George and George (No. 2)

[2015] FamCA 250

FAMILY COURT OF AUSTRALIA

GEORGE & GEORGE (NO. 2) [2015] FamCA 250

FAMILY LAW – STAY – Where the husband sought a stay of an order for property settlement – Application dismissed subject to conditions

Family Law Act 1975 (Cth)

Jackson & Balen [2009] FamCAFC 131

APPLICANT: Mr George

RESPONDENT: Ms George

FILE NUMBER: SYC 7612 of 2011

DATE DELIVERED: 2 April 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 2 April 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Litigant in person

COUNSEL FOR THE RESPONDENT: Mr Gould

SOLICITOR FOR THE RESPONDENT: York Family Law

Orders

1. Subject to the following orders, the husband’s Applications in a Case filed 27 February 2015 and 30 March 2015, seeking a stay of the orders made 27 January 2015 be dismissed.

2. Paragraphs 2 and 3 of the property settlement order made on the 27 January 2015, be varied by deleting the words “within three (3) months from the date of these orders” and inserting instead the words “on or before 4 June 2015”, provided that the husband shall pay to the wife on or before 4 June 2015 an amount of interest calculated on the sum of $115,455 from 27 April 2015 to the date of payment, in accordance with the Family Law Rules 2004 (Cth).

3. It be a condition of the refusal of the stay in order 1 that the wife ensure that until the conclusion of the proceedings commenced by the husband’s Notice of Appeal filed 20 March 2015, or further agreement between the parties in writing:

   3.1The property at T Street, Suburb F (“the Suburb F property”), remain in the wife’s sole name as registered proprietor after it is transferred to her.

   3.2The wife not encumber the property by an amount of more than the sum of $650,000, subject to the further written agreement of the parties or further order of the court.

   3.3The wife occupy the property, and in the event she vacates the property, she is to give the husband written notice that she has done so and is not to allow anybody else to occupy the property for a period of 28 days after that written notice, and the husband has liberty on 14 days to apply to re-occupy the property on the basis that he pay the wife market rent for the Suburb F property.

   3.4The husband will pay to the wife the sum of $600 per week calculated from the 27 April 2015 to the date of him vacating the Suburb F property such sum to be paid at the same time as the payment of the amount pursuant to paragraph 2.1.3 of the property settlement order made 27 January 2015.

4. The husband is to inform the wife as to when he has obtained approval for finance that would allow him to comply with paragraphs 2.1.2, 2.1.3, and 2.1.4 of the property settlement order made on 27 January 2015.

5. Any application for enforcement of orders be filed within seven (7) days together with a supporting affidavit and listed on 27 April 2015.

6. I reserve both parties costs of today to be dealt with on 27 April 2015.

IT IS NOTED that publication of this judgment by this Court under the pseudonym George & George (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 SYDNEY

FILE NUMBER: SYC 7612 of 2011

Mr George

Applicant

And

Ms George

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. By way of applications in a case filed on 27 February 2015 and 30 March 2015 the husband seeks a stay of an order for a property settlement made on 27 January 2015.  The wife seeks that that application for a stay be dismissed.

2. Part of the property settlement order allows the wife, if she satisfies certain conditions, to take ownership and possession of a property at T Street, Suburb F, the Suburb F property, which was the former matrimonial home, and requires the husband to give occupancy of that property to the wife.  The husband has been living in the property since the parties separated.

3. The conditions which the wife needs to satisfy are contained in paragraphs 2 and 3 of the order made on 27 January 2015:

   2.      Within three (3) months from that date of these orders:

   2.1.the husband do all acts on things and sign all documents necessary to:

   2.1.1.transfer to the wife all of his right, title and interest in the parties former matrimonial home situated at and known as [T Street, Suburb F] in the State of New South Wales being the whole of the land in folio identifier 22/1464 ("the [Suburb F] property");

   2.1.2.discharge the mortgage to the CBA in relation to the property situated at and known as [C Street, Town S] in the State of New South Wales being the whole of the land in folio identifier 3/802208 ("the [Town S] property");

   2.1.3.pay to the wife the sum of $115,455;

   2.1.4.in the event the mortgage on the [Suburb F] property in favour of the Commonwealth Bank (“the [Suburb F] mortgage”) exceeds the sum of $416,363, pay to the Commonwealth Bank the amount of that excess.

   2.2.Contemporaneously with the husband’s compliance with paragraph 2.1, the wife do all acts and things and sign all documents to:

   2.2.1.discharge the [Suburb F] mortgage up to a balance of $416,363;

   2.2.2.transfer to the husband all of her right, title and interest in:

   2.2.2.1.The [Town S] property;

   2.2.2.2.Citibank investment account …9275;

   2.2.2.3.Citibank investment account …2090;

   2.2.2.4.(Co) HSBC accounts …8161 and …5236;

   2.2.2.5.CBA account …2931;

   2.2.2.6.Hong Kong accounts;

   2.2.2.7.Artworks;

   2.2.2.8.Farm machinery at the [Town S] property.

   2.3.Contemporaneously with the husband's compliance with paragraph 2.1, the wife do all acts and things and transfer to the husband all her right, title and interest in:

   2.3.1.[V1] Pty Limited (ABN …);

   2.3.2.[V2] Pty Limited (ABN …);

   2.3.3.[V3] Pty Limited (ABN …);

   2.3.4.[W] Pty Limited (ABN …);

   2.3.5.[N] Pty Limited (ABN …); and

   2.3.6.[N] Pty Limited as trustee for [N] Trust (ABN …),

   (collectively “[W] Companies”).

   2.4.Contemporaneously with the wife’s compliance with paragraph 2.3, the husband indemnify the wife in relation to any debt of either or both the parties connected to the [W] Companies.

   3.      Within three (3) months from the date of these orders (and subject to the wife’s compliance with paragraph 2.2 and 2.3 but only if the husband has complied with paragraph 2.1):

   3.1.the husband is to vacate the [Suburb F] property and leave the same in good order and condition including ensuring that all taps, cisterns, ovens, stoves, lights, dishwasher, curtains, blinds, fixtures and fittings are in good order and condition;

   3.2.the husband must deliver to the wife's solicitors the keys, remote controls, and all spare keys for the [Suburb F] property (in relation to all doors, gates and letter box) as well as the alarm code for the said home (if an alarm is connected);

   3.3.after 1:00pm on the day that the husband had complied with paragraph 3.1, the wife shall be at liberty to collect the keys and remote controls and the alarm code for the [Suburb F] property for the purposes of inspecting the home to ensure that it is in good order and condition.

4. The orders were made on 27 January 2015.  The husband acknowledges that he received the orders on that day.  The three month period that is allowed by order 2 and order 3 expires on 26 April 2015.  At that time, provided the wife has discharged the Suburb F mortgage to a balance of $416,363, as required by order 2.2.1 and provided she is ready, willing and able to comply with her responsibilities under orders 2.2.2 and 2.3, the husband is required by the orders to provide the wife with vacant possession of the Suburb F property (order 3).

5. The wife in her affidavit filed 27 March 2015 gives evidence that to facilitate the husband’s compliance with order 2.1.2 on 10 February 2015 her solicitor provided the husband’s former solicitor with an original stamp transfer for execution via the husband to transfer his interest in the Suburb F property to the wife.  The wife says that her solicitor wrote on two occasions and made calls on two occasions to attempt to ascertain whether or not the transfer had been signed by the husband.  The husband has not sought in his affidavit in response to put that evidence in issue.

6. The wife says on Tuesday 24 March 2015 she instructed her solicitors to forward the transfer to the husband.

7. The wife further says that to facilitate her compliance with order 2.2.1 she has obtained approval for an interest-only mortgage to discharge the mortgage over the Suburb F property up to a balance of $416,363, with a further facility of about $200,000.

8. The wife says on 25 November 2015 she instructed her solicitors to write to the husband’s solicitors confirming that she was ready, willing and able to execute all documents required by her in order for her to comply with orders 2.2.2 and 2.2.3.  The wife says to date the husband has not provided the wife with any documents he requires to execute pursuant to the orders.  The husband has not in his affidavit in response put that in issue, and it seems clear the husband actually has not sent any share transfers to the wife for her to sign in relation to the W companies.

9. The wife says it is her intention once the Suburb F property has been transferred to her, to move into the property.  It seems that the parties are equally sharing the time that, particularly, the three younger children are spending with each of them, so that her moving in to the Suburb F property and the husband moving out will not dramatically affect the amount of time the three younger children spend in the Suburb F property.  The wife gives evidence that the interest-only mortgage will significantly improve her weekly accommodation expenses.  She says she currently pays $1000 towards rent, whereas her interest-only payments on the mortgage will be about $363 per week.

10. The husband was granted an extension of time to file his Notice of Appeal, He filed it on 20 March 2015.  The grounds of appeal are lengthy and are in narrative form. 

11. The husband says that his appeal is firstly against the discretionary elements of the judgment, and if he challenges those successfully, would lead to him receiving a 7.5 per cent adjustment of the overall assets in his favour and that is a sum of approximately $280,000.  Secondly, the husband has foreshadowed an application in an appeal to the Full Court for leave to adduce fresh evidence in relation to the movement in the value of the different pieces of real estate, which he asserts on the current orders would lead to a further adjustment in his favour of about $300,000.  There are other challenges the husband wishes to make in relation to waste and similar matters where the adjustment he expects would be less than $100,000. The husband also challenges the decision to allow the wife first chance at owning the Suburb F property.

THE LAW APPLICABLE TO A STAY OF AN ORDER PENDING AN APPEAL

1. I have provided the husband today with the relevant dot points from paragraph 28 of Jackson & Balen [2009] FamCAFC 131.

2. In Jackson & Balen the Full Court said at paragraph 28:

   The principles to be applied in hearing a stay application pending an appeal are well settled (see Federal Commissioner of Taxation v Myer Emporium Ltd [No.1] (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685; Jennings Construction Ltd v Burgundy RoyaleInvestments Pty Ltd (1986) 161 CLR 681). 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.

FAIRNESS OF GRANTING A STAY

1. The husband seeks that no transactions at all take place until after his appeal has been finalised, apart from what he refers to as a limited number of minor matters. The husband is content for the stay to be limited so the smaller “W related” and “chattels” and “photos” related transactions proceed.  The completing of the W-related order, however, is not a small matter because it involves a transfer to the husband from the wife of shares that have a combined value of close to $500,000. 

2. The husband wants the control monies frozen, although the wife has given evidence that she has already accessed and utilised the control moneys. 

3. The husband says in his affidavit that there was a long stay tenant in the B Street property, but I have heard evidence, and it is now an agreed fact, that that tenant has moved out now, and that that accommodation is available or is at least vacant.

4. The husband asserts that his bank, the Commonwealth Bank, have indicated to him that they will need a far longer period than the time that remains under the current order to assess his application for finance. In discussions with the husband during oral submissions the husband agreed he had to raise $450,000 to comply with the order to pay off the $15,000 that is going to be left on the Suburb F mortgage after the wife has paid $416,363 off it; to pay the $115,000 to the wife and to pay $220,000 to remove the wife’s name from the mortgage on the Town S property.  That is the husband has to raise $459,000 on assets, being the two pieces of real estate and the W Company shares that are worth about 1.38 million.

5. The husband says that there has been complexities in relation to this refinance to date with his own bank because he has got to deal with different parts of the bank.  As I discussed with the husband during submissions, it must be the case that discharge of the joint mortgage on the Suburb F property significantly improves his financial position with the bank in terms of being able to borrow $450,000 from them. 

6. The orders disadvantage the husband in as much as they require him to move out of the residence that he has been in for the last few years and the husband will have to secure new accommodation for himself and accommodation for the children when they are with him, and also for the family pets that have been mentioned in the evidence and in submissions.  The husband will also have to manage possibly some interim storage of furniture and belongings.

7. There were issues raised in the husband’s material and in his submissions in relation to difficulties in gaining access to a shared safety deposit box that holds a mortgage document from 2004.  He says the wife has taken the key and he has not been able to get into the box and she has not talked to him about it, despite his attempts to engage her in that communication.  As I said during submissions, I can not understand how any of that is relevant to whether or not I grant a stay.  It might be relevant as to whether or not some further order  for implementation is made, but so far as I am aware, there is no order specifically about the safety deposit box.

8. The husband, likewise, raised issues in relation to a debenture associated with a yacht club in Hong Kong and said that that might fall under order 2.2.2.6 but again I am unable to remember that asset being raised during the hearing.  It certainly was not put on the balance sheet as being an asset of value. 

9. The husband also says that in order to make B Street acceptable accommodation, then there would have to be necessary repairs carried out to that property.  He mentioned that it was not really suitable for he and the children.  He said that the renovations that needed to be carried out to it to make a long term accommodation proposition are related to fixing up the kitchen and the bathroom and doing some other things. 

10. The husband also asserts that there are an onerous and disproportionate number of actions to be taken by him compared to the wife under the orders. He seeks a reasonable extension of time to assist him on this basis. I don’t accept that the central requirements to implement the orders which require them to be completed within the time originally specified were onerous when those orders were made.  It might now be onerous, given the time that has passed with nothing substantially happening in relation to the husband attending to their implementation. 

11. The husband says that completing the “smaller” transactions would be helpful with “getting on with it”, and I accept that certainly completing the W transaction might be integral to him arranging finance. As was discussed during submissions, settlement of everything would happen on the same day and the wife would hand to the husband signed transfers in relation to her interests in the W shares at the same time as everything else was being attended to under the orders by way of discharge of the two mortgages and the payment to the wife of the $115,000. 

12. The husband has raised issues in relation to the wife’s current financial position, pointing to the fact that she had moved into a larger residence, commenced employment, recently went overseas, and may be in a new relationship.  The husband believes that there has been some possible merging of assets or mingling of finances between the wife and the person with whom the husband believes she is having a relationship.  The husband says the wife is not in financial hardship and she can endure the stay. 

13. On the other hand, the wife sets out in her affidavit what she says is her difficult financial position, and I have already mentioned the improvements she says will happen if the orders are implemented.  The wife on the face of her material makes out that she will suffer some hardship if she is not able to receive the benefit of her property settlement order, and it should be emphasised that, as the Full Court said in Jackson & Balen, a person who has obtained a judgment – particularly a money order judgment in a financial matter – is entitled to the benefit of their judgment, and is entitled to presume the judgment is correct, and that the mere filing of an appeal is not sufficient to grant a stay. 

THE RISK THAT THE HUSBAND’S APPEAL MAY BE RENDERED NUGATORY IF A STAY IS N OT GRANTED

1. The wife intends to move into the Suburb F property, to become the registered proprietor of the Suburb F property, to take the mortgage on the Suburb F property.  She has arranged an additional line of credit of $200,000.  The wife has indicated that she would be prepared to give the Court an undertaking that she would not borrow against the property in a way that would mean that there wasn’t $300,000 in equity left in the property.  The husband seeks that the equity remain so that the maximum borrowing against the property is $650,000.If the property is worth $1.3 million, as per the agreed value when the hearing took place, the husband’s proposal would mean that the wife could borrow the amount of $416,000 and the additional facility of $200,000, and the husband’s suggested condition could remain.  Given that an order limiting the borrowing to $650,000 would not interfere with the wife’s current intentions to borrow against the property, I will make an order as sought by the husband, subject to the parties’ further written agreement or further order of the Court.

A PRELIMINARY ASSESSMENT OF THE STRENGTHS OF THE PROPOSED APPEAL

1. In relation to making a preliminary assessment of the strengths of the husband’s proposed appeal and whether or not he has an arguable case, I accept the submissions by counsel for the wife that on the face of the appeal it is to a large degree an appeal against an exercise of discretion. The husband says that that analysis, or the analysis carried out in the wife’s affidavit at [15], is incomplete in terms of the scope of the husband’s appeal and inaccurate in terms of its impact to the percentage distributions and asset allocations and reflects only a simplistic view of his appeal. I have already mentioned the amounts over and above the 7.5 per cent adjustment for discretionary errors earlier in these reasons.

2. Insofar as the husband is asserting that the judgment was outside a generous range of results in respect of which reasonable minds might differ, a preliminary assessment of the strength of that part of his proposed appeal would be that it’s not strong. 

3. I have insufficient information to assess whether or not the husband has any reasonable prospects of convincing the Full Court to accept updated valuations of property.  That would not be something the relevant authorities would normally permit, but I say no more about that.

4. I am unable to say that the husband has any real prospects of obtaining an adjustment in relation to the waste arguments that may have been ventilated at the hearing, or may not have.  I haven’t analysed the husband’s arguments about that sufficiently when comparing it with what’s in the judgment to know.  But the amount involved there is less than $100,000. 

5. The husband points to an error in the judgment in paragraph 9, which seems to be conceded by the wife.  The wife submits, however, that she never wanted the Suburb M property (a property that the husband brought into the marriage) and that the husband would need to convince the Full Court that the distribution set out in Table 1 was not a just and equitable one as between the parties. 

WHETHER THE APPEAL CAN BE HEARD WITHIN A REASONABLE AMOUNT OF TIME

1. The husband has not made any application to the Court for expedition.  There is no outstanding feature of this property case that would give comfort to think that such an application would be successful.  I have no evidence as to how long it would be before the Full Court is able to hear and determine the appeal, although it seemed a consensus between both parties that it is approximately 18 months plus the amount of time it will take for the Full Court to deliver a determination on the appeal. If a stay is granted, the wife would not have the benefits of a judgment for what is a long and unknown period, and would not have the occupancy of the Suburb F property until the appeal is heard and determined.

CONCLUSION

1. The husband accepts that from 27 January 2015 he was aware as to the amount of time that had been given to meet his obligations under the property settlement order.  I do, however, take into account that the reality that we face today is that he hasn’t got a loan approval and he hasn’t made any serious arrangements about, or even turned his mind to, moving out of the Suburb F property. 

2. I accept that the husband will need to find new accommodation if he doesn’t think Suburb M is suitable, and will possibly on an interim basis need to store furniture and belongings.  He has had however since 27 January 2015 to organise himself in that regard. I take into account the husband has been representing himself, and that might be part of the reason why he has not put in place proper arrangements yet.

3. The husband has said today that he will need time to organise himself and, taking everything into account, I have concluded that a stay should be granted, but on the basis that certain other orders are made. 

4. The husband refers to difficulties in accessing the safety deposit box and difficulties in attempting to communicate with the wife in relation to the implementation of orders in respect of photographs.  The husband does not make clear why any document that was put in a box in 2004 would be required for the implementation of the orders. In any event, that must go to a matter of implementation and can be of no weight in respect of the stay application.

5. I intend to dismiss the husband’s applications for stay, but upon conditions, I intend to vary orders 2 and 3 by deleting the words “within three months from the date of these orders” and inserting the words “on or before 4 June 2015”. Further, the husband is to be responsible for interest in relation to the $115,000 from 27 April 2015, and also to pay the wife a sum of $600 per week from 27 April 2015 to the date of him vacating the Suburb F property so as to compensate her for the loss of advantage that she says she would receive by being able to move into the Suburb F property.

6. I should also say that in relation to the husband’s complaints about the wife’s noncompliance in respect of orders, they are not matters that are directly relevant to his stay applications.  They’re matters that go to enforcement, and if anybody wishes to put on application in relation to enforcement, they can do so within seven days supported by the relevant evidence and that application can be listed on 27 April with everything else. 

7. The husband has also made an application that, in the event that the wife does not occupy the property, or does not remain in occupancy of the property – the Suburb F property – then he have the opportunity of reoccupying the property.  That is an appropriate application, given the fact that there is a pending appeal, including an appeal that relates to the future occupancy and ownership of the Suburb F property, and I will make an order that the wife give the husband written notice if she moves out, and she cannot relet the property for 28 days, giving the husband 14 days to come back to the Court and ask for an order that he be able to reoccupy the property at market rent. 

I certify that the preceding forty (40) paragraphs are a true copy of the ex tempore reasons for judgment of the Honourable Justice Watts delivered on 2 April 2015.

Associate: 

Date:  13.4.15