SITWELL & SITWELL
[2013] FamCAFC 54
•12 April 2013
FAMILY COURT OF AUSTRALIA
| SITWELL & SITWELL | [2013] FamCAFC 54 |
| FAMILY LAW ─ APPEAL ─ ADJOURNMENT ─ Where the appellant had on previous occasions been granted an adjournment to enable him to obtain legal representation and had failed to do so ─Application dismissed. FAMILY LAW ─ APPEAL ─ Appeal against the refusal of the trial Judge to stay orders ─ Where there were no prospects of success of the appeal ─ Where there was no evidence that the appellant could prosecute his appeal in a timely fashion ─ Where there was delay and prejudice to the respondent ─Appeal dismissed. FAMILY LAW ─ APPEAL ─ COSTS ─ Where the appeal against the refusal of the trial Judge to stay orders was wholly unsuccessful ─ Appellant ordered to pay the respondent’s costs of and incidental to the said appeal. |
| Family Law Act 1975 (Cth): ss 79, 79A |
| Eure & Tidwell (1995) FLC 92-622 Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681 |
| APPELLANT: | Mr Sitwell |
| RESPONDENT: | Ms Sitwell |
| FILE NUMBER: | PAC | 5769 | of | 2010 |
| APPEAL NUMBER: | EA | 31 | of | 2013 |
| DATE ORDERS MADE: | 10 & 12 April 2013 |
| DATE JUDGMENT DELIVERED: | 12 April 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace, Ryan & Loughnan JJ |
| HEARING DATE: | 10 April 2013 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 19 March 2013 |
| LOWER COURT MNC: | [2013] FamCA 200 |
REPRESENTATION
| FOR THE APPELLANT: | Mr Sitwell appeared in person |
| COUNSEL FOR THE RESPONDENT: | Mr Sansom |
| SOLICITOR FOR THE RESPONDENT: | Champion Legal |
Orders made on 10 April 2013
The application in an appeal for an adjournment of the appeal, filed by the appellant husband on 8 April 2013, be dismissed.
Orders made on 12 April 2013
Appeal EA 31 of 2013 be dismissed.
The appellant husband pay the respondent wife’s costs of and incidental to the appeal as agreed or, in default of agreement, as assessed.
Certify for counsel for the respondent.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sitwell & Sitwell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 31 of 2013
File Number: PAC 5769 of 2010
| Mr Sitwell |
Appellant
And
| Ms Sitwell |
Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed 25 March 2013, Mr Sitwell
(“the husband”) appeals the refusal by Collier J on 19 March 2013 to grant a stay of orders made by his Honour on 14 March 2013 in property proceedings between the appellant and Ms Sitwell (“the wife”).
The wife opposed the appeal and seeks to maintain the trial Judge’s orders.
Background
It is important to set out the procedural history of the proceedings to give a context to and understanding of the orders against which the husband appeals.
The husband and wife married in June 1979 and separated in October 2009. Property proceedings were commenced between them. Of significance in this matter is a business conducted by the parties and known as GE Services. The business was conducted through the G Partnership.
On 7 February 2011 an order was made that the parties sell the partnership business. Mr BB was appointed to act as broker on the sale. To that end, the parties retained Mr BB by letter of instruction dated
14 February 2011. At the same time, Mr GS, an adult son of the parties, was appointed to conduct the partnership business in relation to which Order 2 made that day provided:
2The husband and the wife forthwith do all acts and things and sign all such documents as are necessary to;
…
c)[Mr GS] to pay to the husband and wife drawings in the sum of $1,000 per week each subject to the ability of the Partnership to meet that expense.
d)Cause [Mr GS] to distribute to each party monthly detailed MYOB accounts of the Partnership together with a copy of each quarter BAS Statement.
The order requiring payment of the weekly sum to the husband became a matter of considerable significance in the subsequent litigation.
On 19 October 2011, Johnston J made final orders for settlement of property in terms agreed to by the parties. Order 10 provided for the sale of the business “G Partnership” and appointed Mr GS to run the business pending its sale.
The husband wanted to buy the business as did the wife and three of the parties’ five sons who, for this purpose, formed a company, TG Pty Ltd. Thus Mr BB conducted negotiations between the two as prospective purchasers.
In March 2012 the husband commenced proceedings in the
Supreme Court of New South Wales seeking to establish that he had a concluded agreement with Mr BB to purchase the business. Ultimately the husband’s application failed in relation to which costs orders were made against him.
On 16 May 2012 an order was made, in part by consent, for the purpose of implementing and perhaps amending the orders of 19 October 2011:
1.…
2.That orders are made in accordance with the Minute of Order in relation to [Mr BB] filed in Court today and signed by Johnston J as set out hereunder:-
1.That for the purpose of implementation of Order 12.5 made
19 October 2011 in the event either the husband and/or the wife fail or neglect to execute a Contract for the Sale of the
[G Partnership] (its business and assets) within 3 business days of:
1.1[Mr BB] providing to each of the parties a copy of the Contract as negotiated; and
1.2[Mr BB] in writing requesting that the parties attend his offices to execute the Contract as provided in 1.1 above before expiry of such 3 day period;
then [Mr BB] shall be empowered pursuant to s.106A of the Family Law Act to execute that Contact for Sale for and on behalf of the party in default.
In reasons for judgment delivered on that day, Johnston J recorded that the TG group had withdrawn its interest in purchasing the business.
On 24 May 2012 the husband offered to purchase the business for $986,000. The wife told Mr BB that she was not prepared to accept the offer in the absence of a deposit and evidence of funding to complete the purchase from the husband. The contract has not been completed.
Despite the wife’s misgivings, on 8 June 2012, Mr BB accepted the appellant’s offer and exchanged a contract with him as purchaser. No deposit was paid. The contract was governed by the usual condition requiring completion within six weeks. The husband did not complete the contract within that time.
Mr BB terminated his retainer with the parties on 24 July 2012.
On 13 November 2012 the wife, as vendor, served the husband with what purported to be a valid Notice to Complete the contract. He did not complete in accordance with that Notice, the validity of which he disputed. Although nothing turns on whether the wife was able to issue a Notice to Complete, that she did so reflects her desire that the business be sold. As she subsequently indicated to his Honour, if the husband failed to promptly complete she sought to terminate the contract and following which she would be appointed Trustee for the sale of the business.
On 11 December 2012 orders were made:
…
5. That in the event that the contract for sale by the parties as vendors and the husband as purchaser in respect of the [G] Partnership business is not completed by the close of business on
Monday 11 February 2013 then the contract shall be terminated.
6.That upon the contract being terminated, the wife shall be appointed as trustee for sale of the business, described as the [G] Partnership, to such person as may be engaged to acquire the business.
…
9.That I grant liberty to either party to restore the mater to list (sic) with no minimum notice requirement by arrangement with my Associate in the event that these Orders are not complied with.
No appeal was filed in relation to those orders.
On 11 February 2013 the husband filed an application seeking the time for completion of the contract for him to purchase GE Services be extended to
11 March 2013.
On 14 February 2013 the husband appeared before Collier J on his application to extend time to complete the contract to purchase the business. The husband told the Court that he was not able to conduct the hearing of the application without legal assistance and sought an adjournment. During the hearing he was given time to make enquiries and he returned, saying that he had secured the assistance of legal representation by Mr Richardson SC and Mr Byrne. The
trial Judge adjourned the hearing of the application to 26 February 2013.
On 26 February 2013 the husband appeared before the trial Judge without legal representation. He asserted that while he had arranged representation, that had been the subject of interference by the wife’s solicitors and, as a result he no longer had legal representation. In any event, the husband said that he could not proceed with the hearing that day as he was unwell. He sought a further adjournment of two weeks. He asserted that Mr P, who is a solicitor, had agreed to act for him, and had agreed that he could be available on
14 March 2013, a date proposed for the adjournment. Over the strong objections of the wife, the matter was adjourned to 14 March 2013.
On 11 March 2013 the husband filed an application that Collier J disqualify himself.
When the matter returned to court on 14 March 2013, there was no appearance by the husband. The matter commenced at about 4.30 pm and, at about 4.40 pm the trial Judge was handed an email, which he said was from the husband indicating that he could not appear that day.
The trial Judge proceeded to determine and dismiss both of the husband’s applications; the application for extension of time in which to complete the purchase of the business and the application that he disqualify himself from hearing the matter.
In considering the application to extend the time for completion of the contract, his Honour said:
16. The husband, as purchaser, had entered into a contract for sale with the wife as vendor for him to acquire that business. That contract was entered into in June 2012. The Order I made on
11 December 2012 was in two parts so far as the [G Partnership] business was concerned. The first was that if the sale to the husband was not completed by close of business on
11 February 2013, the contract would be, and would stand, terminated. The second part was that upon the contract being terminated, the wife was to be appointed as trustee for sale of the
[G Partnership] business.
17. In respect of that order, nothing was heard from the husband until on the very day upon which completion was required, ie the
11 February 2013, he filed his application for time to be extended in which to complete the contract for sale. It is his case, as I apprehend it, that he was unable to complete the purchase for a number of reasons, none of which are in my view sufficiently detailed in his material. He endeavours to place at the feet of the wife, and those acting for her, the fault and/or blame for the contract not completing in accordance with my order of 11 December 2012.
His Honour set out some of the procedural history of the matter and said:
25. I am most concerned with the course this matter has taken. Whilst I have endeavoured to make every allowance for the husband being unrepresented on each of the occasions he has appeared before me, I have come to the conclusion that there has been a deliberate course by the husband to avoid this matter reaching a conclusion. I say that in light of the fact that His Honour Johnston J made final Orders, by consent, on 19 October 2011.
…
28. The issue that I understand I have to determine is whether or not his application for extension of time should be in any way entertained. Firstly, I believe that I am not in a position to make such an order. In my view, the order that I made on the previous occasion
(11 December 2012) was not a self-executing order but a final property order.
After referring to a number of cases his Honour continued:
30. In the leading judgment of the Full Court in Slapp, Nygh J made it clear that the extension of time “cannot be described as merely a change of machinery”. It had the effect of depriving the wife, in that case, of a substantive right which took effect on the husband’s failure to pay by the due date.
…
32. If I am wrong in my categorisation of the orders as final property order then the husband’s application for extension of time relates to a self-executing order. I am satisfied that, having regard to the decision of the Full Court of the Family Court of Australia in
Eure & Tidwell, before a self executing order is varied, there must be real and significant reason for so doing. As their Honours of the Full Court in that decision said “self executing orders are grave orders that need to be complied with.”
33. In my view, if these were self-executing orders – and my primary position, of course, is that they are not – then I am satisfied that the husband has done nothing to displace the coming into effect of the self-executing orders. He has totally failed to, in any way, put before the Court proper reasons why the Orders of 11 December 2012 should not come into effect.
On 15 March 2013 the husband filed a Notice of Appeal against the orders of 14 March 2013, both as to the refusal to extend time and as to the refusal by the trial Judge to disqualify himself.
Ground 2 asserts:
That under clause 9 of His Honour’s orders of 11/12/12 there was liberty for the application filed by the plaintiff on 11/2/13 to be filed and it should be heard.
On 19 March 2013 the husband filed an application seeking a stay of
his Honour’s refusal to extend time which was determined by the trial Judge that day.
The trial Judge refused to stay the operation of his orders of 14 March 2013.
Reasons of the trial judge
His Honour observed at [5] that the husband had filed a Notice of Appeal in respect of the orders of 14 March 2013 and thus had standing to bring the application for a stay.
His Honour indicated that, amongst other matters, he was required to consider the prospects of success in the appeal. He said:
8. Mr Jamieson, who appears today for the wife, submitted that there is in reality nothing that the appeal relates to. The situation, he asserts, is that, pursuant to the consent Orders made by Johnston J after the matter had commenced a defended hearing, the husband entered into a contract as purchaser with the wife as vendor to acquire the [G Partnership] business. Thereafter, the husband did not complete that contract.
9. The history of the matter shows that it came before me on
27 November 2012. On that date, I allowed an adjournment to
11 December 2012. On 11 December 2012, I made a series of Orders, the main purpose of which was to allow the husband until
11 February 2013 to complete the contract. My Orders of
11 December 2012 further provided that if the husband did not complete the contract within the time specified, the contract would be terminated and the wife would be appointed as trustee for sale of the [G Partnership] business.
10. The husband did not complete the contract. In fact, on
11 February 2013, he filed an application for an extension of time in which to complete the contract. I dealt with that application on
14 March 2013, after granting the husband yet two further adjournments to obtain legal advice on 14 February 2013 and on
26 February 2013 respectively. I gave reasons and dismissed the application for extension of time.
11. In my view, there is much in what Mr Jamieson says when he points out that the appeal, of itself, is not going to achieve that which the husband seeks, because his opportunity has been lost completely. Neither the Orders made by Johnston J, nor my Orders of
11 December 2012 have been appealed against.
12. I do not believe that the husband’s appeal enjoys realistic prospects of success.
His Honour then considered at [13] and [17] that the effect of the stay would be to further delay the wife’s rights pursuant to orders already made.
He further considered that, given the history of the matter as demonstrated in the appearances before him, the husband would not prosecute the appeal with dispatch and said:
15…I am not able to be satisfied that the stay is anything other than a device that will postpone the inevitable in this matter.
The appeal
Although the husband appealed against the trial Judge’s refusal to stay both of his orders, this aspect of the stay appeal was directed solely to his Honour’s dismissal of the extension of time application.
So much of the grounds that relate to the trial Judge’s refusal to stay his orders are:
1. The granting of a stay is essential to providing the right of Appeal in this matter. Without a stay the Appeal is vitiated as soon as the Partnership Business and or Premises is sold. The respondent’s aim is to do just that, to prevent the applicant succeeding, this may happen at any time.
2. As the business is very profitable there is no risk to the business from a Stay being granted.
…
The husband filed no written argument in support of his appeal. Counsel who appeared for the wife did.
The adjournment application
On 8 April 2013, the husband applied to adjourn the hearing date for the appeal. His application was supported by an affidavit in which he gave his reasons for wanting the adjournment:
1. I received the “reasons for Judgement” for the relevant hearings on 14/3/13 and 19/3/13, along with an extensive authorities list, on Thursday 4/4/13. As discussed with Registry Staff on Friday, as a layman, who must also work, it was impossible to research & the above & prepare appropriate submissions to the Full Court in time for 4pm Friday 5/4/13 & a hearing on 10/4/13. Also it has become clear to me from the above material that I must seek legal assistance with my submission in this appeal for a “stay”.
2. To obtain funds to enable this I am filing an ‘Application in a Case” using the attached figures Annexure 1 obtained on 3/4/`2, seeking an enforcement order to compel the other side to pay me my 50% share of profits from the [G Partnership] Business. A drawing of $1000 is required to be paid each week but nothing has been paid for 2 years (24 months), net profit in the attached MYOB figures complied by the respondent show an annual excess of $1 million.
The husband argued that, as his affidavit indicated, he was unable to conduct the appeal himself and he needed legal assistance. To do that he needed to be placed in funds. He told the Court that he had prepared an application which seeks enforcement of the order made in February 2011 that required payment to him of a weekly sum from the business. He said it would be filed forthwith in Parramatta Registry of the Court.
It is apparent from the reasons of the trial Judge and the transcripts of the hearings in this matter, that the issue of enforcement of this order has been raised by the husband on many, many occasions. It is unnecessary for us to quote each occasion, save to observe that the husband referred to enforcing that order when appearing before the trial Judge on 26 February 2013 and again on 19 March 2013. On that date, he said (Transcript, page 5, line 45):
[Mr Sitwell]: Now, I now – and I'm sorry how belated this is, I apologise to the court – but I’ve now become aware that I must make an enforcement application, that just telling the court is not enough. That application is going in on Wednesday this week. The application is almost finished now and it also includes other matters which are very important….
In answer to the question “how had circumstances changed such that the court could have confidence that the enforcement application would indeed be filed”, the husband said that the application was completed and needed merely to be signed, witnessed and filed in the registry. While this may indeed herald some movement on the question of enforcement of that order, given the history of the matter, we could not be satisfied that any action would result. As the husband has conceded, this intention to apply to enforce an order made on
7 February 2011 is very much belated.
It must be observed too that the mere filing of the application is but the first step in what the husband conceded would be contested litigation. He asserted that it was and had always been open to the wife to make or cause those payments to be made in compliance with the order and thus, provide him with sufficient funds to be represented in the litigation. This has not occurred, and in our estimation, the likelihood of it occurring in the context of what has gone before, is remote.
There is likely to be a more secure source of funds available to the husband. Pursuant to orders made on 19 October 2011, title to a New South Wales property was to be transferred to him. That has yet to occur. The initial delay was the fault of the husband who lost the title documents. However, the wife has caused the recent delay. The property has a value of the order of $90,000 and although it secures an obligation of the husband to pay the wife’s ordered and reserved costs in the amount of about $25,000, that property could represent a relatively accessible source of funds to the husband. Thus there is some prospect of the husband having the wherewithal to fund legal representation for his appeal.
Whether in funds or not, the fact is however, that the husband seeks indulgence on indulgence and he has not met his obligation to prosecute his own case in the proceedings. On several occasions, every consideration was extended to the husband, over the strong and justified objections of the wife and then, as now, he was not able to prosecute his case.
We thus refused the husband’s application to adjourn the appeal.
The appeal against the refusal to grant a stay
The principles in relation to the grant of a stay are well known and set out, for example, in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681.
The husband made submissions on his appeal. We understand them to be as follows:
1. The trial judge was wrong in his assessment of the prospects of success of the appeal because order 9 made on 11 December 2012 gave liberty to the parties to apply for variation of the orders made that day, and the application for extension was such a variation. Further that the refusal to grant a stay was plainly wrong and reflects an error in the exercise of his Honour’s discretion.
2. The delay in bringing the proceedings to a close was not detrimental to the wife because she was enjoying the profits from the business which she was running, she could have complied with the order of 7 February 2011 and had the weekly sum paid to the husband and thus ended the delay and having been excommunicated from his church and community, the delay was orchestrated by the wife and her community to cause him to “cease to exist.”
3. The trial judge was wrong in his finding that the husband would not prosecute the appeal with despatch because in coming to that conclusion, the trial judge failed to take into account that the husband had, up until the advent of the litigation, conducted his business ventures with considerable energy and success and it was only being deprived of funds that has caused him to delay the litigation.
Prospects of success in the appeal
The trial Judge considered the order he made on 11 December 2012 to be a property order pursuant to s 79 of the Family Law Act 1975 (Cth) and, as such could only be altered by recourse to the provisions of s 79A. However he did consider that if he is incorrect in that characterisation, then the order could properly be considered a machinery order in the nature of a “self-executing” order which had come into effect. He said, in any event, there needed to be a “real and significant reason” for varying such an order which the husband failed to demonstrate. Based on his findings, the trial Judge considered that the husband did not have prospects of success in the appeal. While minds might differ as to the nature and effect of the order made on 11 December 2012, his Honour’s findings in the alternate were open to him. It follows that the husband has not demonstrated any appellate error.
It is clear that the husband regarded the stay as being important to secure the business from being sold to a third party before he could complete the contract. He argued, as we have indicated, that there was no prejudice to the wife or the business from the granting of the stay and argued that in those circumstances, his Honour’s decision was plainly wrong and reflected an error in the exercise of his discretion. As was observed during addresses the property orders provide that significant liabilities owed by the parties to related interests and banks are to be paid from the sale proceeds of partnership assets, which includes the business. Hence we are unable to accept that there is no prejudice to the wife if the stay was continued.
The determination of whether to grant a stay is a matter for the discretion of the trial Judge. We are not persuaded that the result is such that it speaks of error. Even if the husband succeeded in having the contract revived and available for completion, there is no evidence that he could complete the contract. Apart from an amount that might be claimed on the hearing of an enforcement application that has not been filed, let alone listed for hearing, there is no indication from the husband as to a source of the funds with which he could complete a purchase for $986,000.
Delay and prejudice to the wife
The delay to which the trial Judge referred in declining to grant the stay reached back to the making of orders in February 2011 for the sale of the business. The husband’s argument neglects the trial Judge’s findings that the wife is entitled to the benefit of the orders which include the sale of the business and receipt by her of the sale price. Whether she is receiving a share, or even accepting the husband’s assertion that she is wrongfully receiving the whole of the profits of the business (which we do not), does not outweigh the delay and presumed prejudice to her from the maintenance of the proceedings in the face of orders which have not been the subject of appeal.
The husband’s ability to prosecute the appeal in a timely fashion
Although the husband asserts that his position is different to that which he had obtained before the trial Judge in that he has prepared the application for enforcement of orders, it is far from certain that he will successfully recover money or if he does that it will be a significant amount and occur shortly. Many of the adjournments granted in this matter have been because the husband has said that he needed legal representation and lacked the funds to engage a lawyer. On nearly all of those occasions, he has asserted the enforcement application as being the source of funds for him, yet he has not filed it let alone prosecuted it. We accept that the husband has, in the past, demonstrated considerable business acumen in building up the business, however it seems that for whatever reason he has become unable to address important matters in a timely way. His Honour’s finding in this regard was well open to him.
Importantly, there is no evidence or submission as to the utility of a stay. If there was a stay of the order dismissing the application to extend time to complete the contract, how would the husband be better off? There is no contract. It was terminated by an order that has never been challenged, a factor which sits uncomfortably with the husband’s suggestion that the refusal to grant a stay would render his appeal nugatory. The fact that the application to extend time is dismissed does not mean that the contract is somehow revived and can be completed or that the business could not be sold to someone else.
It follows then that the husband’s appeal against the trial Judge’s refusal to grant a stay of his refusal to extend the time for the husband to complete the contract for purchase of the business will fail.
Costs
As is usual we sought submissions from each party as to the costs in the appeal. The wife sought an order that, if the appeal failed, the husband pay her costs and that those costs be secured by charge over a property owned by the husband.
Counsel for the wife agreed that there were ample sources from which any costs ordered could be paid to the wife without creating a charge over property. That concession was properly made in our opinion and we do not propose to make such an order.
However, the appeal having wholly failed, the husband should be ordered to pay the wife’s costs of the appeal.
It is appropriate to certify for counsel.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 12 April 2013.
Associate:
Date: 12 April 2013
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