Kapoor and Kapoor (No.2) - [2010] FamCAFC 146

FAMILY COURT OF AUSTRALIA

KAPOOR & KAPOOR (NO.2)

[2010] FamCAFC 146

FAMILY LAW - APPEAL – Application in an appeal – where the applicant sought a stay of the orders for the sale of the former matrimonial home pending the outcome of the applicant’s application for special leave to appeal to the High Court – stay granted.

Family Law Act 1975 (Cth)

Fauna Holdings Pty Ltd and Ors & Mitchell (2000) FLC 93‑024
Russell & Russell (1976) 134 CLR 495

APPLICANT/APPELLANT:

MRS KAPOOR

RESPONDENT:

MR KAPOOR

FILE NUMBER:

CAC

1065

2003

APPEAL NUMBER:

2008

DATE DELIVERED:

2 August 2010

PLACE DELIVERED:

Canberra

PLACE HEARD:

Canberra

JUDGMENT OF:

Finn J

HEARING DATE:

2 August 2010

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

14 January 2010

LOWER COURT MNC:

[2008] FMCAfam 8

REPRESENTATION

SOLICITOR FOR THE APPELLANT:

Mrs Kapoor – In person

SOLICITOR FOR THE RESPONDENT:

Mazengarb Barralet Family Lawyers

Orders

That the orders of Federal Magistrate Brewster made on 14 January 2008, as amended on appeal on 22 June 2010 be stayed, until the High Court determines the wife’s application for special leave to appeal, or if special leave be granted, the appeal is determined by the High Court.
That the wife pay the costs of the respondent husband’s solicitor, for his appearance at Court on 28 July 2010 (for the hearing of the wife’s application in an appeal, which was originally listed for hearing that day), being 1 hour under Rule 19.18(1)(d) of the Family Law Rules 2004 (Cth) ($192.90) within 3 months of the date of these orders.

IT IS NOTED that publication of this judgment under the pseudonym Kapoor & Kapoor (No. 2) 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 CANBERRA

Appeal Number: EA 14 of 2008
File Number: CAC 1065 of 2003

MRS KAPOOR

Applicant/Appellant

And

MR KAPOOR

Respondent

REASONS FOR JUDGMENT

On 22 June 2010, I made orders and delivered a judgment in which I allowed an appeal against orders ultimately made by the Federal Magistrates Court on 14 January 2008 in property settlement proceedings between the husband, Mr Kapoor and the wife, Mrs Kapoor. In my orders of 22 June 2010, I varied one of the orders made in the Federal Magistrates Court which related to the amount, or the share, of the proceeds of the sale of the former matrimonial home that the husband and wife were each to receive. In particular, the husband’s share was reduced.
Subsequently, on 6 July this year (2010) the wife filed an application in an appeal in which she sought a stay of the orders for the sale of the former matrimonial home. I mention here that the Federal Magistrate’s orders had originally provided for the sale of the former matrimonial home, and in the application which she filed on 6 July 2010, the wife sought that until the 15 August 2010, the order for the sale be stayed.
In a supporting affidavit, the wife gave as her reasons for that application the fact that she was currently negotiating with her previous employer and was hopeful that, as a result of those negotiations, she might be in a position to buy out the husband’s share of the home. She also relied on the fact that she was not in a physical condition capable of tidying up the house for sale and she annexed a medical certificate in that regard.
The wife, in that affidavit, said she was considering applying for special leave to appeal my judgment to the High Court of Australia. Subsequently, on 22 July 2010, she sent to the Appeal Registrar, as she is required to do, a copy of an application for special leave to appeal to the High Court, which she had filed in that court on 20 July 2010.
The grounds relied upon by the wife in her special leave application are as follows:
A.Error of law under constitution due to trial judge and appeal judge having no jurisdiction to split property, where there is NO APPLICATION IN COURT FOR DIVORCE and principles established in the case of Russell v Russell (1976) have NOT BEEN AMENDED. In Family Law Amendment Act 1983 No.72 of 1983 the amendments were made in relation to maintenance and therefore reference made by appeal judge to this amendment is incorrect and appeal judge’s reference to parliament bill is also incorrect due to parliament not having power to amend the definition of “matrimonial cause”, defined in the constitution par. (xxii).
B.Property split with orders to sale [sic] family home can end the marriage under Australian Family Law. No protection provided under outdated Australian Family Law to a person who does not want to end his/her overseas registered marriage, is an error of law.
The wife’s application for a stay was originally listed before me for hearing on Wednesday, 28 July 2010. The wife did not appear at the hearing on that day as she was engaged in proceedings in the Federal Court, which were between herself and her previous employer. Accordingly, I adjourned the application for a stay until today.
At the hearing today, the wife amended her application orally (which I was prepared to accept), to be granted a stay of the sale first until the High Court decision in relation to her special leave application, or until January next year, that is, as I understood it, January 2011, when she was hopeful that her son might be able to assist her in raising the necessary funds to purchase the husband’s share of the matrimonial home. She sought that the stay be to the later of those two dates.
However, I understood the wife’s final position before me to be that she only sought a stay until the High Court determines her special leave application.
Her reasons for seeking the stay are, in summary, now as follows. So long as she is unemployed, it is impossible for her to negotiate refinancing with the bank. Negotiations with her employer are continuing, although she acknowledges they are unlikely to be successful, but she should know the outcome definitely about that matter (and that matter could well include the fate of her proceedings in the Federal Court) in about three months’ time.
She also relies on the fact that she is unfit to do physical activities, in the sense of having the physical capacity to prepare the house for sale, and she was able to produce an updated medical certificate, which is “Exhibit 1” before me.
Finally, she relied on the fact that if she is unsuccessful in her negotiations with her former employer, her son, who is now 23 and lives at home and is currently a student, may be back at work and able to obtain finance to assist her in the purchase of the husband’s share.
Mr Mazengarb, appearing for the husband, opposed the grant of the stay for the following reasons. The medical certificate which the wife produced today was directed, in Mr Mazengarb’s submission, to the capacity for work rather than physical capacity to tidy up a house. But in addition, he relied on the fact that the certificate indicated that the medical conditions which the wife has are permanent.
I interpolate here to explain that it was also during Mr Mazengarb’s submissions, that I was able to ascertain from the wife that her application for legal aid to help with the sale of the house has not been successful.
This was a matter she relied on in her affidavit, but I note she is still waiting to hear from the legal aid authorities concerning legal assistance with the special leave application. Although as Mr Mazengarb said, it is difficult to see that that has much relevance to the matter I have to decide today.
In relation to assistance from the parties’ son, Mr Mazengarb pointed out that there was no evidence of his attitude or capacity to assist his mother.
Similarly, Mr Mazengarb did not consider, in his submissions, that the state of the wife’s negotiations with her employer was likely to assist her case for a stay to enable her to be in a financial position to buy the husband’s share of the house.
Mr Mazengarb recognised in his submissions that probably the most powerful consideration in support of the wife’s application for a stay was the fact that she has lodged an application for special leave to the High Court.
Against the background consideration that lodging an appeal, or any type of appeal application, does not operate as a stay on the order from which there is sought to be an appeal, Mr Mazengarb relied on the decision of the Full Court of this Court in Fauna Holdings Pty Ltd and Ors & Mitchell (2000) FLC 93‑024.
Essentially, that decision focuses on matters which, in various High Court decisions, have been identified as matters relevant to the grant of a stay. The important consideration that emerges out of those High Court decisions is the need to maintain the subject matter of the litigation. But as Mr Mazengarb went on to submit, in addition to considering that matter, it is also necessary to look at the prospects of, or to try to anticipate, the prospects of success of the special leave application, and as identified in Fauna Holdings (supra), to take into account the delay involved and the prejudice to both parties.
In connection with prejudice to the husband, Mr Mazengarb has pointed out that these proceedings have now been on foot for five years. They have been extremely, no doubt, stressful to both parties, particularly as neither are apparently in a position to move from the former matrimonial home. They both need some resolution of their dispute in order to put them both in a position where they can live independently.
In this connection Mr Mazengarb also pointed to the fact that the wife was given the opportunity in two different ways, or on two different occasions, by Brewster FM, to buy out the husband’s interest in the house and she did not avail herself of those opportunities. But, as Mr Mazengarb has acknowledged, persons’ attitudes do change and circumstances change.
However, Mr Mazengarb also relied on the fact that whatever the outcome of the High Court proceedings, the husband will continue to seek the sale of the house, and for the reasons just canvassed, there does need to be a sale if either of these parties are ever to be able to go their own way, so to speak, because of the limited financial circumstances of each of them.
It is against the background of these competing considerations that I have to decide this matter. I have to take into account of course (as I have tried to explain to the wife today), that the filing of an application for special leave, or indeed, any other appeal, does not operate as an automatic stay. Rather the Court has to consider in each case whether or not it should grant a stay, and the authorities, particularly the High Court authorities, emphasise that stays are sparingly granted.
However, the important point, as I have said before in canvassing Mr Mazengarb’s submissions, is the need to preserve the subject matter of the litigation. There is very little doubt as recourse to my judgment and that of the Federal Magistrate would show, that the real subject matter of the litigation is the matrimonial home. It is the principal asset of the parties in the sense that it is the asset that is currently available to them. True it is that both, particularly the wife, have superannuation entitlements, but of course, such entitlements cannot be readily accessed. And so it is the future of the home that can be considered the real subject matter of the litigation, and the question is therefore whether that subject matter would be lost by not granting a stay.
Now as I said before, Mr Mazengarb has emphasised in argument for the husband that on any view of this case, and even if the High Court were to remit the case for re-determination, a party, one party, presumably the husband, would continue to seek the sale of the property.
There is, however, an underlying consideration in this case which is somewhat complicated to express. I here refer, but without taking time at this point to revisit exactly what I said, to observations that were made in my judgment of 22 June 2010 (particularly in paragraphs 58 to 79). While I have very little doubt that the law is, as I held it there to be, in relation to the jurisdiction to determine property settlement proceedings between people who are not only not divorced, but are still living in the same house (albeit the husband would say, not as husband and wife), my previous judgment would show that this factual (and consequently jurisdictional) situation really was at the heart of the matter.
The wife is able to point to the earlier decision of the High Court in Russell & Russell (1976) 134 CLR 495. But given the subsequent statutory amendments, I identified in my judgment, the question at the heart of this case is whether the Court has the power (or jurisdiction) to determine a division of property pursuant to the provisions of section 79 of the Family Law Act 1975 (Cth) (“the Family Law Act”) in circumstances where the parties have not physically separated from the matrimonial home, which importantly, as I have earlier identified, is the main and presently realisable subject matter of the litigation.
In my previous reasons for judgment of 22 June 2010, and again without at this point taking time to revisit exactly what I there said, I did draw attention (in paragraph 72) to the fact that one reason why I was confident (as confident as I as a single judge, albeit in the appeal jurisdiction can be) of the existence of the necessary jurisdiction, was that if one party, even though he or she might want to maintain the marriage, still wanted a sale of their matrimonial home, I could not see where they could get relief other than under the Family Law Act and the courts exercising jurisdiction under that Act. This is because the operation of the definition of “matrimonial cause” would probably exclude either party being able to seek relief in the State or Territory courts, even if they are both registered owners, as I understand to be the position in this case. But even if the house is in the husband’s name alone, I equally have difficulty seeing where he could get relief other than under the Family Law Act. But, these may be questions that might just attract the interest of the High Court, and in those circumstances, given that the home is so central to these issues, I consider that I should grant the stay (of its sale) until the High Court determines the wife’s special leave application.
I take into account the delay which this stay decision will involve. But there have already been, unfortunately, very long delays in this case. However, as I said earlier today, the High Court now seem to be processing special leave applications within a matter of months rather than the minimum 12 month period that once seemed to apply. In these circumstances, I am as confident as I can be, that there will be a relatively early determination of this matter, one way or other, by the High Court.
As to the inconvenience for, or prejudice to, the husband, I am also mindful that he has been continuing to live in circumstances which he does not want to be in, and as Mr Mazengarb has said, without recourse too to the funds due to him. But, again, these considerations go back to the jurisdictional issue that appears to be at the heart of the application for special leave (although I have to concede that the application is not drafted in the best legal terminology).
The husband has been living in this home for all the time of these proceedings, and while what is likely to be perhaps another six month period is, no doubt, I accept, an inconvenience to him, it is inconvenience which I consider, has to be tolerated, when balanced against the confusion that may result through the sale of the house pending determination by the High Court of the applicable law. In these somewhat controversial circumstances, I take into account also that no progress has so far been made on this sale and so nothing is lost in that regard by the grant of the stay.
For these reasons, therefore, I propose to grant the stay until the determination of the wife’s special leave application to the High Court or, of course, a determination of the appeal by the High Court, should the High Court grant special leave to appeal.
I did not understand the wife to finally press for a longer period for the stay, being until she could ascertain whether the son was in a position to help her. But there being no evidence on that matter, and taking into account the need for ultimate resolution of this matter, I would not have been minded to extend the stay to take into account the son’s position if that proved to take a longer time to ascertain than the decision of the High Court. So for those reasons I grant the stay.

I certify that the preceding thirty three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court Justice Finn delivered on 2 August 2010.

Associate:

Date: 13 August 2010