SENIOR & ANDERSON (NO. 2)

[2012] FamCA 880

FAMILY COURT OF AUSTRALIA

SENIOR & ANDERSON (NO. 2) [2012] FamCA 880

FAMILY LAW – STAY APPLICATION – sale of real property – grounds and merit of appeal – whether failure to grant stay would render successful appeal nugatory – discretionary considerations – no automatic entitlement to stay – leave to husband to re-draft grounds of appeal.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth) - Rule 22.11

Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106
Bryant v Commonwealth Bank of Australia (1996) 134 ALR 460
Carlin & Carlin (1977) FLC 90-320
Friscioni & Friscioni [2009] FamCAFC 43
Kelly & Kelly (1981) FLC 91-007
Sheldon & Weir [2011] FamCA 2
State Central Authority & Ustinov (No 2) [2008] FamCA 368

APPELLANT: Mr Anderson

RESPONDENT: Ms Senior

FILE NUMBER: MLC 9546 of 2008

DATE DELIVERED: 23 October 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 26 September 2012

REPRESENTATION

COUNSEL FOR THE APPELLANT: In Person

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: Ms Smallwood

SOLICITOR FOR THE RESPONDENT: Gillian Coote, Lawyers

ORDERS

IT IS ORDERED:

1. That my orders pronounced 16 July 2012 be stayed pending the hearing and determination by the Full Court of the Notice of Appeal filed by the appellant husband in proceedings No. SOA 58 of 2012.

2. That within fourteen days the appellant make, file and serve upon the respondent wife’s solicitors an amended form of orders sought, as required by section 10 Part F of the Notice of Appeal.

3. That there be no order as to costs of and incidental to the hearing and determination of this stay application.

4. That the appellant husband’s Application in a Case filed 3 September 2012 be otherwise dismissed. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Senior & Anderson (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 MELBOURNE

FILE NUMBER: MLC 9546 of 2008

Mr Anderson

Appellant

And

Ms Senior

Respondent

REASONS FOR JUDGMENT

ISSUES

1. On 16 July 2012 I delivered Reasons for Judgment and pronounced final orders for a division of the property of the parties pursuant to s 79 of the Family Law Act1975 (Cth).

2. On 6 August 2012 the husband filed a Notice of Appeal against my orders.

3. On 3 September 2012 the husband filed an Application in a Case seeking that my orders be stayed pending the hearing of his appeal to the Full Court.

4. The husband’s Application was supported by an affidavit filed 3 September 2012 wherein he deposed to his filing of the Notice of Appeal and highlighted that he sought to set aside my orders, including orders 3 and 4 thereof, which required the B property, a jointly owned shop and residence, to be sold with the proceeds to be divided, as ordered, between the parties.

5. The husband subsequently filed a Summary of Argument on 24 September 2012 and a further updated Summary of Argument on 26 September 2012.

6. That first Summary of Argument recorded the grounds upon which the husband sought a stay and he there submitted that:

   There was a fundamental matter of misunderstanding, and the wrong assumptions which were taken into consideration and absorbed by the Family court, in making the final judgement and orders on 16^th July 2012.

   On the other hand the fact, the effect, and the nature of my legal matter were not taken into consideration regarding my investment contract with my family, the debts to my brother in law, and all other legal aspects of my legal matter, in this proceeding which I already mentioned in my notice of appeal.  During the time of proceedings for the appeal, the Full Court should find some merits supporting my legal matter and deal with these merits.  So there is a very high prospect of success, and the possibility of the appeal to be allowed very high.

   Secondly on the balance of convenience, there will be a real disadvantage to me if the stay is not granted.  It will mean that the property will be sold.  I will be in difficulties and the money will be distributed and gone; in addition to that, the financial damage for me and for the other party will be severe, if we are considering the other cost for the agent.  If the Appeal finds there has been an error, it will be too late, the property will have been sold if the order remains, and this is irreversible.

   On the other hand, if the stay is granted, there is no disadvantage to the other party in maintaining the status quo.  The other party has a high income and stable accommodation beside a secured job.

   This means the balance of convenience favours having the order stayed pending Appeal.

7. The respondent wife opposed the granting of a stay.

8. On 17 September 2012 the wife filed an Application in a Case seeking orders for all times to be abridged for an urgent hearing of her case and for orders, in summary:

   §that the husband execute a transfer of land in the wife’s favour for the B property, so as to enable her to have conduct of its sale on terms and conditions that replicated the Court orders or otherwise as were said to be necessary to facilitate the sale process;

   §for the proceeds of sale to be applied in the manner previously ordered and updated as a result of this further Application being filed;

   §that a Registrar of the Family Court of Australia be appointed to sign relevant documents in the name of the husband pursuant to s 106A of the Family Law Act1975;  and

   §that the husband pay the wife’s costs of her Application on an indemnity basis as a result of what was said to be his failure to comply with orders of the Court.

9. The wife’s Application was supported by an affidavit of her solicitor, Ms Coote, filed 17 September 2012.  That affidavit exhibited correspondence that had passed between her office and the husband as to efforts made to list and to sell the subject property.  Subsequently the wife’s solicitors were served, first with the Notice of Appeal and thereafter with the Application for a stay and the husband’s supporting documents.

10. The submission on behalf of the wife is that, because of the husband’s resistance to facilitate the sale of the subject property, the wife should have the conduct of its sale and the real estate agents nominated by her, Hocking Stuart of B, be appointed as the sales agent.

11. Otherwise I record that I have read the annexures to the affidavit of Ms Coote and have evaluated that evidence in determining the stay application now before me.

12. I listed the matter for hearing on 26 September 2012.  The husband appeared in person and Ms Smallwood of Counsel appeared for the wife, who was not present in Court for reasons that were appropriately explained.

13. I was advised in the course of hearing the stay application that the Registrar supervising the conduct of the appeal had conferred with the parties and the Court Index for the appeal documentation had been settled on 12 September 2012.

14. The husband advised the Court, and I accept, that he had ordered the transcript of the trial and that he had paid a deposit of $2,000 towards the costs thereof.

15. The husband’s primary argument was that he had appealed within time, he was genuine in his desire to appeal, that the orders pronounced by the Court were said by him to be unfair and inequitable, that the Court had misunderstood facts and had made wrong assumptions upon which the final orders were based and that if the property were now to be sold it was an irreversible decision which would severely prejudice him if he were to be successful on appeal.  

16. The husband highlighted that a sale of the B property would be a real disadvantage to him in that the property would be sold and the proceeds of sale “distributed and gone”.  If then my order was to be varied or discharged he argued that it would be “too late as the property would have been sold … and this is irreversible”.

17. The husband asserted that, if a stay were to be granted, there is no disadvantage to the respondent in maintaining the status quo and he asserted, but had not proved, that she had both a high income and a secure job, as well as stable accommodation.  The husband emphasised that “the balance of convenience favoured the orders being stayed pending the determination of his appeal”. 

18. Ms Smallwood, on behalf of the wife, objected to the stay and her primary submissions focused upon:

    §that the husband gave no reasons, or insufficient reasons, in his affidavit material to warrant a stay of the orders being granted;

    §the wife must be entitled to the “fruits of her judgment”;

    §a stay would cause undue and unnecessary hardship to the wife and would exclude her from having access to the monies which she was awarded in the Judgment;

    §the husband’s prospects of success on appeal were said to be negligible and that there are no serious issues identified in his Grounds of Appeal; and

    §that it would be unfair and prejudicial to the wife to grant a stay on the facts and circumstances of the case, based upon the findings made in the trial Judgment, and given her financial and economic circumstances. 

19. It was said that the wife currently has no access to matrimonial funds, as they are controlled by the husband.  Ms Smallwood compared what she said was the wife’s likely hardship if a stay was granted to that of the husband’s if the stay was refused, which she said was minimal.  She said that even if the property was sold the husband would still get to keep his home and that he was therefore merely losing an investment property and not his residential property. 

20. Ms Smallwood identified the fact that even if the property were sold it would simply be converted into another asset, that is, cash.  Even if the appeal was successful that asset would still always be in existence, just in a different form, being cash, and that accordingly, any required cash adjustment could be made based on the outcome of the appeal.  She detailed that there was no requirement to keep the asset in specie, and that the asset would always be in existence, just in a different form.  It was on that basis that Ms Smallwood submitted that a refusal to grant a stay would not render any successful appeal nugatory, contrary to the submissions of the husband. 

21. Ms Smallwood challenged the validity of the Notice of Appeal, submitted that it was not properly drafted and did not meaningfully seek and identify appropriate orders sought in Part F (paragraph 10) thereof.

22. I find that there is some merit in that argument and the stated orders sought by the husband are more matters of argument and submission than a statement of his actual orders sought.  He will need to redraw them but, with that qualification, it is otherwise clearly apparent from the Grounds of Appeal, in paragraphs 1 – 12 (inclusive), that the husband does seek the setting aside of my orders and that he retain ownership and possession of the B property.

23. I have decided that it is appropriate, as a condition of the stay that I have determined to grant, to require the husband to make, file and serve amended orders sought in the appeal within a further fourteen days of the date hereof.

24. It is my understanding that, subject to compliance with all directions of the Registrar, the completion of the required Appeal Books and the filing of a Summary of Legal Argument, that this appeal will be listed in the Melbourne Registry for hearing in March 2013.  That is not an undue delay given that that is  the next sitting of the Full Court in Melbourne and that the appeal should be heard in this Registry.

25. Ms Smallwood highlighted what she submitted was a further likely issue, that is, the possible delay in the Full Court delivering their Reasons for Judgment and pronouncing orders subsequent to its hearing of the appeal.  I do not speculate on the time that any Judgment of the Full Court may be reserved, if indeed it is reserved.  It may be delivered ex tempore or within a short time of the hearing of the appeal.  The period of time in which the appeal will be heard is an important consideration in a stay application, as is detailed further below, however, it is only one of a number of different and equally important considerations.

26. It was the wife’s formal application that no stay be granted in any form.  During the hearing I raised with Ms Smallwood the possibility of allowing the sale of the real property, but that the net proceeds of sale be held on trust pending the Full Court’s decision.  Ms Smallwood noted that she did not have instructions on this point and that the wife’s formal application was that the stay should be refused.  Ms Smallwood conceded that the alternative approach would assist to preserve the asset, albeit in cash form, but stated that the existence of the alternative was not an argument in itself for the granting of the stay.   

27. Rule 22.11 of the Family Law Rules 2004 (Cth) governs the principles surrounding the stay of an order, pending the determination of an appeal. It provides that:

    (1)The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision.

    (2)If an appeal has been started, or a party has applied for leave to appeal against an order, any party may apply for an order staying the operation or enforcement of all, or part, of the order to which the appeal or application relates.

    (3)An Application for a stay must be filed in the Registry in which the order under appeal was made and be heard by the Judge, Federal Magistrate or Magistrate who made the order under appeal.

28. This rule makes it clear that the filing of a Notice of Appeal does not in itself grant a stay of the orders being appealed.  A stay of those orders will only occur where a party is successful in a stay application.  The onus of establishing a proper basis for a stay is upon the applicant (Friscioni & Friscioni [2009] FamCAFC 43).

29. The decision of whether or not to grant a stay is wholly discretionary.  As Fogarty J said in Kelly & Kelly (1981) FLC 91-007:

    A stay is not granted as of course and that appropriate (or if one likes the term “special”) circumstances must be shown.

30. Given the discretionary nature of the decision as to whether or not to grant a stay, there are no set rules as to what should be considered.  Instead, “the circumstances that would justify an order for a stay depend on the circumstances of each case” (Friscioni (supra)).  Fogarty J in Kelly (supra) stated that:

    It is, I think, unhelpful to attempt to circumscribe the exercise of that discretion by particular phrases or by reference to particular categories.  Each case must be looked at in the light of its own circumstances against the background of that general approach, a decision made in each case as to whether a stay is proper…That the discretion should be wife and untrammelled by reference to particular to particular categories is particularly important under the Family Law Act.    

1. Nonetheless, numerous cases have attempted to set out the circumstances that are commonly considered in stay applications. Watson SJ in Carlin and Carlin (1977) FLC 90-320 detailed the following considerations as being relevant:

   (a)the rights of the children…;

   (b)the delays as to appeal;

   (c)whether refusal of a stay renders a successful appeal nugatory;

   (d)the hardship to the successful respondent in comparison to the hardship of the appellant;

   (e)the grounds of appeal…

   His Honour noted that the above list was not intended to “in any way fetter…discretion”. 

2. Many cases since Carlin (supra) have reiterated as well as expanded upon the above considerations.  One recent example is the Full Court (Bryant CJ, Boland and Crisford JJ) decision of Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106, where the Full Court noted at paragraph 18 (references omitted) that:

   The principles to be applied in determining an application for a stay of orders both in the general law and in respect of parenting proceedings are also well known…The authorities stress the discretionary nature of the application which should be determined on its merits.  Principles relevant to his matter include 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 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 insufficient to grant 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 a 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 the stay for a short period of time; and

   ·the best interests of the child the subject of the proceedings are a significant consideration.  

3. One of the key considerations in this case is whether a successful appeal by the husband would be rendered nugatory if a stay is not granted.  This is particularly important in this case given that the stay application is in relation to real property.  Although this consideration is not determinative, it is a “substantial factor in determining whether it will be appropriate to grant a stay” (Aldridge (supra)).  Nonetheless, the harm that may be caused to the applicant in refusing the stay application must be weighed against the harm to the respondent if the stay is granted.  This is effectively a balance of convenience test, involving the balancing of the various harms that could be caused to both parties.  This approach emphasises the discretionary nature of a stay decision. 

4. This balancing approach was demonstrated in Fogarty J’s reasoning in Kelly (supra).  In that case the husband was ordered to pay $200,000 to the wife immediately.  The husband appealed the decision and sought a stay of the orders.  He argued that he would have to sell real estate and other assets to pay the sum, which could not be overturned if his appeal was successful.  Fogarty J stated:

   On the present material it seems to me that it may be an inordinate hardship and an inappropriate course to adopt to refuse the application insofar as it may create a position where the husband is required to immediately pay the whole of the $200,000.  On the material before me that may be likely to produce a situation where he will be required to sell real estate and stock in appropriate circumstances.  On the other hand it would I think be inappropriate to delay the wife becoming entitled to at least a significant portion of the judgment.   

   In weighing up these considerations, Fogarty J ultimately ordered the husband to pay only $100,000, based on evidence that he was able to do so without having to sell any real estate.

5. Another key consideration is the grounds and merit of the husband’s appeal. In Sheldon & Weir [2011] FamCA 2 Ryan J cited Bryant v Commonwealth Bank of Australia (1996) 134 ALR 460, noting that Kirby J in that case said that “a decision on a stay application should not become an occasion for a detailed analysis of the issues that will arise in the special leave application and, if granted, the appeal”. Instead, the “prospects of success will necessarily involve a matter of judicial impression”. Ryan J stated that it was appropriate to adopt that approach in the family law context. The father in Sheldon (supra) listed over 45 grounds of appeal, many which went to the trial judge’s findings of fact.  In refusing the stay application on various grounds, including this one, Ryan J stated that:

   On a reconsideration of my reasons although one could not conclude there is no merit in the father’s grounds of appeal as presently drafted they are relatively modest and a successful appeal is more unlikely than likely.  When the grounds are considered in the context of my knowledge of the evidence and the analysis of those issues in my reasons, I am unable to find the appeal is based on substantial grounds. 

1. A further consideration is the bona fides of the husband’s stay application.  In State Central Authority & Ustinov (No 2) [2008] FamCA 368, Dawe J considered “whether the appeal raises serious issues and that the grounds appear to be substantial rather than merely a delaying tactic”. This consideration therefore ties in with the above consideration, that is, a consideration of the grounds and merits of appeal. If the grounds of appeal do not appear to be substantial then it is more likely that the stay application is a delay tactic.

2. In my evaluation of the evidence and submissions before me in this application, I have proceeded upon the basis that the husband has the onus to establish the proper basis for the granting of a stay.  He does not have to establish any exceptional circumstances.  I am however conscious of the requirement that I must weigh the balance of convenience and the competing rights of each of the parties and I have undertaken that assessment on the basis of the documents and submissions filed by the parties, and their further oral submissions.

3. I am particularly mindful that the respondent wife is entitled to the benefit of the Judgment which I delivered and is entitled to presume that my Judgment is correct.  I have balanced those matters against a weighting of the risk that, if a stay is not granted, then the appeal would be rendered nugatory as it is, and always was in the hearing, the husband’s application and overwhelming desire to retain both his home and the B investment property.

4. My primary Judgment involved an evaluation of the evidence of financial contributions made from the husband’s overseas extended family and the alleged contractual and loaned basis upon which all such monies were said to have been advanced.  The issue of whether the husband was and should have been found to have remained financially liable to repay borrowings or advances from his family was a central issue in the hearing and upon which I have made particular findings which are now under challenge.  The husband’s ground of appeal, and I well understand that they are drawn by a self represented litigant, highlighted a challenge to my finding of the net pool of assets, including assets which I excluded from the pool and other liabilities which I refused to accept as a financial adjustment to the benefit of the husband’s case.  It is clearly understood from the Notice of Appeal that these matters are all put in issue by the husband.

5. The grounds of appeal may not present a strong case, but it may be an arguable case and therefore I do not conclude that there is no merit in the appeal.  Whilst I am of the opinion that the appeal may not be based upon substantial grounds, as per Sheldon (supra), I have given leave for them to be amended within 14 days and it is therefore proper that I leave the outcome of the appeal to the Full Court. 

6. I do not doubt the bona fides of the husband and he has punctually complied with the filing dates and the requirements of the appeal process.  I accept that the appeal has not been filed as a delay tactic.

7. On balance, I have decided, in the exercise of my discretion, that it is proper to grant a stay of my orders pending the hearing and determination of the appeal.  As earlier foreshadowed I do so however on the basis that the husband is required to substantially amend and redraw his orders sought in the appeal and thus, within fourteen days, section 10 Part F of the Notice of Appeal must be redrawn, filed and served upon the wife’s solicitors.

I certify that the preceding forty six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 23 October 2012.

Associate: 

Date: