Cantoni & Cantoni (No. 2)
[2021] FamCA 553
•29 July 2021
FAMILY COURT OF AUSTRALIA
Cantoni & Cantoni (No. 2) [2021] FamCA 553
File number(s): PAC 1840 of 2018 Judgment of: FOSTER J Date of judgment: 29 July 2021 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – APPLICATION FOR STAY – where application made by the wife for stay of interim property orders pending appeal – where consideration of applicable principles – where appeal would be rendered nugatory absent a stay – where stay ordered – where wife to meet property outgoings pending determination of appeal. Legislation: Family Law Rules 2004 (Cth) r 22.11 Cases cited: Alexander and Others v Cambridge Credit Corporation Ltd (Receivers Appointed) and Another (1985) 2 NSWLR 685
Fauna Holding Pty Ltd and Ors & Mitchell [2000] FamCA 548; (2000) FLC 93-024
House v The King (1936) 55 CLR 499
Jackson & Balen [2009] FamCAFC 131
Medlow & Medlow [2016] FamCAFC 34
Cantoni & Cantoni [2021] FamCA 464Re Middle Harbour Investments Ltd (in Liq) (unreported, Court of Appeal (NSW), 15 December 1976)
Number of paragraphs: 21 Date of last submission/s: 26 July 2021 Date of hearing: 23 July 2021 Place: Parramatta Solicitor for the Applicant: Ms Khalil of Khalil Family Lawyers Pty Ltd Counsel for the Respondent: Mr McCormick Solicitor for the Respondent: Goldsmiths Lawyers ORDERS
PAC 1840 of 2018 BETWEEN: MS CANTONI
Applicant
AND: MR CANTONI
Respondent
ORDER MADE BY:
FOSTER J
DATE OF ORDER:
29 JULY 2021
THE COURT ORDERS THAT:
1.Orders made on 2 July 2021 be stayed pending determination of the wife’s appeal conditional upon:
(a)the wife diligently prosecuting her appeal and application for leave to appeal;
(b)the wife paying as they fall due and payable as and from 2 July 2021 all council, water rates and insurances payable in respect of the property at D Street, Suburb E, Victoria; and
(c)the wife paying all mortgage instalments due and payable in respect of the said property, such that the balance outstanding on the mortgage not exceed the amount due and owing as at 2 July 2021.
2.The husband and wife have liberty to apply as to implementation or enforcement of these orders.
3.The costs of the present application for stay be reserved to agreement for final hearing.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cantoni & Cantoni has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
FOSTER J:
On 2 July 2021 the Court made orders and delivered Reasons for judgment in relation to an interlocutory application in the context of ongoing financial proceedings between the primary applicant husband and the primary respondent wife: Cantoni & Cantoni [2021] FamCA 464.
Orders were made as follows:
1. All outstanding interlocutory applications be dismissed.
2.Mr B from C Real Estate is hereby appointed Trustee for Sale of the property situated at D Street, Suburb E, Victoria, more particularly described in the Certificate of Title Volume … Folio … (“the Suburb E Property”) with the property to be placed on the market for sale by such method determined by the Trustee forthwith for the best price reasonably obtainable and for the purposes of this order the property shall vest in the Trustee for Sale.
3.Upon sale of the Suburb E, the proceeds of sale are to be distributed in the following order and priority:
(a)In payment of all selling expenses, including the Trustee’s fees, selling agent’s commission, advertising expenses and conveyancing costs;
(b)In payment to discharge the Westpac mortgage registered on title to the Suburb E property;
(c)In payment of the balance then remaining to be held on trust for the parties by the Trustee for Sale in an interest bearing account in the name of the Trustee as trustee for the parties pending further order of the Court.
4. Pending settlement of the sale of the Suburb E Property:
(a)The parties are to keep the property in at least the same state of repair as at the date of these Orders;
(b)The parties shall do all things required of them to facilitate the sale of the Suburb E Property;
(c)The parties must deliver up possession of the Suburb E Property in vacant possession to the Trustee forthwith;
(d)Neither party shall further encumber the Suburb E Property or draw down on the existing Westpac mortgage registered on title without the prior written consent of the other party.
5.All previous Orders as to the completion and/or construction of the Suburb E Property and the sale of the Suburb E Property are discharged.
6.In the event that either of the parties refuse or neglect to sign any document required by them to be signed, the Registrar of the Family Court of Australia shall be and is hereby empowered to sign such documents on behalf of that party pursuant to section 106A of the Family Law Act 1975 (Cth).
7.The parties serve a copy of these orders and these Reasons for Judgment on each of the caveators within seven days from this date.
8.Liberty to each party and to the Trustee for Sale to apply as to implementation or enforcement of these orders.
9.The proceedings be listed before a registrar for directions so as to facilitate compliance with trial directions such as to facilitate the matter proceeding to final hearing.
The interim orders followed a long history of ongoing litigation between the parties in respect of which they were unable to agree about virtually any issue. These Reasons assume familiarity with the Reasons for judgment delivered on 2 July 2021: Cantoni & Cantoni (supra).
Subsequent to orders made 2 July 2021, the wife on 16 July 2021 lodged a Notice of Appeal incorporating an application for leave to appeal from the interlocutory orders.
Subsequently, and on 16 July 2021, the wife filed an Application in a Case seeking a stay of the operation of orders made 2 July 2021. The Application in a Case was supported by the affidavit of the wife sworn 15 July 2021.
The Notice of Appeal sets out seven grounds of appeal. In summary, they comprise the following:
(1)That the Court erred in dismissing the wife’s application pursuant to Rule 15.49 of the Family Law Rules to adduce valuation evidence in respect of the subject property “as is” and in the event that building and rectification works were completed.
(2)That the Court failed to give Reasons in relation to the previous ground of appeal.
(3)That the dismissal of the appellant’s oral interlocutory application filed 19 August 2020 (sic) under Rule 15.49 was an error in that it removed any element of fairness and justice to the appellant in the substantive proceedings.
(4)That the Court erred in principle and discretion in finding that the sale of the subject property rendered no prejudice to the caveators on title to the said property.
(5)That the Court erred in fact in that His Honour failed to find that there will, upon the sale of the subject property “as is”, more likely than not be no net proceeds of sale.
(6)That the Court erred in that it failed to give adequate weight or failed to disclose reasoning sufficient to permit an understanding of how the Court had regard to the evidence of the proposed builder as to various factual matters: That as a consequence of those factual matters there was no need to secure further monies from the present mortgagee or another financial institution for the amount anticipated for the required works; The evidence of the builder in South Australia and the steps to be taken in order to become a registered builder in Victoria and that the build itself would be complete within two or three months.
(7)That the Court’s discretion miscarried in that the result embodied in the order was plainly wrong and manifestly unjust.
The Stay Application: Discussion
It is well settled that a stay will not be granted lightly or as a matter of course.
The power to order a stay (r 22.11 of the Family Law Rules 2004 (Cth)) is incidental to the right of appeal and derives from the inherent power of the Court to do whatever is necessary to prevent injustice in relation to the proceedings in the Court: Fauna Holding Pty Ltd and Ors & Mitchell [2000] FamCA 548; (2000) FLC 93-024.
In Jackson & Balen [2009] FamCAFC 131 the Full Court said at [28]:
The principles to be applied in hearing a stay application pending an appeal are well settled (see Federal Commissioner of Taxation v Myer Emporium Ltd [No. 1] [1986] HCA 13; (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685; Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [1986] HCA 84; (1986) 161 CLR 681).
Those authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter include the following:
a)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;
b)a person who has obtained a judgment is entitled to the benefit of that judgment;
c)a person who has obtained a judgment is entitled to presume the judgment is correct;
d)the mere filing of an appeal is insufficient to grant a stay;
e)the application must be bona fides;
f)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;
g)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;
h)some preliminary assessment of the strength of the proposed appeal – whether the appellant has an arguable case.
In Alexander and Others v Cambridge Credit Corporation Ltd (Receivers Appointed) and Another (1985) 2 NSWLR 685 the NSW Court of Appeal outlined relevant principles as follows (at 694-695):
It is sufficient that the applicant for the stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour.
There are other principles to be kept in mind. The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties ... The mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case, nor will it discharge the onus which the applicant bears ... The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it.
...
Two further principles can be mentioned. The first is that where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay ... Thus, where it is apparent that unless a stay is granted an appeal will be rendered nugatory, this will be a substantial factor in favour of the grant of a stay ... Secondly, although courts approaching applications will not generally speculate about the appellant's prospects of success, given that argument concerning the substance of appeal is typically and necessarily attenuated, this does not prevent them considering the specific terms of a stay that will be appropriate fairly to adjust the interest of the parties, from making some preliminary assessment about whether the appellant has an arguable case. This consideration is protective of the position of a judgment creditor where it may be plain that an appeal, which does not require leave, has been lodged without any real prospect of success and simply in the hope of gaining a respite against immediate execution of judgment...
The Court of Appeal also referred with approval to the approach enunciated by Mahoney JA (with whom Moffitt P and Glass JA agreed) in Re Middle Harbour Investments Ltd (in Liq) (unreported, Court of Appeal (NSW), 15 December 1976) (at 2):
Where an application is made for a stay of proceedings, it is necessary that the applicant demonstrate an appropriate case. Prima facie, a successful party is entitled to the benefit of the judgment obtained by him and is entitled to commence with the presumption that the judgment is correct ... where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party.
The present Appeal requires leave to appeal from the interlocutory judgment. For leave to appeal to be granted there must be sufficient doubt about the decision to warrant it being reconsidered, and that substantial injustice would result if leave were refused, supposing the decision to be wrong: Medlow & Medlow [2016] FamCAFC 34.
The wife’s appeal involves an appeal against a discretionary judgment. The limits on appellate interference in respect of such judgments are well known: see House v The King (1936) 55 CLR 499 at 504 – 5 (Dixon, Evatt and McTiernan JJ):
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
As properly contended by the husband, the wife’s submissions accept that the existence of appellate arguments are not of themselves a sufficient basis for a stay.
Whilst there is doubt as to the merits or otherwise of the various grounds of appeal, the present application is substantially resolved by a consideration of the subject of the interim orders. The husband contends that in the event of a stay being ordered it should be conditional on the wife paying property outgoings pending determination of the appeal.
The subject property comprises the primary asset of the parties. It has been the husband’s application for some time that the property in its incomplete state be sold, as it has remained stagnant now for almost three years. It is the wife’s position that she be permitted to speculatively expend some $700,000 or so of borrowed funds to complete the construction of the property within what she says is a short compass of time by using an interstate builder. It is noted that that the present community circumstances present their own difficulties by reason of the COVID-19 pandemic.
However, it is patently clear that to not stay the orders for sale of the property would render the wife’s appeal completely nugatory, notwithstanding that ultimately she seeks a sale of the property provided that it is completed.
The other issue in these proceedings is the interest of various caveators who have lodged various claims purporting an interest in the property itself, or in the interest of either the husband or wife in the property. None of those caveators have been joined as parties to these proceedings although the primary orders made would see their claim be preserved, not as against the property itself but as against the net proceeds of sale after discharge of the secured first mortgage.
It is to be expected that provided leave is granted to appeal, the appeal will not be heard and determined until early 2022.
Whilst for the reasons given it is appropriate that the stay be ordered, it is proper that such stay be conditional on the wife meeting the property outgoings as and from the date of the primary judgment, so that the husband is not prejudiced by the delay.
Orders will be made accordingly.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Foster. Associate:
Dated: 29 July 2021
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