MATTHEWS & MATTHEWS

Case •

[2006] FamCA 1250

•

24 November 2006

FAMILY COURT OF AUSTRALIA

MATTHEWS & MATTHEWS [2006] FamCA 1250

FAMILY LAW – APPEAL – Interest - Appeal from decision of Family Court Judge – Effect of a stay of property orders on a claim of interest – Appeal in relation to property orders allowed at first instance - Appeal allowed

FAMILY LAW – APPEAL – COSTS – Appeal allowed – Court to grant costs certificates to the parties under s 9 and s 6 of the Federal Proceedings (Costs) Act 1981

Family Law Act 1975 (Cth)

P Aker Flowerbulbs Pty Ltd & Coulter  (2004) 212 ALR 606
Re Brent Hughes; Ex Parte Westpac Banking Corporation (2004) 212 ALR 606
Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306

APPELLANT:  MATTHEWS

RESPONDENT:  MATTHEWS

FILE NUMBER:  BRF5208 of 1997

APPEAL NUMBER:  NA 20 of 2005

DATE DELIVERED:  24 November 2006

PLACE DELIVERED:  Brisbane

JUDGMENT OF:  Finn, Coleman and May JJ

HEARING DATE:  8 August 2005

LOWER COURT JURISDICTION:  Family Court of Australia  

LOWER COURT JUDGMENT DATE:               18 March 2005

COUNSEL FOR THE APPELLANT: Mr Page SC
SOLICITOR FOR THE APPELLANT: Butler McDermott & Egan Solicitors
SOLICITORS FOR THE RESPONDENT:

Bernadette Farnell

Solicitor

ORDERS

  1. That the appeal be allowed.

  2. That paragraph 1 of the orders made on 18th March 2005 be set aside and in its place the following order be made:

    1.The appellant wife pay to the respondent husband interest at the rate prescribed by the Family Law Rules (being 9.55 per cent) on the sum of $87,976.88 from 7 June 2004 to 7 December 2004.

  3. The Court grants to the appellant a costs certificate, pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate stating that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under the Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

  4. The Court grants to the respondent a costs certificate, pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate stating that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under the Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal

FAMILY COURT OF AUSTRALIA  AT BRISBANE

APPEAL NUMBER:           NA 20 of 2005

FILE NUMBER:                  BRF5208 OF 1997

MATTHEWS
Appellant Wife

And

MATTHEWS
Respondent Husband

REASONS FOR JUDGMENT

Finn J:

  1. I agree with Coleman and May JJ that this appeal against an order made by Bell J on 18 March 2005 should be allowed.  I will explain my reasons for reaching this conclusion after referring briefly to the background to the order.

  2. On 7 April 2004 Warnick J made orders in property settlement proceedings between the husband and the wife, which included as Order 16, an order that within 60 days and in exchange for payment to the husband by the wife of the sum of $213,558, the husband transfer certain real property to the wife.

  3. Following the filing of a notice of appeal by the wife against Order 16 and an application by her for a stay (or partial stay) of that order, Warnick J made the following order on 18 May 2004:

    Order 16 of the orders made … on 7 April 2004 be stayed in so far as that order requires payment by the wife to the husband of $213,558.00, to the extent of $138,558.00, until further order.

  4. It appears common ground that the date on which payment was required under the order of 7 April 2004 was 7 June 2004, and also that the wife paid the sum of $75,000 (being so much of the sum ordered to be paid which had not been stayed) on 4 June 2004.  As a result of this payment the wife owed the husband the sum of $138,558.

  5. On 28 October 2004 the Full Court allowed the wife’s appeal and ordered that Order 16 of Warnick J’s orders of 7 April 2004 “be varied by substituting the sum of $171,669 for the sum of $213,558 there appearing.”

  6. As a result of the Full Court’s variation the wife would have owed the sum of $96,669.  However, it appears to be common ground that the sum in fact owed was $87,976.88 because of amounts received from certain managed funds.

  7. On 10 December 2004 the husband filed an application seeking interest on the monies owed to him under the order of 7 April 2004 as varied by the Full Court.  The precise terms of the order sought by the husband were:

    1.That within 30 days of the date of the making of this order the wife shall pay to the husband interest on the money owed by the wife to the husband pursuant to the Order made by the Family Court of Australia, at Brisbane, on 7th April 2004 and amended by the Full Court of the Family Court on 28th October, 2004 calculated as follows: -

    Amount in accordance with order 2

    (of order made 28 October 2004)  $171,669.00

    Less amount already paid  ($75,000.00)

    Less difference between amounts received from managed

    Funds  ($8,692.12)

    Amount to be paid to Husband  $87,976.88

    Interest on $87,976.88 @ 9.55% for the period 7 June 2004 to 29 November 2004 i.e. 175 days = $4028.25

    Interest on $87,976.88 @ 9.55% for the period 30 November 2004 to date of payment to be advised.

  8. Section 117B of the Family Law Act 1975 (“the Act”), the terms of which I will later set out, provides for the payment of interest on monies ordered to be paid under the Act.

  9. The husband’s application for interest was heard by Bell J on 25 January 2005.   On 18 March 2005 his Honour delivered reasons for judgment and ordered that the wife “pay interest on the sum of $138,558 until 28 October 2004 and thereafter on the amount of $87,976 within one month…”.

  10. The wife now appeals Bell J’s order of 18 March 2005.  The essence of the wife’s appeal as it emerges from the summary of argument of her counsel (particularly paragraphs 10 and 11) is that Bell J was wrong in concluding as he did in his reasons for judgment:

    ·     first, that the Full Court’s order varying the amount payable by the wife took effect only from the date on which the Full Court made its order, being 28 October 2004 and not from the date of Warnick J’s original order, being 7 April 2004; and

    ·     secondly, that the stay granted by Warnick J on 18 May 2004 did not operate to prevent the husband from claiming interest until the determination of the appeal.

The date of effect of the Full Court’s variation of the trial Judge’s order of 7 April 2004

  1. It was submitted on behalf of the appellant wife that because s 94(2) of the Act empowers the Full Court when determining an appeal from an order such as that made by Warnick J on 7 April 2004, to make “such decree as… ought to have been made in the first instance”, the variation by the Full Court of the amount payable under the order of 7 April 2004 took effect from the date on which that order was made, and not from the date of the Full Court order as was held to be the case by Bell J (in paragraphs 11 and 17 of his judgment) and ordered by him.

  2. In relation to this matter it is important to note that the husband in his application filed on 10 December 2004 only sought interest as from 7 June 2004 on the amount of $87,976.88, which was the amount owed under the order as reduced by the Full Court.

  3. Thus, it has to be accepted that his Honour was in error in ordering that interest (if indeed it was payable) be paid on the amount outstanding under the trial Judge’s original order, because it was not the order which the husband sought. 

  4. However, because counsel for the wife argued this matter on the basis of principle rather than on the basis of an apparent misunderstanding by his Honour of the application before him, I consider it appropriate to make the following observations.

  5. In my view, having regard to what was said by the High Court in Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 (at 318-319), Bell J would have been correct in concluding that the Full Court’s order only took effect from the date on which it was made (if that had in fact been the husband’s application).

  6. In Official Receiver in Bankruptcy v Schultz (supra) the High Court was concerned with an order made by the Full Court of the Supreme Court of Queensland under O 7, r 11 of the Rules of the Supreme Court of Queensland which provided in words similar, it will be noted, to s 94(2) of the Act, that:

    The Court, upon the hearing of an appeal, shall have power … to give any judgment and make any order which ought to have been given or made in the first instance, and to make such further or other order as the case may require.

  7. Having set out that rule, the High Court then set out the terms of O 66, r 4 of the Rules of the Supreme Court of Queensland which provided:

    Every order, when drawn up, shall be dated of the day of the week, month, and year, on which the same was made, unless the Court or Judge otherwise directs, and shall take effect accordingly.

  8. Again, it will be noted that the Queensland rule is to the same effect as Rule 17.01(2) of the Family Court Rules 2004, being that “[a]n order takes effect on the date when it is made, unless otherwise stated”.

  9. Having set out these rules, the High Court observed:

    Rules providing in similar terms have been considered in various cases.  In Borthwick v. Elderslie Steamship Company (No. 2) (1905) 2 KB 516, at p 519, Collins M.R. said of an order made on appeal:

    "The judgment is not ipso facto antedated by reason that it is          substituted for the judgment in the Court below."

    Romer L.J. took the same view, at p 521, stating that the judgment had to be "treated as of the date on which it was given in the Court of Appeal".  This approach has been endorsed by this Court, in Nicol v. Allyacht Spars Pty. Ltd. (No. 2) (1988) 165 CLR 306, at p 311, and by the House of Lords, in Nitrate Producers Steamship Co. Ltd. v. Short Brothers Ltd. (1922) 127 LT 726; (1922) All ER Rep 710.

    A distinction has been drawn between the case where a judgment at first instance has been restored by a second appellate court after having been reversed at the first appeal:  Nitrate Producers, at p 727; p 712 of All ER Rep. Of course, that is not the present case. …

    Although the presumption is that the order of the appellate court takes effect from the date on which it is made, it will sometimes be possible to infer from the terms of the order an intention that it operate with effect from the date of the order at first instance.  On this basis, this Court held in Gould v. Vaggelas (1985) 157 CLR 215, at p 274, that an appellate court's order varying the amount of a judgment and ordering payment of interest "from date of judgment" necessarily referred back to the date of the original judgment.

    In the present case, the terms of the order of the Full Court do not reveal that any consideration at all was given to the date as at which the order should take effect.  In these circumstances, it is not possible to infer that the Full Court's order took effect any earlier than the date on which it was made.

  10. Thus, the presumption is that an order of an appellate court takes effect from the date on which it is made unless it can be inferred that the order should take effect from an earlier date.

  11. In the present case the Full Court provided no indication in its orders of the date from which its order should take effect.  Thus, it must be accepted that its order only took effect from the date on which it was made, being 28 October 2004.  Accordingly, if interest was payable in this case, Bell J would have been correct in concluding that it would be payable on the amount outstanding under Warnick J’s order of 7 April 2004, being $138,558 from 7 June 2004 until the date of the Full Court order (had the husband sought interest on that amount).

The effect of the stay order of 18 May 2004 on the husband’s claim for interest

  1. In considering and ultimately upholding the husband’s claim to be paid interest on the amount outstanding under Warnick J’s order of 7 April 2004 until such time as that order was varied by the Full Court, Bell J said:

    12.I do not believe that an order of the Full Court varying an original order by a trial Judge does in any way affect the interest payable upon        the original orders unless it is specifically said so by the court of appeal. In other words, what I am saying, the granting of a stay of execution does not preclude interest from running from the date of the original judgment, if in fact, the date for payment of interest is the date of the original judgment.

  2. Then, having cited certain passages from Weinberg J’s decision in P Aker Flowerbulbs Pty Ltd v Coulter (2004) 212 ALR 606 and having referred to the provisions of s 117B(2) of the Act, his Honour concluded:

    17.No application was made by the respondent for a stay of interest payable under the order. No application was made by the applicant for    a different rate to be applicable and consequently I am of the opinion        that the interest continues on the outstanding amount that is something        like $138,000.00 until changed by the order of the Full Court which took place on 28 October 2004 where the amount was reduced to $171,000.00. Consequently, there would in my opinion, be at that stage an amount owing to the husband as set out in the application of the husband filed on 10 December 2004 in which he says there is a short fall from the $75,000 already paid by the wife between $171,000.00 and that $75,000.00 but it appears as though a further amount of $8,000.00-odd was credited to the amount paid by the wife.

  3. In endeavouring to establish that his Honour’s conclusion in this regard was wrong, counsel for the wife relied on the provisions of Rule 22.12(2) of the Family Law Rules which provides:

    (2)If an appeal has been started, or a party has applied for permission 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.

  4. Counsel then submitted that this rule makes a distinction between “operation” and “enforcement”; that nothing in Warnick J’s stay order of 18 May 2004 made any such distinction; and that accordingly, Warnick J’s order stayed both the operation and enforcement of the original orders, including any interest payable in respect of monies unpaid under that order.

  5. It is important, in my opinion, to remember that the right to interest in respect of monies due and unpaid under an order made under the Act for the payment of money, is a right conferred by the Act itself, in the following terms:

    117B(1)Subject to any order made by the court under subsection (2), where, in proceedings under this Act, a court makes an order for the payment of money (other than an order for the payment by way of maintenance of a periodic sum), interest is payable, at the rate prescribed by the applicable Rules of Court, from:

    (a)      the date on which the order is made; or

    (b)      the date on which the order takes effect;

    whichever is later, on so much of the money as is from time to time unpaid.

  6. Section 117B then goes on in its second sub-section to provide that the court that makes such an order for the payment of money may order that interest is not payable, or that it be paid at a rate different to the prescribed rate, or that it be payable from a date other than a date specified in s 117B(1). The terms of s 117B(2) are:

    (2)A court that makes an order for the payment of money as mentioned in subsection (1) may order that interest is not payable on the money payable under the first mentioned order or may order:

    (a)that interest is payable at a rate specified in the order, being a rate other than the rate prescribed by the applicable Rules of Court; or

    (b)that interest is payable from a date specified in the order, being       a date other than the date from which the interest would be payable under subsection (1).

  7. I can leave open for present purposes the question of whether an order under s 117B(2) varying the operation of s 117B(1) can be made at any time other than the time at which the order for the payment of money referred to in s 117B(1) is made, or whether an order made under s 117B(2) can be made by any court other than the court which made the order for the payment of money referred to in s 117B(1).

  8. For present purposes it is sufficient to conclude that if an order was to be made under rule 22.12(2) with the intention of “staying” the payment of interest - in other words, altering the operation of s 117B(1) – it would need to express that intention in the clearest possible terms.

  9. Nothing in Warnick J’s order of 18 May 2004 suggests in any way that it was intended to alter the operation of s 117B(1). Thus, in my opinion, Bell J was correct in concluding that that order did not alter the husband’s statutory entitlement to interest as from 7 June 2004 on the amount outstanding under the order of 7 April 2004.

Conclusion

  1. Because his Honour apparently misunderstood the application before him, the appeal must be allowed and Order 1 of his orders set aside with a new order being made providing for interest to be paid on the sum of $87,976.88 from 7 June 2004 to 7 December 2005.

Coleman and May JJ:

Introduction

  1. This appeal raises the question as to the effect of a stay of property orders on a claim for interest where an appeal in relation to property orders is ultimately allowed.

  2. In a Notice of Appeal filed on 15 April 2005 the wife appealed from all the orders of Bell J made on 18 March 2005. The orders sought are that the application of the husband seeking the orders for interest filed on 10 December 2004 be dismissed and that the respondent pay the appellant’s costs of the appeal.

Background

  1. On 7 April 2004, Warnick J, in orders made after a hearing in relation to property and children’s matters ordered that within 60 days the wife pay to the husband the sum of $213,558 in exchange for a transfer to the wife of the former matrimonial home. No order was made in relation to interest.

  2. To avoid confusion the orders of 7 April 2004 made by Warnick J will be referred to as the ‘trial orders’ and the orders made by Bell J as the ‘interest orders’.

  3. An appeal was filed by the wife from the trial orders. An application for a stay of the orders in relation to the sum to be paid was heard by Warnick J on 18 May 2004. He ordered that:

    “Order 16 of the orders made by the Honourable Justice Warnick on 7 April 2004 be stayed in so far at [sic] that order requires payment by the wife to the husband of $213,558.00, to the extent of $138,558.00, until further order”.

    In other words, until the hearing of the appeal and delivery of the judgment the wife was obliged to pay the husband the sum of $75,000.  She did pay that sum by 7 June 2004 as the order of 18 May required.

  4. On 25 October 2004 the appeal was heard.  The judgment of the same date provided that the orders “be varied substituting the sum of $171,669 for the sum of $213,558”. Costs certificates were granted.

  5. On 10 December 2004 the husband filed an application seeking interest. In paragraph 1 the orders the husband was seeking are as follows:

    1.That within 30 days of the date of the making of this order the wife shall pay to the husband interest on the money owed by the wife to the husband pursuant to the Order made by the Family Court of Australia, at Brisbane, on 7th April 2004 and amended by the Full Court of the Family Court on 28th October, 2004 calculated as follows: -

    Amount in accordance with order 2

    (of order made 28 October 2004)  $171,669.00

    Less amount already paid  ($75,000.00)

    Less difference between amounts received from managed

    Funds  ($8,692.12)

    Amount to be paid to Husband  $87,976.88

    Interest on $87,976.88 @ 9.55% for the period 7 June 2004 to 29 November 2004 i.e. 175 days = $4028.25

    Interest on $87,976.88 @ 9.55% for the period 30 November 2004 to date of payment to be advised.

  6. The significance of 7 June 2004 is the date provided for the payment in the orders of Warnick J and 29 November 2004 is the date after the decision of the Full Court when it is agreed the balance of the adjusted sum became payable.

  1. The amount was not paid by the wife until 7 December 2004.

  2. The questions for Bell J were whether the wife was liable for interest at all and if so on what sums and during what dates. For example, was the wife liable to pay interest on the sum of $135,558 (representing the difference between the trial judgment sum and the amount paid subsequent to the stay application) or the sum of $87,976 (representing the difference between the Full Court judgment and the amount paid by the wife).

  3. The trial orders and the orders of the Full Court were silent as to interest. The provisions of section 117B of the Family Law Act 1975 (Cth) allow for such imposition. No issue is taken as to the appropriate rate at which interest was to be calculated upon the default of payment provided for in the Family Law Rules.

  4. Another issue raised in this appeal is whether the stay orders in some way froze the liability of the wife to pay interest until after the delivery of the Full Court judgment.

  5. The orders made on 18 March 2005 by Bell J required payment of interest on a sum of $138,558 until 28 October 2004 and thereafter on the amount of $87,976.00 within one (1) month of the date of the order. No commencement date is referred to in the orders of Bell J despite the application of the respondent that it commence on 7 June 2004. The sum of $138,558 is a reference to the sum contained in the trial order of 7 April 2004. The sum of $87,976 is the agreed balance payable by the wife after the Full Court orders.

Reasons for judgment

  1. The central part of His Honour’s judgment commences in paragraph 10:

    “10…As from 6 June, I am of the opinion that interest would be applicable to any judgment of His Honour, but what then has happened?

    11.Subsequent to that time and on the date to which I have hereinbefore referred, the Full Court has re-exercised the discretion of the trial Judge that there is a lesser sum to be paid by the wife to the husband. The question which then arises is upon what sum is interest to be calculated upon subsequent to 6 June 2004. It is well known that a filing of an appeal in no way affects the operation by way of stay of any order of the court and that obviously is the reason why the wife sought a stay from His Honour. Such stay was granted only as to part of the quantum of the judgment. Any amounts outstanding would, in my opinion, still gather interest at the relevant rate until such time as the remaining order was interfered with, which it was interfered with, by an order of the Full Court.

    12.I do not believe that an order of the Full Court varying an original order by a trial Judge does in any way affect the interest payable upon the original orders unless it is specifically said so by the court of appeal. In other words, what I am saying, the granting of a stay of execution does not preclude interest from running from the date of the original judgment, if in fact, the date for payment of interest is the date of the original judgment.

    13.I have found that the date for payment of interest would be no earlier than 6 June 2004.”

  2. His Honour referred to a decision of the Federal Court, P Aker Flowerbulbs Pty Ltd v Coulter (2004) 212 ALR 606, commencing at paragraph 35.

  3. His Honour noted that

    “17.No application was made by the respondent for a stay of interest payable under the order. No application was made by the applicant for a different rate to be applicable and consequently I am of the opinion that the interest continues on the outstanding amount that is something like $138,000.00 until changed by the order of the Full Court which took place on 28 October 2004 where the amount was reduced to $171,000.00. Consequently, there would in my opinion, be at that stage an amount owing to the husband as set out in the application of the husband filed on 10 December 2004 in which he says there is a short fall from the $75,000 already paid by the wife between $171,000.00 and that $75,000.00 but it appears as though a further amount of $8,000.00-odd was credited to the amount paid by the wife.

    18.Consequently, it appears to me that the amount of interest payable by the husband was at the relevant rate from 7 June 2004 to 28 October 2004 on an amount of $138,558.00 and from thereafter, that is, after that date of the order of the Full Court, interest at the applicable rate on the amount of $87,976.00 until the date of payment to be advised. It appears to me that this was on or about 10 December 2004.

    19.I am also aware that there may have been variations in the applicable rate of interest to be paid on judgment debts. It is not for this court to sit down and work out arithmetically what those amounts are. I have indicated in my reasons that the interest is payable on separate sums for separate dates.”

Grounds

  1. The grounds of the appeal are as follows:

    1.That in determining that the wife pay interest on the sum of $138,558.00 until the 28th of October 2004, the trial Judge erred in that he failed to have any or any proper regard to the Orders of the full Court made on the 28th of October 2004.

    2.That determining that interest was payable on any sum payable by the wife by the Appellant the Trial Judge erred in that he failed to have any regard or any proper regard to the Orders made on the 7th of April 2004.

    3.The Learned Judge erred in failing to determine that the Husband was entitled to interest on the sum of $138,558.00 on the basis that the Husband is not entitled to be paid that amount by order of the Court of His Honour Justice Warnick on the 7th of April 2004.

    4.The Learned Judge has erred in failing to determine that the Order of His Honour Justice Warnick of 7th April 2004 was stayed and did not “take effect” until the 28th of October 2004.

    5.The learned Trial Judge has erred in determining on the material before him that the funds were paid by the Wife on or about the 10th of December 2004 and interest should run to that date, notwithstanding the evidence before him that the monies were available to be paid to the Husband as and from the 20th of November 2004 in accordance with the Full Court’s Orders.

Submissions of Appellant

  1. After noting that whilst there is nothing in the orders of the Full Court which discharge the orders of Warnick J, it was submitted that the provisions of s94(2) of the Family Law Act in defining the powers of the Full Court on an appeal clearly indicate that a variation of the order made by a trial Judge is the order that the Appeal Court considers “ought to have been made in the first instance”. We agree that no other sensible interpretation of the orders made on 28 October 2004 is possible.

  2. The proper interpretation of the orders of the Full Court on 28 October 2004 are that the sum remaining payable after 7 June 2004, making provision for the sums received, was $87,976.88.

  3. It is submitted that a question arising from the stay granted by Warnick J on 18 May 2004 is whether those orders prevented the respondent from claiming interest on the trial judgment sum until the determination of the appeal.

  4. It is correct that a distinction is to be drawn between a stay of execution of a judgment and a stay on the operation of the judgment. As was said by Merkel J in Re Brent Hughes; Ex Parte Westpac Banking Corporation [1997] 1324 FCA:

    “In principle, a stay of execution relates solely to a stay in respect of the legal processes of enforcement which are available in respect of the judgment but does not, of itself, suspend or otherwise affect the validity or operation of the judgment. A stay on the operation of the judgment, suspends the operation and the legal affect of, and the rights conferred under, the judgment.”

  5. We were asked to consider the order with which Weinberg J dealt in P Aker Flowerbulbs Pty Ltd v Coulter (2004) 212 ALR 606, being an order of a County Court Judge as follows:

    “4.The payment of the sum referred to in paragraph 1 hereof and the payment of the costs referred to in paragraph 3 hereof, be stayed for one month from today’s date.”

    It was submitted that the terms of Warnick J’s order both stayed the operation and enforcement of the order to which the appeal related and, that included the payment of interest on any sum left payable.

  6. It was submitted at the hearing of the appeal by counsel that the wife could not seriously oppose the payment of interest from 29 October 2004 to 7 December 2004.

Respondent’s submissions

  1. It is conceded that the trial Judge did not give a commencement date for the payment of interest in his order. The Court was referred to paragraph 13 of his judgment where Bell J found that the date for the payment of interest would be no earlier than 6 June 2004.

  2. It was submitted that notwithstanding the Full Court made an order to vary the order of Warnick J, it continued to be an order of the Court until it was varied by the Full Court. Further, that the Full Court did not make orders altering the date for payment by the wife so that the date the order took effect was 7 June 2004.

  3. It is the respondent’s submission that the stay granted by Warnick J does not prevent the respondent from claiming interest on the money owing to him by the wife being the whole amount from 7 June 2004 and then as reduced by the order of the Full Court because Warnick J’s order did not include an order to stay the payment of interest on the money owing to the husband.

Conclusions

  1. This appeal raises two questions.

1.    Did the stay order of Warnick J affect the imposition of interest at all and in particular on the whole of the judgment sum or the balance unpaid from 7 June 2004.

2.    Did the order whereby the Full Court varied the sum payable by the wife to a lesser figure affect the date the altered amount became payable or the amount upon which the interest payable was based.

  1. To some extent the answers to these questions lie in the legislation and the words of the stay order.

  2. The provisions of s117B(1) are as follows:

    “Subject to any order made by the court under subsection (2), where, in proceedings under this Act a court makes an order for the payment of money (other than an order for the payment by way of maintenance of a periodic sum), interest is payable, at the rate prescribed by the applicable Rules of Court, from:

    (a) the date on which the order is made; or

    (b) the date on which the order takes effect;

    whichever is later, on so much of the money as is from time to time unpaid.”

  3. Section 94(2) provides:

    “Upon such an appeal, the Full Court may affirm, reverse or vary the decree or decision the subject of the appeal and may make such decree or decision as, in the opinion of the court, ought to have been made in the first instance, or may, if it considers appropriate, order a re-hearing, on such terms and conditions, if any, as it considers appropriate.”

    and Rule 22.12(2) provides:

    “If any appeal has been started, or a party has applied for permission 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.”

  4. The stay order of Warnick J clearly related to “…payment, until further order”. The effect of the order is nothing more than a stay of execution it did not have the effect of depriving the husband of his right to interest. His right to interest commenced on 7 June 2004 when the amount as first ordered by the trial Judge became payable. The order merely prevented the husband from insisting on the payment of the whole of the amount as ordered by the trial Judge being $213,558 until the hearing and the determination of the appeal.

  5. The answer therefore to the first question is that the stay order did not affect the imposition of interest, at first on the whole of the judgment sum but then when varied by the Full Court, interest on the sum as determined by the Full Court.

  6. The answer to the second question is governed by the legislation. First that section 117B provides for interest and secondly, that section 94(2) provides for the Full Court varying an order to one that “ought to have been made in the first instance”.

  7. In this case we think it quite clear that interest should be calculated on the sum adjusted by the Full Court as it was varied.  In the absence of a varied date for payment it must run from 7 June 2004. The interest payable then by the wife is not on the whole of the original judgment sum as ordered by his Honour but on the amount left unpaid which is agreed to be $87,976.88 from 7 June 2004.

  8. As was observed by the solicitor for the respondent, to do otherwise would have the effect that the appellant would not carry the risk of the appeal being successful but that the rights of the respondent to interest from the original judgment date on however much the Full Court determined was the proper sum would be taken from him.

  9. It follows that the appeal must be allowed.

  10. We received submissions as to the proper order should the appeal succeed.

  11. We have had the benefit of reading the judgment of Finn J. Although the decisions to which she refers were not referred to by counsel it is important that such principles not be overlooked.

  12. It would be wrong in our view to conclude that the orders of the Full Court in this case intended that they operate from 28 October 2004, especially since the moneys had been partly paid by the wife.

  13. Clearly the intention of the orders was that the operation date of 7 June 2004 remain but that the sum payable be varied.

  14. A notable difference is that in Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306, the Full Court set aside the order of the trial Judge and substituted a new order of its own (p317,318).

  15. In addition, in this case the husband’s application for interest was on the sum varied by the Full Court not the order originally made by the trial Judge.

Costs

  1. In relation to the question of costs both parties asked for a certificate. The appeal is allowed in part in that it is apparent that it was an error to order that the wife must pay interest on the total of the judgment sum from a date unspecified until 28 October. In our view each party is entitled to a certificate

Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0

Cases Cited

4

Statutory Material Cited

1

Official Receiver in Bankruptcy v Schultz [1990] HCA 45
Official Receiver in Bankruptcy v Schultz [1990] HCA 45
L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) [1982] HCA 59