Henson & Marlin (No 5)
[2024] FedCFamC1F 908
•20 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Henson & Marlin (No 5) [2024] FedCFamC1F 908
File number(s): BRC 10186 of 2020 Judgment of: HOGAN J Date of judgment: 20 December 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the applicant sought a stay of final orders pending hearing of his appeal – Where compliance with the final order has the real risk of rendering the appeal nugatory –Where a conditional stay is granted pending appeal – Where orders are made for the applicant to ensure the removal of unlawful occupants from a property subject of the final orders, and for the applicant to secure the property and provide proof of that to the respondent’s legal representatives – Where the applicant is to pay the respondent weekly spousal maintenance – Where the applicant is restrained from dealing with property Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Aldridge & Keaton [2009] FamCAFC 106 Division: First Instance Number of paragraphs: 38 Date of hearing: 20 December 2024 Place: Brisbane Counsel for the Applicant: Mr Hackett of Counsel Solicitor for the Applicant: Hirst & Co Counsel for the Respondent: Mr Drysdale of King’s Counsel Solicitor for the Respondent: KLM Solicitors ORDERS
BRC 10186 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR MARLIN
Applicant
AND: MS HENSON
Respondent
ORDER MADE BY:
HOGAN J
DATE OF ORDER:
20 DECEMBER 2024
THE COURT ORDERS UNTIL FURTHER ORDER THAT:
1.Orders, 1, 2, 3, 4, 7, 11, 12 and 14 of the Final Orders made on 25 October 2024 are stayed pending the determination of the Amended Notice of Appeal filed by Mr Marlin on 18 December 2024, on the conditions that:
(a)within forty-eight (48) hours, Mr Marlin take all necessary steps to:
(i)ensure the removal of all unlawful occupants of the real property situated at 2 DD Street, Suburb FF; and thereafter
(ii)secure the real property at 2 DD Street, Suburb FF; and
(iii)provide Ms Henson’s legal representatives with confirmation, by way of photographs, that this has occurred.
(b)Mr Marlin pay Ms Henson the sum of $553 per week by way of periodic spousal maintenance, with the first payment to be made on 21 December 2024 into an account nominated by Ms Henson and with such sum to be paid each Saturday thereafter; and
(c)Mr Marlin be restrained and an injunction issue restraining him from:
(i)encumbering any real property/ies owned by him personally, or taking any steps to cause any corporate entity under his control to encumber any real property, without the prior written consent of the respondent; and
(i)giving any notice or seeking or consenting to any order, either in his personal capacity or in his capacity as a director of any entity (either in relation to that entity itself or in its capacity as corporate trustee of any trust), that affects any real property/ies; and
(ii)making any agreement, either in his personal capacity or in his capacity as a director of any entity (either in relation to that entity itself or in its capacity as corporate trustee of any trust), affecting real property/ies; and
(iii)otherwise dealing with any real property/ies, either in his personal capacity or causing any corporate entity (whether for that entity itself or in its capacity as corporate trustee of any trust) to deal with any real property/ies in any way.
2.In the event that any party seeks an order that another party pay the costs of and incidental to the Application in a Proceeding sealed 5 December 2024:
(a)any such party shall, within twenty-eight (28) days of the finalisation of the appeal, file and serve:
(i)any affidavit necessary to support such application; and
(ii)written submissions in support of such application for costs; and
(b)the party against whom an order for costs is sought shall, within a further fourteen (14) days thereafter, file and serve:
(i)any affidavit necessary for the determination of any such application for costs; and
(ii)any written submissions in answer to the submissions filed and served by the party seeking an order for costs; and
(c)the party seeking an order for costs shall, within seven (7) days of being served with the submissions relied on by the party against whom an order for costs is sought, file and serve any further written submissions, strictly in reply, to the submissions served by the party against whom an order for costs is sought,
and any such application for costs shall be considered in Chambers.
IT IS NOTED THAT:
A.There is no Court known by the name “Federal Circuit and Family Court of Australia”.
B.The design of the seal affixed to this order issued by the Federal Circuit and Family Court of Australia (Division 1) has been determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 the pseudonym Henson & Marlin has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTHOGAN J:
By an Application in a Proceeding filed 5 December 2024, Mr Marlin seeks a stay of the operation of orders 1, 2, 3, 4, 7, 11, 12 and 14 of the final property orders I made on 25 October 2024 pending determination of his appeal against the same, commenced by Notice of Appeal filed on 20 November 2024 and as continued, in a sense, by an Amended Notice of Appeal filed in the appellate jurisdiction of this Court on 18 December 2024.
The respondent to the appeal, Ms Henson, opposes the making of an order staying the operation of the October 2024 orders. In the alternative, if the Court is persuaded that it is appropriate in the exercise of discretion to make such an order, submissions were made on her behalf to urge that such stay be conditional upon Mr Marlin being required to pay to her the sum of $250,000 in total, accompanied by a number of orders, by way of injunction, restraining him in his use of real property.
The application for a stay is necessary because the filing of a Notice of Appeal does not operate to stay the operation of the orders (r 13.12(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (the Rules)).
Each of the parties has filed an Outline of Case Document. Insofar as Mr Marlin is concerned, that document was sealed on 17 December 2024. Insofar as Ms Henson is concerned, that document was sealed on 18 December 2024. Each of those documents provides detail of the affidavits and documents relied upon by each party at the hearing earlier today. Insofar as Mr Marlin's case is concerned, the documents listed on the Outline of Case Document were supplemented by reference to an affidavit from Ms AS sealed 19 December 2024 and a further affidavit by Mr Marlin, also sealed 19 December 2024. No objection was taken by Counsel who appeared on behalf of Ms Henson to Mr Marlin being permitted to rely upon those additional documents.
The essence of the submissions
I turn now to summarise briefly the submissions made on behalf of each of the parties to the application, whether those submissions were made in the Outline of Case documents or orally earlier this morning by Counsel who appeared on behalf of each of them.
Insofar as the submissions made on behalf of Mr Marlin are concerned, the following seems to me to be particularly apposite.
It was submitted that the Court would be persuaded and would accept that Mr Marlin has lodged his appeal in good faith and not for the purpose of delaying or interfering with the operation of the orders. It was submitted that he has prosecuted it expeditiously by filing a Notice of Appeal containing the grounds of appeal prior to the last day for the filing of the same and by also filing a Draft Appeal Index on 28 November 2024 – some 18 days before the required deadline of 18 December 2024.
In addition, oral submissions made earlier today by Mr Hackett who appeared for Mr Marlin referenced the preparation and filing, in the appellate jurisdiction of this Court, of the Outline of Argument prior to the requirement for the same to be filed (that document was filed on 18 December 2024 and is exhibited to Ms AS's affidavit).
It was also submitted on behalf of Mr Marlin that the Court would be persuaded that the balance of convenience favours the grant of the stay sought by him because the evidence would persuade that he cannot satisfy the terms of the October 2024 order without being unfairly prejudiced in that, in order to satisfy the terms of that final order, he is required to sell real property, with the consequence that not only will it be sold, but he will incur capital gains tax of significant amount consequent upon that sale.
It was submitted in essence, then, that the requirement to dispose of real property in order to be able to meet the terms of the October 2024 order by way of persuading the commercial lender, which is secured over those properties, would place Mr Marlin in the position whereby there is a significant risk that his appeal may be rendered nugatory. It was also submitted, insofar as the requirement of the balance of convenience issue is concerned, that if property was transferred in accordance with the orders by him to Ms Henson and money was paid to her as required by that order, there is a risk – said to be a likelihood, but in any event a risk – that Ms Henson may deal with it or spend it in a way that would mean it would be impossible for the position to be restored to its current situation if his appeal against the October 2024 orders was ultimately successful.
In addition, it was submitted on Mr Marlin's behalf that the Court would be persuaded that there is a significant risk that his appeal would be rendered nugatory if his application for a stay was unsuccessful because, as I have said, in order to comply with the orders, he is required to sell real property and incur costs in order to persuade the commercial lender to remove its security over the properties he has been ordered to transfer to Ms Henson and also to meet his obligation under the orders to pay her the sum of money set out in order 7 of the October 2024 orders.
It was also submitted on his behalf that, if he was successful on his appeal, it would be likely that the capital gains tax liability would be taken up as a liability in the calculation of the net value of the total property of the parties, at least to some extent.
It was submitted on behalf of Mr Marlin that the Amended Notice of Appeal filed on his behalf persuades of the existence of an arguable case on appeal. The grounds of appeal may be summarised in broad form as positing:
(a)asserted error in determining that it was just and equitable to make any order adjusting the property interests of the parties; and
(b)asserted error in failing to include capital gains tax and payments to Ms Henson in the calculation of the net value of the total property of the parties; and
(c)asserted error in the exercise of discretion and assessment of contributions, to the extent that it is asserted that such assessment was plainly wrong and outside the discretion available to judges at first instance; and
(d)asserted error in exercising the discretion to make a further adjustment of five per cent, following upon the determination of an assessment of 35 per cent on the basis of contributions, such that that adjustment of five per cent was made without proper basis and is plainly wrong and outside the discretion available to judges at first instance; and more recently
(e)an asserted failure to provide adequate reasons in relation to why it was just and equitable to make a de facto property settlement order pursuant to s 90SM(3) of the Family Law Act 1975 (Cth); and
(f)an asserted error in the exclusion of capital gains tax as a liability of the parties; and
(g)an asserted error in the exclusion of the partial property settlements, referred to in paragraph 2(b) of the Grounds of Appeal, from the calculation of the total net value of the property of the parties; and
(h)an asserted error as to the contributions-based assessment, particularly having regard to the assessment of Mr Marlin's initial contributions; and finally
(i)an asserted error as to why a s 90SF(3) adjustment was appropriate, just and equitable.
It was also submitted on behalf of Mr Marlin that the Court would take into account, and weigh appropriately, the information provided by the Appeals Registrar to the effect that it is likely that the appeal may be set for hearing in the sittings of the Full Court of this Court which are to take place in March 2025 – and, possibly, earlier during the February 2025 sittings – such that, at present indication at least, it appears likely that the appeal will at least be heard, if not determined, within three months of today.
Whilst I think it has already probably been the subject of comment, in order to ensure that it is made clear that I have considered it in my assessment of the appropriate way to exercise the decision in determining the application, I note that it was also submitted on behalf of Mr Marlin by Counsel who appeared for him earlier today as follows:
(a)that the evidence would persuade the Court that, absent the sale of real property, the third party or the bank will not provide Mr Marlin with further funding at this stage unless he is in a position to reduce the debt owing to it, and to do that he needs to sell property; and
(b)that, in essence, he is unable to transfer to Ms Henson any of the property he has been ordered to transfer to her without selling other property to ensure that the bank releases the security it holds over all of the properties; and
(c)in essence, as I have already said, that the Court would be persuaded that there is a significant risk that Mr Marlin's appeal against the final orders made in October of this year would be rendered nugatory if he was required to sell the property, and he was successful on his appeal – it was submitted he could simply not be placed back in the same situation as currently exists in such a scenario.
I turn now to the submissions made on behalf of Ms Henson in opposing the granting of a stay. In essence, the submissions may be summarised to be as follows.
Whilst it appeared initially to be her position that the Court would be concerned and would conclude that Mr Marlin had delayed in bringing the application for a stay, that aspect of her opposition to the granting of the same was abandoned by Counsel who appeared on her behalf earlier today. The submissions that were maintained, though, were as follows:
(a)that Ms Henson is entitled to the benefit of the final order; and
(b)that the Court should be cautious in conducting its preliminary assessment of the merits of the appeal, given the grounds of appeal to which I have already referred; and
(c)that making an order staying the operation of the final orders pending the determination of the appeal against them would be detrimental to Ms Henson because it would mean that she continues to be unable to repay significant debts – said to be in total, I think, of a little over $1 million; and
(d)that the consequence for her of the making of the final order on 25 October 2024 included, as a consequence of r 5.01 of the Rules, that any interlocutory order was automatically discharged and ceased to have continuing effect – in this case, that has the effect that the interlocutory order made on 31 August 2022 which required Mr Marlin to pay to her a sum of $553 per week by way of spousal maintenance was brought to an end, with the consequence, it was submitted, in essence, that she no longer has the benefit of that order but, if the stay sought by Mr Marlin is granted, will then not be in a position to receive the property which it was determined in October of this year to be just and equitable that she receive.
It was also submitted on her behalf that the Court should, in essence, not forget that a position advanced on behalf of Mr Marlin at trial was that, if the Court determined that it was just and equitable to make property settlement orders, he had the capacity to pay to Ms Henson a sum up to, it was submitted, $3 million within 90 days – although I note that, in reply, Mr Hackett, who appeared for Mr Marlin, submitted that Mr Marlin's position at trial in relation to the payment of such funds was not advanced on the basis that he could make such payment without selling property.
Mr Drysdale KC, who appeared on behalf of Ms Henson, also submitted that the Court would be persuaded on the evidence that, in essence, Mr Marlin had taken no steps after the October 2024 orders were made to ensure that the value of the real property located at 2 DD Street (which is one of the properties the October 2024 orders require him to transfer to Ms Henson) was appropriately maintained and managed so as to ensure that the value of the same does not decrease. It was submitted on behalf of Ms Henson that, if Mr Marlin's application is acceded to, he will be placed, in essence, in the position of permitting an ongoing diminishment of the value of that property – noting in particular that it is an asset that she is to receive according to the final orders made in October of this year. Mr Drysdale submitted that the Court would be persuaded to refuse the application for a stay, at least as I understood the submission, insofar as it related to the order which required Mr Marlin to transfer that property to Ms Henson so she could take steps to ensure that the value of the same is maintained and/or protected.
It was also submitted on behalf of Ms Henson that the Court would have no confidence, given the findings made in the determination of the matter in October 2024 as expressed in the Reasons for Judgment published in support of the orders then made, that Mr Marlin would do anything other than act in a manner detrimental to Ms Henson and decrease the value of the assets that she is to receive pursuant to those orders.
It was submitted on behalf of Ms Henson that acceding to the stay application would see Ms Henson incur further costs via interest accruing on debts and liabilities that she has and, in essence, will cause her overall loss and prejudice.
Insofar as the issue of whether refusing the stay would mean that there was a risk that Mr Marlin's appeal would be rendered nugatory, it was submitted, in essence, that if the transfer of the real property at 2 DD Street, Suburb FF was permitted to occur, that property could always be re-transferred to Mr Marlin – in that sense, if his appeal was successful, at least in relation to that asset, it would not be rendered nugatory.
Insofar as the alternative position advanced by Ms Henson is concerned – namely, that if the Court is persuaded to accede to the application for an order staying the operation of the October 2024 orders, it would only do so on the basis of the imposition of conditions – Mr Drysdale submitted, in essence, that the Court would be persuaded to make an order requiring Mr Marlin to pay to Ms Henson the sum of $250,000, with the same to be characterised in the manner set out in the Outline filed on her behalf, and also that the Court would be persuaded to make injunctions in the terms set out in the Reply to the Application in a Proceeding.
Insofar as the issue of a condition requiring Mr Marlin to pay the sum of $250,000, or any sum, to Ms Henson is concerned, Mr Hackett submitted that the Court would not be persuaded that it was appropriate to impose such a condition, noting, at least as I infer, the grounds of appeal raised in the Amended Notice of Appeal. It was submitted the Court would be persuaded by and would accept Mr Marlin's evidence that he does not have the capacity to make such a payment and that being required to do so would place him at risk, as it were, of being unable to recover such payment if his appeal is ultimately successful. It was also submitted that there was nothing in the material relied upon by Ms Henson to demonstrate how the figure of $250,000 was arrived at.
Insofar as the submissions made on her behalf about Mr Marlin's conduct in relation to the 2 DD Street property is concerned, it was submitted on instructions that Mr Marlin had, in essence, been taking steps to remove squatters who have moved into that property – having been removed, they had turned up again and moved in again and steps were being taken to remedy a broken window and have it replaced and that Mr Marlin intended, in the new year, to take steps to remove the squatters and secure it, I think, by way of boarding it up or in some other way.
The principles to be applied in the determination of an application such as this for the stay of the operation of orders pending the determination of appeal against them are uncontroversial. They are well settled and they are well known. They are set out in cases such as Aldridge & Keaton.[1] They are accepted by each of the parties. They are as summarised, helpfully, at paragraph 5 of the Outline of Case document filed on behalf of Mr Marlin.
[1] [2009] FamCAFC 106.
I accept that Mr Marlin has the onus to establish a proper basis for the stay and that Ms Henson is entitled to the benefit of the judgment and is also entitled to presume that the judgment is correct. It is clear that the mere filing of the Notice of Appeal is insufficient to ground the stay.
I accept that Mr Marlin is bona fide in his prosecution of his appeal and bona fide in prosecution of the application for a stay.
I accept that, in the formulation of the grounds of appeal as contained in the Amended Notice of Appeal, Mr Marlin has an arguable case – noting that I am not required to descend any further into an assessment of the likely prospects or otherwise of the prosecution of that appeal.
I note that it appears likely, at this stage at least, that the appeal will be brought before the Full Court of this Court by no later than the March 2025 sittings. When it will be finalised is, of course, a matter for those who constitute that Court at that time.
A significant and substantial factor in the exercise of the discretion about whether to make an order staying the operation of final orders pending an appeal requires a weighing of the risk that, absent the grant of the stay, the appeal may be rendered nugatory. In assessing that aspect of the necessary requisites, it is clearly established by authority that it is unnecessary for Mr Marlin to demonstrate any special or exceptional circumstances.
It appears to me on the evidence before me, that Mr Marlin cannot satisfy the terms of the October 2024 order without selling real property so as to reduce his level of indebtedness to the bank and persuade it to release the security it holds over the same. I accept the submissions made on his behalf to the effect that being required to undertake that exercise has the very real risk that his appeal is rendered nugatory either entirely or to a significant degree. It seems unlikely that he could be placed back in the position that he is currently in if he was required to sell property so as to satisfy the terms of the order. Given the relatively short passage of time between now and the likely hearing of the appeal, that factor seems to me also to support a determination that the balance of convenience favours the granting of the stay.
So, for those reasons, and placing particular weight upon the position that Mr Marlin cannot satisfy the orders without being required to sell property and incur tax consequences, and that, therefore, compliance with the orders has the very real risk that it would render his appeal nugatory, I am persuaded to exercise the discretion in favour of granting a stay.
However, I also note that authority makes clear that a stay may be granted on terms that are fair to all parties.
In weighing the various considerations to which I have referred in the course of providing these reasons orally this afternoon, I take into account the impact upon Ms Henson of the effect of the final order on the interim order requiring Mr Marlin to pay her the sum of spousal maintenance – that is, bringing that order to a conclusion. In that way, then, given that I am persuaded to make an order staying the operation of the October 2024 orders, Ms Henson is placed in the position where she has neither the benefit of those orders arrived at following the determination of a trial, nor the benefit of the interlocutory orders which provided her with the payment of spousal maintenance on a weekly basis in the amount of $553.
I consider that is a significant factor which persuades me that it is appropriate to grant a stay on terms that will require Mr Marlin to pay to Ms Henson the sum of $553 per week, with the first of those payments to be made on 21 December 2024, into an account nominated by her, and with such sum to be paid each Saturday thereafter.
I am also persuaded that a further condition that is appropriate in the circumstances that were the subject of discussion during the course of the hearing earlier this morning, is to require that Mr Marlin take all necessary steps to ensure the removal of all unlawful occupants of the real property situated at 2 DD Street, Suburb FF and to secure that property and to provide Ms Henson’s legal representatives with confirmation by way of photographs of his conduct in this regard within 48 hours of the making of the order. In that way, the value of the property and the potential that it may be damaged by those who unlawfully occupy it can be minimised, and any prejudice that may flow to Ms Henson if Mr Marlin is unsuccessful in his prosecution of his appeal against the October 2024 orders can also be minimised.
It is also, in my view, appropriate to make injunctive orders in the terms sought by Ms Henson at paragraph 3 of the Response to an Application in a Proceeding in order to ensure that her position is protected in the event that Mr Marlin's prosecution of the appeal is unsuccessful.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Ex-Tempore Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 28 January 2025
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