Balaskas & Stratos (No 2)
[2021] FCCA 997
•14 May 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Balaskas & Stratos (No 2) [2021] FCCA 997
File number(s): CAC 735 of 2020 Judgment of: JUDGE HOWE Date of judgment: 14 May 2021 Catchwords: FAMILY LAW Stay Application whether a Stay should be granted – Stay sought in relation to litigation funding order - manifest inequity between parties Legislation: Family Law Act 1975 (Cth) ss 79, 117 Cases cited: Balaskas & Stratos [2021] FCCA 100
Aldridge v Keaton (Stay Appeal) (2009) FamCAFC 106
Australian Coal and Shale Employees’ Federation v The Commonwealth (1956) 94 CLR 621
Rakete & Rakete [2012] FamCA 267
Sarti & Sarti & Anor (No.2) [2020] FCCA 2595
Number of paragraphs: 55 Date of hearing: 11 May 2021 Place: Canberra Counsel for the Applicant: Dr J Behrens Counsel for the Respondent: Mr G Richardson SC ORDERS
CAC 735 of 2020 BETWEEN: MR BALASKAS
Applicant
AND: MS STRATOS
Respondent
ORDER MADE BY:
JUDGE HOWE
DATE OF ORDER:
14 MAY 2021
THE COURT ORDERS THAT:
1.The Application in a Case filed by the wife on 16 February 2021 be dismissed.
2.Cost be reserved.
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Balaskas & Stratos (No 2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE HOWE:
Introduction
The application for determination is an Application in a Case, filed by the wife on 17 February 2021 (‘the application’), seeking to Stay the payment of a $110,000 ‘ litigation funding order’[1] pursuant to s.117 (a) of the Family Law Act 1975, as made by Judge Neville on 28 January 2021. The Judgment and associated Orders of 28 January 2021 were decided by Judge Neville on the papers with both parties filing written submissions.
[1]
The application was listed for hearing on 11 May 2021, with each of the parties making oral submissions in addition to written submissions and other documents relied upon. The oral submissions of counsel, as well as the material below at paragraphs 11 and 12 should be taken as incorporated in these reasons
Procedural History
On 28 January 2021, his Honour Judge Neville delivered written judgment and made orders pursuant to s.117 of the Family Law Act1975 requiring the de facto wife (‘the wife’) to pay to the de facto husband (‘the husband’) the sum of $110,000 within 28 days. I acknowledge that the parties in this matter were never married however I have referred to them as the husband and the wife throughout these reasons for clarity and simplicity.
The Orders dated 28 January 2021 also provided that:
3. the costs of both parties in relation to litigation funding order application be reserved
4. that within 21 days of the date of the orders being 17 February 2021 the parties are to advise the court via email of the following:
a. whether the matter (including all interim applications) might proceed to arbitration, and if so, timeframes; and any other agreed procedural orders; or
b. whether the matter (including all interim applications) should otherwise proceed to a private mediation, and if so, timeframes and any other agreed procedural orders; or
c. whether the matter should be listed for further mention or directions on a date to be advised in April.
5. In the light of order 4 above, and subject to the information provided pursuant to it or any other consent order, all outstanding applications be stood over to a date and time to be advised by the court.
The wife then filed an Application in a Case on 16 February 2021 seeking a Stay of the orders dated 28 January 2021. This Application was supported by a brief Affidavit filed 16 February 2021. The wife also filed an undertaking on 7 May 2021which provided that:
If this Honourable Court grants a Stay in accordance with Order 2 of the Application in a Case filed on my behalf and sealed 17 February 2021 I undertake to do all things within my power to ensure the appeal is pursued expeditiously and with diligence.
The de facto wife filed her appeal against the Judgment of Judge Neville and associated Orders dated 28 January 2021 within time, on 15 February 2021. I accept for present purposes that her appeal is bona fides and that she has a genuine grievance with the orders of 28 January 2021 and the reasons given for them.
Factual background
The parties in this matter were in a de facto relationship for approximately 10 years. There appears to be some dispute about various aspects of the relationship. Those issues may require further determination, however, that material is not before me for the purpose of this Application, nor is it relevant.
Much of the background to this matter is canvassed in the Judgment of Judge Neville dated 28 January 2021 and I need not repeat that history here.
Stated summarily, the following aspects of the matter are not disputed:
(a)the husband is 45 years of age and the wife is 55 years of age
(b)the wife is a significantly wealthy woman and it appeared to be uncontentious that her assets, inclusive of superannuation, have an estimated value in excess of $24 million
(c)As detailed in his financial statement filed 23 April 2020, the husband submits that his asset pool is modest, totalling $15,000, inclusive of superannuation, with liabilities of $47, 932.
It is noted that the wife also contends that the de facto husband may have assets outside of the jurisdiction but as yet, this has not been tested.
Evidence and submissions
The wife relied upon the following material at the hearing of 11 May 2021:
(a)the Judgment of Judge Neville dated 28 January 2021
(b)the Application in a Case filed by the wife on 16 February 2021
(c)the Affidavit of the wife filed 16 February 2021
(d)the Undertaking of the wife filed 7 May 2021
(e)Response to Initiating Application filed 6 May 2020
(f)the written advice of the wife emailed to the Court on 21 September 2020
(g)the Case Summary document and Costs Notice of the husband filed 6 May 2021
(h)the Affidavit of the husband filed 23 October 2020 with particular reference to paragraphs 47 to 51
(i)the Case Summary document of the wife filed 6 May 2021
The husband relied upon the following material at the hearing of 11 May 2021:
(a)the Case Summary document and Costs Notice of the husband filed 6 May 2021
(b)the Judgment of Judge Neville dated 28 January 2021
(c)the Affidavit of the husband filed 23 October 2020
Consideration of legal principles
In considering the Application for a Stay as sought by the respondent wife, the relevant principles are as set out by their Honours Bryant CJ, Boland & Crisford JJ in Aldridge v Keaton (Stay Appeal) (2009) FamCAFC 106 at [17] – [18] as follows:
17. This is an appeal from a discretionary judgment. There are well established principles on the limits on interference by an appellate court with such a judgment (see House v R (1936) 55 CLR 499; Gronow v Gronow (1979) 144 CLR 513; (1979) FLC 90-716).
18. The principles to be applied in determining an application for a stay of orders both in the general law and in respect of parenting proceedings are also well known (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Ltd [No (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation (1985) 2 NSW LR 685; Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681; Clemett & Clemett (1981) FLC 91-013; JRN & KEN v IEG & BLG (1998) 72 ALJR 1329 at 1332). The authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter include the following:
· 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;
I refer to his Honour Judge Neville’s helpful summary of the law relating to Stay Applications in the matter of Sarti & Sarti& Anor (No.2) [2020] FCCA 2595 at [20] to [23] (footnotes omitted):
I remind myself of the oft-cited statement of principle by Stephen J in Gronow v Gronow, where his Honour said (emphasis added):
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight. In the present case it should not have done so at all.
In the same case, Aickin J said (at pp.537-538) (Mason and Wilson JJ agreeing at p.526) (emphasis added):
Statements of the general principles to be applied by an appellate court when asked to set aside an order made in the exercise of a judicial discretion generally include a reference to the trial judge giving inadequate weight to some factors and excessive weight to others. It is however a mistake to suppose that a conclusion that the trial judge has given inadequate or excessive weight to some factors is in itself a sufficient basis for an appellate court to substitute its own discretion for that of the trial judge. As Kitto J. said in Lovell v. Lovell (1950) 81 CLR, at p 533 :
“The proposition that the appeal court will consider whether 'no sufficient weight' has been given to relevant considerations is not inconsistent with the principle that the appeal court does not deal with the appeal as if it were exercising the original jurisdiction; even if it considers that insufficient weight has been given to some relevant consideration, it will still not substitute its judgment for that of the primary judge unless it comes clearly to the conclusion for that reason that the discretion has been exercised wrongfully.”
It is clear that that test will not be satisfied merely by reason that the appellate court, considering the matter de novo, would itself have arrived at a different result. The fact that a decision on custody depends upon the exercise of a judicial discretion recognizes that in many cases different minds may arrive at different conclusions.The advantage which a trial judge has of seeing and hearing the witnesses is of particular importance in matters of custody where so much depends on an evaluation of the characters and personalities of the parents, and their attitudes, not only to the child, but also to each other. The attribution of comparative weight or importance to various factors will generally be influenced by the impression formed on seeing and hearing each parent, and in appropriate cases the child or children involved. Some objective matters such, for example, as relative financial resources and adequacy of accommodation may stand in a different position but in the present case it is not suggested that any error occurred in that respect.
I also remind myself of the observations by Kirby J in CDJ v VAJ, where his Honour said, at [185, par.2] (internal citations omitted; emphasis added):
Such reasons for appellate restraint are of general application. However, they have particular relevance to appeals within, and from, the Family Court of Australia. This is because of the functions and purposes of that Court and the difficult and evaluative decisions which it often has to make. The peculiar nature of decisions relating to the intensely personal questions of the division of the property of parties to a failed marriage and the welfare of their children makes it essential that those who decide appeals respect the onerous responsibilities of those whose decisions they review. They need to recognise that it is of the very nature of such decisions, including those relating to the residence of children, that any two decision-makers may, with complete integrity and upon the same material, often come to differing conclusions. This is an inescapable feature of the nature of this jurisdiction.
To similar effect and emphases are the comments in Sigley v Evor where the Full Court said (at [128] – [129]; emphasis added)):
Discretionary judgment
[128] This is an appeal against a discretionary judgment and the principles to be applied are well established: House v The King (1936) 55 CLR 499; Gronow v Gronow (1979) 144 CLR 513; Norbis v Norbis (1986) 161 CLR 513 and CDJ v VAJ (1998) 197 CLR 172.
[129] We are mindful of the position of the Federal Magistrate in relation to complaints about assessment of weight where no error of law or fact is obvious: see Gronow v Gronow at 519-20 per Stephen J. We are also mindful of the necessity to avoid “an overly critical, or pernickety, analysis of the primary judge’s reasons, given the large element of judgment, discretion and intuition which is involved”: see AMS v AIF (1999) 199 CLR 160 per Kirby J at 211; A v J (1995) 19 Fam LR 260 at 269 per Full Court (Fogarty, Lindenmayer and O’Ryan JJ) and Rollings v Rollings (2009) 230 FLR 396 per Full Court (Boland, O’Ryan and Murphy JJ).
The considerations listed above are not exhaustive. The onus in bringing the Application is on in the wife to demonstrate a proper basis for the Stay. It not necessary for the wife to demonstrate any “special” or “exceptional” circumstances[2]. However, the husband is entitled to the benefit of the judgment of 28 January 2021. He is also entitled to presume that the judgment is correct.
[2] Aldridge v Keaton (Stay Appeal) (2009) FamCAFC 106.
The granting of a Stay is entirely discretionary. The mere filing of an appeal is insufficient to justify the grant a Stay. Relevant to the application for a Stay is the Applicant’s bona fides, which I have already addressed above. The Court may grant a Stay on terms that are fair to all parties. The decision necessarily involves the 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 will also be a substantial factor in determining whether it is appropriate to grant a Stay.
The Court is entitled to assume that the decision which is the subject of the appeal is correct. Indeed, the Full Court must subsequently approach the appeal on the basis of a strong presumption that the decision is correct.[3]
[3] see Australian Coal and Shale Employees’ Federation v The Commonwealth (1956) 94 CLR 621 at 627.
Summary
As noted in the submissions made on behalf of the wife, the strength of the appeal is relevant in determining whether or not to grant the Stay.
The grounds of appeal of the Judgment dated 28 January 2021 are contained within the Notice of Appeal filed 15 February 2021.
During oral submissions at the hearing of 11 May 20201, Senior Counsel for the wife submitted that his Honour Judge Neville was led into error regarding the existence of a summary dismissal application made by the wife. It was further submitted that this error had caused Judge Neville to make the orders of 28 January 2021 on a misconstruction of the evidence.
Senior Counsel for the wife was directly asked if a summary dismissal application was made by way of oral submission or in written submissions at any stage of the proceedings. In response, Senior Counsel indicated that at no point was anything stated about an application for summary dismissal. It was contended that his Honour had somehow inferred that a summary dismissal application was made of his own accord.
As I was not the presiding Judge at previous mentions and the previous hearing of 26 October 2020, 1 refer to the transcript of proceedings and to submissions previously made.
On 15 September 2021, the matter was heard for directions before his Honour Judge Neville. I refer to the following interchanges with respect to reference to a summary dismissal application:
MR CAMERON: Your Honour, the parties attended a mediation session on 4 August of this year. The parties were unable to reach an agreement, both on an interim basis and also a final basis. The parties are a significant way apart. You will see from the document filed by the parties that the respondent is seeking an order that my client’s application be dismissed without any property adjustment, and you will see from my client’s documents that he is seeking a property adjustment, the effect of which is that he receive 25 per cent of the overall pool. Pool is ‑ ‑ ‑ [4]
[4] Transcript of proceedings 15 September 2021, page 2.
Shortly thereafter, the proceedings continued:
HIS HONOUR: No, I understand. Am I right in assuming – and obviously, please correct me if I’m wrong – that my general understanding of the respondent’s case is that based upon what has already been provided – I use that in a very general sense, of course – what has been provided to the applicant is, at least, equal to, if not, more than what he would otherwise be entitled to under any property proceedings, hence the summary dismissal application? Is that – accepting the generality of the statements, is that generally the respondent’s position?
MS CAPAR: Sorry, your Honour. I do apologise. Could you repeat that?
HIS HONOUR: Just basically, what has already been provided to the applicant by the respondent in terms of whether it’s rental accommodation, other provision of financial resources that, on her account of the facts, that he’s already received what he might otherwise be entitled to, maybe even more than he would be entitled to on a final basis; therefore, because he has already got it, and he’s not entitled to anything more, therefore his application should be summarily dismissed.
MS CAPAR: I’m not sure, your Honour, but I can clarify that for you.
HIS HONOUR: I’m just trying to get a better handle on it, because the basis of the summary dismissal application, that’s really what I’m alluding to, you basically say that he’s not entitled to anything or anything more than what he’s already received; that’s the basis of the summary dismissal application, isn’t it?
MS CAPAR: Yes. But I would like the opportunity to confirm that, which I’m happy to do so in writing.
HIS HONOUR: It would be useful. [5]
[5] Ibid, page 6.
The above interaction between his Honour and the lawyer for the wife demonstrates his Honours attempt to clarify the wife’s position in relation to the applications that she sought or intended to seek.
When discussing the procedural course for the matter, the following interaction occurred between his Honour and the lawyer for the wife.
HIS HONOUR: … There would need to be an outline of submissions in relation to each of the issues that are agreed that are on the table, and the outline of submissions would need to be done no less than five days prior. In the meantime, that I would be grateful, Ms Capar – again, really, it’s just for my information, but obviously for Mr Cameron’s as well – if within seven days – and I’m happy to get it just by way of email to my associate as to the basic argument for the summary dismissal application, whether it’s of the kind that I’ve indicated, namely, the applicant has already got what he might otherwise be entitled to, if not, more if the matter was run to a final hearing now, and therefore, that he wouldn’t be entitled or isn’t entitled to anything more. That’s as I apprehend the respondent’s argument. But perhaps if you could confirm that within seven days, just in a very short note.
MS CAPAR: Thank you, your Honour. I’m happy to do so.[6]
[6] Ibid, pages 6-7.
In concluding, his Honour noted the following:
HIS HONOUR: So we will be back in touch soon. But we will hear from Ms Capar within 7 days about the basis for the summary dismissal application. and we will also be back in touch within seven days with an approximate range as to when the interim hearing might be able to be fixed. Very well. Unless anything else, we can ‑ ‑ ‑
MS CAPAR: Thank you very much. Your Honour.
HIS HONOUR: ‑ ‑ ‑ let you all go. Thank you.[7]
[7] Ibid page 9.
Accordingly, his Honour made Order 3 of the Orders dated 15 September 2020 to reflect the conversations with the wife’s lawyer as follows:
Within 7 days of the date of these Orders, being by 22 September 2020, the legal representative for the Respondent is to provide the Court via email to [email protected] the basic argument for the Respondent’s Summary Dismissal Application
In accordance with that Order, written advice was received by the Court via email dated 21 September 2021 in which provided the following information (footnote omitted):
2. The Respondent does not presently seek an order for summary dismissal or any other form of summary disposition of the proceedings. She may do so in the future if and when particulars are provided as a consequence of the interlocutory orders she seeks for provision of the same.
Throughout the material, there is significant reference to and discussions associated with a potential or foreshadowed application for summary dismissal. It was clear that both parties and the court foreshadowed such an application, noting that there remained ambiguity regarding whether and when the application might be made and whether the making of the application was contingent on further material being filed.
Despite the submission by the wife’s Senior Counsel that the Court was led into misapprehension by the mistake of the husband, it is clear upon the Orders, in conjunction with the discussions and submissions of the parties, that there was a real prospect of an application for summary dismissal being made.
It was submitted that the inference drawn by his Honour as to the wife’s failure to pursue an application for summary dismissal, was a key factor in determining whether the appeal has any likelihood of success.
The transcript of proceedings on 15 September 2020 does not support the contention that the Court was misled as to the existence of any summary dismissal application, whether to be made immediately or pursued at a later time. The timing of such an application was, and is, at the election of the wife and it was her determination, as outlined in the written advice provided to the Court on 21 September 2020.
The above is not a clearly articulated position of there being no application at all, as the wife now submits.
Even if I were to find that his Honour were led into error in relation to the summary dismissal, which I do not, such an argument would not outweigh the other considerations that I have before me.
Ground 3.2 of the Notice of Appeal refers to ‘failure to give adequate reasons … for the quantum of [the] order’.
His Honour was provided with a costs notice for both parties which refers to the amounts paid by both parties for their respective legal representation. It is clear that the determination of quantum is a discretionary one having regard to the information provided to the court. This was an interlocutory application and one that does not require a forensic or mathematical analysis by the Court. There was no objection made by either party as to the material being inaccurate.
Accordingly, I find that ground 3.2 has no merit.
Even if I were to take this submission at its highest, it does not change the fact that the Judgment granting the litigation funding payment took into account all essential factors, including hardship and the unequal financial positions of the parties.
At ground 3.3.1 of the Notice of Appeal, the wife refers to what is described as an ‘adverse inference as to the conduct of the Appellant as described as ‘gaming’.
It is clear from the reasons of judgment that the commentary of Judge Neville was directed to both parties and was not a finding as to the credit of either party. Indeed, his Honour provided that (emphasis added):
Regrettably, if the “gaming” in the litigation would cease by one or both sides, the sooner some genuine attention could and should be given to resolving it so that the parties can get on with their lives[8]
[8] Page 33 para 46(g) Balaskas & Stratos 2021 FCCA 100.
Accordingly, I find that ground 3.3.1 has no merit.
It was accepted by both parties that the refusal to grant the Stay application would render the appeal nugatory. This is only one of many discretionary factors I must consider and balance.
On the matter of potential prejudice to either party in the event that the Stay was granted or otherwise, Senior Counsel for the wife submitted that, in the event that the wife was wholly successful in her application, there would be no property adjustment in favour of the husband, and therefore no opportunity for her to be repaid the amounts that she has expended in accordance with the Orders of 28 January 2021. Senior Counsel described a potential injustice to the wife, as she would bear the only prejudice if the Stay is not granted.
Conversely the husband submitted that the prejudice lies entirely on his shoulders, given that, absent the litigation funding payment being made, he will not have the financial means to adequately pursue his application for a just and equitable division.
In considering the argument that the prejudice exists due to the potential inability of one party to recover costs in the event that they are wholly successful at trial, the capacity to repay is a relevant consideration, but not one that can be elevated to the status of an essential pre-condition to the making of an order.[9]
[9] Rakete & Rakete [2012] FamCA 267 at [55].
It is clear from their respective applications that further litigation is deemed necessary by both parties on their pathway to finalising the financial property arrangement between them.
There has been no finalisation of the interim matters between the parties, these including an application for interim spousal maintenance. It is anticipated that even in circumstances where the wife is wholly successful in her final orders, there are outstanding interim applications that still require determination absent agreement being reached.
It is clear that the financial circumstances of the wife are far superior to those of the husband. Her financial circumstances are sound whilst he contends that, not only is he impecunious, but his health precludes him from any further asset accumulation.
The balance is between the potential injustice to the wife of being unable to recover $110,000 from a pool of assets valued at approximately $24 million, which she will retain if she were to ultimately succeed in the substantive proceedings and the potential injustice to the husband of not being able to successfully respond to the appeal proceedings and the interim applications, or to secure any proper entitlement under s.79.
It was submitted that, if paid, the majority of the $110,000 would in fact be consumed immediately to cover costs already incurred by the husband, thereby leaving little available for any future litigation. On this basis, Senior Counsel for the wife submitted that the court could not be satisfied that the money would guarantee that legal representation could be secured. Respectfully, I have no evidence to support such a contention. Conversely, I cannot make any findings that the legal representation of the husband will only continue to act if outstanding work is paid as put by the husband. I have no evidence to substantiate such a submission.
In circumstances where the wife has put a case, including the current appeal on foot, that requires answers from the husband and the fact it remains unknown whether the wife will formally make an application for summary dismissal, it is clear that the litigation will continue. I am satisfied that that there are justifying circumstances and that the justice of the case favours the husband being able to pursue and possibly defend any pending proceedings, which necessarily requires having the funds to do so.
The potential injustice to the husband of being unable, in practical terms, to be in a position to receive legal assistance outweighs any potential injustice to the wife of being unable to recover the costs amount.
The decision to grant a Stay is discretionary. Whilst balancing the competing factors as I must, I am compelled by the argument that to ensure that the interests of justice are met and are accessible to all parties to the proceedings, the husband must be provided with what can only be described, in the circumstances, as a modest amount to meet his legal costs. These costs are incurred not only in advancing his own position but in answering the case as put to him by the wife.
Having regard to all of the relevant factors, I am not satisfied that is it appropriate to exercise my discretion to grant the Stay of the orders of 28 January 2021 for litigation funding.
I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Howe. Associate:
Dated: 14 May 2021
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