Nixon and Nixon (No 2) - [2012] FamCA 964

FAMILY COURT OF AUSTRALIA

NIXON & NIXON (NO 2)

[2012] FamCA 964

FAMILY LAW – Stay pending appeal against enforcement orders. No merit shown despite probable nugatory effect. Application dismissed. Indemnity costs order.

Family Law Act 1975 (Cth)

Bryant & The Commonwealth of Australia [1996] HCA 3
Colgate-Palmolive Company and Anor v Cussons Pty Ltd (1993) 46 FCR 225
Federal Commissioner of Taxation v Myer Emporium Limited (1986) 60 ALJR 300
Fingleton v R [2005] HCA 34
House v R [1936] HCA 40
Jennings Construction Limited v Burgundy Royal Investments Proprietary Limited (1986) 161 CLR 681
Kelly & Kelly (1981) FLC 91-007
McCabe v British American Tobacco [2002] VSC 172
Molier & Van Wyk (1981) FLC 91-001
PetroTimor Companhia de Petroleos SARL v the Commonwealth of Australia [2003] FCAFC 83

APPLICANT:

Mr Nixon

RESPONDENT:

Ms Nixon

FILE NUMBER:

MLC

2061

2009

DATE DELIVERED:

7 November 2012

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

7 November 2012

REPRESENTATION

THE APPLICANT:

In person

SOLICITOR FOR THE RESPONDENT:

Mr Vadarlis

SOLICITORS FOR THE RESPONDENT:

Vadarlis & Associates

Orders

That the application in a case filed by the husband on 2 November 2012 is dismissed.
That the husband pay the wife’s costs on an indemnity basis in relation to this application.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Nixon & Nixon 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 MELBOURNE

FILE NUMBER: MLC 2061 of 2009

Mr Nixon

Applicant

And

Ms Nixon

Respondent

REASONS FOR JUDGMENT

On 19 October 2012, Dessau J made orders after four days of hearing about the enforcement of property orders. On 1 November 2012, Mr Nixon, to whom I shall refer as the husband, filed a notice of appeal and paid the filing fee of $1004. The appeal is therefore still pending.
On 2 November 2012 the husband filed an application in a case, seeking a stay of the immediate execution of a warrant ordered by Dessau J, pending his appeal being heard. His application sought orders in the alternative that the execution of the orders which required him to vacate a house for the purposes of its sale, be stayed until 4 January 2013.
The stay application was listed before me on 5 November 2012, because Dessau J was not in the Registry. Provision for that is provided under the Family Law Rules.
The husband represented himself and Mr Vadarlis, the solicitor for the wife, appeared for her. Although the wife had not filed a response, because of the urgency, the execution of the order being later this week, I indicated I would hear submissions from both parties and also read the husband’s evidence. The wife opposed the stay. I have contemplated the matter over 48 hours and had the opportunity to read, not only the husband’s documents but also her Honour’s judgment.
After considering all of that, the husband’s entire application must fail. These are my reasons.
Because the husband’s affidavit was not particularly helpful, his notice of appeal had to be carefully examined to distinguish grounds of appeal from what might be described as a litigant unhappy with the outcome. I went through the grounds with the husband during his submissions. In this sense, and with some degree of difficulty interpreting them, the grounds of appeal appear to be as follows:
1.The orders interfere with parenting orders made in January 2012 and he and his pregnant partner will be homeless on 9 November 2012.
2.Her Honour did not exercise her judicial discretion properly. To support that he says:
(a)The wife had an order to sell up other property in April 2012 but when that was not successful, she chose to pursue this remedy and her Honour should not have allowed that, or for that matter, should have contemplated other remedies open to the wife;
(b)The wife should have joined other parties, such as the Australian Taxation Office as well as his own partner, as interested parties, but that her Honour continued to determine the proceedings without that having occurred. In addition, because of the sale, the parties’ children would be affected and consequently, an independent children's lawyer should have been joined to that process;
(c)The enforcement warrant, a consequence of her Honour’s orders, has had the effect of impacting upon the solvency of the husband’s business and caused concern to creditors, even to the extent that they are now moving against him; and
(d)That her Honour should not have issued an enforcement warrant because the requisite rules of court had not been complied with.
The third category of grounds is that:
Her Honour made findings of fact unsupported by the evidence.
To support that assertion, the husband pleaded as follows:
1.An issue in the dispute was whether the ANZ Bank had to consent to the payment to the wife and her Honour erred about that requirement.
2.Her Honour misinterpreted the management accounts, concluding that the husband received benefits and consequently had the capacity to pay the wife.
3.Her Honour misconstrued the purpose of some of the husband’s emails.
4.Her Honour ignored the issue of the wife being aware of a buyout of the minority shareholder, which would have been essential to enable the refinancing that he was proposing and pursuing.
The fourth category of grounds appears to be that her Honour failed to accord him procedural fairness. In that respect he pleaded:
1.First, her Honour should have recused herself because of her position as an AFL Commissioner; the AFL being a client of his firm;
2.Secondly, the timeframe her Honour required to produce documents for the hearing was unfair and unreasonable;
3.Thirdly, the hearing was lengthy and he was ridiculed and derided by the wife’s counsel and her Honour did not stop that process; and
4.Fourthly, her Honour did not allow him to make proper submissions.
The fifth category of grounds appears to me to be that her Honour did not understand his affairs and business structure and consequently his evidence.
The sixth category is that her Honour did not raise presumptions against the wife about her having destroyed documents which the husband asserted the wife had done for tactical purposes.
The seventh category seems to me to be that the husband says that her Honour personalised the matter and had lost what he described as “judicial immunity”. I will not deal with other issues, because they are not relevant to the stay application.
The husband’s affidavit said that:
The husband and his partner had nowhere to live.
That was particularly a problem where his partner is pregnant and he has contact with his children over the forthcoming school holidays. He said the orders had “unintended consequences” namely that one of his financiers had lost confidence in him, triggering default notices. Ironically, his same concern seems to have not been as high in relation to his own default about the wife’s entitlements. He said the orders had the effect of preventing a refinancing of the property “which would have occurred in the ordinary course of business”. This becomes relevant when I consider the duration of the husband’s default.
He went on to say that the orders affected the business to such an extent that the auditors had expressed concern about his legal position, which required solvency. That concern can clearly be seen in the auditor’s letter about the company’s obligations as holders of financial services licenses. Further, the husband said that because he and the wife had borrowed from the company which was ultimately affected by the orders, its intercompany loans (and presumably his and those of the wife) would be called in. Finally, he went on to refer to the lack of any disadvantage to the wife in the Court granting a stay and that the wife could advertise the property for sale, if she wished, but it would not sell quickly anyway.
Ultimately, the husband’s main argument in his submission was that on the material above, a refusal of the stay would render his appeal nugatory.
Apart from the fact that I was not the trial judge, before looking at the legal issues, it is instructive to see just what Dessau J did. Her Honour said, and insofar as it is relevant to the application this was the second round of enforcement proceedings brought by the wife against the husband to enforce property and spousal maintenance orders; a child support agreement, which related to periodic child support as well as private school and extra-curricular fees for the three daughters of the parties, as well as enforcement orders that were made by consent on 3 April 2012.
Her Honour noted that the final orders were arrived at after three years of bitter litigation, much of it centering on the husband’s non-compliance with orders, even orders to which he had consented. Her Honour noted that the wife sought a total of $1.7 million in unpaid amounts. In the proceedings, her Honour noted that the wife was seeking an enforcement warrant to take possession of various chattels to meet the cost of sale – various chattels had to be sold and then to discharge the secured debt over the particular property, and the balance was to be paid to the wife.
The wife’s case, according to her Honour, was that she had tired of the outstanding and unpaid debt and she wanted compliance with the order. According to her Honour, the wife was in desperate financial circumstances. Her Honour noted that the wife rejected the husband’s claim that he had not been able to make the payments, and pointed to a number of instances in which he had shown a capacity to pay, but had neglected to do so.
Her Honour then turned to the husband’s case and described it as, one in which he was saying that he was genuinely unable to meet the payments under the orders.
She noted his argument about being able to obtain a particular loan from the ANZ Bank. What he was ultimately able to obtain was much less than that which he had sought. She noted that the husband had said that the orders of the Corporate Group insisted that trade creditors needed to be paid and that was how the borrowed funds were predominantly used. Her Honour then said that the husband’s argument was that at all times he wanted to ensure that the wife received the moneys due to her and had tried to cooperate in every way.
She noted that he argued that if the house was sold, he and his new partner, to whom she referred as being pregnant, would be homeless. That is still the husband’s position as I perceive it in the stay application.
Her Honour noted that in the husband’s view, he had no equity in the particular property sought to be sold and that if the order was made for its sale, it would trigger a default so that the secured creditors would foreclose on their debts claimed against the husband. The husband’s argument therefore, according to her Honour, was that if that occurred, the wife would get nothing.
Her Honour then made the observation that she was left with the impression that the husband had failed to produce materials and chosen to file a large pile of unfiltered material which her Honour described as a form of obfuscation. She noted that throughout the proceedings, including up to final submissions, he was still volunteering to produce material. This becomes relevant from my perspective in relation to some of the grounds of appeal. Her Honour says at paragraph 21 and I quote:
Despite ample opportunity and his expressed keenness to assist with full disclosure, he failed to produce many relevant documents in a timely manner, or in some instances, at all.
Her Honour dealt clearly with the joinder issue, one of the grounds mentioned in the notice of appeal, pointing out as to who was on notice and who had participated. Her Honour then said at paragraph 36:
[Although the husband said] that he wanted to cooperate with the Court, that he wanted to pay all moneys owing and that he was making every honest effort at open disclosure and resolution, his conduct has consistently been to the contrary.
Her Honour then dealt with the background with which it would appear the husband did not, or at least now, does not, cavil save that in his affidavit, he described some of the complaints against him by her Honour, as minor. That was a reference to such things as the sale of a crockery set. Her Honour recorded a variety of orders, some of which were made with the husband’s consent but that he had not honoured. Of the husband’s financial position, her Honour set out her findings about his affluent lifestyle. Her Honour found that the husband had the capacity to fulfil his spousal maintenance obligations.
Her Honour commented about the husband’s failure to comply, which, in my assessment, shows, if it is correct, breathtaking audacity. There were earlier enforcement proceedings which had culminated in orders with which her Honour found that the husband had again failed to comply. This seems to be the area of time, where the husband said that the wife had a remedy, but it had not been pursued. Her Honour obviously had a different view.
In relation to the husband, her Honour described his evidence as “unimpressive” and she found that the husband was manipulative, evasive and untruthful.
At paragraph 86 of her Honour’s judgment, she said:
[The husband’s] prevarication and evasiveness was most apparent when, on numerous occasions, he was asked simple, straightforward questions to which he gave complicated answers that did not address the question, did not contain useful or responsive information, or appeared to be an attempt to “snow” the Court with irrelevant material. In the course of the examination, I referred to it as “mumbo jumbo”. He said that he simply was a “fluid” thinker, and did not think in the “simple” way that Dr. Ingleby, the cross-examiner thought. That struck me as a disingenuous answer. So did his claims from time to time that he did not understand some of the legalities of the situation, or that he was overwhelmed by the process.
Her Honour then set out some of the expenses that the husband currently incurs including $870 per week on a Porsche motor vehicle, which was impounded and weekly travelling expenses which he had estimated at one stage of being $100 to $200 per week. Her Honour dealt with the husband’s capital position. Although the husband seems to take issue with it, her Honour clearly found that he was not impecunious. When her Honour turned to the issue of the husband’s capacity to pay, her Honour found that the resources that the husband had were clear and that he had drawn significant money since January 2012, but chosen not to pay the wife. In a very comprehensive judgement, her Honour balanced the answers the husband gave against the material that she was presented.
This appeal will apparently very much be about the consequences of the orders that her Honour made but there can be no doubt that her Honour exhaustively considered all of that evidence. It is a long judgment.
It must be kept in mind that what her Honour was doing was deciding whether or not to exercise the discretion to enforce the Court’s own orders where there seemed, and quite frankly still seems, little by way of a meaningful offer to satisfy the judgment. Her Honour found, at paragraph 200, and I quote:
In that sense, Mr [Nixon] is the master of his own financial destiny. Dr Ingleby for the wife made it clear in final submissions that Mrs [Nixon] would welcome and co-operate with any such sale. However, I am satisfied that no further delay should be built into the execution of the orders for that to occur. It is an option open to Mr [Nixon]. If he effects a prompt sale, he may thereby retain his home, the chattels and the [SW] property.
That seems a clear picture emerging from her Honour’s reasons.
I turn then to the legal issues that underpin this particular application. Ordinarily, a party is entitled to the fruits of a judgment but circumstances may exist which justify a stay until an appeal is heard or other relevant events arise. The stay power is clearly discretionary and has been considered by the court in a number of cases including Kelly & Kelly (1981) FLC 91-007; Molier & Van Wyk (1981) FLC 91-001; Jennings Construction Limited v Burgundy Royal Investments Proprietary Limited (1986) 161 CLR 681; Federal Commissioner of Taxation v Myer Emporium Limited (1986) 60 ALJR 300; PetroTimor Companhia de Petroleos SARL v the Commonwealth of Australia [2003] FCAFC 83, and of course, Bryant & The Commonwealth of Australia [1996] HCA 3.
From those authorities, the following principles may be extracted. A stay should not be ordered as a matter of right or a matter of course and the applicant for an order must establish a ground for it. No criteria is specified in the Family Law Act (1975) (Cth) (“the Act”) relating to the exercise of that discretion and much depends on the circumstances of each case. Those circumstances include: whether refusing a stay will render a successful appeal nugatory or make it impossible or impracticable to restore the position; any hardship that would be suffered by the applicant as a result of granting or refusing the stay; the merits of the appeal; whether there has been a delay in applying for the stay; the bona fides of the applicant at the time that it is expected for the appeal to be heard.
In this case, will the refusal of a stay render the appeal nugatory? Probably it will because the husband will lose the house and there may be a domino effect. But, equally, nothing I have heard or seen suggests he has an alternative other than that the wife should wait or that if she proceeds, she will lose all of her money. The nugatory effect must be seen in the light of a number of things. First, this was a discretionary judgment. The husband has to overcome the authority of House v R [1936] HCA 40. Secondly, the husband’s fallback position was that he did not want an immediate execution but rather wanted as an alternative, to wait about two months.
In addition, he was content for the wife to be in charge of the sale. Thus, it seems to me, he accepts the inevitability of the enforcement. The restoration of his position would therefore seem doubtful in any event. If he is successful on an appeal, the debt would still be owed and the wife would still be at liberty to pursue execution of her judgment.
Thirdly, is there a hardship to the parties? My impression from her Honour’s judgment is that the wife has been extraordinarily patient whilst the husband has been self-indulgent.
It is always difficult to contemplate the merits of an appeal but, here, some insight is gained by looking at the grounds pleaded by the husband.
I earlier set out the seven rough categories as I have tried to contain them. In reverse order, I shall address those seven categories.
In relation to the issue of her Honour’s losing her judicial immunity, the husband pointed to the decision of Fingleton v R [2005] HCA 34. That submission might have some foundation if there was some prosecution or civil proceedings at issue as there was in Fingleton. In this case, there is not. I was, at first, concerned that the husband may not have understood what judicial immunity meant but I note her Honour’s judgment records the husband as having a law degree and considerable intelligence. That ground seems to me to be pure humbug.
The husband pleaded that her Honour did not deal with issues of the presumption relating to the destruction of documents as referred to in McCabe v British American Tobacco [2002] VSC 172. That issue does not appear to have been raised by the husband before her Honour and to raise it now points to an element of desperation having regard to her Honour’s view about the husband’s failure to produce appropriate documents including on a timely basis. The husband’s ground on that issue seems to have no merit.

The husband pleaded that her Honour did not understand his business arrangements. Nothing I have read from the comprehensive reasons nor from the husband’s broad statements in his affidavit, supports that contention. In any event, he did not point to how it might have tainted the reasons for judgment. It is hard to see a Full Court being interested at all in that ground.
The next ground was that her Honour failed to accord the husband procedural fairness. He conceded that he had not sought her Honour recuse herself during the enforcement hearing. It is difficult to see the Full Court allowing him that opportunity to raise that now particularly as he was always apparently aware of the ground which forms the basis of what he now argues. Clearly, if the Sports League was a client of his company, he must have known that when he appeared before her Honour.
He claims the timeframes were unreasonable but her Honour’s judgment would suggest otherwise. There did not seem to be any suggestion of an adjournment application.
The husband’s complaints about how he was treated do not seem linked in any way to the ultimate order for the sale. I cannot see a Full Court discerning any merit in an argument that the judgement was infected by bias at least, at this stage, from the husband’s affidavit.
The husband pleads the findings are not supported by the evidence but there is no dispute that the debt here is still due.
As I earlier mentioned, the husband did not set out the solution to the problem other than for the wife to wait. Even if her Honour was wrong about a variety of findings, they do not seem to me to have infected what is essentially the exercise of her Honour’s discretion. Again, that gives rise to the problem that the Full Court will no doubt have to deal with which is the decision of House v R (supra).
The second category concerns the exercise of discretion generally. It is hard to see what alternative her Honour had. Whilst other judges might not have exercised the discretion in favour of the wife, her Honour did and the husband, again, has the problem of overcoming the decision of the High Court in House v R (supra).
The final but, in fact, the first ground, is simply an indication of an unhappy litigant who had the control of the problem in his own hands. He cannot complain now after the series of hearings. I cannot see a Full Court construing that as a ground of appeal let alone having any merit. I acknowledge that I am not the Full Court and I am not dealing with the husband’s appeal. I am cautiously approaching the matter because I am not sitting in judgment on her Honour. I cannot, however, see – because I am required to – whether there is a ground here that has any merit.
There is also the unknown and unargued issue of whether the husband needs leave to pursue this appeal in any event. I do not stop here to consider that issue because, in my view, the application has no merit at this point in time. That being so, it seems to me that the husband is an adventurous spirit who is simply obfuscating as her Honour thought.
There is finally the issue of when this appeal might be heard. No evidence was presented to me about that and having regard to the time that the wife has waited and the husband’s fallback or alternative position about staying the execution until January, I could not conceive the Full Court determining the matter prior to that time in any event.
I have no idea whether a stay would create more of a wait for the wife to achieve what is acknowledged by the husband to be the fruits of her judgment.
Having considered all of those matters, it seems to me the husband cannot satisfy any of the tests that would justify a stay. I acknowledge that granting a stay is a discretionary judgment as well. But on the basis of all of the evidence before me and particularly having had the benefit of reading her Honour’s judgment, the application must fail and accordingly the application is dismissed.

RECORDED : NOT TRANSCRIBED

This is an application for costs arising out of the reasons for judgment and the orders that I have just made. Section 117 of the Act provides the basis upon which any order for costs can be made. Section 117 provides that in litigation in this court, each party should bear their own costs unless there are circumstances justifying a departure from that principle. If the court is contemplating a departure from that principal then it has to take into account that set out in s 117(2A) of the Act. Those particular provisions are not necessary unless I look to justifiable circumstances.
First, what Mr Nixon has just put to me is that perhaps his application was misconceived on the basis that it did not “go to form” and whilst there may be some merit in that argument, the problem is that he effectively did roll the dice. It is hard to see, as I pointed out, what a Full Court can do to assist him in those circumstances. I think there are justifiable circumstances for making an order for costs because had he, in fact, sought some advice prior to filing the application from a lawyer, he might have been given certain advice about what he was doing.
Having determined that there are justifiable circumstances here, it is important that I look at the other factors set out in s 117(2A). The first of those is the financial circumstances of each of the parties. Mr Nixon has made it clear that he is effectively insolvent now and he intends to inform his bankers this afternoon. However, that flies in the face of what her Honour found and it is that that I must turn to in the sense that her Honour had little doubt about Mr Nixon’ capacity to at least pay some of what he was owing to his wife. It would be hard for me in the face of that judgment to simply accept the statement from the bar table that he is insolvent.
It was part of the case last Monday that the wife was, effectively, taking her chances and I see no reason why I should worry about the wife in those circumstances. It seems to me that I have to follow what Dessau J was determining which was that the husband does have the financial circumstances to pay. There are clearly no legal aid considerations here.
One of the other factors in s 117(2A) relates to the question of the parties’ compliance with orders. This is a classic example of someone who has not complied with orders and not come up with a solution as to how the problem could be resolved. To appeal and seek a stay in those circumstances seems to me to simply exacerbate the situation.
There are no other circumstances that I can think of here and I do not take into account the email tendered to me that was written yesterday. It seems to me that all that does is extend the points set out in the notice of appeal which seems to me to be a stream of consciousness rather than genuinely trying to work out a solution to the problem.
In those circumstances, it is appropriate that I make an order for costs. I am minded to make an order for indemnity costs here simply because of the fact that the trial judge determined that it was appropriate.
I am not entirely sure what the reasons were for her Honour so doing but her Honour, in her reasons for judgment, does refer to the judgment of Sheppard J in the Colgate-Palmolive Company and Anor v Cussons Pty Ltd (1993) 46 FCR 225 which is effectively what most courts in this country are now following. One of the fundamental points made by Sheppard J was that if the chance was taken in circumstances where the proceedings should never have been commenced, the loser can hardly complain if costs are ordered particularly in circumstances where if the full costs of the other party are not met by such an order, the other party who was dragged along to the proceedings, is effectively out of pocket.
I think it is a case where indemnity costs should be ordered and I propose to make an order that the husband pay the wife’s costs on an indemnity basis arising out of this application.

RECORDED : NOT TRANSCRIBED

I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 7 November 2012.

Associate:

Date: 21 November 2012