Fowles & Fowles (No 4)
[2024] FedCFamC1A 174
•3 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Fowles & Fowles (No 4) [2024] FedCFamC1A 174
Appeal from: Fowles & Fowles (No 4) [2023] FedCFamC1F 819 Appeal number: NAA 305 of 2023 File number: MLC 8587 of 2015 Judgment of: ALDRIDGE, CAMPTON & SCHONELL JJ Date of judgment: 3 October 2024 Catchwords: FAMILY LAW – APPEAL – STAY – Application for stay of orders pending application for special leave to appeal to the High Court of Australia – Subject orders require the applicant to transfer his interest in a property to the respondent and pay her a fixed sum – Applicant asserts he will suffer irredeemable prejudice if a stay is not granted – Absence of evidence as to the applicant’s financial position – Prospects of a grant of special leave are not substantial – Balance of convenience favours the respondent – Respondent concedes stay of order for transfer of property – Order made for payment of a fixed sum to a controlled monies account pending the outcome of the special leave application – Application otherwise dismissed. Legislation: High Court Rules 2004 (Cth) r 41.02.1 Cases cited: Fowles & Fowles [2023] FedCFamC1A 238
Fowles & Fowles (No 2) [2024] FedCFamC1A 115
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681; [1986] HCA 84
Number of paragraphs: 33 Date of hearing: 3 October 2024 Place: Sydney Counsel for the Applicant: Mr Wyles KC with Ms Frederico Solicitor for the Applicant: Nicholes Family Lawyers Counsel for the Respondent: Mr Sheales Solicitor for the Respondent: Lander & Rogers ORDERS
NAA 305 of 2023
MLC 8587 of 2015FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR FOWLES
Applicant
AND: MS FOWLES
Respondent
ORDER MADE BY:
ALDRIDGE, CAMPTON & SCHONELL JJ
DATE OF ORDER:
3 OCTOBER 2024
THE COURT ORDERS THAT:
1.Order 1(b) of the orders of 6 October 2023 is stayed pending the hearing of the application for special leave to appeal to the High Court of Australia and any subsequent appeal or further order of this Court.
2.Upon the applicant paying the sum of $1,240,231 to the respondent’s solicitors to be held on trust in a controlled monies account until further order of this Court, or upon securing payment of that sum to the written satisfaction of the respondent, Order 3 of the orders of 6 October 2023 is stayed pending the determination of the application for special leave to the High Court of Australia and any subsequent appeal or further order of this Court.
3.The Application in an Appeal is otherwise dismissed.
4.Written submissions of no more than three pages dealing with the question of costs are to be filed and served within seven days.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 the pseudonym Fowles & Fowles has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTALDRIDGE J:
This is an application for a stay of orders made by a judge of the Federal Circuit and Family Court of Australia (Division 1) on 6 October 2023 in property settlement proceedings between the parties and of the orders dismissing the appeal, pending the determination of an application for special leave to appeal to the High Court of Australia. The subject orders required the applicant to transfer all of his right, title and interest in a property at X Street, Melbourne (“the X Street property”), to the respondent, free of encumbrance. The applicant was also ordered to pay $1,240,231 to the respondent.
The orders required the apartment to be transferred within 90 days and the payment to be made within 30 days of the orders being made. The applicant has not complied with these orders and an enforcement hearing is listed before the Court tomorrow.
As is conceded by the applicant’s counsel, a stay of the orders dismissing the appeal will not assist the applicant and need not be considered further.
In her Response to an Application in an Appeal filed 30 September 2024, the respondent proposed an order that the applicant pay the sum of $1,240,231 and accrued interest into a controlled monies account to be held on trust pending the outcome of the application for special leave and any subsequent appeal.
At the hearing of the application, the respondent further indicated that she did not oppose an order staying the transfer of the X Street property to her, again pending the outcome of the special leave application and any subsequent appeal.
That approach leaves in force a number of orders for payment of miscellaneous sums of money and, importantly, the order requiring the applicant to continue to pay the mortgage over the X Street property and the order requiring its discharge.
The applicant continued to press for a stay of all orders without condition.
BACKGROUND
The applicant filed a Notice of Appeal on 3 November 2023. On 20 December 2023, Austin J stayed the operation of the order for the transfer of the property to the respondent and the payment of the $1,240,231 pending the determination of the appeal (Fowles & Fowles [2023] FedCFamC1A 238). His Honour declined to stay the order requiring the applicant to discharge the encumbrance over the property. Nonetheless, that order has also not been complied with.
The appeal was dismissed on 12 July 2024 (Fowles & Fowles (No 2) [2024] FedCFamC1A 115).
In mid-August 2024, the applicant filed an application for special leave to appeal in the High Court of Australia. He also sought an order that compliance with r 41.02.1 of the High Court Rules 2004 (Cth) be dispensed with as the application was not filed within the prescribed time.
The present application was filed on 12 September 2024.
CONSIDERATION OF A STAY
The applicant seeks to preserve his position pending determination of the application for special leave to appeal, which may not be resolved this year. He asserts that he will suffer irredeemable prejudice if he is obliged to pay $1,240,231 to the respondent.
First, the applicant says that if he pays any money to the respondent, she will immediately use those funds to pay her creditors, especially her lawyers. Once that sum is spent, she will then have no capacity to repay it to the applicant if any appeal is ultimately successful. That possibility is avoided by the order proposed by the respondent.
The second prejudice is said to be the raising of the sum of $1,240,231 itself and the loss of its use. Such a prejudice can easily be inferred but, in the absence of any evidence from the applicant as to his financial position, the weight to be given to that prejudice is difficult to determine. It might be a minor or major inconvenience but that cannot be determined on the evidence.
In the absence of such evidence, it is also difficult to determine whether any delay in the time for the payment to the respondent would adversely affect the applicant’s ability to pay it when due.
In support if this application, in an affidavit filed 12 September 2024, the applicant said:
20.Pursuant to Order 1(a) of the Orders dated 6 October 2023, I am required “to repay any loan secured by ..” the [X] Street apartment registered to Westpac. I am not in a financial position to repay the mortgage or any loan secured by the [X] Street apartment for the following reasons:
i.I have spoken with Westpac and understand that the mortgage repayments are currently on hold pending negotiations in relation to new terms.
The amount outstanding under the mortgage, at least as at 29 June 2023 according to the Statement of Claim filed by the mortgagee in possession proceedings commenced against the applicant in September 2023, was $57,381.82 (Annexure “[MF]-2” of the respondent’s affidavit filed 30 September 2024). However, in the absence of relevant evidence, I would not be prepared to find that this was because the applicant has not been able to afford to make those payments merely on that say so, particularly given the history of non-disclosure found by the primary judge.
I would also note that since 21 August 2024, the applicant has paid, from his income and from a sum of $100,000 which had been paid on account of security for costs and subsequently released, total legal costs of $257,276.56.
Compliance with the orders requiring the applicant to discharge the mortgage would involve no more that the applicant rectifying his default with the mortgagee by paying it. As he is legally obliged to do so anyway, he would lose nothing by complying with the order.
Presently, the applicant has no right of appeal – that depends upon his application for special leave to appeal being successful. The respondent is fully entitled to pursue the fruits of the judgment.
Justice Brennan said in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681 at 684, “A stay to preserve the subject-matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted”.
As to the matters to be taken into account in determining such an application, his Honour said (at 685):
In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court’s discretion. In each case when the Court is satisfied a stay is required to preserve the subject matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.
The application for special leave identifies the following as the questions of law of public importance relevant to the administration of justice:
3.This application raises questions of law of public importance that coincides with the interests of the administration of justice in this particular case.
(1)Did the trial of this matrimonial cause over a period of 3.5 years on 43 days (with substantial gaps between hearing days, cross-examination of the applicant for 53 hours over 22 days, and the publication of reasons and judgment 5.5 years after the commencement of the trial) give rise to an improper exercise of judicial power in failing to ensure a fair trial at which the applicant could put his case, and have his case properly considered? The answer is “yes”.
(2)Would a fair-minded lay observer – mindful of the “ordinary judicial practice” that a trial judge is not to enter the fray including by cross-examining and disparaging a party giving evidence – reasonably apprehend that a judge engaging in such conduct towards a party might not bring an impartial mind to the resolution of a dispute? The answer is “yes”
(Footnote omitted)
(Annexure “[MRF]-1” to the applicant’s affidavit filed 12 September 2024)
As I understand these matters, the applicant does not challenge the identification of the relevant legal principles by the Full Court or seek to suggest that the High Court should re-consider the content of those principles. Rather, the applicant invites the High Court to determine that the application of those principles to the facts in this matter should result in a different outcome.
The history of special leave applications suggests that the High Court is less likely to grant special leave in matters of this kind as opposed to matters where the content of the principle to be applied is in dispute.
Most applications for special leave are unsuccessful.
It follows that the prospects of special leave being granted cannot be regarded as substantial.
The legitimate interests of the respondent cannot be ignored. If they can be preserved in a way that does not render any appeal nugatory, that is an appropriate way of balancing the competing claims and doing justice between the parties. Such a process must be based on the evidence that is before the Court. The obvious lack of evidence does not assist the applicant.
It follows that the balance of convenience favours an order securing the payment of the sum of $1,240,231 by payment into a controlled monies account or it being secured to the satisfaction of the respondent.
I would not stay the order requiring the payment and discharge of the mortgage as the applicant is legally bound to the mortgagee to do so in any event.
Given the extraordinary nature of the discretion to be exercised, and taking all the above matters into account, I propose the following orders:
(a)Order 1(b) of the orders of 6 October 2023 is stayed pending the hearing of the application for special leave to appeal to the High Court of Australia and any subsequent appeal or further order of this Court;
(b)Upon the applicant paying the sum of $1,240,231 to the respondent’s solicitors to be held on trust in a controlled monies account until further order of this Court, or upon securing payment of that sum to the written satisfaction of the respondent, Order 3 of the orders of 6 October 2023 is stayed pending the determination of the application for special leave to the High Court of Australia and any subsequent appeal or further order of this Court;
(c)The Application in an Appeal is otherwise dismissed; and
(d)Written submissions of no more than three pages dealing with the question of costs are to be filed and served within seven days.
CAMPTON J:
I agree with the orders proposed and the reasons given by Aldridge J.
SCHONELL J:
I too agree with the reasons and the orders as proposed by Aldridge J.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justices Aldridge, Campton & Schonell. Associate:
Dated: 4 October 2024
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