Strahan and Strahan - [2018] FamCA 84

FAMILY COURT OF AUSTRALIA

STRAHAN & STRAHAN

[2018] FamCA 84

FAMILY LAW – ORDERS – Stay – where wife seeks stay of appeal against property and spousal maintenance orders – where a basis is said to be that the husband may dispose of assets if orders are implemented during appeal – stay refused.

Family Law Act 1975 (Cth)

Aldridge and Keaton (stay appeal) [2009] FamCAFC 106
House v The King (1936) 55 CLR 499
Mareva Compania Naviera SA v International Bulk Carriers SA (1980) 1 All ER 213
Strahan and Strahan [2017] FamCA 76
Strahan and Strahan (No. 3) [2017] FamCA 948
Strahan and Strahan (No. 4) [2017] FamCA 949

APPLICANT:

Ms Strahan

RESPONDENT:

Mr Strahan

FILE NUMBER:

ADF

228

2005

DATE DELIVERED:

22 February 2018

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

15 February 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Livesey QC

SOLICITOR FOR THE APPLICANT:

Charlton Rowley

COUNSEL FOR THE RESPONDENT:

Mr Wilson

SOLICITOR FOR THE RESPONDENT:

Kennedy Partners

Orders

That the application in a case filed on 31 January 2018 for a stay of the orders made on 23 November 2017 is refused

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Strahan & Strahan has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: ADF 228 of 2005

Ms Strahan

Applicant

And

Mr Strahan

Respondent

REASONS FOR JUDGMENT

By an application in a case supported by an affidavit, Ms Strahan (“the wife”) seeks a stay of orders made in her absence on 23 November 2017 pending an appeal to the Full Court of this court.
By a response to the application of the wife and filed on 15 February 2018, Mr Strahan (“the husband”) seeks a dismissal of her application and costs. He supports his application with an affidavit filed the same day as his response.
The appeal by the wife arises from two orders. The first was made on 13 November 2017 in which I dismissed the wife’s application for an adjournment of what was then anticipated to be the final hearing and I gave leave to the husband to proceed on an undefended basis. The judgment and orders now under appeal can be found at Strahan and Strahan (No. 3) [2017] FamCA 948.
On 23 November 2017, I made orders on the husband’s application and delivered reasons for judgment (see Strahan and Strahan (No. 4) [2017] FamCA 949).
The appeal of the wife against the refusal of the adjournment was filed on 11 December 2017. The notice alleges that an error arises from not placing sufficient weight on the wife’s personal circumstances such as to allow her further time to prepare. The Notice of Appeal in respect of the orders alleges error in granting leave to the husband to proceed. She then filed a second Notice of Appeal in relation to the substantive property settlement orders. In addition to repeating that an error was made about refusing the adjournment, allowing the husband to proceed on an undefended basis, in the alternative, it is pleaded that error was made in the assessment of the respective parties’ contributions and in respect of the findings about the husband’s interest in a particular trust. It is further alleged that there is error in the finding that the wife could adequately support herself from the capital provided by the orders.
The relevant orders subject to the appeal are, inter alia, by 31 January 2018, the husband pay the wife $2 million and that upon the wife being presented with the necessary documents, she resign any office she holds in a number of companies, relinquish her role as the appointor of the relevant trust and transfer to the husband various shares. Significantly, the orders required her to withdraw all caveats lodged by her in relation to real properties retained by the husband in Australia, Asia and Europe.
The husband opposes the stay on the basis that to the extent that the wife’s appeal has any merit, she will be seeking for the Full Court to interfere with the exercise of discretion (see House v The King (1936) 55 CLR 499).
The parties agreed that the law relating to the granting of a stay pending an appeal is set out in Aldridge and Keaton (stay appeal) [2009] FamCAFC 106. For the purposes of these reasons, I set out those matters in paragraph [18] of the Full Court’s judgment insofar as they are relevant here:
[18]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 (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited [No.1] (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation (1985) 2 NSW LR 685; Jennings Construction Limited v Burgundy Royale Investments Pty Limited (1986) 161 CLR 681; Clemett & 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 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 bona fides of the applicant;
·    …
·    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;
…
In the affidavit in support of the stay application, the wife focussed on a number of different issues. At [7], she said:
Given the Appeal is yet to be heard and determined, I am concerned that if some of the Final Orders are effected, the outcome of the Appeal may be rendered nugatory.
The foundation for her belief and concern was said to be that the orders related to the transfer of interests in real and other property held in Australia and overseas and if those interests were transferred “and then subsequently disposed of or dealt with”, it may not be possible to recover them if she was successful on the appeal.
Insofar as the wife seeks to say that the husband should not be allowed to dispose of that property because she wanted to recover it, I can only refer to what I said in the final reasons for judgment as follows:
[8]On 14 March 2017, the wife filed an application seeking litigation funding and a discharge of the September 2016 trial orders. On 17 March 2017, a hearing, at which the wife was not present because she was overseas with the husband, saw the 3 April 2017 final hearing vacated. I refixed it for 20 April 2017 when I understood that all parties would be back in Australia. By this time, the husband had filed his evidence but the wife had not. So out of date was the wife’s application for orders or final relief, that her last document was well-buried in the court file. Years had passed without any clear indication of what she was seeking, notwithstanding the parade of lawyers passing. Most of those lawyers were involved in interlocutory disputes about discovery and litigation funding.
That particular explanation has to be seen in the context of the following:
[1][Mr Strahan] (“the husband”) married Ms Strahan (“the wife”) on … 1994 and they commenced living together in a relationship that lasted until January 2005.
[2]Legal proceedings between the parties were commenced about one month after their separation but it has taken until November 2017 to bring all of those proceedings to an end. Along the way, the court record shows innumerable hearings and over 700 filed documents. The evidence of both parties shows the expense has been extraordinary but they have each also used an enormous amount of the court's time over that journey.
It is difficult in the circumstances therefore to understand how the wife can seek to “recover” any property now given to the husband in circumstances where she had not seen fit to tell the court what relief she was seeking. That remark must be important even in circumstances where the fundamental bases of her various adjournment applications in 2017 related to her desire not only to have legal representation, and for it to be somehow funded by the husband, but also to enable her to conclude various investigations into financial matters. That particular discovery approach can be seen in my remarks in the final hearing at [5] where I said:
[5]Over more than 12 years, the wife has had involvement with about 15 different firms of lawyers who each filed a Notice confirming that they had instructions to represent her. Each in turn, either ceased to act or alternatively, had their services terminated.
…
[7]The wife’s solicitors who appeared in February 2017, flagged unresolved issues of litigation funding and discovery that they submitted had to be determined before a trial. Accordingly, an interlocutory hearing was fixed for 3 March 2017 (see Strahan and Strahan [2017] FamCA 76).
Returning to the wife’s affidavit, much of what then followed was expressions of concern by the wife that if the final orders were implemented, it would have a devastating effect on the health and wellbeing of the parties’ now adult child.
In the same reasons earlier mentioned, I made the following remarks:
[32]The wife cares for [Mr S] but it would be important to acknowledge that she is assisted by a number of people all of whom are paid largely by the husband.
[33]For example, the parties’ cooperation in relation to [Mr S] included a trip to the United States of America in early 2017 for the purposes of pursuing some form of treatment or cure and the carers were all taken as well. This was all at the husband’s expense.
[34]There is no dispute from the husband that the wife has a significant role in the care of [Mr S] but counsel for the husband submitted that the court could take some comfort from knowing that the support would continue in the future. The role of the husband in the past would corroborate that submission.
[35]…
[36]…Thus, I conclude that there is substance to the submission by counsel for the husband that I can rely upon the husband to continue supporting his son.
In my view, the issue about the impact of the orders upon Mr S is therefore irrelevant to the issue of the appeal in circumstances where no evidence was presented by the wife to the contrary of the husband and he provided unchallenged evidence that he had, and would, continue to support his son in what could only described as substantial sums of money.
The wife then turned to her own health and argued that she had problems which she had set out in an affidavit in August 2017 which she said placed “an incredible burden” on her if she was required to facilitate the implementation of the final order as well as prosecute her appeal and attend to her son’s special needs. It is hard to know exactly what all of that means. The implementation of the orders would certainly alter legal interests but it is hard to know what the wife’s argument is in relation to the properties that ultimately belonged to the husband under the final orders having regard to the absence of any evidence that she had either claimed relief associated with them or indeed had some legitimate assumption about ownership of them.
Senior counsel for the wife submitted that his focus was on the loss of properties because it was connected with the health and well-being as well as the care of, the parties’ child who is now an adult. He submitted that there was no prejudice to the husband but that the real risk of a refusal of the stay rendering the wife’s appeal nugatory lay in the fact that the husband could do as he pleased with the properties he received under the final orders. Senior counsel quite properly conceded that although the wife had been provided with a cheque by the solicitors for the husband in the sum of $2 million (as was required by the final orders), that sum had not been accepted, nor banked, although the cheque is still in the hands of the solicitor. The absence of prejudice to the husband it was submitted, could only be that relating to a delay of him being able to access his entitlement if the appeal was unsuccessful not to mention the fact that he would be obliged to pay further spousal maintenance.
In respect of spousal maintenance, a return to the reasons for judgment wherein I said:
[37]In March 2010, the wife filed an application for interim orders including “interim spousal maintenance” of $278,000 per calendar month. On 31 May 2010, an order was made that the husband pay by way of spousal maintenance, pending the determination of that application, a lump sum of $325,000. The wife appealed.
[38]In July 2010, an order was made by consent that the husband access an interest in a company and pay one half to each of himself and the wife and the characterisation as spousal maintenance or interim property settlement be reserved to the trial. That did not resolve the spousal maintenance issue.
…
[40]On 24 April 2012, the parties litigated the issue of spousal maintenance and Dawe J made the following order:
(2)The husband pay the wife interim spouse maintenance fixed in the sum of TWENTY SIX THOUSAND AND TWENTY ONE DOLLARS [$26,021.00] per calendar month, the first payment to be on 1 May 2012 and thereafter the first day of each calendar month pending trial. (My emphasis)
…
[43]Her Honour noted that the husband had submitted that the claim of the wife was “manifestly excessive and unjustified”. Her Honour then looked at the amounts of expenditure of the wife and determined that it was proper to make an interim order for $26,021 per calendar month.
[44]The present order has continued since 2012 and the husband now seeks that it be discharged. The financial statement filed by the wife in July 2016 showed similar expenses to those contemplated by Dawe J in 2012. Some of them are hard to understand but then again, the wife asserted that she had lived a luxurious lifestyle. The difficulty for the court now is that the wife has not participated in these proceedings and importantly, the orders I propose to make relating to property have her capital entitlements in mind so I am entitled to consider whether she can live within her means with those assets.
[45]In my view, absent the wife’s participation, and taking into account the orders, the wife can adequately support herself even factoring in what she had previously described as a luxurious lifestyle. Some of the expenses that she deposed to having included “other necessary commitments” $1573 per week, “gifts, hairdressing, toiletries and cosmetics” $615 per week, “clothing and shoes” $1560 per week and “entertainment/hobbies” $350 per week. Absent some indication as to why those expenses are necessary even taking into account the “luxurious lifestyle” to which the wife deposed in the proceedings before Dawe J, and even allowing for income which would now be taxed (as it has not been by virtue of the fact that the payment she has received has been spousal maintenance), my view is that the wife should be able to live comfortably by community standards factoring in the significant amount of money and property that she will have from this case.
Nothing in the wife’s affidavit material has indicated why, in respect of her own position, the loss of the spousal maintenance acts to her detriment and there is nothing in the grounds of appeal that I can see other than an assertion that there was an error in the finding that she could adequately support herself from the capital resources.
Counsel for the husband submitted that there was no indication that the husband would dispose of property or that the wife had been asked to leave the house in which she and the child are living. He offered an undertaking on behalf of the husband that the husband would not dispose of the South Australian property interests or require the wife to vacate any of them including the farm property without giving 30 days notice in writing. That of course would leave the husband free to do as he wishes under the orders relating to the property outside of Australia.
I shall accept the husband’s undertaking in relation to the Australian properties because it has been offered.
I turn then to the principles relating to a stay. There is no dispute that the wife is required to show special or exceptional circumstances. However, there is the dilemma here that she did not participate in the final hearing having had the application for the adjournment rejected. In contemplating the proper basis for a stay, I take into account that the refusal of the adjournment was not for the first time. This case had been set down for trial in 2016 and the wife had been given a number of opportunities to participate. There is no better example of the dilemma than the reference by her own counsel on the adjournment application to his observation that the wife had been given indulgences already.
It is also clear that having determined the matter as I had, the husband is not only entitled to the benefit of the judgment but also to presume that it is correct.
In the context of all those matters, weighing up whether this appeal would be rendered nugatory if the stay was not granted and which is seen as a substantial factor in favour of granting a stay, I must turn to the basis of the wife’s assertion that if the husband was entitled to insist upon completion of the relevant orders, there is risk to her entitlements because the husband could “do as he pleased”.
Before resolving that last issue, there is the question of whether or not I am in a position to make some preliminary assessment of the strength of the proposed appeal and importantly, whether I consider the wife has an arguable case. I agree with the submission on behalf of the husband that most of the grounds as presently pleaded, relate to the exercise of discretion, the most fundamental of which, was the refusal of the adjournment application. It is important that I observe that the adjournment was not rejected just because of the wife having had indulgences in the past as recognised by her counsel. That can be seen in my observation that I had little confidence in the wife not terminating the instructions she was proposing to give to the new lawyers, they having been one of a string of lawyers who had previously acted for her. To the extent that it was suggested that the wife’s inability to prepare for a final hearing was inhibited by the absence of funding, that too was canvassed during one of the adjournment applications in 2017. Thus when assessing the question of the merits of the appeal, there is much to be said for the fact that the exercise of discretion to refuse the adjournment was made with a substantial knowledge of the background of the litigation and the concession by senior counsel for the wife that she was again seeking an indulgence.
The real question therefore in relation to the stay application is whether or not giving the husband the right to do as he pleases (but noting his undertaking not to dispose of the South Australian assets), is likely to render the appeal nugatory.

The submission by the wife is that unless the orders are stayed, the husband may put any future relief outside of a court’s control. It is trite to say that neither party submitted that the wife had raised such a concern over the extraordinary life of this litigation. That may have been because of the wife’s capacity to lodge caveats on those properties although I am unaware of the nature and extent of any such caveatable interest or because everyone has just forgotten. To my knowledge, the wife had not argued that she had some interest in those properties as distinct from a general claim based on the statute.
Although no application for injunctive orders seems to have been lodged by the wife in recent times, the stay order sought is tantamount to such an order. I consider my discretion should take into account the approach that the authorities have previously taken to such injunctions. Here, there is no evidence that the husband is going to, or ever has, endeavoured to dispose of these assets.
The wife’s approach seems to me to be consistent with a Mareva injunction rather than an injunction to preserve property. That is because the husband is already the owner of property, directly or indirectly through corporate entities; the wife has not previously asserted there was a risk that he would do something to thwart her claim such as to justify preservation orders in her favour; and there is now the accepted fact that he is entitled to treat the judgment as correct.
In Mareva Compania Naviera SA v International Bulk Carriers SA (1980) 1 All ER 213 the issue was about property which was the very subject of a claim in the proceedings. I readily acknowledge that there is a difference between a damages claim and that arising from one made under the specific statutory provisions of Part VIII of the Family Law Act 1975 (Cth) (“the Act”). In the Mareva-type claim, the focus is on the ability to enforce a judgment against the specific property whereas under s 79 of the Act, the property does not have to be specific and the claim for relief only has to be directed to property of the parties to the marriage to which, directly or indirectly, a relevant contribution has been made. A court dealing with the s 79 claim still has to decide that it is just and equitable to alter the interests in the various component parts of the party’s property whereas it is the specific property that is relevant in the Mareva case.
In this case, which is not the subject of any application for an injunction in either sense, there is a blurring of the boundaries because the wife is arguing that the husband may dispose of property to thwart that ultimate entitlement if she is successful on appeal but that could only be a consideration if there was no other property from which to satisfy her claim. In this case her argument during the initial adjournment application, which was refused, was that there were many millions of dollars that she wished to investigate. That gives little comfort when assessing whether there is a reasonable prospect that absent the preservation of assets, she would be disadvantaged.
It is not clear to me why the wife’s appeal would be rendered nugatory unless the status quo remained. As the wife had not provided anything more than a proposal to investigate matters that had not been the subject of inquiry for a number of years, it is difficult to see how not allowing the husband to have what is now found to be his property to her exclusion, and which has always been under his control, is necessary to prevent the frustration of the court’s process. There is no doubt that the balance of convenience and hardship is relevant to the exercise of discretion here but having regard to what I have just set out, the wife needs to point to something as evidence of an intention by the husband to dispose of the assets now deemed to be his such as would defeat any judgment which the wife might obtain if she is successful on the appeal.
In my view, there is no basis to grant the stay but I have accepted the husband’s undertaking. The application for a stay is dismissed.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 22 February 2018.

Associate:

Date: 22 February 2018