RIDDLER & RIDDLER

[2015] FamCA 442

FAMILY COURT OF AUSTRALIA

RIDDLER & RIDDLER [2015] FamCA 442

FAMILY LAW – APPLICATION IN A CASE – Application for a stay of property orders – Whether there is a proper basis for the stay – Where the applicant has not provided evidence in support of his asserted financial position – Where the applicant claims he will suffer financial hardship if the stay is not granted – Where the applicant submits that he would be prejudiced against if the stay is not granted– Whether the appeal would be rendered nugatory if the stay is not granted – Where the respondent seeks costs – Application dismissed.

Family Law Act 1975 (Cth) s 117

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

APPLICANT: Mr B Riddler

RESPONDENT: Ms A Riddler

FILE NUMBER: WOC 302 of 2013

DATE DELIVERED: 30 April 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Aldridge J

HEARING DATE: 30 April 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Applicant in person

COUNSEL FOR THE RESPONDENT: Mr Lloyd SC

SOLICITOR FOR THE RESPONDENT: Reid Family Lawyers

Orders

1.   That the Application in a Case filed by the Husband on 25 March 2015 is dismissed. 

2.   That leave is granted to the Respondent Wife to make an oral application for costs this day.

3.   That the Applicant Husband is to pay the Respondent Wife’s costs in the sum of $7,000 as assessed by me today.  Such costs are to be payable upon the distribution of the proceeds of sale of the husband’s shares of E Pty Ltd.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Riddler & Riddler 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 SYDNEY

FILE NUMBER: WOC 302 of 2013

Mr B Riddler

Applicant

And

Ms A Riddler

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. By an Application in a Case filed on 25 March 2015, Mr Riddler (“the applicant”) seeks a stay of orders made by me on 27 February 2015.  He filed a Notice of Appeal against those orders on 25 March 2015.

2. The proceedings were property proceedings between the applicant, the respondent and the applicant’s parents.  One of the issues in the proceedings was whether or not shares in E Pty Ltd entitled the owner of the shares to occupancy of a unit by company title and whether the shares were owned by the applicant or were in fact owned by his parents.

3. The orders I made were as follows (Riddler & Riddler and Ors [2015] FamCA 436):

   (1)That pursuant to section 106B of the Family Law Act 1975 (Cth) (“the Act”):

   (a)The Deed of Loan Agreement between [Mr C Riddler], [Ms D Riddler] and [Mr B Riddler] dated 23 November 2010; and

   (b)The Residential Tenancy Agreement between [Mr C Riddler], [Ms D Riddler] and [Mr B Riddler] dated 28 July 2012

   be set aside.

   (2)The Court declares that Mr Riddler is the beneficial owner of the Unique Shares No’s … to … in E Limited .

   (3)That within fourteen (14) days of the date of these orders, the husband shall do all things and sign all documents to sell his shares in E Limited (which give the right to occupy the property [F Street, Suburb G]), being Unique No’s … to … and for the purpose of implementing that sale the parties shall do the following:

   (a)List the property for sale by public auction, such auction is to occur within four (4) months of the making of these orders at a price to be agreed between the parties and failing such agreement at a price, or at a reserve price, nominated by the President of the New South Wales Division of the Australian Property Institute and his/her nominee;

   (b)Forthwith appoint such real estate agent and auctioneer, as the parties may agree and failing agreement within fourteen (14) days, list the property with such agent and auctioneer nominated by the President of the New South Wales Division of the Australian Property Institute (“the Agent”), the costs of and incidental to such appointment to be borne equally by the parties as and when they fall due.

   (c)The parties shall each co-operate in every way with the Agent including (without limiting the generality the foregoing):

   (i)making the keys available to the Agent;

   (ii)allowing inspection of the property at all reasonable times as required by the Agent;

   (iii)not do or say anything to hinder or prevent a sale being effected;

   (iv)ensuring that the property including the grounds are in a neat, fit state of repair and tidy condition at the time of the inspection by the Agent and prospective purchasers;

   (v)sign all documents as requested by the Agent in relation to the listing for sale of the property except contracts or agreements for sale which have not been authorised by the parties’ solicitors;

   (vi)the parties shall each execute the contract for sale on the forms prepared by the solicitors having the conduct of the sale at a price or reserve price  agreed upon by the parties or in the absence of any agreement at or above the price nominated by the President of New South Wales Division of the Australian Property Institute;

   (vii)the parties shall do all things and sign all documents necessary to instruct a solicitor or licensed conveyancer, within seven (7) days of the date of these orders, to have the primary conduct of the sale on behalf of both parties and, failing agreement, such solicitor or conveyancer as nominated by the President of the New South Wales Division of the Australian Property Institute.

   (viii)that any costs payable to the solicitors will be and form part of the legal costs of the sale to be deducted from the proceeds of sale.

   (ix)neither party may confer upon any agent without the consent of the other party any right, or sole or exclusive agency in respect to the property or to any commission. 

   (d)That the husband is to vacate the [Suburb G] property at least seven (7) days prior to settlement.

   (e)       The proceeds of the sale shall be disbursed as follows:

   (i)in payment of the usual costs associated with such sale including Agent’s commission, legal costs and disbursements;

   (ii)in discharge of any mortgage or other encumbrances held over the property;

   (iii)in discharge of any capital gains tax liability incurred on the sale of the property (and for the purpose of effecting such a payment the solicitor acting on the conveyance for the parties shall calculate and retain a sum sufficient for payment of the Capital Gains Tax);

   (iv)the balance is to be distributed, as to 71 per cent to the wife and 29 per cent to the husband.

   (4)That wife’s application for a lump sum payment of spousal maintenance is dismissed.

   (5)That other than as provided by these orders, the parties shall retain to the exclusion of the other, all property in their sole name, possession and control, including their superannuation entitlements.

   (6)The parties shall indemnify the other and keep the other forever indemnified and shall be solely liable for all debts in their sole name or for which they are jointly liable with any other person and the husband is to indemnify the wife against any liability to Credit Corporation Limited, Alphera Finance Limited Commonwealth Bank of Australia other than in relation to account …, National Australia Bank other than the account in her name, Macquarie Bank, Citibank or Westpac Banking Corporation.

   (7)Pursuant to section 117 of the Child Support (Assessment) Act 1989 (Cth), there be a departure from the administrative assessment of child support payable by the husband to the wife in respect of the children as follows:

   (a)From the date of this order, the weekly rate of periodic child support payable by the husband to the wife in respect of the children be $500 per child; and

   (b)From the date of this order, by way of non-periodic child support, the husband pay 100 per cent of the costs of:

   (i)School fees and the costs of all school uniforms, stationery, books, excursions and all other associated costs with the childrens’ attendance at school;

   (ii)The cost of participation by each of the children in swimming and one winter and one summer sport and any other agreed extra-curricular activities of the children;

   (iii)Monthly premiums for private health insurance for the children;

   (iv)Gap medical expenses for each of the children.

4. In the Application in a Case, the applicant seeks a stay of Orders 1, 3, 6 and 7.  He does not therefore seek a stay of the declaration that he is the beneficial owner of the shares in E Pty Ltd (“E shares”).  Neither his mother nor his father has appealed against any of the orders that were made.  When regard is had to the orders sought in the appeal, it is clear that there is no appeal against Order 2 as made by me, and therefore as presently drafted, the declaration that the shares in E are beneficially owned by the applicant will stand.  If that had been the position adopted at trial then the relevant issues before the court would have been the appropriate division of the parties' property and the child support departure orders.

5. The evidence called by the applicant in support of a stay application is brief.  It consists entirely of the following:

   1.On March 25^th 2015 I made Notice to Appeal orders of February 27^th 2015.

   2.I am requesting a stay of the abovementioned orders.

   3.My current financial affairs relate to the Notice of Appeal and the reason for appeal.

   4.The impact of orders of February 2015 will leave me insolvent in regard to the property matter.

   5.I require a stay of orders to rearrange my affairs during the appeal.

   (Affidavit of Mr B Riddler affirmed 25 March 2015)

6. When asked what he meant by rearranging his affairs, the applicant said by way of submission that the property remaining unsold would assure that the wife and the children will receive payment of what they were entitled in the future, and that these matters were inextricably involved in the parenting issues between the parties which are yet to be determined.  The applicant said by way of submission that if he were held to the orders, the payments he would be required to make would affect his solvency in the short term. 

7. There is no financial evidence before the court as to the applicant’s current circumstances that would make that submission good.  When that was pointed out to him, the applicant referred to the financial material he had disclosed during the hearing, in particular his bank account and his tax returns.  His evidence in those proceedings was the subject of substantial criticism by me in the judgment.  As quoted by me at [196], at one stage in cross-examination he was asked the following:

   When might we find out just what you make out of your business?  Would it be during the currency of this court case, do you think?

   (Transcript of proceedings, 1 October 2014, page 90, lines 30-39)

8. The answer given was “no”.  The evidence before the court as to the applicant’s financial position was entirely unreliable and that was a factor taken into consideration in the making of both the property orders and the child support departure order.  There is no evidence beyond that before me today.

9. In determining whether or not to grant a stay, the court is required to take into account a number of considerations, which were helpfully summarised by the Full Court in Trahn & Long (No 2) [2008] FamCAFC 194. At [38], the court said:

   38.These principles, both in the general law and in respect of parenting proceedings, are well settled (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited (1986) 160 CLR 220 at 230; Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685. Jennings Constructions Limited v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681; Clemett and Clemett (1981) FLC 91-013; JRN & KEN v IEG & BLG (1998) 72 ALJR 1329 at 1332). The authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter included the following:

   ·   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 “special” or “exceptional” circumstances;

   ·   a  person who has obtained a judgment is entitled to the benefit of that judgment;

   ·   the person who has obtained a judgment is entitled to presume the judgment is correct;

   ·   the mere filing of an appeal is insufficient to ground a stay;

   ·   the bona fides of the applicant;

   ·   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;

   ·   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 the stay;

   ·   some preliminary assessment of the strength of the proposed appeal - whether the  appellant has an arguable case;

   ·   the desirability of limiting the frequency of any change in a child’s living arrangements;

   ·   the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of a stay for a short period of time; and

   ·   the best interests of the child the subject of the proceedings.

10. It is quite clear from the authorities that, whilst the onus to establish a proper basis for the stay is on the applicant, it is not necessary for there to be a demonstration of special or exceptional circumstances.  However, a person who has obtained a judgment is entitled to the benefit of it and is entitled to presume it is correct.  The mere filing of an appeal is insufficient to establish a stay.

11. It is difficult to determine the bona fides of the application on the material before the court.  I shall assume for present purposes that the application and appeal are bona fide. 

12. A substantial factor in determining whether or not it is appropriate to grant a stay is the risk that an appeal may be rendered nugatory if a stay is not granted.

13. The submission from the applicant was that if the shares, which entitled him to the occupation of the unit, were sold before the appeal, he would lose his accommodation and he would not have a residence for the children to stay in. The applicant has not seen the children for some 16 months, and pursuant to interim orders of the court, the children do not spend time with him. 

14. The applicant also submitted that he would suffer a prejudice in that he would not be able to use the property to grow his business affairs for the benefit of himself, his children and the respondent.  He did not elaborate on what the phrase "grow his business affairs" meant.

15. The present position is that there is no appeal against the declaration that the E shares are beneficially owned by the applicant, so that will remain the position even after the appeal.  In those circumstances, it seems to me that even if I made a significant error in determining the appropriate property division between the parties, any property division between the parties would require those shares to be sold.  If the property is sold, the applicant is entitled under the orders to 29 per cent of the net proceeds of sale.  On the evidence before me at the final hearing, he was entitled to receive from his brother €60 872, which at the time of the hearing equated to A$88 264.  Therefore, although he would lose his present accommodation, he has the means to secure other accommodation for himself. 

16. If the phrase "using the property to grow the business" is an indication that the property was to be used as a security for borrowings in order to assist the applicant with his solvency or to grow his business, that would be prejudicial to the respondent because it would have the effect of potentially, and more likely than not, reducing the property available to the parties to be taken into account in any property settlement if the present one is ultimately set aside on appeal. 

17. I am therefore not satisfied on the evidence before me that the appeal would be rendered nugatory if a stay is not granted.

18. The property available to the parties would not substantially be diminished on a sale.  All the sale will do is convert the real property to cash.  It is the unchallenged intention of the respondent to use as much of that to repay her parents, but as was pointed out by the applicant himself, her parents have a significant capacity to make any repayments if they should ultimately be reversed.

19. The court is to consider by way of at least a preliminary assessment, the strength of the appeal.  The court is not to determine whether or not the appeal will succeed but whether or not there is an arguable case on appeal.  This of course places the trial judge in a somewhat invidious position, having to determine the best it can the strength of the appeal against the court's own reasons.

20. There are 13 grounds of appeal.  They have been drafted by the applicant himself, although he says he has been speaking to an experienced family lawyer giving him assistance.  Whether or not assistance was provided in relation to the Notice of Appeal is unknown, but they appear on their face to have been drafted by the applicant himself.  Accordingly, it would be appropriate to give significant latitude to the drafting of those, but nonetheless the court is still required to consider the prospects of the appeal, and the appropriate place to start is the grounds.

21. Ground one seems to relate to the child support departure order because there is a reference to the provision of evidence as to income, financial position and several references to Order 7, which is the child support departure order.

22. Ground two seems to be a submission but also refers in terms to Order 6, which relates to the debts of the parties’ and who should indemnify the other as to payment thereof.

23. Ground three refers to the E shares not being sold as referred to with funds from the applicant’s parents.  Order 3 is an order dividing the property and is based upon the declaration at Order 2 against which no appeal is made.  The ground also reads as a submission.  In any event, it was not disputed between the parties that the E shares were paid for entirely with funds from the applicant’s parents.  The argument was whether or not the presumption of advancement in relation to those funds had been rebutted.  Ground three doesn't take the matter very far.

24. Ground five seems to be a reference again to child support departure order.

25. Ground six reads like a submission, but again refers to the payment of funds in relation to the acquisition of the shares, and in particular  $120 000.  There was no evidence either from the applicant or his father that that sum was in fact provided, so that would seem to be a difficult ground on which to succeed.

26. Ground seven and eight again have the form of submissions.  Grounds nine to 11 relate to parenting matters which are not subject of the decision.

27. Ground 12 could be seen as challenging the finding as to the presumption of advancement, and paragraph 13 seems to relate to costs, the payments after judgment.

28. There was no issue as to the law relating to the presumption of advancement.  The decision was based partly upon rejection of the applicant’s evidence and that of his father.  That rejection was in turn based on emails sent by them.  Whilst it is possible that I misconstrued those emails, to my mind I made it quite clear that the applicant and his father were doing what they could to cover up a gift that had been made to the applicant in order to avoid it being subject of the property proceedings. 

29. As presently drafted, it is difficult to say that there is a reasonably arguable ground of appeal.

1. The next consideration that the court must take into account is whether or not a stay could be granted on terms that are fair to all parties, which would involve the court weighing the balance of convenience and the competing rights of the parties.  I have already referred to the prejudice said to be identified by the applicant.

2. The respondent has the care of the children.  They are residing in a property made available to her by her parents.  She continues to be employed part-time and receiving government benefits.  Her parents are continuing to assist her with payment of utilities, car expenses, legal fees and private health insurance.  The respondent says that she hopes to use the sale proceeds from the E property to repay her parents the money that she owes them and look to secure alternative accommodation for her and the children.

3. The applicant seeks not only a stay of the sale of the E property but a stay of the child support departure order.  That order was made partly on the basis of the applicant’s evidence that at the time of hearing, the child support assessed by the Child Support Registrar was not adequate for the support of his children.  He indicated that he had a capacity to pay more than the child support that he was paying.  In the light of that evidence, it is not surprising the child support departure order was made, particularly taking into account the lack of disclosure as to the applicant’s business affairs.  Not only are the prospects of success on that ground not strong given that evidence, there was at the hearing, a ready acceptance by the applicant that his children needed support beyond the current assessment and that he had the capacity to pay it in the absence of any evidence as to his present financial position. 

4. The court cannot go beyond that.  If the order is stayed there will be a real prejudice to the respondent and to the children.  There is no evidence, as I have said, of prejudice to the applicant other than his assertion, very baldly stated, that he would become insolvent in the short-term if he had to make those payments.

5. Taking those matters into account and given it appears clear that the shares in E will have to be sold at some stage in any event, I am satisfied that the prejudice to be suffered by the respondent by a stay significantly outweighs the prejudice that would be suffered by the applicant in that event.  I am not satisfied that he has established that a stay should be granted and the application in a case filed on 25 March 2015 is dismissed.

6. The respondent has sought an order that the applicant pay to her costs of his unsuccessful application for a stay. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that, subject to the balance of the section, each party to the proceedings under this Act is to bear his or her own costs. Nonetheless, if the court is of the opinion that there are circumstances that justify it doing so, the court may make another order. In considering whether or not to make such an order, the court is to have regard to the matters set out at s 117(2)(a) of the Act.

7. The court is to have regard to the financial circumstances of each of the parties to the proceedings.  As I have pointed out in the primary judgment and again in the judgment on the stay application just given, it was not possible to determine the precise financial position of the applicant due to the difficulties with his evidence outlined in the primary judgment.  He has called no further evidence since then as to his financial position.  He asserts that he cannot pay any sum, that he cannot afford it and that it is unreasonable.  These are statements from the bar table.  There is no evidence to that effect.

8. Under the judgment, the applicant is to bear the burden of a debt to Credit Corporation of some $42 000 and Alphera Finance of just under $25 000, but is to receive the benefit of 29 per cent of the sale property value of the E shares and has a debt owed to him by his brother of some €60 000.  That is the extent of his evidence before the court.  It indicates that at least from the sale of the E shares, if not his income, he has a capacity to pay the costs as sought.

9. The financial circumstances of the respondent are that she continues to work part-time, receives some government benefits, but is largely supported by her parents.  The financial circumstances of the parties support the making of a costs order as sought.

10. In regards to the conduct of the proceedings, there is nothing particular to be taken into account under this ground, save as to remark that the evidence adduced on this application by the applicant who was acting for himself was extraordinarily limited.  The applicant was wholly unsuccessful in the proceedings.

11. The court is to take into account such other matters as the court considers relevant.  The application for a stay is an application that is not made in the ordinary course of proceedings.  It is an application made in aid of an appeal.  It is therefore, in my opinion, in a somewhat different category to property proceedings or the parenting proceedings before a primary judge. 

12. Costs orders are commonly made in appeals against the unsuccessful party.  The stay application was entirely unsuccessful.  One of the key problems at the primary hearing and on the stay application is the failure of the applicant to call acceptable evidence as to his financial position.  The respondent therefore continues to be put to considerable legal expense in having to deal with his applications in the absence of that evidence. 

13. Taking all these matters into account, there are circumstances that justify the making of a costs order.

14. The respondent seeks costs in the sum of some $14 000 as identified in a document quantifying those costs, which I will mark as exhibit 1 on this application.  Senior counsel appearing for her readily accepted that it was likely that of any taxation those costs, even if fully properly incurred - and there is no evidence to suggest that they were not, other than the applicant’s bald assertion to that effect - would nonetheless be reduced on taxation or assessment, and invited me to make a quantification of those, even if that necessarily be done on a very broad-brush approach.

15. Senior counsel also accepted that the appropriate order would be to make the costs payable on the distribution of the proceeds of the sale of the E shares, so that if there is any force in the applicant’s submissions that his income is not available to meet them, that would meet that objection.

16. Taking a very broad-brush approach, I propose to assess the costs in the sum of $7000 and order that they be paid upon the distribution of the proceeds of the sale of the applicant’s shares in E Pty Ltd.

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 30 April 2015.

Associate:

Date:  12 June 2015