Medapati and Revanka (No. 2)

[2018] FamCA 738

FAMILY COURT OF AUSTRALIA

MEDAPATI & REVANKA (NO. 2) [2018] FamCA 738

FAMILY LAW – PRACTICE AND PROCEDURE – Interim Order – Stay – Application for stay of interim orders pending hearing and determination of Appeal – Where Application is dismissed and costs ordered.

Family Law Act 1975 (Cth)

Family Law Rules 2004 (Cth)

Medlow & Medlow (2016) FLC 93-692

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

APPLICANT: Ms Medapati

RESPONDENT: Mr Revanka

FILE NUMBER: BRC 2961 of 2016

DATE DELIVERED: 18  September 2018

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 17 September 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Balzamo

SOLICITOR FOR THE APPLICANT: Hunter Solicitors

THE RESPONDENT: Self-represented

Orders

1. That the Husband’s Application in a Case filed 13 August 2018 in which he seeks a stay of this Court’s Orders of 31 May 2018, is dismissed.

2. That the Husband shall pay the Wife’s costs of and incidental to the dismissed Application in a Case filed 13 August 2018, fixed in the sum of $3,803.57.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Medapati & Revanka (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 2961 of 2016

Ms Medapati

Applicant

And

Mr Revanka

Respondent

REASONS FOR JUDGMENT

1. For immediate determination in these pending substantive property adjustment proceedings is the husband’s application for a stay of my Orders of 31 May 2018 pending the hearing and determination of an appeal against those Orders that he filed on 27 June 2018.

2. As was pointed out by counsel for the wife in his written outline of case relied upon at the hearing of the husband’s application, the Orders that the husband appealed against were not final Orders but rather were interlocutory in nature, not finalising the parties’ rights in respect of the competing property adjustment applications before the Court. Accordingly, I apprehend that the husband actually first needs to obtain leave from the Full Court to appeal against my Orders.

3. The test to be applied in applications for leave to appeal against an interlocutory Order is whether, in all of the circumstances, the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court and whether substantial injustice would result if leave were refused, supposing the decision to be wrong (see Medlow & Medlow (2016) FLC 93-692).

4. The principles to be applied in the discretionary determination of an application for a stay of Orders pending appeal against those Orders are well settled. I consider that those same principles are appropriately applied where the application is correctly one for a stay of Orders pending an application for leave to appeal against those Orders being heard and determined. Those principles were conveniently set out by the Full Court in Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106. The Full Court observed that the authorities stress the discretionary nature of the application which should be determined on its merits. It set out a list of relevant principles as follows:[1]

   [1] At [18].

   ·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.

5. The Orders the husband appeals against declared the wife to be trustee for sale of four particular real properties in Australia, registered in the name of the husband, as a consequence of default by the husband in respect of obligations imposed upon him by Orders made on 21 April 2017 to keep paying the mortgage repayments, rates and other charges owing in respect of another property in which the wife and a child of the parties have been living. The Orders also included machinery provisions facilitating the sale of those properties. Net sale proceeds were to be applied pursuant to the Orders of 21 April 2017, so that after the arrears of mortgage debt and rates on the property in which the wife and child live are discharged, they are to be held in the trust account of the wife’s solicitors and only utilised in keeping the mortgage and rates on that property paid pending final property adjustment orders being paid.

6. The husband’s Notice of Appeal lists nine “Grounds”. In the first ground, whilst he concedes that he breached the April 2017 Orders that he maintain the mortgage and rates payments on the property occupied by the wife, he asserts that “a grave error” was made in assessing the amount owing.

7. In the second ground, he refers to pending litigation in Country J that he says “will impact the marital pool” and asserts there was error in not taking that into consideration in the proceedings here.

8. In the third ground, he asserts that the amounts outstanding on the mortgage and rates on the relevant property are less than $40,000 and that these can be met by the sale of only one of the four properties that the wife has been authorised to sell and that this would meet the interests of justice in the circumstances.

9. In the fourth ground, he asserts that I have a bias against him.

10. In the fifth ground, he asserts that he will be reporting me to the Chief Justice for making “professionally derogatory comments against” him.

11. In the sixth ground, he asserts that the wife has come to Court with “unclean hands” that he proved and that I ignored.

12. In the seventh ground, he asserts that three of the four properties do not need to be sold now as the market is not “encouraging” and that he will lose out if they are sold now rather than at some later time.

13. In the eighth ground, he asserts that my reasons for authorising the wife to sell all four properties are “silly” and exhibit a lack of understanding on my part of “financial management” or “bias” against the husband.

14. In the ninth ground, the husband challenges the costs order I made against him, seemingly asserting that I failed to take into account a relevant consideration, namely, that the wife is “clearly” a “serial litigator”.

The Husband’s Submissions

1. The husband submits that the Orders sought to be stayed are “oppressive, economically unfair, biased” and will cause irreparable damage to him. He also submits that he “believes he stands a very good chance of either reversing those orders or varying them.”

2. The husband stressed in his written and oral submissions that he does not seek to stay the operation of the Orders in so far as they permit the wife to sell the Brisbane CBD apartment. He asserts its sale will provide sufficient funds to pay the arrears owing on the mortgage and the rates on the C Town property in which the wife lives, thus securing her occupation of the property in the interim period. He asserts he only seeks to stay the operation of the Orders that permit the wife to sell the block of land on H Town, the property in the rural Queensland town of E Town and the apartment in the Melbourne CBD. He asserts that staying the sale of those three properties will not prejudice the wife’s interim position whilst, on the other hand, if the stay is not granted, there is “a danger the [wife] would sell the assets below their full values (as has been observed recently and cannot be denied by [her]) and thus deprive [him] the full potential of his share of the assets”. He submits that refusing the stay will render his appeal nugatory.

The Wife’s Submissions

1. Counsel for the wife pointed out that the husband’s appeal is against machinery orders that simply confirm and spell out powers the wife has as trustee for sale of four real properties that the husband’s conceded breach of substantive orders made in April 2017 brought into operation. The husband did not appeal against those 2017 Orders and it now seems as if his unhappiness is directed at the Orders that actually created the basis pursuant to which the wife became trustee for sale of the four properties, yet he seeks to prevent the sale of three properties by appealing against and seeking to stay the operation of Orders that simply clarify the wife’s powers as trustee for sale rather than the Orders by which she was appointed trustee for sale.

2. In effect, for the wife it is submitted that the appeal against the May 2018 Orders and any stay of them that is granted will not actually achieve what the husband really seeks, which is a stay of the 2017 Orders.

3. This submission, as I understand it, also raises questions about the ‘bona fides’ of the husband’s appeal and this application.

4. Counsel went on to submit that the wife’s evidence demonstrates that the mortgagee bank is still expressing an intention to exercise its power of sale in respect of the relevant property and that the husband has not adduced any evidence to support the submission that any of the properties, let alone the Brisbane CBD apartment that he says he is willing to sell, can or will be sold within an appropriate time to satisfy the mortgagee bank and cause it to refrain from taking steps to sell the wife’s home. He submits that any fetter on her right to sell any or all of the properties in the order she deems necessary to try to salvage her occupancy of her home would be “grossly unfair to the wife”.

5. Whilst he concedes that the husband’s attempt, through the appeal, to prevent the sale of the other three properties could very well be rendered nugatory without the wife’s power to sell the properties being stayed, counsel for the wife submits that the prejudice to the husband would be “non-existent” due to the fact that there would remain property preservation orders in place that preserve any net sale proceeds until final orders are made.

6. Ultimately, counsel for the wife submits that although the husband asserts he believes his appeal will succeed, he really has not demonstrated that it has any truly arguable grounds and any real prospects of success. 

My Determination

1. I am satisfied that there is a great deal of merit in the submission made by counsel for the wife about the nature of the husband’s appeal. In April 2017, I made Orders that the husband continue to keep the mortgage repayments and rates payments owing on the home in which the wife and child are living, up to date, in default of which the wife was appointed trustee for sale of the four other real properties situated in various parts of Australia.

2. The husband did not appeal against those Orders, but he quickly defaulted, which he concedes, thus activating the default provisions of those Orders that appointed the wife as trustee for sale of the four properties. He then took no action, either in this Court or in terms of attempting to sell the Brisbane CBD apartment which he now claims he is willing to sell to meet his April 2017 obligations, whilst at the same time allowing the rates owing in respect of at least that property, if not all of them, to go unpaid and also fall into arrears.

3. When, on the application of the wife, by declaration I confirmed her to be trustee for the sale of the four properties and expressly stated some of the things she could do in that role, the husband has appealed against those Orders in an attempt to prevent the wife from selling three of the four properties. 

4. I respectfully now consider that the absence of an appeal against the April 2017 Orders I made presents problems for the husband as, left to stand, those Orders alone, upon his default, made the wife trustee for sale of the four properties. Success on his Appeal in its current form would probably not be enough to prevent the sale of the properties by the wife.

5. This fact, that I am satisfied the husband has been aware of since the hearing of the wife’s application in May this year when counsel for the husband first made the point, along with the husband’s fervent assertion made at the hearing of the stay application, that the Court should understand that the husband will appeal every order of this Court, does raise concerns for me as to the husband’s bona fides in respect of this appeal. Though, I hasten to say, that concern alone is not itself determinative of this application, in my judgment.

6. The merits of the husband’s appeal also concern me though. With all due respect to the husband, the Grounds of Appeal set out in his Notice of Appeal are very poorly drafted. After some effort, one can perhaps apprehend that he is probably asserting that the decision is assailable on appeal because, he submits, I took irrelevant matters into consideration and did not take other relevant matters into account. I also apprehend that the husband seeks to challenge my Orders on appeal on the basis that they were, he claims, affected by bias.

7. The husband has already made an unsuccessful application for me to recuse myself from hearing this matter on the basis of an allegation of bias. I heard and determined that on 15 May 2017 and gave oral reasons at the time. The things that the husband still points to as evidence supporting his claim that I am biased are matters he raised at the time I dismissed that application. He did not appeal that decision not to recuse myself from hearing this matter. I do not consider that there is merit in that part of his appeal.

8. The other matters that I apprehend from his Grounds of Appeal, he submits I did not take into account when making the Orders appealed against, are:

   (i)Pending litigation in Country J;

   (ii)That the sale of the Brisbane CBD apartment would suffice to meet the wife’s needs; and

   (iii)That the wife has come to Court with “unclean hands”.

9. I do not accept the husband’s contention that I failed to take those matters into account or, if it is his contention, that I did not give any of those sufficient weight in the discretionary exercise. Of course, if his Grounds of Appeal ultimately rely on that ‘weight’ argument, his prospects of success are even more limited. Furthermore, if it is correct that the husband firstly requires leave to appeal, (and I am of the view that it is), I am not satisfied that the decision under appeal is imbued with sufficient doubt to warrant it being reconsidered by the Full Court or that a substantial injustice will be done if leave is refused.

10. I consider this assessment of the extremely limited prospects of success of the husband to be very relevant in the determination of this application, notwithstanding that refusal to grant the stay sought could render the appeal nugatory. I accept that the wife’s evidence demonstrates that the mortgagee bank is still expressing a current intention to exercise its power of sale in respect of the relevant property. I am satisfied that the time frame within which that may happen is becoming critical. The evidence the wife has adduced is that she has a contract in place to sell the H Town land, but the net sale proceeds of that (expected to be somewhere around $11,000 to $12,000) will go only some way towards discharging the arrears of the mortgage on the wife’s home (currently around $40,000).

11. There is no evidence before me that supports a finding that the Brisbane CBD apartment can or will be sold quickly or within a time frame that will necessarily satisfy the mortgagee bank such as to prevent it from acting. Giving the wife the opportunity to sell all four properties, if she needs to, and in the order she chooses or is able to achieve, is a much more satisfactory process, in my judgment, and one that is more likely to satisfy the bank and achieve the outcome the bank requires.

12. Despite the repeated assertions of the husband that the wife was selling the properties for significantly less than value, the husband put no evidence before the Court to support the assertion. The contract for the sale of the H Town property entered into by the wife sells it for $15,500 when the evidence is that the agents appraised it at $16,500 to $17,500. I do not consider that to be a price significantly less than value.

13. In addition, the husband asserted that his current wife asserts beneficial ownership of the H Town property. However, he conceded that she had taken no steps in these proceedings or elsewhere to claim the beneficial ownership of the property. I am not persuaded that is a legitimate reason for preventing the wife from selling the property.

14. As I observed during the hearing, the wife is bound by duties as a trustee including getting the best price she can for any of the properties she sells, having regard to the urgent circumstances to meet the mortgagee bank’s requirements. If the husband maintains that she sells any of the properties for an amount that is significantly below market value, it is a matter that he may well seek to prove at trial and have taken into account in any determination of orders that are just and equitable as between him and the wife.

15. Particularly having regard also to the fact that my April 2017 Orders and May 2018 Orders are interlocutory only and do not finally determine rights as between the parties, I do not consider the husband has demonstrated that the interests of justice demand the granting of a stay as he submitted that they do.

16. I will not grant the stay the husband seeks and will dismiss his application.

Costs

1. I heard submissions from each of the parties in respect of their respective costs applications depending on the outcome of the application.

2. The husband submitted that if he is successful in the application, the wife should be ordered to pay his costs even though he is appearing without legal representation. He told the Court that his phone bill will be $600 and that he has spent 8 hours of his time preparing and arguing the application and that his time is worth $500 per hour. Accordingly, he asked for $4,600 to be paid by the wife.

3. Counsel for the wife submitted that if the husband is wholly unsuccessful in the application the wife should get her costs fixed in the amount of $3,803.57. He referred to the schedule of costs attached to affidavit set out in a form reflecting the work that has been done and charge rates calculated by reference to Schedule 3 of the Family Law Rules 2004.

4. I am satisfied that the circumstances justify an order for costs being made against the husband as he has been wholly unsuccessful in his application to stay Orders that have been put in place because of his admitted breach of previous Orders. I consider that his application had so little merit that it should not have been brought. It has caused the wife to incur costs that she should not reasonably had to incur.

1. I am satisfied that the amount asked for is an appropriate amount to order the husband to pay in all of the circumstances and that to do so would be just.

2. I will order that the husband’s application for a stay be dismissed and that he pay the wife’s costs of and incidental to the dismissed application fixed in the sum of $3,803.57.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 18 September 2018.

Associate: 

Date:  18 September 2018