Lesley and Lesley

[2015] FamCAFC 249

FAMILY COURT OF AUSTRALIA

LESLEY & LESLEY [2015] FamCAFC 249

FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Expedition – Where the husband seeks to expedite an appeal against orders for interim property settlement and litigation funding – Whether the matter should be afforded priority to the detriment of other cases – Where the nature of the appeal does not justify priority to the detriment of other cases  – Application dismissed.

Family Law Act 1975 (Cth): s 94(2D)(j)

Family Law Rules 2004 (Cth): r 12.10A

APPELLANT: Mr Lesley

RESPONDENT: Ms Lesley

FILE NUMBER: SYC 1313 of 2015

APPEAL NUMBER: EA 182 of 2015

DATE DELIVERED: 16 December 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Ryan J

HEARING DATE: 16 December 2015

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 23 October 2015

LOWER COURT MNC: [2015] FamCA 894

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Richardson SC

SOLICITOR FOR THE APPELLANT: Caroline Chung & Associates

COUNSEL FOR THE RESPONDENT: Mr White SC

SOLICITOR FOR THE RESPONDENT: Michael Conley Lawyers

Orders

1. That the Application in an Appeal filed 23 November 2015 be dismissed.

2. That each party bear their own costs of the application.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lesley & Lesley has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA
AT SYDNEY

Appeal Number: EA 182 of 2015
File Number: SYC 1313 of 2015

Mr Lesley

Appellant

And

Ms Lesley

Respondent

REASONS FOR JUDGMENT

1. These reasons were delivered orally.

2. Mr Lesley (“the husband”) and Ms Lesley (“the wife”) are engaged in property settlement proceedings pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) following the breakdown of their marriage.

3. By an application in an appeal filed on 23 November 2015 the husband seeks an expedited hearing of his application for leave to appeal and his appeal against interim financial orders made by McClelland J on 23 October 2015, as contained in his Further Amended Notice of Appeal filed on 8 December 2015.  It assumes some importance in these reasons that the orders which are the subject of the application for leave to appeal are interlocutory. 

4. The orders under appeal provide for the husband to pay the wife $250,000 by way of interim property settlement within two months (Order 1), and within three months a further $297,430 to the trust account of the wife’s solicitor by way of current and future legal fees in the proceedings (Order 2).  Both orders were made in the exercise of the Court’s property power.

5. As I will shortly discuss, on 10 December 2015, McClelland J considered the husband’s application to stay Orders 1 and 2 pending determination of this appeal.  Insofar as the application for a stay concerned Order 1, the husband was unsuccessful.  In relation to Order 2 he achieved a measure of success.

Relevant background

1. In order to give this application context, it is necessary to refer to some brief background facts.  These are largely taken from his Honour’s reasons and the documents filed in support of this application.

2. The husband is currently 55 years of age, and the wife is currently 52 years of age.  The parties married in 1988 and separated on a final basis in early 2015.  There are two children of the marriage, one who is aged 19 and the other 16.  The husband is a health professional. The wife is employed part‑time.  Through various corporate entities and family trusts the parties own a number of properties, in Australia and overseas, as well as several pharmacies and apparently related businesses.  On the husband’s case, the net value of the parties’ property is approximately $10.8 million, while the wife contends it is considerably higher. 

3. On 2 March 2015 the husband instituted proceedings in this Court seeking interim and final property orders.  On 15 June 2015 the wife filed her Response with respect to interim and final property orders, which response was later amended on 13 August 2015.  By her Amended Response the wife sought that the husband pay her $250,000 by way of interim property settlement, as well as orders for the release of funds for the payment of her legal fees.

4. On 15 June 2015 the parties entered into interim consent orders regarding certain orders sought by the wife.  Those orders provided, inter alia, that the husband pay the wife spousal maintenance in the amount of $1,000 per week; that he be responsible for mortgage instalment payments, rates and insurances for the parties’ Suburb T and Suburb R properties; and that the parties make arrangements for expert valuations regarding their properties and companies, as well as a series of injunctions.

5. On 20 August 2015 the interim proceedings came before McClelland J, following which his Honour reserved his decision.  On 23 October 2015 his Honour published his reasons for judgment and made the orders to which reference has already been made.  Paragraphs 1 and 2 of which are the subject of the husband’s appeal and are set out in full below:

   (1)Within two (2) months of the date of these Orders, the husband is to pay to the wife the sum of $250 000 by way of interim property settlement.

   (2)Within three (3) months of the date of these Orders, the husband is to pay into the wife’s solicitor’s trust account, the amount of $297 430 for the payment of the wife’s current and future legal costs in relation to these proceedings.

6. On 16 November 2015 the husband filed his Notice of Appeal against Order 2, which notice was subsequently amended on 23 November 2015. That same day the husband filed his application for expedition of the application for leave to appeal and an affidavit in support sworn by his solicitor.  A further Amended Notice of Appeal was filed on 8 December 2015, the significance of that being the husband now seeks to challenge Order 1 of his Honour’s orders.

7. By her Response filed on 2 December 2015, the wife initially sought orders for the expedition application to be dismissed.  However, in her Amended Response to the application which was filed on 10 December 2015, the wife, in effect, joins in the application for expedition.

8. As I have mentioned earlier, on 10 December 2015, McClelland J considered the husband’s application to stay Orders 1 and 2.  His Honour made orders pending determination of the husband’s appeal as follows:

   THE COURT ORDERS THAT:

   1.The applicant husband’s oral application to amend his Application in a Case filed on 23 November 2015 to include a Stay of Order 1 of the Orders made on 23 October 2015, is granted.

   2.The applicant husband is granted leave to rely upon the affidavit of [Mr Lesley] filed 9 December 2015.

   THE COURT FURTHER ORDERS THAT:

   3.The oral application made in Court today on behalf of the applicant husband by his counsel that Order 1 of the Orders made on 23 October 2015 be stayed pending determination of the Appeal, is dismissed.

   4.Order 2 of the Orders made on 23 October 2015 is stayed on the following conditions:

   a.That on or before 23 January 2016 the applicant husband is to pay to the respondent wife’s solicitors an amount equivalent to the amount which he has paid for legal costs and/or disbursement related to these proceeding to date; and,

   b.That within 7 days of any monies being paid by or on the behalf of the applicant husband for legal costs and/or disbursements in relation to these proceedings, (but excluding the costs of any single expert) the applicant husband shall pay an equivalent amount to solicitors for the respondent wife to be applied solely to her legal costs and disbursements of these proceeding with characterisation of that sum to be reserved to the trial judge, those costs shall be payable on dollar for dollar basis.

   5.The applicant husband’s costs of today be reserved pending determination of the Appeal. 

9. The gist of his Honour’s orders is that the husband’s stay qua Order 1 was dismissed but a conditional stay was granted in relation to Order 2.

10. By the terms of the conditional stay the husband is required to pay the wife an amount equivalent to the legal expenses he has incurred to date, and thereafter, pay an equivalent amount to her for legal expenses to those he pays from time to time.  Senior counsel for the husband provided a precis of the effect of that order, and it is that the husband has paid something like $122,000 in legal expenses to date, which means, as I read his Honour’s orders, that the husband must shortly pay the wife an equivalent amount.  It follows that in terms of the monies the wife was entitled to receive under the orders, she is approximately $175,000 short now, but that is not the end of the situation.  I will discuss the practical effect of that shortfall when I consider issues of prejudice.

Discussion

1. Section 94(2D)(j) of the Act provides the Full Court of the Family Court may make an order to expedite the hearing of an appeal, including an application for leave to appeal. There is no provision in the Act or the rules which specifically deals with the criteria to be applied on expedition of an appeal.

2. However, r 12.10A of the Family Law Rules 2004 (Cth) deals with applications for an expedited trial. That rule provides that the Court must consider whether a case should be given priority to the possible detriment of other cases. The potentially relevant factors referred to in the rule which the Court may take into account, and which are also relevant to appeals, will be discussed.

3. Sub-paragraph (a) is concerned with whether the husband has acted reasonably and without delay in the conduct of the case.  There is no doubt that in relation to the appeal and this application the husband has moved promptly and done all that is required to prosecute both his appeal and case for expedition.  The application of the subsection weighs in favour of an order for expedition.

4. Sub-paragraph (b) is concerned with whether the application has been made without delay.  That matter has already been addressed and need not be considered further.

5. Sub-paragraph (c) concerns prejudice to the respondent.  Senior counsel for the wife argued that the effect of the stay in relation to Order 2 is that the wife is, in effect, locked out of her full entitlement to that which she received at first instance.  At first blush this is true.  However, the $297,000 to which the wife is entitled is the totality of the costs that the wife is likely to incur with the matter proceeding to a trial.  There was no opposition to my suggestion that a trial is probably one year away.

6. It is difficult to see how, with the substituted dollar‑for‑dollar order now in place (the imminent payment of $122,000 to be applied towards fees incurred to date) that the wife is, in fact, prejudiced if she does not have immediately available to her the entirety of the amount that she says she will need to take the matter through to a concluded trial.  It is uncontentious that the vast majority of cases in this jurisdiction resolve by agreement, and it is a somewhat grim prediction this early in the proceedings, in particular, before valuations are done, to anticipate that it will be necessary for there, in fact, to ever be a trial.  Common sense, for example, might break out.

7. So although it is accepted that there is, at first blush, a spectre of prejudice to the wife if she does not have the entirety of the $297,000 available to her now, in my view, that prejudice is more theoretical than it is real.  The application of the subsection does not weigh in favour of the wife.

8. Sub-paragraph (d) requires consideration of circumstances which would justify this case being given priority to the detriment of other cases.  This is a particularly important factor in this appeal given, as I have said earlier, it is an appeal in relation to interlocutory orders.  When I say the detriment of other cases, I mean to other cases that have been filed earlier and would be called on for hearing in the ordinary course, but not if this case was expedited, and, as senior counsel for the husband described it, allowed to jump the queue.

9. Examples of what constitute a relevant circumstance are set out in r 12.10A(4)(a) – (g). On the evidence before me it cannot be said that any of the examples listed therein apply here. However, that is not the end of the matter because the list of factors contained in the sub‑rule does not purport to be exhaustive.

10. Senior counsel for the husband provided the Court with an affidavit of the husband filed in support of his application for a stay, and correspondence from Westpac Bank in relation to an application by him to raise some $670,000, the majority of which can be seen as attributable to an attempt by him to comply with Orders 1 and 2 made by the trial judge.

11. In that correspondence the bank, who are the husband’s bankers, indicate that they are satisfied he has sufficient security to support the additional borrowings.  However, the application is declined because:

    Westpac has determined that we are unable to extend any further funding to the group, with the overall income position insufficient to meet debt servicing requirements.

12. The point being, notwithstanding that the husband has sufficient assets under his control to cover the borrowing, the bank is concerned that the overall cash flow position of the husband and the entities is not sufficient to support an increased borrowing.

13. It is not suggested, as I understand it, that this response from this bank is determinative of the approach that might be adopted by all lenders to a similar request by the husband.  And all that can be deduced from this correspondence is that the first attempt made by the husband to arrange his finances so as to comply with his Honour’s orders has been unsuccessful.  In my view, it would be little more than speculation to deduce from this that all attempts to raise finances and, if necessary, restructure would meet with the same lack of success.

14. It will be recalled that even on the husband’s case the parties have a net property pool valued in excess of $10 million.  There is nothing in evidence before me that suggests either the entities themselves are under risk or that, in relation to the substantial borrowings supported by those assets and the income from those assets, that there had been any default or concerns in relation thereto raised to date.  Thus, while I accept the orders may present some practical difficulties in terms of where the funds are to be sourced, that issue, in my view, is better explored at first instance and is not determinative of this application.

15. I fully appreciate that the question of source of funds is to be agitated on appeal but, concerned as I am with expedition, it is not so persuasive that that factor alone would triumph over those which weigh against an order for expedition.  So that it is clear, this is not a matter where the purpose of the case would be lost if it is not heard in priority to other appeals.  In my view, this Court has to be more concerned with appellate resources being made available for appeals against final rather than interlocutory orders.  For reasons which are obvious, this is an approach commonly adopted by intermediate courts of appeal.

16. Finally, it is necessary to consider the grounds of appeal.  All that needs to be said at this point is that the husband raises a number of challenges to his Honour’s reasons and the exercise of discretion.  It is difficult to see on the grounds as presented that the appeal is presented on such strong grounds that this Court should dislocate other appeals so as to give this appeal priority.

Conclusion and costs

1. Thus, notwithstanding the matters that weigh in favour of expedition, in my view the case for this appeal to be given priority over all other appeals awaiting a hearing has not been made out.  Consequently, the application for expedition should be dismissed and I order accordingly.  Given that the wife supported the application it is appropriate the parties bear their own costs.

I certify that the preceding thirty two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 16 December 2015.

Associate: 

Date:  20 January 2016