Hall and Hall (No 3)
[2014] FamCA 406
FAMILY COURT OF AUSTRALIA
| HALL & HALL (NO. 3) | [2014] FamCA 406 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Interim Orders – husband sought stay of orders pending appeal – orders included exclusive use of matrimonial home and spouse maintenance – wife opposed application and sought injunction restraining husband from disposing or attempting to dispose of the former matrimonial home – husband’s debts secured against the former matrimonial home and other properties – husband received advice from ATO to reduce debt – wife sought mutual order for discovery to clarify husband’s financial position – husband has other assets with which to reduce debt and it is not appropriate to dispose of former matrimonial home – husband’s application dismissed. FAMILY LAW – PRACTICE AND PROCEDURE – wife alleged husband retained items of jewellery and other personal property at the date of separation – limited argument – husband ordered to return property within 14 days. |
| Family Law Act 1975 (Cth) s 114 | |
| Family Law Rules 2004 (Cth) r 22.11 Blueseas Investment Pty Ltd & Mitchell & McGillivray (1999) FLC 92-856 | |
| APPLICANT: | Mr Hall |
| RESPONDENT: | Ms Hall |
| FILE NUMBER: | ADC | 3671 | of | 2013 |
| DATE DELIVERED: | 17 June 2014 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Dawe J |
| HEARING DATE: | 14 March 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr O’Shannessy |
| SOLICITOR FOR THE APPLICANT: | Kennedy Partners |
| COUNSEL FOR THE RESPONDENT: | Mr Ackman, QC (with Mr Werner) |
| SOLICITOR FOR THE RESPONDENT: | Barnes Brinsley Shaw Lawyers |
Orders
The husband and wife do each make discovery on oath within fourteen [14] days and to include but not limited to on the part of the husband copies of any applications or financial statements provided to any bank or lending institutions within the last three [3] years and copies of any documents referred to in the affidavit of the wife’s solicitor, Mr Barnes, filed on 12 March 2014.
Within twenty-one [21] days from today any of the wife’s personal items, including but not limited to, clothing, jewellery, notes and professional journals and other documents at the Suburb L property, be delivered to the wife by the husband taking steps to have them delivered to an agreed neutral address UPON NOTING if such neutral address cannot be agreed within fourteen [14] days then the same to be delivered to the wife’s solicitors’ office.
That the husband be restrained and an injunction be granted restraining the husband from selling or attempting to sell the former matrimonial home at E Street, Suburb F, and do forthwith remove the home from being advertised for sale through U Real Estate or any other agency.
That the husband be restrained and an injunction be granted restraining the husband from selling or attempting to sell Properties AA and BB, W Street, Suburb F, in the State of South Australia.
The Application in a Case filed by the husband on 7 March 2014 is dismissed and removed from the active pending cases list.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hall & Hall (No. 3) 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 ADELAIDE |
FILE NUMBER: ADC 3671 of 2013
| Mr Hall |
Applicant
And
| Ms Hall |
Respondent
REASONS FOR JUDGMENT
Introduction
By Application in a Case filed on 7 March 2014 the husband sought orders discharging Orders made on 10 December 2013 which continued Orders made on 23 October 2013 providing for the wife to have sole use and occupation of the former matrimonial home at E Street, Suburb F in the State of South Australia, that he pay the outgoings and that he be restrained from attending at the former matrimonial home, save as to collect or return the children and be restrained from disposing of or encumbering or dealing with the former matrimonial home or any asset save and except in the usual course of business without notifying the wife and providing her with no less than 14 days’ notice.
Paragraph 1.3 of the Order of 10 December 2013 provided for the husband to pay the wife spouse maintenance at the sum of $10,833 per calendar month.
In his application filed on 7 March 2014 the husband also sought in the alternative that the operation of those orders be stayed pending the determination of the Notice of Appeal which was filed by the husband on 20 December 2013.
In the Response to the Application in a Case filed on 12 March 2014, the wife sought that the husband’s application be dismissed. She further sought orders for discovery, delivery up of personal items, an order restraining the husband from confiscating the children’s mobile telephones and directing that the children have such telephones upon their person or in their immediate vicinity “at all times that the children are in his care”. The response also sought an injunction restraining the husband from selling, or attempting to sell the former matrimonial home and an order that he remove the home from being advertised for sale. Similar orders were sought in relation to Properties AA and BB, W Street, Suburb F.
In relation to the specific applications the husband filed an affidavit on 7 March 2014. On 13 March 2014 (the day before the interim hearing) the husband e-filed a Financial Statement sworn on 12 March 2014.
The wife relied upon the affidavit e-filed on 13 March 2014 (the day before the interim hearing).
Summary of relevant background and issues
Proceedings between the parties commenced in October 2013 when the wife brought an Initiating Application in relation to the children and for use and occupation of the former matrimonial home and various injunctions.
By Amended Initiating Application filed later in October 2013, the wife also sought a property settlement order (vaguely worded) and spouse maintenance of $20,000 per month. The Amended Initiating Application also sought interim orders for urgent spouse maintenance or interim spouse maintenance of $14,000 per month and an injunction restraining the husband from disposing, encumbering or dealing with the property at E Street, Suburb F (the former matrimonial home) and injunctions restraining him from disposing of or dealing with assets save and except in the normal course of business without first notifying the wife.
By Response to the Amended Initiating Application filed on 13 November 2013 the husband sought various orders including orders that the wife return to the husband the keys and/or remote controls to the Suburb L property and that the wife forthwith vacate the former matrimonial home at E Street, Suburb F and “fully cooperate with the husband to allow its immediate sale”. He also sought orders that the wife cooperate with the husband to allow the immediate sale of Properties AA and BB, W Street, Suburb F and for the net proceeds of sale, after discharge of all debt, to be invested in joint names pending final property settlement. By way of final orders the husband also sought settlement of property orders in vague terms.
The husband’s application also raised issues about the disclosure of any interest the wife may have in her late father’s estate.
Further documents were filed. On 23 October 2013, when the matter came on before me, orders were made in relation to children’s issues. An order was also made that during the period of the adjournment the wife was to have the sole use and occupation of the former matrimonial home at E Street, Suburb F, with the husband to continue to pay the outgoings. The order also included an injunction restraining the husband from attending at or in the vicinity of the former matrimonial home and orders preventing him from dealing with or selling the former matrimonial home or other assets except on special conditions.
On 10 December 2013, after hearing argument on 9 December 2013 from Mr Ackman, QC for the wife and Mr Richards for the husband, I delivered the ex tempore judgment which provided that pending final determination of property settlement and spouse maintenance proceedings between the parties, Orders 8.1 and 8.3 of 23 October 2013 were continued, the husband to pay the school fees, spouse maintenance to the wife in the sum of $10,833 per calendar month. (Paragraphs 8.1 and 8.3 of Order 23 October 2013 related to the sole use and occupation of the former matrimonial home at E Street, Suburb F and the Orders restraining the husband from attending at the former matrimonial home, disposing of, encumbering or in any way dealing with the former matrimonial home or disposing or dealing with any assets save and except in the usual course of business without first notifying the wife in writing and providing her with no less than fourteen days’ notice).
On 20 December 2013 the husband filed a Notice of Appeal from the Orders made on 10 December 2013. The Orders sought in the Notice of Appeal (including being granted leave to proceed with an appeal) sought that all of the orders made on 10 December 2013 be discharged. The grounds of appeal are as follows:
Grounds of Appeal
1.The learned trial Judge erred in determining that the Respondent was in need of spousal maintenance.
2.In the alternative to Ground 1, the learned Judge erred in awarding the Respondent periodic spouse maintenance in the sum of $10,833 per month in that such an award is excessive having regard to the Respondent’s reasonable needs.
3.The learned trial Judge erred in determining that the Applicant/Appellant had the ability to make payment pursuant to the Orders, effectively in the sum of $27,900 per month “pending final determination of property settlement and spouse maintenance proceedings between the parties.”
The appeal has not been heard.
Whilst the appeal appears to be against all of the Orders of 10 December 2013, the Notice of Appeal does not make any reference to the continuation of paragraphs 8.1 and 8.3 of the Order of 23 October 2013 which related to the sole use and occupation of the former matrimonial home at E Street, Suburb F and the injunctions restraining the husband from entering the property or dealing with the property.
On 7 March 2014 the husband filed the Application in a Case which sought the discharge of paragraphs 1.1 and 1.3 of the Orders of 10 December 2013 or in the alternative that the Orders be stayed pending the appeal.
The wife filed her response on 12 March 2014 seeking the dismissal of the application and various orders, including the injunction in relation to the children’s mobile telephones and the injunction restraining the husband from selling, or attempting to sell the E Street, Suburb F property or the W Street properties.
Paragraph 1.1 of the Order of 10 December 2013 continued the orders of paragraphs 8.1 and 8.3 of the Orders of 23 October 2013 pending final determination of property settlement and spouse maintenance proceedings between the parties.
Paragraphs 8.1 and 8.3 of the Order of 23 October 2013 deal with the sole use and occupation of the former matrimonial home at E Street, Suburb F and injunctions restraining the husband from attending at or in the vicinity of the property, disposing of, encumbering or dealing with the former matrimonial home or disposing of or dealing with any assets save and except in the usual course of business without first notifying the wife in writing and providing her with no less than fourteen days’ notice.
Paragraph 3 of the grounds of appeal refers to an alleged error in relation to his ability to make payment “effectively in the sum of $27,900 per month” this may refer to the orders which required him to pay spouse maintenance of $10,833 per month as well as the outgoings in relation to the former matrimonial home.
In the affidavit filed by the husband on 7 March 2014 the husband refers to him being a “self-employed [in the property industry] and investor”. In his affidavit at paragraph 11 the husband says, “I work [in the property industry], managing a number of investments which I will collectively describe in this affidavit as “the [Hall] Group”. He then sets out the significant assets which the Hall Group owns. In that affidavit he estimates the gross value of the Hall Group at “perhaps $70 Million”. He then refers to the assets being “heavily leveraged”. He alleges that the group’s debt to third parties totals “in excess of $50 Million”.
He asserts in the affidavit that he does not receive a salary from the Hall Group, but refers to dealing with the Trust and loan accounts.
At paragraph 15 of his affidavit he says, “To the extent that the wife has alleged my current annual income is about $4 Million this is incorrect”.
The affidavit then sets out the information in relation to the W Street and the E Street properties and the debts secured over the same.
In the affidavit he also refers to the negotiations which have been undertaken by the husband and his accountants in relation to the Australian Taxation Office (“the ATO”). The husband asserts that he has been given advice to “pay down the existing debt by realising assets”. He seeks to sell the W Street properties and the E Street property, describing them as assets which he would be able to sell “quite quickly”. (Paragraph 28).
In relation to the wife’s financial position he makes reference to the dispute concerning the wife’s interest in her late father’s estate and her possible interest in the V Group.
In the wife’s affidavit filed on 13 March 2014 she opposes the sale of the W Street, Suburb F properties. She says that she would like to retain the properties on final property settlement. The wife refers to the affidavit of her solicitor in which she says it is alleged that there has been “no financial disclosure” by the husband or discovery of financial documents. She says that she strongly opposes any order for the sale of the properties until “full and frank disclosure has been made”.
In relation to the former matrimonial home at E Street, Suburb F, the wife refers in the affidavit to the steps the husband had taken in January 2014 to instruct agents to place the former matrimonial home on the market for sale. The wife also sets out in the affidavit the items which she has requested to be delivered to her from the home at Suburb L.
Much of the information in the affidavits of the husband and the wife relate to factual matters that were known or existed when the orders were made on 23 October 2013 and continued on 10 December 2013.
In the submissions on behalf of the husband in relation to the discharge of the spouse maintenance order and the discharge of the injunctions for sole use and occupation, counsel for the husband maintained that the information now available in relation to the estate of the late father of the wife indicated that the wife has, or is going to have, shares worth approximately $7.2M. He submitted that this therefore removed the basis upon which any spouse maintenance order could be made because the wife was able to support herself.
The other submission was that the husband has had recent information from the ATO which cautioned about him continuing to draw from the loan accounts against the various commercial entities, rather than disclose a greater taxable income.
The wife maintained that she had fully disclosed her interest in the family companies based upon the information she had been given.
At the time of the hearing before me there remained considerable dispute about what interest, if any, the wife has in her late father’s estate. There was no clear or reliable evidence of the value of any shares the wife held in the family group of companies and trusts.
There was also considerable disagreement about the value of the husband’s interest in the various entities, taking into account monies he had borrowed from those entities.
Whilst the husband maintained that the Suburb L property was worth approximately $2.2M, the wife’s counsel maintained that the wife believed the property to be worth “$5M to $6M”.
On behalf of the wife it was maintained that apart from the information concerning the ATO there was no new material which warranted further consideration of the existing orders.
It was maintained on behalf of the wife that there was an error in the wife’s late father’s Will when it referred to shares being transferred to the wife on the basis that she already owned those shares. It was also maintained on behalf of the wife that there is no evidence that the shares that the wife held were worth $7.2M. It was maintained that significant issues remained not only as to the value of those shares, but the wife’s capacity to sell the shares.
The Law
Rule 22.11 of the Family Law Rules 2004 (Cth) (“the Rules”) provides the following:
(1)The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision.
(2)If an appeal has been started, or a party has applied for leave to appeal against an order, any party may apply for an order staying the operation or enforcement of all, or part, of the order to which the appeal or application relates.
(3)An application for a stay must be filed in the Registry in which the order under appeal was made and be heard by the Judge, Federal Magistrate or Magistrate who made the order under appeal.
The Full Court in the decision of Friscioni & Friscioni [2009] FamCAFC 43 at 54 reiterated that making an order for a stay is “wholly discretionary”. It is dependent upon “the circumstances of each case”.
The Full Court judgment of Trahn & Long (No 2) [2008] FamCAFC 194 summarised the law in relation to stays at paragraphs 37 to 38.
37.In determining that the father’s stay appeal should be dismissed we had regard to the principles which the trial Judge was obliged to apply when determining such an application, and considered whether or not his Honour had correctly applied the relevant principles.
38.These principles, both in the general law and in respect of parenting proceedings, are well settled (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited (1986) 160 CLR 220 at 230; Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685. Jennings Constructions Limited v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681; Clemett and Clemett (1981) FLC 91-013; JRN & KEN v IEG & BLG (1998) 72 ALJR 1329 at 1332). The authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter included 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 “special” or “exceptional” circumstances;
·a person who has obtained a judgment is entitled to the benefit of that judgment;
·the person who has obtained a judgment is entitled to presume the judgment is correct;
·the mere filing of an appeal is insufficient to ground a stay;
·the bona fides of the applicant;
·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 the stay;
·some preliminary assessment of the strength of the proposed appeal - whether the appellant has an arguable case;
·the desirability of limiting the frequency of any change in a child’s living arrangements;
·the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of a stay for a short period of time; and
·the best interests of the child the subject of the proceedings.
The provisions of s 114 of the Family Law Act 1975 (Cth) (“the Act”) provide the Court with power to grant an injunction being such injunctions as it considers it is proper with respect to the matter to which the proceedings relate. This includes, but is not limited to, s 114 (1)(e) “an injunction in relation to the property of a party to the marriage”; or s 114 (1)(f) “an injunction relating to the use or occupancy of the matrimonial home”.
The Court has the power to grant an injunction of the type sought by the wife if the Court is satisfied that there is a serious issue to be tried and the balance of convenience supports the making of the order (Yunghanns & Ors (1999) FLC 92-386 and Blueseas Investment Pty Ltd & Mitchell & McGillivray (1999) FLC 92-856).
It has been readily accepted that the purpose of interlocutory restraining orders is to preserve the status quo until significant issues can be determined at the final trial. The law in relation to application for stay relevant to these proceedings requires that the consideration be given to various factors, including some preliminary assessment of the strength of the proposed appeal and whether the appeal would be rendered nugatory if the stay were not granted. (See the principles discussed in Jennings Constructions Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681).
The authorities all indicate that the discretion is to be exercised on the basis that it is not necessary for the person seeking the stay to demonstrate special or exceptional circumstances, but the onus is on the person seeking the stay to establish the basis for the stay.
Discussion and finding
I accept that the dealings with the ATO were not the subject of evidence or argument in relation to the original orders providing the wife spouse maintenance nor for the injunctions protecting her occupation of the former matrimonial home and restricting the sale of the W Street properties. However, the information concerning the ATO and the need to reduce the husband’s loan account in one of the entities (the X Trust) does not of itself indicate that on an interim basis the former matrimonial home in which the wife resides with the children and the other assets which the wife seeks to retain in an overall property settlement should be sold.
I am not satisfied that the fresh information concerning the ATO and the new issue concerning the value of the wife’s shares and the possible, but not yet determined, interest in her late father’s estate, provide sufficient reliable evidence upon which to discharge the injunctions and permit the husband to sell the former matrimonial home in which the wife and children currently reside and the other two W Street properties.
The husband’s preference to sell those properties rather than substantial other assets he owns and controls is not a sufficient basis to make the interim orders he seeks before the significant factual matters are determined.
The orders restraining the husband from dealing with assets give him an opportunity to deal with assets if he gives fourteen days’ notice to the wife. Sensible negotiations and appropriate disclosure and discovery should enable the parties to make arrangements which would satisfy the ATO.
On the application by the husband to stay the orders pending the appeal it is necessary to consider the grounds of appeal set out in the Notice of Appeal. The grounds of appeal refer only to the orders for spouse maintenance and do not make any reference to the orders in relation to sole use and occupation of the former matrimonial home, nor the orders restraining the husband dealing with the real estate properties. As such therefore the husband has not established any basis upon which he has an arguable case so far as it relates to the interim injunctions concerning the use and occupation of the former matrimonial home and the injunctions concerning the sale of the other properties.
Continuing the preliminary assessment of the strength of the appeal, and whether the husband has established an arguable case in relation to his appeal, the grounds of appeal asserts that I “erred in determining” the spouse maintenance order. The grounds assert that the award was excessive having regard to the wife’s reasonable needs and that I erred in determining that the husband had the ability to make the payments pending final determination.
The Court is also required to consider the person who has obtained a judgment is entitled to the benefit of that judgment and to presume it is correct.
If the husband is successful in his appeal and the order for spouse maintenance is set aside an appropriate adjustment will be capable of being made on final determination of the property settlement proceedings.
The Application in a Case filed by the husband on 7 March 2014 (document 54) is dismissed.
In the Response to the Application in a Case filed by the wife on 12 March 2014, the wife seeks an order for mutual discovery on oath within seven days, and in particular, seeks:
copies of any applications or financial statements provided to any bank or lending institution within the last three years and the documents referred to in the affidavit of the wife’s solicitor, Mr Barnes, filed on 12 March 2014.
All relevant discovery needs to be made. The specific order will remove doubt and reduce further argument.
There was limited argument concerning the order that the husband deliver up the wife’s personal belongings. If the husband has retained the wife’s personal items, such as clothing, jewellery, notes and professional journals and other documents at the Suburb L property, those items should be delivered to the wife by the husband taking steps to have them delivered to a neutral address. If such neutral address cannot be agreed within fourteen [14] days then the items should be delivered to the wife’s solicitors’ office.
In the Response to the Application in a Case the wife sought an order that the husband be restrained from confiscating the children’s mobile telephones and ensure that they have them on their person or in the vicinity at all times when the children are in the husband’s care. Taking into account the ages of the children and the dispute concerning the care of the children, which is now the subject of orders providing for an independent supervisor, such an order is not necessary. The Court is not satisfied that such an order would be in the best interests of the children.
In that Response to the Application in a Case the wife also sought:
5.That the husband be restrained and an injunction be granted restraining the husband from selling or attempting to sell the former matrimonial home at [E Street, Suburb F], and do forthwith remove the home from being advertised for sale through [U Real Estate] or any other agency.
6.That the husband be restrained and an injunction be granted restraining the husband from selling or attempting to sell [Properties AA and BB, W Street, Suburb F].
The Orders of 23 October 2013, which have been continued, provide in 8.3.2 “that the husband is restrained and an injunction is granted restraining him from disposing of, encumbering or dealing with the former matrimonial home”. It is clear from the uncontested evidence that the husband has taken steps, notwithstanding that order, to place the former matrimonial home on the market for sale. In view of this uncontested evidence it is appropriate to extend the orders made in paragraph 8 of 23 October 2013 so that there is no room for doubt that the husband should not take any steps to sell or attempt to sell the former matrimonial home at E Street, Suburb F or Properties AA and BB, W Street, Suburb F. That is consistent with the orders that have already been made for the reasons given.
I certify that the preceding fifty eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 17 June 2014.
Associate:
Date: 17 June 2014
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Stay of Proceedings
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Injunction
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Discovery
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Appeal
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Costs
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Remedies
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