Cheetham and Cheetham (No 2)

[2018] FamCA 601

FAMILY COURT OF AUSTRALIA

CHEETHAM & CHEETHAM (NO. 2) [2018] FamCA 601

FAMILY LAW – PRACTICE AND PROCEDURE – STAY – Application by the wife for a stay of operation of the final property orders pending her appeal – Where a sale of the former matrimonial home was ordered with the proceeds of sale to be divided between the parties in a defined ratio – Where the wife wishes to retain the former matrimonial home – Where the wife submits that without a stay order, her appeal could be rendered nugatory – Where the husband opposes the application – Where the husband submits that he will be disadvantaged by the delay in receiving funds awarded to him in the substantive judgment – Where a cautious approach is taken in assessing the prospects of the appeal being successful – Where the appropriate course is to order the stay on the condition of a payment to the husband from resources acknowledged as available.

Family Law Rules 2004 (Cth) r 22.11

APPLICANT: Ms Cheetham

RESPONDENT: Mr Cheetham

FILE NUMBER: MLC 1499 of 2016

DATE DELIVERED: 15 June 2018

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: 7 June 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr McIvor

SOLICITOR FOR THE APPLICANT: Kenna Teasdale Lawyers

COUNSEL FOR THE RESPONDENT: Ms Jenkins

SOLICITOR FOR THE RESPONDENT: Conlan Cummings Lawyers

Orders

Stay Application:

1. That the application for a stay of operation of orders made on 15 March 2018 is granted on the following condition:

   1.1That the wife pay to the husband the sum of $145,000 within 21 days of the date of these orders.

Costs:

1. That the wife pay to the husband costs on an indemnity basis of $4572 in respect of the hearing, and its precedents, on 26 April 2018.

2. No order as to costs in respect of the hearing on 17 May 2018.

3. Any application in respect of costs arising from the hearing of 7 June 2018 is to be made within 28 days of the date of these orders.

4. Costs arising from the trial in August 2017 are to be stood over to a date to be fixed after the hearing and determination of the appeal pending. 

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 Cheetham & Cheetham (No. 2) 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 NEWCASTLE

FILE NUMBER: MLC 1499 of 2016

Ms Cheetham

Applicant

And

Mr Cheetham

Respondent

EX-TEMPORE REASONS FOR JUDGMENT

Introduction

1. This is an application by Ms Cheetham, the wife, for a stay of operation of the final orders made 15 March 2018 (“the March 2018 orders”) pending the outcome of her appeal.

2. The application was filed on 12 April 2018. 

Short history of relevant events

1. There was a two day hearing before me on 14 and 15 August 2017.  The matter concerned adjustment of interest in matrimonial property.  The orders and reasons for judgment were delivered on 15 March 2018.  In summary, the orders provided for sale of the former matrimonial home in Suburb D, and division of the net proceeds in a defined ratio, for sale of a share portfolio and application of those funds in a defined way, and otherwise for each party to keep assets in current possession, including superannuation interests.

2. On 12 April 2018, the wife filed an appeal and also this stay application.  The first return date of the stay application was 26 April 2018.  On that day the matter was argued, the husband opposing the stay.  Counsel for the applicant wife referred in submissions to a letter dated 22 April 2018 from a bank in relation to a possible refinancing of the matrimonial home to pay out the husband’s interest. 

3. The letter was said to have arrived that morning, but had not been provided to the legal representatives for the husband prior to submissions commencing.

4. The obviously procedural unfairness of going ahead with the application was acknowledged appropriately by counsel, and application was then made to adjourn the hearing to enable the wife to rely on the new evidence.

5. It was also properly conceded that costs of the husband would be difficult to resist.  I indicated that an order for costs would be made, but the dispute which had arisen over the basis of that order (indemnity or party-party) could be deferred to the adjourned date of 17 May 2018.

6. Ultimately, I have concluded that the costs should be on an indemnity basis, in circumstances where time and cost were thrown away over a document relating to the central issue of the appeal and this stay. 

7. The main thrust of the stay is that the wife wishes to retain the family home, and appeals the order for sale of that property.  That was her position at trial, as was acknowledged in the reasons, and in particular paragraphs 30 to 35, as follows:

   30.The wife wishes very strongly indeed to retain the Suburb D property for the benefit of herself but primarily for the parties’ son E. I have no reason to doubt her evidence that the music room and back yard suitably accommodate the two great interests of the boy, music and cricket.

   31.Unfortunately the wife gave her evidence with the underlying presumption that she would retain the property. This certainty about outcome may have been the cause of her reluctance to make any concession about contributions during the marriage by the husband. It did not assist her to take this blinkered approach.

   32.There is no evidence of the ability of the wife to refinance at a level beyond the range of her application, that is, by an increase of debt by $45,000.

   33.In cross-examination the wife referred in general terms to having “spoken to the bank” without referring to a response by the bank, and that family members were “keen to help her [and E]” remain in the home.

   34.The wife has just returned to the paid workforce. There are no savings for either party to fall back on.

   34.The wife was well aware of the husband’s proposal for equal division of the assets. It was incumbent on her to put evidence before the Court of how, if she were unsuccessful with her application, she would refinance both current debt and a substantial payment to the husband of several hundred thousand dollars. That she did not do so, to any extent, suggests that the wife was either well aware of her inability to do so or was closing her eyes to the reality of her financial position.

8. The husband sought an order for sale of the matrimonial home, not acquisition of it by himself.  The submissions of the husband, made on the first occasion that the stay application was before me, reflect that finding and note that no evidence of plans and intentions of the wife were included in her first affidavit of 12 April 2018 in support of the stay.  That is, there was a continuation of the stance taken at trial, simply, that the wife wishes to retain the property.

9. The husband argued strongly that he was entitled to the fruits of the judgment, and that the wife’s position continued to be unrealistic.  It was only after those submissions had been made that a refinancing proposal earlier referred to in these reasons from the bank was raised and the matter was adjourned. 

10. On 1 May 2018, the husband filed a response seeking dismissal of the application.  On 17 May 2018, the application came back before the Court for a second time.  The wife had filed an affidavit three days prior on 14 May 2018.

11. There were some further submissions, and again the matter was adjourned, this time on the application of the husband. 

12. A subpoena had issued on behalf of the husband, returnable that day.  The parties had not yet inspected the material.  Further, the husband had only received the affidavit of the wife of the afternoon of the Monday prior to the adjourned hearing.

13. The matter was adjourned again to 4.15 pm on 7 June 2018. 

14. On 31 May 2018, the husband filed an affidavit of his own. 

15. On 5 June 2018, the wife filed a further affidavit.  The parties had reached a point of arguing their respective positions through their affidavits. 

16. On 7 June 2018, there were further submissions and my decision was reserved.

Stays

1. The lodging of an appeal does not stay the operation of orders being appealed.  A stay is not granted lightly or as a matter of course.  The onus rests with the applicant and no criteria are set out in the rules.[1] 

   [1] Family Law Rules 2004 (Cth) r 22.11

2. Relevant matters for consideration do arise from authorities.  In order of significance in this matter, they are as follows:

3. Firstly, would the refusal of a stay render the appeal nugatory?  That has considerable weight and significance in this matter.  In the event that the stay was refused, inevitably the sale of the matrimonial home would go ahead, and that situation could not be rectified. There could not be a clearer example of an appeal being rendered nugatory by a stay being refused.

4. The next consideration is the entitlement of a party to the fruits of a judgment.  An order was made in March 2018 that the matrimonial home be sold and divided in a way that would release approximately $450,000 to the husband in order to buy accommodation for himself and the parties’ son. 

5. Next, is whether there is hardship caused by the granting or refusing of stay. There is hardship of the kind just described for the husband, in that he is hoping to provide accommodation.  The wife, together with the parties’ son, continues to live in the property.  There is no hardship in that sense there. 

6. The next consideration is the merits of the appeal.  The grounds of appeal, whilst arguable, do not appear to be entirely persuasive.  Nevertheless, they are not such that the appeal could not be considered as a genuine one.  There has been no delay by the wife in making her application for the stay, and eventually there was evidence before me of when the appeal would be disposed of.  It is likely not to be heard before November, although it might be mentioned in August, which means that it may be heard in November but likely not determined until early in 2019.

7. The husband submitted that given there was a further five months until the appeal would be heard and a further period before it was determined, the disadvantage to him in a rising market outweighed the wife’s desire for retention of the property.  Also on behalf of the husband, what has become known as the Elias principle, from an earlier decision of this Court, was raised.  That is to the effect that the wife was bound by what she had sworn to in the proceedings.  I do not consider that that applies in this situation.  There is no current representation in conflict with the evidence of the wife at trial.  Rather, she failed to put evidence before the court of how she could refinance and pay out the husband’s interest in the event that the outcome generally favoured the position of the husband rather than her own.  The magnitude of the borrowing is the issue.

8. I do give weight to the argument of the husband about the disadvantage to him of delay in receiving funds.  However, the prejudice to the wife of her appeal being rendered entirely nugatory by the sale of the matrimonial home must, in my view, be given greater weight, no matter how slight the prospect of ultimate success on that point. 

9. The wife failed to acknowledge in her written and oral evidence that the husband could achieve the orders he had sought.  She did so by bringing no evidence of how she could pay out his interest in those circumstances.

Conclusion

1. The response to this stay should not be a punitive one, rather, a balancing of competing considerations. 

2. For the reasons given, I have concluded that the stay should be granted on condition that there is a part payment by the wife of money to the husband in terms that she indicated through her counsel were immediately possible from a variety of sources. 

3. Orders are made accordingly.

I certify that the preceding thirty (30) paragraphs are a true copy of the ex-tempore reasons for judgment of the Honourable Justice Cleary delivered on 15 June 2018.

Associate: 

Date: 15 June 2018