CHAN & CHIH

[2018] FamCA 998

FAMILY COURT OF AUSTRALIA

CHAN & CHIH [2018] FamCA 998

FAMILY LAW – PRACTICE AND PROCEDURE – APPLICATION FOR STAY – Where the husband makes an application to stay the property settlement order pending the determination of his appeal – Where the orders provide for a default sale of the former matrimonial home if the husband does not pay the wife a certain sum – Where the husband seeks to retain the former matrimonial home but submits that he is unable to raise the sum of money to pay the wife – Where the husband argues that the first instance judgment gave an inappropriate adjustment to the wife for s 79(4)(d)-(g) considerations - Where the appeal would be rendered nugatory if the stay is not granted –Where the husband says he is able to raise and pay a lesser sum of money in the interim if the court found it appropriate to attach that condition to the order granting the stay – Where the court finds it is appropriate in circumstances where the wife needs the funds and the husband is ordered to pay the wife a lesser sum pending the appeal being determined.

Family Law Act 1975 (Cth)

Jackson & Balen [2009] FamCAFC 131

APPLICANT: Mr Chan

RESPONDENT: Ms Chih

FILE NUMBER: SYC 3511 of 2014

DATE DELIVERED: 27 November 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 21 November 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gould

SOLICITOR FOR THE APPLICANT: Kim & Associates

COUNSEL FOR THE RESPONDENT:	Ms Christie, SC
SOLICITOR FOR THE RESPONDENT:	Cominos Family Lawyers

Orders

1. Paragraphs 2, 3 and 4 of the property settlement order made 11 October 2018 be stayed until the husband’s appeal against that order is determined upon the following conditions:

   a)Within a period of 42 days from the date of these orders, the husband pay to the wife the sum of $267,500; and

   b)The husband at all times prosecutes his appeal with the Full Court expeditiously.

2. In the event the husband does not fulfil the conditions of this stay, the wife has liberty on 14 days’ notice to relist the matter before me if I am reasonably available for consideration as to whether the stay order shall continue to remain in place.

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 Chan & Chih 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: SYC 3511 of 2014

Mr Chan

Applicant

And

Ms Chih

Respondent

REASONS FOR JUDGMENT

introduction

1. By way of an Application in a Case filed 14 November 2018, the husband seeks an order that the property settlement order made by me on 11 October 2018 be stayed until the husband’s appeal against that order is determined.

2. The husband was given leave by consent to amend the orders sought in the Application in a Case so that only paragraphs 2, 3 and 4 of the property settlement order be stayed.

3. Also by leave, in the event that the stay was not granted, the husband made an oral application that he be given a further 42 days from the date of delivery of this judgment to make the payments due under paragraphs 2 and 3.1 of the property settlement order.

4. The husband also indicated that, in the event the stay was granted and the court thought it appropriate, he would consent to a condition being imposed that he pay to the wife the sum of $267,500 within 42 days from the date of the delivery of this judgment. This was the amount the husband, during the hearing before me, proposed he pay to the wife pursuant to paragraph 2 of the property settlement order.

5. The property settlement order made 11 October 2018 required:

   a)The husband pay to the wife the sum of $665,166 within 42 days of the order being made. That period of time expires on 22 November 2018;

   b)Simultaneously, with the payment by the husband to the wife, the husband discharge the current mortgage on the property he lives in at Suburb C and the wife to transfer her interest in the Suburb C property to him;

   c)In the event that the husband fails to comply with his obligations to pay the money and discharge the mortgage by 22 November 2018, the property settlement order requires the parties to forthwith join in the sale of Suburb C property;

   d)The husband transfer a motor vehicle to the wife; and

   e)A superannuation splitting order that moves about $48,000 of the husband’s superannuation to the wife.

6. On 11 October 2018, the Reasons for Judgement (“the Reasons”) for making the property settlement order were published.

7. On 8 November 2018, the husband filed a Notice of Appeal against the property settlement order. There are eight grounds of appeal. The first six relate to a finding in the Reasons that there should be a five per cent adjustment in favour of the wife pursuant to s 79(4)(d) – (g) considerations. Grounds seven and eight are generic grounds.

8. In support of the husband’s stay application, a short affidavit was filed on 14 November 2018 which discloses that he has received a written opinion from a barrister which resulted in him forming the view that he had “good prospects of success” and that he should proceed to appeal the property settlement order.

9. The husband makes the following bare assertion:

   I stand to suffer severe financial hardship if I were to comply with the orders of Justice Watts and I would have to dispose of my home or obtain a significant loan from overseas at high expense. I have already an existing loan in Australia and I believe I am unable to procure further loans in Australia in order to make payments pursuant to the orders of Justice Watts.

10. The husband was given leave to file in court an affidavit sworn 21 November 2018. In that affidavit, the husband gave evidence that he concluded after making online inquiries that he had no borrowing capacity with CBA and ANZ Banks and that Westpac would only lend him $9,800. He says he then confirmed his borrowing capacity with an employee of Westpac.

11. Notwithstanding that, counsel for the husband assured the court from the bar table that he had instructions that the husband could, in fact, raise an amount of $267,500.

12. The wife handed up in court a Response (incorrectly entitled “Response to an Application in Appeal”) in which she seeks that the husband’s application for a stay be dismissed and an affidavit sworn 20 November 2018. Counsel for the wife said that these documents had been filed the previous day, but they have not been recorded on the court system as being filed. The affidavit sets out information in relation to the execution of the superannuation splitting order and her current financial circumstances.

13. In Jackson & Balen [2009] FamCAFC 131, the Full Court said at paragraph 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) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685; Jennings Construction Ltd v Burgundy RoyaleInvestments Pty Ltd (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:

    ·the onus to establish a proper basis for the stay is on the husband for the stay. However it is not necessary for the husband 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 application must be bona fides;

    ·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.

14. There is no issue as to the onus that the husband bears; that the wife is entitled to the benefit of the property settlement order; that the wife is entitled to presume that the judgment is correct and that the mere filing of an appeal is not sufficient to grant a stay. The husband asserts that his appeal is bona fide on the basis that he has been told that he has “good prospects of success”.

15. The order the husband seeks in the Notice of Appeal is that the property settlement order be varied so that the husband makes no payment to the wife and even if he fails to remove any liability of the wife for the mortgage on the Suburb C property, there would be no provision for a forced sale to achieve that outcome. However, during submissions, counsel for the husband foreshadowed that it was likely that the order that the husband would seek from the Full Court was not that he pay no money to the wife but that he pay an amount of $267,500.

16. The wife originally made an application for a property settlement order by filing an application in the Federal Circuit Court on 10 June 2014. She has been waiting for the result of this litigation now for nearly four and a half years. The parties separated under the one roof in June 2013 and since the wife left the matrimonial home in October 2015 the husband has continued to reside in the Suburb C property and the wife has been living in rented accommodation and has had the substantial burden of costs occurring from the children and continues to do so. At the time of the hearing, the wife worked casually earning approximately $600 a week. The husband was employed as a manager earning about $1,300 a week.

17. The husband’s assertion that he could obtain a significant loan from overseas, but that that would be at “high expense” is unsupported by any evidence but as I have already indicated, counsel for the husband asked me to accept that he had received instructions from his client that he could, in fact, raise a sum of $267,500.

18. Apart from the minimal inquiries referred to in the affidavit the husband filed in court he has not indicated that he has done anything in the last 42 days to attempt to obtain finance.

19. Currently, the husband has no alternate contingency plans in place to enable him to comply by 22 November 2018 with paragraphs 2 and 3.1 of the property settlement order.

20. The wife submits that significant injustice would be caused to her if, after waiting four and a half years, she has to live for a further period of time awaiting the outcome of an appeal in circumstances where she is deprived of the fruits of her litigation. The wife in her affidavit sets out the difficult financial circumstances in which she finds herself, notwithstanding, the fact that she apparently now has obtained full time employment.

21. On the other hand, refusing to grant the stay would, as things currently stand, require the husband to participate in the sale of the Suburb C property and to ultimately vacate possession of the Suburb C property to a purchaser.

22. Axiomatically, it is the husband’s case that if the Suburb C property is sold he will be placed in a position where he will lose all opportunity to retain the property. He claims consequently that his appeal would be rendered nugatory.

23. Counsel for the wife submitted that, as the evidence stands, the husband does not have the capacity to pay the wife the amount required under the orders and, therefore, the appeal would not be nugatory in circumstances where the Suburb C property will have to be sold in any event.  It was put that the appellant could not on one hand file a Notice of Appeal seeking orders that were totally outside the range of possible results and then on the other assert that if the stay was not granted the appeal would be rendered nugatory.

24. Counsel for the husband submitted that if the sale proceeded and the wife received the funds pursuant to the property settlement order, there was no guarantee that those funds would still be available should the husband be successful in his appeal. There is no evidence that would support a finding that the wife would expend any lump sum she would receive in a way that would mean that the husband, if he was successful in the appeal, could not recover whatever amount he successfully obtained to his advantage by way of a change of the property settlement order.

25. The effect of the orders sought in the Notice of Appeal takes $665,166 away from the wife and places it in the husband’s hands. The amount of $665,166 is a 16.33 per cent (665,166/4,071,375) adjustment or a movement of the assets between the parties of 32.66 per cent. As earlier indicated, counsel for the husband suggested that the orders sought in the Notice of Appeal may not be orders that are sought in any further Amended Notice of Appeal and the husband would propose a payment of $267,500 to the wife.

26. Putting to one side the final two grounds of appeal which are generic, the husband’s attack on the Reasons centres around the finding as to the adjustment that should be made for s 79(4)(d) – (g) matters. The matters considered when making that adjustment are set out in paragraphs 151 – 158 of the Reasons. Whilst Ground 5 asserts that those reasons are insufficient, counsel for the husband did not indicate the basis upon which that assertion was made.

27. Counsel for the husband submitted that paragraph 150 of the Reasons did not put into context the husband’s contention for a zero to five per cent adjustment for s 79(4)(d) – (g) matters because that was in the context of submissions proposing different contribution findings and was confined to pool three of the husband’s suggested three pool approach. Whilst that may be so, the outcome was in the range between that suggested by the husband and that proposed by the wife based upon the considerations set out in paragraphs 151– 158.

28. Ground 4 asserts that there was a failure to have regard to future income that would flow to the wife from the commercial property. That assertion in the grounds of appeal seems to be inconsistent with paragraphs 152 – 154 of the Reasons. It is not asserted that any other significant factor in the husband’s favour was overlooked in the s 79(4)(d) – (g) adjustment nor that any matter favouring the wife was incorrectly taken into account. The appeal primarily seems to be an appeal based on the assertion that the s 79(4)(d) – (g) considerations were incorrectly weighed. Succeeding on an appeal on that basis is notoriously difficult for reasons referred to in well-known authorities.

29. Based upon the present Notice of Appeal, the strength of the husband’s proposed current appeal seems weak.

30. Counsel for the husband also suggested that the husband may make an application in the appeal to adduce further evidence relating to the wife’s improved income.

31. It is my understanding that currently appeals are being listed without undue delay, however, I have been given no information as to the progress of this appeal.

32. This is a property settlement order. The wife is not receiving the fruits of her litigation. She has the primary care of the children which includes their accommodation. Those considerations are ameliorated to some degree by the husband agreeing to a condition of stay that he, within a period of another 42 days, pay the wife the sum of $267,500 if the court was to determine that that order was appropriate. I find it is appropriate to impose that condition if an order granting the stay is made.

33. Taking all those matters into account, I find as a substantial and ultimately determinative consideration the fact that the sale of the Suburb C property is an irreversible step. It could render the outcome of the husband’s appeal nugatory. For those reasons, I will grant the stay upon conditions which are:  

    a)Within a period of 42 days from the date of these orders, the husband pay to the wife the sum of $267,500;

    b)The husband at all times prosecutes his appeal with the Full Court expeditiously; and

    c)That in the event the husband does not fulfil the conditions of this stay the wife has liberty on 14 days’ notice to relist the matter before me if I am reasonably available for consideration as to whether the stay order shall continue to remain in place.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 27 November 2018.

Associate: 

Date:  27.11.18