net total, the net value of the assets should be altered to $2,664,100.00.
As I found at paragraph [87] of the judgment that there was to be an equal division of the matrimonial assets between the parties, the value of the assets to be received by the Husband to bring about an equal division of the matrimonial assets is $1,332,050.00, being 50% of $2,664,100.00.
The Husband is to retain, has received or is to receive assets totalling $951,744.00.
Thus, it follows that the amount payable to the Husband by the Wife to bring about an equal division of the matrimonial assets in Order (6) should be reduced to $380,306.00 from the earlier figure of $525,712.00.
I accept that this mathematical error was made and on 23rd August 2013 I noted the Submissions made on behalf of the Husband and made the following Order:
(1)That pursuant to the Slip Rule Order 6 of the Orders made by this Court on 28 June 2013 be altered to provide that within 3 months of the date of these Orders the wife will pay to the husband the sum of $380,306.00.
Consequently, it appears to me that the reference to the sum of $525,712.00 in Order (7) should also read $380,306.00 and I will alter Order (7) under the slip rule accordingly.
It follows that the Orders the subject of the Appeal, and therefore the stay Application, now provide that:
a)Within three (3) months the Wife is to pay the Husband the sum of $380,306.00 (Order (6));
b)In the event that the Wife has not paid to the Husband the sum of $380,306.00 within three (3) months then interest will accrue at the rate prescribed under Rule 22.01 (Order (7));
c)In the event that the Wife has not paid to the Husband the monies due under Order (6) within three (3) months the Wife is to take all steps necessary to:
i)Sell the [omitted] business; and
ii)Sell the property at Property P (Order 8)
d)There is to be a superannuation splitting order (Order (10)); and
e)Within fourteen (14) days the Wife must serve [omitted] Accountants with an authority to release all records relating to the [Sacco] Superannuation Fund to the Husband (Order (13)).
The Wife has appealed. The grounds of appeal in her Amended Notice of Appeal are:
1. That the Trial Judge erred in law in that he failed to adequately reveal the process of reasoning which led his Honour to find that the contributions of the parties to the acquisition, conservation and improvement of the property of the parties to the marriage were equal.
2. That, irrespective of the adequacy or inadequacy of the Trial Judge’s Reasons for Judgment, finding that the parties’ contributions were equal was not reasonably open in the light of the concession made by the Respondent in relation to the financial and non-financial contributions of the Appellant in the post separation period.
3. That, irrespective of the adequacy or inadequacy of the Trial Judge’s Reasons for Judgment, finding that the parties’ contribution were equal was not reasonably open in the light of his Honour’s failure to make findings with respect to the various disputed issues of the fact which he identified.
4. That, irrespective of the adequacy or inadequacy of the Trial Judge’s Reasons for Judgment, finding that there should be no adjustment to the Wife for Section 75(2) factors was not reasonably open in the light of his Honour’s failure to make findings with respect to the various issues of fact which he identified.
5. That notwithstanding that the Trial Judge could not have known what the Full Court would decide in Bradley v Bradley (Bevan v Bevan) [2013] FamCAFC 226 delivered 8 August 2013 in the light of the decision of the Full Court his Honour erred in principle and discretion “adding back” the sum of $596,564 and by “inflating” his consideration of Section 79(4) and Section 79(2) factors.
6. The Orders made by Judge Scarlett did not have regard to the contributions made by the wife post separation.
Submissions
The Applicant Wife submitted that there are two main issues to which the Court should have regard when determining her application for a stay:
a)Whether or not the refusal to grant a stay would render the Appeal nugatory (see Kelly & Kelly[2]); and
b)Whether the Appeal has reasonable prospects of success.
[2] (1981) 6 Fam LR 741; FLC 91-007
As to the first point, it is submitted that if the judgment is not stayed, there is a real prospect that the former matrimonial home at Property P will have to be sold, as the Wife has been unable to borrow the necessary money to pay out the Husband. Thus, provided that her appeal is not spurious, a failure to grant a stay would render her appeal nugatory.
Similarly, the Wife is seeking an order in respect of the parties’ superannuation. If the stay were not to be granted, she would have to transfer her interest in the superannuation to the Husband, thereby rendering that part of her appeal nugatory.
It is submitted on behalf of the Wife that there will be no prejudice to the Husband if the stay were to be granted. If the appeal is not granted, he would still receive the interest that was ordered to be paid.
The Wife also submits that her appeal has strong prospects of success. Whilst it is argued that reasons were not provided, that is not in fact the case. The parties were in fact provided with written reasons.
The Wife also relies on the decision of the Full Court of the Family Court in Bevan & Bevan[3], relating to what is called “addbacks”. In particular, the Court has been referred to paragraph [79] of the judgment, where their Honours held:
We observe that “notional property” which is sometimes “added back” to a list of assets to account for the unilateral disposition of assets is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s. 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part…
[3] [2013] FamCAFC 116
Whilst the Applicant concedes that the decision in Bevan had not been handed down at the time that the decision under appeal was made, the Applicant still submits that, as assets totalling $446,564.00 were attributed to her and taken into account when determining the equal division of the parties’ assets, this was an erroneous decision in the light of the judgment in Bevan.
Thus, the Wife submits that the Appeal has merit and, indeed, good prospects of success and so it is appropriate for the stray to be granted.
Counsel for the Husband submitted that the Husband had received only $120,000.00 to date and should not be deprived of the fruit of the litigation. The Court should look at the substance of the Appeal, noting that four out of the seven grounds of Appeal relate to discretionary matters. He submitted that the Wife has very little prospects of success on her appeal.
Further, on the subject of hardship, Counsel for the Husband noted that the sum payable to the Husband has been reduced from $525,712.00 to $380,306.00 and submitted that there was no evidence to support the Wife’s claim of hardship. The profit from the [business] would have been sufficient to provide an income of $14,000.00 per month, which would have been more than sufficient to meet the Wife’s needs, to the extent of over $8,000.00 per month.
Thus, it was submitted that the Application for a stay should be dismissed with costs.
The Relevant Law to be considered.
The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision (Family Law Rules 2004, r. 22.11).
The grant of a stay is discretionary and the onus is on the applicant for the stay.
The principles governing the grant of a stay pending an appeal are set out in various authorities, including Stone & Stone[4] at [64]; Aldridge & Keaton (Stay Appeal)[5]at [18]; Jackson & Balen[6] at [28]; and Senior & Anderson (No 2)[7]at [31]-[40].
[4] [2013] FamCA 479
[5] [2009] FamCAFC 106
[6] [2009] FamCAFC 131
[7] [2012] FamCA 880
Aldridge & Keaton is a decision of the Full Court of the Family Court on an appeal from a decision of the Chief Federal Magistrate[8] and is binding on this Court. The principles to be considered are set out in paragraph [18] of the decision, where their Honours Bryant CJ, Boland and Crisford JJ point out that the authorities “stress the discretionary nature of the application which should be determined on its merits”[9]. The principles enunciated in the decision are (relevantly):
[8] As his Honour then was
[9] [2009] FamCAFC 106 at [18]
·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 bona fides of the applicant;
·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;
·(not relevant)
·The period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of the stay for a short period of time; and…[10]
[10] [2009] FamCAFC 106
Consideration
In my view, the Applicant has established a proper basis for a stay. There is a real risk that the Appeal would be rendered nugatory if a stay were not to be granted pending the hearing and determination of the Appeal, noting the Applicant’s argument that compliance with the Orders the subject of the Appeal would necessitate the sale of the former matrimonial home. Quite clearly, the sale of the property cannot be undone if the Applicant were to be successful on appeal.
The hardship to the Respondent would be less serious if a stay were to be granted, as interest will continue to accrue on the amount of money to which he is entitled under the Orders.
I am also in no doubt as to the bona fides of the Applicant in:
a)appealing against the decision; and
b)seeking a stay of the orders pending the Appeal.
It appears that the Applicant has an arguable case on appeal. It is undesirable and unnecessary for a trial judge to engage in a spirited defence of the decision under appeal, only to be satisfied that there is an arguable case. If it were the fact that the grounds of appeal referred to were obviously spurious and doomed to failure, then the Court would certainly not be minded to grant a stay. What has to be established is an arguable case on appeal, not necessarily a case that has overwhelming prospects of success, or even a better than even chance. An arguable case is just that.
As I am satisfied that the Applicant has an arguable case on appeal and the refusal of a stay would render the appeal nugatory, I propose to grant the Application for a stay of Orders (6), (7), (8), (10) and (13) of the Orders of 28 June 2013.
The question of costs can abide the result of the Appeal.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 11 September 2013
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