Meredith and Allen (No. 2)

[2014] FamCA 629

FAMILY COURT OF AUSTRALIA

MEREDITH & ALLEN (NO. 2) [2014] FamCA 629

FAMILY LAW – PRACTICE AND PROCEDURE – Stay of proceedings sought in respect of property orders and adult child maintenance order –– where the husband has not complied with final orders – where the wife is entitled to the benefit of the judgment and to presume the judgment is correct – where the husband has little prospect of success in respect of the grounds of appeal as developed to date but it is accepted he may amend grounds – appeal may be rendered nugatory if stay not granted – order made for stay of property orders pending appeal on conditions – condition that the husband at all times prosecute his appeal expeditiously – condition that the husband pay regular mortgage payments and outgoings on the matrimonial home – condition that the husband pay all arrears and comply with adult child maintenance order – application for a stay of proceedings in respect of adult child maintenance order dismissed

Family Law Act 1975 (Cth)

Jackson & Balen [2009] FamCAFC 131

APPLICANT: Mr Meredith

RESPONDENT: Ms Allen

FILE NUMBER: SYC 6886 of 2008

DATE DELIVERED: 7 August 2014

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 4 August 2014

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Litigant in person

SOLICITOR FOR THE RESPONDENT: Mills Oakley Lawyers

Orders

1. Pending further order and in so far as it has not already been implemented, a stay is granted of the property settlement orders (orders 1 – 15) made on 6 June 2014 upon the following conditions:

   1.1.The husband at all times prosecutes his appeal to the Full Court expeditiously;

   1.2.The husband continues to pay all regular mortgage repayments and all regular payments on any loans secured against the property situated at and known as E Street, Suburb S (“the Suburb S property”), together with arrears and that the husband pays all rates, taxes and other outgoings associated with the Suburb S property and any arrears in respect of those liabilities;

   1.3.On a monthly basis the husband provide to the wife written evidence that he has complied with order 1.2;

   1.4.The husband pays all arrears in relation to adult child maintenance and regularly complies with his obligations under that order.

2. In the event the husband does not fulfil the conditions of the stay set out in order 1, the wife has liberty on 14 days notice to relist the matter before me for consideration of a discharge of order 1.

3. I note the husband’s appeal is listed for a procedural event on 19 August 2014. The Registrar is requested to consider expedition of the appeal.

4. The application for the stay of the order for adult child maintenance (order 18 made 6 June 2014) is dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 6886 of 2008

Mr Meredith

Applicant

And

Ms Allen

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. On 6 June 2014 final orders were made for a division of the property of the parties and for adult child maintenance. The orders made on 6 June 2014 are set out at Schedule 1.

2. Amongst other things, the property orders provided that the husband, within 42 days, discharge the mortgage on the property in which the husband lives at E Street, Suburb S (“the Suburb S property”) and pay to the wife a sum of $256,144. Simultaneously with the husband doing that, the wife was ordered to transfer her interest in the property to the husband and transfer to the husband any interest that she has in the bond held by Suburb S Municipal Council. The husband has failed to comply with the order for the payment to the wife on the discharge of the mortgage. A further order was made on 6 June 2014 that if the husband failed to comply with that order, the wife who is currently the registered proprietor of the property, be at liberty to sell the property so that she would receive (in percentage terms) what the primary orders would otherwise have given her. She has commenced that process of sale pursuant to that default implementation order. The wife has instructed her real estate agent to act on the sale of the Suburb S property. The wife arranged for the marketing campaign for the sale to commence on 18 July 2014 (42 days following the orders). The husband has not allowed for open house inspections to occur, as order 6.3 requires him to do. 

3. There was also an order made on 6 June 2014 for adult child maintenance. The parties have a severely disabled child who lives with the wife most of the time. The husband was ordered to pay $199 per week from 1 January 2014. The husband has also not complied with that order. He informed the court that he had created a fund into which he asserted he was paying $50 a week, being an amount that he had independently calculated was an appropriate amount to set aside for B’s care. He indicated that he had obtained legal advice not to make any payment to the wife. He said however he would comply with the court order for adult child maintenance in the event that the court granted a stay in relation to the sale of the Suburb S property.

4. As the reasons for judgment disclose, the net assets of the parties which remain in the joint or sole names of the parties as at date of hearing (an amount of $1,045,705) were to be divided as to 60 per cent to the wife and 40 per cent to the husband. As a result of the property distribution, the husband’s principle asset in the event that he paid the money to the wife as ordered and discharged the mortgage on the Suburb S property, would be the equity that he retained in the Suburb S property. He would also retain a significant income stream of at least $100,000 a year from a business that he operates (P Pty Ltd which was not otherwise valued on the balance sheet). In addition, the husband is involved in other entrepreneurial activities associated with a website that he had developed for the purposes of selling property, particularly to buyers from Asian Country CD, and into which he had invested $100,000.

5. In comparison, the wife’s future earning capacity and ability to regenerate new capital is meagre.

6. On 3 July 2014 the husband filed a Notice of Appeal against orders for alteration of property and adult child maintenance. The wife says she may file a cross appeal.

7. The husband filed an Application in a Case on 17 July 2014 seeking that the orders made on 6 June 2014 be stayed pending the hearing of his appeal to the Full Court.

8. The husband’s Application was supported by an affidavit also filed on 17 July 2014.

9. The wife opposes the granting of a stay and filed an affidavit on 1 August 2014. She also seeks that the husband pay her costs of this application.

THE LAW APPLICABLE TO A STAY OF A PROPERTY ORDER PENDING AN APPEAL

1. In Jackson & Balen [2009] FamCAFC 131, the Full Court said at paragraph 28:

   The principles to be applied in hearing a stay application pending an appeal are well settled (see Federal Commissioner of Taxation v Myer Emporium Ltd [No.1] (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685; Jennings Construction Ltd v Burgundy RoyaleInvestments Pty Ltd (1986) 161 CLR 681). Those authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter include the following:

   ·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 application must be bona fides;

   ·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.

FAIRNESS OF GRANTING A STAY

1. The parties have litigated over a five year period. A company which was controlled by the husband sued two companies controlled by the wife in a State court and lost that case. Costs were ordered against the husband’s company. A liquidator was appointed for the two companies that the wife controlled. At a point in time when the wife says she was no longer able to meet the periodic payment of substantial liabilities, the wife moved out of the Suburb S property and sought to sell it. She was able to do that given that it was in her sole name. The husband caused his company to bid at the auction and was the highest bidder. The husband caused his company to enter into a contract to pay a 10 per cent deposit but managed to frustrate the sale by failing to complete the settlement of the conveyancing transaction.

2. The effect of the husband’s current application is to stop the implementation of the order for sale. The wife has commenced marketing the property. The lawyer for the wife submits that the husband, in this application, has led no evidence that he can raise the necessary finance to pay out the current mortgage, let alone raise the money necessary to comply with the order. The husband’s response to that is that he hopes to convince the Full Court that not only should he not have to pay the wife any money but that she should pay him funds, thereby putting him in a position which would make it easier for him to refinance the Suburb S property.

3. I accept the submission that the husband has not demonstrated what his capacity will be to borrow funds to put him in a position to continue to retain the Suburb S property.

4. As recorded in the reasons for judgment, the husband’s application during final submissions at the hearing was couched in very vague terms (see [2] of the reasons for judgment). The orders that the husband now seeks on appeal are significantly different from the orders that he sought during final submissions.

5. The wife submits that a significant injustice would be caused to her if after waiting five years, in circumstances where she supports the children of the marriage who live with her (including B, with her special needs), she has to live for a further period of time awaiting the outcome of the appeal process in circumstances where she is deprived of the fruits of the litigation.

6. The wife now says Hunt & Hunt Lawyers claim from her the sum of $76,843. The history of that claim is referred to in the reasons for judgment.

7. A refusal to grant the stay will require the husband to vacate the Suburb S property. The husband submits that he will lose his family home where he resides with his fiancé, her son and CC, and where the parties’ other children spend time with him also. The husband contends that his ability to care for B will be severely impacted if the house is sold.

8. The husband also points to the fact that the wife has already received, as a result of the orders made, the monies that were in the controlled monies account in the sum of $249,590. I accept the wife’s evidence that all but $46,827 of those monies has been expended or committed to past and current legal fees and disbursements in circumstances where the husband has in large part appeared as a self-represented litigant.

9. Overall, I find balance of convenience considerations favour the wife.

THE RISK THAT THE HUSBAND’S APPEAL MAY BE RENDERED NUGATORY IF A STAY IS NOT GRANTED

1. The husband appeals against all orders made. That is, against the orders for property settlement and the orders for adult child maintenance.

2. In relation to the order for property settlement, the husband’s case is that if the sale of the Suburb S property goes ahead he will be placed in a position where he would not be able to re-acquire that property. More than that, the wife concedes that I have no evidence that she would use the monies that she would receive from the proceeds of the sale of the Suburb S property to invest in a manner which will preserve those monies. The lawyer for the wife said that her client would use the money for living expenses and to accommodate herself and the children with her new partner, most probably in rental accommodation. She further stated that whether or not there is any capital left at the time of the appeal would be dependent upon whether the wife could secure a loan to acquire a property together with the necessary money needed to modify that property for B’s needs, and I have no evidence in this application of any such proposal or capacity.

3. The lawyer for the wife submits that given the wife’s conduct during the history of the litigation, I would be confident that she would comply with any order that is ultimately made to pay back funds to the husband. The difficulty with that submission is I am aware of the impecunious nature of the wife and the fact that she would have little capacity to do so.

4. There is a risk that not granting a stay may render the husband’s appeal nugatory.

A PRELIMINARY ASSESSMENT OF THE STRENGTH OF THE PROPOSED APPEAL

1. The appeal filed by the husband is drawn in generic terms.

2. The husband’s affidavit and oral submissions were more specific in relation to the contentions he makes in respect of error. The husband during oral submissions (without notice to the wife or the court) handed up various pages of transcript upon which he will apparently rely during his appeal. I accept the husband could develop grounds of appeal.

3. The husband raises a number of matters. The most significant of these seem to be a submission that funds, which all agree no longer exist, should be “added back” onto the balance sheet and counted against the wife.

Monies received by the wife post separation

1. The husband fundamentally asserts that there has not been a proper consideration of the monies that the wife received after the separation. The husband points to the amount of $439,000 which the wife received in 2010 and asserts that that amount has been not properly accounted for by the wife. These matters are dealt with at paragraphs 113 to 117 of the reasons for judgment. I concluded I was unable to make a finding in the husband’s favour that the wife had squandered or secreted significant funds. It appeared from the husband’s submission that he sought to demonstrate to the Full Court that that finding was unsafe, and that a finding should have been made that the wife has squandered or secreted funds.

Monies provided by and paid to the wife’s parents

1. The husband asserted that I had failed to take into account an amount of $114,000 which is an amount referred to at page 208 of the transcript of the proceedings on 4 December 2013. The issue of amounts of money received by the wife’s parents are dealt with at paragraphs 92 and 93 and paragraphs 118 to 122 of the reasons for judgment. Whilst the amount of $114,000 was not specifically referred to, there seems little merit in the husband’s assertion that payments made to the wife’s mother have not been taken into account. I understood the husband during oral submissions to assert an amount of $48,000 paid by the liquidators to the wife’s mother had not been taken into account. That assertion is not accurate. It has been particularly placed on the balance sheet against the wife at item 18 (for reasons discussed at [92] to [93] of the reasons for judgment).

Alleged errors in the balance sheet

1. The husband asserts that I incorrectly placed the Suburb S Municipal Council bond of $10,350 in the distribution table against him when it was actually in the wife’s name. That assertion ignores the effect of order 3 and the last part of order 5.

2. The husband also complains about the motor vehicle which is listed in the balance sheet at item 17 as his motor vehicle, and has been put into the distribution table as his motor vehicle. The factual underpinning of that assertion was not fully explored (it may be that the husband’s motor vehicle has been incorrectly described in the reasons for judgment as a Make AAA rather than a Make EF). Order 14 provides that property in the possession of the respective parties is to be their sole property. If in fact that motor vehicle which has been allocated to the husband in the distribution table and was assumed to be in his possession, is in the wife’s possession, some order might need to be made under the slip rule if the parties cannot otherwise agree on that matter.

Value of A Pty Limited

1. The husband asserted that he did not agree that the value of this company should be nil. It is a matter that is not contentious that the company was placed into liquidation and that the liquidator distributed the whole of the funds received in respect of the companies (including placing the balance in a controlled monies account). The figure claimed by the husband seems to relate to his contention that conduct of the wife led to loss of value of Meredith Pty Ltd. That contention is mentioned at paragraph 80 and otherwise dealt with at paragraphs 111 and 112 of the reasons for judgment. I rejected the assertion that there was some loss of value of Meredith Pty Ltd as a result of wilful or reckless conduct by the wife. The husband did not indicate the basis upon which he sought to challenge that finding.

Special contribution

1. The husband asserts that I found, at paragraph 113 of the reasons for judgment, that the wife made a special contribution. I did not use that terminology. I accepted the wife’s evidence that she was primarily responsible for negotiating with the strata owners the amount of back pay of $439,000. That finding was more than available on the evidence.

Conclusion in respect of grounds of appeal

1. I accept the submission by the wife that the husband has little prospect of success on existing arguments to date.

WHETHER THE APPEAL CAN BE HEARD WITHIN A REASONABLE AMOUNT OF TIME

1. The wife’s lawyers submitted that it might be 18 months to two years before an appeal is heard and the outcome known. Without expedition that may be the case. That creates a serious disadvantage to the wife.

2. The husband seeks to delay the wife having the benefit of a judgment which she is entitled to receive.

3. I understand the next procedural event for this appeal is scheduled for 19 August 2014.  

CONCLUSION IN RELATION TO STAY OF PROPERTY ORDER

1. The husband is a self-represented litigant who is highly motivated by the emotions generated by the litigation. Objectively his bona fides can be questioned. There is no doubt from comments he made during oral submissions that he sees the application for stay as a way of blocking the sale.

2. The wife would rightly suspect that once he had achieved that objective, he would not necessarily be in any particular hurry to prosecute his appeal.

3. Having said that, the husband is entitled to have the Full Court consider the contentions that he raises in relation to the order altering property.

4. I will order, pending further order, a stay of the property settlement order but only upon certain conditions. Those conditions are:

   40.1.The husband at all times prosecute his appeal to the Full Court expeditiously;

   40.2.The husband continues to be solely responsible for all regular mortgage repayments and all regular payments on any loans secured against the Suburb S property, rates, taxes and other outgoings associated with the Suburb S property and any arrears;

   40.3.On a monthly basis the husband provide to the wife written evidence that he has complied with the previous order;

   40.4.The husband pay all arrears in relation to adult child maintenance and regularly complies with his obligations under that order.

1. In the event the husband does not fulfil the conditions of the stay, the wife shall have liberty on 14 days notice to relist the matter before me for consideration as to whether the stay order shall continue to remain in place.

2. I shall request the Appeal’s Registrar to consider expediting the appeal.

NO STAY OF THE ADULT CHILD MAINTENANCE ORDER

1. The husband has not in any way demonstrated that he has any ground of appeal in relation to the order for adult child maintenance. His attitude in respect of that order demonstrates a lack of bona fides and I conclude that on the material that I have, there seems no strength in his proposed appeal against that order.

2. I have discussed the husband’s income earning capacity above.

3. Further, not staying that order would not render his appeal nugatory as any reduction in that order (or even its total discharge) could be catered for by a reduction in periodic payments in the future or by an order that the wife repay an amount periodically in the future.

4. In any event, the husband has indicated he is prepared to abide by the order to support B if he gets a stay in relation to the property orders.

5. The application for stay in relation to adult child maintenance shall be dismissed.

I certify that the preceding forty-seven(47) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 7 August 2014

Associate:   

Date:  7 August 2014  

SCHEDULE 1

1. Pursuant to s 79 Family Law Act 1975 (Cth) (“the Act”) an order be made in accordance with paragraphs 2 to 15 below.

2. Within 42 days, the husband shall do all such things as may be necessary to:

   2.1.Withdraw the caveat lodged by the husband and registered against the Suburb S property; and

   2.2.Discharge the mortgage to St George Bank Limited secured against the Suburb S property; and

   2.3.Pay to the wife the sum of $256,144.

3. Simultaneously with the husband’s compliance with order 2, the wife do all acts and things and sign and execute all documents necessary to transfer to the husband any right, title and interest which she may have in the property situated at and known as E Street, Suburb S in the State of New South Wales being all of the land comprised on Folio Identifiers … (“the Suburb S property”) and the wife transfer to the husband any right, title and interest in the bond held by Suburb S Municipal Council. The husband is to be responsible for the payment of stamp duty (if any) in respect of the transfer of the Suburb S property.

4. In the event the husband fails to comply with order 3 hereof within 42 days of the date of these orders the wife shall do all such things as may be necessary to list the Suburb S property for sale by auction and to sell the Suburb S property for the best price reasonably obtainable and upon the following terms and conditions:

   4.1.The auction shall take place within six weeks after 42 days from the date of these orders or as soon as practicable, whichever is the later.

   4.2.The wife shall attend at the auction and in the event that the Suburb S property is passed in the wife shall negotiate with the highest bidder and shall accept any offer to purchase the Suburb S property at no less than 90 per cent of the reserve price.

   4.3.In the event that the Suburb S property does not sell at auction or does not sell by private treaty within two weeks after the date of the auction then the wife shall relist the Suburb S property for sale by auction at intervals of no more than six weeks upon the same terms and conditions as set out herein until the Suburb S property is sold.

5. Upon the Suburb S property being sold at auction the wife shall distribute the proceeds of such sale as follows:

   5.1.In payment of real estate agent’s commission and expenses on the sale;

   5.2.In payment of property legal costs and disbursements of each of the parties of and incidental to the sale;

   5.3.Payment of an amount to St George Bank Limited in respect of loans secured over the Suburb S property in an amount calculated to be sufficient to extinguish those loans had all regular payments been made to the date of settlement in respect of those loans;

   5.4.Payment to the wife of 45 per cent of the remaining balance;

   5.5.Payment of all arrears of the mortgage to St George Bank Ltd;

   5.6.In adjustment of rates, levies and taxes on the Suburb S property so that all outgoings are paid to the date of settlement;

   5.7.Payment to the wife of any arrears of adult child maintenance for B;

   5.8.In payment of the balance then remaining to the husband; and

   the husband shall simultaneously withdraw the caveat registered by him against the Suburb S property and the parties do all things and sign all necessary documents to release the bond held by Suburb S Municipal Council in relation to the Suburb S property to the husband.

6. Pending the sale of the Suburb S property pursuant to orders 4 and 5 hereof the husband shall:

   6.1.Be solely responsible for all regular mortgage repayments and all regular payments on any loans secured against the Suburb S property, rates, taxes and other outgoings associated with the Suburb S property and the husband shall indemnify the wife and keep her indemnified with respect to all such mortgage repayments, rates, taxes and outgoings and any arrears of these liabilities pending the sale of the Suburb S property;

   6.2.Vacate and shall cause any other occupants to vacate the Suburb S property at a date agreed in writing between the parties and failing agreement, no later than two weeks prior to any proposed date of settlement of the sale of the Suburb S property, leaving the property in its current state of repair and condition;

   6.3.Do all such things and sign all such documents as may be necessary to facilitate the sale of the Suburb S property by the wife within seven days of receiving a request from the wife to do such things or sign such documents including but not limited to:

   6.3.1.Facilitate the discharge of the mortgage to St George Bank Limited secured against the Suburb S property;

   6.3.2.Causing the caveat registered by the husband against the Suburb S property to be withdrawn, at the husband’s expense.

   6.4.Be and is hereby restrained from placing a bid at the auction of the Suburb S property.

7. The husband shall forthwith relinquish any right title and interest in the following, including but not limited to payment of any dividends:

   7.1.Meredith Pty Limited ACN …; and

   7.2.A Pty Limited ACN …

   and the wife shall simultaneously indemnify the husband and keep him indemnified in relation to all liabilities whatsoever and howsoever arising with respect to the above named entities.

8. The husband and the wife forthwith shall do all things and sign all such documents as may be necessary to resign as a trustee from the Meredith Superannuation Fund, furthermore the wife shall relinquish any right, title and interest to Meredith Superannuation Fund (the Fund) or its accumulated balance and the wife shall do all things and sign all such documents as may be necessary to facilitate the transfer of Lot 1 SP No. …5. The husband is to indemnify the wife in relation to any taxes or stamp duty (if any) owed by the Fund or arising from this order.

9. Pursuant to s 90MT(1)(b) of the Act, whenever a splittable payment becomes payable in respect of the interest held by the wife in the Meredith Superannuation Fund, the husband shall been entitled to be paid 100 per cent of that splittable payment and that there be a corresponding reduction to the entitlement the wife would have received in the Meredith Superannuation Fund but for this order.

10. The husband and wife shall do all such acts and things and sign all documents as may be necessary to give effect to the preceding order.

11. The orders in relation to superannuation are to have effect from the operative time, being the date of these orders.

12. The wife forthwith shall relinquish any right, title and interest in the husband’s interest in the following:

    12.1.H Pty Limited ACN …;

    12.2.P Pty Limited ACN …;

    12.3.Q Pty Limited ACN …;

    12.4.R Pty Limited ACN …;

    12.5.T Limited ACN …;

    12.6.Meredith Family Trust; and

    12.7.Meredith Family Trust No. 2

    and the husband shall simultaneously indemnify the wife and keep her indemnified in relation to all liabilities whatsoever and howsoever arising with respect to the above named entities.

13. Each party do all things and sign all necessary documents to cause any company or entity they control to release the other party from any liability which that other party owes that company or entity and each party will indemnify the other in respect of any debt the other party allegedly owes any company or entity which is controlled by that party.

14. Subject to these orders, each party be solely entitled to the exclusion of the other to all other property, chattels and superannuation in their respective names or possession as at the date of these orders and that each party indemnify the other in relation to any debt associated with any asset that is kept by each of them respectively.

15. Each party do all tings and sign all necessary documents to give effect to these orders.

16. If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.

17. Either party have liberty on 14 days notice to make application for an order implementing these orders. 

18. Pursuant to s 66G Family Law Act 1975 the husband shall pay to the wife by way of adult child maintenance in respect of the child B born … 1995 the sum of $199 per week, the first such sum payable from 1 January 2014 and any arrears shall be charged against the Suburb S property.