FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Macarthur & Macarthur [2021] FedCFamC1F 15
File number(s): BRC 6154 of 2020 Judgment of: ALTOBELLI J Date of judgment: 3 September 2021 Catchwords: FAMILY LAW – PROPERTY – application to stay interim spousal maintenance and property orders – application made in circumstances where a notice of appeal has been filed – whether the orders ought to be varied – whether there has been a change in circumstances sufficient to justify a variation of the spousal maintenance orders – whether there are adequate grounds to grant the stay – stay declined – order for spousal maintenance varied due to changed circumstances. Legislation: Evidence Act 1995 (Cth) s 131
Family Law Act 1975 (Cth) s 83
Cases cited: Aldridge & Keaton [2009] FamCAFC 106
In the Marriage of Caska (2002) FLC 93-092
Trahn & Long (No. 2) [2008] FamCAFC 194
Zhai & Niu [2015] FamCA 639
Division: Division 1 First Instance Place: Sydney Number of paragraphs: 44 Date of last submission/s: 20 August 2021 Date of hearing: 20 August 2021 Counsel for the Applicant: Ms Lioumis Solicitor for the Applicant: Ramsden Lawyers Counsel for the Respondent: Mr O’Reilly Solicitor for the Respondent: The Norton Law Group ORDERS
BRC 6154 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR MACARTHUR
Applicant
AND: MS MACARTHUR
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
3 SEPTEMBER 2021
THE COURT ORDERS PENDING FURTHER ORDER THAT:
1.Order 7 of the orders made on 26 May 2021 be varied to read:
(a)The husband forthwith pay to the wife by way of spousal maintenance the sum of $1,435 per week.
2.Any order for spousal maintenance be suspended under the following circumstances:
(a)When the husband is in receipt of no income at all; and
(b)is limited to that period only; and
(c)the husband has forthwith notified the wife of the period when he ceases to, and resumes, receiving an income.
3.F Company holding the rental income in the F Trust Account is hereby authorised to release to Ramsden Lawyers sufficient funds to pay the below invoice that remains outstanding:
(a)G Company invoice dated 21 June 2021 in the sum of $470.00.
4.The orders of 26 May 2021 be varied to include the following provision at Order 9:
(a)In the event either party refuses or neglects to sign any document necessary to give effect to any of these orders then a Registrar of the Court shall be appointed pursuant to section 106A of the Family Law Act 1975 to sign such document in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the documents; and an order shall be made for the defaulting party to pay the other party's costs of and arising from his or her default with any of these orders.
5.The husband’s Application in a Case filed 23 July 2021 be otherwise dismissed.
Note: The form of the order is subject to the…
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CaseChat Overview and Summary
In the matter of Macarthur & Macarthur, the husband filed an Application in a Case on 23 July 2021 seeking a stay of certain orders made by the Family Court on 26 May 2021. The orders in question related to the disbursement of the proceeds of the sale of a property in Suburb C and the payment of spousal maintenance to the wife. The husband also sought variations to the spousal maintenance orders and other ancillary orders. The wife opposed the application. The primary legal issues before the court were whether special circumstances existed to justify a departure from the ordinary rule that a successful litigant is entitled to the fruits of their litigation pending the determination of any appeal and whether the husband had demonstrated a proper basis for the stay.
The court considered the principles established in previous cases, such as Zhai & Niu, Jennings Constructions Limited v Burgundy Royale Investments Pty Limited, and Trahn & Long (No. 2). The court noted that the husband had filed a Notice of Appeal on 21 June 2021 but had not yet obtained leave to appeal. The court also considered the husband's financial circumstances, the prospects of the appeal, and the balance of convenience. The court found that the husband had not reasonably satisfied it that there was any proper basis for the stay, particularly as he had not addressed concerns about his financial circumstances and had presented a distorted picture of his income and expenses. The court also found that the appeal was not likely to be rendered nugatory if the stay was not granted and that the wife had a strong case.
The court varied the spousal maintenance orders, reducing the amount payable to the wife from $2,037 per week to $1,435 per week, effective from the date of settlement of the Suburb C property. The court also made orders 4 and 5 sought by the husband, which seemed relatively uncontentious. However, the court declined to make order 3 proposed by the husband, which related to the suspension of spousal maintenance payments during periods of unemployment or COVID-19-related work suspensions. The court found that this order was problematic as it invited endless argument about reasonable needs and expenses and could lead to further litigation. Instead, the court ordered that any order for spousal maintenance be suspended only when the husband was in receipt of no income at all, and that the husband notify the wife of the period when he ceased to, and resumed, receiving an income.
In summary, the court declined to grant the stay sought by the husband but varied the spousal maintenance orders and made certain other orders sought by the husband. The court found that the husband had not demonstrated a proper basis for the stay and that the appeal was not likely to be rendered nugatory if the stay was not granted. The court also found that the wife had a strong case and that the husband had not addressed concerns about his financial circumstances and had presented a distorted picture of his income and expenses.
The court considered the principles established in previous cases, such as Zhai & Niu, Jennings Constructions Limited v Burgundy Royale Investments Pty Limited, and Trahn & Long (No. 2). The court noted that the husband had filed a Notice of Appeal on 21 June 2021 but had not yet obtained leave to appeal. The court also considered the husband's financial circumstances, the prospects of the appeal, and the balance of convenience. The court found that the husband had not reasonably satisfied it that there was any proper basis for the stay, particularly as he had not addressed concerns about his financial circumstances and had presented a distorted picture of his income and expenses. The court also found that the appeal was not likely to be rendered nugatory if the stay was not granted and that the wife had a strong case.
The court varied the spousal maintenance orders, reducing the amount payable to the wife from $2,037 per week to $1,435 per week, effective from the date of settlement of the Suburb C property. The court also made orders 4 and 5 sought by the husband, which seemed relatively uncontentious. However, the court declined to make order 3 proposed by the husband, which related to the suspension of spousal maintenance payments during periods of unemployment or COVID-19-related work suspensions. The court found that this order was problematic as it invited endless argument about reasonable needs and expenses and could lead to further litigation. Instead, the court ordered that any order for spousal maintenance be suspended only when the husband was in receipt of no income at all, and that the husband notify the wife of the period when he ceased to, and resumed, receiving an income.
In summary, the court declined to grant the stay sought by the husband but varied the spousal maintenance orders and made certain other orders sought by the husband. The court found that the husband had not demonstrated a proper basis for the stay and that the appeal was not likely to be rendered nugatory if the stay was not granted. The court also found that the wife had a strong case and that the husband had not addressed concerns about his financial circumstances and had presented a distorted picture of his income and expenses.
Orders
Orders of the court
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Background
Background to the litigation
These reasons for judgment explain the orders the Court has made in the context of the Application in a Case seeking a stay of orders filed on behalf of the husband on 23 July 2021 in this case.BACKGROUND On 26 May 2021 I delivered judgment in the form of oral reasons and made certain orders, the relevant ones of which are, for present purposes, orders 5(d) and 7. 5.Upon completion of the sale of the Suburb C property pursuant to the above orders 3 and 4, both parties do all acts and things including signing all documents as may be necessary to cause the proceeds of sale to be disbursed in the following manner and priority:…d. Payment of $80,000 to the wife;…7.The husband forthwith pay to the wife by way of spousal maintenance the sum of $1,348 per week, with such amount to increase to $2,037 per week upon settlement of the Suburb C property. On 21 June 2021 the husband filed a Notice of Appeal. As the order I made was an interlocutory order, leave to appeal needs to be sought. The appeal is listed for a procedural hearing on 23 December 2021. By way of his Application in a Case filed 23 July 2021 the husband seeks the following orders:1.That Orders 5(d) and 7 of the Family Court Orders made by His Honour Justice Altobelli on 26 May 2021 be stayed pending the determination of the Notice of Appeal filed on 21 June 2021 and that the following Orders be made: -2.That until further Order, the Husband pay to the Wife by way of spousal maintenance the sum of $200 per week .3.That any Order for spousal maintenance by suspended under the following circumstances:a. When the Husband is unemployed; orb.When the Husband's work is suspended due to COVID-19 and he is required to self-isolate during the period and he is not in receipt of an income.4.By that this Order, That F Company holding the rental income in the F Trust Account is hereby authorised to release to Ramsden Lawyers sufficient funds to pay the below invoice that remains outstanding:a. G Company invoice dated 21 June 2021 in the sum of $470 .00;5.That the Order of 26 May 2021 be varied to include the following provision at Order 9:9.In the event either party refuses or neglects to sign any document necessary to give effect to any of these Orders then a Registrar of the Court shall be appointed pursuant to section 106A of the Family Law Act 1975 to sign such document in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the documents; and an Order shall be made for the defaulting party to pay the other party's costs of and arising from his or her default with any of these Orders.6. Any further Order that the Court may deem meet.AND IN THE ALTERNATIVE TO A STAY OF ORDER 77.That Order 7 of the Family Court Orders made by His Honour Justice Altobelli on 26 May 2021 be varied such that the Husband pay to the Wife by way of spousal maintenance the sum of $200 per week during the time that he is employed.8.That any Order for spousal maintenance by suspended under the following circumstances:5.a. When the Husband is unemployed; or6. b.When the Husband's work is suspended due to COVID-19 and he is required to self-isolate during the period and he is not in receipt of an income.(As per the original)
Evidence
Evidence Before The Court
I was also informed that settlement negotiations between the parties was ongoing, both directly between the parties, and through their legal representatives. There was measured optimism about settlement.EVIDENCE In support of his case, the husband sought to rely on the following documents:(a)His Application in a Case filed 23 July 2021;(b)His Notice of Appeal filed 21 June 2021; (c)His Affidavit filed 23 July 2021; (d)An Affidavit of Ms D filed 23 July 2021; (e)His Affidavit filed 18 August 202; and(f)A Case Outline document filed 18 August 2021. In support of her case, the wife sought to rely on the following documents:(g)Her Response to an Application in a Case filed 16 August 2021;(h)Her Affidavit filed 16 August 2021;(i)My Judgment and Reasons for Judgment dated 26 May 2021; and(j)A Case Outline document filed 19 August 2021.APPLICABLE LAW Counsel for the wife submitted that the applicable law relating to the stay application is conveniently summarised in a decision of his Honour Justice Austin in Zhai & Niu [2015] FamCA 639 at [6] - [8]:Legal principles[6] The discretion to stay the operation of orders should only be exercised where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his or her litigation pending the determination of any appeal. Such special circumstances justifying a stay will exist where it is necessary to prevent the appeal from being rendered nugatory or for whatever other reason there is a real risk it will not be possible for a successful appellant to be restored substantially to his or her former position if the judgment against him or her is executed (see Federal Commissioner of Taxation v Myer Emporium (No 1)(1986) 160 CLR 220 at 222-223). The Court should also consider the prospects of the appeal and where the balance of convenience lies (see Jennings Constructions Limited v Burgundy Royale Investments Pty Limited (No 1)(1986) 161 CLR 681 at 685). Those common law principles apply equally to judgments delivered in this jurisdiction.[7] The Court is entitled to assume that the decision which is the subject of the appeal is correct. Indeed, the Full Court must subsequently approach the appeal on the basis of a strong presumption that the decision at first instance is correct (see Australian Coal & Shale Employees’ Federation v The Commonwealth (1956) 94 CLR 621 at 627).[8] Of course, the orders under appeal in these proceedings are interim in nature. In such circumstances, the husband must obtain leave in order to prosecute the appeal (see s 94AA of the Act; reg 15A of the Family Law Regulations 1984(Cth)). A party seeking leave to appeal against an interim order must demonstrate that there has been an error of principle and/or a substantial injustice in order to secure a grant of leave (see Adam P Brown Male Fashions Proprietary Limited v Philip Morris Inc(1981) 148 CLR 170 at 177;Marriage of Rutherford(1991) FLC 92-255 at 78,715). Counsel for the husband referred to the Full Court decisions in Trahn & Long (No. 2) [2008] FamCAFC 194 at [38] and Aldridge & Keaton [2009] FamCAFC 106 at [71]. Counsel summarised the relevant principles in her Case Outline document at paragraph 3 as follows:3. The cases emphasise that such applications are discretionary in nature; however, they also point to a number of principles to be applied and matters to be taken into account when determining a particular application. These include:•the mere filing of an appeal is an insufficient basis for granting a stay;•the applicant has the onus of establishing a proper basis for the stay;•it is not necessary to show “special” or “exceptional” circumstances;•a litigant is prima facie entitled to the benefit of their judgment;•the applicant’s bona fides;•whether there has been delay in applying for the stay;•the time that will elapse before the appeal can be heard;•a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted – this will be a substantial factor;•some preliminary assessment of the strength of the proposed appeal – whether the appellant has an arguable case; and•a stay may be granted on terms – this may involve weighing the balance of convenience and the competing rights of the parties.
Decision
Reasons for decision
As from the date of settlement of the sale of the Suburb C property, and noting that this will already have occurred by the date these reasons are published, the amount of maintenance payable to the wife should be reduced to $1,435 per week, and the orders varied to this extent based on the changed circumstances brought about via the payment of child support and the availability to the wife of a lump sum to pay off her credit card debt.CONCLUSION Insofar as the husband’s case is conceptualised as an application to vary the order for spousal maintenance based on changed circumstances, for the reasons set out in the immediately preceding paragraphs, the Court is prepared to vary the amount of maintenance payable to the wife to $$1,435 per week, effective from the date of settlement of the Suburb C property. The Court otherwise declines to grant the stay sought by the husband. He has failed to reasonably satisfy the Court that there is any proper basis for the stay. In particular, the husband has done nothing to address concerns raised in the reasons supporting the order under appeal about his financial circumstances. The impression created is that his financial circumstances are more translucent than transparent. A distorted, unclear picture is presented. The Court has expressed concerns about his bona fides in circumstances where the evidence of his communications with the wife present a very different picture to that otherwise presented in his sworn evidence. The Court is not satisfied on the evidence that the appeal would be rendered nugatory if the stay is not granted. Indeed, apart from the issue that has led the Court to vary the spousal maintenance orders, this Court accepts the submissions made on behalf of the wife about the strength of the husband’s proposed appeal. The husband through the presentation of his evidence has done very little to assist his own case. Nonetheless, orders 4 and 5 sought by the husband in his application in a case seem relatively uncontentious and will be made. Order 3 proposed by the husband is problematic. This Court has expressed its concerns in relation to the lack of transparency, and inconsistency about the husband’s income and expenses. The order proposed invites disputation about its meaning, but if the orders fail to address the nature of the husband’s employment this also invites further litigation. An order which has regard to changes in the husband’s income is problematic as it invites endless argument about reasonable needs and expenses. The only practical solution is to suspend the order for any period that the husband is in receipt of no income at all. On his own evidence as it is understood by this Court, this is relatively infrequent. The orders will therefore be that any order for spousal maintenance be suspended under the following circumstances:(a)when the husband is in receipt of no income at all; and (b)is limited to that period only; and(c)the husband has forthwith notified the wife of the period when he ceases to, and resumes, receiving an income.
Ratio Decidendi
Legal Principle Established
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