Goudarzi and Bagheri
[2017] FamCAFC 9
•7 February 2017
FAMILY COURT OF AUSTRALIA
| GOUDARZI & BAGHERI | [2017] FamCAFC 9 |
| FAMILY LAW – APPEAL – APPLICATION FOR REINSTATEMENT – Where the appeal was deemed abandoned after the appellant failed to file a draft appeal index within the time required by r 22.13 of the Family Law Rules 2004 (Cth) – Where no reasonable explanation for delay – Where prejudice to the respondent if appeal reinstated – Where grounds of appeal unlikely to attract appellate intervention – Application dismissed. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth): r 22.13 |
| Gallo v Dawson (1990) 93 ALR 479 Jackamarra (an Infant) v Krakouer (1998) 195 CLR 516 Rand & Rand [2009] FamCAFC 88 |
| APPLICANT: | Ms Goudarzi |
| RESPONDENT: | Mr Bagheri |
| FILE NUMBER: | SYC | 7646 | of | 2008 |
| APPEAL NUMBER: | EA | 92 | of | 2016 |
| DATE DELIVERED: | 7 February 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ryan J |
| HEARING DATE: | 7 September 2016 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 31 May 2016 |
| LOWER COURT MNC: | [2016] FamCA 482 |
REPRESENTATION
| FOR THE APPLICANT: | In person |
| SOLICITOR FOR THE RESPONDENT: | Barkus Doolan |
Orders
The Application in an Appeal filed 24 June 2016 be dismissed.
The Application in an Appeal filed 4 August 2016 be dismissed.
No later than two (2) months from the date of these orders, the Appellant wife shall pay the Respondent husband’s costs in relation to these applications in the amount of $1,110.80.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Goudarzi & Bagheri has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| IN THE APPELLATE DIVISION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 92 of 2016
File Number: SYC 7646 of 2008
| Ms Goudarzi |
Applicant
And
| Mr Bagheri |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Goudarzi (“the wife”) and Mr Bagheri (“the husband”) are engaged in property settlement proceedings pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”) following the breakdown of their marriage. Or more correctly, final property orders have been made by Cleary J which are subject to an appeal instituted by the wife.
These proceedings comprise two Applications in an Appeal by the wife which arise out of a second appeal by her against a conditional stay of orders made in the wife’s favour by Cleary J on 31 May 2016. It needs to be understood that the wife failed to adhere to the conditions attached to the stay, as a consequence of which the stay has been discharged.
As to the first application, by Application in an Appeal filed on 4 August 2016 the wife seeks to reinstate her Notice of Appeal filed on 22 June 2016. The appeal was deemed abandoned because she failed to file and serve the draft appeal index by 20 July 2016, being the date prescribed by r 22.13(2) of the Family Law Rules 2004 (Cth) (“the rules”) and as confirmed by correspondence from the Appeals Registry on 27 June 2016. As a consequence and by virtue of r 22.13(3), the appeal was deemed abandoned.
In the event the appeal is reinstated, the second application which was filed on 24 June 2016 seeks expedition of the wife’s appeal against the stay orders (but not the substantive appeal).
By her Notice of Appeal (for the stay appeal), the wife seeks that all orders made by the primary judge on 31 May 2016 be set aside. Although I note the wife appears to take no issue with order 1.3. The wife also seeks a series of other orders which, on an appeal of this type, are not available.
The orders under appeal provide as follows:
1.Until determination of proceedings number EA66 of 2016, the operation of Orders 3, 4, 5 and 6 of the Orders made on 4 April 2016 be stayed subject to and conditional upon the wife paying, as and when due, each of the following:
1.1Loan repayments for the St George Bank residential loans, being account numbers … and …;
1.2Strata levy payments to the Owners of Strata Plan No. … relevant to the property situated at and known as [2 Q Street, Suburb R] (“the [Suburb R] property”);
1.3Council and water rates in respect of the [Suburb R] property.
2.In the event the wife fails, neglects or refuses to pay the sums set out above, when due, and the default remains for 7 days, the stay shall stand discharged.
3.The husband’s costs of and incidental to this Application shall be determined by the outcome of the appeal proceedings.
THE COURT NOTES THAT:
(A)The wife will likely be compelled to draw upon the loan facility.
The loan facility mentioned in the notation is a line of credit in the wife’s name.
The husband opposes reinstatement of the wife’s appeal and seeks orders that her applications be dismissed.
Relevant background
The parties were born abroad and both are professionals. They met at university in Australia in 1983 and commenced a relationship shortly thereafter.
The parties married in 1992 and separated in December 2006 on the wife’s case, or in August 2011 on the husband’s case. The parties’ divorce was declared final on 21 January 2013. There are two children of the marriage, a girl born in 2000 and a boy born in 2006.
The wife instituted parenting proceedings in December 2008 to restrain the husband from removing the children from Australia. Those proceedings were resolved by consent on 9 July 2009.
The wife instituted further parenting proceedings on 21 October 2011 (which later expanded to include property proceedings by way of her amended application filed on 27 July 2012) and since that time the parties have been engaged in various interlocutory disputes encompassing both property and parenting matters. Between them they have spent a vast sum of money on legal expenses.
On 23 April 2013 the parties entered into final consent orders in relation to the parenting proceedings. Those orders provided for the children to live with the wife and spend significant time with the husband. However, on 2 February 2016 the wife filed an application seeking to discharge those orders. The proceedings are well advanced but ongoing.
With respect to the property proceedings it is important to record the following history.
During their marriage the parties acquired a number of real properties which were each purchased in their sole names.
The wife acquired the following investment properties in her name:
a)M Street, Suburb N (“the Suburb N property”) in July 1988;
b)O Street, Suburb P (“the Suburb P property”) in October 1990; and
c)1 Q Street, Suburb R (“the 1 Q Street property”) in September 1992.
At trial these properties had agreed values of $550,000.00, $820,000.00 and $1,150,000.00 respectively.
The husband acquired several real properties in his sole name, the following of which he still owns and, save for the property at Suburb J where he presently resides, provide him with rental income:
a)G Street, Suburb H (“the Suburb H property”) in August 1988;
b)I Street, Suburb J (“the Suburb J property”) in October 1998; and
c)1 K Street, Suburb L (“the Suburb L property”) in December 1998.
In July 1999 the husband also acquired the Suburb R property which became the family home. It was initially purchased in his name but in December 2004 title was transferred into the parties’ joint names. It is the only jointly owned property and is where the wife currently resides with the children.
On 4 April 2016, Cleary J made orders following a six day final hearing in respect of financial issues. Those orders provided, inter alia, that the husband and wife each retain the three real properties held in their own names and sell the family home, with the parties to effect a division of the net sale proceeds 65/35 per cent in the wife’s favour. The primary judge found that the family home was worth $8.5 million and, with that figure in mind the wife would receive in the vicinity of $5.5 million from the sale proceeds. The primary judge also ordered that pending the sale of the family home, the husband was to meet the various loan repayments secured over the home, the parties were to equally share its strata levies, and the wife was to pay council and water rates.
On 29 April 2016, the wife filed a Notice of Appeal against those orders in proceedings EA 66 of 2016. The wife further sought a stay of the orders pending the outcome of her appeal.
On 31 May 2016 Cleary J granted the wife a conditional stay of the orders which provided for the sale of the family home pending the outcome of her appeal. The conditions required that the wife pay the loan repayments for two of the St George Bank residential loans, as well as the strata levy payments and council and water rates. In the event the wife failed to meet those conditions and the default continued for seven days, the stay would be discharged. It is appropriate to record at this stage that the two St George loans secured over the family home are in the husband’s sole name.
On 22 June 2016 the wife filed a Notice of Appeal against those orders. It is within this appeal that the two instant applications arise.
As was mentioned earlier, the wife has not complied with the conditions of the stay order, and as such the stay has been discharged. The wife made it absolutely clear that even if her appeal was reinstated she would not rectify the breaches and would not comply with the conditions of the stay pending the appeal hearing. As to the St George loans, the effect of her non compliance is to put the husband’s credit rating and relationship with his bank at risk – albeit, in failing to make the other payments, she potentially damages both their credit reputations.
Applicable law
The principles relating to applications to reinstate an appeal are set out in Gallo v Dawson (1990) 93 ALR 479. Although that case dealt with an extension of time to appeal, the principles also apply to an application to reinstate an appeal (Rand & Rand [2009] FamCAFC 88). At page 480, the High Court said:
The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262.
This means that the discretion should only be exercised in favour of an applicant if it is established that compliance with the rules will work an injustice upon the applicant.
The decision of the High Court in Jackamarra (an Infant) v Krakouer (1998) 195 CLR 516, in particular, Gummow and Hayne JJ at [33] is also relevant:
…[W]hen an appellant has instituted an appeal within time, if all other things are equal, the bare fact that the appellant has failed to take some interlocutory step within the time fixed by the rules would not be reason enough to shut that appellant out from the pursuit of the appeal unless it were clear that the appeal would fail. Of course, the qualification “if all other things are equal” is very important and it should not be permitted to obscure the fact that very often the fact that an appeal is pending may itself affect the respondent adversely in some way…
As will shortly be explained, all other things are not equal and the application for reinstatement will be dismissed.
Delay
Pursuant to r 22.13 of the rules, the wife was required to file her draft appeal index within 28 days of filing her Notice of Appeal. The rules provide that if an appellant fails to file the draft appeal index, the appeal is taken to be abandoned. Accordingly, the wife had until 20 July 2016 to file her draft appeal index. This was confirmed through correspondence sent to the wife from the appeals registry on 27 June 2016. The wife did not do so and by operation of the rules her appeal is abandoned.
The first question to be answered is whether the wife has provided an adequate explanation for her failure to comply with the timeframe for filing the draft appeal index? Her explanation is contained in her affidavit filed on 4 August 2016. As it transpired her affidavit evidence proved to be unreliable and the totality of the evidence available to me, including concessions the wife ultimately had little choice but to acknowledge, is that she gave priority to other matters rather than this litigation.
The wife initially sought to mount an argument about why the date for filing the draft index was wrong. This was constructed out of nothing and done in an attempt to establish that she was only hours out of time and to show her diligence in rectifying the breach once it was brought to her attention. It also seemed to be designed to avoid the problems she anticipated by virtue of the fact that correspondence from the Appeal Registry provided the correct date. In response to evidence adduced in the husband’s case the wife ultimately withdrew her argument that the date was wrong and that she had attempted to file a draft index within hours of it being due.
The wife then argued that as soon as the failure to file was brought to her attention, she moved quickly and thus could be trusted to diligently prosecute her appeal if it was reinstated. If the only correspondence provided to her by the Appeal Registry was that of 2 August 2016, her argument might have had some attraction. However, as became apparent during the hearing before me, a letter was sent to the wife by the Appeals Registrar on 21 July 2016 recording that as no index had been received, the appeal was deemed abandoned as of the close of business on 20 July 2016 pursuant to r 22.13(2) of the rules. Suffice to say, the correspondence from the registry was correctly addressed and I am comfortably satisfied that the wife did indeed receive it; which in fairness to her she ultimately seemed to accept she had. Far from acting with the claimed alacrity she took until 3 August 2016 to attempt to file a draft index.
The net effect of the evidence is that in relation to this issue, the wife gave a highly selective account of her dealings with the Appeal Registry and, as I said earlier, insufficient attention to her obligations as a litigant. The later point was reinforced by her decision to attend this hearing without any of the court documents or material which might have supported her contentions (for example, her contention she had paid some council and water rates).
On balance, I am satisfied that during the relevant period, the wife gave her time and attention to other matters and paid scant regard to the need to file the draft index by the due date. The explanation in these circumstances is not reasonable and she has not provided an adequate explanation for her delay.
The merits of the appeal
It is appropriate to use a degree of circumspection in assessing the apparent merits of the appeal. The wife, who has spent at least $700,000.00 on legal expenses and now represents herself, prepared her own Amended Notice of Appeal.
The wife relies on eight grounds of appeal by way of challenge to the stay orders, the most significant of which appear to be that she was denied a fair hearing, she was wrongly ordered to pay loans which were fraudulent, there should have been a longer period of default before the stay would be discharged and that on a proper evaluation of her financial circumstances the primary judge should have realised the wife could not make the various payments upon which the continuance of the stay hinged. It is understood most of these grounds mirror those relied on in the substantive appeal. Otherwise, grounds 5, 6, 7 and 8 are argumentative and no grounds at all.
As to grounds 1 to 4, even with the benefit of explanation from the wife of their import during the hearing, the submission made for the husband, that even with a low threshold of satisfaction the wife’s prospects of success appear poor, should be accepted. By way of example, notwithstanding the vehemence of the wife’s submissions on the point, it is not accepted that merely because for a period of some ten years the loan on the family home was not reduced, the husband is guilty of tax fraud. Nor is it accepted that the stay orders would force the wife into bankruptcy; she is clearly solvent. The transcript of the stay hearing which is attached to the wife’s affidavit filed on 25 June 2016 does not support the wife’s challenges as to the conduct of the hearing.
On the material presently available I am satisfied that the stay appeal as presented would most likely fail.
Prejudice and Conduct
There can be no doubt that the husband will be prejudiced if the appeal is reinstated. As was alluded to earlier, the wife demonstrated a complete lack of interest in the notion that reinstatement may occasion hardship to the husband. The point being the loan is in his sole name and her default damages his credit worthiness. She has no intention of making good the default; the effect of her evidence being she would continue to direct her income to other expenses. There was no suggestion she would realise other assets to make good the default and pay the ongoing expenses.
And of course, the husband is also entitled to a significant share of the proceeds of sale (in the vicinity of $2 million), which he has thus far, and would for a not inconsiderable period, continue to be denied. He too is a man of some wealth and his inability to access his share of the sale proceeds does not compromise his immediate standard of living. However, he has significant borrowings (loans and a line of credit) which he plans to discharge from his share of the sale proceeds. Presently he pays some $10,859.00 per month in relation to these loans which, if the loans were paid out, would cease.
It follows that reinstatement of the appeal, even if on terms consistent with the stay, would cause him hardship.
It is accepted that the wife would also suffer hardship if the appeal is not reinstated. The point being she would lose the chance to argue that the terms of the stay were somehow erroneous and, if the husband moves to enforce the orders (the outcome of which in itself is discretionary), she may well lose her chance to retain the family home (albeit she will remain quite wealthy). The risk to the family home is a very weighty consideration, but of course the significance of it is tempered by the fact that the loans are in default, on the wife’s case will continue to be in default and thus the third party mortgagee has rights it may pursue.
The wife’s refusal to make the mortgage repayments persuades me that the hardship which befalls the husband should carry greater weight than that which befalls her.
Conclusion and costs
The application for reinstatement will be dismissed. It follows the application for expedition of the stay appeal should also be dismissed.
In the event the wife was unsuccessful, the husband sought an order that she pays his costs. This was on the basis that the wife would have been wholly unsuccessful in an application necessitated by her failure to comply with her obligation to comply with the rules. The husband’s application was opposed by the wife, essentially on the basis that he is a fraudster who should not be rewarded in this fashion.
For the reasons advanced by the husband’s solicitor, the husband should have his costs. As to quantum, he sought the equivalent of four hours at scale including attendance at the hearing. This is an appropriate sum and will be reflected in the order.
As to time to pay, I am conscious the wife says she is in straightened financial circumstances and could not readily raise this amount. However the wife has significant assets at her disposal and I am not persuaded requiring her to reasonably promptly pay these costs would occasion undue hardship. She will have two months within which to make whatever arrangements she needs to make to satisfy the order.
I certify that the preceding forty seven (47) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 7 February 2017.
Associate:
Date: 7 February 2017
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