Stephens & Stephens and Ors - [2009] FamCA 156

FAMILY COURT OF AUSTRALIA

STEPHENS & STEPHENS AND ORS

[2009] FamCA 156

FAMILY LAW - ENFORCEMENT OF ORDERS – Where the wife sought enforcement of the Orders of the trial Judge providing for the payment of a sum of money to the wife in settlement of property following the husband’s unsuccessful appeals to the Full Court and the High Court – Where the husband asserted that he had insufficient personal funds out of which to satisfy the Order – Where the husband asserted that the funds in question were the property of the parties’ children’s trusts and that the Court had neither jurisdiction nor power to make an order with respect to those monies in favour of the wife in satisfaction of a liability which is personal to the husband – It is not for this Court to revisit issues which have been conclusively determined against the husband by the High Court – The s 106B orders made by the trial Judge, which were undisturbed by the High Court, had the effect that the funds were not funds of the Children’s trusts, and to the extent that the funds were trust funds they were the funds of a trust of which the wife was an object, over which the husband had legal control. Further, to the extent that the funds were once the assets of either trust, the funds in question were now in fact removed from those trusts – Not established that the Court cannot or should not order that the stakeholders release to the wife the funds to satisfy her entitlement.

FAMILY LAW - ORDERS – Interest – Whether interest should be payable on the outstanding balance of the judgment sum owing to the wife following the husband’s unsuccessful appeals to the Full Court and to the High Court – Whether the Court should exercise its discretion pursuant to section 117B(2) to make an order for the payment of interest for a different period, and/or at a different rate to those which would otherwise apply by operation of section 117B(1) of the Act – In the circumstances of the case, it is not appropriate to make an order pursuant to section 117B(2) with respect to the period during which interest should accrue on the wife’s entitlement – The Court declined to adopt the interest rate prescribed by the Rules, adopting a rate 2 per cent in excess of the rate from time to time prescribed by the RBA as the cash rate.

FAMILY LAW - COSTS – Security for costs – In the circumstances, to decline to preserve a fund to abide the outcome of the various costs issues would be to create a real and substantial risk that the wife would be unable to recover her current and possible future entitlements to costs – Interlocutory injunctive relief granted.

Waugh and Waugh (2000) FLC 93-052; (2000) 27 Fam LR 63
Deputy Commissioner of Taxation and Kliman (2002) FLC 93-113; (2002) 29 Fam LR 301

APPLICANT:

Ms STEPHENS

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Stephens & Stephens and Ors [2009] FamCA 156
Case: [2009] FamCA 156
Decision Date: 10 March 2009

CaseChat Overview and Summary

In *Stephens & Stephens and Ors*, Coleman J considered an application by the wife for the enforcement of property settlement orders made by Strickland J, which had been upheld by the Full Court and the High Court. The husband contended that he lacked sufficient personal funds to satisfy the orders, asserting that the monies in question belonged to the parties' children's trusts and that the Court lacked jurisdiction to order their release to the wife. The wife also sought interest on the outstanding judgment sum and interlocutory injunctive relief for security for costs.

The primary legal issues before the Court were whether it had the jurisdiction and power to order the release of funds held by stakeholders to satisfy the wife's entitlement, despite the husband's claims regarding trust ownership. The Court was also required to determine whether interest should be payable on the outstanding balance, and if so, for what period and at what rate, and whether security for costs should be granted.

Coleman J reasoned that the issues concerning the ownership and disposition of the funds had been conclusively determined by the High Court. His Honour noted that orders made under s 106B of the *Family Law Act 1975* (Cth) by the trial judge had the effect that the funds were not solely the property of the children's trusts, and to the extent they were, the wife was an object of the trust and the husband had legal control. Furthermore, the funds in question had been removed from the trusts. Consequently, the Court found no impediment to ordering the stakeholders to release the funds to the wife. Regarding interest, the Court declined to make an order under s 117B(2) for a different period but exercised its discretion under s 117B(1) to adopt an interest rate of 2 per cent above the RBA cash rate. The Court also granted interlocutory injunctive relief for security for costs, finding a real and substantial risk that the wife would be unable to recover her costs if the fund were not preserved.

The Court ordered the stakeholders to pay the wife the outstanding principal sum of $996,362.18 and interest of $500,647.98. A sum of $500,000 was to be invested pending the determination of various costs liabilities. The balance of the funds held by the stakeholders was to be paid to the husband upon his written specification. The Court also discharged a previous order and set timelines for written submissions regarding the wife's application for costs.

Orders

Orders of the court

That Kennedy Wisewoulds solicitors (the stakeholders) forthwith pay to the wife from moneys held by the stakeholders pursuant to orders of the Court of 1 February 2009 the sum of $996 362.18 being the balance of moneys owed by the husband to the wife pursuant to the orders of the Court of 30 November 2005

That the stakeholders do forthwith further pay from the moneys held by them the sum of $500 647.98 by way of interest payable on moneys owed by the husband to the wife pursuant to orders of the Court of 30 November 2005

That the stakeholders invest the sum of $500 000 of the moneys held by them pursuant to orders of this Court on 1 February 2009 in an interest bearing account as trustees for the parties pending quantification and/or determination of

(a) The husband’s liability for costs pursuant to orders made by the High Court of Australia on 3 December 2008

(b) The husband’s liability for costs pursuant to orders made of the Full Court of the Family Court of Australia on 13 July 2007

That the stakeholders pay the balance of the moneys held by them after payment and/or investment of the moneys referred to in orders 1, 2 and 3 hereof to the husband or such entity or entities as the husband shall within 48 hours of these orders specify in writing to the stakeholders

That order 4 of the orders made by Watts J on 1 February 2009 be and is hereby discharged

That written submissions in support of any application for costs of the wife’s application filed 2 February 2009 be filed and served within 21 days

That written submissions in opposition to any such submissions be filed and served within 35 days

That written submissions in reply be filed and served within 42 days

That the wife’s application filed 2 February 2009 and the husband’s response filed 13 February 2009 be otherwise dismissed

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In her judgment, Kiefel J said: 191.The "net asset pool", to which the primary judge had regard in assessing the parties' contributions, included the trust assets. His Honour found that the parties' contributions were 52% by the husband and 48% by the wife. The net result was that the husband was entitled to $5,105,435 and the wife $4,712,709. After taking account of the assets of which the wife had the benefit, the husband was ordered to pay the wife $2,182,302. Although his Honour said "[w]here that will come from though is entirely up to the husband", he clearly had in mind the trust assets, which he considered could be treated as the property of the husband. His Honour had found that the trust was at all times subject to the control of the husband. (footnotes omitted) [Reasons for Judgment of the High Court of Australia, 3 December 2008, par 191]. Quite apart from the obvious reality that, for reasons which have been briefly suggested earlier, Strickland J did, and had to, anticipate that the husband could, and would, satisfy some or all of the wife’s entitlement out of assets which, but for the s 106B order he made, may have been the assets of the children’s trusts, his Reasons for Judgment confirm that such was the case. Without suggesting that such analysis is exhaustive of the issue, the passages of the judgments of the High Court to which reference has briefly been made confirm that their Honours were never in any doubt as to either the basis upon which Strickland J determined the wife’s entitlement, or the realities of how that entitlement might have been satisfied. Though conscious of those bases, and the nature of the husband’s challenges to them, the High Court declined to disturb Strickland J’s orders. Nothing which the husband has raised in the current proceedings persuades the Court that it cannot or should not order that the stakeholders release to the wife the sum of $966 362.18 to fully satisfy her entitlement pursuant to Strickland J’s orders. The wife’s claim for interest in the sum of $676 498.11 to 17 February 2009 was calculated on the basis of a document provided to the Court, and the husband, by her Senior Counsel. As noted earlier, the husband objected to any interest being awarded to the wife on the basis that, having paid to her $1 038 000, the husband had no other property or assets from which the wife could successfully recover any monies awarded by way of interest, or otherwise. The Court having rejected that assertion, it is necessary to consider the other bases upon which the husband objects to the imposition of interest on the monies payable to the wife. The husband asserted that interest should accrue from 2 September 2008, the date upon which his unsuccessful appeal to the High Court was heard. The logic underpinning that date is less than entirely clear. The husband contended that he had done no more than pursue his legal rights to challenge Strickland J’s judgment. There is no evidence before this Court that the husband delayed the appeal process through to the High Court. It is also a matter of record that the issues raised on the husband’s behalf gave rise to a division of opinion in the Full Court of this Court and in the High Court. The husband thus contends that he should not be penalised by way of an award of interest.

Ratio Decidendi

Legal Principle Established

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