Swayte & Swayte

[2021] FedCFamC1F 156

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)

Swayte & Swayte [2021] FedCFamC1F 156

File number(s):	PAC 633 of 2020
Judgment of:	HARPER J
Date of judgment:	19 October 2021
Catchwords:	FAMILY LAW – PRACTICE AND PROCEDURE – Application for a stay of orders pending appeal – Where husband seeks injunction restraining the wife from proceeding with contract of sale of a property – Contract already exchanged – Where wife is the trustee for sale - Where husband contends he wishes to keep the property on a final basis – Where cooling-off period expires the day of the hearing – Right of rescission during cooling-off period lies with purchaser – Where husband has applied for leave to appeal and hearing is the following day – Where husband contends purchaser might be motivated to rescind the contract during the cooling off period – Appeal would not be rendered nugatory if stay not granted – Injunctive relief for a short period would be futile – Application dismissed.
Legislation:	Family Law Act 1975 (Cth) s 114(1)
Division:	Division 1 First Instance
Number of paragraphs:	21
Date of hearing:	19 October 2021
Place:	Sydney
Counsel for the Applicant:	Mr Hodgson
Solicitor for the Applicant:	Diamond Conway Lawyers
Counsel for the Respondent:	Ms Dart
Solicitor for the Respondent:	Kalmath Lawyers

ORDERS

PAC 633 of 2020
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MR SWAYTE Applicant
AND:	MS SWAYTE Respondent

ORDER MADE BY:	HARPER J
DATE OF ORDER:	19 OCTOBER 2021

THE COURT ORDERS THAT:

1.The Application in a Proceeding filed on 18 October 2021 by the Respondent Husband be dismissed.

2.All questions of costs be reserved pending further consideration.

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

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

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

EX TEMPORE REASONS FOR JUDGMENT

HARPER J

1. In these proceedings, there came before me on 19 October 2021 an urgent application by the Respondent Husband (“the husband”) in the substantive proceedings. That application seeks urgent relief in the form of an injunction restraining the Applicant Wife (“the wife”) from proceeding with the sale of a property situated at V Street, W Town (“the W Town property”), pursuant to a contract for sale dated 11 October 2021. In that contract, WW Family P/L as Trustee for the WW Family Trust is nominated as the purchaser. In the alternative to an injunction, the husband seeks a stay of an order made by his Honour Justice Foster on 16 March 2021, which, in substance, appointed the wife as the trustee for sale of a number of properties, including the W Town property.

2. I am told, and there was evidence of this, that there is listed before the Full Court on 20 October 2021, that is, tomorrow, an application for leave to appeal filed by the husband. This appeal seeks discharge of the orders made by Foster J on 16 March 2021, including, therefore, the order pursuant to which the wife is presently the trustee for sale of the W Town property. 

3. The husband’s appeal, I am told, was filed on 12 April 2021, but he did not file any application for a stay of the relevant order until August 2021. It is unfortunate that the application for a stay, which seems to have been filed on 4 or 5 August 2021 in the Parramatta registry, and although listed before a registrar on 31 August 2021, has not been given a hearing date since then.

4. The application that came before me on 19 October 2021 was a fresh application seeking the orders already referred to.

5. Several other background facts are relevant. One is that in July 2021, the wife entered into a selling agency agreement for sale of the W Town property by private treaty. There was no dispute that by no later than 26 August 2021, the husband knew of the existence of the selling agency agreement. That is, he knew some days prior to 31 August 2021, that the wife had taken a step to exercise her powers as trustee for sale over the W Town property.

6. The powers of the Court to grant a stay pending appeal are well known and are not required to be set out in this judgment. There was no dispute that the Court had power to grant a stay. The injunctive power which is relied upon by the husband is found in s 114(1) of the Family Law Act 1975 (Cth) (“the Act”), and there was no dispute that there is a pending matrimonial cause in this Court in relation to the 44 year marriage between the parties, and an asset pool of some $26 million.

7. I note here, that as part of his final relief, the husband seeks to retain the W Town property in specie.

8. In relation to the application for injunctive relief, the husband proffers an undertaking as to damages supported by the significant asset pool, which will be the subject of property adjustment orders on a final basis. 

9. I was told that the reason why the wife required sale of the W Town property was to discharge a range of outstanding liabilities, including tax owing to the Australian Taxation Office. There was no evidence about those matters. The husband also submitted, from the bar table by his counsel, that there was a fund of some $1.5 million held in the wife’s solicitor’s trust account, although there was no actual evidence about this. 

10. The husband conceded, quite properly, that the wife had the power to sell the W Town property pursuant to the presently undisturbed orders of Foster J of 16 March 2021. The husband submitted that it was open to me to grant injunctive relief, a stay, or both, for a short period of time until the Full Court had had an opportunity to consider the husband’s application for leave to appeal on 20 October 2021. The husband pointed to the fact that, pursuant to the contract of sale between the wife and the purchaser of the W Town property, there was an agreed cooling-off period that expires at 5.00pm today, that is, 19 October 2021. 

11. Whilst counsel for the husband conceded that any right to rescind this contract of sale lay with the purchaser, his argument was that if I granted an injunctive order or a stay today, that might be some motivation to the purchaser to consider exercising their right of rescission during the cooling-off period, in which case any issues with the preservation of the W Town property would, for the moment, be resolved. 

12. In her submissions, counsel for the wife contended that before any orders will be made which would interfere with the passage of the sale of the W Town property to the purchaser, the purchaser would need to be given an opportunity to be heard. This is a submission that I broadly accept. However, it is true that if an injunction was granted for a limited period to, say, 4.00pm on 20 October 2021 (after the conclusion of the appeal), the requirement for such procedural fairness to be offered to the purchaser would, as a practical consideration, be of rather limited significance. 

13. However, that observation in itself raises squarely the question of whether the Court, in the exercise of discretion, can see any utility in granting the orders sought by the husband for a very short period of time.

14. In granting an interlocutory injunction, the Court has to be persuaded there is a prime facie case, and that the balance of convenience favours the grant of the orders sought. I will assume, in favour of the husband, that there is a prima facie case which rests upon his claim to the W Town property on a final basis in specie. However, I am not persuaded that the balance of convenience favours the grant of any injunction. 

15. On the material available to me, I am not inclined to grant an injunction for an unconstrained period. It seems to me that the question of what happens in relation to this contract of sale, bearing in mind there was no dispute that it was entered into on 11 October 2021 with a 42 day settlement period, should be left to further consideration after the Full Court has determined whether any leave to appeal should be granted to the husband. It is self-evident that if leave is refused, that is the end of the matter. If leave is granted, it is open to the Full Court to make orders in relation to the preservation of any assets, pending the determination of the appeal heard as a result of the grant of leave.

16. I can see no practical utility in granting an injunction, as sought by the husband, for a limited period of, say, 24 or 48 hours. Whether or not the grant of such an order might motivate the purchaser to exercise a right of rescission during the cooling-off period is something which can only be a matter of speculation, and is insufficient, in my view, on the question of balance of convenience, to justify even the limited order sought.

17. The real issues in relation to this exchange of contracts will become, if the husband is successful in his appeal, whether or not the wife should be exposed to an application for specific performance by the purchaser, or whether the purchaser ultimately decides to terminate the contract on some other contractual basis, as a result of the proceedings which will continue in this Court. 

18. In my view, the same considerations apply in relation to the application for a stay. It is disturbing, I agree, that although the husband made an application for a stay in August 2021, there has been no allocation of hearing dates in relation to that application prior to the matter coming before me one day before the application for leave to appeal is listed before the Full Court. However, in the circumstances, it strikes me that knowing that there was a selling agency agreement for sale by private treaty by 26 August 2021, the onus lay upon the husband to take whatever steps he could to agitate for an urgent listing, such as the very one which has come before me today, that is, one day before the listing in the Full Court.

19. Consequently, on the limited material available to me, I refuse the relief sought by the husband in his Application in a Proceeding filed on 18 October 2021. In reaching that conclusion, I am mindful of the fact that it is open to the husband to renew an application for orders which might preserve the substance of his appeal before the Full Court, in the face of the refusal of a stay by me today.

20. I should say here that I have also taken account of his argument that if the stay or injunction was not granted, and if leave to appeal was granted by the Full Court, the husband’s appeal would be rendered nugatory, at least in part. That is not certain in my view, and on the limited material available to me today, it is not a submission which I am prepared to accept as the proper basis for making the orders sought.

21. Accordingly, I dismiss the Application in a Proceeding of the husband filed on 18 October 2021. I do not propose to make any order for costs.

I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Harper delivered on 19 October 2021.

Associate:

Dated:       8 November 2021