Vasilias and Vasilias (No. 5)

[2008] FamCA 421

FAMILY COURT OF AUSTRALIA

VASILIAS & VASILIAS (NO. 5) [2008] FamCA 421

FAMILY LAW – PRACTICE AND PROCEDURE – Application for stay of proceedings – Refused

Family Law Act 1975 (Cth)

Director-General, Department of Community Services & De Lewinski (No. 2) (1996) FLC 92-677
Jennings Construction Limited v Burgundy Royale Investments Propriety Limited (1986) 161 CLR 681

APPLICANT: MRS VASILIAS

RESPONDENT: MR VASILIAS

RESPONDENT PATERNAL

GRANDPARENTS:

MR AND MRS VASILIAS (SNR)

THIRD RESPONDENT: MR RW

FILE NUMBER: MLF 3158 of 2005

DATE DELIVERED: 13 JUNE 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: 12 JUNE 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT WIFE: MR JOHN CANTWELL

SOLICITOR FOR THE APPLICANT

WIFE:

HOGG & REID

THE RESPONDENT HUSBAND: IN PERSON

SOLICITOR FOR THE RESPONDENT PATERNAL GRANDPARENTS: MR KOUKOULIS

SOLICITOR FOR THE RESPONDENT
PATERNAL GRANDPARENTS: S KOURKOULIS & ASSOCIATES

Orders

1. That the husband’s application for a stay of the orders made on 19 May 2008 is refused.

2. That the application in a case filed by the husband on 12 June 2008 is dismissed.

3. That there be no order as to costs.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 3158  of 2005

MRS VASILIAS

Applicant

And

MR VASILIAS

Respondent

And

MR AND MRS VASILIAS (SNR)

Respondent Paternal Grandparents

And

MR RW

Third Respondent

REASONS FOR JUDGMENT

1. I have just pronounced orders on the husband’s application for a stay.  At the present time, I am sitting in the Sydney Registry and have indicated to the parties that I will have these reasons transcribed and made available to them tomorrow morning.  Importantly, I have made orders that the husband’s application for a stay of the orders I made on 19 May 2008 pending an appeal be refused and that his application in a case filed on 12 June 2008 be dismissed.  At the conclusion of the telephone hearing, Mr Cantwell of counsel on behalf of the wife sought an order for costs which I have refused.

2. The reasons that follow therefore relate to both the application for the stay and also the costs.

3. The husband seeks a stay of the operation of orders I made on 19 May 2008 pending the hearing of an appeal against those orders.

4. The respondent to the application is Mrs Vasilias to whom I shall refer as “the wife”.  She has been represented by the same counsel throughout.  She opposes the orders sought by the husband.

5. The next respondents to the proceedings although not named in either the Notice of Appeal or the application in a case are Mr and Mrs Vasilias (Snr) who are the husband’s parents.  In the telephone hearing, they were represented by Mr Kourkoulis who is their solicitor.  Their involvement in the proceedings is as to the receipt of monies arising out of an agreed variation of orders that I made in January 2008. 

6. The final respondent to the proceedings is Mr RW.  He has been represented since March 2008 in these proceedings by Mr Rockman.  Mr Rockman provided an indication to my staff that he did not intend to participate in the application this day because of the fact that he wanted to save his client costs.

7. By way of background, I made orders and published a judgment on 31 January 2008. 

8. In the final orders, I directed that the wife pay to the husband a set sum and that contemporaneously, the husband transfer to the wife his interest in a property at R.  I also made orders that in the event that the wife failed to make the payment and failed to discharge some liabilities for which she was responsible, then the husband was to have the option to pay the wife a sum of nearly $175,000.  There was then a provision in relation to sale if neither of those options was exercised.

9. Subsequent to the making of the orders in January, problems arose predominately because of two caveats.  The first caveat was lodged before the trial began by the husband’s parents.  The second caveat was lodged by Mr RW.

10. I dealt with these matters by orders on 19 March 2008 at which point, both the husband’s parents and Mr RW were parties to the proceedings and represented.

11. The second caveat was lodged after I pronounced my January orders.  That was lodged by Mr RW.  He also participated in the proceedings on 19 March 2008. 

12. Before turning to the orders of March, it is important to note that the first proceedings subsequent to the orders in January brought the matter on for hearing before me on 26 February 2008.  At that time, the husband appeared by his solicitor but the husband himself was absent because he was incapacitated.  Agreement was reached on that day between the parties that the time for settlement which I had set out specifically in the January orders was extended to 14 May 2008.  It is the further extension beyond 14 May which has caused the current appeal point.

13. The proceedings then came back before me on 12 March 2008 on the issue of the two caveats.  Mr RW and the husband’s parents were both represented.  The husband did not appear nor did he have any representation on that day.  He did however send in a letter signed by his solicitors indicating that he would be bound by the orders of the court.  Because I was unsure just exactly what that meant or the extent of the husband’s consent, I made provision for the husband to set aside the orders that everyone else had agreed upon in the event that he felt prejudiced.  That application was in fact made by the husband but for reasons that are not clear to me, the husband did not proceed with it.

14. What then transpired was the matter came back before me on 19 May 2008 predominantly because of the fact that the events that had occurred subsequent to the extension of the settlement time had precluded the settlement occurring on the date that I had fixed by agreement between the parties. 

15. On 19 May 2008, the husband appeared in person and simply maintained that the time had expired for settlement and that I was “functus officio” and that he wanted the first of the two default provisions of the January orders to apply.

16. What was abundantly clear by 19 May was that the husband was to receive no money from the settlement on the basis of the earlier orders which effectively garnisheed the husband’s money to be paid by the wife. 

17. There have also been costs proceedings involving the husband’s parents and Mr RW and I have dealt with those matters separately.

18. On 19 May 2008, I further extended the time for settlement to 16 June 2008.  Unashamedly, that was over the opposition of the husband.

19. In paragraph 3 of his affidavit filed on 12 June 2008, the husband makes reference to the hearing on 19 May 2008 alleging that the wife’s solicitor “ambushed” him with a 14 page affidavit which he did not see until the mention commenced.  The transcript of those proceedings will show that I gave the husband a number of opportunities to decide what he wanted to do and as I pointed out in my reasons for judgment on 19 May 2008, he chose to proceed with the matter that day having a very fixed view about what he wanted.

20. On 19 May 2008, I took the view that the relevant provisions of the orders that I made in January were of a consequential nature rather than of a substantive nature and that notwithstanding the opposition of the husband, I had the power to vary them.

21. Notwithstanding the rather vague nature of the Notice of Appeal filed 12 June 2008, it is clear that the husband is arguing that I had no such power and he now desires that the court orders of January 2008 be enforced.  He does not make any reference to the impact of those orders having regard to the subsequent orders involving his parents and Mr RW but that is a matter that he will need to consider.

22. The affidavit in support to which I have earlier referred sets out that he was prejudiced by virtue of the orders that I had made and that he was not aware of “half the correspondence” because his solicitor had ceased to act for him on 12 May 2008.  Mr Cantwell disputed that on behalf of the wife.  He said that his instructor received a Notice of Ceasing to Act on 28 May 2008.

23. It is important to note at this point that having made the orders on 19 May 2008, the settlement which is complex is due to take place from a conveyancing perspective tomorrow morning at 10.00am.  Notwithstanding it is the husband’s application for the matter to be listed urgently, all parties were notified by the court and no-one objected to me determining the matter as I have.

24. The husband repeats what he said earlier to me in May that the problems that occurred delaying the settlement were nothing to do with him. 

25. Importantly, relevant to the question of the stay, the husband says that an urgent court order is needed to stop the settlement because if it is executed, it will cause him extreme financial disaster.  He makes reference to the fact that his legal bill is in excess of $127,000 and he has to pay the wife $175,000 if the January orders are implemented.  In addition there are other payments to be made under the orders not to mention $101,000 that is currently outstanding on the mortgage.  He told me that he had the wherewithal to pay between $320-$330,000 because some lending institution will assist him.  He said that the solicitors have agreed to accept $50,000 and then the balance by instalments.  The capacity to fulfil the orders eludes me having regard to the fact that he says he is otherwise impecunious.  He says that the children have nothing and what he was really after was a legacy for his children.  He made the observation that the wife is currently being investigated by the Department of Social Security and he has spoken to the Australian Federal Police.  All of those are matters that in my view do not affect the question of what I have to determine.

26. In paragraph 7 of his affidavit, the husband says that if the stay was granted, he would be able to meet all of those obligations.  As I have pointed out, that seems unlikely but I do not have any other evidence to the contrary.

27. The husband said in his affidavit and repeated in submission that he was suffering from depression as the wife was denying him telephone access to the children.  That is also a matter that I do not take into account.  The final matter was that he referred to a facsimile transmission from my Associate dated 12 June indicating that judgment had been delivered without crucial material which was the fault of the court.  That related entirely to the cost question and has nothing to do with this application.

28. Having read that material and explained to the husband that this was his opportunity to explain to me why a stay should be granted, he raised no new material. 

29. Mr Cantwell on behalf of the wife pointed to the fact that there is an enormous amount of urgency in this case.  He said that 24 days had elapsed since the orders had been made and this application was made as a matter of urgency the very night before the settlement.  There is some substance in that.  The husband said that he only got the document from the 19 May orders very recently but he conceded that he had been present when I not only pronounced the orders but delivered an extempore judgment on 19 May.

30. Mr Cantwell pointed out that the authorities relating to stay applications go back to 1977 but the important one was Director-General, Department of Community Services & De Lewinski (1996) FLC 92-677 which in turn referred to Jennings Construction Limited v Burgundy Royale Investments Propriety Limited (1986) 161 CLR 681.

31. What is important to mention also is that I pointed out to the husband that if the Full Court took the view that I did not have the power to unilaterally vary the orders, the settlement and effectively completion of the orders would not create an estoppel situation or prevent the Full Court from overturning my decision on 19 May and directing that the orders that I made in January be implemented.  Mr Cantwell on behalf of the wife conceded that the wife would not raise such an estoppel issue and that my indication about that point was correct.

32. Mr Kourkoulis on behalf of the husband’s parents indicated that they had some sympathy for the husband’s position but would be bound by any decision that I had made.  They were not opposing or conceding the application and when I asked specifically about the fact that a stay would delay the payment for them, Mr Kourkoulis said that that troubled his clients.  That is particularly so in circumstances where the best information I have available is that the appeal could not be heard much before October and if judgment was reserved for some time, the parents would face a significant delay.

33. The law in relation to a stay is clear.  In Jennings Construction Limited (op cit) Brennan J as he then was said at 684 that a stay to preserve the subject matter of litigation pending an application for special leave was an extraordinary jurisdiction and exceptional circumstances had to be shown before the exercise was warranted.

34. His Honour then said:

    In exercising the extraordinary jurisdiction to stay, the following factors and material is to be exercised at this Court’s discretion.  In each case when the Court is satisfied a stay is required to preserve the subject matter of the litigation, it is relevant to consider, first, whether there is a substantial prospect the special leave to appeal will be granted;  secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the Court in which the matter is pending;  thirdly, whether the grant of a stay will cause loss to the respondent; and, fourthly, where the balance of convenience lies.

35. The Family Law Rules 2004 provide that an appeal to the Full Court does not operate as a stay of proceedings. I have explained that to the husband. If an appeal is instituted, I have the responsibility to consider whether or not the orders I made should be stayed pending the determination of the appeal.

36. I explained to the husband that the authorities consistently say that a stay should not be ordered as a matter of right or a matter of course but that the applicant for an order must establish a ground for it.  Nothing in the legislation sets out how that issue is to be determined and the circumstances are discretionary and depend upon the circumstances of each case.

37. Relying however upon the guidance of Jennings Constructions Limited to which I have just referred, I have to consider whether there is a substantial prospect that the appeal will be successful.  There is nothing in the material at this stage to indicate how the husband will argue his case.  It is relevant as a part of the discretionary exercise to decide whether or not a stay would render a successful appeal nugatory.  Alternatively, whether a stay would make the appeal impracticable to restore the position.  Having regard to the concession made by Mr Cantwell, that is not an issue here.  As the transcript will show, I made it clear to Mr Cantwell that I was not in any way binding the Full Court in respect of the estoppel point and he agreed.  He made it clear however that his client would not argue that that was the case.

38. The next issue is whether or not the applicant for the appeal and consequent stay has failed to take whatever steps are necessary in relation to the stay.  Whilst the husband is within time, I reject his suggestion that he was simply waiting for the papers and that they had only just arrived.  I pronounced my decision and orders on 19 May and he was present throughout.  There is every reason to be concerned in this case that this application is brought the night before the settlement is due to take place.  That is particularly so having regard to what the husband says about wanting to retain the home for his children and his own impecuniosity.

39. The third question is whether or not the grant of a stay would cause loss to the respondent.  Whilst Mr Rockman on behalf of Mr RW did not participate in the proceedings, I am entitled to presume that his client wants his money.  Mr Kourkoulis on behalf of the husband’s parents was equivocal at the start of the application but not so at the end.  He made it clear when I indicated that a stay would delay the payment for some time that his clients would not be happy about that.  More importantly however, a delay for the wife in this case has catastrophic effects.  The mortgage is currently in arrears and the wife has set in train replacement finance.  As I understand the argument, the current mortgagee has created significant problems giving rise to the delayed settlement in the first place and as a consequence, a replacement of that mortgagee with current finance that the wife seems to have satisfied her lending authority about must be in everyone’s interests.

40. The final consideration is where the balance of convenience lies.  It is important in that consideration to achieve an outcome which provides justice for all parties.  Particularly having regard to the fact that I see no reason why if I was proved to be wrong about the May orders, the position could not be rectified.  In those circumstances, the balance of convenience clearly lies in refusing the application.

41. At the conclusion of the proceedings Mr Cantwell applied for costs.  Mr Kourkoulis declined to apply. 

42. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) says that each party shall pay their own costs unless the circumstances justify departing from that principle.

43. In determining whether or not there are circumstances that justify a departure, the Act requires that I consider the matters set out in s 117(2A).

44. Whilst the husband has made an application consequent upon lodging his Notice of Appeal, I do not think that that justifies an order for costs.  The circumstances in this case are not unusual.

45. In this case it is clear that the financial circumstances of the parties are now not good.  Having regard to the orders that were made in March 2008, I have every reason to accept what the husband says about his impecunious circumstances.  He repeated a number of times today that he has no money.  I have expressed some cynicism about his capacity to borrow the funds that would enable him to do what he wanted to do but it still seems to me that his circumstances are poor.  Having said that, the wife is clearly in no better position. 

46. It is clear that neither party today has been in receipt of legal aid.

47. Section 117(2A) requires that I contemplate the conduct of the parties to the proceedings. The lodging of a Notice of Appeal is a matter of right. The lodging of the application of the stay may be on one view, misguided. However, I take into account that the husband did not have legal advice in respect of that application. I do not believe that his conduct warrants criticism.

48. There are no circumstances here where the proceedings have been necessitated by the failure of the husband to comply with orders because those matters were all previously rectified.

49. Whilst the husband has been wholly unsuccessful in seeking the stay of the orders, the speed with which the matter occurred and the fact that the matter was dealt with without requiring paid work to be prepared indicates to me that, whilst the wife will incur some costs, they will not be enormous.  The fact that the husband is unrepresented gives him the advantage from a costs point of view but that is not a basis upon which an order for costs should be made.

50. Having regard to the difficult financial circumstances of both parties, it is my view that it is not appropriate to make an order for costs in this case.

I certify that the preceding Fifty (50) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  13 June 2008