Cerny and Seidler

[2019] FamCA 273

FAMILY COURT OF AUSTRALIA

CERNY & SEIDLER [2019] FamCA 273

FAMILY LAW – PRACTICE AND PROCEDURE – STAY – Where the father files an application in a case for a stay of orders – Where the orders are subject to an appeal – Where the father also sought a substitution of some of the orders – Where a correction of orders is also sought under the slip rule – Where the father application for a correction under the slip rule will be heard at a later date – Where the father also makes an application for the mother to be dealt with for contravening orders – Where this application will also be heard at a later date – Where the parties presented an agreed minute of order for the pattern of living arrangements after the school holidays and the issue was resolved – Where the father bears the onus to establish a proper basis for the stay – Where he is not required to demonstrate special or exceptional circumstances – Where there is little difference in the terms of the stay proposed by the mother and the father – Where the order made are based on the mothers proposed terms of the stay – Where a stay is granted on certain orders pending the determination of the appeal commenced by the father – Where the father seeks further subpoenas be issued – Where leave is not granted until the determination of the slip rule application.

APPLICANT: Mr Cerny

RESPONDENT: Ms Seidler

FILE NUMBER: SYC 6696 of 2014

DATE DELIVERED: 7 March 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 27 February 2019

REPRESENTATION

APPLICANT HUSBAND IN PERSON: Mr Cerny

SOLICITOR FOR THE RESPONDENT: Karras Partners Lawyers

Orders

1. Pending the determination of the appeals commenced by Notices of Appeal filed on behalf of the father 22 February 2019 the following orders of 30 January 2019 are stayed on these terms:

   i.Order 3(c) is varied to provide:

   (c)In discharge of the mortgage to the Westpac Banking Corporation being registered dealing number …63 relating to Westpac Loan …98 only and that the funds required to discharge Westpac Banking Corporation loan …18 be held in a controlled monies account by the conveyancing solicitor; 

   ii.The mother is restrained from allowing the balance of the Westpac Loan …98 to increase above $1,319,542;

   iii.The mother is restrained from further encumbering the property at F Street, Suburb G in any way other than by the Westpac Loan …98;

   iv.Order 3 (e) is varied to provide:

   (e)In paying an amount sufficient to discharge the Westpac Loan …69 into a controlled monies account by the conveyancing solicitor;

   v.The mother is restrained from allowing the balances of the Westpac Loans …18 and …69 to increase above $94,161 and $149,936, respectively.

2. It is Noted that the issue of whether or not Westpac loans …18 and …69 must be paid out of the sale proceeds of the Suburb G property may be finalised on determination of the father’s slip rule application.

3. Otherwise, the father’s application filed on 30 January 2019 is dismissed.

4. Leave is granted to the parties to apply within 28 days, on giving at least seven days’ notice to the Court and each other, in relation to the wording of these orders.

Note:  The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym  Cerny & Seidler has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

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 r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  SYC6696 of 2014

Mr Cerny

Applicant

And

Ms Seidler

Respondent

REASONS FOR JUDGMENT

1. These are proceedings that were heard by me on 27 February 2019, largely relating to a stay of orders made on 30 January 2019.  The latter orders are the subject of appeal and some other applications.  The parties were excused on delivery of judgment. 

2. The application for a stay of orders comes in the context of an appeal against orders made on 30 January 2019 for parenting, property settlement and Child Support between Ms Seidler, (“the mother”), and Mr Cerny, (“the father”); they are also referred to as the wife and husband.

3. What follows are the reasons for the orders made today on those matters.  As to the applications, on 2 February 2019, the father filed an Application in a Case seeking a stay of orders 3(c), 3(d), 3(e), 3(j), 4, 5(a) and 6 of the order made on 30 January 2019 pending the determination of his appeal against those orders.  He also sought that there be orders in substitution for some of those orders and he sought certain other orders.  By one Notice of Appeal filed on 22 February 2019, the father has appealed against orders 3(c), 3(d), 3(e), 3(j), 4, 5(a) and 6 of the orders of 30 January 2019 and by a separate Notice of Appeal also filed on 22 February 2019 he has appealed against a refusal on 13 December 2018 of an application for an adjournment of the substantive trial.  The application for adjournment was filed or at least dated, 8 December 2018. 

4. In addition to the father’s appeal, he has applied for the correction of some orders under the slip rule.  The father’s application under the slip rule has been listed for hearing on 14 May 2019.  That date was identified as earlier dates available to the Court were not convenient to both parties.  That is unfortunate as some of the issues relevant to the stay application are also the subject of the slip rule application.  If corrected under that rule, aspects of the appeal and therefore the stay application may be resolved thereby.  It may be that some of those matters will be compromised between the parties prior to 14 May 2019. 

5. Given that applications of the slip rule should, by definition, not be controversial, I would expect that once the parties are in a position to reflect on the slip rule issues and to be properly advised, any justifiable application of the rule will be compromised. 

6. By an application filed on 22 February 2019, the father has also sought that the mother be dealt with for contravening orders.  That application is returnable on 22 May 2019 and will be heard by another judge. 

7. As to evidence, the father relied on his affidavit which was filed on 22 February 2019. 

8. The hearing of the stay application was listed for 27 February 2019.  The father has appealed against the parenting orders made on 30 January 2019, but, in any event, the parties, including the ICL, have agreed that order 1(b), which provided for the pattern of living arrangements to be reset after each school holiday period, should be changed to an arrangement whereby the pattern follows on from one school term to the next.  In that regard, the parties presented an agreed minute of orders and that order was made on 27 February 2019.  That was not really a slip rule issue, simply a case of the parties agreeing about something that was not apparent to me when I drafted the original orders.  That issue being resolved, the ICL sought and, there being no objection, was granted leave to withdraw. 

9. There was a level of agreement about the orders to be made as a result of the father’s application but the parties were unable to present an entirely agreed position about all of the issues about which there was at least a level of compromise.  The learned solicitor for the mother prepared a document which I marked exhibit 2 which was said to reflect the mother’s concessions about issues raised by the father. 

10. The father spoke to a different form of words that he proposed and which he had recorded on his mobile phone.  The father’s application raises some other interlocutory issues associated with one or more of his applications.  He sought a determination of objections made to a subpoena issued in the substantive proceedings to the Westpac bank and he sought leave to issue at least one other subpoena. 

11. As to the authorities in relation to stays, in the decision of Trahn & Long (No. 2) [2008] FamCAFC 194 (“Trahn & Long”) the Full Court addressed the principles relating to a stay of order, albeit on the facts of that case, in the context of an appeal against parenting orders. The Full Court said at [38]:

    These principles, both in the general law and in respect of parenting proceedings, are well settled (see TheCommissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited (1986) 160 CLR 220 at 230; Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685; Jennings Constructions Limited v Burgundy Royale Investments Proprietary Limited (1986) 161 CLR 681; Clement & Clement (1981) Fam LR 91 013; JRN &KENv IEG &BLG (1998) 72 ALJR 1329 at 1332.)

12. The authorities stress the discretionary nature of the application for a stay, which should be determined on its merits.  The effect of the Full Court decision in Trahn & Long as to non-parent proceedings is as follows:

    ·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 special or exceptional circumstances. 

    ·A person who has obtained a judgment is entitled to the benefit of that judgment. 

    ·The person who has obtained the judgment is entitled to presume the judgment is correct. 

    ·The mere filing of an appeal is insufficient to grant a stay. 

    ·The Court is to consider the bona fides of the applicant. 

    ·A stay may be granted on terms that are fair to all parties.  This may involve the Court weighing the balance of convenience and the competing rights of the parties, a weighing of the risk that the 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 the stay; and

    ·Some preliminary assessment should be undertaken of the strength of the proposed appeal - whether the appellant has an arguable case.

13. In addressing those matters in the context of this case, the onus to establish a proper basis for the stay is on the father, but he is not required to demonstrate special or exceptional circumstances.  The mother is entitled to the benefit of the judgment under appeal and the appeal proceeds on the basis that the judgment at first instance is correct.  There is no automatic stay brought about by the filing of the appeal.  As to the bona fides of the father, in my view, the appeal and the application for a stay are sincerely sought and sought for their stated purposes.  There is no indication to the contrary.

14. A stay may be granted on terms that are fair to all parties and this would involve the Court assessing the balance of convenience and competing rights of the parties.  Here, the father has proposed what he describes as substitute orders but they could also be described as conditions for the granting of a stay.  I will deal now with the specific orders sought. 

15. Firstly, orders 3(c) and 3(e).  The father seeks a stay of those orders and he seeks in relation to 3(c) that pending the determination of the appeal that order be recast to read:

    In payment of $1,302,000 to Loan Account [ending in the numbers] …98.  Any residual debt in this account to be paid solely by the Wife from the Wife’s division of the proceeds of sale of the property.

16. I should say that order 3(c) is an order in the sequence of the disbursement of the net proceeds of sale of the Suburb G property.  The effect of this proposal by the father is to prevent the discharge of a different loan, a Westpac loan with an account number ending in the numbers …18, from the proceeds of sale from the Suburb G property prior to the release of the proceeds to the parties.  Similarly, by his application to stay paragraph 3(e), the father proposes under the stayed order that the Westpac loan ending in the numbers …69 in the names of Mr and Mrs H not be paid out from the joint funds.  In a related order paragraph 14, the father also proposes the following that:

    Pending the appeal, the wife is restrained from allowing or creating any increase in the level of debt mortgaged to the [F Street] property –

    And that is the Suburb G property –

    …above the level of $1,302,000; and is restrained from using the [F Street] property as security for any other debts except for Westpac account [ending in the numbers] …98. 

17. The proposal of the mother in relation to those matters is found in a document that I marked as exhibit 2 and it provides as follows, that:

    Pending the determination of the notice of appeal filed by the husband dated 22 February 2019:

    1.1that order 3(c) of the orders made on 30 January 2019 be varied to read as follows:

    1.1.1in discharge of the mortgage to the Westpac Banking Corporation being registered dealing number …63 relating to Westpac loan ending in the numbers …98 only; and

    1.1.2The funds necessary to discharge Westpac Banking Corporation loan ending in the numbers …18 be held in a controlled moneys account by the conveyancing solicitor.

    1.2That the wife be restrained from allowing the balance of the Westpac loan end in numbers …98 to increase about $1,319,542.

    1.3That the wife be restrained from further encumbering the property at [F Street, Suburb G], noting the only encumbrance on the property is the Westpac mortgage relating to loan ending in the numbers …98.

    1.4The wife be restrained from allowing the balance of the Westpac …18 and …69 to increase beyond $94,161 and $149,936, respectively.

    1.5That order 3(e) be varied so that funds are sufficient to discharge Westpac loan …69, be held in a controlled moneys account by the conveyancing solicitor.

18. She also asked for a notation that the issue of whether or not loans ending in …18 and …69 are to be paid out from the sale proceeds, may be finalised on the determination of the husband’s slip rule application.  That is the end of the wife’s proposals. 

19. There is little difference between the parties’ proposals.  As to the amount in relation to the Suburb G mortgage to be specified in the substituted or conditional order 3(c), the husband’s proposed amount is referable to his contention that the amount of the loan that should be met from joint funds is the amount at which the loan stood at a particular date.

20. In my view, it will be sufficient if a stay is granted in the terms proposed by the mother.  In my view, the father’s wording is not suited to any order intended to have practical effect on the settlement of a conveyance.  In my view, his appeal on this point is not a strong one.  The prima facie position in property settlement proceedings is that the valuations of both assets and liabilities are taking at the day of the hearing and not at some other date.  In any event, there is no sense in which the father’s appeal on this point would be rendered nugatory in the absence of a stay worded as he proposes.

21. There is little difference between the two amounts and it could be adjusted at a later date if necessary.  As to the impact of the proposals on the loans with account numbers ending in …18 and …09, each of the proposals achieves the aim of preserving the issue for another day.  I will make the orders basically in the terms proposed on behalf of the mother. 

22. As to 3(d): the order as made again provides for a payment in the sequence of disbursing net proceeds of sale of the property at Suburb G:

    (d)in payment of the Capital Gains Tax payable by the mother in relation to the sale of the property and to give effect to this Order the sum of $100,000 (or as otherwise agreed by the parties in writing) is to be held in the trust account of Karras Partners Lawyers or a joint controlled moneys account held on behalf of the parties by the conveyancing lawyer as the parties may agree, with the Capital Gains Tax liability to be paid from that account and the balance thereafter (if any) to be divided between the parties in the proportions 60 per cent to the mother and 40 per cent to the father.

23. The father wants a stay of that order and, pending the determination of the appeal, he would prefer that the order read:

    The sum of $100,000 (or as otherwise agreed by the parties in writing) is to be held in a joint controlled monies account held on behalf of the parties by the conveyancing lawyer or as the parties may agree, pending the outcome of appeal.

24. The mother does not agree with that order.  The effect of the order proposed by the father would potentially delay the payment of capital gains tax owed by the mother arising from the sale of the Suburb G property.  It is submitted on behalf of the mother that the appeal may not be determined by the time capital gains tax is assessed and that she may be prejudiced if she is not in position to discharge that liability.  It is the father’s case, ultimately, that he should not be responsible for the capital gains tax impost arising to the wife on the sale of the Suburb G property and that liability should be met from the wife’s own resources.  The father is concerned that it may be difficult for him to recover his share of the amount paid to the ATO in the event that his appeal is successful. 

25. The father has an arguable case on this point, albeit that he faces the challenge of interfering with a discretionary judgment.  There is no sense in which his appeal would be rendered nugatory if the stay is not granted.  Through her solicitor, the mother indicated that it was likely that she would apply funds received through the property settlement orders to her needs including her need for accommodation upon the disposition of the Suburb G property.  Depending on the outcome of the slip rule application, the balance will change between the amount ultimately received by the mother under the orders for property settlement and the balance of debts owing by her that are not paid out in the terms of those orders. 

26. That, in turn, will determine the likely amount available to the mother to commit to her needs, including her need for rehousing.  It seems to be conceded that on any case there would be some funds available to the mother for those purposes.  The fact that funds are applied to acquiring another asset does not automatically mean that there would be no mechanism available for a belated adjustment between the parties.  On balance, I will not grant a stay in relation to that order.

27. 3(j):  this is the provision in the sequence of disbursing the proceeds that provides for 60 per cent of the remaining proceeds to be paid to the mother.  The father seeks a stay of that order.  Pending the appeal, he seeks that the order read:

    Of the remaining proceeds; in payment of 55 per cent to the mother, and 5per cent to be held in a joint controlled moneys account held on behalf of the parties by the conveyancing lawyer or as the parties may agree, pending outcome of appeal. 

    The mother does not agree to that order.  The considerations on this issue are similar to those in relation to order 3(d).  The father has a case to argue on this point, albeit that he faces the challenge of interfering with a discretionary judgment. 

28. In this instance, the issue is complicated by the potential impact on orders 3(c) and 3(e) of the father’s slip rule applications.  Again, there is no sense in which his appeal would be rendered nugatory if the stay is not granted.  On balance, I will not grant a stay in relation to that order. 

29. Order 4:  order 4 provides:

    The father shall forthwith do all things and sign all documents necessary to transfer his interest in the joint [M Bank] account …16 to the mother and the mother is to thereafter indemnify the father against all or any liability in relation to the said joint bank account.

1. The mother does not agree to the father’s proposal that that order be stayed pending the appeal.  I simply do not understand the father’s case on appeal on this issue.  On that basis, his case would not appear to be a strong one.  In any event, there is no suggestion that a refusal of a stay would render the father’s appeal nugatory.  There will be no stay. 

2. Order 5(a):  order 5(a) reads:

   Other than provided for in these Orders, the father and mother be declared to have the sole right, title and interest in: 

   (a) any chattels, goods, furnishings, bank accounts and other property which are at the date  hereof in their possession respectively.

3. The father seeks a stay of that order and as I understand his application he seeks that an order be made:

   Pending the appeal there be a division of the household contents and other personalty between the parties as documented in a list provided by email to the wife’s solicitors on 12 December 2018 or in default of agreement about that issue that there be a valuation ordered of all household contents within four weeks. 

4. I was not told that the mother agreed to those orders.  I understood from the parties that during the course of the hearing on this application on 27 February 2018 the father accepted delivery from the mother’s solicitors of personalty in the form of jewellery.  It may be that the parties will be able to belatedly resolve the balance of this issue.  I referred in the reasons for judgment in the substantive proceedings that although there was reference in the parties’ documents to an attempt to agree to a division of personalty, I was not provided with the details of any such agreement.  In any event, there is no need for a stay in relation to this order.  If the order is successfully overturned on appeal and a different order is made, then the parties can proceed to comply with the resultant order. 

5. Next, is order 6.  Order 6 is an order for Child Support departure.  It reads:

   By way of Child Support Departure Order the father shall pay child support to the mother in respect of the child, [D], as a periodic sum of $300 per week with the first payment to be made within seven days of these Orders and thereafter such funds be deposited weekly into a bank account nominated by the mother in writing.

6. The father seeks a stay of that order pending appeal.  He seeks that the following order be made:

   From the date of these orders until 29 February 2020, By way of Child Support Departure Order the father shall pay child Support to the mother in respect of the child, [D], in a periodic sum of $300 per week with the first payment to be made within seven days of these Orders and thereafter such funds to be deposited weekly into a bank account nominated by the mother in writing.

7. The mother does not agree to this order.  Again, I apprehend that the father’s case on appeal is in similar terms to his application under the slip rule.  It is the father’s contention under the slip rule that order 6 is expressed in absolute terms, rather than being limited to the duration of the current Child Support assessment as was foreshadowed in the reasons for judgment.  There is no need for any action to be taken by way of stay to preserve until February 2020, the integrity of the argument to be made by the father.  In any event, I apprehend that if the matter is not resolved by the slip rule proceedings, it is highly likely that the appeal will be heard and determined before that date.  There will be no stay in relation to order 6.

Subpoenas

1. As I have indicated the father’s application raises some interlocutory issues associated with one or more of his applications.  He sought a determination of objections made to a subpoena issued in the substantive proceedings addressed to the Westpac Bank, and he sought leave to issue one or more further subpoenas.  A litigant in person requires leave to apply for the issue of a subpoena.  A subpoena is a solemn document usually representing an order for production under penalty against a third party, made without notice to that third party.  Of course, a subpoena can only issue where there is a relevant connection between the documents sought and current proceedings.

2. I understood from the father that the need for compliance with the existing subpoena and the issue of further subpoenas may be determined by his slip rule application.  It is the father’s case that he did not pursue inquiries in relation to debts of the wife that were incurred for the purposes or substantially for the purposes of meeting her legal fees because of things said from the bench during the trial.  As I understand his case, he says that the same propositions have been repeated in the reasons for judgment and it is his contention that the orders made are inconsistent with the findings set out in the judgment.

3. I understand that the father issued the existing subpoena and wishes to issue further subpoenas for the purpose of exploring the use to which the borrowed funds were put.  Therefore, if the father is successful on his slip rule application it may be that he will not require any further evidence, or irrespective of his requirements, he may not have any basis for calling any further evidence.

4. It was submitted on behalf of the mother that the question of subpoenas in respect of debts in the name of persons other than the mother has been a matter of controversy in the interlocutory stages of the substantive proceedings, both in the Federal Circuit Court and in this Court.  I would like to avoid a repetition of those interlocutory controversies if they can be achieved.  I will not grant leave in relation to the determination of an objection to an existing subpoena or for the issue of fresh subpoenas, at least until the determination of the slip rule application.

5. Finally, the father sought at paragraph 17 of his application an order that the mother authorise the real estate agent and conveyancing solicitor to keep the father informed of the details of the sale of the Suburb G property.  He sought details of buyer interest, expected price and all other relevant matters.  He also sought an order that the real estate agent and conveyancing solicitor answer the father’s queries relating to the sale.  This issue was not the subject of extensive submissions before me.  I apprehend that those persons, the agent and the solicitors have or will be given authority in relation to at least some of those matters.  I do not propose to make any order in relation to that issue.

I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 7 March 2019.

Associate: 

Date:  3 May 2019