TOMARAS & TOMARAS (No.3)
[2019] FCCA 3913
•14 November 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TOMARAS & TOMARAS (No.3) | [2019] FCCA 3913 |
| Catchwords: FAMILY LAW – Application for stay of orders pending appeal – discretionary decision – principles to be applied. |
| Legislation: Family Law Act 1975 (Cth), ss.4, 72, 79, 90AE, 94A, 114 Life Insurance Act 1995 (Cth) |
| Cases cited: Alexander v Cambridge Credit Corporation Ltd(Receivers Appointed) (1985) 2 NSWLR 685 |
| Applicant: | MS TOMARAS |
| Respondent: | MR TOMARAS |
| File Number: | BRC 11325 of 2013 |
| Judgment of: | Judge Howard |
| Hearing date: | 14 November 2019 |
| Date of Last Submission: | 14 November 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 14 November 2019 |
REPRESENTATION
| The Applicant attending as a self-represented litigant. |
| There being no appearance by or on behalf of the Respondent. |
ORDERS
THE COURT ORDERS ON A FINAL BASIS:
That the Application in a Case filed 7 November 2019 by the wife for a stay of the Orders made 8 October 2019 be dismissed.
THE COURT ORDERS UNTIL FURTHER ORDER:
That by no later than 4:00pm on 21 November 2019, the wife shall file and serve a copy of the Affidavit of Service from the process server which she engaged to serve the Application in a Cased filed 7 November 2019 and the supporting material on the Respondent.
That the Contravention applications filed 10 June 2019, 5 July 2019 and 6 September 2019 be adjourned for Mention only at 9:30a.m. on 10 March 2020 in the Federal Circuit Court of Australia at Brisbane.
That personal attendance in Court by the parties and their legal representatives (if any) is required on 10 March 2020.
That on 10 March 2020, the Court may consider making an order or a further order in relation to the matter.
That if a party fails to attend Court on 10 March 2020 without any reasonable explanation, the Court may consider making final orders on that day.
IT IS NOTED:
(A)The parties must note Division 13.1A of the Federal Circuit Court Rules
IT IS NOTED that publication of this judgment under the pseudonym Tomaras & Tomaras (No.3) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 11325 of 2013
| MS TOMARAS |
Applicant
And
| MR TOMARAS |
Respondent
REASONS FOR JUDGMENT
EX TEMPORE
A.These reasons were delivered ex tempore on 14 November 2019 and have been settled and corrected for grammatical errors in order to convey the precise intention of the Court.
The matter before the Court has a long history of litigation in the Family Law jurisdiction. The applicant today, Ms Tomaras, is the wife in proceedings which originally went to trial – (that is to say, the trial commenced) – on 9 July 2015. The application today is an application by Ms Tomaras seeking a stay of final orders made by her Honour Judge Purdon-Sully on 8 October 2019.
Those orders made by her Honour were made after the conclusion of a lengthy process, which could even be described as an epic process. The trial between the wife and the husband, Ms Tomaras and Mr Tomaras, had the following hearing dates, 9 and 10 July 2015, 7 December 2015, 26 August 2016 and 21 February 2019.
The judgment notes that, for the purposes of the final hearing, Ms Carew of Queen’s Counsel, (as her Honour then was), appeared on behalf of the applicant wife. The solicitors for the applicant wife were Hartnett Lawyers. At some stage, Mr Hodges of Counsel represented the respondent husband, and at some stages the respondent husband seems to have been self-represented. It may be the case that the applicant wife also, at some stage, may have been self-represented.
Judge Purdon-Sully delivered reasons for judgment and made final orders on 8 October 2019. The application for a stay of those orders was filed by the applicant wife on 7 November 2019.
The matter was listed for today, 14 November 2019. The applicant wife has provided what seems to be two affidavits of service, which she has handed up today, and to the extent that it is necessary, she has been granted leave to rely upon the affidavits of service.
In addition to forwarding the application and the accompanying affidavits to the respondent husband by email, the applicant wife also swears to the fact that she organised for a process server to serve the documents. A copy of the process server’s affidavit of service will have to be filed by the wife within seven days.
The proceedings before Judge Purdon-Sully related to property adjustment sought by the wife under section 79 of the Family Law Act 1975 (Cth) (“the Act”). In addition, pursuant to section 72 of the Act, the wife sought an order for spousal maintenance. The wife was born in 1967. The husband was born in 1972. The duration of the cohabitation of the husband and the wife was 18 years and six months, and they have three children together.
The decision of Judge Purdon-Sully and the orders that flowed from that decision, led to the Court dismissing the wife’s application for final orders. All previous orders were discharged. In considering the application for a stay, the principles are well-settled. They come from cases such as Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685.
In many cases in the family law jurisdiction, the principles referred to in the Cambridge Credit decision have been reiterated and relied upon. I note, for instance, the decision of the Full Court of the Family Court in Sullivan & Tyler (No.2) (2015) FLC ¶93-668, a decision of Finn, Thackray and Strickland JJ.
In Sullivan & Tyler the Court referred to an earlier Full Court decision in Trahn v Long (No. 2) [2008] FamCAFC 194. In Trahn & Long, the principles that are relevant and that applied to the grant of a stay of orders pending determination of an appeal against those orders were set out by the Full Court. It also includes matters applicable only to parenting cases. Those aspects are underlined. The relevant part of the decision in Trahn & Long states:-
“38. These principles, both in the general law and in respect of parenting proceedings, are well settled (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited (1986) 160 CLR 220 at 230; Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685. Jennings Constructions Limited v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681; Clemett and 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 included 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 “special” or “exceptional” circumstances;
·a person who has obtained a judgment is entitled to the benefit of that judgment;
·the person who has obtained a judgment is entitled to presume the judgment is correct;
·the mere filing of an appeal is insufficient to ground a stay;
·the bona fides of the applicant;
·a stay may be granted on terms that are fair to all parties – this may involve a court weighing the balance of convenience and the competing rights of the parties;
·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 the stay;
·some preliminary assessment of the strength of the proposed appeal - whether the appellant has an arguable case;
·the desirability of limiting the frequency of any change in a child’s living arrangements;
·the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of a stay for a short period of time; and
·the best interests of the child the subject of the proceedings.”
I would add to the list of matters to be considered – whether there has been any delay in applying for a stay and, if so, the explanation for any delay. The authorities stress the discretionary nature of the application. The relevant decision in Trahn & Long was a decision of Dessau J sitting as the Full Court. In Sullivan & Tyler the subsequent Full Court cited with approval the list of principles from Trahn & Long (note paragraph 21 of Sullivan & Tyler).
Before the Court today is an affidavit in support of the application for a stay filed on 7 November 2019. This affidavit is affirmed by Ms Tomaras and comprises, including annexures, 170 pages. In addition thereto, the Court has before it an affidavit filed on 11 November 2019. The deponent is Mr A. Also there is a supplementary affidavit - that is how it was referred to today by the applicant wife – filed on 11 November 2019.
I also have had regard to the written reasons for judgment delivered by Judge Purdon-Sully on 8 October, and I have also had regard to exhibit 4 from the proceedings before her Honour, which is a copy of the relevant insurance policy. The company that initially granted the policy was called EE Insurance. Apparently, there has been several name changes. The evidence states that the company was also referred to as FF Insurance. Throughout the applicant’s material she refers to the insurance company as FF Insurance.
I have had regard to all of that material, and I have had regard to the notice of appeal which was filed by the applicant on 23 October 2019. The notice of appeal is quite lengthy and includes many complaints in relation to various issues.
There are, it seems to me, two primary matters that the Court needs to focus on in this application. They were the two matters that were the subject of the oral submissions today; primarily, the subject of the oral submissions today by Ms Tomaras, the applicant. The first of those is whether or not Judge Purdon-Sully was correct in her conclusion that the husband’s income protection policy constituted “property” for the purposes of section 79 of the Family Law Act. The other main complaint from the applicant wife was her Honour’s conclusion in relation to the spousal maintenance. Her Honour concluded, concerning the income protection policy that it did not constitute “property” for the purposes of section 79, and her Honour also concluded that the applicant wife did not prove that she was entitled to an order for spousal maintenance in her favour.
There are other aspects to the notice of appeal, including, for instance, what are described as the husband’s behaviour, the husband’s misleading evidence, the husband’s circumstances, and what is referred to as an apprehension of bias.
In asking the Court to exercise its discretion to grant the stay, the applicant must refer to a proper basis upon which the Court can exercise its discretion. The respondent has not appeared today. I am satisfied he has notice of the hearing. The hearing has been conducted in his absence. He has obtained a judgment – and he is entitled to the benefit of it. A person in his position is entitled to presume that the judgment is correct.
The filing of the appeal is insufficient to ground the stay.
I do not doubt the bona fides of the applicant. I do note that Judge Purdon-Sully made credit findings against the applicant, but in terms of this particular application before the Court, I think that the applicant earnestly believes in her application. As to whether her earnestness is misguided or misplaced is another question altogether.
One of the matters for consideration is some preliminary assessment of the strength of the proposed appeal. That is to say whether the appellant has an arguable case. As part of that consideration, I will also take into account the other matter which I need to refer to, namely, the risk that a successful appeal may be rendered nugatory if a stay is not granted.
Judge Purdon-Sully had the income protection policy in evidence before her. Her Honour went to extensive lengths in the Reasons for Judgment when considering the question as to whether or not the income protection policy constituted “property” for the purposes of the Family Law Act 1975 (in particular sections 4 and 79 of the Act). Her Honour had regard to a long list of reported cases. Her Honour made findings based on the evidence in front of her, and I note, for instance the following findings (which appear from paragraphs 89 to 94):-
“89. The husband’s Income Protection Policy has no surrender or cash value. The wife has never sought to value it.
90. The husband does not have a right to commute the payments.
91. Its primary purpose of the policy is to provide financial protection in the event of disability caused by injury or illness.
92. It is a right to receive income described as “disability income insurance”, income disclosed as such in the husband’s income tax return, on which he is assessed for income tax purposes.
93. It is a “right” to receive payments contingent on the husband meeting certain obligations under the policy whilst the insurer remains of the view that the husband is disabled within the meaning of the policy. If he is not so disabled then the payment ceases.
94. It is an entitlement capable of being reduced or terminated at the insurer’s option, the husband’s payments regulated by the insurer dependent on the medical evidence presented by him, the husband required to complete regular progress forms and his employability assessed by the insurer monthly with a medical assessment undertaken by him every three months.”
I note, for instance, her Honour’s finding that the husband’s income protection policy had no surrender or cash value. Her Honour found that the wife had never sought to value it. Her Honour also found that the husband does not have a right to commute the payments.
During the submissions made today by the applicant, I fear that the applicant is working under a misapprehension in relation to this question of the commuting of payments under the income protection policy. The finding, based on the evidence that was in front of her Honour, was that the husband did not have a right to commute the payments. That is a different question altogether as to whether or not, at some stage in the past, the insurance company had indicated that they “might” or “would be willing” – to commute the payments. It is quite apparent, from the material that has been put before me – that the insurance company (in its total discretion) might or might not agree on a cash payment in respect of the policy. The wife conceded that if the insurance company came to that conclusion, it would be highly likely they would want the payment to be discounted. And, of course, it would be subject to the payment of taxation.
There was not before her Honour and there is not before this Court any valuation in respect of the policy. The fact that the wife has put before the Court some historical emails that show that the insurance company, at some stage, gave consideration - perhaps even serious consideration - to commuting the policy does not amount to a valuation, and it certainly does not amount to a “right” in the husband to commute the policy.
The Court has been taken to the wife’s affidavit. Even if I accept (for present purposes) her evidence that the husband’s entitlement under the policy amounted to $15,500 a month, and even if I accept that she is correct that he would be entitled to this to the age of 65, that, of course, is contingent upon a number of issues. This fact was reiterated by her Honour. In paragraph 93 of the judgment, as noted above, her Honour said:
“93. It is a “right” to receive payments contingent on the husband meeting certain obligations under the policy whilst the insurer remains of the view that the husband is disabled within the meaning of the policy. If he is not so disabled then the payment ceases.”
Her Honour also noted in paragraph 94 that the husband’s income protection policy amounted to an entitlement capable of being reduced or terminated at the insurer’s option. The husband’s payments were regulated by the insurer and were dependent upon the medical advice presented by the husband. He was required to complete regular progress forms and his employability was to be assessed by the insurer monthly, with a medical assessment undertaken by him every three months.
Her Honour referred to the various cases on the point. That is to say, whether this husband’s entitlement under the income protection policy was “property” for the purposes of the Act. Her Honour referred to cases such as Crapp & Crapp (No 2) (1979) FLC 90-615, Marchant & Marchant [2012] FamCAFC 181, Perrett & Perrett (1990) FLC 92-101, Kennon & Spry (2008) 238 CLR 366, and Duff & Duff (1977) FLC 90-217. Her Honour had close regard to the actual terms of the policy. Her Honour had regard to the relevant legislation, including the Life Insurance Act 1995 (Cth). Her Honour had regard to the case of Hoare v Mercantile Mutual [2000] NSWSC 1026. The conclusion that her Honour reached after a thorough consideration of the evidence before her and the authorities was that, in the circumstances of this case, the husband’s income protection policy did not amount to “property” for the purposes of section 79 of the Family Law Act. I would have to say on that aspect I have come to the conclusion that the applicant does not have an arguable case in respect of the appeal.
The next consideration is the question of the spousal maintenance. Her Honour, at some length, made credit findings against the applicant wife. Her Honour after an extensive consideration of the evidence and the appropriate legislation and the appropriate authorities, came to the conclusion that the wife had not managed to prove her entitlement to spousal maintenance.
The applicant has not put before this Court material to satisfy this Court that she has an arguable case on the appeal.
The Court is also required to weigh the risks that a successful appeal may be rendered nugatory if the stay is not granted. The authorities suggest that consideration will be a substantial factor in determining whether it is appropriate to grant a stay. It may well be a substantial factor – but it is not the only factor. In the present case, the wife is, essentially, seeking to reinstate an injunction. If paragraph 1 of the orders of Judge Purdon-Sully dated 8 October 2019 is stayed – the previous relevant order will continue to operate. That will include an order for an injunction under section 114 of the Family Law Act. The injunction appears in the initial order dated 28 February 2018 (as amended on 19 April 2018). The injunction would prevent the husband from communicating with the insurer or from seeking to commute or surrender or try to settle or compromise with the insurance company in respect of the relevant insurance policy.
What risk is there that at a successful appeal may be rendered nugatory? At the time of the final hearing, the respondent husband was an undischarged bankrupt. The husband and the wife owed significant amounts of money to the Commissioner of Taxation. The trial Judge granted the Commissioner leave to intervene in the proceedings. Pursuant to section 94A of the Family Law Act 1975 (Cth) her Honour stated a question of law to the Full Court of the Family Court. The wife submitted that the Commissioner was bound by section 90AE of the Act. By section 90AE(1)(b) of the Act the Court has the power to make an order directed to a creditor (in this case the Commissioner) of one party to a marriage (in this case the wife) to substitute the other party to the marriage (in this case the husband) in relation to the debt owed to that creditor (the Commissioner). The Full Court of the Family Court concluded that that the Commissioner (the Crown) is bound by Part VIIIAA. Accordingly, a Court exercising family law jurisdiction does have the power to make an order pursuant to section 90AE(1)(b) requiring the Commissioner to substitute the husband in relation to the debt owed by the wife to the Commissioner (Tomaras v Tomaras (2017) 327 FLR 228). The Commissioner of Taxation sought and obtained special leave to appeal the decision to the High Court of Australia. The High Court dismissed the appeal (Commissioner of Taxation (Cth) v Tomaras & Ors [2018] HCA 62). When the matter made its way back to the Federal Circuit Court of Australia her Honour concluded that both the wife and the husband should be responsible for the payment of the taxation debt.
The conclusion of the Court was that there was no property. There was no property pool. Her Honour concluded that the Life Insurance Act 1995 (Cth) was of no assistance to the applicant wife. This is because the policy in question did not come within the definition of a "continuous disability policy". The conclusion by her Honour was that this meant that the policy could not be assigned. Her Honour decided against the applicant on the question.
Her Honour found against the wife on all of those arguments. There is no pot of money.
There has not been put before this Court any other evidence that would convince this Court that her Honour was incorrect in her conclusions. It seems to me there is nothing to be rendered nugatory. If there was a house, if there was an amount of cash, if there were jewels, if there were shares, then possibly failure to make an order for a stay might render nugatory a successful appeal. What we have here is – what could be described as – the wife’s case that, at some stage in the future, the husband and the insurance company might possibly agree that the insurance company will make a payment to the husband. The insurance company are not under an obligation to do so. The husband does not have any right to demand that they do so. This consideration of "rendering anything nugatory" in the circumstances of this particular case is quite illusory.
The applicant wife also referred the Court to an email that was apparently sent by the husband to her on 11 October 2019. The wife has sworn that the husband stated in his email:-
“If FF Insurance will now pay out the policy, I will give you an additional amount to satisfy your debt to Mr A (sic). That could be a ways off: but I’m happy for you to hold me to that. And, I’ll buy a unit in Suburb GG for you and Mr L if that story plays out.”
It seems to me to confirm the conclusion I have reached. The sentence starts, “If FF Insurance will now pay out the policy…” There is no right. There is no entitlement to enforce or to require FF Insurance to do anything. And none of the other material annexed to the affidavit convinces me otherwise either. For instance, there is an email dated 7 March 2014, annexure T20, which includes a paragraph that the wife has circled that says:
“After the 5th of November, 2016, Ms Tomaras (the husband)…Will apply to FF Insurance to have the policy paid out. Any proceeds from the policy being paid out will be divided equally between Ms Tomaras and Mr Tomaras.”
This is an email which apparently was sent by Mr Tomaras, the husband. Again, the wording of the email has to be looked at closely. It says, “Mr Tomaras will apply to FF Insurance to have the policy paid out”. The email does not say that Mr Tomaras will enforce his right or his entitlement to have the policy paid out.
There are so many discretionary aspects to her Honour’s decision. For instance, in relation to the spousal maintenance case – the findings against the wife on credibility would need to be overcome. A lot of the material that has been put before the Court by the wife in this application (in her own affidavits and in the affidavit of Mr A) seeks to re-agitate factual considerations which were in issue at the trial. It is not the role of this Court to consider the issues that were in dispute before her Honour. This Court, on the hearing of this application for a stay, needs to weigh and have regard to the proper considerations to which I have referred.
There is no proper basis for granting a stay. The wife’s application for a stay is dismissed.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Judge Howard
Date: 28 May 2020
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Stay of Proceedings
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Appeal
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Costs
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Jurisdiction
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