Daymond & Anor and Daymond & Ors (No. 2)

[2013] FamCA 552

FAMILY COURT OF AUSTRALIA

DAYMOND AND ANOR & DAYMOND AND ORS (No. 2) [2013] FamCA 552

FAMILY LAW – PROPERTY – where the proceedings involve two brothers and their respective wives – where the majority of the pool of property available for distribution in each case comprises the brothers’ respective interests in a family business – final property orders made requiring the parties to provide Minutes of Order giving effect to ordered percentage distribution and the Reasons for Judgment – where the parties in each case failed to provide Minutes of Order within the specified timeframe – where the matter subsequently brought on for mention – where one set of former spouses reached agreement prior to the hearing – where the Minutes of Order handed up at the mention differed significantly from the Minutes of Order subsequently forwarded by the husband’s legal representative – whether the Minutes of Order as forwarded are just and equitable – orders made in terms of the Minutes of Order – where the other set of former spouses have been unable to reach agreement – where the orders proposed by the husband do not provide certainty in terms of payment to the wife of the amount due to her in accordance with the ordered percentage distribution – where matter complicated by the fact that properties owned by the family company will need to be sold – where orders made requiring payment within a specified timeframe.

FAMILY LAW – STAY – where the husband in one of the proceedings has filed an appeal against the final property orders – where the husband seeks a stay of the orders, with such a stay having the effect that the wife receive the percentage distribution which the husband contended for at trial pending the outcome of the appeal – where the difference between the percentage ordered and the percentage contended for by the husband is approximately $330,000 – whether a stay should be granted and, if so, to what extent – where the appeal is bona fides – where the husband has an arguable case on appeal – where the wife will receive, on the husband’s proposal, a real property and a cash payment in excess of $300,000 – stay granted in the terms proposed by the husband.

Family Law Act 1975 (Cth)

Jackson & Balen [2009] FamCAFC 131
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681

1^st APPLICANT: Ms M Daymond

2^nd APPLICANT: Ms R Daymond

1^st RESPONDENT: Mr D Daymond

2^nd RESPONDENT: Mr I Daymond

3^rd RESPONDENT: P Pty Ltd

3^rd PARTY: Mr A Daymond

FILE NUMBER:	BRC	18	of	2011
FILE NUMBER	BRC	11578	of	2010

DATE DELIVERED: 26 July 2013

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 17 July 2013

REPRESENTATION

COUNSEL FOR THE 1^ST APPLICANT: Mr Carter

SOLICITOR FOR THE 1^ST APPLICANT: A M Law

COUNSEL FOR THE 2ND APPLICANT:	Mr Hackett
SOLICITOR FOR THE 2ND APPLICANT:	Bruce Dulley Family Lawyers

COUNSEL FOR THE 1^ST, 2^ND, 3^RD

RESPONDENTS:

Ms Carew

SOLICITOR FOR THE 1^ST, 2^ND, 3^RD

RESPONDENTS:

Best Wilson Family Law

THE 3^RD PARTY: Self Represented

Orders

A.IN THE MARRIAGE OF MR D DAYMOND and MS M DAYOND

As and by way of settlement of property pursuant to s 79 of the Family Law Act 1975 (Cth) and so as to give effect to the Orders made 9 April 2013, IT IS ORDERED BY CONSENT:

1.Pursuant to Rule 10.17 of the Family Law Rules 2004, Orders, declarations and notations be made in terms of the document titled “Minutes of Consent” sealed and placed on the file.

B.IN THE MARRIAGE OF MR I DAYMOND and MS R DAYMOND

As and by way of settlement of property pursuant to s 79 of the Family Law Act 1975 (Cth) and so as to give effect to the Orders made 9 April 2013, IT IS ORDERED:

2.The husband shall do all such things, sign all such documents and give all such consents as might be necessary so as to transfer to the wife and/or abandon all right, title and interest he has or may have in and to:

a.Her property situated at J Street, Suburb L in the State of Queensland;

b.Her furniture;

c.Her Kia Rio motor vehicle;

d.Her cash savings with the ANZ Bank;

e.Her superannuation with T Super, U Super and V Super;

f.Her credit card liability with ANZ Bank and CBA;

g.Her HECS debt; and,

h.The ANZ Bank mortgage liability on the said Suburb L property.

3.The wife shall do all such things, sign all such documents and give all such consents as might be necessary so as to transfer to the husband and/or abandon as the case may be all right, title and interest she has or may have in and to:

a.His interest in the professional practice;

b.His furniture;

c.His loan to P Pty Ltd;

d.His interest in P Pty Ltd;

e.His cash savings with Westpac;

f.His superannuation with X Super; and,

g.His credit card liability with ANZ Bank.

4.Save as otherwise expressly provided in these Orders:

a.Each party be solely entitled to the exclusion of the other party to all property (including choses-in-action) in the possession of such party as at the date of these Orders;

b.Any money standing to the credit of the parties in a bank account are to be retained by the party in whose name the account appears;

c.Each party hereby foregoes any claim they may have to any superannuation benefit that is belonging to or owned by the other save as provided for in these orders;

d.All insurance policies are to become the sole property of the owner named hereon; and,

e.Each party be solely liable for and indemnify the other against any liability encumbering any asset to which that party is entitled pursuant to these Orders.

5.The parties shall each and together do all such things, sign all such documents and give all such consents as might be necessary so as to:

a.Enter into an unconditional contract to sell the property situated at G Street, Town H to Ms Y; and,

b.Effect settlement of the said sale on a date not later than 30 days after the date of these Orders, with the husband to ensure that all outgoings in respect of the property are up to date.

6.In default of settlement of the sale contemplated in paragraph 5, Mr I Daymond shall transfer to Ms R Daymond all his right, title and interest in the property at G Street, Town H and provide vacant possession not later than 4:00pm on a date 32 days from the date of these Orders with the transfer to occur at the value agreed by the parties at trial, namely $180,000. Ms R Daymond or her agent shall inspect the property and any damage shall be repaired at the expense of Mr I Daymond.

7.The husband shall raise and pay to the trust account of Bruce Dulley Family Lawyers:

a.The sum of $44,000 within fourteen (14) days of the date of these Orders; and,

b.The amount of $818,284.80 by 4:00pm, 24 November 2013 in the event that paragraph 5 of these Orders is carried into effect; or,

c.The amount of $638,284.80 by 4:00pm, 24 November 2013 in the event that paragraph 6 of these Orders is carried into effect.

Stay Pending Appeal

8.Pending the hearing and determination of the appeal instituted by the husband by his Notice of Appeal filed 7 May 2013 or otherwise by written agreement between the parties:

a.The order provided for in paragraph 7(b) of these orders be stayed so as to require the husband to pay to the wife pursuant to its terms the sum of $483,790.30 by the date there specified; or,

b.In the event that paragraph 7(c) of these Orders operates, so as to require the husband to pay to the wife the sum of $303,790.30 by the date there specified.

C.ORDERS IN RESPECT OF PROGRESSION OF COSTS APPLICATIONS

IT IS ORDERED:

9.The parties’ respective applications for costs be listed for hearing before Justice Murphy at 10:00am, 25 October 2013.

10.By 4:00pm, 23 August 2013, the parties shall file and serve any affidavit material they intend to rely upon in respect of the applications for costs made by the First Applicant, Second Applicant, First Respondent and Second Respondent.

11.By 4:00pm, 6 September 2013, the First Applicant, Second Applicant, First Respondent and Second Respondent file and serve written submissions in support of their respective applications for costs.

12.By 4:00pm, 20 September 2013, the First Applicant, Second Applicant, First Respondent, Second Respondent, Third Respondent and Third Party file and serve any written submissions they intend to rely upon to oppose the respective applications for costs made against them.

13.By 4:00pm, 4 October 2013, First Applicant, Second Applicant, First Respondent and Second Respondent file and serve any outline of submissions in reply.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Daymond and Anor & Daymond and Ors (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC18/2011 and BRC11578/2010

Ms M Daymond

1^st Applicant

And

Ms R Daymond

2^nd Applicant
And

Mr D Daymond

1^st Respondent
And

Mr I Daymond

2^nd Respondent
And

P Pty Ltd

3^rd Respondent
And

Mr A Daymond

3^rd Party

REASONS FOR JUDGMENT

1. On 9 April 2013 I made orders and delivered Reasons in respect of two claims pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). Subsequent issues have arisen between the parties to which these Reasons relate.

2. The respondents to each of the two s 79 claims are brothers. While the applicant in each of those two cases was the wife of each brother, each of the proceedings involved the resolution of a further claim asserting a trust interest by Mr A Daymond (“Mr A”). Mr A is the son of one brother Mr D Daymond (“Mr D”) and the nephew of the other brother Mr I Daymond (“Mr I”). All of those proceedings were heard together and the reasons delivered on 9 April relate to each.

3. The claim by Mr A was dismissed.  The property interests of each of the brothers and their wives (amounting in each case to a little more than $2 million inclusive of superannuation interests) were the subject of orders dividing those interests in specified percentages.

4. Mr D and Mr I are directors of, and control, a proprietary company. That company was also a respondent to Mr A’s claim and was represented by the same counsel who represented each of the other respondent husbands. The legal and equitable interests in the shares in that company, held by each of the husbands, formed part of the husbands’ property. Each respondent husband had a loan account in the company by which the company owed each a significant sum. The interest of each brother in their respective loan account was also included in their property.  The shares and the loan accounts together comprised a significant proportion of the property and superannuation interests to which the orders applied in each case (about 78 per cent and 74 per cent respectively).

5. The shares had an agreed value. That value was assessed on an asset-backing basis. The company owns land; stock and plant and equipment. The company ran stock and, on one block of land, a mine from which Mineral Z is extracted. The value of the land owned by the company represents (effectively) the bulk of the value of the shares owned by each of the husbands. 

6. Orders were made in the proceedings involving the first applicant Ms M Daymond (“Ms M”) and Mr D that their property and superannuation interests be divided in the proportion 55 per cent to Mr D and 45 per cent to Ms M.  Orders in the other proceedings saw Mr I receive 47.5 per cent and Ms R Daymond (“Ms R”) 52.5 per cent.

7. In each case, consistent with the request of all parties, the following orders were made:

   THAT so as to give effect to [the paragraph providing for the relevant percentage distribution], the parties shall, within 21 days of the date of these Orders, provide via joint e-mail communication to …@familycourt.gov.au an agreed minute of Order.

   THAT in the event that the parties are unable or unwilling to arrive at the orders contemplated by [the preceding paragraph], the matter be listed for hearing before Murphy J on a date and at a time to be advised and, in that event, the parties shall, not later than 5 days before such date, file and serve all such material as might be necessary so as to make submissions in respect of any order for costs of and incidental to the failure to provide a minute of order as [the preceding paragraph] contemplates.

   (Bold emphasis in original).

8. The twenty-one days provided for in those orders elapsed without agreement being reached as to the orders.  A hearing date was allocated and material foreshadowed by those orders was filed.   Subsequently, on 7 May 2013, Mr I filed a Notice of Appeal. It is common ground that the appeal will not be heard before November this year and, if not in those sittings, then not before March 2014.

What Are the Issues on This Application?

1. A number of applications arise for determination resulting from the circumstances just outlined:

   a)Mr I and Ms R remain in disagreement about the orders giving effect to my judgment;

   b)Each of those parties and each of Mr D and Ms M apply for their costs of these proceedings. (Mr D and Ms M are agreed on the substantive orders to be made in their s 79 claim, but in circumstances about to be discussed);

   c)Mr D seeks an order for his costs of the trial as against Ms M;

   d)Ms R seeks an order for her costs of the trial as against Mr I;

   e)Ms R seeks an order that Mr D, Mr I and Mr A (or, in the alternative, Mr A solely) pay her costs referable to the “third party proceedings” (i.e. the proceedings in respect of Mr A’s claim);

   f)Mr I seeks a stay of the property order pending appeal to the extent that the ordered amount exceeds 37.5 per cent of the value of the property as found;

   g)Ms R contends that a “maintenance” payment by Mr I should have continued post-trial and that arrears are owing in respect of it.

What Orders for Settlement of Property?

The Consent, the “Further Changes” and the Remaining Issues

1. At the hearing of the application, the Court was advised by counsel that Mr D and Ms M had reached agreement as to the terms of s 79 orders giving effect to my judgment. The Court was advised that “there has been agreement in all matters … this morning. We are just formalising the changes [to the orders proposed by Mr D] which will reflect that.” Subject to that qualification, indicative Minutes of Order were handed up. Those minutes, insofar as they pertained to the sale of assets of the third respondent company, were a “mirror copy” of the orders contended for by Ms Carew on behalf of Mr I save for obvious changes giving effect to differing percentage entitlements. It was indicated to Ms Carew (also counsel for Mr D) and counsel for Ms M, that they were at liberty to forward finalised minutes via joint e-mail communication to my Associate once final terms were agreed.

2. There remained, then, the issue of the terms of orders giving effect to the judgment in respect of Mr I and Ms R.  Mr I’s case proceeded on the basis that the Court should make orders in terms of a tendered draft, being the “mirror copy” of the orders sought by Mr D in respect of his proceedings with Ms M about which the Court was told there was agreement. 

3. Ms R sought orders which, in broad summary, took account of the mooted transfer of a specific piece of real property and, thereafter, sought the payment of the relevant cash adjustment to give effect to her ordered percentage entitlement by a specific date (19 August 2013). In default of payment by that date the appointment of a receiver to the company was sought.

4. A number of points were made by counsel for Ms R about the orders as proposed. It will be appreciated that at that point in time, precisely the same considerations were applicable to the orders proposed as to the consent minutes between Mr D and Ms M. 

5. Counsel for Ms R contended, accurately as it seems to me, that the orders provide for no certainty as to when the payment of the bulk of the moneys owing will be made.  The orders provide for an initial (modest) cash payment, a mooted sale of specified real property to a specified prospective purchaser and, otherwise, a potentially endless series of auctions with the auction succeeding an unsuccessful auction being “on the same terms and conditions”.  There was no provision, for example, for an auction without reserve.  Those orders provide for the sale of one of the real properties known as “Property AB” (the most valuable of the component real properties) but only if the potentially endless series of auctions had eventually produced a sale and there remained a shortfall.

6. I was, to say the least, extremely surprised to be told that Ms M had agreed to orders essentially in that form and I harboured some doubts as to whether the orders as then apparently agreed could be said to a just and equitable expression of the result I had arrived at.

7. Subsequent to the hearing, Minutes of Order as agreed were forwarded by e-mail by the representatives of Mr D (back copied to the representatives for each of the other parties). It was said, in that email, that there were “some further changes” to the orders promulgated at the hearing.  In summarising the orders (accurately), the e-mail records relevantly:

   Please find attached the agreed version of the orders as between [Mr D] and [Ms M].  There have been some further changes to the orders other than those indicated, in particular, the sum to be paid to [Ms M] is no longer to be adjusted according to the sale price of the properties, commission or sale costs; [Property AB] is to go to sale in 6 months regardless of the state of sale of the other properties (if money is still owing); any final cash payment is to be met within 30 days of 12 months, and the provision in relation to [Ms R] is as per ultimately as (sic) determined by the court.

8. It can be seen that the “further adjusted” minutes take account of the issues earlier outlined.  The minutes as submitted ultimately also alter – not insubstantially – other provisions of the indicative minutes handed up during the hearing.  In particular, it was contended during the hearing that the parties should share equally sale costs and commissions and also that the ultimate amount payable to the wife would alter with the ultimate sale price achieved pursuant to the mooted sales (whenever they might take place).   All of those matters were the subject of submissions by counsel for Ms R during the hearing of this matter and also the subject of comment from the Bench. 

9. I pointed out that the orders to be made were those whose terms were a just and equitable expression of the judgment arrived at based on the evidence before the Court at the trial.  In that respect, the property at trial was agreed without reference to any deduction for sale costs or commission. So, too, no evidence or submissions at trial referred to any specific orders for sale or as to how any such orders might impact (if at all) upon the value of any remaining property held within the company and, thus, the value of the shares.  The matter was not addressed at trial either by reference to any evidence or submissions as to the topic generally or as to the potential dollar impact whether in reduction of the property as a liability or by reference, for example, to s 75(2)(o).  To suggest that the wife’s entitlement should alter by reference to those matters now is to suggest something different to the basis upon which the trial was conducted and to suggest an entitlement different to that upon which the trial findings and orders were made.

1. It is, then, understandable that not insubstantial changes have been made to the indicative orders handed up during the hearing.  Those matters have the potential to have a bearing on the consideration of the orders sought by Mr I.  That issue will be addressed shortly.

2. Mr D and Ms M were married for a considerable period of time.  They have a (adult) son who was involved in this litigation against them.  The orders will necessarily have an impact on the company and the business.  Ms M is, and at all times has been, legally advised.  The parties are entitled to have their respective entitlements met in a manner upon which they are agreed provided the terms are in accordance with the result and findings at trial and are otherwise, of themselves, just and equitable. 

3. I am prepared to make the orders in the terms agreed by consent as between Mr D and Ms R as I consider the terms just and equitable.

The Impact of Different Orders Being Sought by Mr D and Mr I?

1. The changes to the terms agreed to by Mr D and Ms M are not insignificant in considering the orders that should be made in the Mr I/Ms R proceedings.  The result of agreed changes being made to the proposed Mr D/Ms M orders after the hearing of this application leaves the issue of the disputed orders to be decided by reference to orders submitted on behalf of Mr I that were the same as those for Mr D but no longer are.  The result is that each and all of the difficulties inherent in those orders to which earlier reference was made remain as difficulties in the orders sought by Mr I.

2. As a result, whatever other arguments might pertain in respect of the orders proposed on Mr I’s behalf, I could not be persuaded to make the orders as sought.  In my view they provide no certainty at all about when Ms R would be paid the balance of her entitlement and, as a result, there is no certainty about if she would be paid the whole of her entitlement.  In terms, they do not provide for a payment certain to Ms R at all; in respect of the bulk of her entitlement, the mooted orders give her merely the right to insist upon repeated auctions on the same terms and conditions as earlier unsuccessful auctions.

3. Further, as a result of the position adopted in respect of Mr D, it must be seen that Ms Carew argues on behalf of one director of the company that the agreed orders should be made and argues on behalf of the other director of the company that a different set of orders should be made.  Each potentially affects the company in different ways.  No separate submission is made on behalf of the company as to whether one or the other set of orders is, from the company’s perspective, preferable.  No submissions are made as to whether there is or might be conflict in the position of two husbands and a company all represented by the same counsel.

4. I have come to the conclusion that it is not necessary in the circumstances of this case to cause yet further delay and expense to the parties in the finalisation of the trial by requiring a further appearance to address any such potential issues.  I am persuaded that no injustice results to any party if, as I consider is possible, orders can, nevertheless, be made.

5. It was accepted at trial that the shares in the company ought be treated as property of each of the brothers because the company would do their bidding; in essence, it was their alter ego.  It was accepted at trial that the brothers would each cooperatively take actions within and on behalf of the company so as to facilitate the wives’ respective entitlements being met.  No evidence before me suggests that I ought reconsider that premise implicit in the trial evidence.  If there is a conflict between directors as a result of differing orders being made in respect of each director/husband, that is a matter that can be left to the cooperation of the brothers acting in accordance with their statutory and fiduciary responsibilities and, if not, can be left to both enforcement proceedings in this Court (the company is a respondent) or to the general provisions of the corporations law.

What Orders Should be Made as Between Mr I and Ms R?

1. The Court is charged with arriving at orders that give force and effect to the trial judgment and findings based on the evidence at trial.  The terms of the orders must themselves be just and equitable. 

2. Difficulties inherent in the orders proposed by Mr I have already been addressed.  If those matters are put to one side, the orders might be seen to contain a broader contention that there should be specific provision made for the sale of properties so as to facilitate the required cash payment.  As has been seen, apart from embracing a mooted sale of specific property to a prospective purchaser, Ms R argues for the payment of the relevant specific sum by a specific date in about four weeks.  (It is said additionally that, if the mooted sale of the specific property to the named purchaser does not occur, it should be transferred to Ms R).

3. I consider that a number of matters are relevant to the orders that should be made, bearing in mind that, as I have said, those matters should derive from the findings and ultimate orders made after the trial:

   ·It must have been apparent to the husbands (individually and in their capacity as directors and controllers of the company) that some actions by the company – for example, liquidation of some assets, borrowing or the like – would need to take place in order to meet the wives’ entitlements, even if confined to the entitlements for which each of the brothers contended at trial;

   ·In that respect, the value of the shares in the company and the brothers’ respective loan accounts form, I repeat, the overwhelming bulk of the property in each marriage;

   ·Further, it must have been apparent that orderly and timely steps taken by them in their individual or directorial capacities was in their best interests and the best interests of the company;

   ·There was no evidence that either of the husbands took any step to put in place any such arrangements or to apprise the Court of the potential impact of any such arrangements.  There was no evidence before the Court on the instant application that steps had been taken in that respect post-judgment;

   ·The judgment is assumed correct until such time as the Full Court says otherwise;

   ·In that respect, each of the wives are entitled to the fruits of their judgments until the parties otherwise agree or a Full Court orders otherwise;

   ·The litigation has been proceeding for some two and a half years and it is now some three months since judgment was delivered;

   ·The company provides income for the husbands particularly through the Mineral Z mine conducted on the company’s property;

   ·The properties owned by the company have been in the Daymond family for some considerable time;

   ·The wives knew that a cash sum was not readily available to either of them and would need to be found within the company.  As has already been referred to, counsel for all parties at the trial requested the opportunity to provide minutes of final order consequent upon the findings made by the Court both in respect of Mr A’s claim and the respective entitlements of each of the parties expressed as a percentage;

   ·It is accepted that Ms R will retain property, including a home in which she has resided for many years including post-separation.

4. When, as here, an opportunity is provided for the parties to provide the terms of orders to give effect to a judgment already made, it is not an opportunity to agitate matters not agitated at the trial. Much less is it an opportunity to introduce evidence (or assertions for which there was no evidentiary foundation at the trial). The trial has concluded and the evidence has closed. Here, there is no application to reopen and, in any event, it would be necessary for a party to satisfy the Court that any evidence sought to be introduced on a reopening was not reasonably available for the trial with the application of due diligence.

5. Counsel for the respondents submitted that it was obvious that the company’s properties would need to be sold “to meet the wives’ respective claims”. What property? In what order? In what manner? Over what timeframe? With what ramifications for other properties and for the values as a whole? What is the evidence about potential sale costs, commission and the like? Are there potential taxation ramifications (including, for example, capital gains tax)? None of those questions were answered by reference to evidence at the trial, nor were submissions made about them at the trial.

6. It is true that, had there been evidence about those matters, the best the Court may have been able to do, within the context of a very wide discretion, would have been to take those matters up in a broad-brush way (by reference, for example, to s 75(2)(o)) but, that is a very different situation to having no evidence at trial about any of those matters and no proposed orders at trial that seek to deal with them.

7. All of the circumstances just outlined gives rise to the submission on Ms R’s behalf that orders should provide for the payment of a cash sum within a specified time.

8. The fact that Mr D and Ms M may have agreed about the orders to be made ought not – notwithstanding the fact that the husbands are brothers and directors of the same company – impact upon the potential justice and equity of the terms of the orders made in respect of Mr I and Ms R.  True it is that the obligations of one brother pursuant to his orders may conflict with the obligations of another brother and that, “wearing different hats”, those brothers may each have to make decisions which facilitate the company taking various actions.  In the absence of any evidence at trial about any of those matters but an acceptance that the brothers would need to facilitate the company doing something to meet the respective orders, such decisions as need to be made are a matter for them to resolve as directors consistent with their legal obligations as such.

9. I consider it just and equitable, by reference to the evidence at trial, my findings about that evidence and my ultimate judgment, to make orders providing for Mr I to raise and pay the relevant cash sum (calculated by reference to the findings at trial in respect of the property interest of the parties and their value at trial).  

10. However, notwithstanding the submissions made with respect to delay and what reasonably ought to have been anticipated by Mr I (his brother and the company), I consider those same circumstances render it just and equitable to permit of a longer period of time within which to pay that money than what is contained in Ms R’s proposed orders.  Doing so takes account of the inevitability of Mr I’s need to realise assets or take other actions so as to pay that sum (as was accepted by all parties at trial) and I consider it that order the least likely to result in future proceedings.   I consider a period of four months to be appropriate.  

11. The proposed orders by each of Ms R and Mr I take account of what I gather is a mooted sale of a specific piece of property to a particular potential buyer. Each of the parties contends that this sale should take place if it proceeds. I am content to make orders giving effect to that. Mr I contends that if that mooted sale does not take place, then that property should become subject to the sale regime otherwise provided for in the orders. Ms R says that the property ought be transferred to her.  

12. I consider the order proposed by Ms R is more consistent with the basis upon which the trial was conducted (where no orders for sale were proposed and where a specific value was given to property and shares with no submissions made as to the treatment of any costs of sale).  I also consider that such an order provides greater certainty within a shorter timeframe than the order proposed on Mr I’s behalf.

13. Mr I also proposed an order that he make an initial payment of $44,000 to Ms R within 14 days of the date of the Orders. Counsel for Ms R, not unsurprisingly, took no issue with that proposed order and, in those circumstances, I will make an order for an initial payment of $44,000 to Ms R on the terms proposed by Mr I. Such payment will, of course, affect the total amount payable to Ms R and I will adjust that figure accordingly.

14. I will order accordingly.

Should a Stay Pending Appeal be Granted?

1. Mr I’s application for stay pending appeal seeks an order that my orders be stayed to the extent necessary to ensure that Ms R receives not more than 37.5 per cent of the “asset pool”.   That is the percentage entitlement contended by him at trial.  By reference to the findings made at trial, that would see the wife receiving property with a total value of about $836,200 – that is about $334,500 less than the entitlement ordered by me.

2. The parties are agreed that the wife should retain certain property including her house property at Suburb L. The net assets and superannuation interest received by her pursuant to orders agreed between the parties, would see her receiving just short of $300,000 in cash if the orders were stayed as Mr I proposes. She would be kept out of an amount of slightly more than that (about $330,000) pending the hearing and determination of appeal).

3. As earlier referred to, there was agreement at the bar table that the appeal would not be heard before the November Full Court sittings in Brisbane and, if not in those sittings, at the sittings in March 2014. If, as I consider more likely, it is the latter sittings, judgment in the appeal cannot be anticipated until approximately June 2014.   Accordingly, the timeframe within which the wife will be required to wait for about $330,000 of the judgment in her favour is about 12 months (or about nine months if the appeal is heard in November and judgment delivered within three months thereafter).

4. The principles applicable to Stay are well known. Those principles were summarised relatively recently by the Full Court in Jackson & Balen [2009] FamCAFC 131 at [28]. After referring to earlier authorities in this and other Courts, the Full Court held:

   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 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 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.

5. The granting of a stay involves the exercise of a discretion. As a result, considerations familiar to the exercise of judicial discretion are relevant including, for example, delay, hardship and bona fides (see, for example, Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681). Some assessment of the prospective merits of the appeal must be undertaken – a task not necessarily easy for the judge whose orders are appealed from where caution should properly attend comments made by that judge in respect of the appeal more generally.

6. Written submissions on behalf of Ms R contend that “the husband has the usual difficulty associated with appeals from discretionary judgments” and go on to submit that “[h]ere, the relief sought on appeal seems extraordinary given the facts below, reasons for judgment and the outcome in respect of the other couple that had quite different facts.”  Ultimately, it is submitted that “the appeal is hopeless.” I reject that submission. It seems to me that the appeal is brought bona fides and, by reference to the grounds, I am of the view that the appellant agitates an appeal that is arguable. 

7. Submissions by Ms R’s counsel also refer to factors referred to earlier in these Reasons relating to the apparent inaction on the part of Mr I (indeed both husbands) in preparation for meeting what, even on their own respective cases, was an entitlement of their respective wives giving rise to a consequent reasonable expectation of them taking steps to meet that prospective entitlement.  The absence of them doing so is said to raise questions about the bona fides of the appeal. In essence, it is argued that the appeal is brought for the purpose of further delaying the payment to Ms R of her entitlement.

8. I accept that the length of the time over which the proceedings were pending and the apparent lack of substantive action designed to meet the judgment gives rise to understandable suspicions of that type on Ms R’s part.  Ultimately, however, in the context under consideration, I am unable to persuade myself that the appeal has delay as its purpose and/or that the appeal is brought other than bona fide.  I also reject the submission that the inability of Ms R and Mr I to reach agreement in respect of the orders consequent upon the findings at trial is productive of a finding (or contributes to a finding) of lack of bona fides.

9. The real issue in respect of the application for stay is, as it seems to me, the need to balance in the exercise of discretion two central matters. 

10. The first of those matters is the potential hardship to the wife occasioned by being kept out of a significant sum of money for what is a significant period of time in circumstances where the judgment appealed from is presumed correct.  That factor is exacerbated, I accept, by the litigation history of this matter (which includes proceedings in the Supreme Court and which, in its totality, embraces a significant period of time). 

11. The second and competing matter is the prospect that an appeal will be rendered nugatory if orders are carried out in accordance with the findings at trial.  In addition to (and related to) that factor, Mr I asserts that, by reason of the means by which the order in favour of Ms R must be met – that is, he contends, the need to sell more assets of the company than might otherwise be necessary if his appeal is successful – there is a particular aspect to the appeal being rendered nugatory (or, alternatively, that is an aspect of hardship to him that must be weighed in the discretionary balance).

12. Submissions on behalf of Ms R contend in answer to those assertions that the wife has, and had prior to the judgment, sufficient assets including real property to provide for any repayment to the husband in the event of a successful appeal. In that respect, I repeat, it is agreed that the wife will retain her real property at Suburb L, (subject to a mortgage) together with other property and her superannuation interests. Putting aside the superannuation interests for the purposes of the current application because they are not immediately available to Ms R, she would have assets of about $250,000 and will receive approximately $300,000 pending the appeal if the stay is ordered. No evidence is offered by the wife as to her intentions with respect to that sum.

13. In respect of the second matter to which reference has earlier been made, it is submitted on behalf of Ms R that, because assets will need to be realised in one form or another to pay that $300,000 sum, or the greater sum if Mr I’s appeal is unsuccessful, there is little difference if the whole of the amount due to the wife is paid.  I do not accept this submission. On the face of the evidence before me, the difference between what the company might have to realise in the event of the success of appeal, compared to that which might occur in the event of failure, is significant in light of the type and use of assets within the company form where the amount due to the wife will likely come.

1. It is also contended on behalf of Ms R that she “has a strong application for costs against the husband and the other respondents which, if successful, will also require asset sales by the same company of a further amount of up to $360,000.”  Counsel for Ms R submits that her “strong case” emanates from offers made by her that, it is contended, amount to less than the 37.5 per cent for which the husband contends upon the successful outcome of an appeal. That may be so, but s 117(1) prevails before any order for costs is made and, in any event, begs the question of whether, pending appeal, there would be a stay of any order for costs made in favour of Ms R.

2. In my judgment, balancing the considerations relevant to the exercise of my discretion should result in an order for stay pending the appeal being made in the terms contended for by Mr I.

3. I will order accordingly.

The Applications for Costs

1. The various applications for costs before me are, it is agreed, to be the subject of directions so as to permit any necessary material and submissions to be filed ahead of an appointed hearing date.  

2. However, an application is made on behalf of Mr I that the application by Ms R for the costs of trial should await the hearing and determination of the appeal. I reject that application.

3. First, I am conscious of the time involved in the hearing and determination of the appeal. Secondly, if the issue of costs is determined and considered to contain appealable error, any appeal from the order for costs can (subject of course to any order by the Full Court) be heard at the same as the substantive appeal. Thirdly, the judgment is presumed correct until the Full Court says otherwise and if the appeal is unsuccessful, then the determination of an order for costs is (subject to any appeal from it) determined without the need for litigation post-appeal. Fourthly, and importantly, it seems to me that the arguments raised in respect of the postponement of the hearing of the application might be more properly directed to an application for either a stay of any costs order(s) pending appeal or a stay of execution of the order pending determination of the appeal.  Neither such application is precluded by the costs application being heard and determined prior to the appeal.

4. I will made directions for the hearing for the various applications for costs.

Is “Maintenance” Owing?

1. It is contended on behalf of Ms R that Mr I has failed to continue making a payment which had been made by him for some time.  This payment was made voluntarily by agreement between the parties.  There was no order for maintenance.  No application for maintenance had been made by Ms R.  The issue was not agitated at trial.

2. When asked what was said to sustain the claim, reference was made to [110], [119] and [121] of my trial Reasons. The past payments by the husband (in increasing sums) was referred to as a matter taken into account as part of all of the facts and circumstances relevant to s 79(4). No reference was made to the payment continuing post-trial, much less any order being so directed.

3. One might question the common sense of ceasing the payment at a time when Mr I (and the company of which he is a director) were involved in negotiations as to the best means of meeting the judgment, but nothing to which I have been taken suggests any legal obligation on his part capable of enforcement.

I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 26 July 2013.

Associate: 

Date:  26 July 2013