Eaton and Eaton - [2012] FMCAfam 444

FEDERAL MAGISTRATES COURT OF AUSTRALIA

EATON & EATON

[2012] FMCAfam 444

FAMILY LAW – Practice and Procedure – Application of a stay pending appeal.

Kelly & Kelly (1981) FLC 91-007

Applicant:

MR EATON

Respondent:

MS EATON

File Number:

BRC 5228 of 2009

Judgment of:

Jarrett FM

Hearing date:

15 February 2012

Date of Last Submission:

15 February 2012

Delivered at:

Brisbane

Delivered on:

15 February 2012

REPRESENTATION

Counsel for the Applicant:

Mr Alexander

Solicitors for the Applicant:

Walker Lawyers

Solicitors for the Respondent:

In person

ORDERS

The application in a case filed 1 February 2012 is dismissed.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRC 5228 of 2009

MR EATON

Applicant

And

MS EATON

Respondent

REASONS FOR JUDGMENT

Ex tempore

This is an application for a stay of a judgment for property adjustment wherein amongst other things I ordered that the husband pay the wife a sum of a little over $368,000. In addition I ordered the husband to do some other things such as to cause the removal of caveats over the title to certain property. I ordered the transfer of real property from one party to the other in a certain fashion.
The husband has filed a notice of appeal against those orders as he is entitled to do and he now seeks that the operation of the orders be stayed until such time as the appeal is determined.
The granting of a stay is a discretionary matter. A pending appeal does not operate as a stay of the operation of the orders under appeal.
It is generally accepted according to the authorities – and Mr Alexander has usefully referred to them in his written submissions – that the Courts do not “make a practice of depriving a successful litigant of the fruits of his or her litigation and locking up funds to which prima facie he or she is entitled.” The principles that are relevant and which have been established by the relevant authorities demonstrate that there are a number of factors that need to be considered when the Court comes to consider whether to grant a stay.
Those factors can be summarised as follows:
a)whether refusing the stay will render a successful appeal nugatory or it will be impossible or impractical to restore the parties to their pre-appeal position;
b)any hardship that would be suffered by either of the parties;
c)the merits of the appeal;
d)whether there has been a delay in filing the appeal;
e)the bona fides of the appellant; and
f)the time expected to pass before the appeal is heard.
Again Mr Alexander has usefully referred to the decision in Kelly & Kelly (1981) FLC 91-007 where Fogarty J said this:
“The general proposition is that an appeal does not as such operate as a stay but grants to a judge of the court a discretion to grant a stay in an appropriate case. Clearly there must be circumstances shown which would justify the exercise of that discretion. Each case must be looked at in the light of its own circumstances against the background of that general approach and a decision made in each case as to whether a stay is proper.”
In relation to each of the matters to which I have just referred, I make the following observations.
I am satisfied that the appeal is bona fide. Having looked at the notice of appeal the grounds do not appear to be frivolous or vexatious and I am content to approach the application on the basis that it is a bona fide appeal.
I say nothing about the merits of the appeal. It is difficult to assess the merits. The appeal has only just been filed and the notice of appeal handed up to me from the Bar table. As Mr Alexander pointed out, there is a certain invidiousness about assessing the merits of a notice of appeal against one’s own decision. He did not take that matter any further and I do not intend to do so either. I have already remarked that the appeal appears bona fide.
The husband points out that there has been no delay in filing an appeal, and that is so.
He says, however, that there would be great prejudice wrought to him if the orders were not stayed, if the operation of the orders were not stayed, and that if the orders are carried into effect a successful appeal may be rendered nugatory. The gravamen of his submission is that his financial circumstances are so poor that he simply cannot comply with the terms of the orders, and to make him do so would cause him hardship.
I am not satisfied that that is so. I am not satisfied because one of the core issues in this case was the access that the parties had over the course of their relationship to funds that were available to them, by way of borrowings albeit, from a family trust long established by the husband’s father. Whilst the husband deposes in his affidavit to having approached commercial lenders for the ability to borrow a sum which might assist him in meeting the judgment and his other obligations under the judgment, there does not seem to be much evidence about the capacity that he has to access financial assistance from the trust as these parties have habitually done during the course of their relationship. I am not satisfied that undue prejudice would be caused to the husband if the orders were not stayed.
Moreover it is a question of balance, and I accept that there is some hardship to be caused to the wife if the orders are stayed. I do not accept that the hardship is as the wife would have it, but nonetheless she is entitled to the fruits of the litigation. It is relevant to note that she has been living in the parties’ property at Property M rent free. She has been receiving some income from the Property Y property, and the submission made by the husband, with some force, is that that income has not been contributed towards the mortgage that has now fallen into default. That seems to be accepted by the wife with the consequence that the mortgagee is moving against or is likely to move against the property. Having said that the wife explains that she has made proposals to the husband in relation to that and has received nothing in response.
The appeal in my view would not be rendered nugatory if the operation of the orders was not stayed. The wife deposes in her affidavit to the use to which she might put the funds if they were ever paid to her, namely to reduce the mortgage on the Property M property, to meet some expenses and then to invest the balance. It is clear that the Property M property will always be available and having regard to the valuation evidence before me at trial if the wife reduces the outstanding borrowings on that property then there may well be, it seems to me, sufficient equity in that property to reverse the impact of the orders I have made if they are set aside on appeal.
One of the orders rates special mention: there is an order for the husband to cause the removal of certain caveats from the title to certain real property. In his affidavit he suggests that it is unreasonable and inequitable to order the release of those caveats. A caveat of course is not a security; a caveat simply records against the register of land interests a person’s claim to an interest or estate in that land – it operates as notice. The evidence before me was– and the case argued by the husband was – that these parties had loan accounts which had accumulated over the course of their relationship and which they owed to the trustee ((name omitted)) of a family trust that had been established by the husband’s father.
There was some significant evidence given in the case about the way in which those loans had accumulated and how they were recorded in the books of the trust. They were recorded as loans. It was not suggested that there was any particular security granted in respect of those loans, no mortgage or any other security interest. (name omitted) was not made and did not seek to be joined to the proceedings.
In those circumstances it is difficult to see any basis upon which any caveat registered over the relevant property could be maintained. I accept the wife’s evidence that the presence of the caveats represent a significant difficulty for her in terms of her complying with her obligations under the orders.
I am not satisfied that I ought to exercise my discretion in favour of granting a stay. The application is refused.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Jarrett FM

Date: 11 May 2012