Philkin & Philkin (No 3)
[2021] FedCFamC1F 224
•3 December 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Philkin & Philkin (No 3) [2021] FedCFamC1F 224
File number(s): DGC 2894 of 2018 Judgment of: HARTNETT J Date of judgment: 3 December 2021 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Interim Property Orders – Application for a Stay of Orders made by the court on 16 September 2021 – Where the husband seeks an injunction restraining the parties from dealing with properties as provided for in earlier orders of the court – Where the husband’s application is without merit – Where the husband has filed an Application for Leave to appeal orders made 16 September 2021 – Application of husband dismissed – Where orders sought by wife – Where orders for a sale of property ordered prior to orders of 16 September 2021 – Where terms of sale sought to be varied – Where orders made providing for variation as sought in application of the wife. Legislation: Family Law Act 1975 (Cth)
Family Law Regulations 1984 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106
Philkin & Philkin (No.2) [2020] FamCAFC 264
Trahn & Long (No. 2) [2008] FamCAFC 194
Zhai & Niu [2015] FamCA 639
Division: Division 1 First Instance Number of paragraphs: 58 Date of hearing: 17 November 2021 3 December 2021 Place: Melbourne Advocate for the Applicant: Mr Thompson on 17 November 2021 Professor Karunadasar on 3 December 2021 Solicitor for the Applicant: TAI Lawyers Darwin Counsel for the Respondent: Ms Damon Solicitor for the Respondent: Ryan Carlisle Thomas ORDERS
DGC 2894 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR PHILKIN
ApplicantAND: MS PHILKIN
Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
3 DECEMBER 2021
THE COURT ORDERS THAT:
1.There is leave to the Applicant husband ( the husband) to adduce further evidence in the proceeding being email correspondence from VV Solicitors to the husband’s solicitor, Mr Jeff Thompson, dated 23 November 2021, as contained in the affidavit of the husband filed the 26 November 2021.
2.The Application in a Case filed by the husband on 19 October 2021 is dismissed.
3.Within fourteen (14) days from the date of these Orders, the husband file and serve a financial statement.
4.The husband make full and frank disclosure pursuant to rule 6.09 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), at his expense, and provide the wife with copies of documents relevant to his financial affairs such as are requested by the wife’s solicitors within twenty-one (21) days of any such request.
5.Within fourteen (14) days of the making of these Orders, the parties do all such acts and things and sign all such documents as may be necessary to forthwith sell the property situate at FF Street Suburb F in the State of Victoria (“the FF Street property”) in compliance with Order (2) of the consent orders made by the Court on 13 July 2020.
6.For the purposes of effecting the sale of the FF Street property:
(a)the wife shall be solely responsible for the conduct of the sale of the property up to and including settlement of its sale;
(b)the sale shall be conducted by a real estate agent to be selected by the husband nominating three (3) agents within seven (7) days and the wife to elect an agent out of the three (3) but if the husband fails to make his nomination within seven (7) days, the wife be at liberty to appoint an agent of her choice;
(c)SS Solicitors shall have care of the conveyancing of the sale of the FF Street property;
(d)the mode of sale, asking/reserve price and/or marketing plan shall be as determined by the wife in consultation with the selling agent;
(e)the parties are to do all things and sign all documents required by the selling agent to progress the sale including signing any exclusive sale authority;
(f)the parties are to co-operate with the selling agent in relation to the marketing of the FF Street property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective purchaser;
(g)the wife shall be at liberty to accept any offer that is at least 90 per cent of the asking price or reserve price as the sale price for the FF Street property; and
(h)the parties shall execute the Contract of Sale of the property and all other documents necessary to complete the sale including all transfer documentation forthwith upon such documents being made available to them by the selling agent and/or SS Solicitors and/or their own solicitors.
7.The husband be restrained from further dealing in any way with the sale of the property situate at 2 HH Street Suburb F in the State of Victoria.
8.In the event that the husband refuses or neglects to execute a deed and/or instrument in compliance with the provisions of these Orders, a registrar of the Melbourne Registry is hereby appointed pursuant to section 106A of the Family Law Act 1975 (Cth) (“the Act”) to execute all deeds and/or instruments in the name of the husband and do all acts and things to give validity and operation to the deeds and/or instruments.
9.The husband pay the costs of the wife on a party-party basis fixed in the sum of $8,000
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Philkin & Philkin is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J.
PRELIMINARY
At the commencement of these reasons I provide the background to what has occurred since the parties were advised by my chambers, on 23 November 2021, that judgment was to be delivered the following day, being 24 November 2021 . Shortly thereafter, the solicitor for the Applicant husband (the husband) advised the Court, and the other party, that he intended to file an Application in a Case for leave to adduce further evidence, and that he intended to file a further affidavit, by the end of that day, to include correspondence from the solicitors acting for the Westpac Banking Corporation in its litigation against the husband. The husband did not file his affidavit material until the 26 November 2021. By 30 November 2021, the husband had not filed an Application in a Case. Accordingly, my chambers wrote to the parties and directed that the husband file and serve his Application in a Case by 5 pm Eastern Standard Time that day. In the event he did not do so, then judgment would be delivered at 9 am on 1 December 2021.
The husband filed his Application in a Case on 1 December 2021, at 11 minutes past midnight. The Court indicated thereafter that judgment delivery would again be delayed, but was required to further direct the husband to serve his material upon the other party by 2 pm on 1 December 2021, or judgment would be delivered .
The husband’s Application in a Case for leave to adduce further evidence is, relevantly, evidence as contained in correspondence from VV Solicitors, lawyers acting on behalf of Westpac Banking Corporation in litigation against the husband (proceeding in the County Court of Victoria), to the husband’s lawyer in this proceeding, dated 23 November 2021. Upon the hearing of the application on 3 December 2021, the Respondent wife (the wife) did not oppose the introduction of that evidence, but made submissions as to such evidence, and tendered as evidence documents numbered 1-5 in a tender bundle of the wife. These documents went to correspondence had between the solicitors for the parties, and otherwise supported the wife’s costs application. Essentially, the submissions of Counsel for the wife were that the further evidence as adduced by the husband did not assist the husband’s case.
The correspondence from VV Solicitors (23 November correspondence) noted orders made on 26 October 2021, in the County Court proceeding, that proceeding being as referred to hereafter in these reasons. Such orders were not placed by the husband before the Court in this proceeding. The wife’s solicitors, in correspondence of 25 November 2021, sought production of such orders from the husband. The solicitor for the husband responded by email of the 29 November 2021, that such orders were not in that firm’s possession, although the husband’s solicitor could seek, on behalf of the wife’s solicitors, a copy of the orders from the County Court in the event the wife’s solicitors were unable to obtain such orders. The wife is not a party to that litigation. The husband is. It would appear that the solicitor for the husband in this proceeding is not the solicitor acting for the husband in the County Court and that the husband may be a litigant in person. No information was forthcoming from the husband or the solicitor acting for him on 3 December2021 as to what, precisely, was the situation. The solicitors for the wife have now put the husband on notice that an application will be filed by them for joinder of the Westpac Banking Corporation as Second Respondent to this proceeding. The husband has been placed on notice that the costs of same will be sought by the wife to be paid by the husband. Otherwise, the 23 November correspondence provides information, relevantly, as to the following:
a) total loan amounts, including arrears components, but not including ongoing interests, fees and enforcement expenses as owed by the husband to Westpac Banking Corporation (the Bank) are now in the sum of $1,555,021.64; and
b) the preparedness of the Bank to consider a proposal by the husband to enter into a longer term arrangement, and discontinue the County Court Proceeding, if the husband –
(i)achieves a voluntary sale of the 2 HH Street Property and the net sale proceeds after all usual settlement adjustments are applied to clear all arrears of all the accounts ---(bearing in mind that, while payments are not being made, the arrears will continue to increase while interest and enforcement costs continue to accrue);
(ii)provides evidence satisfactory to Westpac of his ability to service the future repayment obligations under the loan accounts, by completing and returning an updated statement of financial position together with supporting evidence; and
(iii)demonstrates serviceability by maintaining his minimum monthly repayment obligations of all loan accounts for at least 6 months.
BACKGROUND APPLICATIONS
Prior to 3 December 2021, the proceeding was last before me on 7 November 2021. Prior to that hearing, an earlier hearing had been had, on 19 August 2021. The 19 August hearing was occasioned by the husband, who is the Respondent in the substantial proceeding, filing an Application in a Case on 19 July 2021 seeking interim property orders. The wife responded to that Application in a Case seeking differing interim property orders and further and other orders. Following that hearing, and on 16 September 2021, I made orders upon the parties competing applications and delivered reasons for judgment. I do not propose to set out here the matters canvassed in those recently delivered reasons for judgment. I note, however, that those reasons should be read, where relevant, in conjunction with the reasons for judgment delivered herein.
The matter was also more recently before the Court in respect of a further Application in a Case filed by the husband on 11 August 2021. That application was heard by Senior Judicial Registrar Hoult on 8 September 2021. The husband sought a review of the orders made by the Senior Judicial Registrar. The Application for Review proceeded before Justice Johns on 7 October 2021. On 26 October 2021, her Honour made orders and published reasons for judgment in respect of the review application. Her Honour ordered as follows:
1.The Respondent Mother do all such acts and things as may be required to facilitate the child, Z born in 2007 engaging with educational services and return-to-school supports provided by the Navigator Program at H School.
2.The Applicant Father's Application for Review of Orders filed 6 October 2021 be otherwise dismissed.
3.The Applicant Father pay the Respondent Mother's costs on a party-party basis fixed in the sum of $3,750.
The husband has not, to date, complied with Order 3 of the above orders in that he has failed to pay the wife’s costs as so ordered. That is not unusual. There are costs orders outstanding as payable by the husband to the wife in this proceeding, and as set out in paragraphs 81 and 82 of my reasons for judgment of 16 September 2021.
There were also on foot a number of review applications as filed by the husband against decisions of Senior Judicial Registrars and/or Registrars. Approximately four outstanding Applications for Review as filed by the husband were heard by Justice McGuire on 26 November 2021.
There is also a Notice of Appeal filed by the husband on 21 September 2021, being an application for leave to appeal interim property orders as made by me on 16 September 2021. In that appeal, the husband seeks as to one part that there not be a sale of a property as ordered which in this proceeding he seeks to sell as referred to hereafter.
THIS APPLICATION
By Application in a Case filed 19 October 2021, the husband seeks orders that:
1.The execution of the orders of Hartnett J of 16 September 2021 be stayed until further order of the Family Court; and
2.That an injunction be granted restraining the parties from having any dealings with the properties stated below except by agreement between the parties or until after proceedings relating to children’s matters have been finalised and the final hearing in relation to the property and financial matters has been finalised.
(1) FF Street, Suburb F $1000,000.
(2) HH Street, Suburb F $836,000
(3) PP Street Suburb QQ .
By Response to Application in a Case filed 29 October 2021, the wife seeks that the husband’s Application in a Case filed 19 October 2021 be dismissed. The wife seeks a costs order in respect of the hearings on 17 November 2021 and 3 December 2021.
The wife additionally seeks further and other orders. The wife had sought an order pursuant to sections 102QB and 102QE of the Family Law Act 1975 (Cth) (“the Act”) but did not, on the hearing of the matter, press such application. The wife otherwise seeks orders as sought by her in Orders 9 to 17 inclusive of her Response to Application in a Case. Amongst the orders as sought by the wife, the wife sought an enforcement warrant to issue, pursuant to rule 11.56 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) for possession of HH Street, Suburb F in the State of Victoria (“the HH Street property”) with other consequential orders. Given the proximity of the trial (which is presently listed on 16 February 2022, for three days) to the hearing and determination of this Application in a Case, the Court will not make such order at the present time. The Court is mindful however that the property is a property in which the husband is residing, but that he does so despite the orders as made by consent of the parties on 13 July 2020 for the sale of such property, and despite the wife’s ongoing efforts to obtain compliance by the husband with that order for sale in the intervening period. The husband is on notice that the issue of an enforcement warrant is a matter which will be determined upon the hearing of the trial. The husband has, and has had, significant time to address his accommodation needs in the event a warrant is issued at the conclusion of the trial.
The orders as sought by the husband in his Application in a Case do not include an order sought with respect to the property of the husband situate at 2 HH Street, Suburb F (“the 2 HH Street property”), although the husband’s affidavit evidence before the Court appeared to seek a further order in respect of this property. In particular, I refer to paragraph 3 of the affidavit of the husband relied upon by him and sworn 16 November 2021. That paragraph is as follows:
I also seek orders in the interim that the father be allowed to market the property at 3 HH Street at fair market price and that all of the proceeds of the sale of the property after conveyancing and agent costs be applied to the outstanding mortgage with an amount of $100,000 to be paid from the sale to the mother. The money to be transferred to the trust fund of the mother’s solicitor on settlement of the 2 HH Street property. That money to be considered in any final statement of the property matters.
In light of the above, I sought some further information from the solicitor acting on behalf of the husband as to precisely what orders were sought by the husband on the hearing of the matter. The husband confirmed that he wished to sell the property at 2 HH Street and that he wished to have control of that sale. He sought orders to that effect.
THE EVIDENCE
In support of his case, the husband sought to rely on the following documents:
(a)Application in a Case filed 19 October 2021;
(b)affidavits of the husband sworn 17 October 2021 and 16 November 2021; and
(c)document entitled “Submissions of the Plaintiff dated 29 September 2021 prepared by VV Solicitors, solicitors for the plaintiff, in proceedings in the County Court of Victoria in Melbourne between Westpac Banking Corporation and the husband.”
In support of her case, the wife sought to rely on the following documents:
(a)Response to an Application in Case filed 29 October 2021; and
(b)affidavits of the wife affirmed 29 October 2021 and 12 November 2021.
Also tendered in evidence by the wife was email correspondence from the husband’s solicitor, Mr Thompson, to SS Solicitors dated 29 October 2021 together with email correspondence from Z.R.E. to SS Solicitors dated 15 November 2021, marked as exhibit “A1”. I consider those two pieces of correspondence to be relevant to the orders sought by the husband. That correspondence demonstrates that the husband has acted to unilaterally market the 2 HH Street property, for the purpose of its sale, indeed a matter conceded by the husband. Such actions of the husband are not in accordance with the Orders made 16 September 2021. They appear to be supported by the husband’s solicitor.
BACKGROUND
An important backdrop to this litigation is the litigation in the County Court of Victoria at Melbourne as commenced by Westpac Banking Corporation, the plaintiff, on 7 June 2019, against the husband as the named defendant. The first listing of that proceeding was 20 September 2019. As set out in the “submissions of the plaintiff” document, tendered by the husband in the hearing before me, it is noted that the first mention date of the County Court proceeding was adjourned several times to allow for a complaint as made by the defendant to the Australian Financial Complaints Authority (“AFCA”) to be resolved by AFCA. The outcome of this complaint is canvassed in my reasons for judgment of 16 September 2021, paragraphs 39, 83, 92, and 96-97.
It is further set out in those “submissions of the plaintiff” that on 25 August 2021, the defendant informed the County Court that his complaint had been determined and closed by AFCA. The plaintiff proposed timetabling orders for the progression of the matter in the County Court, to which the defendant objected. Consequently, the plaintiff requested an interlocutory determination. The “submissions of the plaintiff” continued:
4.The defendant has provided to the court and the plaintiff a copy of orders made in proceeding PDGC2894/2018 (Family Court proceeding) dated 13 July 2020 (Family Court orders), and expressed concern that order 5 of the Family Court orders prevents him from taking active steps in this proceeding.
I pause there to note that Order 5 of the orders made 13 July 2020 is relevantly set out in paragraph 27 hereafter. Order 5 provides for the husband to do all things necessary to seek a discharge (or stay) of proceedings with respect to the writ issued in the County Court of Victoria, pending the sale of those properties which he had consented to the sale of in July 2020, namely the FF Street property; the HH Street property; and the 2 HH Street property.
The submissions of the plaintiff in the County Court of Victoria proceeding go on to state, relevantly, as follows:
5.On 8 September 2021, the Court made timetabling orders (orders) of its own motion which required, among other things, that the defendant file and serve an affidavit (and may, in addition, file submissions) setting out the basis upon which he says the Family Court orders prevent him from taking any active steps in this proceeding, by 15 September 2021 at 4 pm.
6.To the plaintiff’s knowledge, the defendant has not filed any affidavit or submissions in accordance with order 3 of the orders.
The husband now seeks injunctions to restrain the parties from selling or dealing with in any way the FF Street property; the HH Street property; and the PP Street property, until completion of all extant applications in the Court. The husband sought such injunctive remedy in his interim application filed on 19 July 2021, wherein I note he sought that application be heard ex-parte, despite the solicitors on record for the wife being well known to the husband and to his solicitor, there having been many proceedings already undertaken in the Court. The husband’s application was dismissed. What the husband seeks to do in the filing of this application is to re-agitate his seeking of injunctions as sought in July 2021, with that application being dismissed by orders made 16 September 2021. He also makes this application in the context of the ongoing Westpac Bank litigation seeking to sell up his properties.
The evidence before the Court on 17 November 2021, as to the outstanding debt owed by the husband to the Westpac Bank, was evidence before me on 19 August 2021. As set out in my earlier reasons for judgment of 16 September 2021, the quantum owing to the Westpac Banking Corporation was in the sum of approximately $1,309,996 as at 31 July 2021.[1] The further evidence adduced by the husband on 3 December 2021, indicates that sum has increased by a further $246,025.64 by virtue of the husband making no mortgage payments, nor any other type of payment to the Bank.
[1] See paragraph 74 and 75 of the reasons for judgment of 16 September 2021.
CONSIDERATION
This application, in part, traverses old ground and matters already agitated and/or judicially determined which are sought to be re- agitated and judicially determined. The husband seeks a stay of the operation of the orders of 16 September 2021. When asked by me which particular order/s were sought to be stayed in their operation, or whether it was in fact an application going to the totality of the orders, the husband indicated that he sought a stay in respect of the totality of the orders.
The husband also seeks an injunction restraining the parties from dealing with properties registered in the sole name of the husband until the finalisation of both extant parenting and property order applications. In respect of the duration of the injunctions as sought by the husband, I note the husband’s agreement, on an earlier interim hearing in the proceeding (19 July 2021) to a bifurcation of the proceeding, as referred to in paragraph 6 of the reasons for judgment of 16 September 2021.That bifurcation gave priority to the outstanding property orders proceeding. The injunctions as sought by the husband are injunctions in respect of properties which are the subject of Court order, including operative orders for the sale of the properties referred to in the husband’s Application in a Case. The relevant history is explained in the paragraphs which follow.
On 13 July 2020, the Court made interim property orders by consent (“the July orders”) in circumstances where both parties were legally represented. Those consent orders dealt with the sale of the FF Street property; the HH Street property; and a further property, the 3 HH Street property, being a property in respect of which no injunction was sought by the husband in this proceeding. Not only did those orders provide for the sale of the three properties as referred to, but the orders by consent provided for the mechanisms of sale, including the manner of appointing a selling agent; the determination of the selling list price; the sale price; the appointment of a solicitor or a conveyancer; and the application of the proceeds of sale.
The July orders also provided for the continued sole occupation and use of the FF Street property by the wife pending settlement or sale of that property; of the HH Street property by the husband pending settlement or sale of that property; and of the 2 HH Street property by the husband pending settlement or sale of that property. The orders also provided, in respect of a further property owned by the husband, that he would have interim continued sole occupation and use of that property, situate at PP Street, Suburb QQ in the State of Victoria (“the PP Street property”). The July orders also included Order 5 which provides as follows:
(5)Within 7 days the Respondent Husband and/or his solicitor provide the Westpac Banking Corporation and their solicitors VV Solicitors, with a copy of these Orders and the Respondent Husband do all things necessary to seek a discharge (or stay) of proceedings with respect to the Writ issued in the County Court of Victoria (case number …) pending sale of the above named properties, and provide the Applicant Wife proof of any communication had and received from Westpac and/or their solicitors with respect to the said County Court proceedings.
Following the making of the July orders, and as set out in my reasons for judgment of 16 September 2021, the husband lodged various appeals.[2]
[2] Paragraphs 21-25 of my reasons for judgment of 16 September 2021.
Those appeals were dealt with and dismissed by the Full Court of the Family Court of Australia as it then was (“the Full Court”). I note in particular, that which was said by Strickland J. on the hearing of those appeals, which is as set out in paragraph 22 of my reasons for judgment of 16 September 2021. His Honour stated the following:
25.The first point to make is that all of the orders made were made by consent, and although the father suggests that that was not so, he has nowhere demonstrated that the orders were not made by consent.[3]
[3] Philkin & Philkin (No.2) [2020] FamCAFC 264, paragraph [25].
The July orders remain undischarged and operative. It is those orders which provide for a sale of the FF Street Property and the HH Street property in respect of which the husband now seeks an injunction restraining the parties from dealing with such properties. He does not seek a discharge and/or variation of the July orders. He has prosecuted an unsuccessful appeal in respect of such orders. He has failed to comply with many of the July orders, if not all, on his own evidence. He places before the Court no persuasive evidence as to why the Court would grant any injunctions as sought by the husband, in particular as the husband seeks to fail to comply with the July orders. Any stay of execution of the orders made on 16 September 2021, will not have the effect of avoiding a sale of the properties ordered to be sold pursuant to the July orders.
The third property, the PP Street property, which the husband seeks an injunction with respect to, is a property in relation to which the wife sought orders for sale when the matter proceeded before me on 19 August 2021. By orders of 16 September 2021, being orders numbered 4, 5, 6 and 7, provision is made for the sale of the PP Street property together with terms of sale orders. The husband was restrained from attending upon the property or further encumbering the property without the prior written consent of the wife as and from 17 September 2021. Other mechanical orders were made as necessary to progress the sale of the FF Street property, the HH Street property, and the 2 HH Street property.
The orders made 16 September 2021 (“the September orders”) provided for the wife to have sole responsibility for the conduct of the sale of the FF Street property; the 2 HH Street property; and the HH Street property. Paragraph 8 of those orders is otherwise relevantly as follows:
8. …
(b)RR Real Estate shall be the appointed selling agent and SS Solicitors shall have care of the conveyancing of the sale of these properties;
(c)the mode of sale and list price shall be determined by the wife in consultation with the selling agent. The reserve price shall be as determined and/or nominated by the President of the REIV or her nominee;
(d)the parties are to do all things and sign all documents required by the selling agent to progress the sales including signing any exclusive authorities;
(e)the parties are to co-operate with the selling agent in relation to the marketing of the properties for sale including making the key readily available, allowing inspection of the properties at all times reasonably requested by the agent and ensuring that each of the properties are clean, neat and in good order at the time of inspection by any prospective purchaser;
(f)the wife shall be liberty to accept any offer that is at least 90 per cent of the list price or reserve price as the sale price for these properties; and
(g)the parties shall execute the Contract of Sale and all other documents necessary to complete the sale of these properties including all transfer documentation forthwith upon such documents submission to them by the selling agent and/or SS Solicitors and/or their own solicitors.
Paragraph 12 of the September orders is as follows:
12.The husband on or before 4pm on Monday 20 September 2021, provide copies to the wife of all and/or any current lease and/or tenancy agreement (whether formal or informal) with respect to:
(a) the 2 HH Street property;
(b) the PP Street property; and
(c) the HH Street property.
Paragraph 13 of the September orders is as follows:
13.The wife is permitted to provide a copy of these Orders to Westpac Banking Corporation and their solicitors, VV Solicitors, and is hereby authorised by these Orders to obtain from Westpac Banking Corporation and/or VV Solicitors, all information necessary to arrange the discharge of the mortgage/s over:
(a) the FF Street property;
(b) the HH Street property;
(c) the 2 HH Street property; and
(d) the PP Street property;
including any information required under section 27 of the Sale of Land Act 1962 (Cth) and the husband do all things necessary to facilitate same but failing same, this Order shall be sufficient authority to the wife to obtain this information from Westpac Banking Corporation and/or VV Solicitors.
Despite the existence of paragraph 8 of the September orders, the husband unilaterally, as conceded by him, placed the 2 HH Street property on the market for sale without the knowledge of the wife and before the return date of his Application in a Case of 17 November 2021. The husband, as also conceded by him, unilaterally engaged Z.R.E. to conduct the sale of 2 HH Street, notwithstanding the fact that the orders made on 16 September 2021 provided for the wife to have sole conduct of the sale and for RR Real Estate to be the appointed selling agent. The husband ignored the operative orders and acted contrary to them.
On 5 November 2021, the wife’s solicitors wrote to Z.R.E., notifying them that their engagement to sell the 2 HH Street property was contrary to the orders of the Court, and that the wife was solely responsible for the conduct of the sale, and not the husband. In that correspondence, the wife’s solicitors requested that Z.R.E. immediately suspend all conduct relating to the sale, including to remove their listings from the property forums.
On that same day, the wife’s solicitors wrote to the husband’s solicitor to inform the husband’s solicitor of the wife’s intention to sell the 2 HH Street property in accordance with the September orders, which included that she have sole conduct of the sale, and RR Real Estate be the appointed selling agents. As of the date of hearing, some 12 days later, the husband had not withdrawn his instructions to Z.R.E. and Z.R.E. continued to list the property for sale contrary to the orders of the Court.
The husband had no authority to engage Z.R.E. or flat fee conveyancing services being an alternate conveyancer engaged by the husband contrary to order 8 of the September orders. There are no court orders that permit the husband to act in the unilateral manner in which he has with respect to the sale of the 2 HH Street property and his actions were taken prior to his hearing for a stay of the Orders made on 16 September 2021.
The husband submitted that the 2 HH Street property had a value of in excess of $600,000 and that the mortgage encumbering the property was presently in the sum of approximately $260,000, leaving approximately $340,000 net proceeds of sale before deduction for various associated selling expenses. The husband asserted that the Bank would not take the totality of the net proceeds to reduce the current significant debt outstanding to it as secured by cross-collateral mortgages over the husband’s properties, and would allow the wife to receive the sum of $100,000. There was no evidence before the Court to substantiate that assertion. It was not conceded by the wife, and the wife was not optimistic about the Bank adopting the approach necessary to the formulation of the order proposed by the husband which included a payment of $100,000 to the wife .The further evidence relied upon by the husband, being the 23 November correspondence, made no suggestion of any payment to the wife and indeed stated the contrary.
The husband has not filed a financial statement since 21 June 2019, nor has he provided any significant ongoing disclosure, despite that being sought by the wife in this proceeding and the Westpac Bank in the County Court proceeding. The wife seeks that he file a financial statement so that she is in a position to understand his current financial circumstances. That is essential in terms of the husband meeting his ongoing disclosure obligations. Accordingly, an order as sought by the wife will be made in those terms.
Order 11 as sought by the wife is really one and the same as Order 9, and that is simply that the husband comply with his ongoing financial obligations to enable the wife to better assess the prospective outcome of this litigation. Indeed, to allow both parties to better assess that likely outcome.
Order 10 as sought by the wife is not made by the Court because that order is already an order made in the September orders. There is no benefit in repeating the order. The husband’s response, in submissions, is that his lease documents were left in the FF Street property upon his departure and that he has had no access to that property in the intervening years. No production of those documents to him, has been made by the wife. The wife submits that she does not know the whereabouts of any such documents and has never sighted them. She is accordingly unable to provide them to the husband. The husband’s solicitor submitted that the tenants in occupation of the 2 HH Street property are now on periodic tenancies. The husband has not sought to obtain the original leases from his tenants, and nor has he described to the wife the nature of the periodic tenancies that he now asserts exist, including the notice to quit requirements in respect of such tenancies. The husband has not cooperated in making necessary disclosure to the wife in providing transparency in respect of these matters, and his lack of cooperation continues.
THE APPLICABLE LAW
The applicable law relating to the stay application is conveniently summarised in a decision of his Honour Justice Austin in Zhai & Niu [2015] FamCA 639 at [6] - [8]:
Legal principles
6.The discretion to stay the operation of orders should only be exercised where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his or her litigation pending the determination of any appeal. Such special circumstances justifying a stay will exist where it is necessary to prevent the appeal from being rendered nugatory or for whatever other reason there is a real risk it will not be possible for a successful appellant to be restored substantially to his or her former position if the judgment against him or her is executed (see Federal Commissioner of Taxation v Myer Emporium (No 1)(1986) 160 CLR 220 at 222-223). The Court should also consider the prospects of the appeal and where the balance of convenience lies (see Jennings Constructions Limited v Burgundy Royale Investments Pty Limited (No 1)(1986) 161 CLR 681 at 685). Those common law principles apply equally to judgments delivered in this jurisdiction.
7.The Court is entitled to assume that the decision which is the subject of the appeal is correct. Indeed, the Full Court must subsequently approach the appeal on the basis of a strong presumption that the decision at first instance is correct (see Australian Coal & Shale Employees’ Federation v The Commonwealth (1956) 94 CLR 621 at 627).
8.Of course, the orders under appeal in these proceedings are interim in nature. In such circumstances, the husband must obtain leave in order to prosecute the appeal (see s 94AA of the Act; reg 15A of the Family Law Regulations 1984 (Cth)). A party seeking leave to appeal against an interim order must demonstrate that there has been an error of principle and/or a substantial injustice in order to secure a grant of leave (see Adam P Brown Male Fashions Proprietary Limited v Philip Morris Inc(1981) 148 CLR 170 at 177; Marriage of Rutherford(1991) FLC 92-255 at 78,715).
The Full Court decisions in Trahn & Long (No. 2) [2008] FamCAFC 194 at [38] and Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 (“Aldridge & Keaton”) at [18] illustrate that such applications are discretionary in nature; however, they also point to a number of principles to be applied and matters to be taken into account when determining a particular application. These include:
• 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 an insufficient basis for granting a stay;
• the applicant has the onus of establishing a proper basis for the stay;
• the applicant’s bona fides;
• whether there has been delay in applying for the stay;
• the time that will elapse before the appeal can be heard;
• a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted – this will be a substantial factor;
• some preliminary assessment of the strength of the proposed appeal – whether the appellant has an arguable case; and
• a stay may be granted on terms – this may involve weighing the balance of convenience and the competing rights of the parties.
The Stay Application
One of the submissions made by the husband was that his stay application had a proper basis by virtue of an assertion of the rights of the parties children, being the children’s right to remain residing in the FF Street property, their home of some years now. In respect of the submissions going to the rights of the children, the husband’s solicitor indicated that he had informed the Independent Children’s Lawyer of the Application in a Case as to interim property matters, in the event that the Independent Children’s Lawyer wished to join with him in submissions relating to the need for injunctions on the basis of a consideration of the rights of the children. The Independent Children’s Lawyer appeared on the hearing of the matter as a matter of courtesy and sought to be excused. He had no submissions to make.
Whilst it is not necessary to demonstrate exceptional circumstances, the husband does not demonstrate any circumstances which would justify a stay of the orders as sought by him. He consented to orders providing for a sale of nearly all of the properties the subject of these reasons. Those orders remain operative and they were entered into in the context of the husband’s need to deal with the Westpac Banking Corporation and its litigation against him. In the attempted preservation of the asset pool of the parties, which the September orders and other related orders of the Court address, the wife is entitled to the benefit of the judgment in her favour.
Further, the Court is of the view that the husband would appear to have little prospect of success on his leave to appeal application in respect of the September orders. Even were he to be successful, the appeal would not be rendered nugatory. The sale of 3 of the properties remains in contemplation as ordered by the July orders. The Westpac Bank litigation is moving to trial in July 2022, as submitted by Mr Thompson, and a sale of all properties as secured by the bank is sought to the extent of satisfaction of all monies owed to them.
CONCLUSION
The Court will accede to the orders as sought by the wife in respect of the sale of the FF Street property. The orders as sought by the wife are machinery orders for the sale of that property, necessitated by the failure of the earlier sale which did not proceed after the 16 September 2021 hearing.
The settlement of the sale of the FF Street property was due to occur on 28September 2021. On 16 September 2021, the contract for sale of the FF Street property was mutually terminated by the purchasers and the wife and the wife instructed the selling agent to arrange for the full deposit of $81,000 paid by the purchasers to be refunded to the purchaser’s solicitors. The husband was informed of this on 17 September 2021. It thus becomes necessary to further and forthwith, place the FF Street property on the market for sale.
Order 2(a) of the July orders remains operative to provide for the sale of the FF Street property. However, orders 3(a) to 3(i) of the July orders were discharged by virtue of Order 8 of the orders made on 16 September 2021. The September orders do not specify how the sale of the FF Street property is to be conducted and that is necessary given the parties inability to agree matters.
The husband has had ample opportunity to make offers to the wife to purchase the FF Street property, particularly, as Order 3(g) of the July orders allowed both the husband and the wife an opportunity to purchase the property. The husband has now no obvious means, on the evidence, to make any payment to the wife, or to the bank. He has no updated and relevant financial statement before the Court.
The husband’s now position, and one that he has acted upon in the manner described above, is that he is prepared to sell the 2 HH Street property immediately. But only on his terms. Further, he wishes to take possession of the FF Street property. The existence of the earlier and operative orders of the Court are immaterial to him.
The husband has indicated to the wife that subject to the sale of the 2 HH Street property, he could apply for a loan for $100,000 or redraw that amount to make a payment to the wife. The husband does not however produce any evidence to the Court or to the wife to show that he has a capacity to borrow $100,000. He has not made repayments of the mortgages outstanding for a substantive period of time, and provides no evidence, at all, of any capacity to service his future mortgage repayment obligations. He has not made payment of outstanding costs orders against him. The wife claims that the husband has not been meeting his child support, nor spousal maintenance obligation payments. The husband is proposing that the parties sell only the property which has the least value, being a value of $400,000 to $440,000 as alleged by the husband in his affidavit of 19 August 2021.I observe that during the course of this hearing, some two months later, the husband described that value as being $600,000. There is no valuation evidence before the Court.
All of the above leads the Court to conclude that there is a lack of “bona fides” in the husband’s application.
I shall dismiss the Application in a Case of the husband filed 19 October 2021.
COSTS
The wife seeks an order for costs and tendered in evidence a calculation as to those costs sought by her. Counsel’s fees for the two days of hearing totalled $5,600 and the solicitor instructing fees totalled $2,400. The claimed amount was a reasonable sum of $8,000 in total and was calculated in accordance with the Schedule 3 Scale of Costs as provided for in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. As at 2 December 2021, the wife has incurred approximately $170,000 in legal costs, of which $1000 has been received. Otherwise, the wife’s legal costs will be paid from any settlement funds she receives.
By correspondence of 1 December 2021 to the husband’s solicitor, the wife’s solicitors put the husband on notice that the wife would seek costs against the husband in the event he did not immediately withdraw his application filed 1 December 2021. The husband did not do so. The wife did not seek to oppose the introduction into evidence of the 23 November correspondence, as such evidence did not further advance the case of the husband, but merely highlighted that which was evident on the hearing of the matter on November 17, namely that there should be no stay of the September orders. The evidence further adduced did provide an update as to the quantum of the debt outstanding to the Bank. That did not alter the outcome of this proceeding but rather provided further evidence for the need to dismiss the husband’s Application in a Case. The husband is entirely unsuccessful in obtaining the stay orders whish he seeks. Costs as occasioned to the wife by the conduct of the husband should be paid by the husband.
Counsel for the wife sought a partial and /or complete costs order against the husband’s solicitor personally. Whilst the Court is concerned with the late service of documents on the wife, and with the approach taken by the husband’s solicitor to, in particular, the husband’s actions in respect of the sale of the 2 HH Street property, and the pursuit of this Application in a Case, ultimately it is the husband’s conduct which results in the costs incurred by the wife and the Court shall not depart from the usual practice on this occasion.
I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 3 December 2021
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