Crafter & Ors and Crafter & Ors

[2011] FamCA 366

FAMILY COURT OF AUSTRALIA

CRAFTER AND ORS & CRAFTER AND ORS   [2011] FamCA 366

FAMILY LAW – Stay application pending appeal

Family Law Act 1975 (Cth)

Jackson & Balen (2009) FamCAFC 131
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681

APPLICANTS:	M
W
D Pty Ltd
P

1st RESPONDENT: Ms P Crafter

2nd RESPONDENT: Mr B Crafter

3rd RESPONDENT: N Pty Ltd

FILE NUMBER: ADC 142 of 2007

DATE DELIVERED: 10 May 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane by video-link

JUDGMENT OF: Murphy J

HEARING DATE: 10 May 2011

REPRESENTATION

COUNSEL FOR THE APPLICANTS: Mr Stevens

SOLICITOR FOR THE APPLICANTS: Stokes Legal

SOLICITOR FOR THE 1^ST RESPONDENT: Ms Milen of Jo-Anne N Milen & Associates

SOLICITOR FOR THE 2^ND &

3^RD RESPONDENTS:

Mr Lindley of Lindleys Solicitors

Orders

IT IS ORDERED THAT

1. The Orders contained in paragraphs 2(a), 4(b) and 7(b) of the orders made by his Honour Justice Murphy on 3 March 2011 be stayed pending the determination of the Appeal SOA27/2011.

IT IS RESPECTFULLY REQUESTED THAT

1. The hearing of this appeal be expedited.

IT IS FURTHER ORDERED THAT

1. Such of each and all of the husband and the applicants, as the case might require, shall do all such things, sign all such documents and pay all such fees as may be necessary so as to secure the removal of the caveats currently lodged over the real properties described at paragraph 4(a) of the said order and described in the reasons herewith as “the [G] land”.

2. The Application in a Case filed by the applicants on 31 March 2011 otherwise be dismissed.

3. Any party wishing to make any application for, and submissions in respect of, any order for costs, shall do so in writing by filing a document with the associate to Justice Murphy at …@familycourt.gov.au, and copied contemporaneously to the other parties, within 7 days of the date of the receipt of the settled ex tempore reasons for judgment of today in this matter.

IT IS NOTED that publication of this judgment under the pseudonym Crafter and Ors & Crafter and Ors is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER:  ADC 142 of 2007

M and W and D Pty Ltd and P

Applicants

And

Ms P Crafter

1^st Respondent

And

Mr B Crafter

2^nd Respondent

And

N Pty Ltd

3^rd Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. On 3 March 2011 orders were made by me after a trial over a number of days in Adelaide.  By a Notice of Appeal filed on 31 March 2011, the second to fifth respondents in that trial appeal the bulk of the orders made by me on that day.  On 31 March 2011 those same parties who, for ease of reference, I will refer to in these Reasons as “the [Crafters]” filed an Application in a Case seeking a stay on those orders. It is to that application that these Reasons relate.

2. For present purposes, the relevant orders made at trial can be summarised in this way.  Contrary to the submissions made at trial by the Crafters (and, I might add, in at least some respect, in trial submissions by the husband) orders were made rejecting the contention that trust interests should be declared in respect of certain property.  Some of that property owned by corporations related to property at which a business was being run (it will be assumed for present purposes) independently of the husband and wife. The parents of the husband also reside at the same property (“The [property at MM]”).  Other property consisted of two pieces of vacant land at G (“The [G] land”).

3. The effect of the orders made by me is to permit the husband to control (through a corporate entity) what is to happen to the property at MM and for the G land to be transferred ultimately to the wife.  The husband is to receive certain specified property and a sum of $100,000 from the wife.  The wife is also to receive certain items of property specified in the orders. 

4. The wife opposes the Application for Stay.  The husband has filed no material in respect of the stay and his solicitor indicates before me that he neither opposes nor supports the application and will abide the order of the Court.

5. The orders in respect of the G land obviously permit sale or mortgage of that land by the wife when ultimately transferred to her.  She deposes that she intends to sell the property.  She deposes to having debts to her lawyers arising from the trial of some significance (which had not been pressed for payment until after the trial) and the need to place her lawyers in further funds so as to allow representation at the appeal. 

6. The land at G was acquired by the husband’s father many years ago.  The husband’s father, and other of the Crafters, deposed to that land being acquired for the purposes of subdivision.  There was no evidence at the trial as to any current development proposals or other work on the land. 

7. There is no evidence in the current affidavit material (consisting insofar as this application is concerned of an affidavit by the husband’s brother P, (who was the fifth respondent in the trial proceedings) to suggest any unique or particular characteristics in the land or any current specific proposals for its use.

8. I record that I am aware of the principles applicable to applications of the current type.  They have been referred to in a number of decisions of this Court which have, in broad terms, adopted decisions of earlier courts including, for example, decisions of the High Court of Australia (see eg Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681).

9. More recently, the Full Court of this Court in the decision of Jackson & Balen (2009) FamCAFC 131, having referred to those earlier decisions, set out principles relevant to the application for stay in these terms:

   ·       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 application [for stay] 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 [at para 28].

10. It is not seriously in doubt in the current case that the appeal is brought bona fides. So, too, I accept that there is an arguable case on the appeal in the sense used in Jackson & Balen and earlier authorities. 

11. I also accept that the appeal is not brought for the purposes of delay.  The issue of delay is referred to in the broader context of the exercise of discretion.  The wife argues that the appeal has not been prosecuted as expeditiously as it might.  She cites in support of that assertion the fact that both the Notice of Appeal and the appeal index were undertaken on the last day provided by the Rules and that there was, it is asserted, a delay in service of each of those documents.

12. Whilst I understand the gravamen of the complaint there made, I am not convinced that any such delay as there asserted ought to play a part in the exercise of my discretion in this case. In respect of the specific assertion made in the written submissions filed on behalf of the wife that there has been a failure on the part of the appellant to give an undertaking to set the appeal down for hearing as promptly as possible, I accept what is said on behalf of the Crafters by counsel appearing today on their behalf. 

13. The written submissions on behalf of the wife go on to complain generally in respect of the issue of the expedition with which the appellant is prosecuting the appeal; asserting that the appellant:

    21.2Does not inform the Court as to whether the respondents’ solicitors have yet been put in funds sufficient to undertake the substantial task of obtaining trial transcript and preparing the appeal book; if not, why not; and if not, when the respondents’ solicitors will be funded to do so.

    21.3Does not inform the Court as to what, if any, steps have been taken to ascertain from the Registry of the Court when the hearing of the appeal by a Full Bench of the Court may be able to be scheduled and within what time frame appeal books would need to filed and served in order to meet a timetable to enable the appeal to be heard at the earliest opportunity.

14. Counsel for the Crafters informs the Court unreservedly that sufficient funds are available so as to permit the acquisition of the transcript and to facilitate the other matters required by the Rules of an appellant prosecuting an appeal. 

15. Secondly, counsel refers to correspondence with the Appeals Registrar of this Court in Melbourne relating to the steps that need to be taken so as to properly prosecute the appeal in an expeditious manner.  The Court was informed by counsel for the appellants, without objection by either of the other parties, that the next available appeal sittings at which this appeal could be listed are in July.  Even if I considered the prospects of this matter being heard in that sitting were slim, the following sitting, the Court was informed, would be in September of this year.

16. Whilst the delay in the hearing of the appeal and the delivery of the judgment is a matter directly relevant to a respondent being permitted to enjoy the fruits of a judgment which is presumed to be correct, in my view other matters are more directly relevant to the exercise of the discretion in this case. 

17. In particular, it seems to me that the real issues here are whether a stay or (or a partial stay) would render any appeal by the Crafters nugatory and, secondly and related to that issue, the balance of convenience and fairness and the other considerations earlier referred to, including the presumption as to the trial judgment being correct and the prima facie position that a person who has obtained judgment is entitled to the benefit of it.

18. As to the first of those issues, it is, perhaps, sufficient to say in these short ex tempore reasons that the interests asserted by the Crafters at trial which, ultimately, were found not to be made out, relate to long-standing intra-familial arrangements with respect to a complex interplay of both personal and commercial arrangements of one sort or another. 

19. It is said, particularly in respect of the property at MM, and the business conducted there and the present living arrangements of the husband’s parents, that, in effect, the appeal would render nugatory the appeal by reason of the Crafters needing to, in one form or another, wholly rearrange their business affairs and the means by which they conduct their long-standing business and that the husband’s parents would need to find alternative accommodation to that which is provided to them (at other than commercial terms).

20. It seems to me that the argument that the appeal would be rendered nugatory in respect of that property is a strong one and that the balance of convenience and fairness points strongly to that property being, as it were, preserved notwithstanding the other considerations earlier referred to.

21. However, the property otherwise the subject of the application, the G land, can be seen to be distinguishable in that sense. 

22. The wife attempts to meet the issues raised in respect of the two matters just referred to in an affidavit filed by her in this application.  She deposes, for example, that she is prepared to give to the Court, an undertaking (subsequently formalised in an undertaking filed by her on 21 April 2011).  That filed undertaking provides:

    1.Until the final determination of [the appeal], I shall not sell, mortgage or otherwise encumber my interests in the land at [Property 2 at V].

    2.Upon the sale of the [G land] and upon the receipt by me of the proceeds of such sale pursuant to order 10(b) and (c) made on 3 March 2011, I shall:

    2.1      Retain the amount of $150,000.

    2.2Pay the remaining balance of the said sale proceeds received by me in to the trust account of my solicitors… and;

    2.3Contemporaneously with such payment provide an irrevocable authority to my solicitors not to disburse any of the said sale proceeds held in trust until such time as [the appeal] is dismissed, or until further order of the Court.

23. That undertaking is supplemented by matters further deposed to in the affidavit by the wife.  The wife deposes that she has legal bills of approximately $70,000, the payment of which has been postponed until the conclusion of the trial and is now owing.  The wife also deposes to needing, at the minimum, $12,000 in respect of solicitor’s and counsel’s fees in respect of the conduct of the appeal and deposes to the fact that counsel requires the sum in trust prior to agreeing to appear for the wife on that appeal.  

24. From the prospective sale of the G land, pursuant to my (trial) orders, the wife will need to pay the husband $100,000.  She also needs to pay accountants engaged by her for the purposes of the trial $11,000 (those accountants were also prepared to await payment until the end of the trial).  In respect of the postponement of payment by the wife to her solicitors and accountants, it might be noted that this matter commenced life in 2007 and accounts owing to her solicitors are, she deposes, related back as far as late 2006.

25. In submissions filed on her behalf, it is pointed out that the agreed total value of the two blocks comprising the G land was some $570,000.  From that amount needs to be deducted, in addition, the usual sale costs together with the amounts just referred to.  The submissions record that there will then be about $320,000 available from those properties to be placed into the trust account of the wife’s solicitors pursuant to her undertaking.  The submissions also point out that Property 2 at V, which the wife has undertaken not to sell or encumber, has a value of about $330,000.

26. The submissions also go on to point out that there will be other property of the husband, including one unencumbered piece of real property and two properties subject to mortgage, that are also available to meet the mix of orders that might be made in respect of the ultimate results of any successful appeal.

27. As I have earlier referred to, no evidence before this Court points to the G land having any unique or particular characteristics such that the land should, per se, be preserved in circumstances where such a conclusion would see the wife effectively unable to obtain any of the substantive fruits of her judgment. 

28. In that respect, it is, I think, important to point out the manner in which the trial was conducted. Each of the husband and wife (and inferentially the other parties) contended that the husband and wife should each receive or each retain a certain specified property.  The gravamen of the trial issues between the parties was with respect to what was described during the trial as the “contentious property”. It is in respect of that contentious property, together with the other property, that the wife is, in my view, entitled to retain her fruits so as to give integrity to the trial judgment.

29. It seems to me that the balance of convenience and hardship considerations are important in the context of this particular application.  I am of the view that strong arguments can be mounted in respect of the Property at MM, which contains the business and a residence for the husband’s parents, which favour orders preserving the retention of that property pending the outcome of the appeal. 

30. The G land, though, in my view falls into a different category.  Preserving, as it were, that property pending the appeal pays insufficient regard to the presumption of the correctness of the trial judgment and the fact that the wife (and husband) are each entitled to receive the fruits of the judgment. A result of “preserving” it pending the appeal, is that there would be unfairness to the wife (also the husband) resulting from there being no distribution of the contentious property effected to either of them.

31. A partial stay, in which the Property at MM is, in effect, preserved and the G properties are transferred in accordance with the orders (which will result in their sale by the wife), in my view, properly balances the issues of hardship, inconvenience and the other matters directly relevant to this application to which I have earlier referred. 

32. I will, then, make orders to the effect that there be a stay in respect of those orders that impact upon the Property at MM but otherwise so as to permit the orders with respect to the G property and the consequential orders arising therefrom to be carried into effect.

33. I point out that the effect of those orders is, insofar as the Crafters are concerned, such as to preserve for them (in various degrees and in various guises), the capacity to maintain their business at the current premises and to conduct their business thereat, to preserve for the parents a place for them to live with non-commercial conditions.  Such orders also provide to the husband the sum of $100,000 contemplated as being received by him (noting that he is, as part of his other s 79 entitlement, to retain properties which have a mortgage over them) and it permits the wife to obtain some of the property which I have determined ought be transferred to her and, as a result, allows her to pay debts, including her legal fees, and to be represented on the appeal as well as paying the amount to the husband just referred.

34. One further issue is raised in respect of orders that might supplement the orders just made or, indeed, orders of the type originally sought by the wife.  Caveats were, perhaps understandably, placed over relevant properties by the Crafters in support of the case maintained by them at trial.  Included among the properties over which caveats have been placed are the two properties comprising the G land.  The wife is somewhat concerned that those caveats won’t be removed so that there can be no effect given to the orders that I have just made.

35. Whilst counsel for the Crafters indicates that I have no reason to not accept that they (each or all as the case may be) won’t abide such an order and make the necessary arrangements, including the removal of the caveats, there is, nevertheless, no formal undertaking, or other indication in material filed by them, to that effect.

36. It seems to me appropriate to require by mandatory injunction the relevant parties to do all such things as might be necessary so as to properly remove those caveats. 

37. Mr Stevens, who appears as counsel for the Crafters raises an issue which he describes as a “moot point” relevant, he contends, to whether the Court has jurisdiction to make the order as described and, in particular, whether the relevant Real Property Acts in South Australia contemplate this Court making orders pursuant to those Acts.

38. Whatever be the position under the relevant State real property legislation, no such order is contemplated by me.  The proposed order is a mandatory injunction in aid of orders made for settlement of property in respect of property which was the subject of an application made pursuant to s 79 and in respect of which the Crafters fully participated as parties.  There seems to me to be no jurisdictional or other impediment on the power that I have to make that order and I consider it appropriate in the circumstances of this case.

1. I should also add some brief comments in respect of a request for expedition of the appeal. As I have said earlier in these reasons, the parties have been engaged in litigation now since early 2007 – that is about four years.  As the trial reasons for judgment will reveal, there is a complex interrelationship between the parties to this case that involves, on the one hand the continuation of a business’s parlous financial circumstances, at least at the time of the trial, health issues with respect to the father of the husband and the Crafters. This matter undoubtedly needs to be brought to a conclusion as soon as can possibly occur. 

2. I have for that reason respectfully requested that consideration be given to the expedition of the hearing and determination of this appeal.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 10 May 2011.

Associate: 

Date:  23 May 2011