O’Cleary & Vukasin (No 3)

Case [2024] FedCFamC1F 814

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

O’Cleary & Vukasin (No 3) [2024] FedCFamC1F 814

File number: SYC 4005 of 2020
Judgment of: CAMPTON J
Date of judgment: 28 November 2024
Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application for stay pending appeal – Where the wife appeals from final property adjustment orders – Where the husband gives an undertaking to retain a specific real property and permitting the wife to continue to occupy it pending appeal, militating the appeal being rendered nugatory – Where there prospects of success of the appeal are not strong – Where the husband’s undertakings shift the balance of convenience to not favouring the granting of a stay – Application for a stay dismissed on condition as to the husband filing an undertaking in writing certified by his solicitor.  
Legislation:

Family Law Act 1975 (Cth) s 79

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ch 6
Cases cited:

Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685

Commissioner of Taxation v Myer Emporium Ltd (1986) 160 CLR 220; [1986] HCA 13

Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681; [1986] HCA 84

State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) and Others [1999] 160 ALR 588; [1999] HCA 3
Division: Division 1 First Instance
Number of paragraphs: 36
Date of hearing: 22 November 2024
Place: Sydney
Counsel for the Applicant: Mr Smith
Solicitor for the Applicant: Jc Legal Practice
Counsel for the First Respondent: Mr Levet
Solicitor for the First Respondent: Jeffrey Choy Legal
Solicitor for the Second Respondent: Ms Dunkley, Newnhams Solicitors

ORDERS

SYC 4005 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS O'CLEARY

Applicant
AND:

MR VUKASIN

First Respondent

MR PASSERINI

Second Respondent

ORDER MADE BY:

CAMPTON J

DATE OF ORDER:

28 NOVEMBER 2024

THE COURT ORDERS THAT:

1.Leave is granted to Mr AR to withdraw.

2.The wife has leave to rely on her affidavit filed at 6.59pm on 21 November 2024.

3.By consent, orders 9, 10 and 11 made 30 September 2024 are stayed pending determination of appeal NAA280/2024 filed 25 October 2024.

4.Provided the husband files on or before 4pm today an undertaking to the Court in writing certified by his solicitor to:

(a)Not sell or encumber to property at  G Street, Suburb H other than to make a payment to the wife as provided for in Order 8 made 30 September 2024, pending the outcome of the wife’s appeal; and

(b)To permit the wife to continue to reside at the property at G Street, Suburb H pending determination of the appeal.

(c)The balance of relief, save as to costs, as sought by the wife in her Application in a Proceeding filed 19 November 2024 is dismissed.

5.The listing of the Application…

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AGLC
O’Cleary & Vukasin (No 3) [2024] FedCFamC1F 814
Case
[2024] FedCFamC1F 814
Decision Date

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, the wife, Ms O'Cleary, sought a stay of the final property adjustment orders made against her in favour of her husband, Mr Vukasin. The dispute arose from a property adjustment application commenced by Ms O'Cleary against Mr Vukasin on 22 June 2020. Mr Passerini intervened in the proceedings on 30 December 2023, asserting a 30 per cent interest in the trading enterprise Vukasin Pty Ltd on trust for his benefit. The court made consequential orders on 30 September 2024, determining that Mr Vukasin held 30 per cent of his interest in Vukasin Pty Ltd on trust for Mr Passerini and adjusted the property between Mr Vukasin and Ms O'Cleary, awarding 83.5 per cent to Mr Vukasin and 16.5 per cent to Ms O'Cleary. Ms O'Cleary appealed against these orders, and Mr Vukasin consented to a stay of certain orders pending the appeal. The court was required to decide whether to grant a stay of the final property adjustment orders, considering the prospects of success of the appeal and the balance of convenience.

The court found that the wife's prospects of success on appeal were not strong, as she had failed to comply with her obligations under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). The court also noted that the wife's conduct in not executing the authority to discharge the mortgage carried potential undertones of an attempt to achieve a forensic advantage for the purposes of the stay application. Given the lengthy period the parties had been engaged in litigation, now exceeding four years, the court considered the balance of convenience. The court found that Mr Vukasin's undertaking to permit Ms O'Cleary to continue to occupy the G Street property pending the appeal shifted the balance of convenience in favour of not granting a stay. Consequently, the court dismissed the application for a stay, subject to Mr Vukasin filing an undertaking in writing certified by his solicitor not to sell or encumber the property at G Street, Suburb H and to permit Ms O'Cleary to continue to reside at the property pending the outcome of the appeal.

The court's final orders included granting leave to Mr Passerini to withdraw from the proceedings, permitting Ms O'Cleary to rely on her affidavit filed on 21 November 2024, staying orders 9, 10, and 11 made on 30 September 2024 pending the determination of the appeal, dismissing the balance of relief sought by Ms O'Cleary in her application for a stay, and confirming the listing of the husband's and Mr Passerini's applications for costs. The wife was also required to pay the husband's and Mr Passerini's costs of and incidental to the stay application. The court's reasons for judgment may be subject to review to remedy minor typographical or grammatical errors or to record a variation to the order.

Orders

Orders of the court

SYC 4005 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS O'CLEARY

Applicant

AND:

MR VUKASIN

First Respondent

MR PASSERINI

Second Respondent

ORDER MADE BY:

CAMPTON J

DATE OF ORDER:

28 NOVEMBER 2024

THE COURT ORDERS THAT:

1. Leave is granted to Mr AR to withdraw.

2. The wife has leave to rely on her affidavit filed at 6.59pm on 21 November 2024.

3. By consent, orders 9, 10 and 11 made 30 September 2024 are stayed pending determination of appeal NAA280/2024 filed 25 October 2024.

4. Provided the husband files on or before 4pm today an undertaking to the Court in writing certified by his solicitor to:

(a) Not sell or encumber to property at G Street, Suburb H other than to make a payment to the wife as provided for in Order 8 made 30 September 2024, pending the outcome of the wife’s appeal; and

(b) To permit the wife to continue to reside at the property at G Street, Suburb H pending determination of the appeal.

(c) The balance of relief, save as to costs, as sought by the wife in her Application in a Proceeding filed 19 November 2024 is dismissed.

5. The listing of the Application in a Proceeding of the husband as to costs filed 9 October 2024 and the Application in a Proceeding of MR Passerini the Intervener as to costs filed 17 October 2024 by way of Webex at 9.30am on 6 December 2024 is confirmed.

6. The time for the wife to file any Response to the Applications in a Proceeding as to costs and affidavit material in support thereof pursuant to Order 2 made 23 October 2024 be extended until 25 November 2024.

7. On or before 24 December 2024, the wife pay:

(a) The husband’s costs of and incidental to the Application for a Stay determined today fixed in the sum of $8000;

(b) The intervener’s costs of and incidental to the Application for a Stay determined today and fixed in the sum of $1800.

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

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

The husband, by way of a Response to an Application in a Proceeding filed on 21 November 2024, consented to Orders 9, 10, and 11 as made on 30 September 2024, being the subject of a stay, pending determination of the wife's appeal.BACKGROUND The wife commenced proceedings for the adjustment of property between she and the husband on 22 June 2020. The husband filed a Response to an Initiating Application on 20 August 2020 seeking different orders adjusting that property. Mr Passerini intervened in the proceeding on 30 December 2023, his participation as a party being necessary in circumstances where it was contended the husband held a 30 per cent interest in the trading enterprise Vukasin Pty Ltd on trust for the benefit of Mr Passerini. On 30 September 2024, for reasons then delivered, orders and declarations were made providing that the husband held 30 per cent of his interest in Vukasin Pty Ltd on trust for the benefit of Mr Passerini, and consequential orders were made to implement that determination. The property of the husband and the wife, as found, was adjusted 83.5 per cent to the husband and 16.5 per cent to the wife. The orders provided, consistent with the terms in which the parties conducted the dispute pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”), for a series of events to occur. For the purposes of these reasons, the relevant orders applicable to the stay are as follows:4.On or before 28 October 2024 the husband shall do all things to cause the mortgage secured over the property at [G Street, Suburb H], being Lot […] of Deposited Plan […] (“the [G Street] property”) to be discharged and indemnify the wife in relation to same, and the wife shall sign all such documents as are necessary to facilitate the husband’s compliance with this order.5.On or before 25 November 2024 the wife shall pay to the husband sum of to $3,679,350.6.Pending compliance with Orders 5, 8, 9, 10 and 11, whichever is the earlier, the wife:(a)Is restrained from doing any act or thing to transfer, encumber, mortgage, or adversely affect her interest in the [G Street] property save as to facilitate compliance with Order 5; and (b)Is to do all things as are necessary to keep and maintain the [G Street] property in good order and condition.7.In the event the wife fails or neglects to comply with Order 5, the husband may elect by notice in writing to the wife to be served within seven days of such default to require the wife to transfer to him all her interest in the [G Street] property.8.In the event the husband makes the election in writing pursuant to Order 7 then:(a)On or before 23 December 2024, the husband shall pay to the wife the sum of $2,420,650; and (b)Simultaneously upon receipt of such sum, the wife shall execute all documents prepared by the husband at his expense for the wife to transfer to the husband all her interest in the [G Street] property and the wife shall provide the husband with vacant possession of the [G Street] property.9.In the event the wife fails to comply with Order 5 and the husband does not exercise the election pursuant to Order 7, the husband and wife shall do all such things as are necessary to list for sale the [G Street] property on terms they agree in writing or failing to so agree in writing for more than 14 days, on the following terms:(a)To list for auction with an agent agreed upon by them in writing within 14 days and failing agreement the agent be appointed by the President of the Real Estate Institute of New South Wales or his or her nominee;(b)Give such instructions to a solicitor to act on the sale of the property agreed upon in writing within 14 days, and failing agreement as to the identify of the solicitor, the solicitor be appointed by the President of the Law Society of New South Wales or his or her nominee;(c)Market the [G Street] property for sale by public auction to be held on-site within six weeks of the date this order comes into operation at a reserve price to be agreed by them in writing seven days prior to auction and failing such agreement at a reserve price determined by single real property valuation expert who opined as to the value of the [G Street] property for trial;(d)Attend the auction and in the event that the reserve price set for the auction is not reached negotiate with the highest and second highest bidder and accept any offer to purchase that is the highest made within five per cent of the reserve price set for that auction unless the parties otherwise agree in writing; and (e)Execute the contract for sale and in the event they fail to agree on the terms of the contract for sale, the terms recommended by the solicitor acting on the sale shall be adopted.10.Upon the completion of the sale of the [G Street] property, the husband and wife shall do all things to apply the proceeds of the sale in the following manner and priority:(a) In payment of any outstanding land tax, council rates, and water rates;(b)In payment of fees for the nomination of an agent or solicitor pursuant to these orders, if any;(c) In payment of the valuers fees, if any;(d)In payment of the real estate agent’s commission, selling expenses, and auction expenses incurred on the sale;(e) In payment of conveyancing legal costs associated with the sale;(f)In the amount of 60 per cent of the remaining balance to the husband; and then (g) In payment of the balance to the wife.11.In the event of the husband exercising the election pursuant to Order 7 and the husband failing to comply with Order 8(a), the [G Street] property shall be listed for sale and sold on the terms provided for in Order 9 and the proceeds of sale applied as provided for in Order 10.12.As between the husband and the wife, each shall be responsible for and shall pay one half of the joint and several costs orders payable by them up until 6 September 2022 as made in the New South Wales District Court and New South Wales Court of Appeal and shall indemnify the other in respect of the remaining half balance payable pursuant to those costs orders.13.Otherwise than as provided for in these orders, each of the husband and the wife be and is hereby declared to be the sole and absolute owner to the exclusion of the other of all items of property currently standing in his or her name or otherwise being in his or her possession custody or control.14.In the event that the husband or the wife fails, neglects or refuses to sign or execute any document required by or to give effect to these orders, then the Registrar of the Federal Circuit and Family Court of Australia (Division 1), Sydney Registry, is authorised, empowered, and directed to sign and execute such document on behalf of the party in default upon being satisfied of such failure or neglect by way of affidavit evidence, and the signature of the Registrar shall thereafter be deemed to be the signature of such party. THE LAW

Evidence

Evidence Before The Court

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Decision

Reasons for decision

During the hearing of the stay application, the husband further advised that he would permit the wife to remain in occupation of the G Street property pending determination of her appeal. That further favours the balance of convenience in favour of the husband and ensures that the wife and the children will continue to occupy the house, pending the exhaustion of her rights on appeal.CONCLUSION By way of summary, I have reservations as to whether the Notice of Appeal discloses sufficient merit to attract appellate intervention. I am mindful: (a)That by way of the primary reasons, findings were made as to the failure of the wife to comply with her obligations pursuant to ch 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). The rules have the effect of being orders of the Court. (b)That the wife's conduct in not executing the authority to discharge the mortgage and the potential undertones that carry with it an attempt to achieve a forensic advantage for the purposes of the stay application.(c)Of the lengthy period these parties have been engaged in the litigation, now being in excess of four years. The wife identifies that she will agree to a condition of any stay that she would pay all mortgage repayments in the event the husband redrew the $933,437 from the existing NAB facility secured against the G Street property, then permitting him to apply those funds to discharge his temporary overdraft as part of the Vukasin Investment Pty Ltd facilities identified earlier in these reasons. She further indicated that she would pay all outgoings, utilities and insurances on the property going forward. Notwithstanding the wife's proposal, in the circumstances there is some capacity for further dispute and mischief arising should that pathway be pursued. In that shadow, cast against circumstances where:(a)The primary orders gave the wife the opportunity to progress the retention, at her election, of the G Street property by way of the sequential processes canvassed at trial. She has failed to do so; and(b)The undertaking is given by the husband as a condition of the balance of the application for stay being dismissed, such that the subject matter of the appeal, identified as the G Street property in specie, will not be rendered nugatory. The property will be retained and not be sold, with the wife and her children having continued capacity to occupy it; and(c)The husband will suffer financial prejudice if the title of the G Street property is not transferred to him,I find that the balance of convenience falls in favour of the husband. The husband consents to Orders 9, 10 and 11 made 30 September 2024 being stayed pending determination of the appeal. Such order will be made. Having regard to each of the undertakings proffered by the husband, the balance of relief as to the stay of the orders made 30 September 2024 as sought, save as to costs, will be dismissed.THE STAY OF THE HEARING OF THE HUSBAND’S COSTS APPLICATION OF THE SUBSTANTIVE PROCEEDINGS

Ratio Decidendi

Legal Principle Established

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