DRURY & BENSON (No.4)
[2020] FCCA 3157
•6 August 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DRURY & BENSON (No.4) | [2020] FCCA 3157 |
| Catchwords: FAMILY LAW – Stay Application – where the Applicant has appealed against final orders for property settlement – where the Applicant seeks a partial stay of orders for him to make payment to the Respondent in the sum of $615,726 – consideration of the principles in Aldridge & Keaton (Stay Appeal) – orders made for the Applicant to make a partial payment to the Respondent in to the sum of $500,000. |
| Cases cited: Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 Kelly & Kelly (1981) FLC 91-007 Matthews & Matthews (2006) FLC 93-304 |
| Applicant: | MR BENSON |
| Respondent: | MS DRURY |
| File Number: | ADC 3749 of 2015 |
| Judgment of: | Judge Kari |
| Hearing date: | 6 August 2020 |
| Date of Last Submission: | 6 August 2020 |
| Delivered at: | Adelaide |
| Delivered on: | 6 August 2020 |
REPRESENTATION
| Counsel for the Applicant | Mr Praolini |
| Solicitors for the Applicant: | Kennedy Partners |
| Counsel for the Respondent: | Ms Pyke QC |
| Solicitors for the Respondent: | D’Angelo Lawyers |
ORDERS
That subject to the Respondent’s compliance with Order 3 hereof, the Applicant pay the amount of $500,000.00 (“the payment”) to the Respondent within 30 days of the date of this Order by way of partial satisfaction of Order 2(b) of the Orders made by the Federal Circuit Court of Australia on 10 February 2020 (“the Orders”), and Orders 2(b) and 2(d)(ii) of the Orders be otherwise stayed pending final determination of the Applicant’s Amended Notice of Appeal filed 20 July 2020 (“the Appeal”).
That the Applicant cause the payment to be made by electronic funds transfer (EFT) to an account as nominated by the Respondent within 7 days of the date of this Order but in default of any such nomination, into the trust account of the Respondent’s solicitors, D’Angelo Lawyers.
That within 7 days of the date of this Order, the Respondent do all such acts and things and sign all such documents, at her expense, to withdraw the caveat registered against the title of the property situate at KK Street, Suburb EE in the State of South Australia (“the Suburb EE property”) being registered caveat number …21 and Order 2(c) of the Orders be otherwise discharged NOTING THAT the Respondent intends to lodge a fresh caveat over the property to secure the balance of the judgment sum.
That pending the determination of the appeal, and provided the Respondent has complied with Order 3 hereof, the Applicant be and is hereby restrained by injunction from encumbering, disposing of, or otherwise dealing with his interest in the Suburb EE property without further Order of this Honourable Court and/or written consent of the Respondent (save as to the amount of $500,000) SAVE AND EXCEPT as is necessary to secure any borrowing to meet his obligations pursuant to Order 2(b) of the Orders.
That the Amended Application in a Case filed 22 July 2020 and the Response filed on 26 May 2020 be dismissed.
UPON NOTING the oral application for costs made by the Respondent:
(a)Within 14 days the Respondent do file and serve any Affidavit and any Amended Financial Statement that she intends to rely on with respect to the question of costs; and
(b)Within 14 days thereafter the Applicant file and serve any Affidavit and Financial Statement that he intends to rely on with respect to the question of costs.
That the question of costs be adjourned to 26 October 2020 at 10:30am.
IT IS NOTED that publication of this judgment under the pseudonym Drury & Benson (No.4) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
No. ADC 3749 of 2015
| MR BENSON |
Applicant
And
| MS DRURY |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
This matter comes before me with respect to an application for a stay filed by the Applicant. The proceedings have some significant history before me and, while I have not done a count of applications that I have heard and determined, it is not lost on me that over the last 12 months I have determined the following applications in no particular order:
a)Firstly, I heard a trial with respect to the question of property settlement across three days, last year and I heard final submissions in December last year before delivering reasons on 10 February 2020.
b)Secondly, I have heard and dismissed an application to vary parenting orders originally made by Justice Berman, that application having been brought by the father, and that application was dismissed by me on the basis of principles in Rice & Asplund 1979) FLC 90-725.
c)I have also heard and determined a costs application with respect to the parenting applications before me and so far as that application was concerned, I was satisfied that it was appropriate to make costs orders whereby the father pay the mother's costs with respect to those proceedings.
The current application comes before me with respect to the first of the matters that I heard and determined, namely, the parties' competing applications for settlement of property.
As I have said earlier, I delivered my reasons in that regard on 10 February 2020. Pursuant to those reasons I made orders that would see the mother, Ms Drury, retaining 60 percent of the property of the parties, understanding as I do that I considered it was appropriate that a single pool of property be used to determine the assets of the parties, that pool including both non-superannuation entitlements and the parties' superannuation entitlements.
As a consequence of those orders Mr Benson has lodged a Notice of Appeal with respect to the same. That Notice of Appeal has been amended and I have before me the Amended Notice of Appeal filed on 20 July 2020. I will come back to that later.
In terms of the appeal I am told that the appeal is listed for hearing in the August sitting of the Full Court which is imminent.
The current application comes before me because Mr Benson, who is the appellant, has sought a stay of some of the orders made as a consequence of the final orders that I made.
The stay, while initially sought with respect to the entirety of a payment he was required to make pursuant to those orders in the amount of $615,726, has now been amended such that only a partial stay of that payment has been sought by Mr Benson. As a result of the amendment the amount that Mr Benson is now asking that he be required to pay, pending the determination of his appeal, is an amount of $350,000, which is a little over half of what he says he is ultimately required to pay Ms Drury if the appeal is unsuccessful and my orders are maintained.
I also understand having now properly considered the Notice of Appeal and, in particular, annexure B to the Notice of Appeal and the orders sought, that the appellant Mr Benson is asking that the matter be remitted for hearing if he is successful and not that the Full Court re-exercise discretion.
Having said that, I understand that Ms Drury’s position with respect to the appeal, as a consequence of submissions from her counsel today, is that she would be inviting the court to re‑exercise discretion if, indeed, the appeal is successful.
Understanding that, I also understand that the position argued by Mr Benson before me at trial was that the division of property be one that favoured him by way of a 60 per cent division in his favour, which is the reverse of the outcome that I ultimately ordered in favour of Ms Drury.
I am conscious with reference to the Notice of Appeal that the grounds of appeal would appear not to seek to interfere with my findings and factual findings both with respect to the composition of the pool and other associated matters.
Indeed, the grounds of appeal, on my reading of the appeal, appear to be limited to two matters: firstly, matters related to what is termed a Kennon adjustment that I ordered in favour of Ms Drury which was in the amount of five percent, together with, secondly, a ground of appeal directed to my assessment of contributions generally so far as the appellant Mr Benson is concerned.
Understanding all of those matters I have heard submissions and I have tried to understand the effect of the orders if I was to grant the partial stay that Mr Benson is now promoting.
With reference to the schedule in my reasons delivered on 10 February 2020, at paragraphs 125 and 126 I understand that the net assets of the parties is a figure of $2,259,053. The payment that I ordered to Ms Drury in the amount of $615,726 would result in her retaining assets totalling 60 per cent.
I understand that since the making of those orders the parties have distributed proceeds from the sale of the former matrimonial home at Suburb E. I am told that Ms Drury received funds from that sale in the amount of $255,275.
I am also conscious that in my reasons, and with reference to the schedule I have just referred to, I determined that Ms Drury was retaining assets in her possession of $459,658.
While I am conscious that Ms Drury has said that she has used some funds she has retained, both by way of partial property settlement and as a result of the orders made with respect to the proceeds of the Suburb E property, that she has expended some of those funds on legal fees. Ultimately I do not propose to concern myself with those matters given the provisions of section 117 that each party bear their own costs. At this juncture I do not propose to take into account the effect of costs because that is something that will be the subject of redress ultimately depending on whether the appeal is successful or not.
I am told that Ms Drury has received the figure of $255,275 from the sale of the Suburb E property. On my calculation she has at this juncture retained a figure of $714,933 as and by way of the total assets in her possession and control at this stage.
The payment that Mr Benson now proposes to make is a payment of $350,000. On my calculation that would see Ms Drury retaining total assets of $1,064,933. On my calculation again that is a figure which is approximately $100,000 more than a 40 percent division in Ms Drury’s favour, which is the amount Mr Benson promotes if his appeal is successful.
I have had regard and I have been directed by both counsel to those matters discussed by the Full Court in Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106. In particular, I have had regard to those matters set out at paragraph 18 of the judgment which sets out those principles that are applicable in determining an application for a stay which are as follows:
18. … 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.
I now propose to consider those matters individually.
I accept that the appellant, or the applicant for the stay, rather, is not required to show special circumstances. I equally acknowledge that Ms Drury is entitled to the benefit of the judgment generally and I have had regard to Kelly & Kelly (1981) FLC 91-007, which Ms Pyke QC has referred me to.
It seems to me that the significant factors that are open for consideration in this matter are:
a)Whether the stay should be granted on terms fair to all parties given my understanding particularly that the appellant is seeking only a partial stay;
b)A weighing of the risk of an appeal being rendered nugatory if a stay is not granted;
c)A preliminary assessment of the strength of the proposed appeal and whether the appellant has an arguable case; and
d)The desirability of limiting the frequency of any change in the children's living arrangements and the period of time in which the appeal can be heard, and the best interests of the children.
I will come back to the first of the principles that I have just identified which is whether a stay should be granted on terms fair to all parties.
In terms of weighing the risk of an appeal being rendered nugatory that too is bound up in the topic of fairness that I have just discussed, but I will deal with it now. Unfortunately, Mr Benson has not put substantial evidence before this court to understand his position with respect to an appeal being rendered nugatory.
Indeed, when he filed his application for a stay he filed a short affidavit in support. That affidavit asserts at paragraph 11 that the appeal would be rendered nugatory, however, there is no elaboration of the details of why he asserts that to be so. I am simply invited to accept his assessment in that regard. Indeed, the affidavit in support of the stay is limited to five short paragraphs that take up less than one page of the affidavit.
Significantly, as elucidated throughout the course of the hearing and in discussions with counsel for Mr Benson, it is still no clearer to me why the appellant says the appeal would be rendered nugatory.
I ultimately got to a position where Mr Benson's counsel submitted, after having taken instructions from his client, the following:
a)Firstly, that Mr Benson wishes to retain the Suburb EE property; and
b)Secondly, that Mr Benson has a finance application in place and that he is able to borrow up to an amount of $582,000, although it was put to me that Mr Benson only considers he is able to service an amount of $350,000 confidently.
Frustratingly, I must say, I have not been given any information on oath by Mr Benson in relation to any of those matters. Those matters were only elicited from his counsel as a result of questions asked from the bench during the course of the hearing. That is a significant criticism that can be made of Mr Benson’s position.
The criticism is all the more apparent given the application for a stay has taken some time to get on for hearing in circumstances where I am conscious that the parties had some negotiations with respect to a partial stay, but, in addition, Mr Benson has had the benefit of the submissions filed on behalf of Ms Drury for some significant time now, and a criticism was made in those submissions as to the lack of Mr Benson’s bona fides in failing to put that information before the Court and yet those matters have still not been addressed by him.
Indeed, Mr Benson filed his Amended Application seeking a partial stay, on 22 July 2020 and no affidavit was filed in support to explain why his position had changed and why he now only promoted a partial stay.
Moreover, Mr Benson has not filed any Financial Statement so that I can have some understanding of the submissions now being put to me that he is unable to service anything more than a figure of $350,000. For all of those reasons I am not confident to accept the submissions now put that the appeal would be rendered nugatory if the stay was not granted.
So far as a preliminary assessment of the grounds of appeal, I make the following comments:
a)While I accept that the submissions put with respect to the Kennon topic are ones which are ultimately for determination by the Full Court, I am mindful that the adjustment that I granted in that regard was not a substantial adjustment as and by way of a percentage division. It was a figure of five per cent.
b)In addition, so far as the criticism as to the assessment of contributions, as counsel would know that is a ground of appeal which is difficult to succeed upon generally.
I make no further comment in regards to the preliminary assessment of the appeal.
The other factor that is pleaded with some force on behalf of Ms Drury are matters that relate to the children's living arrangements and the best interests of the children. It is not lost on me that these are children who, as a consequence of the hearing that I heard with respect to Rice & Asplund issues, and as a result of the evidence I heard during the trial that I am well aware that these children have substantially high needs as a result of the myriad of difficulties they have faced both as a result of the family violence which they are said to have witnessed, but also as a consequence of the acrimonious litigation that continues between their parents.
Ms Drury’s position is and was at trial and it, again, is something I commented on in my judgment, that she has been locked out of the parties' matrimonial assets from the time of separation and, indeed, her position now is that she wishes to end that such that she is able to get into the property market and house these children and give them stability. That is a significant factor exercising my mind and I know from the written submissions of Counsel that is a reason why Mr Benson ultimately amended his position such that only a partial stay be sought.
Mr Benson has determined that if he was to make a payment of $350,000 to Ms Drury that those funds, combined with the amount of funds that the wife has retained in her bank account as set out in her financial statement, being a figure of $240,000 would leave Ms Drury with sufficient funds with which to purchase a home to stabilise the living arrangements for the children and herself. Why that figure is one that he considers appropriate is beyond me, but, in any event, that is one of the reasons he gives, or a reason he gives, to promote a partial stay.
My mind is also exercised by the time-frame in which this matter is going to be heard. While Mr Praolini, on behalf of Mr Benson, is right when he submits to the court that the August sittings, being this month, are imminent, that is not the end of the matter. As properly put on behalf of Ms Drury, there will be a delay in the Full Court delivering their reasons and, while I would like to think that reasons will be delivered swiftly, that is something I am unable to predict. Equally, it is not lost on me that if Mr Benson is successful in his appeal, and successful in having the matter remitted for hearing, then that would further increase the delay to when Ms Drury will ultimately receive her entitlements.
I do not know, but that may be another reason that Mr Benson determined that a partial stay was more appropriate. I do not think that it could be said that the delays are insignificant and that if ultimately the appeal is unsuccessful the delays would not prejudice Ms Drury significantly.
I now turn to the final factor which is whether or not a stay should be granted on terms that are fair to all of the parties. I have already referred to the amount that Mr Benson now promotes, being an amount that is approximately $100,000 over what he ultimately says Ms Drury’s entitlements are if his appeal is successful and - and it is a big and - if he is successful in ultimately securing a 60 per cent adjustment in his favour particularly given the way the grounds of appeal are argued.
Having said that, and having done some calculations of my own, in my view while I do consider it appropriate to only grant a partial stay, I do not consider it appropriate to grant it on the terms promoted by Mr Benson.
I am now told that Mr Benson is able to borrow a figure of up to $582,000. I have not been given any evidence as to why Mr Benson asserts he can only service $350,000 and there is some force in the submission put on behalf of Ms Drury that Mr Benson is unlikely to have received approval for borrowings if it is one that he was unable to service.
Having done some calculations of my own, in my view, the payment that I consider appropriate for Mr Benson to make to Ms Drury is a payment of $500,000. On my calculations of the pool available for division as determined by me at the conclusion of the trial, and bearing in mind the sum of $714,933.000 that Ms Drury has retained, that is an adjustment in her favour of 53 per cent. In my view at this juncture that is an amount that I consider appropriate in all of the circumstances. It would leave Ms Drury with a total figure at this stage, bearing in mind those funds she has retained in cash in her bank accounts, with an amount of $739,087.
In my view, that is a substantial sum which will enable Ms Drury to house herself and the children appropriately pending determination of the appeal and if, indeed, the matter is remitted for re-hearing.
For all of those reasons I propose to make the following orders.
I am also invited to make an order staying the provision and calculation of interest on the original judgment sum pursuant to paragraph 2(b) of my orders. I decline to make that order in circumstances where counsel for Ms Drury has directed me to the decision of Matthews & Matthews (2006) FLC 93-304 and, in particular, paragraphs 65 and 66 of the same. I accordingly decline to make those orders.
NOTE: These reasons were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to make the orally delivered reasons easy to read.
I certify that the preceding forty six (46) paragraphs are a true copy of the reasons for judgment of Judge Kari
Associate:
Date: 19 November 2020
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Appeal
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Injunction
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Costs
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Stay of Proceedings
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