Baghti & Baghti & Ors (No 3)
[2013] FamCAFC 201
FAMILY COURT OF AUSTRALIA
| BAGHTI & BAGHTI AND ORS (NO. 3) | [2013] FamCAFC 201 |
| FAMILY LAW – APPEAL – STAY OF ORDERS – Where the husband appeals against the refusal by the trial judge to stay parenting and property orders – Where the respondents oppose the appeal – Where the Independent Children’s Lawyer only opposes the appeal against a stay of the parenting orders – Where there is no explanation as to how a successful appeal would be rendered nugatory if a stay was not granted – Where the husband has not demonstrated that the appeal has a reasonable chance of success – Where no error is identified in the approach of the trial judge – Where no merit is found in either of the grounds of appeal – Appeal dismissed. FAMILY LAW – APPEAL – FURTHER EVIDENCE – Where the wife seeks to adduce further evidence – Where the husband opposes the application – Where the wife asserts that the further evidence would significantly impact upon the Court’s determination of whether or not to grant a stay as sought by the husband – Where the Court determined that it was necessary to receive the further evidence – Further evidence allowed. FAMILY LAW – APPEAL – SECURITY FOR COSTS – Where the wife and her parents made applications for security for costs – Where the husband opposes both applications –Where the wife and the husband each describe their financial circumstances as “impecunious” – Where the appeal is not entirely devoid of merit – Where there is no matter of public importance – Where the granting of an order for security for costs in the wife’s favour would stifle the appeal – Where the wife’s application must fail – Where the wife’s parents argue that they are “strangers to the marriage” and they are parties against whom the husband has been wholly unsuccessful – Where the application should not be treated any differently to the application made by the wife – Where given the impecuniosity of the husband an order for security for costs against him would stifle the appeal – Applications dismissed. FAMILY LAW – APPEAL – COSTS – EXTENSION OF TIME – Where the wife and her parents separately seek costs against the husband in relation to his application seeking an extension of time to appeal – Where the Independent Children’s Lawyer also seeks costs against the husband as well as against the wife and her parents – Where the husband opposes the applications – Where the wife and her parents oppose the Independent Children’s Lawyer’s application – Where the Independent Children’s Lawyer did not pursue costs against the wife’s parents but sought that the wife and the husband each pay one half of her costs – Where the wife submitted that the husband pay all the costs of the Independent Children’s Lawyer or in the alternative that each party pay one half – Where the husband opposed the applications and sought that each party bear their own costs – Where the husband was successful in his application seeking an extension of time and should have his costs against the wife and her parents – Where there is no basis for the husband to pay one half of the costs of the Independent Children’s Lawyer – Where the wife agreed to pay one half of the costs of the Independent Children’s Lawyer regardless – Costs in favour of the Independent Children’s Lawyer ordered. FAMILY LAW – APPEAL – COSTS – ADJOURNMENT OF APPEAL – Where the wife and her parents sought costs against the husband and the Independent Children’s Lawyer sought costs against the husband and the wife – Where the husband sought that each party bear their own costs – Where given the circumstances of the husband’s successful adjournment application the wife and her parents should have their costs against the husband – Where the outcome of the husband’s application for an extension of time should offset those costs and each party should bear their own costs – Where the husband and the wife should be responsible for one half of the Independent Children’s Lawyer’s costs of the adjournment application – Costs ordered. FAMILY LAW – APPEAL – COSTS – REFUSAL TO STAY ORDERS – Where the costs sought by the husband, the wife and the wife’s parents in relation to the refusal of the stay application and the security for costs application offset each other and each party should bear their own costs – Where the husband must pay the costs of the Independent Children’s Lawyer in relation to the appeal against the refusal to stay the parenting orders – Costs ordered. |
| Family Law Act 1975 (Cth) – s 117 (2A) Family Law Rules 2004 (Cth) |
| Adult Guardian and Mother's Parents and B and Child's Representative (2002) FLC 93-116 Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 CDJ v VAJ (1998) 197 CLR 172 Costa and Anor v The Public Trustee of New South Wales [2008] NSWCA 223 Friscioni & Friscioni [2009] FamCAFC 43 Jones and Jones (2001) FLC 93-080 K & B [2006] FamCA 848 Luadaka v Luadaka (1998) FLC 92-830 Sawer & Sawer [2007] FamCA 140 Vadisanis & Vadisanis [2013] FamCAFC 90 |
| APPELLANT: | Mr Baghti |
| FIRST RESPONDENT: | Ms Baghti |
| SECOND RESPONDENT: | Mr B |
| THIRD RESPONDENT: | Mrs B |
| INDEPENDENT CHILDREN’S LAWYER: | Legal Aid NSW |
| FILE NUMBER: | SYC | 2145 | of | 2009 |
| APPEAL NUMBER: | EA | 10 | of | 2013 |
| DATE DELIVERED: | 18 December 2013 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Strickland, Ainslie-Wallace & Stevenson JJ |
| HEARING DATE: | 14 March 2013 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 27 November 2012 |
| LOWER COURT MNC: | [2012] FamCA 1112 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Neil SC with Mr Milanovic |
| SOLICITOR FOR THE APPELLANT: | Demir Legal |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Lawson |
| SOLICITOR FOR THE FIRST RESPONDENT: | Piggot Stinson |
| COUNSEL FOR THE SECOND AND THIRD RESPONDENTS: | Mr Gould |
| SOLICITOR FOR THE SECOND AND THIRD RESPONDENTS: | McDonell Milne Toltz |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Ms Messner |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Legal Aid NSW |
Orders
Leave to appeal against orders (9) and (10) of the orders made by Fowler J on 22 August 2012 be granted.
The appeal against orders (9) and (10) of the orders made by Fowler J on
22 August 2012 be dismissed.
The Application in an Appeal filed by the wife on 12 March 2013 be granted.
The applications for security for costs contained in the Responses to an Application in a Case filed respectively by the wife and the wife’s parents on
14 November 2012 be dismissed.
The Full Court decision in Vadisanis and Vadisanis [2013] FamCAFC 90 be drawn to the attention of the Court.
The wife pay one half of the costs of the Independent Children’s Lawyer in relation to the husband’s application for an extension of time to appeal against the refusal by Fowler J to grant a stay of the orders made on 22 August 2012 such costs to be assessed in default of agreement.
The husband and the wife each pay one half of the costs of the Independent Children’s Lawyer in relation to the husband’s adjournment application made on 6 February 2013 such costs to be assessed in default of agreement.
The husband pay the costs of the Independent Children’s Lawyer in relation to the appeal against the refusal by Fowler J to order a stay of the parenting orders made on 22 August 2012 such costs to be assessed in default of agreement.
There be no other order as to costs.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Baghti & Baghti and Ors (No. 3) 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 SYDNEY |
Appeal Number: EA 10 of 2013
File Number: SYC 2145 of 2009
| Mr Baghti |
Appellant
And
| Ms Baghti |
First Respondent
And
| Mr B |
Second Respondent
And
| Ms B |
Third Respondent
And
| Independent Children’s Lawyer |
REASONS FOR JUDGMENT
Introduction
The following matters were the subject of the hearing before us on
14 March 2013.
First, by Amended Notice of Appeal filed on 13 February 2013 Mr Baghti (“the husband”) appeals against all orders made by Fowler J on
27 November 2012. However, only the appeal against two of those orders was heard by us, namely the orders which dismissed the husband’s Amended Application filed on 22 November 2012 seeking stays of the parenting and property settlement orders made by Fowler J on 22 August 2012. On appeal, the husband seeks that those orders be set aside and that the orders of
22 August 2012 be stayed pending the outcome of the appeal against those orders (Appeal No. EA 118 of 2012). The first respondent in the appeal is Ms Baghti (“the wife”) and the second and third respondents are the wife’s parents, Mr B and Mrs B. They all oppose the appeal. The Independent Children’s Lawyer (“ICL”) took no position in relation to the property settlement orders, but opposed the appeal against the refusal to stay the parenting orders.
Secondly, by Application in an Appeal filed on 12 March 2013 the wife seeks to adduce further evidence comprised in her affidavit sworn on the same day, and which evidence relates to the parties’ former matrimonial home and the wife’s business.
Thirdly, in their Responses to an Application in a Case filed on 14 November 2012, the wife and the second and third respondents seek security for costs in relation to the appeal against the orders made by Fowler J on 22 August 2012 in the amounts of $50,750 and $23,370 respectively. Those applications were appropriately referred by Fowler J to this court and they are opposed by the husband. The ICL appropriately took no position in relation to these applications.
Fourthly, by Application in an Appeal filed on 16 July 2013 the husband sought that the Full Court decision in Vadisanis& Vadisanis [2013] FamCAFC 90 be drawn to the attention of this court. Although the wife and her parents doubted the relevance of this decision to the appeal, and opposed the application initially, as we will explain that opposition was not maintained.
Fifthly, and finally, the question of the costs of and incidental to the hearing on
6 February 2013 including the costs of the adjournment to 14 March 2013 were reserved for further consideration by this court.
We also note that by Application in an Appeal filed on 16 October 2013 the husband sought that the decision of the Supreme Court of New South Wales and the orders of Fowler J made on 20 September 2013 be drawn to the attention of this court. At a hearing before us on 12 November 2013 we made an order by consent in terms of this application.
Leave to appeal
In Vadisanis the Full Court held that leave to appeal is required where it is sought to appeal against orders refusing a stay. Here no application for leave was made and the matter was not raised or argued before us by either party.
In the husband’s written submissions as to the relevance of the decision in Vadisanis it was suggested that leave is not in fact required in this case because “the proceedings are ‘in relation to a child welfare matter’”. Pursuant to reg 15A of the Family Law Regulations 1984 (Cth) orders made in such proceedings are not within the category of prescribed decrees where leave is required.
The respondent chose not to present any submissions as to this issue.
For our part, in the absence of full and complete argument, we are not necessarily convinced that leave to appeal is required in this case, but if it is then we are content to grant leave to enable the appeal to proceed.
Background
The husband was born in 1968 and was aged 43 years at the time of trial. As a result of a motor vehicle accident in 1994 he was medically discharged and voluntarily resigned from the NSW Police Force; and in August 2001 he purchased a security services company.
The wife was born in 1976 and was aged 35 years at the time of trial. In September 2004 the wife and her sister, took over their parents’ business and reopened it as D Business.
The parties married in May 2002 and their only child, N Baghti, was born in May 2003. The parties separated on 5 December 2008 and the wife commenced proceedings in the Family Court in April 2009.
The matter came before Fowler J for hearing over 14 days in August and September 2011 and on 22 August 2012 the trial judge delivered his reasons for judgment in relation to both the parenting and property settlement issues. In summary, the parenting orders provided for the child to live with the wife, for the wife to have sole parental responsibility for the child and for the child to spend time with the husband each alternate weekend, half of school holidays and on special days. In relation to property settlement, various orders were made for the sale of the former matrimonial home and for a 55 per cent/45 per cent division of the parties’ property in favour of the wife. The wife was also to pay the husband $91,080 and thereupon be declared the legal and beneficial owner of her interest in the property owned by her family in Suburb A. Whilst orders were made for the wife’s interest in D Business to be sold, upon the wife’s request, that matter was listed for further hearing as to the form of the orders.
On 19 September 2012 the husband filed a Notice of Appeal (EA 118 of 2012) appealing against the orders of 22 August 2012. On appeal the husband seeks that Orders 1 to 55 made on 22 August 2012 be set aside and that orders be made as sought by the husband in his Minute of Orders filed on 4 October 2011.
On 19 September 2012 the husband also filed an Application in a Case seeking a stay of Orders 1 to 55 made by Fowler J on 22 August 2012. This application was subsequently amended on 22 November 2012.
On 28 September 2012 the husband filed an Application in a Case and sought an order, inter alia, that “the court order that the transcript be produced and the parties have leave to access and photocopy the transcript”. At the hearing of that application on 28 September 2012 Fowler J appropriately referred that application to this court.
On 14 November 2012 the wife and the second and third respondents both filed Responses to an Application in a Case seeking that the husband’s application of 19 September 2012 be dismissed. In the alternative, the wife sought security for costs in the amount of $50,750. The second and third respondents also sought security for costs, but that was sought regardless of whether the husband’s application seeking a stay was dismissed or not.
On 27 November 2012 Fowler J dismissed the husband’s application for a stay. In relation to the parenting and property settlement proceedings, his Honour also ordered the husband to pay the second and third respondent’s costs on an indemnity basis for the hearing and otherwise on a party and party basis; half the ICL’s costs being $12,254.40; the wife’s costs in relation to the parenting proceedings in the sum of $15,000; and 25 per cent of the wife’s costs in relation to the other issues heard. Orders were also made in accordance with those sought by the wife and her sister in relation to the sale of D Business.
On 24 December 2012 the husband filed an Application in an Appeal seeking, inter alia, an extension of time to appeal the orders made by Fowler J on
27 November 2012.
On 30 January 2013 both the wife and the second and third respondents filed Responses to an Application in an Appeal seeking, inter alia, that the husband’s application of 24 December 2012 be dismissed and that the Court hear and determine their applications for security for costs filed on 14 November 2012.
When the matter came before us on 6 February 2013 we made orders (the reasons for which were delivered on 8 February 2013) extending the time for the husband to file a Notice of Appeal to 13 February 2013 and referring the appeal to the Regional Appeals Registrar for urgent listing. Whilst the husband’s application for the provision of the transcript was dismissed, we made orders permitting the parties to listen to the audio recordings of the hearing before Fowler J.
Pursuant to our orders of 6 February 2013 a further directions hearing was held before the Regional Appeals Registrar on 18 February 2013 and the appeal was listed for hearing before us.
Reasons for judgment of the trial judge (insofar as they are relevant)
The trial judge commenced his reasons for judgment by noting the husband’s application for provision of the transcript would have to be made to the Full Court. Later in his reasons, the trial judge noted the applications for security for costs of the appeal would also need to be referred to the Full Court.
The husband’s application for a stay of proceedings pending appeal
In relation to the parenting orders, the trial judge noted the husband was largely concerned about an order which required the child to attend a dietician and a report from Dr F who advised against that course. His Honour noted
Dr F did not so advise the Court at the hearing and therefore considered such a challenge should be the subject of an application to vary that order. Upon considering the best interests of the child and the grounds of appeal, the trial judge was of the view there was unlikely to be appellate intervention in relation to the parenting matters and thus refused the husband’s application for a stay.
In relation to the property settlement orders, the husband argued the failure to grant a stay would render his appeal nugatory in that he was seeking an order that the former matrimonial home be transferred to him rather than sold as ordered by the trial judge. Whilst the husband had a right to buy the property, the trial judge noted the husband’s impecuniosity, the substantial mortgage arrears, and the husband’s obligation to pay costs and, again, formed the view that the grounds of appeal were unlikely to attract appellate intervention and refused the husband’s application for a stay.
Orders made 27 November 2012
Fowler J made the following relevant orders:
…
(9)The husband’s application for a stay upon the parenting orders is refused.
(10)The Court declines to make an order for the stay of proceedings on its judgment on financial issues.
...
(12)The Court notes there is an application for an order for security for costs. That application is referred to the Full Court for determination.
It is unnecessary for us to record here the other orders made by his Honour because it is only the husband’s appeal against orders (9) and (10) which is the subject of this hearing; the appeal against orders (3), (4), (5), and (6) (the costs orders), (7) and (8) (the sale of the business), and (11) (the signing of documents by the husband) was consolidated with the substantive appeal (appeal number EA 118 of 2012), and adjourned to be heard with that appeal.
The applications for security for costs
The wife’s application for security for costs is found in her Response to an Application in a Case filed on 14 November 2012, where the she sought the following orders:
1.That the Application in a Case filed by the applicant husband on
19 September 2012 be dismissed.2.In the alternative, this Honourable Court make an order for security for costs against the applicant in the sum of $50,750.
3.That the applicant husband pay the sum referred to in Order 2 of these Orders into the trust account at Pigott [sic] Stinson in trust for [Ms Baghti] within 21 days of the date on which this Order is made.
4.If the applicant husband does not pay the amount required in Order 2 within the time specified in Order 3 of these Orders, the case of the applicant husband be permanently stayed.
5.That the sum of $50,750 be released to the wife from the trust account of Pigott [sic] Stinson if the husband’s appeal is dismissed within 24 hours of Judgment being handed down.
6.Such other Order or Orders as this Honourable Court deems fit.
7.That the applicant husband pay the wife’s costs of and incidental to these proceedings.
The second and third respondents’ application for security for costs is similarly found in their Response to an Application in a Case filed on 14 November 2012, where they sought the following orders:
1.That the Application in a Case filed by the Applicant Husband on
19 September 2012 be dismissed.2.That this Honourable Court make an Order for security for costs against the Applicant Husband in the sum of $23,370 in respect of the Appeal filed 19 September 2012.
3.That the Applicant Husband pay the sum referred to in Order 2 of these Orders into the trust account of McDonell Milne Toltz in trust for [Mr and Mrs B] within 21 days of the date on which this Order is made.
4.If the Applicant Husband does not pay the amount required in Order 2 within the time specified in Order 3 of these Orders, the Appeal filed by the Applicant Husband be permanently stayed.
5.Such other Order or Orders as this Honourable Court deems fit.
6.That the Applicant Husband pay the Second and Third Respondents costs of and incidental to these proceedings.
application to adduce further evidence
On 12 March 2013 the wife filed an Application in an Appeal seeking to adduce further evidence in the form of her affidavit sworn on the same day. The application was opposed, and we heard argument and reserved our decision on the basis that we would incorporate our reasons for judgment in relation to the application in these reasons for judgment.
The evidence sought to be adduced covered two topics, namely:
a)The foreshadowed mortgagee sale of the former matrimonial home at C Street, Suburb H.
b)The foreshadowed sale of D Business.
It was submitted by counsel for the wife that the evidence as to the foreshadowed mortgagee sale would significantly impact upon this Court’s determination as to whether a stay should be granted. In particular, counsel for the wife contended the parties could not sell the property themselves if a stay was granted and that a mortgagee sale would likely result in the property being sold at a lower price.
Counsel for the husband opposed the application on the basis that orders had been in place since August 2012 requiring the wife to pay the mortgage and that the wife had failed to make full disclosure of her financial circumstances. Counsel for the husband also noted that one of the major issues during the trial was the wife’s lack of business records resulting in the expert’s inability to value the business.
We will address this application further when considering the relevant ground of appeal.
Grounds of appeal
Of the grounds of appeal as contained in the Amended Notice of Appeal filed by the husband on 13 February 2013, only two need to be addressed by us, namely (paragraph numbering as in the original):
30.His Honour erred in law in making order 9 on 27 November 2012 refusing to grant the husband a stay of the parenting orders made by his Honour on 24 August 2012 in Case No. SYC 2145/2009.
31.His Honour erred in law in making order 10 on 27 November 2012 declining to make an order for the stay of the judgment on financial issues in the orders made by his Honour on 24 August 2012 in Case No. SYC 2145/2009.
Discussion
Ground 30
It is apparent from the submissions of the husband that there are two bases for finding that his Honour erred in refusing to stay the parenting orders, namely:
a)His Honour’s final orders of 22 August 2012 substantially changed the pre-existing status quo; and
b)his Honour failed to take into account the report of Dr F which demonstrated that the hostilities between the parties had abated, and opined that the child should not see a dietician as ordered by his Honour.
As to a), the change was from a shared care arrangement to an arrangement whereby the wife has sole parental responsibility for the child, the child lives with the wife, and the child spends time with the husband on each alternate weekend from Friday after school until the commencement of school on the Monday.
As to b), at the hearing of the application for a stay the husband presented a report of the child’s paediatrician, Dr F, dated 25 October 2012, i.e., after the orders made by his Honour. Dr F did not agree with the order made by
his Honour that the child be referred to a dietician, suggesting that it would be “detrimental” to the child. He also commented that at his consultation with the child the parents were able to have a “calm and productive conversation” with him, and much of their “acrimony” that he had previously experienced had “subsided”.
The submissions in response by the wife and the ICL made the following points:
a)That it would not be in the best interests of the child to alter the arrangement put in place by the orders of 22 August 2012 because with the passage of time that would be an unnecessary change.
b)The report of Dr F was untested, and on the basis of one visit with the child could not alter the findings of his Honour as to the hostility between the parties and the need for the child to see a dietician made after a five day hearing on parenting issues.
c)In any event, the issue of the hostility between the parties and the child’s obesity were just two of the plethora of issues that his Honour had before him at trial, and it was his Honour’s findings on all those issues which led to the orders that he made.
d)If there really was a basis for saying that circumstances had changed since the order was made on 22 August 2012 then the appropriate course was for the husband to make an application to vary those aspects of the orders that might be affected by the change.
e)The two issues arising from the report of Dr F could not result in the need to stay all of the parenting orders in any event.
The principles governing stay applications are not in doubt, including those that specifically apply where the stay relates to parenting orders. The general principles are conveniently found in paragraph [18] of Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106, and the principles specific to parenting orders are set out in cases such as Friscioni & Friscioni [2009] FamCAFC 43 at [58] – [59] and K & B [2006] FamCA 848 at [32]. Where a stay is sought of parenting orders, the important thing is to consider the consequences for the child of granting or refusing the stay. In that regard it is crucial to limit the frequency of any changes in the parenting arrangement. It is also not the case that the maintenance of the pre-existing status quo is always appropriate. The Full Court in K & B said this at [32]:
The granting or refusal of a stay involves an exercise of discretion by a trial judge. Whilst such discretion must be exercised judicially, in cases involving children, we accept that from time to time circumstances in existence at the date of the orders, or which occur from the date of orders until the hearing of a stay application, may be very relevant matters to be considered in the exercise of discretion in determining whether or not to grant a stay. The interests of children would not be promoted by an inflexible requirement or presumption in every case to maintain the status quo prior to the making of orders the subject of the stay application, and to ignore unsatisfactory arrangements at the time of the orders, or significant events which have occurred after the making of those orders.
As referred to earlier in these reasons his Honour had regard to the views of
Dr F. In relation to the child seeing a dietician or not, his Honour found that this was not a matter that the court would take into account on an application for a stay. His Honour was concerned that Dr F did not raise this in his oral evidence to the court, and considered that if there was a sound evidentiary base to change the orders as a result of subsequent events it should be made the subject of an application to vary the orders rather than an application to stay them.
That obviously also applies to the issue of the suggested waning of hostilities.
We find no error in this approach by the trial judge and particularly given
his Honour then went on to address the wider question of the welfare of the child as the primary consideration. In that regard his Honour recorded that he reached the conclusion that he did after a “very long and heartily contested hearing and after sifting [all] the evidence”.
It is also relevant to recall the submissions of the wife which put the report of
Dr F into context, and emphasised that the issues arising from that untested report as to the child’s obesity only go to orders 16 and 17 made by his Honour, yet a stay of all orders is sought. Further, that result cannot be justified either by one observation of the interaction of the parties after the orders had been made compared to the extensive evidence that was before his Honour, and
his Honour’s assessment of the same. Nor can the change of arrangement make the difference. Significantly, to grant the stay now would mean yet another change that the child would have to cope with, and it is clearly unwarranted in the circumstances of there being no evidence that there are any difficulties for the child with the current orders.
According to the authorities, apart from the consequences for the child of granting or refusing a stay, a “substantial” factor to be considered is whether the appeal may be rendered nugatory if a stay is not granted. It is suggested that this applies here, but it was not the subject of any specific submission in the husband’s written outline of argument, and nor was it raised in the oral submissions of his senior counsel. It arose only in the context of the Application in an Appeal filed by the husband on 16 July 2013 seeking that the Full Court decision of Vadisanis be drawn to the attention of this court. That application was initially opposed by the wife and her parents, and on
30 July 2013 we made orders for written submissions to be filed initially by the husband as to the relevance of that decision. The husband filed brief written submissions on 8 August 2013 but the wife did not file any submissions. We are content to receive and consider this decision, but at this point we note that it was an appeal against a refusal to stay property settlement orders and not parenting orders. In any event, in the husband’s written submissions as to the relevance of the decision, he says this:
1.It is submitted that the decision is relevant in conveniently summarising the principles to be applied in applications for a stay of orders pending an appeal …
2.The most important principle supporting a stay is that a successful appeal would be rendered nugatory in the event that a stay is not granted. It is submitted that the husband’s appeal against the orders made by Fowler J on 22 August 2012 and 27 November 2012, both in the Parenting Orders and in the Property Orders, will be rendered nugatory if a stay is not granted.
However, the difficulty for us is there is no explanation of how it is said that a successful appeal would be rendered nugatory if the stay is not granted. We can see no basis for such a submission, and absence any detail from the husband we can take this issue no further.
The merits of the appeal against the orders made on 22 August 2012 is also a relevant factor to be addressed in granting or refusing a stay of those orders. Importantly though the strength of the proposed appeal is the relevant issue; i.e., the greater the prospects of success the more likely it is for a stay to be granted.
Again, there was no relevant submission made about this in the written outline of argument of the husband. In paragraph 8 of that outline the husband mistakenly identified what was said in our judgment delivered on 8 February 2013 as to the merits of the appeal against the orders refusing the stay as being a comment on the merits of the appeal against the orders made by the trial judge on 22 August 2012. Thus we can ignore that comment.
We also observe that nothing was said in oral submissions by the husband’s senior counsel as to the strength or otherwise of the grounds of appeal against the orders made on 22 August 2012, and this again creates a difficulty for us. On the other hand the wife’s counsel made extensive submissions as to the merits of the appeal in his written outlines filed on 28 February 2013 and12 March 2013.
Mr Lawson submits that the 101 grounds of appeal (both as to the parenting and the property settlement orders) “do not amount to allegations of appealable error; they do not identify the alleged error of law that the trial judge fell into”. Further, they are said to be “imprecise” and “amount to no more than a catalogue of grievances with the trial judge’s findings of fact”; “they do not rise above a complaint by the [husband] that he simply ‘did not like’ the trial judge’s findings”.
It is beyond doubt that appellate courts are reluctant to interfere with findings of fact by a trial judge unless it can be demonstrated that the trial judge “has failed to use or has palpably misused his or her advantage, or has made findings inconsistent with incontrovertible facts, or has acted on glaringly improbable evidence, or has made findings contrary to compelling inferences” (Costa and Anor v The Public Trustee of New South Wales [2008] NSWCA 223, per Ipp JA at [34]).
As Mr Lawson points out there is nothing in the grounds of appeal that makes out any of these assertions and thus it is difficult to see how it can be said that the trial judge fell into appealable error.
We accept these submissions, supported as they are by the ICL, but of course, in a hearing like this we are not able to be definitive as to the success or otherwise of the appeal. What we can say is that it has not been demonstrated to us that the husband has a reasonable chance of success in the appeal, and this speaks against the granting of a stay. Indeed, that was his Honour’s finding in paragraph 81 of his reasons for judgment delivered on 27 November 2012.
In these circumstances we find no merit in this ground of appeal.
Ground 31
The principles applicable to an application to stay property settlement orders are also to be found in such cases as Aldridge & Keaton (Stay Appeal), and they were confirmed in the recent Full Court decision of Vadisanis referred to us by the husband’s solicitor.
It is apparent from the husband’s submissions that his principal complaint is that the appeal against the orders for property settlement will be rendered nugatory because the stay has not been granted by the trial judge.
First, the husband sought at trial that the former matrimonial home at Suburb H be transferred to him, yet his Honour ordered that that property be sold and the net proceeds of sale be divided 55 per cent to the wife and 45 per cent to the husband.
Secondly, his Honour ordered that money held in a controlled money account by the wife’s solicitors be forthwith released to the wife’s parents to enable them to discharge a mortgage to the ANZ Bank taken out by them to assist in the purchase of a property by the wife. The money in the account comprised the proceeds of sale of that property, and any monies left over after the discharge of the mortgage was to be divided 55 per cent to the wife and 45 per cent to the husband. The husband says that his Honour erred in making this order and seeks that the wife’s parents return the money to the account, and then that money be paid to him.
Thirdly, his Honour ordered that the wife’s interest in the business known as D Business be sold noting that her partner, her sister, will join in the sale, and with the gross sale proceeds being applied to repayment of the loans raised against the business and a sum due to the wife’s parents. Any net proceeds are then to be divided 55 per cent to the wife and 45 per cent to the husband.
The further evidence sought to be adduced by the wife via her Application in an Appeal to that effect filed on 12 March 2013 and referred to above, and the further evidence sought to be adduced by the husband via his Application in an Appeal filed on 16 October 2013, and in respect of which the wife consented to an order being made for that evidence to be received by us, with that order being made on 12 November 2013, is relevant to the first and third issues.
Given what has transpired in relation to the former matrimonial home and the business since the refusal by his Honour to stay the orders, we consider it necessary to receive the evidence comprised in the wife’s affidavit filed on
12 March 2013 (CDJ v VAJ (1998) 197 CLR 172 at [114]). Indeed, the husband’s objection to the same cannot now stand given first that on his own application we now have before us the decision of the New South Wales Supreme Court delivered in August 2013 whereby the ANZ Bank, as mortgagee, was granted possession of the Suburb H property, and judgment was entered against the husband and the wife for $507,991.72. We were also informed at the hearing of the husband’s Application in an Appeal on 12 November 2013 that the bank was now in the process of selling this property pursuant to the terms of the mortgage.
Secondly, the other evidence that was agreed on 12 November 2013 could be placed before us were the orders made by the trial judge on 20 September 2013 whereby his Honour, pursuant to the slip rule, altered order 7(1)(b) of his orders made on 27 November 2012 relating to the terms of sale of the business by excluding the husband from the range of persons who could determine the sale price of that business. The husband appealed against that order (appeal number EA 143 of 2013), but at the hearing of that appeal on 12 November 2013 we dismissed the same. We were also informed that the business had been sold and the entire proceeds of sale had been used to meet the liabilities of the business leaving no money to be distributed to the parties.
The husband’s counsel conceded that in these circumstances there was no utility to the appeal against the orders made on 20 September 2013, and it was on that basis that the appeal was then dismissed.
Pausing there, likewise, it is apparent to us that in these circumstances there is no utility in granting a stay of the order providing for the sale of the business, and we would propose to dismiss that part of the application in any event. We also observe that there is in fact no ground of appeal directed to the order for sale and thus it is not open for this court to find that unless a stay is granted the appeal will be rendered nugatory.
Before we return to the order for the sale of the former matrimonial home, although we have indicated that there can no longer be any objection to the evidence sought to be adduced by the Application in an Appeal filed on
12 March 2013 being before us, we observe that that evidence has really been overtaken by the subsequent evidence that we have received by consent. It relates to earlier actions by the ANZ Bank in relation to the Suburb H property, and the placing of the business on the market.
With the order for the sale of the former matrimonial home the question must also be asked as to whether there is a basis any longer for a stay to be granted. The position is that the bank have obtained possession of the property and they are about to sell the same. Accordingly, even if we find appealable error by
his Honour and re-exercise the discretion to put a stay in place that would not prevent the bank from proceeding to sell the property. We are aware that the husband has filed an Application in a Case seeking orders restraining the bank from selling the home, but we cannot predict the outcome of that application. To be successful the husband not only needs a positive result from the appeal but also from that application. We of course only have control over the former, and turning to that we are not persuaded that his Honour erred in refusing to order a stay.
To repeat, in relation to the Suburb H property, the issue is that the husband in his appeal seeks to achieve a result where that property is transferred to him and not sold. However, the evidence before his Honour was clear, and it is confirmed in the decision of the Supreme Court of New South Wales, that neither the husband nor the wife for that matter are able to raise the funds to discharge the mortgage such that either of them would be able to retain that property.
His Honour said this in his reasons for judgment of 27 November 2012:
75.It is true that if a stay is not granted and the order is implemented then that property will be sold.
76.The husband would have a right to buy it but he points out that he will not absent other benefits from the dispute be able to purchase the property.
77.The property is the subject of a mortgage in respect of which there are substantial arrears exceeding some $83,000.
78.The husband has today in various applications before the Court argued that he is impecunious.
79.He has an obligation pursuant to orders made of this Court in due course to make payments to a number of the parties in these proceedings for costs.
We note that there is no challenge to anything said by his Honour at this point.
It is also relevant to note that it is on this basis that the decision in Vadisanis to which we were referred is of no assistance and can be distinguished. In that case the property involved was to be sold but a stay was granted because the wife sought on appeal that she be able to retain it. Significantly though the wife had her finance approval in place to enable her to retain the property if the appeal was successful.
We also observe that as with the sale of the business there is no ground of appeal that directly challenges the order for the sale of this property, and thus again it is not open to this court to find that unless a stay is granted the appeal will be rendered nugatory. However, if there is any doubt about that, given the inability of the husband to retain the property, there is no basis for finding that he has a reasonable prospect of success in an appeal suggesting the trial judge was in error in ordering the sale. Further, the submission of Mr Lawson made generally in relation to all of the grounds of appeal continues to apply, and with there being no reasonable prospect of success as far as we can gauge on the evidence and submissions before us, there would be no basis for ordering a stay, and that is without taking account of the current actions of the bank.
The husband made a point of stressing that the wife has failed to make the mortgage repayments in respect of the Suburb H property. That is conceded by the wife, and clearly that has led to the actions by the bank, but as we emphasised at the hearing of this appeal, it was always open to the husband to take proceedings to enforce the order that the wife make the mortgage repayments, but he chose not to. Thus he cannot now expect this court to right that wrong by finding error by the trial judge and re-exercising the discretion to grant a stay of that order when it has reached the stage it has.
As to the issue of the release of monies to the wife’s parents the husband seeks on appeal that that order be set aside and the monies be paid to him. There is of course the difficulty that the money was released in accordance with
his Honour’s orders and paid to the bank to discharge the parents’ mortgage. Thus, once again this raises the question of whether there is any utility in a stay of this order. This question was not addressed by the husband in his written outline, and nor by his senior counsel in oral submissions. Indeed there was very little put by way of written or oral submissions in relation to the issue of the release of monies. The wife though did address this issue in her written outline, and submitted that in the circumstances this court would not do what the husband seeks. The wife’s parents are of course vitally interested in this aspect of the appeal, and in their written outline made the obvious point that no basis is put in either the Amended Notice of Appeal or in the submissions in support of that Notice that demonstrate any error by the trial judge in refusing the application to stay this order. We agree with that submission and we observe yet again that on the evidence and the submissions before us, it would appear that the appeal against the order releasing the money has no reasonable chance of success, and it cannot be said that if a stay is not granted that this aspect of the appeal will be rendered nugatory.
In these circumstances we find no merit in this ground of appeal.
Conclusion
Having found no merit in either ground of appeal the appeal against orders (9) and (10) made by his Honour on 22 August 2012 must be dismissed.
The applications for security for costs
As identified above the wife and her parents separately seek security for their costs in relation to appeal number EA 118 of 2012. The wife seeks $50,750 and the wife’s parents seek $23,370. Both applications are opposed by the husband.
The first observation to make is that despite how the order sought is expressed in her Response, at the hearing before the trial judge the wife’s counsel clarified that the wife was seeking security for costs regardless of whether a stay of the order was granted or not (Transcript, 27 November 2012, pages 212 and 213).
The second observation is that at the hearing before us Mr Lawson indicated that the wife’s application related not only to appeal number EA 118 of 2012 but also appeal number EA 10 of 2013. Although at that hearing we were addressing the latter appeal, Mr Lawson explained that there were some aspects of that appeal that were adjourned to be dealt with at the same time as the substantive appeal being appeal number EA 118 of 2012, and that the applications for security also related to those matters.
The principles governing an application for security for costs are well settled. For example the Full Court said this in Sawer & Sawer [2007] FamCA 140:
19.The power in this Court to make an order for security for costs is to be found in s 117(2) of the Act, which is in the following terms:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
20.The provisions of s 117(2A) are as follows (s 117(4) and (5) are not presently relevant):
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
21.The authorities establish that in exercising the discretion to order security for costs, it may also be relevant for the Court to consider in addition to the financial circumstances of the parties and the other five specific matters mentioned in s 117(2A), the following matters:
a) the prospect of success of the litigation;
b) whether the claim for security is made bona fide;
c)whether or not an order for security would stifle the litigation;
d)whether or not the litigation may involve a matter of public importance;
e)whether or not there has been a delay in bringing the application for security;
f)whether there would be difficulty in enforcing an order for costs
(Luadaka v Luadaka (1998) FLC 92-830; Jones and Jones (2001) FLC 93-080; Adult Guardian and Mother's Parents and B and Child's Representative (2002) FLC 93-116.)
The matters of potential relevance referred to by the Full Court in Sawer at [21] largely mirror Rule 19.05(2) of the Family Law Rules 2004 (Cth) (“the Rules”).
We propose to discuss each application by reference to the list of potentially relevant factors summarised in Sawyer at [21]. In doing so, we will touch on matters in s 117(2A) of the Act to the extent necessary.
The wife’s application
The financial circumstances of the husband and the wife
Although there are allegations otherwise, it would appear that neither party is financially well off; indeed they each describe themselves as “impecunious”.
The wife says that her impecuniosity stems from her inability to realise assets and share in the proceeds of sale. As it has transpired though the business has been sold and there are no net proceeds to distribute, and with the former matrimonial home, upon sale there would appear to be little available for the parties.
The husband says that he is unemployed and in receipt of Centrelink benefits, and he has no funds and no access to funds to meet an order for security for costs.
Significantly, given the husband’s position, he will clearly not be able to meet any order for costs that may be made against him if his appeal is dismissed, and that is the very point of requiring security for costs.
The prospects of success of the appeal
This is a crucial issue here because the wife concedes that to require security for costs will stifle the appeal given the husband’s “impecuniosity”, but submits that that would not be inappropriate because the appeal has no prospects of success.
When addressing the appeal against the refusal to stay the orders we of course found that the appeal against the substantive orders had no reasonable prospects of success, but that does not necessarily mean that the appeal has no prospect of success. Indeed, we are not persuaded that the appeal is entirely devoid of merit, and we proceed on that basis for the purposes of the determination of the applications for security for costs.
Whether the making of an order for security will stifle the appeal
Given the concession made by the wife referred to above, we need say no more about this factor. It clearly indicates that the application for security should be dismissed.
Whether the claim for security is made bona fide
There is no suggestion by the husband that this is an issue, and thus we do not need to address it.
Whether or not the litigation involves a matter of public importance
We agree with the submission of the wife that there is no matter of public importance here that would require the appeal to proceed, but that of course does not mean that it should not proceed.
Conclusion
Given that the making of an order for security for costs in favour of the wife would stifle the appeal and we are unable to find that the appeal is devoid of all merit, the wife’s application for security for costs must fail.
The application for security for costs by the wife’s parents
The same considerations apply here as with the wife’s application, but
Mr Gould has attempted to argue that the wife’s parents are in a different position than the wife. It is said that their claim for security is stronger because they are “strangers to the marriage and parties against whom the husband has been wholly unsuccessful.” The latter aspect is of course correct, but that is not the criteria here. The principal issues are still the impecuniosity of the husband, whether an order for security will stifle the appeal, and the merits of the appeal.
These issues are the same in relation to the application by the wife’s parents as they are for the application by the wife, and thus no distinction can be made.
As to the wife’s parents being strangers to the marriage, again that is obviously correct, but it is difficult to see how that should matter in determining an application for security for costs. It is suggested that they should be treated as “being more akin to parties to a commercial dispute where, it is notorious that orders for security for costs are more commonly made.” However, we agree with the submissions of the husband’s senior counsel that there is no evident basis for this submission. Accordingly, we are not persuaded that the wife’s parents’ application should be treated differently, and given that because of the impecuniosity of the husband the making of an order for security would stifle the appeal, and further because we are unable to find that the appeal is devoid of all merit, the application should be dismissed.
The applications for costs of and incidental to the hearing on 6 February 2013, and the costs of the hearing on 14 March 2013
At the hearing on 6 February 2013 the wife and the wife’s parents separately sought costs against the husband in relation to his application seeking an extension of time to appeal. The ICL not only sought costs against the husband in respect of this application, but also against the wife and the wife’s parents.
The husband opposed these applications, and the wife and the wife’s parents opposed the ICL’s application for costs.
On 6 February 2013 we also heard an application by the husband to adjourn the hearing of the appeal against the orders refusing a stay, and we ultimately granted that application. The wife, her parents, and the ICL all sought orders for costs in relation to that adjournment application. Again the husband opposed these applications.
We observe that subsequently neither the wife nor the wife’s parents “press(ed)” their applications for costs and sought orders that “(their) costs of 6 February 2013 be costs in the cause.”
The husband, in his subsequent submissions filed on 1 March 2013 sought that “each party should bear his or her own costs of and incidental to the hearing before the Full Court on 6 February 2013”.
Counsel for the ICL ultimately sought that “the costs of her appearance before the Full Court on 6 February 2013 in the sum of $2,678.50 be paid as to half by the (husband) and half by the (wife)”, and did not proceed with her application for costs against the wife’s parents.
As to that, the husband opposed the application, but the wife submitted that the husband should have to pay all of the ICL’s costs, or if that was not the case then each party should pay one half of those costs. Further, if we determined that the husband’s submission should prevail, namely that he pay none of the costs of the ICL, then the wife’s position was that she would still agree to pay one half of those costs.
As a result of the positions taken by the wife and her parents as to costs, and in any event, we also need to address the question of the costs of and incidental to the hearing on 14 March 2013. In that regard, in the event of the appeal being dismissed, the wife, the wife’s parents and the ICL sought that they have their costs, but the husband opposed those applications and sought that each party bear their own costs.
Finally, there are the costs of the applications for security for costs of the wife and her parents. In the event of both applications being dismissed the wife and her parents seek that the costs be costs in the substantive appeal (appeal number EA 118 of 2012). The husband of course is prima facie entitled to his costs of those applications given that we propose to dismiss the same.
Discussion
It seems to us that we should now deal with the questions of the costs of and incidental to the hearings on 6 February 2013 and 14 March 2013 rather than leave any as costs in the cause (or in the substantive appeal).
As for the husband’s successful application for an extension of time, it is beyond doubt that the husband should have his costs against the wife and her parents. It was not the husband’s fault that he could not file his appeal within time, and relevantly we have found that the appeal against the orders of
22 August 2012 is not entirely devoid of merit. Despite this the wife and her parents opposed the application. The husband though sought that each party bear their own costs in relation to this issue, and we will return to the effect of that shortly.
As for the ICL’s costs, in the circumstances there is no basis for an order against the husband, but the wife accepted that she should pay one half of those costs regardless of the outcome, and we will make that order.
As for the husband’s successful adjournment application, given the circumstances of that (as described in paragraph 55 of our reasons for judgment delivered on 8 February 2013), the wife and her parents should have their costs, but we consider that the outcome of the application for an extension of time should offset those costs and thus each party should bear their own costs of the adjournment application. That leaves of course the ICL, and again counsel for the ICL sought that the husband and the wife each be responsible for one half of the costs of the adjournment application. The wife accepts that she should be responsible for one half of those costs, and in the circumstances we find the husband should be responsible for the one half as well. There is not the opportunity to offset the costs of the husband’s successful application for an extension of time against the entitlement of the ICL to costs in relation to the adjournment application, because the ICL took no position as to the former.
Turning then to the appeal against the refusal of the stay, the wife, the wife’s parents, and the ICL should have their costs given that we propose to dismiss that appeal. However, with the applications for security for costs which we also propose to dismiss, the husband should have his costs against the wife and her parents. Thus these costs should offset each other such that again, each party bears their own costs. However, that does not apply to the ICL because the ICL was not a party to the applications for security for costs, and took no position in relation to the same. Thus, the husband must pay the costs of the ICL in relation to the unsuccessful appeal against the refusal to stay the parenting orders.
I certify that the preceding one hundred and eight (108) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ainslie-Wallace and Stevenson JJ) delivered on 18 December 2013.
Associate:
Date: 18 December 2013
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