Pericles & Hopman (No. 2)
[2021] FamCA 446
•22 June 2021
FAMILY COURT OF AUSTRALIA
Pericles & Hopman (No. 2) [2021] FamCA 446
File number(s): MLC 9624 2016 Judgment of: BENNETT J Date of judgment: 22 June 2021 Catchwords: FAMILY LAW – JUDGMENTS – stay pending appeal. Cases cited: Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106
Pericles & Hopman [2021] FamCA 235
Number of paragraphs: 26 Date of hearing: 22 June 2021 Place: Melbourne Solicitor for the Applicant: Lander & Rogers Counsel for the Applicant: Mr Sweeney Solicitor for the Respondent: Unified Lawyers Counsel for the Respondent: Mr Othen ORDERS
MLC 9624 2016 BETWEEN: MS PERICLES
Applicant
AND: MR HOPMAN
Respondent
ORDER MADE BY:
BENNETT J
DATE OF ORDER:
11 JUNE 2021
THE COURT ORDERS THAT:
1.The Application in a Case filed by the husband, Mr Hopman, on 10 June 2021 be dismissed.
2.The payment made to satisfy order 1 of the orders made 23 April 2021 be paid to the Trust account of Lander and Rogers Solicitors subject to the following conditions;
3.The amount received by the Respondent be reduced to the total sum of $2,253,805 (it being noted that this is not necessarily the figure reflected in paragraphs 9,10,11,35, and 36 of the wife’s submissions);
4.The balance outstanding be invested for and on behalf of the Respondent in an interest bearing account pending the outcome of the Appeal lodged by the Applicant on 21 May 2021 and only be released to the Respondent to be applied to;
5.Meet legal costs incurred by her; and To complete the purchase of any real property purchased hereafter and registered in her sole name and provided that the equity in that real property is not less than 70% of the purchase price.
6.If the wife does acquire property as an anticipated by paragraph 2(ii)(b) then she is restrained by injunction pending the outcome of the appeal from selling, transferring assigning or otherwise dealing with her interest in such property so as to lessen her equity in the property after she acquires it unless the Court otherwise orders or the husband consents in writing.
7.The costs be reserved for determination at the same time as the wife’s application for costs of the proceedings at first instance.
IT IS DIRECTED:
8.That the minute of proposed orders of the husband be marked Exhibit “H1” and remain on the Court file.
9.That the minute of proposed orders of the wife be marked Exhibit “W1” and remain on the Court file.
10.That my reasons for decision this day be transcribed and when settled placed on the Court file and a copy provided to the parties.
11.I am making orders in the terms of the minute proposed by the wife as amended. However, in paragraph – the reference to 50 per cent will be a reference to 70 per cent.
12.Costs be reserved for determination at the same time as the wife’s application for costs of the proceeding at first instance.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Pericles & Hopman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
BENNETT J
This matter comes before me as the application filed by the applicant husband (who is the respondent in the substantive proceedings) for a stay of final property orders made by me on 23 April 2021 pending the hearing and determination of his Notice of Appeal. The background to the parties' litigation are set out by me in my reasons for judgment dated 23 April 2021 in Pericles & Hopman [2021] FamCA 235.
The husband appeals against each and every order made by me on 23 April 2021. His grounds for so doing are set out in his notice of appeal, which appears at pages 13 and 14 of annexure H1 to the affidavit of the husband filed 9 June 2021. It is agreed that, as currently advised, the appeal is likely to be included in the Melbourne sitting in November 2021, however, there is no guarantee of that listing. There is also the possibility that the Full Court may not deliver its reasons immediately following the appeal and there could be a period during which the decision is reserved.
By the husband's application in a case filed on 9 June 2021, he seeks that, pending an appeal, certain monies, which appear to have approximated one third of the wife's eventual entitlement, under my order, be paid to the solicitors to the wife from the proceeds of sale of a property, but be held by them and not disbursed to the wife pending the outcome of the appeal. However, today, the husband sought orders of variance with that in the form of a minute which is Exhibit "F1".
The wife, by her response filed on 18 June 2021, seeks that the husband's application in the case be dismissed and that he pay her costs of the application. However, today, the wife prepared and submitted an alternative order sought, and that is Exhibit "W1". "W1" was then amended.
I have read the husband's affidavit filed 9 April 2021 and the wife's affidavit in response filed 18 June 2021. I have the husband's case summary filed 18 June 2021 and the wife's case summary filed 21 June 2021.
Both parties accept that the relevant principles for a stay are those set out by the Full Court in Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106:
a. 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;
b. a person who has obtained a judgment is entitled to the benefit of that judgment;
c. a person who has obtained a judgment is entitled to presume the judgment is correct;
d. the mere filing of an appeal is insufficient to grant a stay;
e. the bona fides of the applicant;
f. 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;
g. 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;
h. some preliminary assessment of the strength of the proposed appeal - whether the appellant has an arguable case;
The wife makes certain concessions on the substantive appeal as to double counting arithmetical errors and the like. These appear in her written submissions at paragraphs 9, 10 and 11, 35 and 36. There appears to be some conflict in the figures, but the least amount that the wife says represents her overall entitlement is the figure appearing in paragraph 36 of her written submissions, which puts her entitlement to a cash payment of $2,253,805. It is common ground that the wife has received the sum of $718,003.97, funds of which she has immediate use. The husband estimates that the amount of $763,416.37 will be available from the proceeds of sale of a property of Suburb N, Sydney, which would leave a balance of $772,384.66 payable to the wife under the Order from which he appeals.
The husband's application for a stay is largely predicated on the prejudice that the husband would suffer in the event that he was required to sell further real property, in particular, a property in Suburb P in Sydney, to make the payment of $772,384.66 to the wife. However, it is common ground that the husband has more than enough cash at bank to meet his liability to the wife. It is not necessary for him to sell any further real properties.
Mr Othen for the husband confirms that the husband's evidence in relation to the stay application and his assertion that with the effluxion of time and the delay in my delivery of judgment, the husband suffered a downturn in his financial situation is contained in the husband's affidavit sworn or affirmed on 9 June 2021. Going through that affidavit and starting in paragraph 13, the husband makes the point that a property at Suburb P has been appraised as at 1 June 2021 at $3 million to $3.3 million, which is in excess of the value attributed to the property at the final hearing. It appears in the table of divisible non-superannuation, and superannuation assets, at $2.8 million. That is an increase in value of between $20,000 and $50,000 in the value of the property.
At paragraph 14 of this affidavit, the husband refers to the Suburb N property, which, for the purpose of the trial was valued at $2,150,000. He deposes that that now been sold for $2,218,000. Sure enough, the husband has incurred selling expenses on the property. But the property has not decreased in value by virtue of any delay. It appreciated in the sum of $68,000.
Next, the husband refers to a property at H Town. That was valued for the purpose of the hearing at $725,000, but he deposes has now been sold for $823,000, which is a capital gain of some $98,900.
Next, the husband deals with his shareholding in U Limited shares. For the purpose of the hearing, the share price was agreed at 1.46 per share. The husband deposes to having sold six parcels of shares between 19 February 2019 and 25 February 2020. Most of those sales were for a share price in excess of the agreed value of $1.46 per share. In particular the 354,226 shares sold on 19 February 2019 appear to have been at a price of $1.60 per share. The 39,650 shares sold on 1 March 2019 appear to have been at a sale price of $1.65 per share. The 50,350 shares sold on 4 March 2019 appear to have been sold for $1.66 per share. The 145,000 shares sold on 7 March 2019 appear to have realised $1.65 per share. The husband sold 22,399 shares on 21 February 2020 at what appears to be $1.33 per share, which is less than the amount of the agreed value for trial. On 25 February 2020 he sold a further 242,601 shares at what appears to be a price of $1.23 per share, which is less than the share value agreed for the purpose of the trial. However, the amount received by the husband for the sale of shares being, on my calculation, $1,300,532.18 for the 854,266 shares sold equates to an average sale price of $1.52 per share, which is in excess of the amount upon which the parties agreed the shares would be valued for the purpose of the trial.
It is to be noted that in terms of dealing with assets, the husband has not been subject to any restrictions on his use of any assets in his name. With the exception of a very modest car owned by the wife, all assets are in his name and have been at his disposal.
The next real property asset which the husband describes in the context of a deterioration in his wealth is the E development. The husband deposes to having received $1,229,455.01 in proceeds of sale and repayment of a loan owed to him by Mr XX. Because the loan from Mr XX was otherwise included as an asset in the divisible assets at trial, I will deduct the sum of $180,000 - although the amount referred to as an agreed amount for the purpose of trial was $150,000. That means that the husband received $1,049,455.01 together with his remaining interest. His interest in the E property appears to be worth $1,599,264 exclusive of any developers profit and risk allowance. For the purpose of the hearing the interest was valued at $1,779,264 which represents a reduction in value at trial of $180,050, but without any allowance being made for the developers profit and risk allowance which is the subject of one ground of appeal.
The husband's interest under a contract to purchase property at R Street, Suburb S was valued for the purpose of the hearing at $75,129 being the husband's interest in a deposit which had been paid for the incomplete contract to purchase. He deposes that he has received $75,000 on account of a refund of that deposit, which means that he received some $129 less than was the estimated value at trial.
The husband has changed his motor vehicles. At trial the car being driven by the husband was included as a value of $90,000 and it was sold on 25 March 2020 for $65,000.
In short, the evidence on which the husband relies in relation to the downturn in his financial situation since the conclusion of evidence does not appear to be supported by the evidence upon which he relies. It appears that the evidence of the wife that, "Mr Hopman's current financial position is not starkly different to the position at trial" has merit. It was agreed that this mention would be concluded by 10 am, and with that in mind we proceeded quite quickly through submissions. The only forceful argument was that there should be some security for the husband to recoup any monies paid under my Order which are disallowed on appeal.
The husband bears an onus to establish a proper basis for the stay.
I accept that the wife is entitled to obtain the benefit of the judgment which is being made in her favour, and that she is entitled to presume that the judgment is correct for the purpose of this stay application.
I have considered the issue of the bona fides of the husband in applying for the stay. I take into account that many matters of which the husband complains are arithmetical errors which would have fallen comfortably within my allowance for corrections, discussed at paragraph 272 of my reasons for decision. There I said, "I have circulated this draft judgment to the parties and request that counsel draw my attention to typographical corrections, mathematical errors and other obvious mistakes. If I have misunderstood their submission or omitted to consider an issue that was raised, a party can raise that omission with the other side and then with me, although this is not an opportunity to reopen their case or raise any new issues for consideration."
The husband now raises mathematical errors and double-counting on appeal, not having taken any opportunity to raise them prior to me pronouncing final orders.
Ultimately, the only matter in contention was how much equity the wife would have to retain in any real property which was purchased using the proceeds of the judgment. It was submitted on behalf of the wife that it was adequate if any real property purchased by her was in her sole name and she held an equity in it of not less than 50 per cent of the purchase price. On the other hand, the husband said that should be 70 per cent of the purchase price.
In making a preliminary assessment of the strength of the appeal and whether the husband has an arguable case, I take into account the concessions already made by the wife in relation to double-counting and other errors, and assume that, with some fine tuning, those concessions will carry forward to an appeal.
Doing the best that I can, and with the conservatism that must come with me as the trial Judge, assessing the prospects of an appeal against my own determination, I am satisfied that requiring the wife to take up an equity in real property that is not less than 70 per cent of the purchase price represents a high degree of security for the husband in the event that his appeal is successful. I would not be so satisfied, if the equity only had to equate to 50 per cent of the purchase price, as proposed by the wife. Accordingly, I will make orders in the form of the minute of order proposed by the respondent wife, save that the amount of the equity referred to in paragraph 2(ii)(b) will be "not less than 70 per cent of the purchase price".
The wife seeks costs of and incidental to this application for a stay, however, she concedes that that can be set over for determination at the same as her application for costs of the proceedings at first instance. I note that there has been agreement between the parties that that application will be dealt with after the Full Court has determined the Notice of Appeal.
I am satisfied that the terms on which the monies are to be paid to the wife represents an appropriate balance of convenience in the competing rights of the husband the wife on the issue of a stay pending appeal.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bennett. Associate:
Dated: 22 June 2021
0
2
0