Danford and Danford (No 2)

[2010] FamCA 932

FAMILY COURT OF AUSTRALIA

DANFORD & DANFORD (NO. 2) [2010] FamCA 932

FAMILY LAW – PROCEDURAL – stay application pending appeal – application of principles of the grant of a stay of proceedings on terms
FAMILY LAW – COSTS – stay applications

Family Law Act 1975 (Cth)

Penfold v Penfold (1980) 144 CLR 311

APPLICANT: Ms Danford

RESPONDENT: Mr Danford

FILE NUMBER: SYC 7443 of 2007

DATE DELIVERED: 14 October 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: The Hon. Justice Rose

HEARING DATE: 14 October 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: P Campton

SOLICITOR FOR THE APPLICANT: Humphreys & Feather

COUNSEL FOR THE RESPONDENT: R Schonell SC

SOLICITOR FOR THE RESPONDENT: Fisher Nash Morgan

Orders

1. That there be a stay of proceedings of Orders 1 and 2 of the Orders made 31 May 2010 pending determination of the husband’s appeal or other order.

2. That Order 1 herein is made on the following terms:

   (a)The husband seek expedition of the hearing of the appeal at the procedural hearing before a Judge of the Appeal Division.

   (b)In the event the appeal is expedited the husband shall seek the hearing of the appeal be fixed on the earliest date convenient to the Court.

   (c)The husband diligently prosecute the appeal.

3. That the Appeal Registrar list the appeal for a procedural hearing before a Judge of the Appeal Division on 28 or 29 October 2010 or such other early date as is convenient to the Court.

4. That the applications made by each of the parties for costs of and incidental to the husband’s Application in a Case filed 1 October 2010 are dismissed.

5. That the wife’s Application in a Case filed 17 September 2010 seeking a costs order against the husband is stood over to a date to be fixed following determination of the husband’s appeal or other order.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  SYC7443 of 2007

MS DANFORD

Applicant

And

MR DANFORD

Respondent

REASONS FOR JUDGMENT

Introduction

1. The following applications before me today are as follows:

   (a)The Application in a Case filed 1 October 2010 on behalf of the husband in which he seeks a stay pending further order of the Orders made 31 May 2010 and that the wife pay his costs.

   (b)The Application in a Case filed 17 September 2010 on behalf of the wife in which she seeks an order for costs against the husband.

Background

1. The brief background to these proceedings is as follows.

2. The parties are separated under the same roof, in that they have lived in the matrimonial home for a considerable time prior to the property settlement orders being made and have continued to do so.

3. The parties have three children of their marriage, who at the time of the trial were 22, 21 and 20 years of age respectively.  The eldest child lived in the United States of America and the two youngest children continued to live with the parties in the matrimonial home.

4. The wife’s two children from her prior relationship, who were aged 32 and 29 years of age respectively at the time of the trial, live independently.

5. The husband suffered severe injuries in a motor vehicle accident (“the accident”) which occurred on 10 September 2009.  He suffered and continues to suffer from significant and debilitating residual disabilities.

6. The wife conducts the family business on a full-time basis which is principally concerned with the sale of furniture.

7. On 31 May 2010, I made orders for property settlement (“the property settlement orders”) and gave judgment on that day.

8. The two relevant orders made on 31 May 2010 are:

   “1.That the husband sign all documents and do all things necessary to transfer to the wife the whole of his right title and interest in the property situate at and known as [N] described in Folio Identifier […] (“the matrimonial home”) on or before 14 June 2010.

   2.That the husband vacate the matrimonial home on or before 30 September 2010 or such other date as the parties may agree upon in writing whereupon the wife shall have exclusive occupancy of the matrimonial home.”

9. On 28 June 2010 the husband lodged a Notice of Appeal against the property settlement orders.  That appeal is opposed by the wife.

10. The findings as to the property of the parties are set out in paragraph 47 of the Reasons for Judgment delivered 31 May 2010.  The principal property of the parties is represented by:

    (a)their joint ownership of the matrimonial home,

    (b)bank funds held in the husband’s name of approximately $1.2 million representing the compromised damages received by him on a net basis as a result of the injuries suffered in the accident,

    (c)the respective superannuation entitlements of each of the parties.

The husband’s stay application

1. Counsel for the husband accepted the submission made by counsel for the wife in that the critical orders for the purpose of considering the stay application are Orders 1 and 2 made 31 May 2010.

2. I have read the Affidavit of the husband sworn 30 September 2010, the wife’s Affidavit sworn 8 October 2010, and the husband’s Affidavit in Reply sworn 13 October 2010.

3. I was assisted greatly by written and oral submissions made by counsel.

4. I informed counsel that my enquiries revealed that the appeal can be listed for a procedural hearing on 28 or 29 October 2010, and in the event that the hearing of the appeal is expedited, then the matter could be listed in the Full Court sittings commencing 31 January 2011, or possibly in earlier sittings in December 2010 should an appeal set down in those sittings not proceeding.

Conclusion

1. I have determined to grant a stay of proceedings of Orders 1 and 2 made 31 May 2010 for the following reasons.

2. It is well established that the Court has an inherent power to grant a stay of execution or operation of a decree or a general stay of proceedings.  I have inferred and obtained confirmation from senior counsel for the husband that the latter is the order sought by the husband in respect of Orders 1 and 2 made 31 May 2010.

3. In addition, Family Law Rule 22.11 provides that a notice of appeal does not operate as an automatic stay of the operation or enforcement of the orders appealed from.  Therefore, a party to proceedings may apply for a stay.

4. There is no issue that the application for a stay is competent and bona fide.

5. The general principle in relation to civil litigation is that the successful party should not be deprived of the fruits of the litigation, subject to the discretionary power to order a stay.  That general principle must be balanced against other relevant matters and the weight which may be attached to them.

6. One of such matters is that to deny a stay may render a successful appeal nugatory.  I am satisfied that such a situation may develop in these proceedings in the event that the wife either proceeded to exercise her rights as the sole registered proprietor of the property, or in the event of not proceeding as indicated in her affidavit evidence, then her interest being encumbered by way of a mortgage as security for $100,000.00.  Should the covenants of that mortgage be breached, then the mortgagee has the power of sale, which subject to the third party rights contained in the legislation, may not be able to be injuncted.

7. Indeed, correspondence by the wife’s solicitor in evidence makes it clear that the order requiring the husband to vacate the matrimonial home will be enforced, albeit that the husband was offered a further two weeks to vacate.  I do not comment on the merits of that approach as the material relied upon could not be tested.

8. My perusal of the Notice of Appeal demonstrates that the appeal is not frivolous or vexatious.  The salient features of the grounds of appeal are the reliance upon “weight” grounds and whether the property settlement orders were just and equitable.  Upon my reading of the Notice of Appeal as assisted by the submissions by counsel for the wife, it does not appear that a substantial issue for the appeal has been raised in terms of lack of adequate reasons notwithstanding that it is a ground of appeal.

9. A stay of proceedings will not create hardship to the wife, particularly in circumstances where the husband has given evidence that he will diligently prosecute the appeal.  A stay of proceedings can be on terms that he not only do so, but that he does all things necessary to ensure that an application for expedition of the appeal be made at the procedural hearing, and if granted, be fixed for the earliest date convenient to the Court.

10. On the other hand, to deny a stay may cause the husband hardship in that he would be required to vacate the matrimonial home and relocate to other suitable premises, which having regard to the husband’s special needs, may not be readily found.

11. In addition, the husband has offered to provide funds to the wife, implicitly to meet her financial needs so far as costs of the appeal are concerned, as well as other matters referred to by the wife in her affidavit evidence.  The wife’s estimation of costs in regard to the appeal is $25,000.00.  The manner in which that amount was calculated was not referred to in the affidavit.  I raised this matter with counsel for the wife and was informed that the wife does not press the provision of that amount, or any amount to be paid to her as a term and condition of any stay, notwithstanding the evidence in her affidavits of anxiety and pressure partly due to financial constraints.  Consequently, the provision of such funds will not be term of the granting of a stay.

12. The balance of convenience favours the stay being granted due to a combination of the personal and financial consequences endured by the husband, as previously referred, although that is not to say that the wife herself is under considerable personal and financial pressure.  The continuation of secure accommodation for both the husband and the wife in the matrimonial home, notwithstanding the tension each party is undoubtedly experiencing, and the likelihood of an early hearing of the appeal in the event that expedition is sought and the appeal diligently prosecuted, will ensure a continuation of accommodation for both of the parties in circumstances, although trying, will nonetheless represent a minimisation of financial turmoil.

13. With regard to the previous paragraph, I propose to request that consideration be given to the expedition of the appeal, of the Court’s own motion, due to the husband’s continuing substantial residual disabilities from his injuries and the parties continuing to live separated under the same roof, which obviously creates stress for both of them.

The wife’s application for costs

1. With regard to the wife’s costs application, counsel for the wife, in my view, quite sensibly acceded to the suggestion that it be stood over for hearing on a date to be fixed after the appeal has been determined or as may otherwise be ordered.

The wife’s costs of the stay application

1. With regard to the costs of the stay application, counsel for the wife has pressed for costs, irrespective of the fate of the husband’s stay application.

2. The general principle, so far as costs in this jurisdiction are concerned, is that each party bears his or her own costs as provided in s 117(1) of the Act.

3. The Court, nonetheless retains the discretion to make an order for costs in the circumstances set out in ss 117(2) and (2A).

4. The High Court in Penfold[1] made it clear that the discretion which might be exercised is a wide one, however before doing so the threshold must be established.  That is a “circumstance” which may justify the making of an order for costs.

   [1] Penfold v Penfold (1980) 144 CLR 311

5. In my view, a circumstance has not been established given the success of the stay application.  The parties are under financial stress and there was an opportunity to alleviate that stress with regard to the wife.  However, as previously referred to, a term and condition of the stay which might provide payment of an amount to the wife to meet her costs of the appeal was not sought.

6. Consequently, the wife’s application for an order for costs in her favour in relation to the stay application is dismissed.

The husband’s application for costs of the stay application

1. With regard to the husband’s pending application for costs of the stay application, senior counsel for the husband informed the Court that the application is no longer pressed.

2. Consequently, the application by the husband for costs will also be dismissed.

I certify that the preceding thirty seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rose delivered on 14 October 2010.

Associate: 

Date:  15 October 2010