Horleck and Anor and Horleck

[2015] FamCA 267

FAMILY COURT OF AUSTRALIA

HORLECK AND ANOR & HORLECK [2015] FamCA 267

FAMILY LAW – ENFORCEMENT OF ORDERS – Where final property adjustment orders were made pursuant to s 79A – where the respondent filed an appeal against those orders – where the applicants seek an order that the respondent remove the caveats on a number of properties in satisfaction of the orders – where the respondent seeks a stay of the orders pending the hearing and determination of her appeal – order that upon the filing of personal undertakings by the applicants the respondent is ordered to cause the removal of the caveats – application for a stay is not granted.

Family Law Act 1975 (Cth)

FIRST APPLICANT: Mr Horleck

SECOND APPLICANT: Ms Lyman-Horleck

RESPONDENT: Ms Horleck

FILE NUMBER: BRF 8480 of 1994

DATE DELIVERED: 13 April 2015

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 13 April 2015

REPRESENTATION

THE FIRST APPLICANT: In Person (by telephone)

THE SECOND APPLICANT: In Person (by telephone)

THE RESPONDENT: In Person

Orders

1. That upon filing in the Brisbane Registry of this Court of personal undertakings given by Mr Horleck and by Ms Lyman-Horleck in terms set out in documents described as Attachment A and Attachment B to these Orders, such filing to be verified by email from the Judge’s Associate to Ms Horleck confirming the filing of such undertakings, Ms Horleck shall take all steps necessary to cause caveats that she has caused to be registered over properties situated at:

(i)MM Street, Suburb DE;

(ii)M Street, Suburb C;

(iii)Property 1, LL Street, Suburb BC;

(iv)Property 2, LL Street, Suburb BC;

(v)U Street, Suburb B; and

(vi)I Street, Suburb F;

to be removed as soon thereafter as possible.

1. That Ms Horleck shall advise Mr Horleck and Ms Lyman-Horleck by email when she considers she has taken all steps necessary to cause those caveats to be removed.

1. That both Mr Horleck and Ms Lyman-Horleck shall cause Ms Horleck to be provided with copies of all documentation that they obtain from mortgagees of any of the properties referred to in the undertakings required of them that verifies that they have complied with the undertaking insofar as they are only seeking to refinance the existing debt and not increase it.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Horleck and Anor & Horleck 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 BRISBANE

FILE NUMBER: BRF 8480 of 1994

Mr Horleck

First Applicant

And

Ms Lyman-Horleck

Second Applicant

And

Ms Horleck

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. On 5 September 2014 I delivered judgment in proceedings brought by Ms Horleck against her former husband, Mr Horleck, and a number of other parties, including his current wife Ms Lyman-Horleck both in her own right and also as director of a company called X Pty Ltd, and that company as a party in its own right as Trustee for the H Trust, a discretionary family trust. I had accepted in my judgment that the family trust was the family trust of Mr Horleck and his wife Ms Lyman-Horleck.

2. In those orders I determined pursuant to s 79A of the Family Law Act to set aside a number of orders of a former judge of the Court, Justice Butler, who made orders on 8 December 1995 in property proceedings between Ms Horleck and her former husband Mr Horleck, and I made a number of other orders in their place. 

3. In summary, those orders included an order that the husband pay the wife, within six weeks, the sum of $220,000.  I then made an extensive list of orders that effectively put in place injunctions in default of the payment and until such payment was received that impacted upon the rights of Mr Horleck and the company X Pty Ltd as Trustee for the H Trust and Ms Lyman-Horleck herself, in respect of real properties that were owned by each of those various parties. I also put in place an injunction in respect of superannuation interests of the husband himself. 

4. I ordered that certain real properties owned by those various parties, be the subject of injunctions restraining the parties from selling, gifting, charging, encumbering or further encumbering or otherwise dealing with them, pending receipt by Ms Horleck of the sum of $220,000 that I ordered the husband to pay to her.  I also enjoined the husband from drawing upon or using or spending any of his superannuation interests that he may have already drawn upon, pending the payment of the $220,000 to Ms Horleck.

5. Finally, I made an order that upon payment to Ms Horleck of all the money due to Ms Horleck under the order, namely the $220,000, the husband retain as his own absolutely all of his interests in real and personal property and superannuation.

6. Subsequent to making the orders Mr Horleck made the payment to Ms Horleck of the sum of $220,000 as required.  However, not only did that happen but also Ms Horleck lodged a Notice of Appeal to the Full Court of this Court against my orders.  An Amended Notice of Appeal was filed on 2 March 2015 in which Ms Horleck, the appellant, sets out her grounds of appeal.  A rough count suggests to me that there are about 34 grounds of appeal contained within that Amended Notice of Appeal.  It is common ground between the parties that the appeal is currently listed for hearing in sittings of the Full Court of this Court taking place here in the Brisbane Registry some time towards the end of next month 2015, just over four weeks away. 

7. On 8 January 2015, Mr Horleck, filed an Application in a Case that is currently before me for hearing and determination.  In that Application in a Case he seeks that an order that Ms Horleck remove all caveats in satisfaction of Order 7 of my orders handed down on 5 September 2014. 

8. Whilst I did not make an order that Ms Horleck remove all caveats that were then registered over the properties, I accept the submission made on behalf of the husband that an order such as the one that I made in paragraph 7; that upon payment to the wife of all money due to her under the order the husband shall retain as his own absolutely all his interest in real and personal property and superannuation, finalised property adjustment proceedings between the parties and effectively required Ms Horleck to remove caveats that she has lodged and registered over properties that were the subject of the orders that I made in September 2014. 

9. Mr Horleck in support of his Application in Case filed an affidavit on the same day, 8 January 2015, where he deposed in simple form to the fact that he has presented Ms Horleck with the $220,000 cheque and as a consequence she should now be required to release the caveats from the properties, all of the matters outstanding between them having been determined by my decision and orders of October 2014. 

10. Just a few days ago, namely last Thursday, 9 April 2015, Ms Horleck filed her own Response to the Application in a Case.  She seeks a number of orders that are contained in that Response including that the husband’s enforcement application be stayed pending the outcome of her appeal;  that all of my orders of 5 September 2014, save for the order that she be paid $220,000, be stayed; that the $220,000 already received by her be taken into account as a partial property settlement (which I have to say at this stage is simply beyond my power given that I have already made orders finalising property adjustment rights as between the parties); seeking injunctions restraining Mr Horleck, Ms Lyman-Horleck, X Pty Ltd and X Pty Ltd as Trustee for the Trust, from selling, gifting, charging, encumbering or further encumbering or otherwise dealing with all of the properties that she lists in the application; an order that caveats in place over a number of properties remain in place pending the outcome of the appeal; an order for further caveats to be placed over properties upon which there are no current caveats; and further injunctions restraining Mr Horleck, Ms Lyman-Horleck, the company and the Trust from doing anything to cause or change the shareholdings, office bearers or any part of the trust or encumbering or charging them further; and restraining Mr Horleck further in respect of his superannuation.

11. My assessment of the application Ms Horleck has made in response to Mr Horleck’s application is that she seeks orders best described as orders staying the outcome provided for by my final orders in the s 79A proceedings that I made in September 2014 pending the hearing and determination of her appeal to the Full Court against all of my orders. Realistically, although his application came first, Mr Horleck’s application is one resisting or opposing any such stay and for orders requiring the removal of the caveats.

12. I am satisfied that the making of the orders that are sought by Ms Horleck is a matter of discretion for me and that the principles that apply to the determination of that discretion are effectively those principles that are set out in the authorities that deal with the granting of a stay of orders pending the determination of an appeal against those orders.  The determination of the application by Ms Horleck is therefore a matter of discretion that requires the application to be determined on its merits and in accordance with the principles. 

13. The principles that are relevant to the determination of applications for stays pending appeals are well established. I discussed them in exchange between the parties who are all unrepresented who appear before me today, whilst they were presenting argument about their case.  I particularly discussed them with Ms Horleck who gave me cause to believe that she had some appreciation of the need for such principles to be considered in this sort of application.  The principles include, relevantly, the following:

    (a)That the onus to establish a proper basis for the stay is on the applicant for the stay and it is not necessary for the applicant to establish any special or exceptional circumstances;

    (b)That a person who has obtained judgment such as that obtained by Mr Horleck, Ms Lyman-Horleck and the other parties in this case, to the extent that one can say it was a benefit, is entitled to the benefit of that judgment.  The benefit of the judgment was that on the payment of $220,000 to Ms Horleck the matter was concluded by all of the other property interests reverting to where they fell;

    (c)That a person who has obtained a judgment such as that obtained by Mr Horleck, Ms Lyman-Horleck and the other parties is entitled to presume that the judgment is correct. The mere filing of an appeal against that judgment is not sufficient grounds alone for the granting of the stay;

    (d)One is also required in the position that I find myself in to give some consideration to the bona fides or otherwise of the applicant.  The principles establish that a stay may be granted on terms that are fair to all parties. This may involve the court weighing the balance of convenience and the competing rights of the parties;

    (e)It also can require a weighing of the risk that an appeal may be rendered nugatory if the stay is not granted.  This is indeed a substantial factor in determining whether it would be appropriate to grant a stay; 

    (f)It also requires some preliminary assessment of the strength of the proposed appeal, that is, whether the appellant has some sort of arguable case and whether she has demonstrated that she has some sort of arguable case. 

    (g)It also importantly requires consideration of the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of the stay for a short period of time. 

14. In support of her application, Ms Horleck submits that my findings about the way in which Mr Horleck and Ms Lyman-Horleck went about acting in respect of their property interests and the property interests that Mr Horleck shared with Ms Horleck at the time of the Orders made by Justice Butler would cause me to have little faith in them acting between now and the determination of the appeal that is due to be heard in five weeks, in a way that did not prejudice Ms Horleck’s interests or Ms Horleck’s potential interests having regard to the possible outcome of her appeal in her favour if the caveats that she placed over the properties that currently restrict their dealings with the properties are not kept in place.  Ms Horleck points to alleged previous breaches of injunctions in similar context relating to property and dealing with property by Ms Lyman-Horleck as evidence supporting the view that Mr Horleck and Ms Lyman-Horleck simply cannot be trusted, over and above the findings that I accept I made about them in my Reasons for Judgment given in support of the Orders that Ms Horleck has appealed against. 

15. Ms Lyman-Horleck admitted that notwithstanding some injunctions that were apparently in place at the time she went and caused further borrowing against properties that were secured that were not supposed to be dealt with, she has asserted, albeit not under oath or not in evidence in an affidavit, but effectively from the bar table today at my questioning, that she had some basis for believing that it was okay to do that in the circumstances.  Ms Horleck pointed out that was in dispute, but conceded that she never brought an application for Ms Lyman-Horleck to be dealt with in respect of such alleged contravention and accordingly is not able to point to any actual findings of contravention without reasonable excuse made against Ms Lyman-Horleck at that time.

16. Ms Horleck also submits to the Court that she has good prospects of success in a number of respects on the appeal against my judgment.  I have said many times when a stay has been sought of orders I have made pending an appeal against those orders, that it is a rather onerous task to ask a trial judge who has made orders to consider the likely merits of an appeal that has been lodged against those orders, but nevertheless that is what is required.  Certainly, I am not required to determine that the appeal will win, I am simply required to look at the grounds of appeal that are advanced and consider whether there is an argument in the case. 

17. Ms Horleck pointed to a couple of particular aspects where she submits she has quite an arguable case on appeal. At this point in time, it is certainly not vehemently being asserted by Mr Horleck & Ms Lyman-Horleck that she has no prospects on those points. I am not prepared to say in the exercise of my discretion that I consider Ms Horleck has no prospects and that the appeal is not an arguable one.  I am particularly comforted in saying that when I consider at the same time that the appeal is listed for hearing in just over five weeks.  The merits or otherwise of Ms Horleck’s arguments and grounds of appeal against my Orders are going to be considered by the Full Court very soon. 

18. As to how long the Full Court might take to hand down its decision, well that is not for me to say. It is known for the Full Court to dismiss appeals or to make orders in respect of successful appeals on the day that they hear them and give reasons later. Of course, it is known for the Full Court, the same as it is for this Court, to reserve their decision and take many months to hand down their judgment.  I cannot at this point determine that it will take the Full Court a long time to hand its decision down or otherwise.  But what I am conscious of is the fact that they are going to be hearing the appeal in about five weeks time. 

19. I have no concerns that the Notice of Appeal lodged by Ms Horleck is not bona fide.  I am satisfied that she is motivated by nothing other than bona fide in bringing her appeal and arguing that I have made errors that would lead to a successful appeal. 

20. Although Mr Horleck said nothing in his affidavit (bearing in mind that he and Ms Lyman-Horleck only received the application contained in the Response filed by Ms Horleck and her affidavit last Thursday), and no affidavit deposing to matters that Mr Horleck or Ms Lyman-Horleck assert go directly to responding to Ms Horleck’s application for the stay have been put on.  I asked again of Mr Horleck and Ms Lyman-Horleck, in the context of finding out their position for the determination of this matter, whether or not they had any intention of dealing with any of the properties over which caveats are currently registered in any way pending the hearing and determination of the appeal. 

21. They both assured me that the only dealings with the properties that they would seek to achieve, the very reason why they currently seek to have the caveats lifted, is for a refinancing of loans currently secured by mortgage over those properties in order to achieve lower interest rates in respect of those loans that would effectively see them being able to save $750 per month in interest payments compared to what they are currently paying.  They both readily informed the Court that they would be prepared to give undertakings to the court not to do anything other than that in respect of these properties pending the hearing and determination of Ms Horleck’s appeal. 

22. Considering that if those undertakings were in place and they were honoured, I am readily satisfied that the risk of Ms Horleck’s appeal being rendered nugatory if the stay is not granted is significantly, if not completely ameliorated and, as I have said before, considering the question of this risk is indeed a substantial factor in determining whether or not a stay should be granted. 

23. Considering this matter, and having only just called upon Mr Horleck and Ms Lyman-Horleck to inform the court whether they would be prepared to give such undertakings, I asked Ms Horleck to put submissions to me why I ought not be satisfied that that was enough to protect her interests.  As I have said earlier, she submitted that having regard to my findings about the honesty, or dishonesty she would rather say, I think, of Mr Horleck and Ms Lyman-Horleck in their dealings with her interests in the past, I would not be satisfied that undertakings alone would be sufficient protection. 

24. However, I made it clear to everyone involved, without making any predetermination of the issue, I jealously regard my own orders, particularly when any contravention application is brought before me in respect of orders that I have made that are said to have been contravened.  In particular, I would feel even more inclined to jealously regard undertakings that have been offered to the Court by people such as Mr Horleck and Ms Lyman-Horleck in the circumstances pertaining to this case. I reminded everyone in this case today that terms of imprisonment for persons who wilfully breach such undertakings in such a way that the other person was prejudiced financially and could not be otherwise recompensed by orders setting aside any such dealings or the like would not be unlikely outcomes.

25. Both Mr Horleck and Ms Lyman-Horleck assured me quite clearly on the record that they understood that if they gave such undertakings and without coming back to this Court to be released from those undertakings or being released by operation of an order, that an outcome of imprisonment might very well be expected.  I am satisfied that they both appreciate the importance of the undertakings that would be given to the Court and, therefore, I am satisfied there is such a significant amelioration of the risk of Ms Horleck’s appeal being rendered nugatory that in the exercise of my discretion I order the removal of the caveats registered over the properties upon the giving of undertakings in certain terms.

26. As for the injunction Ms Horleck seeks in respect of the husband’s superannuation, I do not grant it as the Court was informed that the superannuation has been used to repay borrowings that were obtained to pay the $220,000 to Ms Horleck pursuant to my final orders. It was drawn upon after the payment to Ms Horleck and used to repay such borrowings as the husband was no longer enjoined from drawing upon it after Ms Horleck had been paid.

1. I accept the proposition that was put to me that I did not really allow for Mr Horleck and/or Ms Lyman-Horleck to be able to obtain $220,000 through the use of properties either by sale or security and accept that what Mr Horleck says about how he had obtained the money is an appropriate explanation for how and why he has dealt with his superannuation now since the extinction of that injunction after he paid $220,000 to Ms Horleck. 

2. In the circumstances I do not intend to make the orders that are sought by Ms Horleck, including in particular the order that a further injunction issue towards Mr Horleck restraining him from dealing with his superannuation.

3. I make the following Orders.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 13 April 2015.

Associate: 

Date:  15 April 2015