Laue and Laue (Deceased) by his Legal Personal Representative Daniel Fellon and Ors

[2018] FCWA 74

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

CITATION: LAUE and LAUE (Deceased) by his Legal Personal Representative DANIEL FELLON & ORS [2018] FCWA 74

CORAM: DUNCANSON J

HEARD: 23 JANUARY 2018

DELIVERED : 27 APRIL 2018

FILE NO/S: PTW 3387 of 2012

BETWEEN: ROSIE PINA LAUE

Applicant

AND

RAY WILBUR LAUE (Deceased) by his Legal Personal Representative DANIEL FELLON

First Respondent

AND

CAMDEN PTY LTD

Second Respondent

AND

ARM PTY LTD

Third Respondent

AND

BARKER PTY LTD

Fourth Respondent

Catchwords:

PRACTICE AND PROCEDURE - Application for stay of property orders pending determination of appeal - Application refused - Where a party seeks orders for the subdivision of the property - Application for orders for subdivision adjourned generally

Legislation:

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth) r 22.11

Category: Reportable

Representation:

Counsel:

Applicant	:	Ms S Wellings & Ms A Sassella
First Respondent	:	Self-Represented Litigant
Second Respondent	:	Mr K Dundo
Third Respondent	:	Ms S Wellings & Ms A Sassella
Fourth Respondent	:	Ms S Wellings & Ms A Sassella

Solicitors:

Applicant	:	Carr & Co
First Respondent	:	Self-Represented Litigant
Second Respondent	:	HopgoodGanim Lawyers
Third Respondent	:	Carr & Co
Fourth Respondent	:	Carr & Co

Case(s) referred to in decision(s):

Aldridge v Keaton (Stay Appeal) [2009] FamCAFC 106

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1On 13 October 2016 Walters J delivered reasons for judgment in proceedings for the alteration of property interests pursuant to s 79 of the Family Law Act 1975 ("the Act"). On 8 November 2016 Walters J pronounced orders pursuant to those reasons ("the said orders").

2On 5 December 2016, the second respondent [Camden Pty Ltd] filed a notice of appeal against the said orders. On 31 August 2017 the second respondent filed an application in a case seeking a stay of the said orders pending the determination of its notice of appeal by the Full Court of the Family Court of Australia.

3The application for a stay is opposed by the applicant, [Rosie Pina Laue]. The applicant is also sole director of [ARM Pty Ltd], the third respondent and [Barker Pty Ltd], the fourth respondent who also oppose the stay. In her response filed 7 December 2017 the applicant also seeks other orders as set out at paragraph 16 below.

THE NOTICE OF APPEAL

4In the notice of appeal the second respondent appeals all of the said orders. Orders 3, 4, 7, 8, 9, 11, 12, 18 and 20 in Part B of the said orders relate to the second respondent, and orders 9, 13, 14 and 20 relate to a non-party [Mrs Laue Snr] who is the sole director and majority shareholder of the second respondent.

5The second respondent states 24 grounds of appeal which can be broadly summarised as follows:

•error with respect to bias;

•error with respect to jurisdiction and power;

•error in findings relating to the property known as [Property B] and failure to take into account matters with respect thereto;

•error in order and finding relating to [ARM Pty Ltd] as trustee for the [Property A Land Trust]; and

•errors with respect to interest on marital debt, the treatment of [Mrs Laue Snr] and findings in relation to her and her entities including findings of credit.

6The orders sought by the second respondent in the appeal are that the said orders made by Walters J be set aside. The second respondent seeks an order that the applicant's claims against it be wholly dismissed. It seeks various other orders including the discharge of orders dated 30 June 2014 and 12 August 2014 which contain injunctions against the second respondent in respect of Property B and against the third respondent in respect of Property A.

The second respondent's position

7Order 4 of the said orders requires the second respondent to execute and deliver to the fourth respondent a transfer in respect of each of the certificates of title which comprise Property B, to be held in escrow by the fourth respondent's solicitors pending compliance with order 5. The second respondent deposes it has complied with this order.

8Order 5 of the said orders requires the fourth respondent to pay the sum of $2,242,091 in reduction of the [CQT] and/or [D & D] facilities. Order 8 requires the second respondent to discharge mortgages secured over Property B and Property A by paying the sum then remaining pursuant to the CQT and D & D facilities. The second respondent deposes that amount is approximately $1.68 million.

9Order 11 of the said orders requires the second respondent to execute and deliver to the applicant, a discharge the mortgage in respect of each of the certificates of title which comprise Property A. The second respondent deposes it has complied with this order.

10The second respondent deposes if the appeal is successful the effect of the orders sought by it is that Property B remains legally and beneficially owned by the second respondent. The third respondent as trustee for the Property A Land Trust is entitled to an indemnity against trust property for all costs and expenses incurred by it while it held legal title to that property.

11The second respondent deposes that if the transfer of Property B proceeds and the facilities are paid out:

•substantial stamp duties will arise which may not be recoverable;

•substantial capital gains tax issues will arise which may not be recoverable; and

•the fourth respondent may deal with [Property B] in a manner that is irreversible.

12The second respondent opposes the orders sought by the applicant for subdivision as set out below, which it submits are orders which were not contemplated by the trial judge. The second respondent submits that the applicant is not able to obtain ownership of Property B as order 4 of the said orders is subject to her satisfying order 5 for payment. The second respondent submits the subdivision will incur "irreversible taxation and stamp duty consequences" and it is a transaction which will irreversibly change the nature of Property B.

13The second respondent submits if the appeal is successful it would retain ownership of Property B and deal with it in the way it wants to and not in the way the applicant wants to deal with it.

14Counsel for the second respondent acknowledges the second respondent may have to sell Property B but, as discussed below, says that does not need to occur at this time.

15The second respondent urges the Court to maintain the status quo. The second respondent concedes that the injunctions contained in order 14 must remain if the stay is granted and it did not seek a stay in respect of orders 15, 16, 17 and 20.

The applicant's position

16The applicant seeks an order that the second respondent's application be dismissed. She seeks the following further orders:

…

2The Second Respondent do all acts and things and sign all documents necessary to subdivide the property situate [sic] at and known as "[Property B]" being more particularly described as follows:

(a)Lot XXXXX on Diagram XXXX being the whole of the land contained in Certificate of Title Volume XXXX Folio XXX; and

(b)Lot XX on Diagram XXXXX being the whole of the land contained in Certificate of Title Volume XXXX Folio XXX;

which includes but is not limited to the following:

(c)[T & P Pty Ltd Project Management Agreement] for industrial rezoning and approval;

(d)[T & P Pty Ltd Consultancy Agreement] for the subdivision of Proposed Lot 2 as defined in the Agreement annexed hereto and marked Annexure A;

(e)WAPC Form 1A Subdivision Application;

(f)Memorials and notifications documentation;

(g)documentation to progress the subdivision required by the Water and Rivers Commission; and

(h)application for a new title for the proposed Lot 1.

3The Applicant be responsible for the costs associated with the subdivision at first instance with such costs (including fees paid to date and those yet to arise) to be:

(a)reimbursed on any sale of [Property B]; or

(b)shared equally by the Applicant and the Second Respondent in the event the appeal is successful and the Second Respondent reimburse the Applicant within 30 days of the delivery of the judgment in Appeal WA25/2016 and thereafter within 7 days of receipt by the Respondent of any additional invoice.

4The Second Respondent pay the costs of the Applicant and Fourth Respondent of and incidental to this application.

17The applicant refers to the declaration at order 3 that the beneficial and legal ownership of Property B was transferred to the fourth respondent as trustee for the Laue Family Trust. For that transfer to take place, the fourth respondent and the second respondent are to discharge mortgages in proportions determined by the orders.

18The applicant disputes that there is no disadvantage to her in maintaining the status quo and granting the stay. She refers to the complicated history of loans secured over Property B and Property A. The CQT loan and D & D facility remain secured against Property B, both loans in default with the loans incurring default interest at a rate of in excess of $1,187 per day. The mortgages are incurring interest of $8,400 per week, which is not being met and which is reducing the equity in the property. Counsel for the applicant pointed out that the second respondent's case is that it will retain Property B, but the applicant should retain the debt.

19The applicant deposes that the only way to achieve the transfer of Property B is to sell part or, all of Property B so that the sale proceeds could discharge the mortgage. The applicant has ascertained that the best price would be achieved by subdividing the property. She has negotiated a sale of approximately one half of the property for $6,361,158 and one of the conditions of the contract of sale is that the applicant must apply for the subdivision to move the relevant titles. The price represents a substantial increase in value which would allow a complete discharge of the loans including the share to be paid by the second respondent.

20The applicant proposes the net sale proceeds remain in her lawyers trust account.

21The applicant points to the other most recent offer which was $7.75 million for the entire Property B, and which did not include subdivision.

22The applicant says that there is no prejudice to the second respondent in proceeding with the subdivision and sale given that she proposes to retain the net sale proceeds in trust and it is possible that the second respondents may even benefit from the increase in value.

PRINCIPLES APPLICABLE TO APPLICATIONS FOR A STAY

23Rule 22.11 of the Family Law Rules 2004 (Cth) provides:

(1)The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision.

(2)If an appeal has been started, or a party has applied for leave to appeal against an order, any party may apply for an order staying the operation or enforcement of all, or part, of the order to which the appeal or application relates.

(3)An application for a stay must be filed in the Registry in which the order under appeal was made and be heard by the Judge of the Family Court, Judge of the Federal Circuit Court or Magistrate who made the order under appeal.

24The principles applicable to the determination of an application for a stay of orders was set out by the Full Court in Aldridge v Keaton (Stay Appeal) [2009] FamCAFC 106 where the Full Court stated at [18]:

18.The principles to be applied in determining an application for a stay of orders both in the general law and in respect of parenting proceedings are also well known (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited [No 1] (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation (1985) 2 NSW LR 685; Jennings Construction Limited v Burgundy Royale Investments Pty Limited (1986) 161 CLR 681; Clemett & Clemett (1981) FLC 91-013; JRN & KEN v IEG & BLG (1998) 72 ALJR 1329 at 1332). The 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 bona fides of the applicant;

·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;

·the desirability of limiting the frequency of any change in a child's living arrangements;

·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; and

·the best interests of the child the subject of the proceedings are a significant consideration.

DISCUSSION

25The onus to establish a proper basis for the stay is upon the second respondent. It is not necessary for the second respondent to demonstrate any special or exceptional circumstances. The basis for the stay is the notice of appeal.

26The applicant is entitled to the benefit of the judgment. She points to order 3, namely the declaration that from 1 July 2005, the beneficial and legal ownership of Property B was transferred to Barker Pty Ltd as trustee for the Laue Family Trust. Order 11 provides that the second respondent execute and deliver to the applicant a discharge of the mortgage in respect of each of the certificates of title comprising Property A.

27The applicant is entitled to presume that the judgment is correct.

28It is not in dispute the mere filing of the appeal is insufficient to grant the stay.

29The application for the stay must be bona fide. In this respect I find the second respondent's position to be contradictory, and its argument that it seeks to retain Property B and deal with it in a way it wants to be unconvincing.

30At paragraph 384(h) of his reasons, Walters J found:

… It was universally accepted during the course of the trial that [Property B] will have to be sold. One valuer attributed a value of $8,550,000 to [Property B]; the other estimated that it was worth $4.6 million. In those circumstances, I am not confident in accepting the evidence of either valuer. …

31His Honour referred to this again at paragraph 385 where he said:

… As indicated above, however, I am unwilling or unable to make findings in relation to two very significant items. The first relates to the value of [Property B] (which all parties concede will have to be sold); …

32On 9 May 2017 the second respondent's counsel informed Thackray J (sitting as a single judge of the Full Court of the Family Court of Australia) that his client was agreeable to a sale of Property B, but that the applicant would not consent. The applicant was agreeable to the sale subject to a dispute as to the terms of any sale.

33The second respondent's application for a stay was received by the Court on 23 December 2016, but not pressed at that time. On 17 August 2017 notice of an offer and a copy thereof was provided to the second respondent. Only thereafter on 30 August 2017, did the second respondent seek a relisting of the stay application. The application was filed on 31 August 2017. At that time the second respondent was willing "to continue discussions to advance the sale of [Property B]" on the basis that the said orders be stayed.

34Counsel for the second respondent said the second respondent may have to sell Property B, or it is likely it may have to sell Property B. However, counsel said the second respondent may want to sell it in a different manner, in a different form, in a different time period. He said from the second respondent's point of view it was a timing issue.

35Counsel for the applicant submitted that the position taken is further evidence of Mrs Laue Snr's opportunistic approach to the proceedings. Counsel submits the application for the stay has been brought to defeat the applicant's ability to obtain the best sale price from the property even in circumstances where the second respondent may benefit from the sale.

36The second respondent deposes that a refusal to stay the orders would cause "inordinate hardship to the second respondent and to [Mrs Laue Snr]" and "there is a real risk that the Appeal will be rendered nugatory if the Orders are not stayed pending determination of the Appeal."

37It is the second respondent's case that if Property B is subdivided and part of it sold, it will not be able to retain Property B in its entirety. This argument is inconsistent with its position that it may have to be sold.

38Counsel for the second respondent submitted at length to the strength of the proposed appeal, referring to what he described as a fundamental error of the trial judge in making findings in relation to the trust deed of the Property A Land Trust when the document was not before him. Counsel for the applicant submitted the trial judge would not fall into error in that respect because the second respondent did not rely on the trust deed and did not seek to tender it.

39As to the strength of the proposed appeal it is not for me to make a detailed analysis of the issues which arose in the appeal. It is almost impossible for me to assess the prospects of success having had no involvement in this lengthy and complex litigation until now.

40A stay must be granted on terms that are fair to all parties. It is necessary for me to weigh the balance of convenience and the hardship that will be caused to the second respondents if I do not grant the stay against the hardship to the applicant if the stay is granted.

41The second respondent submits that the granting of the stay maintains the status quo and is not to the detriment of either party, because the applicant has not been able satisfy the orders, and the substantial increase in the value of the property far outweighs the interest which is accruing. The second respondent submits the assets have appreciated significantly and the interest component is not a relevant factor.

42The applicant submits on the contrary that the accumulation of interest on the loan is a very substantial matter, not least because the second respondent's position is that it should retain Property B, but the applicant should retain the debt.

43Counsel for the applicant submitted that the interest accumulates at the rate of almost $8,500 per week. Counsel for the applicant referred to the "spiralling and crippling debt secured against the property which continues to deplete the equity in the property and the assets available for division at a very alarming rate".

44The applicant does not propose the dissipation of the sale proceeds, which will remain in trust pending the outcome of the appeal. The applicant also concedes she would not deal with Property A. It is difficult to understand why the sale is opposed, but for it being a timing issue. In my view the balance of convenience favours the applicant.

45The onus is upon the second respondent to establish the proper basis for granting the stay. I have borne in mind that the applicant is entitled to the benefit of the judgment and to assume that the judgment of Walters J is correct. It is difficult in this complex matter to make an assessment of the strength of the grounds of appeal and I am unable to come to any conclusion in that respect.

46I question the bona fides of the second respondent and its submission that there is a real risk that the appeal may be rendered nugatory if the stay is not granted having regard to the second respondent's position that Property B may have to be sold. In my evaluation the balance of convenience favours the applicant.

47On balance and in the exercise of my discretion I refuse the application for the stay.

48The applicant seeks the orders as set out at paragraph 16 above by way of implementation of the said orders. I decline to make those orders at this time. While I am conscious of the interest accruing, I take into account that these proceedings have been ongoing for several years. The appeal was heard on 9 and 10 August 2017 and the outcome is awaited. Counsel for the second respondent indicated that the decision was imminent. I have no knowledge of that. The matter was extremely complex and it is not known when the Full Court will hand down its decision. I consider the orders sought by the applicant with respect to the subdivision should await the outcome of the appeal. The applicant's application in that respect will stand adjourned generally.

THE ORDERS

49I make orders as follows:

1The application of the second respondent, [CAMDEN PTY LTD] filed 31 August 2017 be dismissed.

2Orders 2 and 3 sought by the applicant, [ROSIE PINA LAUE] in the Response filed 7 December 2017 stand adjourned generally with liberty to relist.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

RM
ASSOCIATE

27 APRIL 2018