Jackson & Balen - [2009] FamCAFC 131

FAMILY COURT OF AUSTRALIA

JACKSON & BALEN

[2009] FamCAFC 131

APPEAL – STAY – Refusal to grant stay pending determination of substantive spousal maintenance appeal – Whether Federal Magistrate failed to give reasons for refusing the stay – Where the husband claimed to have become unemployed since the interim spousal maintenance orders were made – Whether the Federal Magistrate failed to take into account the husband’s changed financial position – Whether the Federal Magistrate correctly applied the principles relating to a stay application – No appealable error established – Appeal dismissed

Carlin & Carlin (1977) FLC 90-320
Dmitrieff & Shaw (No. 2) [2008] FamCA 992
Federal Commissioner of Taxation v Myer Emporium Ltd [No. 1] (1986) 160 CLR 220
Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681
Metwally v University of Wollongong (1985) 60 ALR 68,
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Coulton v Holcombe (1986) 162 CLR 1
Banque Commerciale S.A., En Liquidation v Akhial Holdings Ltd (1990) 169 CLR 279)

Family Law Act1975 (Cth) s 77A

APPELLANT:

MR JACKSON

RESPONDENT:

MS BALEN

FILE NUMBER:

SYC

5684

2008

APPEAL NUMBER:

2009

DATE DELIVERED:

28 July 2009

PLACE DELIVERED:

Perth

PLACE HEARD:

Sydney

JUDGMENT OF:

Warnick, Boland and Crisford JJ

HEARING DATE:

18 June 2009

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

14 May 2009

LOWER COURT MNC:

[2009] FMCAfam 366

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Ms Winfield

SOLICITOR FOR THE APPELLANT:

Eleanor Murphy & Company

COUNSEL FOR THE RESPONDENT:

Mr Dura

SOLICITOR FOR THE RESPONDENT:

Flintoff Lawyers

Orders

That the appeal against the refusal to stay Orders 5, 6 and 7 of the orders of Federal Magistrate Sexton of 9 April 2009 be dismissed.
That the husband pay the wife’s costs of and incidental to the appeal as agreed and failing agreement, as assessed.

IT IS NOTED that publication of this judgment under the pseudonym Jackson & Balen is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 71 of 2009
File Number: SYC 5684 of 2008

MR JACKSON

Appellant

And

MS BALEN

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

By Notice of Appeal filed 2 June 2009, Mr Jackson (“the husband”) sought to appeal orders made by Sexton FM on 14 May 2009. Those orders dismissed an application for a stay of earlier orders of the Federal Magistrate made on 9 April 2009.
The orders of 9 April 2009 relate to an amended application in a case filed by Ms Balen (“the wife”) on 10 February 2009, seeking interim spousal maintenance. As far as is relevant here those orders are:
·The husband pay to the wife by way of periodic spouse maintenance the sum of $650.00 per week or $2,817 per calendar month, such payments to be deposited into the wife’s [S] Credit Union Bank Account … on the 20^th day of each month, commencing 20 April 2009.
·The husband pay to the wife by way of lump sum spouse maintenance the sum of $43,000 by no later than 30 April 2009 unless Order (7) applies.
·In the event the husband causes to be delivered to the wife, at an address nominated in writing by the wife’s solicitors to the husband’s solicitors within 7 days, the furniture and personal items held by the husband in storage in Australia within 21 days of Order, the amount payable by the husband to the wife in accordance with Order (6) herein be reduced by a sum of $20,000.
The husband filed a Notice of Appeal against those orders on 1 May 2009. He subsequently sought a stay of those orders on 14 May 2009.
Although the husband filed an amended Notice of Appeal against the substantive orders on 25 May 2009, at the time the Federal Magistrate dealt with the stay application she had before her the original Notice of Appeal filed 1 May 2009.
On 11 June 2009, Boland J expedited the stay appeal for hearing on 18 June 2009.

BACKGROUND HISTORY

At the time the original judgment was delivered on 9 April 2009 the wife was 34 years old and the husband 41 years old. They commenced living together in December 2003, married in November 2005 and separated in March 2008.
As a result of the husband’s employment with a business known as L Corporation the parties moved from Australia in 2005. At separation they were living in Poland.
There is one child of the marriage, aged 4 years, who presently lives in Poland with the husband.
It is common ground the wife commenced proceedings in October 2008 in Poland for parenting orders and for spousal maintenance. On 4 December 2008 orders were made for the wife to spend supervised time with the child. It is unclear as to the course of the maintenance proceedings.
The husband deposes that the wife’s application for maintenance in Poland was dismissed. A careful reading of the translated decision which he annexes to his affidavit sworn 13 May 2009 does not satisfy us that this is so. We had little reliable evidence as to the status of the maintenance proceedings in Poland. In any event we are of the view nothing turns on this for present purposes.
Prior to the wife’s return to Australia in December 2008 she became pregnant to a Mr B. Mr B travelled to Australia on 10 February 2009 but deposed to an intended return to Poland due to the expiration of his tourist visa in early May 2009. The child of this relationship is due in September 2009.
The evidence of the wife and Mr B at the hearing was they were friends but were not in a relationship.
On 13 May 2009 the husband deposed to having become unemployed. He accepts that earlier, on 7 April 2009, he deposed to being in a financial position to meet any interim maintenance order that might be made. He now says he was unaware this would involve a large lump sum which he is now unable to meet. He also says he is unable to meet the weekly payments ordered and is obliged to live off capital.

GROUNDS OF APPEAL AGAINST THE REFUSAL OF THE STAY

The grounds of appeal as set out in the Notice of Appeal filed 2 June 2009 asserted a variety of errors on the part of the Federal Magistrate. Those grounds are as follows [the typographical errors are in the original]:
1.Her Honour erred in that she failed to give reasons for her decision.
2.Here Honour erred in that she failed to take into account that there were jurisdictional issues which would invalidate her orders of 9 April.
3.Her Honour erred in not taking into account the changed financial position of the husband which would make the orders of 9 April inequitable.
4.Her Honour erred in the principles to be applied on an application for a stay in that she failed to take into account that refusal of the stay and compliance with the orders by the Husband would render a successful appeal nugatory.
5.Her Honour erred in the principles to be applied in that she did not consider the hardship which will be caused to the Appellant by refusal to grant a stay.
5.Her Honour erred in the principles to be applied in that she did not give proper weight to the merits of an appeal.
It is noted the first ground was, appropriately, not pursued in the appeal. Sexton FM delivered ex tempore reasons very late in the evening on 14 May 2009 in order for the parties to have the result expeditiously. The solicitors for both parties elected not to be present to hear the decision, but rather chose to await the receipt of written reasons which duly followed, albeit after the stay application was filed.

THE FEDERAL MAGISTRATE’S REASONS IN REFUSING TO GRANT THE STAY

After noting her reasons were delivered orally, the Federal Magistrate gave a brief history of the litigation before her.
She noted that the husband relied on an affidavit of his legal representative, Ms Eleanor Murphy, filed on 12 May 2009, and an unfiled affidavit and financial statement of himself sworn on 13 May 2009. Ms Murphy annexed to her affidavit a Notice of Appeal against the substantive judgment filed on 1 May 2009. This Notice of Appeal sets out 5 grounds of appeal which are as follows:
1.Her Honour erred in not finding the Applicant was at the time of making the orders living in a de facto relationship with Mr B and had done previously both in Australia and in Poland.
2.Her Honour erred in making a spousal maintenance order in circumstances where the Applicant was at the time of making of the order for spouse maintenance was living in a de facto relationship.
3.Her Honour erred in that the amount ordered by way of periodic spouse maintenance was excessive.
4.Her Honour erred in not finding the Wife was being supported by Mr B.
5.Her Honour erred in making an order for lump sum maintenance as such order was not required for her support and in effect amounted to a property order.
Sexton FM then went on to set out the relevant law to be applied in hearing a stay application pending an appeal. She did so correctly, in our view. Importantly, she stated that the principles which govern the granting of a stay involve an exercise of discretion.
Referring to whether the refusal of a stay would render a successful appeal nugatory or make it impossible or impracticable to restore the position of the husband, the Federal Magistrate noted that the husband had funds or an equivalent amount in assets to satisfy the lump sum order she made.
Although it is now suggested there is a mathematical error in her calculations, we are not satisfied that is the case or, in any event, it shows there is appealable error. We again simply note here the husband deposed on 7 April 2009 he was able to meet any interim spousal maintenance order that the Court might make. This was after the service on his solicitors of the amended application for spousal maintenance filed 10 February 2009 seeking $80,900.00 lump sum and $911.00 on a weekly basis.
The Federal Magistrate noted that any payment made by the husband to the wife would be taken into account in the final property proceedings as a post-separation contribution by him.
The Federal Magistrate then identified the hardship that each party was likely to suffer as a result of granting or refusing a stay.
She identified a number of difficulties in accepting the accuracy of the detail of the husband’s present financial position. With the assistance of the extensive affidavit material of the wife, she was satisfied that the wife would experience substantial and greater hardship than the husband if a stay was granted.
The Federal Magistrate then carefully considered each of the husband’s five grounds of appeal.
She identified that three of the grounds concerned the issue of the wife’s relationship with Mr B, noting that although he had filed an affidavit in the proceedings his evidence had not been challenged.
Referring to the other two grounds of appeal, the Federal Magistrate identified both the evidence upon which she had relied in awarding the specific amount of periodic maintenance and her reasons for the making of an order for lump sum maintenance in the amount she did.
Overall, it can be concluded the Federal Magistrate did not consider the Notice of Appeal disclosed any identifiable grounds of appeal with significant merit.

APPLICABLE PRINCIPLES RELATING TO THE STAY APPLICATION

The principles to be applied in hearing a stay application pending an appeal are well settled (see Federal Commissioner of Taxation v Myer Emporium Ltd [No. 1] (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit CorporationLtd (1985) 2 NSWLR 685; Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681). Those authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter include 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 any “special” or “exceptional” circumstances;
·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;
·the mere filing of an appeal is insufficient to grant a stay;
·the application must be bona fides;
·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 a stay;
·some preliminary assessment of the strength of the proposed appeal – whether the appellant has an arguable case.

DISCUSSION

We have summarised the Federal Magistrate’s examination of the husband’s proposed grounds of appeal. We discern no error by the Federal Magistrate in her consideration of each of the husband’s grounds of appeal, and conclude there was no error by the Federal Magistrate in her assessment of the prospects of success of the appeal on the grounds contained in the Notice of Appeal, at least as they were drafted at the time of the hearing of the stay application.
The husband’s counsel seeks to persuade us that the Federal Magistrate failed to take into account “jurisdictional issues which would invalidate her orders of 9 April”.
The genesis of her argument is found in her written submissions and is said to be that “the Wife had already applied for maintenance in Poland and that application had been dismissed … or at worst, was partially but not fully completed and was still pending (lis alibi pendens)”.
The maintenance proceedings in Poland received scant attention in the initial hearing and only slightly more in the stay application. In the stay proceedings the husband’s counsel raised it in the following manner.:
Your Honour, there’s also some evidence that the wife had applied for maintenance in Poland and that application had been dismissed in Poland, which would suggest there’s been some forum shopping, which probably isn’t a matter for appeal but was a matter that probably should have been put before you because of course Poland is a signatory to the convention on recovery of maintenance abroad so that if the wife had an order in Poland it should be registered here.
FEDERAL MAGISTRATE: Ms Winfield, it wasn’t raised.
MS WINFIELD: No, I appreciate it wasn’t raised but it is a matter, your Honour, that can be raised on the application for a stay. Your Honour, the merits of the appeal are only one aspect. Your Honour, the third ground is that the amount ordered by way of periodic spouse maintenance --- (transcript 14 May 2009, p5)
The written submissions filed on behalf of the husband in the stay appeal demonstrate even his counsel remains uncertain of the exact status of the Polish proceedings. The issue was never squarely raised until the Amended Notice of Appeal was filed on 25 May 2009, some 10 days after the stay hearing. In those amended grounds it is said that:
8.The Learned Magistrate erred in that she should have refused to hear the application given the evidence that the Wife had made a recent previous application for maintenance in Poland which was refused, Poland being a participating jurisdiction in the recovery of maintenance abroad and given that the parties last resided together in Poland and given that the Wife had not demonstrated a change of circumstances sufficient to justify a further application.
Appropriately, the husband’s counsel conceded more evidence was needed on this point. It seems to us that the issue, if there is one, relates to that of forum rather than jurisdiction.
This matter was never specifically raised as an impediment to the Federal Magistrate making her initial orders. It was raised in what can only be described as a cursory fashion in the hearing of the stay application. It is difficult to see even on the information we now have before us, how it can be suggested there is an appealable error.
Counsel for the husband further submitted that the Federal Magistrate erred in not taking into account the changed financial position of the husband and this omission would make the orders of 9 April 2009 inequitable.
Firstly, it is useful to consider what evidence was before the Federal Magistrate in this respect. On 11 May the husband’s solicitor deposed:
4.I am currently obtaining instructions from my client in relation to that but I do say that he informs me and I believe that he has just now (about 2 weeks ago) been told by his firm that he no longer has a position with them and he is in dire straits in terms of obtaining another job in the present financial climate but he is using his best endeavours to do that. He is still in discussions with the firm, [L] by whom he has been employed but the receipt by that firm of many emails from the wife have, on my instructions, precipitated the decision to separate him from his employment.
On 13 May 2009, the day prior to the stay hearing, the husband swore an affidavit stating he was no longer employed. He provides little objective detail of this event:
6.In any event, I am now unemployed, my firm having made redundant numerous senior staff in the company and I believe, in my case, having been alarmed by many emails and text messages received from the applicant by the company and company personnel and so I am unable to meet the weekly payments ordered and am obliged to live off capital.
On the same date he had also sworn a financial statement which lends support to his position.
It is of note that there was neither an application filed in the Federal Magistrates Court for a variation of the spousal maintenance orders nor was there any appeal point in the grounds of appeal directed at the fact the husband’s ability to meet the orders was compromised by his lack of employment.
The Federal Magistrate was sceptical, and rightly so, in our view, as to how she could use the information provided by the husband about his changed circumstances. Objectively, we see the position as follows:
·the husband chose not to place financial information before the Court at the spousal maintenance hearing, save for an expansive statement that he could pay whatever was ordered; and
·the husband chose not to challenge the evidence given by the wife about his capacity to pay based on her knowledge of their lifestyle together in Poland.
We fail to understand how the Federal Magistrate could base her decision for a stay on what was, at best, a prospective appeal point.
At the time of the hearing of the stay application there were two grounds of appeal directed to the substance of the maintenance orders as follows:
·the Federal Magistrate erred in that the amount ordered by way of periodic spouse maintenance was excessive; and
·the Federal Magistrate erred in making an order for lump sum maintenance as such order was not required for the wife’s support and in effect amounted to a property order.
Counsel for the husband argued before the Federal Magistrate that the fact of the husband’s change in financial circumstances was relevant to two issues. She submitted that if a stay was not granted the husband would experience hardship and it is likely the appeal would be rendered nugatory. She pointed out that to satisfy the orders the husband would be required to sell some of his property or obtain finance in circumstances where he was solely supporting the one child of the marriage.
After a review of the evidence the Federal Magistrate concluded the wife’s hardship would be greater than that of the husband if a stay was granted. She noted that any lump sum payment by the husband would be taken into account in the final accounting of financial matters, and that she had put in place in the orders a mechanism whereby the lump sum payment could be reduced by the return of some personal items to the wife.

In her reasons for judgment delivered on 14 May 2009, the Federal Magistrate specifically referred to the information provided by the husband in his financial statement when she was considering those two issues. She did take the husband’s changed circumstances into account but she concluded it did not change her view. She did so correctly, it seems to us.
Further, the Federal Magistrate expressed her lack of confidence in the accuracy of the information she had from the husband in relation to his changed circumstances, especially as contained in the financial statement. We have little trouble accepting it lacked the detail necessary for her to accurately consider what his financial position was. Indeed, the husband’s counsel was not in a position to assist her in clarifying the situation and conceded her own confusion about the husband’s expenses. It is of little assistance to analyse that document as the lack of detail simply gives rise to confusion and uncertainty. We do not accept it has any material effect on the outcome of the appeal.
We do not accept that the bald assertion that the husband was no longer in employment automatically led to a conclusion that a stay should be granted. We find no merit in this ground of appeal.
The last three grounds of appeal against the stay are directed at errors in the application of appropriate principles in determining stay applications.
The authorities in relation to the granting of a stay in proceedings such as the present are well settled and do not need repeating. There is criticism of the Federal Magistrate’s reference to Boland J’s decision in Dmitrieff & Shaw and Ors (No2) [2008] FamCA 992, a case involving a stay application where her Honour summarised the principles enunciated by courts dealing with stay applications in commercial matters including, at paragraph 12, the following principles:
·a person who has obtained a judgment is entitled to the benefit of that judgment; and
·the person who has obtained a judgment is entitled to presume the judgment is correct.
Rather, the husband’s counsel referred us in her written submissions to the principles she said are to be applied in determining whether to grant a stay. We were directed to the matters discussed by Watson SJ in Carlin & Carlin (1977) FLC 90-320. His Honour, in that case, was considering the principles upon which a stay should be granted in what was then known as custody cases. His Honour went on to say that as a general principle of law the court does not make a practice of depriving a successful litigant of the “fruits of his litigation”, which we consider to accord with what Boland J said in Dmitrieff & Shaw. We see no error in the Federal Magistrate’s statements of the guiding principles to be applied in stay proceedings.

In any event, there is nothing in the judgment of the Federal Magistrate to suggest that the two statements of general principle specifically isolated by the husband’s counsel in her written submissions played any role in the Federal Magistrate’s decision.
Having found no error in the actual principles the Federal Magistrate identified, we consider she thereafter carefully applied those principles to the evidence she had before her.
It is clear that a number of matters raised on behalf of the husband in support of not only the granting of a stay of the orders but also in this appeal are not matters that were raised at the original hearing. Whilst it may be that some of the matters which go to questions of law are permitted to be agitated before the Full Court, in accordance with decisions of the High Court in cases such as Metwally v University of Wollongong (1985) 60 ALR 68, Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, Coulton v Holcombe (1986) 162 CLR 1, and Banque Commerciale S.A., En Liquidation v Akhial Holdings Ltd (1990) 169 CLR 279, we do not believe in these circumstances they could properly advance the husband’s application for a stay of the Federal Magistrate’s orders.
In particular, we refer to the matter agitated by counsel for the husband in raising that a failure by the Federal Magistrate to make a notation pursuant to s 77A of the Act supported her argument that the Federal Magistrate had made an order going to property, rather than spousal maintenance. This was not a matter raised before the Federal Magistrate.
In her amended application filed 10 February 2009 the wife sought to have the Court specify that the amount she was seeking by way of a lump sum, $80,900, be categorised as maintenance. It seems to us, from the wife’s point of view, that approach is a sensible one. It is also very clear that the lump sum order made did relate to the maintenance of the wife. The fact the order was not expressed to be one to which s 77A of the Act applied is hardly a basis for the husband to argue a stay.
Although the Court is aware of the substantial difficulties overseas litigants face in the conduct of their case from afar, it is still incumbent upon a litigant seeking a stay to place before the Court very clear reasons for the basis of it. These reasons do not have to be special or exceptional, but there must be sound and clear reasons to justify a court granting a stay.
We do not accept the Federal Magistrate erred in the exercise of her discretion in considering and weighing matters relevant to the grant or refusal of the stay. There being no substance in any of the grounds relied upon by the husband, we accordingly dismiss the appeal.

COSTS

The husband’s appeal has been entirely unsuccessful. We consider an order for costs should be made against him, as agreed or, in default, as assessed.

I certify that the preceding fifty eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court

Associate:

Date: 28 July 2009