Ramirez and Ramirez (No. 2)

[2014] FamCA 371

FAMILY COURT OF AUSTRALIA

RAMIREZ & RAMIREZ (NO. 2) [2014] FamCA 371

FAMILY LAW – PRACTICE AND PROCEDURE – Stay of proceedings in respect of property orders – Agreement for stay to be made pending appeal on conditions – Determination of whom or what percentage of the net rental the parties should each receive in respect of the property being tenanted pending determination of the appeal – Husband seeking to adduce fresh evidence on appeal to have opportunity to purchase the property from the wife  – Wife entitled to the benefit of the Judgment and to presume the Judgment is correct – Appeal unlikely to be heard for a significant period of time – Some grounds of husband’s appeal appear to lack merit – Appeal may be rendered nugatory if stay not granted – Application for stay granted by consent on certain grounds

Trahn & Long (No.2) [2008] FamCAFC 194

APPLICANT: Mr Ramirez

RESPONDENT: Ms Ramirez

FILE NUMBER: PAC 2655 of 2010

DATE DELIVERED: 9 May 2014

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Hannam J

HEARING DATE: 9 May 2014

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Satkunanathan of Michael Vassili Solicitors and Barristers

SOLICITOR FOR THE RESPONDENT: Ms Munk of Matthews Folbigg Pty Ltd

Orders

The Court Orders by Consent that

1. Orders 14 to 19 of orders made on 18 March 2014 are stayed on condition that:

   (a)Within 10 weeks of these orders the husband will cause the property at I Street, Suburb B to be let.

   (b)Within 7 days of these orders the husband will engage an agent to:

   (i)Manage the letting of the property;

   (ii)Advise the husband and the wife of repairs that are required to enable the property to be let.

The Court Orders that

1. The parties are to share the costs of repairs equally in the event that those costs are required to be paid prior to the letting of the property.  In the event that the costs of repair are not required to be paid in advance then the rent is to meet the costs of the repairs.

The Court Orders by Consent that

1. The net rent after the payment of the costs including costs of repairs for the first 3 months of letting is to be paid to the wife.

2. For the period after the first 3 months the net rent after any outgoings and any further outstanding costs of repairs is to be paid 65 per cent to the wife and 35 per cent to the husband.

The Court Orders that

1. The costs of the wife of today are reserved.

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

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 2655  of 2010

Mr Ramirez

Applicant

And

Ms Ramirez

Respondent

REASONS FOR JUDGMENT

1. In this matter the Applicant in respect of the Application in a Case is an Appellant in an appeal against a decision given on 18 March 2014.  The decision relates to an application in respect of parenting orders and property orders, but the appeal has been instituted by the husband against the property orders only.

2. Central to the decision and the orders in question is a property at I Street, Suburb B.  In the orders made that property was to be cleared and after a two month period sold by the wife, who was to be appointed as trustee for sale.  The sale proceeds were to be distributed, with the wife receiving 65 per cent of the net proceeds and the husband receiving 35 per cent of the net proceeds.

3. The overall division of property was in accordance with these proportions and, to maintain the proportions, the wife was to simultaneous with the payment of the proceeds of the sale of property, pay to the husband a sum of about $180,000 to maintain that ratio.

4. The husband’s appeal contains eight grounds in relation to the treatment of the I Street, Suburb B property.  The main concern in the appeal, in effect, is that the husband contends that he was not given an opportunity to purchase the property from the wife and, in particular, challenges the finding of the Court that the husband did not have the capacity to pay the wife her share of the property.

5. It appears to be acknowledged that the husband had not provided any evidence to support the contention that he did have the capacity to purchase the wife’s share in the property as he has filed an affidavit which appears to be evidence he will seek leave to adduce at the appeal.  This evidence is to the effect that the husband has spoken to each of his parents and his sister, who have indicated that they will lend him the money to purchase the wife’s share of the property.

6. Having regard to the orders sought in the appeal, it appears that the husband does not challenge the order that the wife is to receive 65 per cent of the property and he is to receive 35 per cent, though it may be that there is a small discrepancy as he refers to seeking an order that he pay 65 per cent of the value of the property in its uncleared state, whereas the order of the Court provided that he was to pay to the wife 65 per cent of the proceeds of the property sold in its cleared state, and there was evidence to the effect that the property was valued at $125,000 less in its uncleared state.

7. The balance of the orders sought in the appeal relate to the husband purchasing the wife’s share of the property from her.  Although the grounds of appeal refer to the Court not having given the husband the opportunity to address the matter of Capital Gains Tax, there is no order sought in relation to making an allowance for Capital Gains Tax.

8. There is also a ground of appeal which relates to an alleged failure to afford the husband procedural fairness by failing to allow the husband the opportunity to test the wife’s evidence in relation to valuation but there is no corresponding order sought challenging the valuation of the property.

9. The parties have reached agreement as to virtually all of the matters before the Court today and, in particular, agreement in relation to the application for stay.  The application is that each of the property orders, being orders 14 to 19, be stayed pending the hearing of the appeal. Agreement has been reached that they be stayed conditional upon the husband causing the property to be rented within 10 weeks of the orders and other orders associated with the mechanics of that renting.  The order in dispute relates to who should receive the net rent during the period that the property is rented and the orders stayed.

10. Ordinarily the Court would need to consider the principles in relation to stay applications which has been submitted by the Applicant husband that those are set out in Trahn & Long (No.2)[1].  Of particular significance in this matter, is that the person who has obtained a judgment is entitled to the benefit of that judgment and is entitled to presume the judgment is correct.  In this case, the wife commenced proceedings for property orders on 4 June 2010.  The property in question was vacated by the wife on 1 May 2010 and has been vacant since that date.  As is clear from the reasons for Judgment, the wife had attempted for a lengthy period of time and from at least November 2011 for the parties to jointly develop a plan to clear the property so it could be let or sold.  The background circumstances also were that the husband had been required to clear the property by the Local Council, which had extended that time up until 17 May 2011, but the property as at the date of the proceedings and, as I understand it, as at today’s date, remains uncleared.  The wife had also been attempting since late 2011 to have the husband, in whose name the property is registered, have the property let.

    [1] [2008] FamCAFC 194

11. The husband submits so far as the principles applicable to stays are concerned that the most significant factor in his favour, and the wife concedes that this is the case, is that the appeal may be rendered nugatory if the stay is not granted.  It is the husband’s case in this matter that it would be an injustice to him if the Full Court were to find that he should have the opportunity to purchase the wife’s share if the property had already been sold at the time that decision was made.

12. One of the other difficulties in this matter and which needs to be taken into account in considering whether to grant the stay and if it be granted, that it be on terms that are fair to all parties, is that the Court weighs the balance of convenience and the competing rights of the parties.

13. Enquiries have been made in relation to the period of time in which the appeal is likely to be heard which is relevant to this issue of the competing rights and which is also independently a principle to be taken into account in its own right.  I am informed that it will be 12 to 18 months before the appeal would be heard and it very well may be that there will be a few months before judgment is given and then a further few months for the orders to be effective.

14. One of the matters that the Court must take into account is the merits of the appeal.  In my view, the ground of appeal which relates to Capital Gains Tax has no merit and it appears that it very well may not be argued as there is no order sought that relates to this issue.  There was no evidence before the Court relating to the way in which Capital Gains Tax may affect the husband, nor was it suggested in submissions how the Court was to treat the issue of Capital Gains Tax, and this matter is dealt with in the Judgment.  I simply do not understand the ground of appeal which says that the Court failed to afford the husband the opportunity to be heard on the matter.

15. Similarly, ground 7 is unintelligible.  This ground says that the trial Judge found that the husband was suffering from a mental condition as reasoning in regard to the parenting orders but failed to provide sufficient weight to such findings in the property orders.  Considering that the Appellant father does not seem to be challenging the overall percentages of the divisions of assets, it is difficult to understand this ground of appeal. 

16. Ground 8, which relates to an alleged lack of procedural fairness with respect to valuation, is also difficult to understand when the issue of valuation does not appear to be challenged.  Indeed, one of the orders sought by the husband of itself appears to accept the valuation given by the expert witness, and which was accepted by the Court.

17. The balance of the grounds of appeal seem to relate to the issue of refusing the husband the opportunity to purchase the property and issues relating to the injustice that may be occasioned to the husband if he were required to remove his stock-in-trade from the property.  There was no evidence at the trial relating to any change in value in the stock-in-trade if it were required to be removed.  The affidavit, which appears to contain additional evidence in respect of which leave will be sought at the appeal, does not refer to the issue of the removal of the stock-in-trade.  For this reason, I am of the view that this ground of appeal has no merit.

18. The only possible ground which may have some merit is the ground which relates to the missed opportunity to purchase the property from the wife.  This ground will rely upon adducing fresh evidence and, having regard to the principles from Full Court decisions in relation to fresh evidence, there is a real chance that the Appeal Court will not allow that evidence to be adduced as it could have been adduced in the trial.  Nonetheless, if it were the case that merit is found in this ground, I accept that the appeal may be rendered nugatory if the stay was not granted.

19. On the other hand, as has been indicated, this matter has been ongoing for many years.  There was evidence in the trial, and it is referred to in the reasons of Judgment, of the husband suffering from a psychological condition which is characterised by severe procrastination.

20. The husband has had the benefit of the property since May 2010 and has not cleared it or let it despite considerable effort, including an application to the Court which was ultimately not proceeded with by the wife as the husband gave assurances that he would clear the property within a matter of months in 2012.

21. In all of these circumstances, it appears that the wife would suffer considerable prejudice in not receiving the benefit of the Judgment for a further 18 months to two years, which is a realistic estimate.

22. As indicated, the parties have reached agreement in these circumstances that the orders be stayed on condition that the husband cause the property to be rented within 10 weeks of these orders and agreement has been reached about specific orders.

23. It has been agreed that the property will be placed in the hands of an agent who will manage the rental.  It is agreed that that agent will advise the husband and the wife of repairs that are required to enable the property to be tenanted and that the first three months’ rent will be firstly applied to meet the cost of repairs with any balance being paid to the wife.  Thereafter, it is the wife’s submission that she should receive all of the net rental, whilst it is the husband’s submission that each of the parties should receive 50 per cent of the net rental.  This is the only matter for judicial determination.

24. The wife submits that it is the husband who is seeking the indulgence of the Appeal Court and that indulgence includes seeking leave to adduce evidence which could have been adduced at the trial, that there will be a delay for a significant time and that the rental will ameliorate the situation.

25. The wife submits that she is, in any event, entitled to more than 50 per cent of the rent.

26. The husband says that it is not only the wife who is missing out on the benefit of the orders which are now appealed against as under them he would also receive the money from the wife. 

27. The husband, as I have indicated, does not appear to dispute, or only disputes in a very minor manner as indicated, the 65 percentage to the wife and 35 percentage to himself.  In these circumstances, in my view, the most just outcome is that the wife is to receive 65 per cent of the net rent and the husband is to receive 35 per cent of the net rent during the period within which the property is tenanted.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hannam delivered on 9 May 2014.

Legal Associate:       

Date:    4 June 2014