Janos and Janos (No 2)

[2013] FamCA 919

FAMILY COURT OF AUSTRALIA

JANOS & JANOS (NO 2) [2013] FamCA 919

FAMILY LAW – APPLICATION FOR STAY PENDING APPEAL – Property proceedings – Consequences of splitting order made at trial not in contemplation of either party at trial – Stay application opposed by wife who seeks implementation of partial splitting order pending determination of appeal – Consideration of general principles particularly hardship to the husband in the event that such an order was made – Application for stay granted.

Family Law Act 1975 (Cth ) s79A

APPLICANT: Mr Janos

RESPONDENT: Ms Janos

FILE NUMBER: PAC 2676 of 2009

DATE DELIVERED: 27 November 2013

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 12 November 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gould

SOLICITOR FOR THE APPLICANT: Harris Freidman

COUNSEL FOR THE RESPONDENT: Mr Thomas

SOLICITOR FOR THE RESPONDENT: King Cain Solicitors

Orders

1. That the implementation and operation of superannuation splitting Orders 1 to 5 made on the 1 October 2013 be stayed pending determination of the Husband’s Appeal filed 24 October 2013.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Janos & Janos 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 PARRAMATTA

FILE NUMBER: PAC 2676  of 2009

Mr Janos

Applicant

And

Ms Janos

Respondent

REASONS FOR JUDGMENT

The Proceedings

1. The application before the Court is an application by the husband filed on 24 October 2013 seeking orders to the effect that the operation of orders made on 1 October 2013 be stayed pending determination of the husband’s appeal filed on 24 October 2013.

2. On 1 October 2013 reasons for judgment were delivered and orders made in the property proceedings between the present applicant husband and the respondent wife ([2013] FamCA 846). The orders were made following a hearing that took place on 26, 27 and 28 August 2013.

3. The Notice of Appeal filed on 24 October 2013 attains 16 asserted grounds. Those grounds will not be considered in detail in the context of the present issue before the Court save to note that one of the grounds of appeal is as follows:

   That the trial Judge erred in including in the adjusted balance sheet a figure of $220,000 as an asset (said to be the value at age 60 of the husband’s interest in the State Superannuation Scheme) when there is no evidence to suggest that the fund has such a value in real terms, and the husband is aged 58 at trial.

4. In support of the application for stay the husband relied upon an affidavit by his solicitor, the contents of which clearly indicate that the effect of the splitting order contemplated in the reasons for judgment was significantly different to the reality once the splitting order was served upon the trustee of the subject fund.

5. It was the intention of the orders that as a consequence of the splitting order made the wife would receive a lump sum of approximately $181,600 from the husband’s superannuation fund.

6. A letter to the wife from the trustee of the superannuation fund dated 18 October 2013 reveals that in fact the lump sum that would be paid to the wife as a consequence of the splitting order would be $508,198.50.

7. On 28 October 2013 the husband’s application for stay was first listed before the Court and on that day an interim order staying the operation of the splitting order was made. Proceedings were adjourned to 12 November 2013 for further argument and for the purposes of facilitating further enquiries being made of the husband’s superannuation fund.

8. On 12 November 2013 the husband’s application was again listed before the Court.

9. By letter to the husband’s solicitors dated 11 November 2013 the trustee of the husband’s superannuation fund confirmed that the lump sum splittable amount payable to the wife by reason of the splitting order would be $508,198.50 and further confirmed that the value of the husband’s future income stream pension superannuation entitlement as at 18 October 2013 was $635,248. That letter further confirmed that in the event that the husband at age 60 commuted his entire future income stream pension to a lump sum that the sum payable to him would be $425,402.

10. Consequently the wife by reason of the proposed splitting order would receive a lump sum far in excess of the lump sum that would be available to the husband at age 60 on commutation. The logic of that calculation is unexplained.

11. It is clear that the consequences of the splitting order made at trial were not in the contemplation of either party during the course of the hearing nor indeed was there any evidence before the Court that was indicative of such a result.

12. The wife asserts that she has significant outstanding legal fees and seeks in effect a partial implementation of the splitting order in order that she might receive a capital sum similar to that provided for in orders made on 1 October 2013. She has outstanding legal fees of $167,122 and in the event that she receives a partial payment would apply that payment firstly in payment of legal fees outstanding, then in provision of a sum to cover future fees in relation to the husband’s appeal and thereafter in reduction of the parties’ joint liability to the ANZ Bank, a deposit on a home unit or house and the balance if any to her superannuation fund.

13. The wife seeks, as a condition of any stay order, the implementation of a partial splitting order that would provide to her at least the sum of approximately $310,000 with those monies to be applied in the priority referred to.

14. In the event that the wife was to receive a lump sum by way of partial implementation of the proposed splitting order the amount payable to the wife would be paid to her as a lump sum unpreserved superannuation entitlement and tax would be levied at 21.5 per cent of that lump sum.

15. The principles applicable to a stay pending appeal are well settled.

16. A stay will not be granted lightly or as a matter of course, with the onus on the applicant for the order. However it is not necessary for the applicant to demonstrate any special or exceptional circumstances.

17. In short general considerations include:

    a)Whether refusing to grant the stay would render the appeal nugatory;

    b)The entitlement of the other party to the benefit of the judgment;

    c)The other party is entitled to presume the judgment is correct;

    d)The mere filing of an appeal is insufficient to grant a stay;

    e)The bona fides of the application for stay;

    f)That any order for stay may be granted on terms that are fair to all parties and such a consideration will involve the Court in weighing the balance of convenience and the competing rights of the parties;

    g)Some preliminary assessment of the strength of the proposed appeal and whether the appellant has an arguable case;

    h)The likely period of time in which the appeal can be heard.

18. The difficulty confronting the parties in the context of the present application is that the effect of the proposed splitting order would appear to have not been in the contemplation of the parties at trial nor indeed the subject of evidence adduced by either party at the trial.

19. The husband in his Notice of Appeal seeks that the orders made at trial be set aside and that by way of property adjustment he pay to the wife the sum of only $10,000 with each party thereafter retaining such other assets or entitlements as are in their respective possession. The effect of such orders would be that the parties would remain jointly liable for an ANZ Bank debt of approximately $100,000.

20. Whilst it may be that as a consequence of the reality of any splitting order made in the proceedings and the knowledge now as to the lump sum available to the husband on a commutation of his pension at age 60, the orders sought by the husband on appeal may change. However at present in the appeal he does not seek that there be any splitting order in relation to his superannuation pension.

21. Should the Court accede to the wife’s request for a partial splitting order, even if the Court was satisfied that it had power to do so, the effect would be to render the husband’s appeal substantially nugatory in relation to the superannuation question.

22. Should a partial split be ordered as a condition of any stay order the husband would suffer a significant diminution of his superannuation pension that provides a substantial portion of his present income. It is contended on behalf of the husband that such a circumstance would present to him a significant hardship.

23. The Court has had regard to the considerations set out above. The circumstances that have arisen in relation to the proposed splitting order were not in the contemplation of the parties at trial nor the subject of evidence, notwithstanding that at trial the wife sought a significant splitting order in her favour.

24. As a consequence there is a real prospect that the husband’s appeal will see a change to this Court’s orders made at trial.

25. Indeed in the circumstances it would appear that the husband may have a remedy under section 79A of the Act, although no such application has been made.

26. For the reasons set out above the Court will order that there be a stay in relation to the operation of the superannuation splitting orders made on 1 October 2013.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 27 November 2013.

Associate: 

Date:  27 November 2013