Daily & Daily (No 4)

[2024] FedCFamC1F 149

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Daily & Daily (No 4) [2024] FedCFamC1F 149

File number(s):

ADC 4606 of 2018

Judgment of:

BERMAN J

Date of judgment:

13 March 2024

Catchwords:

FAMILY LAW – PRACTICE AND PROCEDURE – Stay – Application for stay of final property orders pending appeal – Consideration of the circumstances of the case – Consideration of circumstances that would justify a stay order – Where the litigation has been ongoing since 2018 – Where the Court considers that the appeal would not be rendered nugatory if a stay was not granted – Consideration of injunctions – Orders made to stay the operation of various orders.

Legislation:

Family Law Act 1975 s 79

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 13.12

Cases cited:

Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106

Daily & Daily [2020] 61 FamLR 75

Daily & Daily [2023] FedCFamC1F 222

Friscioni & Friscioni [2009] FamCAFC 43

Division:

Division 1 First Instance

Number of paragraphs:

57

Date of hearing:

21 February 2024

Place:

Adelaide

Counsel for the Applicant:

Litigant in person

Counsel for the First Respondent:

Ms Pyke KC

Solicitor for the First Respondent:

Norman Waterhouse Lawyers

Counsel for the Second Respondent:

Ms Barnett

Solicitor for the Second Respondent:

Barry Nilsson Lawyers

ORDERS

ADC 4606 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR DAILY

Applicant

AND:

MS DAILY

First Respondent

R LAWYERS PTY LTD

Second Respondent

ORDER MADE BY:	BERMAN J
DATE OF ORDER:	13 MARCH 2024

THE COURT ORDERS THAT:

1.The operation of order 6 made on 9 February 2024 be stayed.

2.The operation of orders 1.1 made on 9 February 2024 be stayed as follows:

(a)That the wife be restrained from accessing or using the sum of $241,634 currently held in the trust account of Norman Waterhouse Lawyers save and except if those funds are required to be used for the purchase of real property with the first respondent registered as the sole proprietor.

3.Paragraph 2 of orders made 9 February 2024 be discharged.

4.The applicant be restrained and an injunction granted restraining him from accessing and/or withdrawing the sum of $150,000 of the transferred funds from the parties’ joint Westpac Bank Account ending XXX59.

5.The Amended Application in a Proceeding filed 16 February 2024 and the Response filed 20 February 2024 are dismissed.  

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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

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

REASONS FOR JUDGMENT

Berman J

INTRODUCTION

1. Mr Daily (“the applicant”) and Ms Daily (“the first respondent”) continue to be engaged in contested litigation that commenced in 2018 in respect of the first respondent’s application to set aside a financial agreement entered into between the parties on 21 July 2005 (“the financial agreement”) and if successful, then to consider her application for settlement of property and division pursuant to s 79 of the Family Law Act 1975 (“the Act”).

2. The background to the matter is adequately set out in reasons delivered in Daily & Daily [2023] FedCFamC1F 222 and in the earlier decision of Daily & Daily [2020] 61 FamLR 75.

3. As part of the proceedings, the applicant joined R Lawyers Pty Ltd (“the second respondent”) who provided legal services to him in relation to the financial agreement.

4. The applicant sought damages for negligence against the second respondent on the basis of a finding that the financial agreement was not drawn such that there was contractual certainty.

5. The following orders were made on 31 March 2023:

   1.Pursuant to s 90K(1)(d) and/or s 90KA of the Family Law Act 1975 (Cth), the financial agreement entered into between the parties dated 21 July 2005 be set aside.

   2.The matter be listed for further submissions on the question of the quantum of damages on a date to be determined in consultation with the parties.     

6. The applicant appealed those orders and on 3 August 2023 the Full Court made the following orders:

   1.        The appeal is dismissed.

   2.        The Notice of Contention filed on 9 June 2023 is dismissed.

   3.        Order 1 made on 31 March 2023 is amended to provide as follows:

   The financial agreement between the spouses, dated 21 July 2005, is set aside.

   4.The appellant shall pay the first respondent’s costs of and incidental to the appeal, fixed in the sum of $15,000.00.

   5.The appellant shall pay the second respondent’s costs of and incidental to the appeal, fixed in the sum of $15,000.00.

7. The applicant has now accepted that the financial agreement should be set aside.

8. The final submissions as to damages and the consequence, if any, for final orders for settlement of property was heard on 27 November 2023.

9. The following orders were made on 9 February 2024:

   1.        By way of property settlement and division:

   1.1within seven (7) days of the date of this judgment, the parties do all things necessary and sign all documents as may be required to cause the sum of SEVEN HUNDRED AND FORTY ONE THOUSAND SIX HUNDRED AND THIRTY FOUR DOLLARS ($741,634) to be withdrawn from the parties’ joint Westpac Bank Account ending [XXX59] and be paid to the trust account of Norman Waterhouse Lawyers for and on behalf of the wife (“the settlement sum”); and

   1.2the parties do all things necessary to cause the parties’ joint Westpac Bank Account ending [XXX59] to be closed conditional upon the remaining funds being transferred to an account as nominated by the husband.

   2.The husband be restrained and an injunction granted restraining him from accessing and/or withdrawing any of the transferred funds from the parties’ joint Westpac Bank Account ending [XXX59] for a period of forty two (42) days from the date of this order.

   3.As between the husband and the wife, they are each declared to be the sole legal and beneficial owner of all other property currently or beneficially owned by them, in their respective possession, within their sole or partial control, including but not limited to real property, superannuation entitlements, cash, funds held in bank accounts, motor vehicles and other items of personalty.

   4.The parties each irrevocably indemnify the other against all liabilities held in their name or jointly with a third party including but not limited to mortgages, credit cards, personal loans, overdrafts, tax labilities, unpaid school fees, rates and utilities.

   5.In the event that either of the parties refuse or neglect to sign any document required by them to be signed, a Judicial Registrar of this Honourable Court shall and is hereby empowered to sign such documents on behalf of that party pursuant to s 106A of the Family Law Act 1975 (Cth).

   6.Within thirty (30) days of the date of this order, the second respondent pay to the husband the sum of THIRTY EIGHT THOUSAND DOLLARS ($38,000) by way of damages in full and final settlement of the husband’s claim.

10. On 13 February 2024 the applicant filed a Notice of Appeal.

11. In addition, by an Application in a Proceeding filed 12 February 2024 the applicant sought an order that the orders made on 9 February 2024 be stayed pending the resolution of the appeal.  The Application in a Proceeding was the subject of an Amended Application in a Proceeding filed 16 February 2024 wherein the applicant sought the following orders:

    1.That the orders made by the Honourable Justice Berman on 9 February 2024 be stayed and have no affect until the appeal is finalised.

    2.That the First Respondent be restrained and an injunction granted restraining her from accessing the settlement sum of $741,634 paid to the trust account of Norman Waterhouse Lawyers unless otherwise ordered by the Court for Urgent Spousal Maintenance and/or Litigation Funding.

    3.That the First Respondent pay to the Applicant Urgent Spousal Maintenance for his reasonable living expenses in the amount of $6,300 per month (on or before the last day of each month including for February 2024) until final orders for spousal maintenance are made by the Court.

    4.That the First Respondent pay to the Applicant Urgent Spousal Maintenance for him to repay his overdue debt to [XX Lawyers] in the amount of $45,880.50 on or before 29 February 2024.

    5.That the First Respondent pay to the trust account of the Applicant’s solicitors Urgent Spousal Maintenance and/or Litigation Funding for his reasonable legal expenses relating to his Notice of Appeal stamped 13 February 2024 in the sum of $100,000 within 7 days of notice from the Applicant’s solicitors.

    6.That the Applicant have leave to file a further updated Financial Statement (draft filed 16/2/2024).

12. The Notice of Appeal sets out 24 grounds of appeal.  For the purposes of the application for the stay of the orders, grounds 1 to 6 and 22 to 24 relate to property settlement whereas the balance of the grounds of appeal relate to the applicant’s damages claim.

13. As matters have transpired, the applicant and the first respondent did all things necessary to transfer $741,634, being the settlement sum, pursuant to the order of 9 February 2024 to the trust account of the first respondent’s solicitors.  The money remains in that account.

14. The balance of the money in the Westpac Account is the subject of an injunction that restrains the applicant from accessing and/or withdrawing any of the transferred funds from the parties’ joint Westpac Account for a period of 42 days in circumstances where the first respondent had foreshadowed that there would be an application for costs.

15. The balance of funds totals approximately $292,933.82.  There is no restraint on the applicant transferring the balance of funds in the parties’ joint Westpac Account to his own account. 

16. The order of 9 February 2024 also provided for the second respondent to pay to the applicant the sum of $38,000 by way of damages in full and final settlement of the applicant’s claim.  Thirty days has not elapsed, and payment has not been made.

17. In circumstances where the applicant seeks a stay of the operation of the order, the second respondent did not consider that it was necessary for them to do anything and whilst it is likely that the second respondent is considering their position in relation to the judgment, there is no opposition to the stay order sought by the applicant insofar as it relates to the question of damages.

18. The parameters of the dispute, insofar as it relates to the stay application, were the subject of some concession by each of the applicant and the first respondent.

19. For his part, the applicant considers that an order for settlement of property in favour of the first respondent would be represented by a settlement sum of between $300,000 and $500,000.  The first respondent accepted that to the extent of the order seeking an injunction restraining her from accessing funds in her solicitor’s trust account, it is conceded that she should be able to access $300,000 and possibly as much as $500,000.

20. For her part, the first respondent concedes that whilst the costs sought by her in the Application in a Proceeding filed 21 February 2024 are in the sum of $250,000, as determined on a party/party basis, she only seeks that the sum of $150,000 be the subject of injunction.

21. The consequence of the first respondent’s concession is that there is no impediment to the applicant being able to draw down approximately $142,933.82 either from the joint Westpac Account or if transferred, from the applicant’s personal account.

    LEGAL PRINCIPLES

22. Pursuant to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Family Law Rules”), the filing of a Notice of Appeal does not in and of itself stay the operation of an order. The Family Law Rules provide as follows:-

    13.12  Stay

    (1) The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision.

    (2) If an appeal has been started, or a party has applied for leave to appeal against an order, any party may apply for an order staying the operation or enforcement of all, or part, of the order to which the appeal or application relates.

    (3)       An application for a stay must:

    (a)       be filed in the registry in which the order under appeal was made; and

    (b)be heard by the Judge or Magistrate who made the order under appeal, unless that judicial officer is unavailable.     

23. The making of an order for a stay “is wholly discretionary and the circumstances that would justify an order for a stay depend upon the circumstances of each case” (see Friscioni & Friscioni [2009] FamCAFC 43 at [54].

24. In Aldridge & Keaton(Stay Appeal) [2009] FamCAFC 106 the following is set out:-

    17.This is an appeal from a discretionary judgment. There are well established principles on the limits on interference by an appellate court with such a judgment (see House v The King (1936) 55 CLR 499; Gronow v Gronow (1979) 144 CLR 513; (1979) FLC 90-716).

    18.The principles to be applied in determining an application for a stay of orders both in the general law and in respect of parenting proceedings are also well known (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited [No.1] (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation (1985) 2 NSW LR 685; Jennings Construction Limited v Burgundy Royale Investments Pty Limited (1986) 161 CLR 681; Clemett & Clemett (1981) FLC 91-013; JRN & KEN v IEG & BLG (1998) 72 ALJR 1329 at 1332). The 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 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 bona fides of the applicant;

    •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;

    •the desirability of limiting the frequency of any change in a child’s living arrangements;

    •the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of the stay for a short period of time; and

    •the best interests of the child the subject of the proceedings are a significant consideration.

    CONSIDERATION

25. The applicant does not set out with any formality the orders by way of property settlement that he seeks but rather the orders sought in the Notice of Appeal are procedural in the sense that the applicant seeks that either the parties file an updated Financial Statement or cause a joint balance sheet to be prepared with the intention that they will be considered on the appeal.

26. The other orders sought in the Notice of Appeal are more declaratory in nature in that the applicant seeks a finding as to the following matters:   

    •That superannuation assets of the parties are included in the distributable asset pool for division consistent with the parties’ non-superannuation assets.

    •That legal costs paid by the parties are not “add backs” and therefore excluded from the distributable asset pool.

    •That damages received by the applicant from the second respondent are not property of the parties and therefore excluded from the distributable asset pool.

    •That the division of assets including consideration of s 75(2) factors is reassessed.

27. Upon further enquiry of the applicant, it was conceded that the reference to damages received by the applicant from the second respondent was in anticipation of a successful appeal in relation to his claim against the second respondent such that if substantial damages were awarded, they should not be brought to account in considerations of property settlement.

28. It is not controversial that the awarded damages totalling $38,000 was not considered a relevant matter to the finalisation of property settlement.

29. The application for stay filed by the applicant is supported by a short affidavit filed 14 February 2024 and a more expansive affidavit filed 16 February 2024.

30. There has been little material filed in support of the stay application that is actually relevant to the factors that I am required to consider when making an order.

31. The applicant accepts that he bears the onus of establishing a proper basis for the stay, even though it is not required that he demonstrate “special” or “exceptional” circumstances. 

32. It is apparent from the Family Law Rules and the well settled principles that apply to the granting of a stay that the basic principle is that there be no stay of proceedings pending an appeal unless the contrary is ordered.

33. A stay should not be granted as a matter of course but only when it is appropriate to do so. 

34. A consideration of whether to grant a stay will, of necessity, vary from case to case. 

35. The basis upon which the applicant brings his application for a stay is that if a stay is not granted, there is a real risk that his ability to access the settlement funds, which now remain in the first respondent’s solicitor’s trust account, may well render a successful appeal nugatory or make it impracticable, difficult or even impossible to restore the current situation.

36. It is a relevant consideration that the applicant concedes that the injunction he seeks should not apply to an amount of between $300,000 and $500,000.

37. The first respondent emphasises that the litigation has been ongoing since 2018.  Significant legal fees have been incurred by each of the parties and some of the complexity arises from the access by the applicant to his superannuation and other entitlements totalling in excess of $1,200,000.  Simply put, the first respondent’s contention is that it has taken five years for final orders to be made and she considers that she is entitled to the fruits of the litigation.

38. The first respondent argues that the Court must weigh the balance of convenience in respect of the possible risk of the first respondent dissipating the settlement proceeds such as to render the appeal nugatory as opposed to the first respondent’s entitlement to a settlement.

39. The first respondent intends to use part of her settlement sum to pay her outstanding legal fees of $82,000 and given that the figure does not include current work in progress it is likely that a further amount will need to be available for the payment of future legal fees that will of necessity arise from the applicant’s appeal.

1. The second consideration is that the first respondent intends to purchase a property given that she has been locked in litigation since 5 November 2018.

2. As discussed in the various delivered judgments in this matter, I considered that the first respondent was a reliable witness and there was no challenge to her credit.

3. The first respondent is a public servant.

4. I am satisfied that over and above the payment of the first respondent’s legal fees, the balance of the settlement sum is likely to be utilised for the purchase of a property and if so, would safeguard any amount that was required to be returned to the applicant should his appeal be successful acknowledging his concession that the first respondent should receive between $300,000 and $500,000 in any event. 

5. A careful consideration of the grounds of appeal reveal that the primary challenge is in respect of the exercise of my discretion.  Grounds 3 and 4 are difficult to understand. 

6. I propose to grant a stay upon condition that the first respondent is able to utilise $500,000 without restriction with the balance of the settlement sum being $241,634 to be the subject of an injunction save and except in circumstances where the money is to be utilised for the purchase of real property with the first respondent being the registered proprietor.

7. It may well transpire that the appeal is heard at an early time in circumstances where the proposed injunction would cause little prejudice to the first respondent.

   SPOUSAL MAINTENANCE

8. As has been a common theme in recent Applications in a Proceeding filed by the applicant, he seeks orders in respect of urgent spousal maintenance firstly, in the sum of $6,300 per month and also by way of a lump sum of $45,880.50 to repay an overdue debt to his solicitors and then a further sum of $100,000 by way of litigation funding as the likely reasonable legal fees to be incurred in having the appeal heard and determined.

9. There is no Initiating Application seeking orders for spousal maintenance.  There was no order sought for spousal maintenance in the currency of the proceedings and whilst the applicant sought to amend the Initiating Application to seek spousal maintenance pending the delivery of the final tranche of the judgment, that has now occurred, and the application was dismissed.

10. There is no affidavit in support of the applicant’s application for lump sum spousal maintenance.  Whilst I accept that he has outstanding legal fees to his former solicitors, no documents have been provided as to the extent of those fees nor in particular the basis upon which he seeks $100,000 in litigation funding.

11. The applicant conceded that his previous two appeals incurred fees of between $50,000 and $65,000.  It is therefore difficult to understand how he reaches the figure of $100,000.  Again, there is no correspondence, assessment or consideration given by a solicitor as to the likely costs of the applicant’s representation to prepare and run his appeal.

12. A further and more fundamental consideration is that it is an improper use of the spousal maintenance power to pay for present and likely future legal fees.

13. The applicant concedes that whilst he seeks urgent spousal maintenance in the sum of $6,300 per month from the first respondent, her financial situation is such that that amount could only be paid from the settlement sum received by her.

14. Again, a further difficulty is that the applicant seeks orders of spousal maintenance on the basis of urgency and until “final orders for spousal maintenance are made by the court” in circumstances where there is no formal application.

15. Whilst not readily accepted by the applicant, the concession made by the first respondent that of the money remaining in either the Westpac Account or the applicant’s account of $292,933.82, she seeks an order that quarantines the sum of $150,000 in anticipation of the Court determining her application for costs favourably.  The consequence is that the applicant will have immediately available to him the sum of $142,933.82.  That should be sufficient to pay outstanding costs to his solicitors and preserve an amount in anticipation of the appeal with the balance of approximately $50,000 for other expenditure.

16. Again, it is relevant that there is no current application before the Court in respect of final orders for spousal maintenance and it is a matter for the applicant as to how any surplus funds are utilised.

17. I propose to grant the stay as sought by the applicant in respect of the order requiring the payment of damages to him by the second respondent.

18. I make orders as appear at the commencement of these reasons.

I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman.

Associate:

Dated:       13 March 2024