Francis and Francis

[2008] FamCA 111

FAMILY COURT OF AUSTRALIA

FRANCIS & FRANCIS [2008] FamCA 111

FAMILY LAW – PRACTICE AND PROCEDURE – Stay pending appeal

APPLICANT: Mr Francis

RESPONDENT: Ms Francis

FILE NUMBER: SYF 3032 of 1997

DATE DELIVERED: 20 March 2008

PLACE DELIVERED: Parramatta

PLACE HEARD: Sydney

JUDGMENT OF: STEVENSON J

HEARING DATE: 6 March 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mrs Knox

SOLICITOR FOR THE APPLICANT: Dettmann Longworth Lawyers

FOR THE RESPONDENT:	In person
INDEPENDENT CHILDREN’S LAWYER	Ms Karagiannis

Orders

1. That pending the determination of the Appeal (EA 43 of 2007) paragraph 9 of the Orders made 2 March 2007 be stayed.

2. That pending the determination of the Appeal (EA 43 of 2007) the husband be restrained from disposing of the following assets without firstly providing to the wife or her solicitors 28 days written notice of his intention:

   a)Land at T, Queensland;

   b)His shares in E Holdings Pty Limited.

3. That pending the determination of the Appeal (EA 43 of 2007) the husband be restrained borrowing against the following assets such that the combined equity is lower than $160,000:

   c)Land at T, Queensland;

   d)His shares in E Holdings Pty Limited.

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

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: SYF 3032 of 1997

MR FRANCIS

Applicant

And

MS FRANCIS

Respondent

REASONS FOR JUDGMENT

1. There has been an extraordinarily long history of litigation between the husband and the wife.   After 20 hearing days, orders were made by Lawrie J on 2 March 2007.  These orders included a requirement that “the husband repay to the wife the sum of $153,061.08”.  The husband has appealed this order and sought a stay, pending the decision of the Full Court.  His stay application contained a provision that he be restrained from disposing of or encumbering certain assets so as to reduce their net equity below $160,000.

2. The wife opposed the application for a stay.  The principle reason seemed to be that she is suspicious that the husband’s financial position will render the proposed injunctions meaningless.  She believes that the husband has a long history of failing to disclose his true financial situation and that his assets may already be encumbered to such an extent that her position would not be protected. 

3. The wife pointed out that the husband’s solicitor advised her, in a letter dated 21 September 2007:-

   “Our client has changed to this firm his interest in the nominated assets to pay his legal fees.”

   The “nominated assets” are vacant land in Queensland and shares in a private company known as “[E] Holdings Pty Limited”.   These are the assets in respect of which the husband offers injunctive relief.  The wife was concerned that there was no evidence of the value of the husband’s shares in the company. 

4. On 5 March 2008 the wife filed an application seeking orders, inter alia, that the husband complete and serve a Financial Statement.  The husband has consistently refused to provide this information over a period of several months, as correspondence between his solicitor and the wife’s former solicitor makes clear.  The basis of the husband’s objection to provision of financial information did not emerge from this correspondence, nor was I given any reason during the hearing of the stay application.

5. The authorities establish that the following matters are relevant to the determination of a stay application:

   ·    Whether the refusal of a stay will render a successful appeal nugatory or make it impossible or impracticable to restore the position;

   ·    Any hardship that would be suffered by the applicant and respondent as a result of granting or refusing the stay;

   ·    The merits of the appeal;

   ·    Whether there has been a delay in applying for a stay;

   ·    The bona fides of the applicant;

   ·    The time expected for the hearing of the appeal.

6. In my view, refusal of a stay would be likely to render a successful appeal nugatory.  In evidence was a judgment of the Supreme Court of New South Wales, dated November 2007, in proceedings between the wife and the executors of the estate of her late mother.  The wife’s application for provision for her maintenance, education or advancement in life was unsuccessful and she was ordered to pay the costs of the executors. 

7. The judgment of the Supreme Court referred to the wife’s financial position, which can reasonably be described as precarious.  At that time she had a total income of approximately $750 per week and expenditure totalling about $1260.  Her assets consisted of a motor vehicle, nominal bank savings, furniture and personal effects.  She had liabilities totalling about $96,000 and was about to incur additional legal costs in the ongoing Family Court litigation. 

8. The husband says that he fears that he will never be able to recover any money which he pays to the wife, pursuant to the orders of Lawrie J, if his appeal is successful.  He relied upon the wife’s alleged history of non-compliance with a series of orders for costs and contribution to the fees of single experts, as set out in his affidavit.  It seems to me that there are valid grounds for the husband’s concern that any money paid by him to the wife would be unable to be recovered.  A successful appeal would thus be rendered nugatory, as she has no assets of substance. 

9. These circumstances, in my opinion, would amount to hardship to the husband if a stay is not granted.  On the other hand, there would be hardship for the wife in that she would be denied the fruits of her litigation.  It is a question of balancing these two considerations, having regard as well to other relevant matters.

10. The husband’s solicitor prepared the application in a case filed on 5 November 2007 and settled his affidavit sworn on 4 November 2007.  The husband deposed as follows, inter alia:-

    “I presently have a substantial debt for my legal proceedings to date well exceeding $200,000.  I have been very grateful my lawyers have not pressed me hard for these funds and I am hoping to get through the rest of this litigation before I can work out how I am going to pay for these debts.  I did however have to provide some funds for the appeal.  I have borrowed $50,000 which I have placed in the trust account of my solicitors.  I have also given my solicitors a charge over my assets from Family Court proceedings.  I believe there is sufficient equity, even after that charge, to allow for the order that I seek.”

    And further:-

    “I do propose however that I be subject to an injunction pending the outcome of my appeal so that I am restrained from disposing from my shares in [E] Holdings Pty Limited or the Queensland property without adequate notice to [the wife], and a further restrain from borrowing against either of those assets such that the combined equity is lower than $160,000.”

11. I would regard it as a very serious matter for the husband’s solicitor to put this application and written evidence before the Court, if the charge to secure payment of his own fees would render the proposal useless in terms of the wife’s position.  That being so, I assume that the charge does not mean that there will be insufficient funds to guarantee payment to the wife if the appeal is unsuccessful.   

12. Without going into the merits of the appeal in detail, it seems to me that the husband has an arguable case.  I was informed that his appeal is likely to be heard in June 2008, thus there is no question of a lengthy delay.

13. It is true that the husband delayed in making his application for a stay.  Correspondence between the party’s solicitors, however, demonstrates that extensive negotiations took place in an attempt to reach agreement on the terms of a stay.  I do not, therefore, regard this delay as a factor which militates against the granting of a stay.  Likewise, nothing in the evidence before me suggests a lack of bona fides on the part of the husband. 

14. On balance, therefore, I am inclined to order a stay of the order of Lawrie J.  I will make orders in accordance with the application in a case filed by the husband on 5 November 2007. 

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson

Associate:     

Date:              20 March 2008