Guo & Zoric
[2023] FedCFamC1F 628
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Guo & Zoric [2023] FedCFamC1F 628
File number: PAC 4845 of 2021 Judgment of: BRASCH J Date of judgment: 26 July 2023 Catchwords: FAMILY LAW – STAY – Where husband failed to participate in substantive proceedings – Where final property orders made in husband’s absence in November 2022 – Where no appeal filed – Where husband sought a stay of final orders “up until the making of a further order” – Where s 79A orders sought on a final basis - Where husband filed no material on the stay, or at any time in the entire proceedings - Application dismissed
FAMILY LAW – COSTS – Where husband, through his solicitor, was ordered to file a Costs Notice as required by r 12.06(7) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Legislation: Family Law Act 1975 (Cth) ss 79A, 79A(1)(a)
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 25(1)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 10.13, 12.06(7)
Cases cited: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Gull & Gull (Stay Application) [2009] FamCAFC 104
Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd [1983] 3 NSWLR 378
Jackson & Balen [2009] FamCAFC 131
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Philkin & Philkin (No 3) [2021] FedCFamC1F 224
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Zhai & Niu [2015] FamCA 639
Division: Division 1 First Instance Number of paragraphs: 93 Date of hearing: 24 July 2023 Place: Sydney Solicitor for the Applicant: Kerrisons Legal Services Counsel for the Respondent: Ms Hamilton Solicitor for the Respondent: Family Focus Legal Pty Ltd ORDERS
PAC 4845 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR ZORIC
Applicant
AND: MS GUO
Respondent
order made by:
BRASCH J
DATE OF ORDER:
26 JULY 2024
THE COURT ORDERS THAT:
1.Order 4 as contained in the Proposed Interim Orders in the Amended Initiating Application filed on 14 February 2023 is dismissed.
2.Order 9 as contained in the Proposed Interim Orders in the Amended Initiating Application filed on 14 February 2023 is dismissed.
3.The husband, through his solicitor, is to file a Costs Notice pursuant to r 12.06(7) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) by no later than 4.00 pm on Friday 28 July 2023.
4.The wife, through her solicitor, is at liberty to provide a copy of this order and Reasons to B Lawyers.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
BRASCH J:
INTRODUCTION
These are my ex tempore reasons. I will correct the transcript for grammatical errors and to make my oral reasons more amenable to the written word.
Background
Final property orders were made in this matter on 10 November 2022 and reasons published on 15 November 2022. The husband is obviously unhappy with the trial judge’s decision. However, he has not appealed. Instead, he asks that those 2022 final orders be set aside pursuant to s 79A(1)(a) of the Family Law Act 1975 (Cth) (“the Act”). That application was not before me for determination yesterday. Rather, the husband asks for an interim order that I stay some of those final orders “up until the making of a further order”. To be clear, this is not a stay pending appeal.
The applicant is Mr Zoric, who was born in 1961. The respondent is Ms Guo, born 1958. The parties commenced cohabitation in 1995, were married in 2002 and separated in April 2016. They have one adult child, being Mr C born 1998.
The wife instituted property proceedings on 7 October 2021. The matter worked its way through Division 2 and ended up in the trial judge’s docket. Ultimately, on 10 November 2022 the trial judge gave ex tempore reasons and made final orders with respect to the parties’ property proceedings. The reasons, as said, were published on 15 November 2022.
The trial judge’s reasons give many examples of the husband not complying with orders. Indeed, on 26 April 2022, the matter was listed for an undefended hearing. The husband appeared on that day and was represented by Mr Kerrison, who remains his solicitor. Orders were subsequently made by consent for the parties to attend a conciliation conference and for the husband to file and serve a Response, supporting affidavit, Financial Statement and Financial Questionnaire by 7 June 2022, along with further orders to facilitate the conciliation conference and for disclosure.
The trial judge’s reasons indicate the husband did not comply with those directions and the conciliation conference was vacated. The matter then came before the trial judge on 28 October 2022 for a Compliance and Readiness Hearing. Despite Kerrison Legal Service being on the record for the husband, there was no appearance by him on that date. The husband still had not filed any material, which by that time was over one year after service of the wife’s application upon him.
There are many orders for the husband to file material, but he did not.
The matter was listed before the trial judge on 10 November 2022 for an undefended hearing. The husband did not appear at that hearing, but his solicitor instructed Mr D of counsel to appear on his [the husband’s] behalf and seek the undefended hearing date be vacated. The trial judge records, “there has been no evidence filed in support of that application”.
The trial judge refused the oral application to vacate the hearing date. Mr D withdrew and the hearing proceeded.
The trial judge was satisfied in the circumstances of the case a 60 per cent division to the wife ($1,423,736) and 40 per cent adjustment to the husband ($949,158) was just and equitable. The trial judge determined the property pool totalled $2,372,894, although the value of the husband’s savings account/s and any superannuation was unknown.
Before me yesterday, Mr Kerrison attacked two of the items in the pool (as found by the trial judge), being the value attributed to the Suburb F property and almost $600,000 held in trust in a conveyancing trust account, being the sale proceeds of G Street, Suburb H. That was a property said to be inherited by the husband in 2010 upon his mother’s passing. The paternal grandmother’s will is dated 1979; clauses 4 and 5 contain various contingencies. There is no evidence before me whether any of the contingencies arise. Probate was granted in 2011. The Suburb F property was sold by the husband in 2020. The proceeds have been retained in a trust account on trust for the husband and wife ever since. It was said by Mr Kerrison (all evidence from the bar table) that some of those proceeds were really assets belonging to the husband’s late mother’s estate, and, on his calculations, $172,000 of those funds were attributable to the husband and the husband’s brother was entitled to about $400,000.
Those attacks are in circumstances where the husband declined to put on any evidence about the Suburb F valuation or his alleged entitlement to the estate at trial - or indeed at any time. The husband did not even attend the trial and has never sworn an affidavit.
On my reading of the trial judge’s orders, the husband would keep the property at Suburb F with a value of $900,000 (this is one of the attacks made by Mr Kerrison before me) less him being responsible for two particular home loans, a house in Country E valued at $20,000 and his superannuation entitlements and bank account/s which were, and still are, unknown.
The wife was to keep a property at J Street, Suburb H with a value of $730,000 with the mortgage discharged, modest bank accounts and shares, a motor vehicle, her superannuation and responsibility for a credit card.
The trial judge calculated that the husband would need to pay the wife the sum of $550,748 and ordered this, and some costs, to come from the money on trust (the second area of attack before me).
Those orders were made in the absence of the husband with the Court noting that r 10.13(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), the Court or a registrar may vary or set aside orders if made in the absence of a party. It may be that Mr Kerrison for the applicant husband has confused that rule with a different kind of application to set aside orders, being one made pursuant to s 79A of the Act.
I am not aware of the husband bringing an application pursuant to that r 10.13. Rather the husband has brought an application to set aside the trial judge’s final orders on the basis of s 79A(1)(a) and specifically, as was said in submissions, that the trial judge committed a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance.
When asked about the trial judge committing the miscarriage of justice, Mr Kerrison eventually moved away from such a serious allegation against a judicial officer and said the wife had knowingly given false evidence to the Court and that was a s 79A(1)(a) issue. Much of the hearing time was spent on Mr Kerrison’s assertions that the wife knowingly misled the Court. Those submissions were made as evidence and opinion from the bar table. Indeed, Mr Kerrison had very little by way of evidence to support very much he said at all. The husband was given an opportunity to file material and he did not.
The husband files to set aside the final orders in 2023
The husband filed his first Initiating Application to set aside the final November 2022 orders in January 2023. That document was not before me. I am told, and it was common ground, that that that Initiating Application did not seek a stay in the terms currently sought, or at all. The husband was ordered to file a competent Amended Initiating Application by 13 February 2023, but he did not file until the following day. That is when the order for a stay was first raised.
That Amended Initiating Application contained 12 “proposed interim property orders”, nine of which were heard and determined by Justice Rees on 11 April 2023. Her Honour also struck out three of the final orders sought in that Amended Initiating Application and removed the second respondent as a respondent. What is before me are the remaining interim orders sought by the husband.
However, it is important to understand how her Honour dealt with an affidavit of Mr Kerrison, the husband’s solicitor, and the implications of her Honour’s decision for the hearing before me.
The first interim order sought by the husband was in the following terms. It was dismissed by Justice Rees:
1.Leave sought to Rely upon the Supporting Affidavit of solicitor Robert Francis Kerrison sworn on 9 January 2023 and filed on 13 January 2023.
That leave be granted to rely upon the Supporting Affidavit of solicitor Robert Francis Kerrison sworn on 9 January 2023 and filed on 13 January 2023 in support of the Orders sought in this Initiating Application, notwithstanding the size limitations contained in Rule 5.08(2) and (3) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (the Family Law Rules 2021).
(emphasis in original)
Despite the fact that Justice Rees dismissed that order, the husband’s solicitor wanted to rely on that same affidavit in the hearing before me. Mr Kerrison, for the husband, was unable to give me any authority, rule, or section of the Act that would allow me to, frankly, ignore Justice Rees’ order of 11 April 2023.
For the reasons given by me yesterday morning, I did not accept Mr Kerrison’s argument that that dismissal only related to the hearing before Justice Rees. Plainly that is not so. On the terms of the order drafted by Mr Kerrison, he sought leave to rely upon his own affidavit “in support of the orders sought in this Initiating Application”. In other words, he sought to file the affidavit in support of the entirety of his client’s case, not just that which was before Justice Rees on 11 April 2023.
Before I move to the balance of the orders that Justice Rees struck out, I repeat my concerns expressed to Mr Kerrison yesterday that there is an inherent conflict involved in him being a witness in his client’s case and also his client’s legal representative. I invite Mr Kerrison to consider this going forward as there may well come a time where he will not be permitted to wear both hats.
While speaking of affidavits, I also express my concerns that should the matter proceed further in whatever format, there will come a time (and indeed it is well overdue already) that the husband will need to put pen to paper and swear or affirm an affidavit. I think it most unlikely that a court would entertain the s 79A application without any sworn or affirmed affidavit from the applicant husband. However, that will be for another judge to decide on another day.
Returning to the proposed interim orders, Justice Rees then struck out Orders 2, 3, 5, 6, 7, 8, 10 and 11, many, if not most, were incompetent. I will attach those orders to these Reasons as they illuminate not only the incompetency of their drafting, but more so, they assist in understanding the interesting case the husband is trying to run (and without any evidence) and the submissions made before me.
What was before me?
Orders 4 and 9 of the proposed interim orders were before me, although the applicant did not press Order 9. Order 4 reads as follows:
Stay or Suspension of the Operation of Orders 1, 2 and 8 of the Orders made by Her Honour Judge Murdoch on 10 November 2022.
That, until further Order, the operation of Orders 1, 2 and 8 of the Final Orders made by Her Honour Judge Murdoch on 10 November 2022 be stayed or suspended and therefore cease to have any validity or effect for the period of the stay or suspension up until the making of a further Order.
(emphasis in original)
It is important to note the words used in proposed Order 4 - the applicant seeks a stay “up until the making of a further Order”. He does not seek a stay in the more traditional way pending an appeal; there is no appeal on foot. He also does not seek a stay pending the determination of his s 79A application for final orders. All he seeks is a stay pending further orders.
Material
Contrary to the requirements of the Central Practice Direction paragraph 5.18, the husband did not file a Case Outline seven days prior to yesterday’s hearing. Indeed, he did not file a Case Outline at all. Accordingly, it was not apparent to me or the respondent (as confirmed by her counsel Ms Hamilton) what material the husband was relying on in support of his application.
Whilst Justice Rees dismissed the husband’s application that he have leave to rely on the affidavit of Mr Kerrison “in support of the orders sought in his Initiating Application”, Justice Rees made an order in the following terms:
5.That the husband file and serve any material upon which he seeks to rely in support of his application for a stay not later than 4:00 pm on 8 May 2023.
(emphasis in original)
The husband did not take up this opportunity. When I ruled that I would not ignore Justice Rees’ order of April, Mr Kerrison then made an oral application for an adjournment. Ms Hamilton for the wife opposed to that. For the short reasons given yesterday I dismissed that oral application.
Accordingly, the husband relied upon:
·Amended Initiating Application filed 14 February 2023, and moved on Order 4.
The husband also failed to comply with the requirements in r 12.06 for the filing of a Costs Notice. Mr Kerrison was unable to give any reason why that had not been complied with. It was something that was well within his power to do - Mr Kerrison as the solicitor on the record for the husband. I drew Mr Kerrison’s attention to r 12.06(7) and will require him to comply with that within three days of yesterday when I brought it [the rule] to his attention.
The wife also did not file a Case Outline but that is understandable when she simply did not know the material the husband was relying upon and thus what case she had to meet.
An order was made that the wife is to file and serve any material upon which she sought to rely no later than 4.00 pm on 6 June 2023 (Order 6 of the orders made 11 April 2023). She complied.
Thus, the wife relied upon:
·Response to Final Orders filed 13 March 2023; and
·Affidavit of the wife Ms Guo filed 6 June 2023.
For yesterday’s purposes, the wife opposed the stay and sought orders that the applicant’s interim orders for a stay be dismissed and sought indemnity costs. The wife filed a Costs Notice and a tender bundle dated 6 June 2023. I indicated to Ms Hamilton for the wife that I would not receive the tender bundle in its entirety, but rather she could tender documents in the usual way.
One Exhibit came into existence being correspondence between the two solicitors which Mr Kerrison said proved that the wife did know the particulars of the paternal grandmother’s will – the paternal grandmother died 2010, and her will was dated 1979. The grant of probate is dated 2011.
I was also given a copy of the trial judge’s orders and settled reasons dated 15 November 2022.
In Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62], Gleeson CJ, McHugh and Gummow JJ said this:
…A judge's reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge's failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party's case.
In Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385–386, Mahoney JA said this:
It is not the duty of the judge to decide every matter which is raised in argument.
…
Nor is it necessary for a judge who is exercising a discretionary judgment to detail each factor which he has found to be relevant or irrelevant, or to itemize, for example, in the assessment of damages for tort, each of the factual matters to which he has had regard … Nor is a judge required to make an explicit finding on each disputed piece of evidence. It will be sufficient, if the inference as to what is found is appropriately clear…
Legal principles
What is before me today is the husband’s application for a stay “up until the making of a further order”. I asked Mr Kerrison to identify three things:
(1)What jurisdiction or power did I have to stay an order that was made in Division 2?
(2)What power do I have to make a stay in the terms sought in the interim orders?
(3)Did he need leave?
Unfortunately, Mr Kerrison was unable to give me any assistance with respect to these three questions. He confirmed he had turned his mind to such basic issues when he drafted the application. However, he said he did that back in January and could not recall upon what he landed. Yet, I listed the matter on 3 July 2023 for hearing yesterday, being 25 July 2023. That gave him 22 days to refresh his mind on what principles he ought invite me to invoke with respect to his stay order.
Mr Kerrison relied on two Full Court decisions from 2009 (Gull & Gull (Stay Application) [2009] FamCAFC 104 and Jackson & Balen [2009] FamCAFC 131), which he said concerned stays pending appeal. However, there is no appeal on foot here. I asked Mr Kerrison about applicability of the well-known authority of Medlow & Medlow (2016) FLC 93-692 (“Medlow”), which also concerned a stay pending appeal, but he was unable to assist me with any submissions on that decision either. Similarly, in the earlier oral application for an adjournment, he was unable to make any submissions on the High Court authority of Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175.
Question one
Despite not receiving any assistance from Mr Kerrison (or Ms Hamilton for that matter) about question one, I have satisfied myself that as a Division 1 Judge, I am able to stay an order made by a Division 2 Judge. I refer to s 25(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) which essentially says that when Division 2 causes the transfer of a matter to Division 1, as has occurred here, that transfer then confers original jurisdiction on Division 1. However, I hasten to add that I did not have the benefit of any argument about this. If I am wrong, then there is no prejudice to the husband.
Question two
When I turn to what power I have to make a stay “up and until the making of a further order”, r 13.12 is of no assistance because that concerns a stay pending an appeal. As I said many times in the hearing, much of what Mr Kerrison had to say (albeit his own opinions and evidence from the bar table) really sounded in the form of a submission that might be made in an appeal. Without any assistance from the applicant (who seeks to move the Court) with respect to relevant principles, I will do the best I can.
Question three
No one addressed me on the third question being whether leave was required for the husband to bring the application for a stay. As no one convinced me it was required, I will proceed. Again, even if I am wrong, there is again no prejudice to the husband.
An incompetently drawn order
I will dismiss Order 4 on the basis that it is incompetent; I do not know what a stay “up until a further order” means. I do not know what the further order would be? For example, if I granted the stay, and then made an order, say for costs, would that be a further order that terminated the stay? I do not know of and was not provided with any authorities to support such an order in the form it is drafted. I was also not provided with any assistance on what principles I ought apply when considering the order in the form it is sought.
Orders need certainty. The order lacks that.
An order sought without any evidential basis
Further, or in the alternative, I will dismiss Order 4 because it is not supported by any sworn/affirmed evidence from the applicant husband whatsoever. The currency of this Court is evidence. The husband, despite being given the opportunity to file an affidavit, did not do so. The lack of evidential support is fatal to his application. I indulged Mr Kerrison in giving more than two hours of evidence from the bar table, but that attracts little, if any weight.
Mr Kerrison would no doubt say Exhibit 1 is some form of evidence – that is letters exchanged between the two solicitors. In short, the wife’s solicitor asked for rather standard disclosure. The husband’s solicitor responded and annexed various things, inter alia, the grant of probate from 2011, the paternal grandmother’s will of 1979 and some settlement statements. Mr Kerrison’s letter contains various tables where he sets out his understanding of various distributions but also includes phrases such as “we understand” and “it would appear”.
Mr Kerrison relies upon Exhibit 1 to prove the wife is wrong when she said this in the affidavit before me:
In 2010, [Mr Zoric] received the property at [G Street, Suburb H] as an inheritance from his deceased parents. I was not aware of the particulars of his mother’s Will. All I knew was that [Mr Zoric] was the Executor, and that the [Suburb H] property was transferred into his name.
(Affidavit of [Ms Guo] filed 6 June 2023, paragraph 9)
Mr Kerrison first said the letters (Exhibit 1) proved the wife lied. When I asked him where that proof was in the letters, he then submitted that I should infer that the wife received his letter. But not only would I have to infer she received the letters, I would also have to infer she understood it. Whilst I can well imagine the solicitors for the wife would have sent her a copy, there is no evidence before me that the wife read it, comprehended all that was contained in it, much less accepted Mr Kerrison’s own opinions and assertions.
To the contrary, it would seem the wife did not accept Mr Kerrison’s opinions and assertions given the findings the judge made about the pool. I also observe Mr Kerrison has been on the record since 9 March 2022 and therefore would have received the wife’s trial material. Notwithstanding whatever it contained, the husband took no steps to right the wrongs as he may have perceived them in the wife’s trial material.
For all I know, the wife had a general sense of what happened with the paternal grandmother’s will, but was not aware of the particulars. Given the passage of time, it may also be that she forgot. I cannot, on the balance of probabilities, find that the wife misled me in paragraph 9 as set out above, as Mr Kerrison contended. More importantly, I have no idea what the wife’s material was before the trial judge, as I was not taken to that by the husband. By material, I mean sworn evidence.
To the converse, I accept Ms Hamilton’s submissions that if I were to consider the prospects of the husband’s s 79A(1)(a) application when considering the stay, then I would need evidence, actual evidence, not evidence from the bar table, where I could turn my mind to the prospects of the miscarriage of justice by reason of fraud, duress, suppression of evidence and so on as that subsection sets out. Again I have no such evidence, just submissions from the bar table none of which persuades me because they attract little, if any, weight.
Oral application to cross-examine
Part way through the hearing, Mr Kerrison brought an oral application to cross-examine the wife. Unfortunately, the wife did not attend the hearing. On Monday, 24 July 2023, her solicitors filed a Request for her to attend by electronic means, which I declined. The Request was brought out of time and lacked in evidence. Despite my declining the Request, the wife did not attend yesterday. I find that completely unsatisfactory.
Nevertheless had Mr Kerrison convinced me that he ought cross-examine the wife, then she was available to receive the Microsoft Teams link and that could have occurred. The Court managed to conduct cross-examinations in fair and appropriate ways via Microsoft Teams when we had the Covid crisis. There was no procedural unfairness to the husband in the wife not being in the Court.
In any event, Mr Kerrison wanted to cross-examine the wife because (a) she knew the money in trust was not joint husband and wife funds; (b) to see what she thought of the trial judge’s orders; and perhaps (c) whether she thought or knew some of the things she said about the paternal grandmother’s estate were wrong. I did not allow that. The husband had no evidential basis to support any of this. Further, and perhaps more so, I am not the slightest bit interested in the wife’s opinion about the trial judge’s orders.
Mr Kerrison’s submissions and stay pending appeal
I have already determined to dismiss Order 4 for being incompetent and/or because there is no evidential basis to support it.
I will nevertheless go through Mr Kerrison’s submissions where he sought to draw an analogy with the principles invoked when there is a stay pending an appeal.
In no way should this be taken as a determination by me that the principles relevant to a stay pending appeal apply to a stay “up until the making of a further order”.
Where an application for leave to appeal is filed and a stay is sought pending the determination of that application, the test is that set out in Medlow at [57] where the Full Court of the Family Court said:
We are of the opinion that, subject to the caveat just discussed, the test to be applied in applications for leave to appeal under s 94AA of the Act is whether, in all of the circumstances, the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court and whether substantial injustice would result if leave were refused, supposing the decision to be wrong.
The caveat referred to is at [55] of the decision in Medlow where the Court said:
The adoption of a new test ...is a litmus test to be applied in the general run of cases but always in the context of the unfettered discretion given by s 94AA. In appropriate cases, it being a test or a guideline, it will give way to the particular interests of justice in that case.
Of course, s 94AA has no application to this matter.
Where the appeal is from final orders and is brought as of right, the principles relating to a stay pending appeal are those described by Austin J in Zhai & Niu [2015] FamCA 639 at [6]-[7], recently adopted by Hartnett J in Philkin & Philkin (No 3) [2021] FedCFamC1F 224 (“Philkin”) at [43] as follows (citations omitted):
6.The discretion to stay the operation of orders should only be exercised where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his or her litigation pending the determination of any appeal. Such special circumstances justifying a stay will exist where it is necessary to prevent the appeal from being rendered nugatory or for whatever other reason there is a real risk it will not be possible for a successful appellant to be restored substantially to his or her former position if the judgment against him or her is executed. The Court should also consider the prospects of the appeal and where the balance of convenience lies. Those common law principles apply equally to judgments delivered in this jurisdiction.
7.The Court is entitled to assume that the decision which is the subject of the appeal is correct. Indeed, the Full Court must subsequently approach the appeal on the basis of a strong presumption that the decision at first instance is correct.
Hartnett J in Philkin brought together the principles to be applied and matters to be taken into account when determining a particular application at [44], which I will consider later.
I will do my best to summarise Mr Kerrison’s submissions as follows and the problems with them:
·The trial judge committed a miscarriage of justice so relief is sought under s 79A. Upon questioning, as indicated, Mr Kerrison later refined this to mean the wife caused the judge to commit a miscarriage of justice because she allowed the judge to proceed on matters that were false. However, nothing was stopping the husband from attending court and putting his version of events to the trial judge, but he did not. He well knew of the trial date as he was able to instruct his solicitor to engage counsel to turn up at the trial and ask for the matter to be adjourned;
·The trial judge relied upon a “purported” Joint Balance Sheet, which meant the trial judge was erroneously led to believe the values in that document were agreed. However, when the husband did not attend or put on any evidence it is hard to see what other values the trial judge could have divined. On my reading of the Reasons, the trial judge does not refer to these values as agreed. It would be hard for her to do so given she did not have any evidence from the husband;
·Further, the “Joint Balance Sheet” included almost $600,000 in funds held on trust by a conveyancing solicitor and included a property at Suburb F at $900,000. The complaints here were that the wife apparently knew that some of the money on trust was not matrimonial funds. Mr Kerrison’s evidence from the bar table was, that of that almost $600,000, he calculated CGT would be payable of $55,000 and the husband should get $172,000 on his (Mr Kerrison’s) “preliminary calculations.” Mr Kerrison wanted to give me hard copy calculations of how he had arrived at those figures but I was not prepared to accept unsworn, controversial evidence. In any event, this officer of the Court told me what he wanted to about both the trust monies and the Suburb F valuation, without any regard to actual evidence. I do not include his opinions in documents [Exhibit 1] to be evidence. Again, there was nothing stopping the husband from making submissions to the trial judge about the money on trust or the valuation of Suburb F, but he chose not to. Just as he chose not to file an affidavit as he was directed to do so before me;
·If there is no stay the wife can go to the conveyancing solicitor and get her entitlements - I accept that is so. Night follows day if no stay is in place;
·The wife presented false evidence to the trial judge about the husband’s entitlements under his mother’s 1979 will and the 2011 grant of probate and thus what was matrimonial funds held on trust - again I have no sworn or affirmed material before me to support that submission. Again the husband could have attended the trial and dealt with that. I have already referred to Exhibit 1, being the correspondence, and what I can make of that;
·There is now conflict between the trial judge’s orders and the 2011 grant of probate in the Supreme Court. Even if that is so, I do not understand how a stay until a further order would resolve that alleged conflict;
·If a stay is not granted it will be a fundamental denial of justice - but I must do justice to both parties;
·The husband’s brother known as Mr K is “clearly entitled to $400,000” – again, evidence from the bar table. Yet the brother took no steps to protect his apparent interest in the proceedings before the trial judge nor did he in the hearing before Justice Rees or before me. The husband confirmed his brother was aware of what was going on in the trial;
·If a stay is not granted “the subject matter will be distorted and part of the subject matter will be given to the wife which she is not entitled to receive” – there is no relevant or cogent evidence before me to support the contention that the wife is not entitled to receive what the trial judge ordered, not that the husband attended the trial to prosecute his case in any event;
·“Another problem” is that the title to the Suburb F property is in both names and the husband lives in that property - I do not understand how this supports Order 4;
·In early 2022 Suburb F had been valued at $840,000 and I was asked to take judicial notice about property values accelerating at this time. I declined to do so, I have no knowledge of property valuations in Suburb F in early 2022. Nevertheless, the submission continued that the wife’s solicitors wrote to the valuer outside of the 21 days and the valuer revised his valuation for Suburb F to $900,000. The next complaint was that the primary judge relied upon the $900,000. I really do not know what else the trial was meant to do given the husband chose not to participate in the trial and prosecute his case;
·“There will be a smash and grab on the $600,000 which comes from an exaggerated figure due to the judge relying upon the $900,000 valuation and because the funds held on trust should not be included in the pool in its entirety” - again there is little if any evidential base to support that submission. Submissions are not evidence;
·The wife knows the money in trust is incorrect – again, the husband could have appeared;
·The trial judge’s orders favour the wife – that does not support the stay;
·If the stay is not granted and the wife takes the $600,000 it will be gone and that exposes the “lack of bona fides of the wife. Her male fides” – if the stay is not granted that is because the husband has failed to convince me;
·A stay would be fair to both parties - however it would be unfair to the party who is entitled to the proceeds of the litigation and to assume the reasons at that first instance were correct;
·There is no prejudice to the parties to grant the stay, “the parties can keep doing what they’re doing” - the problem with that is the wife is held out of her entitlements, as is the husband for that matter;
·If there is no stay “(1) the wife will get her hands on the money; (2) the brother may take steps; and (3) the husband would be personally liable for the difference between the judgment sum and what is in trust and the wife might enforce that $30,000 difference against him”. If the wife “gets her hands on the money” that will be because I declined to grant the stay. I did not allow Mr Kerrison is to continue on wildly speculative submissions about the brother, whom he has never spoken to and never met, is not a party to these proceedings and has taken no steps to protect his asserted interest. As for the husband’s personal liability, for all I know the wife has had enough of the litigation – she deposes to the stress it makes her feel - and wouldn’t spend, say, $50,000 in legal fees to try and enforce $30,000.
I turn to the principles collected by Hartnett J referred to above.
the onus to establish a proper basis for the state is on the applicant for the stay. However it is not necessary for the applicant to demonstrate any “special” or “exceptional” circumstances;
I have already determined to dismiss Order 4 for being incompetent and/or lacking any evidential basis. If I am wrong on that, and if the principles to a stay pending an appeal apply, then it will become apparent that the husband has failed to meet the onus that is cast upon him if I use the principles analogous to a stay pending an appeal.
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;
These considerations favour the wife.
the mere filing of an appeal is an insufficient basis for granting a stay;
No appeal has been filed.
the applicant’s bona fides;
The trial judge listed the husband’s many failures to comply with orders. He also failed to comply with the order to file and serve an affidavit before me on this hearing. The wife submitted the husband has engaged in a strategy of delay and that continues before me. Looking at the trial judge’s reasons, and the orders he has subsequently ignored, I accept there is some force in that submission. I am not however prepared to go so far as to say the application is male fide, rather it is both incompetent in the form of order and lack of evidence.
whether there has been a delay in applying for the stay;
The stay order was first sought by the amended application on 14 February 2023. The reasons and orders were handed down on 10 November 2022 and published on 15 November 2022. That delay, and any reasons therefore, is unexplained by the husband.
That does not assist the husband.
the time that will elapse before the appeal can be heard;
Mr Kerrison did not favour me with any evidence when the s 79A hearing might occur. That does not assist the husband.
a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted – this will be a substantial factor;
That consideration refers to appeals. There is no appeal, but a s 79A application. The husband put on no evidence to assist me in this regard other than the rather obvious submission if the wife takes the funds in trust then she takes them.
However, the funds in trust are not the only assets available between these parties. The property pool found by the trial judge was almost $2.4 million. The funds in trust are almost $600,000 of which Mr Kerrison gives opinion evidence that the husband is really only entitled to $172,000. Indulging that evidence from the bar table for a moment, that means the dispute then is about an approximate $400,000 (if I accept, for argument’s sake Mr Kerrison’s opinion evidence). Thus, on a pool of almost $2.4 million, I do not accept the s 79A application would be rendered nugatory if the wife has access to her entitlements that find their way into the trust account.
I also do not understand how the trial judge’s reliance upon the figure of $900,000 for the Suburb F property would be rendered nugatory if the stay was not granted.
some preliminary assessment of the strength of the proposed appeal –whether the appellant has an arguable case; and
Again this is not an appeal and I have little, if any cogent evidence, to support the husband’s submissions. As said, Exhibit 1 does not join the dots in the way Mr Kerrison argued. There was nothing stopping the husband from participating in the trial and putting his case, but he did not.
It is a complete curiosity that the husband has not sworn/affirmed an affidavit at all since these proceedings commenced in October 2021. I do not know what else the trial judge could have relied on for the Suburb F property but the valuation of $900,000 whether that was obtained outside the 21 days or not. As for the funds held in trust, I have no evidence before me to satisfy me that the wife lied or was dishonest in her paragraph 9 that was before me. But that really misses the point. I was not favoured with evidence about what she told the trial judge in her Evidence in Chief. It is for the husband to discharge the onus.
As for the money in trust, the evidence I do have before me (from the wife’s affidavit) is that when the husband gave an undertaking to the wife about retaining the sale proceeds he referred to the property as “my property”. There was no mention of an estate. On settlement of the property sale, it was referred to “[Mr L] purchase from [Mr Zoric]”. There is no mention of the husband as the executor or the estate in those documents. The conveyancing solicitor also advised that they were not aware they were acting for the husband as the executor and were not instructed to that effect.
The actual evidence before me does not support the husband’s case, or his prospects.
Further, I accept Ms Hamilton’s submission that s 79A itself is entirely discretionary. So, even if on the evidence (not that I have much here from the husband) the husband was able to establish any of the matters in s 79A(1)(a), and even on my preliminary assessment, that does not mean he will automatically have the orders set aside. It would be for the judge hearing the s 79A application whether they exercise their discretion to do so. That does not assist the husband with his singular lack of evidence before me (I have referred to Exhibit 1 and its failings) to make a preliminary assessment of his prospects of not only establishing any of the grounds in section 79A(1)(a), but also the exercise of the s 79A judge’s discretion in the husband’s favour.
a stay may be granted on terms – this may involve weighing the balance of convenience and the competing rights of the parties.
I accept the stay might be granted on terms but the only terms that were sought by the applicant was a stay until the making of a further order. I have already determined that to be incompetent.
It is difficult to assess the balance of convenience in any evidenced way because the husband failed to put on evidence. All I have is the bald assertions and opinions from Mr Kerrison that if the wife gets her hands on the money it will be gone. I have already observed that the money on trust (or on Mr Kerrison’s opinion evidence the $600,000 less the $172,000 he says the husband is entitled to) represents about one-fifth of the pool as the trial judge found. That is a pool where the husband declined to assist the Court in understanding what monies he had in bank accounts or what superannuation interests he had. In other words, the pool may have been greater in value had the husband disclosed what he had, or put on evidence.
In the meantime, the wife has the benefit of the judgment. She has waited two years for finalisation of the matter. It was submitted by Ms Hamilton, and I accept, that the husband’s s 79A application and the stay give no assurance to the wife (or the Court) as to how the husband will proceed with that matter. Of course, the wife has legal costs to meet due to the husband’s current and pending applications. It also does [not] assist the husband in persuading me about the balance of convenience that when the trial judge referred to his non-compliance with orders and failure to file anything as being somewhere near contemptuous of the Court, he repeats exactly the same non-compliance before me. I have no comfort that the husband would change his attitude and actually participate and prosecute his claim in a timely fashion.
I have gone through all of those stay-pending-appeal factors, but only some of them were addressed by Mr Kerrison. However, this is not a determination by me that those principles are relevant and applicable to the stay, which is sought by the husband being, essentially, a stay until further order.
Disposition
I will dismiss Order 4. I will also dismiss Order 9 as that was not pressed. The final order is Order 12 being “such other orders as the Court deems fit”.
I deem it fit to make an order that the husband, through his solicitor, comply with the Costs Notice provisions in the rules, in particular subsection 7.
ADDENDUM
At the start of these Reasons, I said I would correct the transcript for grammatical error and to make the oral word more amenable to written reading.
When I was settling these Reasons, the husband, through Mr Kerrison, had not filed the Costs Notice as required. The document was ultimately filed, but not within the timeframe provided in the Order.
I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Brasch. Associate:
Dated: 31 July 2023
ANNEXURE A – STRUCK OUT ORDERS
2. Leave sought to Add Further Parties to the Proceeding.
That leave be granted pursuant to Rule 3.03(4) of the Family Law Rules 2021, to the extent that it might be necessary, to add 2 further parties to the proceeding, being:
(a) Respondent 2, being [Ms M].
(b) Respondent 3, being [Mr N].
3. Declaration in relation to the Balance of the Net Proceeds of Sale of the Real Estate at [G Street, Suburb H].
That, pursuant to Section 78 of the Family Law Act 1975, the balance of the net proceeds of sale of the real estate at [G Street, Suburb H] amounting to approximately $596,061.00 (rounded down to the nearest dollar) held in the Trust Account conducted by Respondent 3 t/as [B Lawyers] (the trust funds) be declared to be the property of the Estate of the late [Ms P] in relation to which:
(a) The late [Ms P] died [in] 2010.
(b) The late [Ms P] left a Will dated […] 1979.
(c) Probate of the Will of the late [Ms P] was granted by the NSW Supreme Court to one of her sons, being the Applicant, who was named in the Will as the Executor.
(d) The Will nominated the sons of the late [Ms P], being the Applicant and his brother [Mr K] as beneficiaries “in equal shares”.
5. Effect of the Payment Directions Letter.
That, until further Order, in relation to the letter on the letterhead of Family Focus Legal addressed to [B Lawyers] dated 7 December 2022 (sic) and counter-signed by Deputy Registrar […] on 21 December 2022 (the Payment Directions letter):
(a) The imprimatur of the FCFCOA be considered to be withdrawn from the Payment Directions letter.
(b) The Payment Directions letter cease to have any validity or effect insofar that it purports to implement the provisions of Order 1(a) made on 10 November 2022.
6.Payment of the Trust Funds into the Trust Account of the Solicitor for the Applicant.
That, within 14 days of the date of the Order, Respondent 3 shall pay the trust funds into the Trust Account of the solicitor for the Applicant.
7. Orderly Administration of the Estate of the late [Ms P].
That, upon receipt of the trust funds into the Trust Account of the solicitor for the Applicant, the Applicant in his capacity as Executor of the Estate of his late mother [Ms P] shall be at liberty to proceed with an orderly administration of the Estate including:
(a) Assessment and payment of all debts and liabilities of the Estate, including Capital Gains Tax (CGT) associated with the sale of the real estate at [G Street, Suburb H], which was sold by Contract for Sale back [in] 2020, settlement of which was effected [in] 2020.
(b) Distribution of the trust funds in accordance with the probated Will of the late [Ms P], who died [in] 2011.
8. Payment of "Matching" Interim Distribution to Beneficiary [Mr K].
That, in the alternative to the Order sought in Proposed Order 7(b) above:
(a) In consideration of the Applicant, who as a beneficiary of the Estate of his late mother [Ms P] has effectively received interim distributions from the Estate of the late [Ms P] totalling $167,522.47, in the form of the following:
No.
Description
Amount
1.
Loan obtained by the Applicant from Q Bank, secured against the Estate property at G Street, Suburb H (the Estate property), which was repaid from the net proceeds of sale at the time of settlement of the sale [in] 2020, amounting to
$ 66,422.47
2.
Interim cash distribution paid to the Applicant from the net proceeds of the sale of the estate property [in] 2020, amounting to
$100,000.00
3.
Payment made to Family Focus Legal on behalf of the Applicant on 2 June 2022, in satisfaction of a Costs Order made on 26 April 2022, amounting to
$ 1,000.00
Total interim distributions received by the Applicant
$167,522.47
(a) Be permitted, in his capacity as Executor of the probated Will of the late [Ms P], to access the trust funds held in the Trust Account of Respondent 3, for the purpose of making a "matching" interim distribution to his brother [Mr K], who is also a beneficiary of the Will, of $167,522.47, in accordance with a written document headed Direction to Executor and stakeholder to make Interim Distribution to Beneficiary by [Mr K] dated 6 February 2023 (the Direction).
(b) Otherwise, the amount of the trust funds then remaining, after payment of the debts and liabilities of the Estate and payment of the “matching” interim distribution to [Mr K], shall not be capable of further distribution to the beneficiaries of the Estate by the Applicant until further Order of the Court.
10. Payment of Damages to the Applicant.
That Respondent 1 and Respondent 2 shall jointly and severally pay damages arising out of the improper registration of Caveat […] over the title to the real estate at [G Street, Suburb H], and then using the Caveat as a “bargaining chip” by refusing to supply a Withdrawal of Caveat to allow settlement of the sale of the real estate to proceed unless the Applicant provided a written Undertaking to retain the trust funds in the Trust Account of Respondent 3 t/as [B Lawyers] or to satisfy such other demands ma orders on the de by Respondent 1 and Respondent 2, such damages to include:
(a) Interest payable on the trust funds, from the date of settlement of the sale of the [Suburb H] property on Wednesday, 29 April 2020 to the date of the release of the trust funds by Respondent 3 in accordance with the proceeding Orders. In this respect:
(i) Such interest shall be payable in accordance with the provisions of Section 117B(1) of the Family Law Act 1975.
(ii) Payment of the interest so calculated shall be paid within 28 days of the solicitor for Applicant advising Respondent 2 in writing of the amount of interest.
(b) Penalties, fines and interest levied by the Deputy Commissioner of the Australian Taxation Office, if any, arising out of late payment of the CGT associated with the sale of the real estate at [G Street, Suburb H], at least 7 days prior to the date for payment of any such penalties, fines and interest.
(c) Exemplary damages of $25,000.00, within 28 days of the date of the Orders.
11. Interest.
That, in the event that the payment of any amounts due and payable by Respondent 1 and Respondent 2 jointly and severally to either the Applicant or Respondent 3 is not paid within the period in which payment is stipulated to be made, then interest shall be payable in accordance with the provisions of Section 117B(1) of the Family Law Act 1975 from the date upon which payment was due to the date upon which payment is actually made.
(as per the original)
2
6
0