MEDLOW & MEDLOW
[2015] FamCAFC 17
•19 February 2015
FAMILY COURT OF AUSTRALIA
| MEDLOW & MEDLOW | [2015] FamCAFC 17 |
| FAMILY LAW – APPEAL – Application for expedition of appeal – Where the appeal is against interlocutory orders – Where one party is involved in ongoing litigation which will affect the assets of the parties – Where proceedings for property settlement cannot proceed until other litigation is completed – Where the husband has significant ongoing legal expenses – Where there is dispute between the parties as to the total value of their assets – Where the wife alleges that the trial judge’s orders would dissipate the pool of assets available for division and thereby frustrate her entitlement to them – Where the wife claims that expedition is necessary to prevent the husband depleting the assets available for division – Where the wife argues that further distributions of funds to the husband will further deplete her entitlement – Application granted – Appeal expedited. |
| Family Law Act 1975 (Cth) |
| APPELLANT: | Ms Medlow |
| RESPONDENT: | Mr Medlow |
| FILE NUMBER: | SYC | 7742 | of | 2010 |
| FIRST APPEAL NUMBER: | EA | 106 | of | 2014 |
| SECOND APPEAL NUMBER: | EA | 140 | of | 2014 |
| DATE DELIVERED: | 19 February 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 10 February 2015 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 18 July 2014 11 September 2014 |
| LOWER COURT MNC: | [2014] FamCA 530 [2014] FamCA 760 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Richardson SC |
| SOLICITOR FOR THE APPELLANT: | Barkus Doolan |
| COUNSEL FOR THE RESPONDENT: | Mr Kirk QC |
| SOLICITOR FOR THE RESPONDENT: | Michael Todd of Watts McCray |
Orders
That Appeals No EA 106 of 2014 and EA 140 of 2014 be expedited and listed for hearing by the Full Court at a time and date to be determined by the Appeal Registrar.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Medlow & Medlow has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Numbers: EA 106 of 2014
EA 140 of 2014
File Number: SYC 7742 of 2010
| Ms Medlow |
Appellant
And
| Mr Medlow |
Respondent
REASONS FOR JUDGMENT
Ms Medlow (“the wife”) by application in an appeal filed on 20 November 2014 seeks expedition of her appeals against orders of Loughnan J made on
18 July 2014 and 11 September 2014.
It is helpful to set out some background to the present application taken from his Honour’s reasons.
The parties married in 1992 and separated in December 2008. There are two children of the relationship, one of whom is an adult and the other in his late teens.
Although proceedings for property settlement orders were begun in 2010, they have not been finally heard.
Mr Medlow (“the husband”) is involved in other litigation. He is on trial for murder. A company associated with the husband is in litigation in the Federal Court of Australia with entities associated with his former business associate. In those proceedings the husband seeks to recover $8 million from his former business associate’s estate. Further, a company associated with the husband is in litigation with a company associated with his brother relating to joint interests of the husband and his brother in relation to land holdings. In March 2014 the husband was enjoined by order of the Family Court from authorising his corporate associations from settling that litigation.
It seems uncontentious that the outcome of some or all of that litigation may have an effect on the assessment of the assets of the parties and, thus, the ultimate orders for property settlement.
The husband’s criminal trial has not yet been fixed for hearing. He is released on bail. None of the civil actions, including the proceedings for property settlement will proceed until the criminal proceedings are completed.
The proceedings before the trial judge
On 15 July 2014, the husband sought an order for payment to him of
$2.9 million. The money was sought from two sources: $1.25 million to be borrowed from his brother and $1.65 million to be paid from the proceeds of a property owned by the parties which had at the time of the application been sold, but in respect of which settlement had not yet occurred. The parties expected to receive $37 million from the sale of the property.
The wife opposed the application. She sought in response that a substantial proportion of the sale proceeds from that property be disbursed to her.
In determining whether to make the orders sought the trial judge noted that there existed a significant dispute between the parties as to the value of the assets of them or each of them available to be taken into account in the property proceedings. The husband contends a value of about $59 million whereas the wife asserts the value of the property to be $107 million.
His Honour identified the controversy before him in relation to the proposed disbursement of $2.9 million to the husband thus:
40. If the husband is right in his argument, the wife’s claim is not threatened by the disbursement of $2.9 million by him, whether that sum is applied to the purposes he identifies or for any other purpose.
41. The real controversy is identified in the wife’s case. As I have indicated the wife points to a proper outcome for her being an award calculated at 35 per cent of the parties’ assets but importantly the assets as she asserts they existed and were valued in 2010. If such an outcome is considered achievable on the balance of probabilities and if the current pool is inadequate or barely adequate to support such an outcome then the orders sought by the husband could not be undone on a final basis. In those circumstances the orders should not be made.
His Honour found that a payment to the husband of $2.9 million would not threaten the wife’s ultimate claim. Thus he ordered payment to the husband of $2.9 million.
Having filed the appeal against the orders of 18 July 2014, the wife sought a stay of some aspects of those orders. The wife argued that the provision of funds to the husband in accordance with his Honour’s orders would dissipate the pool of assets available for division between them and, in the result, frustrate her entitlement. The husband sought interlocutory orders relating to enforcement of the orders and also sought a variation of the orders.
In reasons for judgment delivered on 11 September 2014, his Honour determined that certain of the husband’s identified expenses to be incurred in the following twelve months, namely his legal fees and expenses in relation to the litigation in which he was then involved, said to be in the order of $1.427 million, ought not be stayed. His Honour further made orders that provided for the payment of the husband’s future legal expenses in relation to the criminal proceedings as they fall due on the provision of an invoice to the wife.
On 6 November 2014 by amended notice of appeal EA 106 of 2014, the wife appealed his Honour’s orders of 18 July 2014 and by EA 140 of 2014 the wife appealed his Honour’s orders of 11 September.
Both appeals were consolidated and will be heard together. Both appeals, being against interlocutory orders, require leave to appeal. In accordance with usual practice, the applications for leave will be heard with the substantive appeals.
The application for expedition
The wife contends that if the hearing of the appeals is not expedited the appeals will not be heard until 2016 and, in that event; “… it will render the appeals nugatory.”
She asserts that the effect of his Honour’s orders of 18 July and 11 September 2014 have the effect that, of the $2.9 million paid to the husband, after payment of expenses incurred there will remain $1.472 million available to the husband. From that sum she calculated that the husband is entitled to draw funds in the order of $207,780 per quarter in addition to the costs of his criminal proceedings. In her affidavit filed on 20 November 2014 in support of her application the wife contended:
23. In the event that the appeals are successful, any monies paid to the respondent (or the balance of the monies paid to the respondent) will be returned and be the subject of further Orders.
24. The appeals should be heard before the respondent depletes all of the Amount which was made available to him. I will otherwise lose the benefit of any success I might achieve in respect of the appeals.
25. The gradual depletion by the respondent of the monies made available to him will render the appeals nugatory.
In a further affidavit filed on 6 February 2015, the wife contended that although the orders of 11 September 2014 provided that the husband provide a monthly accounting to her for the application of the funds paid to him, he did not and that it was not until 22 January 2015 that she received an accounting for the months of October, November and December 2014. However, the wife further contends that the accounting shows that the husband has withdrawn $480,000 from the funds paid to him in three months. Thus, she argued that at that rate, the husband will have expended the whole of the amount paid to him within six months.
In argument on the application, Senior Counsel for the wife explained that the wife’s case is that the proceeds of the sale of the property equates to 35 per cent of the property of the parties and it should be sequestered from further distributions to the husband because, even if in the result there remains only that fund available for division between the parties, she will receive the whole of it. Thus, any distribution to the husband, including that already made, has the effect of depleting her entitlement.
Senior Counsel for the husband supported the application for expedition contending that, given the inevitable delay in the finalisation of the property settlement proceedings, the husband will fully expend the funds made available to him and apply for a further distribution.
Given the issues in contention between the parties and the matters of principle to be asserted on the appeal from the trial judge’s determination I am satisfied that the applicant has made out the case for expedition.
I certify that the preceding twenty two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on 19 February 2015.
Associate:
Date: 19 February 2015
0
0
1