Surridge and Surridge (No 2)
[2015] FamCA 755
•11 September 2015
FAMILY COURT OF AUSTRALIA
| SURRIDGE & SURRIDGE (NO 2) | [2015] FamCA 755 |
| FAMILY LAW – PROPERTY – Application for stay of final orders pending appeal – Stay granted in respect of particular orders. |
| Family Law Rules 2004, r 22.11 |
| APPLICANT: | Ms Surridge |
| RESPONDENT: | Mr Surridge |
| FILE NUMBER: | PAC | 4412 | of | 2012 |
| DATE DELIVERED: | 11 September 2015 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 8 September 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Schonell SC |
| SOLICITOR FOR THE APPLICANT: | Matthews Folbigg Pty Ltd |
| SOLICITOR FOR THE RESPONDENT: | Tilley Family Law & Mediation |
Orders
That the operation of Orders 6 and 7 made on 29 June 2015 be stayed pending further order or determination of the wife’s appeal.
Liberty to apply as to implementation or operation of the previous order.
That the costs of the parties be reserved until determination of the appeal.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Surridge & Surridge (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 PARRAMATTA |
FILE NUMBER: PAC 4412 of 2012
| Ms Surridge |
Applicant
And
| Mr Surridge |
Respondent
REASONS FOR JUDGMENT
The applicant wife seeks a stay of final property orders made on the 29 June 2015. Orders were made after a protracted final hearing: Surridge [2015] FamCA 493.
Orders were made as follows:
By Consent:
(1) That the parties forthwith do all acts and things and sign all documents to cause the following things to occur with respect to the company B Pty Ltd:
(a) The 2013 and 2014 statements of financial position to be amended so as to consolidate into one loan account in the joint names of the parties all advances and loan accounts of the parties reported in the statements of financial position;
(b) Dividends then to be declared to each of the parties fully franked for each of the following financial years:
(i) For the 2013 financial year $37,479 imputation credit and $87,452 franked amount;
(ii) For the 2014 financial year $15,366 imputation credit and $35,855 franked amount;
(iii) For the 2015 financial year $115,505 fully franked;
(c) That on the dividends being declared and the 2015 financial statements and tax return prepared and lodged the company to be struck off the company register conducted by ASIC;
(d) The 2015 financial statements to be prepared so as to:
(i) Write off the office equipment;
(ii) Write off the loan to C Pty Ltd;
(iii) Write off the loan to D Pty Ltd.
(2) That the husband shall assign to the wife the benefit of any loan account in his favour created by virtue of Order (1)(d)(iii) in the event that the wife retains that company and the units in the Surridge Unit Trust pursuant to the final orders for property settlement.
(3) That each of the parties shall pay one half of the costs of implementation of these orders including accounting and ASIC fees.
It is further ordered:
(4) That within that 2 months from the date of these orders the husband do all necessary things and sign all necessary documents so as to transfer to the wife his interest in the property at E Street, Suburb F New South Wales being the whole of the land comprised in Folio Identifier … and that concurrently with that transfer the wife do all necessary things and sign all necessary documents so as to procure a discharge of the present mortgages secured over the said property in favour of the Commonwealth Bank of Australia being home loan number … and line of credit account number … and in respect of such discharge the husband shall sign all necessary documents for his part necessary to facilitate the wife obtaining a discharge of the said mortgages.
(5) That the wife hereinafter indemnify the husband from all or any liability arising out of the present mortgages secured over the Suburb F property.
(6) That within 2 months from the date of these orders the husband pay to the wife $129,683 and concurrently with that payment the wife do all necessary things and sign all necessary documents to transfer to the husband her interest in any units in the Surridge Unit Trust and any other entitlements that she may have in or against the trust, resign all positions that she holds in the trustee company D Pty Ltd ACN … and transferred to the husband her shareholding in the said company.
(7) That the husband shall hereinafter indemnify and save harmless the wife from all or any liability including any liability to the Australian Taxation Office arising from the activities of the Surridge Unit Trust or its trustee D Pty Ltd.
(8) That otherwise the wife shall be declared solely entitled to:
(a) The 4WD motor vehicle;
(b) Her Horse float, horses and equipment;
(c) Her Gold watch;
(d) Her Jewellery;
(e) Her K Super Fund interest;
and that subject to these orders otherwise the wife is declared solely entitled to the exclusion of the husband of all items of personalty in her possession, custody and control including but not limited to motor vehicles, cash at bank, superannuation, furniture and personal belongings.
(9) That the wife shall hereinafter indemnify and save harmless the husband from all or any liability pursuant to the judgement obtained against the parties by the wife’s parents Mr and Ms G.
(10) That otherwise the husband shall be declared solely entitled to:
(a) His K Super Fund interest;
(b) New boat shell;
(c) Boat “A”;
(d) Boat “B”;
(e) Car parts;
(f) Boat equipment;
(g) Utility vehicle;
(h) Vintage car 1;
(i) Vintage car 2;
(j) Vintage car 3;
(k) Vintage car 4;
(l) Bike;
(m) Motorcycle 1;
(n) Motorcycle 2;
(o) Watch (Swiss);
(p) Watch (Gold);
(q) Watch (Stainless Steel);
(r) B Pty Ltd Bank account;
(s) D Pty Ltd account;
(t) Bank of America account;
(u) German motor vehicle (net);
and that subject to these orders otherwise the husband is declared solely entitled to the exclusion of the wife of all items of personalty in his possession, custody and control including but not limited to motor vehicles, cash at bank, superannuation, furniture and personal belongings
(11) That the wife shall within 7 days from the date of these orders cause to make available for collection by the husband or his nominee any of the items referred to in the previous order that remain in her possession or control.
(12) The husband shall hereinafter indemnify the wife from all or any liability arising from monies advanced to the husband by his parents Mr H Surridge and Ms I Surridge and any moneys owing to J Repairs.
(13) That within 14 days from the date of these orders the wife shall do all acts and things necessary to cause her existing superannuation entitlements in the K Super Fund to be rolled out of that fund to an approved superannuation fund nominated by the wife and upon completion of that rollover the wife shall resign all positions that she holds in the trustee of the K Super Fund, L Pty Ltd and transfer her shareholding in that company to the husband and the husband shall for his part do all acts and things necessary to promptly facilitate the rollover of the wife’s entitlements in the said fund.
(14) Liberty to apply as to implementation or enforcement of these orders.
(15) That any application for costs be by way of an application in a case filed within one month from the date of these orders supported by affidavit.
The wife has appealed those orders by Notice of Appeal filed 24 July 2015 and an Amended Notice of Appeal filed 25 August 2015.
It is common ground that the appeal will not be determined for about 18-24 months.
The orders appealed against are Orders 6, 9, 10(r ), 10(s), 11 and 13 as set out above.
Primarily the Amended Notice of Appeal relates to orders made in relation to:
a)D Pty Ltd as trustee of the Surridge Unit Trust that owns commercial premises at Suburb U that both parties control that was to be retained by the husband under the orders conditional upon a payment to the wife of $129,683. The wife now seeks to retain the Trust and its asset without payment to the husband.
b)The red vintage motor vehicle presently in the possession of the wife to be retained by the husband under the orders but which the wife now seeks to retain.
c)The speed boat and trailer to be retained by the husband under the orders but which the wife now seeks to retain.
d)The debt owed by the parties to the wife’s parents under a judgment debt that was to remain the wife’s liability, with her to indemnify him, but in respect to which she now seeks that she and the husband remain equally liable.
e)The parties’ self-managed superannuation fund whereby an order was made that she was to roll out her interest. She now seeks for the husband to roll out his interest and that she retain her interest in the fund.
It is well settled that a stay will not be granted lightly or as a matter of course. The onus rests on the applicant for stay in respect of an application for stay under Rule 22.11 of the Family Law Rules 2004.
The significant factors affecting the Court’s determination include the following:
a)Whether refusing a stay would render the appeal nugatory;
b)That the successful party is entitled to the fruits of the judgment;
c)Whether hardship would be caused by the granting or refusal of a stay;
d)The merits of the appeal;
e)Any delay in seeking the stay;
f)The likely delay in the disposition of the appeal.
There is no issue between the parties that the transfer of the property at Suburb F and its refinance by the wife is to go ahead.
Thus primarily the issue relates to D Pty Ltd and the items of personalty now sought to be retained by the wife.
The wife relied on her affidavit filed 29 July 2015 in support of the stay application. The application seeks a stay of orders 6, 7, 8, 9, 10, 11, 12 and 13 set out above. During submissions the wife’s counsel pressed a stay of orders 6, 10(h), 10(s) and 13 only.
The wife expresses concern that the husband by reason of his previous disregard for orders would dissipate the assets of the trust held by D as trustee. It is readily apparent that the husband has had little regard for previous orders as to his dealing with various assets of the parties.
The husband, she says, has removed her access to the D bank account and withdrawn $12,000 from the account. She says she is unable to confirm that mortgage payments are being made in relation to the trust real property at Suburb U.
The husband, in opposing the stay application, relied on his affidavit filed 4 September 2015. He complains that the wife has not made mortgage payments in relation to the Suburb F property leaving the mortgage $16,298 in arrears as at 3 July 2015. Be that as it may, the wife’s inaction only diminishes her equity in a property that she is to acquire under the orders that the parties agree are to be implemented.
The husband complains that he has unpaid legal fees of about $150,000. He says he is unable to work or find work. Yet he gives no explanation as to the disposition of funds otherwise retained by him.
The husband seeks to refinance the trust property up to $485,000 to pay out the wife and capitalise interest for a period of 12 months so that he can use the rental payments of about $7,500 per month to live on.
Discussion
The wife complains in effect that she did not receive a proper or adequate percentage of the property of the parties. She says that on a re-exercise of discretion she would be entitled to retain the D trust property without payment to the husband. She contends that if the property remains in the husband’s control that he may dissipate the trust assets such that her appeal in this regard would be rendered nugatory. The husband’s previous conduct as set out in the primary reasons for judgment must raise concerns as his prospective behaviour notwithstanding injunctive orders seeking to protect the wife’s position. Otherwise he has already signalled a significant further borrowing in circumstances where the equity in the trust property would be significantly diminished.
There is in regard to this issue a real risk that the wife’s appeal to a significant degree would be rendered nugatory.
The husband is entitled to the fruits of the judgment that was to come to him. The wife raises no appeal ground in relation to the items of personalty in dispute: the vintage motor vehicle and the husband’s race boat and trailer. Both had agreed values at trial and were accordingly included in the pool at value and appropriately adjusted. She received value in lieu.
Similarly no appeal ground is raised as to the self-managed super fund. The parties’ entitlements were agreed amounts. The wife received value in the context of her overall entitlement. She can roll out her entitlement.
The husband asserts some hardship in that he will be prevented from accessing the equity in the trust property pending disposition of the appeal and thus free up rent to be received by him. This may be so but must be balanced against the risk that the wife’s appeal in this regard may be rendered nugatory by this or by his subsequent conduct.
The substance of the wife’s appeal focuses on the final adjustment that she seeks. She asserts errors of fact and methodology. Those matters will be determined by the Full Court. The factual matrix between the parties was convoluted and obscure by reason of the poor presentation of evidence at trial and the failure to adduce objective evidence where clearly such evidence should have been available. Consequently inferences had to be drawn. Whether they were open is a matter for the Full Court. Perhaps there is merit in the appeal.
There has been no delay in bringing the stay application and the prospective disposition of the appeal is referred to above.
In all of the circumstances it is appropriate to stay the operation of orders that relate to D and the trust, which is Orders 6 and 7, only.
It is appropriate that the trust continue to operate under the joint control of the parties, that income is applied to mortgage and property outgoings and that the proper business records and returns of the trust are attended to. In the event of any issue parties shall have liberty to apply.
It is otherwise appropriate that costs be reserved pending disposition of the appeal.
Orders will be made accordingly.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 11 September 2015.
Associate:
Date: 11 September 2015